S. 987 - 100 by ’50 Act

115TH CONGRESS
1ST SESSION

S. 987

To transition away from fossil fuel sources of energy to 100 percent
clean and renewable energy by 2050, and for other purposes.

IN THE SENATE OF THE UNITED STATES

APRIL 27, 2017

Mr. MERKLEY (for himself, Mr. SANDERS, Mr. MARKEY, Mr. BOOKER,
and Ms. WARREN) introduced the following bill; which was read twice
and referred to the Committee on Finance

A BILL

To transition away from fossil fuel sources of energy to 100 percent clean and renewable energy by 2050, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE. — This Act may be cited as the “100 by ’50 Act”.

* * *

SEC. 232. PERMANENT STATE REQUIREMENT FOR THE PROVISION OF ADDITIONAL UNEMPLOYMENT COMPENSATION FOR CERTAIN ADVERSELY AFFECTED WORKERS.

(a) UNEMPLOYMENT COMPENSATION. — Chapter 23 of subtitle C of the Internal Revenue Code of 1986 is amended —

(1) in section 3304(a) —

(A) in paragraph (18), by striking “and” at the end;

(B) by redesignating paragraph (19) as paragraph (20); and

(C) by inserting after paragraph (18) the following new paragraph:

“(19) additional unemployment compensation for applicable individuals shall be payable as provided in section 3312; and”; and

(2) by adding at the end the following:

“SEC. 3312. ADDITIONAL UNEMPLOYMENT COMPENSATION FOR CERTAIN ADVERSELY AFFECTED WORKERS.

“(a) ADDITIONAL UNEMPLOYMENT COMPENSATION. —

“(1) IN GENERAL. —

“(A) IN GENERAL. — For purposes of section 3304(a)(19), a State law shall provide that payment of additional unemployment compensation shall be made to applicable individuals who —

“(i) have exhausted all rights to regular compensation under the State law or under Federal law with respect to a benefit year;

“(ii) have no rights to regular compensation with respect to a week under such law or any other State unemployment compensation law or to compensation under any other Federal law;

“(iii) are not receiving compensation with respect to such week under the unemployment compensation law of Canada; and “(iv) are able to work, available to work, and actively seeking work.

“(B) EXCEPTION. — Additional unemployment compensation shall not be denied under subparagraph (A) to an applicable individual for any week by reason of a failure to accept an offer of, or apply for, work if the work does not provide for comparable benefits (as defined in section 232(c) of the Clean Energy Worker Just Transition Act).

“(2) EXHAUSTION OF BENEFITS. — For purposes of paragraph (1)(A), an applicable individual shall be deemed to have exhausted such individual’s rights to regular compensation under a State law when —

“(A) no payments of regular compensation can be made under such law because such individual has received all regular compensation available to such individual based on employment or wages during such individual’s base period; or

“(B) such individual’s rights to such compensation have been terminated by reason of the expiration of the benefit year with respect to which such rights existed.

“(3) WEEKLY BENEFIT AMOUNT, ETC. —

“(A) IN GENERAL. — Subject to paragraph (4), for purposes of this section —

“(i) the amount of additional unemployment compensation which shall be payable to any applicable individual for any week of total unemployment shall be equal to the amount of the regular compensation (including dependents’ allowances) payable to such individual during such individual’s benefit year under the State law for a week of total unemployment;

“(ii) the terms and conditions of the State law which apply to claims for regular compensation and to the payment thereof (including terms and conditions relating to availability for work, active search for work, and refusal to accept work) shall apply to claims for additional unemployment compensation and the payment thereof, except —

“(I) that an applicable individual shall not be eligible for additional unemployment compensation unless, in the base period with respect to which such individual exhausted all rights to regular compensation under the State law, such individual had 20 weeks of full-time insured employment or the equivalent in insured wages, as determined under the provisions of the State law implementing section 202(a)(5) of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note); and

“(II) where otherwise inconsistent with the provisions of this section or with the regulations or operating instructions of the Secretary of Labor promulgated to carry out this section; and

“(iii) the maximum amount of additional unemployment compensation payable to any applicable individual is 156 weeks.

“(B) TRANSITION FOR APPLICABLE INDIVIDUALS RECEIVING COMPENSATION UNDER THE TEMPORARY ADDITIONAL UNEMPLOYMENT COMPENSATION PROGRAM. — In the case of an applicable individual who received temporary additional unemployment compensation under section 231 of the Clean Energy Worker Just Transition Act for weeks ending prior to January 1, 2020 —

“(i) the number of weeks described in subparagraph (A)(iii) shall be reduced by the number of weeks such individual received the temporary additional unemployment compensation under such section 231; and

“(ii) in determining the amount under subparagraph (A) for such individual, the State shall use the same benefit year as was used for such individual under such section 231.

“(4) NO NEW BENEFIT YEAR. — In determining the amount under paragraph (3), a State shall not establish a new benefit year with respect to applicable individuals.

“(5) COORDINATION RULE. — Notwithstanding any other provision of Federal law (and if the State law permits), the Governor of a State that is in an extended benefit period may provide for the payment of emergency unemployment compensation prior to additional unemployment compensation to applicable individuals who otherwise meet the requirements of this section.

“(6) UNAUTHORIZED ALIENS INELIGIBLE. — A State shall require as a condition of additional unemployment compensation that each alien who receives such compensation must be legally authorized to work in the United States, as defined for purposes of the Federal Unemployment Tax Act (26 U.S.C. 3301 et seq.). In determining whether an alien meets the requirements of this subsection, a State must follow the procedures provided in section 1137(d) of the Social Security Act (42 U.S.C. 1320b–7(d)).

“(b) PAYMENTS TO STATES. —

“(1) IN GENERAL. —

“(A) FULL REIMBURSEMENT. — There shall be paid to each State an amount equal to 100 percent of —

“(i) the total amount of additional unemployment compensation paid to applicable individuals by the State pursuant to this section; and

“(ii) any additional administrative expenses incurred by the State by reason of this section (as determined by the Secretary of Labor).

“(B) TERMS OF PAYMENTS. — Sums payable to any State by reason of this section shall be payable, either in advance or by way of reimbursement (as determined by the Secretary of Labor), in such amounts as the Secretary of Labor estimates the State will be entitled to receive under this section for a period, reduced or increased, as the case may be, by any amount by which the Secretary of Labor finds that his estimates for any prior period were greater or less than the amounts which should have been paid to the State. Such estimates may be made on the basis of such statistical, sampling, or other method as may be agreed upon by the Secretary of Labor and the State agency of the State involved.

“(2) CERTIFICATIONS. — The Secretary of Labor shall from time to time certify to the Secretary of the Treasury for payment to each State the sums payable to such State under this section.

“(3) FUNDING. — Payments to States under an agreement under this section shall be made from the Clean Energy Workers Trust Fund established under section 251 of the Clean Energy Worker Just Transition Act.

“(c) FRAUD AND OVERPAYMENTS. —

“(1) IN GENERAL. — If an individual knowingly has made, or caused to be made by another, a false statement or representation of a material fact, or knowingly has failed, or caused another to fail, to disclose a material fact, and as a result of such false statement or representation or of such nondisclosure such individual has received an amount of additional unemployment compensation to which such individual was not entitled, such individual —

“(A) shall be ineligible for further additional unemployment compensation in accordance with the provisions of the applicable State unemployment compensation law relating to fraud in connection with a claim for unemployment compensation; and

“(B) shall be subject to prosecution under section 1001 of title 18, United States Code.

“(2) REPAYMENT. — In the case of individuals who have received amounts of additional unemployment compensation to which they were not entitled, the State shall require such individuals to repay the amounts of such additional unemployment compensation to the State agency, except that the State agency may waive such repayment if it determines that —

“(A) the payment of such additional unemployment compensation was without fault on the part of any such individual; and

“(B) such repayment would be contrary to equity and good conscience.

“(3) RECOVERY BY STATE AGENCY. —

“(A) IN GENERAL. — The State agency shall recover the amount to be repaid, or any part thereof, by deductions from any additional unemployment compensation payable to such individual under this section or from any unemployment compensation payable to such individual under any State or Federal unemployment compensation law administered by the State agency or under any other State or Federal law administered by the State agency which provides for the payment of any assistance or allowance with respect to any week of unemployment, during the 3-year period after the date such individuals received the payment of the additional unemployment compensation to which they were not entitled, in accordance with the same procedures as apply to the recovery of overpayments of regular unemployment benefits paid by the State.

“(B) OPPORTUNITY FOR HEARING. — No repayment shall be required, and no deduction shall be made, until a determination has been made, notice thereof and an opportunity for a fair hearing has been given to the individual, and the determination has become final.

“(4) REVIEW. — Any determination by a State agency under this subsection shall be subject to review in the same manner and to the same extent as determinations under the State unemployment compensation law, and only in that manner and to that extent.

“(d) DEFINITIONS. — In this section:

“(1) APPLICABLE INDIVIDUAL. — The term ‘applicable individual’ means, with respect to a week of additional unemployment compensation, an individual who —

“(A) is a certified adversely affected worker (as defined in section 202 of the Clean Energy Worker Just Transition Act) for such week; and

“(B) has been awarded adjustment assistance for option A under section 221(b)(1) of such Act for such week.

“(2) EB PROGRAM DEFINITIONS. — The terms ‘compensation’, ‘regular compensation’, ‘extended compensation’, ‘benefit year’, ‘base period’, ‘State’, ‘State agency’, ‘State law’, and ‘week’ have the respective meanings given such terms under section 205 of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note).”.

(b) CLERICAL AMENDMENT. — The table of sections for chapter 23 of subtitle C of the Internal Revenue Code of 1986 is amended by adding at the end the following item:

“Sec. 3312. Additional unemployment compensation.”.

(c) EFFECTIVE DATE. — The amendments made by this section shall take effect on January 1, 2020, and shall apply to weeks of unemployment ending on or after such date.

PART IV — OTHER BENEFITS AND SERVICES

SEC. 241. ELIGIBILITY FOR PREMIUM SUBSIDY CREDIT AND COST SHARING BENEFITS FOR HEALTH INSURANCE.

(a) PREMIUM SUBSIDY CREDIT. —

(1) IN GENERAL. — Paragraph (1) of section 36B(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

“(E) SPECIAL RULE FOR CERTAIN CERTIFIED ADVERSELY AFFECTED WORKERS. — If —

“(i) a taxpayer has a household income which is not greater than 100 percent of an amount equal to the poverty line for a family of the size involved, and

“(ii) the taxpayer is a certified adversely affected worker under section 202 of the Clean Energy Worker Just Transition Act and has been awarded adjustment assistance under Option A, Option B, or Option C of section 211(b) of such Act, the taxpayer shall, for purposes of the credit under this section, be treated as an applicable taxpayer with a household income which is equal to 100 percent of the poverty line for a family of the size involved.”.

(2) EFFECTIVE DATE. — The amendment made by this subsection shall apply to months beginning after December 31, 2017.

(b) COST SHARING. — The second sentence of section 1402(b) of the Patient Protection and Affordable Care Act is amended by striking “section 36B(c)(1)(B)” and inserting “subparagraph (C) or (E) of section 36B(c)(1)”.

* * *

SEC. 252. MODIFICATIONS TO RULES RELATING TO INVERTED CORPORATIONS.

(a) IN GENERAL. — Subsection (b) of section 7874 of the Internal Revenue Code of 1986 is amended to read as follows:

“(b) INVERTED CORPORATIONS TREATED AS DOMESTIC CORPORATIONS. —

“(1) IN GENERAL. — Notwithstanding section 7701(a)(4), a foreign corporation shall be treated for purposes of this title as a domestic corporation if —

“(A) such corporation would be a surrogate foreign corporation if subsection (a)(2) were applied by substituting ‘80 percent’ for ‘60 percent’, or

“(B) such corporation is an inverted domestic corporation.

“(2) INVERTED DOMESTIC CORPORATION. — For purposes of this subsection, a foreign corporation shall be treated as an inverted domestic corporation if, pursuant to a plan (or a series of related transactions) —

“(A) the entity completes after May 8, 2014, the direct or indirect acquisition of —

“(i) substantially all of the properties held directly or indirectly by a domestic corporation, or

“(ii) substantially all of the assets of, or substantially all of the properties constituting a trade or business of, a domestic partnership, and

“(B) after the acquisition, either —

“(i) more than 50 percent of the stock (by vote or value) of the entity is held —

“(I) in the case of an acquisition with respect to a domestic corporation, by former shareholders of the domestic corporation by reason of holding stock in the domestic corporation, or

“(II) in the case of an acquisition with respect to a domestic partnership, by former partners of the domestic partnership by reason of holding a capital or profits interest in the domestic partnership, or

“(ii) the management and control of the expanded affiliated group which includes the entity occurs, directly or indirectly, primarily within the United States, and such expanded affiliated group has significant domestic business activities.

“(3) EXCEPTION FOR CORPORATIONS WITH SUBSTANTIAL BUSINESS ACTIVITIES IN FOREIGN COUNTRY OF ORGANIZATION. — A foreign corporation described in paragraph (2) shall not be treated as an inverted domestic corporation if after the acquisition the expanded affiliated group which includes the entity has substantial business activities in the foreign country in which or under the law of which the entity is created or organized when compared to the total business activities of such expanded affiliated group. For purposes of subsection (a)(2)(B)(iii) and the preceding sentence, the term ‘substantial business activities’ shall have the meaning given such term under regulations in effect on May 8, 2014, except that the Secretary may issue regulations increasing the threshold percent in any of the tests under such regulations for determining if business activities constitute substantial business activities for purposes of this paragraph.

“(4) MANAGEMENT AND CONTROL. — For purposes of paragraph (2)(B)(ii) —

“(A) IN GENERAL. — The Secretary shall prescribe regulations for purposes of determining cases in which the management and control of an expanded affiliated group is to be treated as occurring, directly or indirectly, primarily within the United States. The regulations prescribed under the preceding sentence shall apply to periods after May 8, 2014.

“(B) EXECUTIVE OFFICERS AND SENIOR MANAGEMENT. — Such regulations shall provide that the management and control of an expanded affiliated group shall be treated as occurring, directly or indirectly, primarily within the United States if substantially all of the executive officers and senior management of the expanded affiliated group who exercise day-to-day responsibility for making decisions involving strategic, financial, and operational policies of the expanded affiliated group are based or primarily located within the United States. Individuals who in fact exercise such day-to-day responsibilities shall be treated as executive officers and senior management regardless of their title.

“(5) SIGNIFICANT DOMESTIC BUSINESS ACTIVITIES. — For purposes of paragraph (2)(B)(ii), an expanded affiliated group has significant domestic business activities if at least 25 percent of —

“(A) the employees of the group are based in the United States,

“(B) the employee compensation incurred by the group is incurred with respect to employees based in the United States,

“(C) the assets of the group are located in the United States, or

“(D) the income of the group is derived in the United States, determined in the same manner as such determinations are made for purposes of determining substantial business activities under regulations referred to in paragraph (3) as in effect on May 8, 2014, but applied by treating all references in such regulations to ‘foreign country’ and ‘relevant foreign country’ as references to ‘the United States’. The Secretary may issue regulations decreasing the threshold percent in any of the tests under such regulations for determining if business activities constitute significant domestic business activities for purposes of this paragraph.”.

(b) CONFORMING AMENDMENTS. —

(1) Clause (i) of section 7874(a)(2)(B) of such Code is amended by striking “after March 4, 2003,” and inserting “after March 4, 2003, and before May 9, 2014,”.

(2) Subsection (c) of section 7874 of such Code is amended —

(A) in paragraph (2) —

(i) by striking “subsection (a)(2)(B)(ii)” and inserting “subsections (a)(2)(B)(ii) and (b)(2)(B)(i)”, and

(ii) by inserting “or (b)(2)(A)” after “(a)(2)(B)(i)” in subparagraph (B),

(B) in paragraph (3), by inserting “or (b)(2)(B)(i), as the case may be,” after “(a)(2)(B)(ii)”,

(C) in paragraph (5), by striking “subsection (a)(2)(B)(ii)” and inserting “subsections (a)(2)(B)(ii) and (b)(2)(B)(i)”, and

(D) in paragraph (6), by inserting “or inverted domestic corporation, as the case may be,” after “surrogate foreign corporation”.

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years ending after May 8, 2014.

PART VI — MISCELLANEOUS PROVISIONS

SEC. 261. CREDIT FOR HIRING UNEMPLOYED CERTIFIED ADVERSELY AFFECTED WORKERS.

(a) INCLUSION IN WORK OPPORTUNITY CREDIT. — Paragraph (1) of section 51(d) of the Internal Revenue Code of 1986 is amended by striking “or” at the end of subparagraph (I), by striking the period at the end of subparagraph (J) and inserting “, or”, and by adding at the end the following new subparagraph:

“(K) a qualified adversely affected energy industry unemployed worker.”.

(b) DEFINITION OF QUALIFIED ADVERSELY AFFECTED ENERGY INDUSTRY UNEMPLOYED WORKER. — Subsection (d) of section 51 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(16) QUALIFIED ADVERSELY AFFECTED ENERGY INDUSTRY UNEMPLOYED WORKER. — The term ‘qualified adversely affected energy industry unemployed worker’ means any individual who —

“(A) is a certified adversely affected worker under section 202 of the Clean Energy Worker Just Transition Act and whose status as such has not been terminated before the date the individual begins work for the employer,

“(B) is certified by the designated local agency as —

“(i) having aggregate periods of unemployment during the 1-year period ending on the hiring date which equal or exceed 4 weeks (but less than 6 months), or

“(ii) having aggregate periods of unemployment during the 1-year period ending on the hiring date which equal or exceed 6 months.”.

(c) INCREASED CREDIT AMOUNT FOR LONG-TERM UNEMPLOYED WORKERS. — Section 51(b)(3) of the Internal Revenue Code of 1986 is amended —

(1) by striking “and” before “$24,000”, and

(2) by inserting “, and $14,000 per year in the case of any individual who is a qualified adversely affected energy industry unemployed worker by reason of subsection (d)(16)(B)(ii)” after “subsection (d)(3)(A)(ii)(II)”.

(d) CREDIT LIMITED TO INDIVIDUALS HIRED FOR COMPARABLE OCCUPATION. — Subsection (b) of section 51 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(4) SPECIAL RULE FOR QUALIFIED ADVERSELY AFFECTED ENERGY INDUSTRY UNEMPLOYED WORKERS. — The term ‘qualified wages’ shall not include any wages paid to qualified adversely affected energy industry unemployed worker unless the position for which such worker is hired for is a comparable occupation as determined under section 222 of the Clean Energy Worker Just Transition Act.”.

(e) TERMINATION PROVISION NOT TO APPLY. — Paragraph (4) of section 51(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new sentence: “The preceding sentence shall not apply with respect to amounts paid or incurred to qualified adversely affected energy industry unemployed workers.”.

(f) EFFECTIVE DATE. — The amendments made by this section shall apply to individuals who begin work for the employer after December 31, 2017.

* * *

Subtitle C — Making Clean and Renewable Energy Affordable

PART I — REDUCING CARBON POLLUTION AND CREATING JOBS
BY TRANSITIONING TO SUSTAINABLE ENERGY SOURCES

SEC. 321. EXTENSION AND MODIFICATION OF CREDITS WITH RESPECT TO FACILITIES PRODUCING ENERGY FROM CERTAIN RENEWABLE RESOURCES.

(a) PERMANENT EXTENSION FOR CERTAIN FACILITIES. — Section 45(d) of the Internal Revenue Code of 1986 is amended —

(1) in paragraph (4), by striking “and which” and all that follows through the period and inserting the following: “and, in the case of a facility using solar energy, which is placed in service before January 1, 2006.”,

(2) in paragraph (6), by striking “and the construction of which begins before January 1, 2017”,

(3) in paragraph (7), by striking “and the construction of which begins before January 1, 2017”,

(4) in paragraph (9)(A) —

(A) in clause (i), by striking “and before January 1, 2017”, and

(B) in clause (ii), by striking “and the construction of which begins before January 1, 2017”, and

(5) in paragraph (11)(B), by striking “and the construction of which begins before January 1, 2017”.

(b) EXTENSION FOR WIND FACILITIES. —

(1) IN GENERAL. — Section 45(d)(1) of the Internal Revenue Code of 1986 is amended by striking “January 1, 2020” and inserting “January 1, 2034”.

(2) MODIFICATION OF PHASEOUT. — Paragraph (5) of section 45(b) of such Code is amended —

(A) by striking “and” at the end of subparagraph (B),

(B) by striking “January 1, 2020, 60 percent.” in subparagraph (C) and inserting “January 1, 2031, 60 percent, and”, and

(C) by adding at the end the following new subparagraph:

“(D) in the case of any facility the construction of which begins after December 31, 2030, and before January 1, 2034, 80 percent.”.

(c) EXTENSION OF ELECTION TO TREAT QUALIFIED FACILITIES OTHER THAN BIOMASS FACILITIES AS ENERGY PROPERTY. —

(1) IN GENERAL. — Section 48(a)(5)(C) of the Internal Revenue Code of 1986 is amended —

(A) by striking “and the construction of which begins before January 1, 2017 (January 1, 2020, in the case of any facility which is described in paragraph (1) of section 45(d))” in clause (ii), and

(B) by adding at the end the following new flush sentence:

“Such term shall not include any facility described in section 45(d)(1) the construction of which begins after December 31, 2033.”.

(2) EXCLUSION OF BIOMASS FACILITIES. — Clause (i) of section 48(a)(5)(C) of such Code is amended by striking “(2), (3),”.

(3) MODIFICATION OF PHASEOUT PERCENTAGE FOR WIND FACILITIES. — Subparagraph (E) of section 48(a)(5) of such Code is amended —

(A) by striking “and” at the end of clause (ii),

(B) by striking “January 1, 2020, 60 percent.” in clause (iii) and inserting “January 1, 2031, 60 percent, and”, and

(C) by adding at the end the following new clause:

“(d) in the case of any facility the construction of which begins after December 31, 2030, and before January 1, 2034, 80 percent.”.

(d) EFFECTIVE DATES. — The amendments made by this section shall take effect on January 1, 2017.

SEC. 322. EXTENSION AND MODIFICATION OF ENERGY CREDIT.

(a) PERMANENT EXTENSION FOR CERTAIN PROPERTY. — Section 48 of the Internal Revenue Code of 1986 is amended —

(1) in subsection (a)(3)(A) —

(A) in clause (ii), by striking “but only with respect to periods ending before January 1, 2017”, and

(B) in clause (vii), by striking “, but only with respect to periods ending before January 1, 2017”, and

(2) in subsection (c) —

(A) in paragraph (1), by striking subparagraph (D),

(B) in paragraph (2), by striking subparagraph (D),

(C) in paragraph (3)(A), by inserting “and” at the end of clause (ii), by striking “, and” at the end of clause (iii) and inserting a period, and by striking clause (iv), and

(D) in paragraph (4), by striking subparagraph (C).

(b) SOLAR ENERGY PROPERTY. —

(1) EXTENSION. — Section 48(a)(2)(A)(i)(II) of the Internal Revenue Code of 1986 is amended by striking “January 1, 2022” and inserting “January 1, 2034”.

(2) MODIFICATION OF PHASEOUT. — Subparagraph (A) of section 48(a)(6) of the Internal Revenue Code of 1986 is amended —

(A) by striking “and” at the end of clause (i),

(B) by striking “January 1, 2022, 22 percent.” in clause (ii) and inserting “January 1, 2030, 22 percent”, and

(C) by adding at the end the following new clauses:

“(i) in the case of any facility the construction of which begins after December 31, 2030, and before January 1, 2032, 18 percent, and

“(ii) in the case of any facility the construction of which begins after December 31, 2031, and before January 1, 2034, 14 percent.”.

(c) EXTENSION OF 30-PERCENT INVESTMENT CREDIT FOR OFFSHORE WIND ENERGY FACILITIES. —

(1) IN GENERAL. —

(A) IN GENERAL. — Clause (i) of section 48(a)(2)(A) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of subclause (IV) and by adding at the end the following new subclause:

“(V) qualified offshore wind energy property, and”.

(B) QUALIFIED OFFSHORE WIND ENERGY PROPERTY DEFINED. — Subsection (c) of section 48 of such Code is amended by adding at the end the following new paragraph:

“(5) QUALIFIED OFFSHORE WIND ENERGY PROPERTY. —

“(A) IN GENERAL. — The term ‘qualified offshore wind energy property’ means property which is part of a qualified offshore wind facility.

“(B) QUALIFIED OFFSHORE WIND FACILITY. — For purposes of subparagraph (A), the term ‘qualified offshore wind facility’ means any facility which —

“(i) uses wind to generate electricity, and

“(ii) is located in —

“(I) the inland navigable waters of the United States, including the Great Lakes, or

“(II) the coastal waters of the United States, including the territorial seas of the United States, the exclusive economic zone of the United States, and the outer Continental Shelf of the United States.”.

(C) CONFORMING AMENDMENT. — Subparagraph (A) of section 48(a)(3) of such Code is amended by striking “or” at the end of clause (vi), by inserting “or” at the end of clause (vii), and by adding at the end the following new clause:

“(viii) qualified offshore wind energy property,”.

(D) COORDINATION WITH CREDIT FOR OTHER WIND FACILITIES. — Section 48(a)(5)(C) of such Code is amended by adding at the end the following new sentence:

“Such term shall not include any facility which is a qualified offshore wind facility (as defined in subsection (c)(5)).”.

(d) LIMITATION ON CREDIT FOR ONSHORE WIND FACILITIES. — Subparagraph (A) of section 48(a)(5) of the Internal Revenue Code of 1986 is amended to read as follows:

“(E) LIMITATION FOR ONSHORE WIND FACILITIES. — In the case of a qualified investment credit facility described in section 45(d)(1), the credit otherwise determined under the section with respect to qualified property which is part of such facility shall not exceed an amount equal to $200 for each kilowatt hour of capacity of such facility.”.

(e) CREDIT FOR QUALIFIED ELECTRICAL TRANSMISSION PROPERTY. —

(1) IN GENERAL. — Section 48(a)(3)(A) of the Internal Revenue Code of 1986 is amended by adding at the end the following:

“(viii) qualified electrical transmission property.”.

(2) QUALIFIED ELECTRICAL TRANSMISSION PROPERTY. — Section 48(c) of the Internal Revenue Code of 1986, as amended by subsection (c), is amended by adding at the end the following new paragraph:

“(6) QUALIFIED ELECTRICAL TRANSMISSION PROPERTY. — The term ‘qualified electrical transmission property’ means an interstate electrical transmission system, including technologies listed in section 1223 of the Energy Policy Act of 2005, which is capable of carrying or transmitting at least 69 kilovolts.”.

(f) EFFECTIVE DATE. — The amendments made by this section shall apply to property placed in service in taxable year beginning after the date of the enactment of this Act.

(g) EFFECTIVE DATE. — The amendments made by this section shall apply to periods after December 31, 2016, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).

SEC. 323. PERMANENT EXTENSION OF QUALIFYING ADVANCED ENERGY PROJECT CREDIT.

(a) IN GENERAL. — Section 48C(d)(1)(B) of the Internal Revenue Code of 1986 is amended —

(1) by inserting “in any calendar year” after “allocated under the program”, and

(2) by striking “$2,300,000,000” and inserting “$1,000,000,000”.

(b) CONFORMING AMENDMENTS. —

(1) Section 48C(d)(2)(A) of such Code is amended by striking “during the 2-year period beginning on the date the Secretary establishes the program under paragraph (1)”.

(2) Section 48C(d)(4) of such Code is amended by striking subparagraphs (A) and (B) and inserting the following:

“(A) REVIEW. — Not later than 4 years after the close of any calendar year for which allocations were made under this section, the Secretary shall review the credits allocated under this section for such calendar year.

“(B) REDISTRIBUTION. — The Secretary may reallocate credits awarded under this section for a calendar year if the Secretary determines that any certification made pursuant to paragraph (2) has been revoked pursuant to paragraph (2)(B) because the project subject to the certification has been delayed as a result of third-party opposition or litigation to the proposed project.”.

(3) Section 48C(d)(4)(C) of such Code is amended by striking “the Secretary is authorized to conduct an additional program for applications for certification” and inserting “notwithstanding paragraph (2)(A), the Secretary is authorized to accept additional applications for certification with respect to such amounts.”.

SEC. 324. PROMOTING ACCESS TO RENEWABLE ENERGY AND ENERGY EFFICIENCY FOR TAX-EXEMPT ORGANIZATIONS.

(a) IN GENERAL. — Upon application, the Secretary of the Treasury shall, subject to the requirements of this section, provide a grant to each eligible entity who places in service specified energy property to reimburse such person for a portion of the expense of such property as provided in subsection (b). No grant shall be made under this section with respect to any property unless such property is placed in service after 2016.

(b) GRANT AMOUNT. —

(1) IN GENERAL. — The amount of the grant under subsection (a) with respect to any specified energy property shall be the applicable percentage of the basis of such property.

(2) APPLICABLE PERCENTAGE. — For purposes of paragraph (1), the term “applicable percentage” means —

(A) 30 percent in the case of any property described in paragraphs (1) through (4) of subsection (d), and

(B) 10 percent in the case of any other property.

(3) LIMITATIONS. — In the case of property described in paragraph (1), (2), (3), (6), or (7) of subsection (d), the amount of any grant under this section with respect to such property shall not exceed the limitation described in section 48(a)(5)(E), 48(a)(6), 48(c)(1)(B), 48(c)(2)(B), or 48(c)(3)(B) of the Internal Revenue Code of 1986, respectively, with respect to such property.

(c) TIME FOR PAYMENT OF GRANT. — The Secretary of the Treasury shall make payment of any grant under subsection (a) during the 60-day period beginning on the later of —

(1) the date of the application for such grant, or

(2) the date the specified energy property for which the grant is being made is placed in service.

(d) SPECIFIED ENERGY PROPERTY. — For purposes of this section, the term “specified energy property” means any of the following:

(1) QUALIFIED FACILITIES. — Any qualified property (as defined in section 48(a)(5)(D) of the Internal Revenue Code of 1986) which is part of a qualified facility (within the meaning of section 45 of such Code) described in paragraph (1), (4), (6), (7), (9), or (11) of section 45(d) of such Code.

(2) QUALIFIED FUEL CELL PROPERTY. — Any qualified fuel cell property (as defined in section 48(c)(1) of such Code).

(3) SOLAR PROPERTY. — Any property described in clause (i) or (ii) of section 48(a)(3)(A) of such Code.

(4) QUALIFIED SMALL WIND ENERGY PROPERTY. — Any qualified small wind energy property (as defined in section 48(c)(4) of such Code).

(5) GEOTHERMAL PROPERTY. — Any property described in clause (iii) of section 48(a)(3)(A) of such Code.

(6) QUALIFIED MICROTURBINE PROPERTY. — Any qualified microturbine property (as defined in section 48(c)(2) of such Code).

(7) COMBINED HEAT AND POWER SYSTEM PROPERTY. — Any combined heat and power system property (as defined in section 48(c)(3) of such Code).

(8) GEOTHERMAL HEAT PUMP PROPERTY. — Any property described in clause (vii) of section 48(a)(3)(A) of such Code.

Such term shall not include any property unless depreciation (or amortization in lieu of depreciation) is allowable with respect to such property.

(e) APPLICATION OF CERTAIN RULES. — In making grants under this section, the Secretary of the Treasury shall apply rules similar to the rules of section 50 of the Internal Revenue Code of 1986 (other than subsection (b)(3) thereof). In applying such rules, if the property is disposed of, or otherwise ceases to be specified energy property, the Secretary of the Treasury shall provide for the recapture of the appropriate percentage of the grant amount in such manner as the Secretary of the Treasury determines appropriate.

(f) ELIGIBLE ENTITY. — For purposes of this section, the term “eligible entity” means any organization described in section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code.

(g) DEFINITIONS. — Terms used in this section which are also used in section 45 or 48 of the Internal Revenue Code of 1986 shall have the same meaning for purposes of this section as when used in such section 45 or 48. Any reference in this section to the Secretary of the Treasury shall be treated as including the Secretary’s delegate.

(h) APPROPRIATIONS. — There is hereby appropriated to the Secretary of the Treasury such sums as may be necessary to carry out this section.

PART II — SAVING CONSUMERS AND BUSINESSES
MONEY BY PROMOTING ENERGY EFFICIENCY

SEC. 326. PERMANENT EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

(a) IN GENERAL. — Section 179D of the Internal Revenue Code of 1986 is amended by striking subsection (h).

(b) UPDATE OF STANDARD. —

(1) IN GENERAL. — Section 179D of the Internal Revenue Code of 1986 is amended by striking “Standard 90.1-2007” each place it appears and inserting “the applicable ASHRAE standard”.

(2) APPLICABLE ASHRAE STANDARD. — Section 179D(c)(2) of such Code is amended to read as follows:

“(2) APPLICABLE ASHRAE STANDARD. — The term ‘applicable ASHRAE standard’ means —

“(A) Standard 90.1–2013 of the American Society of Heating, Refrigerating, and Air Conditioning Engineers and the Illuminating Engineering Society of North America, or

“(B) in the case of any subsequent standard adopted by the American Society of Heating, Refrigerating, and Air Conditioning Engineers which supersedes the standard described in subparagraph (A), such subsequent standard.”.

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to property placed in service after December 31, 2016.

SEC. 327. PERMANENT EXTENSION OF NEW ENERGY EFFICIENT HOME CREDIT.

(a) IN GENERAL. — Section 45L of the Internal Revenue Code of 1986 is amended by striking subsection (g).

(b) UPDATE OF STANDARD. —

(1) IN GENERAL. — Section 45L of the Internal Revenue Code of 1986 is amended by striking “the standards of chapter 4 of the 2006 International Energy Conservation Code, as such Code (including supplements) is in effect on January 1, 2006” each place it appears and inserting “the applicable standards”.

(2) APPLICABLE STANDARDS. — Section 45L of such Code, as amended by subsection (a), is amended by adding at the end the following new subsection:

“(g) APPLICABLE STANDARDS. — For purposes of this section, the term ‘applicable standards’ means, with respect to any dwelling unit, the standards in effect for residential building energy efficiency under the International Energy Conservation Code on the first day of the taxable year in which construction for the dwelling unit commenced.”.

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to homes acquired after December 31, 2016.

SEC. 328. PERMANENT EXTENSION AND REFUNDABILITY OF CREDIT FOR NONBUSINESS ENERGY PROPERTY.

(a) PERMANENT EXTENSION. — Section 25C of the Internal Revenue Code of 1986 is amended by striking subsection (g).

(b) UPDATE OF STANDARDS. —

(1) QUALIFIED ENERGY EFFICIENCY IMPROVEMENTS. —

(A) IN GENERAL. — Section 25C(c)(2)(C) of the Internal Revenue Code of 1986 is amended by striking “the prescriptive criteria for such component established by the 2009 International Energy Conservation Code, as such Code (including supplements) is in effect on the date of the enactment of the American Recovery and Reinvestment Tax Act of 2009” and inserting “the applicable IECC standards”.

(B) APPLICABLE IECC STANDARDS. — Section 25C(c) of such Code is amended by adding at the end the following new paragraph:

“(5) APPLICABLE IECC STANDARDS. — For purposes of this section, the term ‘applicable IECC standards’ means, with respect to any building envelope component, the prescriptive criteria for such component in effect under the International Energy Conservation Code on the first day of the taxable year for which the credit is allowed.”.

(2) ENERGY EFFICIENT PROPERTY. —

(A) HEAT PUMPS AND AIR CONDITIONERS. —

(i) IN GENERAL. — Section 25C(d)(3) of the Internal Revenue Code of 1986 is amended by striking “the Consortium for Energy Efficiency, as in effect on January 1, 2009” each place it appears and inserting “the applicable CEE standards”.

(ii) APPLICABLE CEE STANDARDS. — Section 25C(d) of such Code is amended by adding at the end the following new paragraph:

“(7) APPLICABLE CEE STANDARDS. — For purposes of this section, the term ‘applicable CEE standards’ means, with respect to any property, the standards established by the Consortium for Energy Efficiency that are in effect for such property on the first day of the taxable year for which the credit is allowed.”.

(B) OTHER ENERGY EFFICIENT BUILDING PROPERTY. — Paragraph (3) of section 25C(d) of such Code is amended —

(i) in subparagraph (A), by inserting “and meets Energy Star program certification requirements as of the first day of the taxable year in which the property placed in service” after “procedure”,

(ii) in subparagraph (C), by inserting “and meets Energy Star program certification requirements as of the first day of the taxable year in which the property placed in service” after “90 percent”, and

(iii) in subparagraph (E) —

(I) by striking “and which” and inserting “which”, and

(II) by inserting “, and which meets Energy Star program certification requirements as of the first day of the taxable year in which the property placed in service” after “75 percent”.

(C) FURNACES AND HOT WATER BOILERS. — Paragraph (4) of section 25C(d) of such Code is amended by inserting “and meets Energy Star program certification requirements as of the first day of the taxable year in which the property placed in service” after “95”.

(D) ADVANCED MAIN AIR CIRCULATING FANS. — Paragraph (5) of section 25C(d) of such Code is amended —

(i) by striking “and which” and inserting “, which”, and

(ii) by inserting “, and which meets Energy Star program certification requirements as of the first day of the taxable year in which the property placed in service” after “test procedures)”.

(c) CREDIT MADE REFUNDABLE. —

(1) CREDIT MOVED TO SUBPART RELATING TO REFUNDABLE CREDITS. — The Internal Revenue Code of 1986 is amended —

(A) by redesignating section 25C as section 36C, and

(B) by moving section 36C (as amended by subsections (a) and (b) and as redesignated by subparagraph (A)) from subpart A of part IV of subchapter A of chapter 1 to the location immediately before section 37 in subpart C of part IV of subchapter A of chapter 1.

(2) CONFORMING AMENDMENTS. —

(A) Section 1016(a)(33) of such Code is amended —

(i) by striking “section 25C(f)” and inserting “section 36C(f)”, and

(ii) by striking “under section 25C” and inserting “under section 36C”.

(B) The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by striking the item relating to section 25C.

(C) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting “36C,” after “36B,”.

(D) The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 36B the following new item:

“36C. Nonbusiness energy property.”.

(d) EFFECTIVE DATE. — The amendments made by this section shall apply to property placed in service after December 31, 2016.

SEC. 329. PERMANENT EXTENSION, MODIFICATION, AND REFUNDABILITY OF CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

(a) PERMANENT EXTENSION. — Section 25D of the Internal Revenue Code of 1986 is amended by striking subsection (h).

(b) MAINTENANCE OF PHASEOUT PERCENTAGE FOR CERTAIN SOLAR PROPERTY. — Paragraph (3) of section 25D(g) of the Internal Revenue Code of 1986 is amended by striking “and before January 1, 2022,”.

(c) CREDIT ALLOWED FOR ENERGY STORAGE PROPERTY. —

(1) IN GENERAL. — Section 25D(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(6) 30 percent of the qualified energy storage property expenditures made by the taxpayer during the taxable year.”.

(2) QUALIFIED ENERGY STORAGE PROPERTY EXPENDITURES. — Section 25D(d) of such Code is amended by adding at the end the following new paragraph:

“(6) QUALIFIED ENERGY STORAGE PROPERTY EXPENDITURE. — The term ‘qualified energy storage property expenditure’ means an expenditure for property —

“(A) which is —

“(i) located in a dwelling unit located in the United States and used by the taxpayer as a residence,

“(ii) directly connected to the electrical grid, and

“(iii) designed to receive electrical energy, to store such energy, and —

“(I) to convert such energy to electricity and deliver such electricity for sale, or

“(II) to use such energy to provide improved reliability or economic benefits to the grid, or

“(B) which is —

“(i) part of a dwelling unit located in the United States which is —

“(I) connected to the electrical grid, and

“(II) used by the taxpayer as a residence,

“(ii) connected to —

“(I) qualified solar electric property, or

“(II) qualified small wind energy property, and

“(iii) designed to receive electrical energy, store such energy, and to convert such energy to electricity for use by the taxpayer.”.

(d) CREDIT MADE REFUNDABLE. —

(1) CREDIT MOVED TO SUBPART RELATING TO REFUNDABLE CREDITS. — The Internal Revenue Code of 1986 is amended —

(A) by redesignating section 25D as section 36D, and

(B) by moving section 36D (as amended by subsections (a) and (b) and as redesignated by subparagraph (A)) from subpart A of part IV of subchapter A of chapter 1 to the location immediately before section 37 in subpart C of part IV of subchapter A of chapter 1 (as amended by section 323).

(2) CONFORMING AMENDMENTS. —

(A) Section 36C(e)(1) of the Internal Revenue Code of 1986 (as redesignated by section 323) is amended by striking “25D(e)” and inserting “36D(e)”.

(B) Section 45(d)(1) of such Code is amended by striking “section 25D” and inserting “section 36D”.

(C) Section 1016(a)(34) of such Code is amended —

(i) by striking “section 25D(f)” and inserting “section 36D(f)”, and

(ii) by striking “under section 25D” and inserting “under section 36D”.

(D) The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by striking the item relating to section 25D.

(E) Paragraph (2) of section 1324(b) of title 31, United States Code, as amended by this Act, is amended by inserting “36D,” after “36C,”.

(F) The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as amended by this Act, is amended by inserting after the item relating to section 36C the following new item:

“36D. Residential energy efficient property.”.

(e) EFFECTIVE DATE. — The amendments made by this section shall apply to property placed in service after December 31, 2016.

* * *

Subtitle B — Helping Americans Move Beyond Oil

SEC. 411. PERMANENT EXTENSION, INCREASE, AND REFUNDABILITY OF CREDIT FOR QUALIFIED NEW PLUG IN ELECTRIC DRIVE MOTOR VEHICLES.

(a) REPEAL OF PHASEOUT. — Section 30D of the Internal Revenue Code of 1986 is amended by striking subsection (e).

(b) EXTENSION FOR 2-WHEELED VEHICLES. — Subparagraph (E) of section 30D(g)(3) of the Internal Revenue Code of 1986 is amended to read as follows:

“(E) is acquired —

“(i) in the case of a vehicle that has 2 wheels, after December 31, 2014, and

“(ii) in the case of a vehicle that has 3 wheels, after December 31, 2017.”.

(c) INCREASE IN DOLLAR LIMITATION FOR BATTERY CAPACITY. — Paragraph (3) of section 30D(b) of the Internal Revenue Code of 1986 is amended by striking “$5,000” and inserting “$7,500”.

(d) PERSONAL CREDIT MADE REFUNDABLE. —

(1) IN GENERAL. — Section 30D(c)(2) of the Internal Revenue Code of 1986 is amended by striking “subpart A” and inserting “subpart C”.

(2) TECHNICAL AMENDMENT. — Paragraph (2) of section 1324(b) of title 31, United States Code, as amended by this Act, is amended by inserting “30D(c)(2),” after “36D,”.

(e) EFFECTIVE DATE. — The amendments made by this section shall apply to vehicles acquired after December 31, 2016.

SEC. 412. PERMANENT EXTENSION OF CREDIT FOR HYBRID MEDIUM AND HEAVY-DUTY TRUCKS.

(a) IN GENERAL. — Section 30B(k) of the Internal Revenue Code of 1986 is amended —

(1) by striking “after” in the matter before paragraph (1),

(2) by inserting “after” before “December” each place it appears, and

(3) in paragraph (3), by inserting “and before the date of the enactment of the Energy Policy Modernization Act of 2017” after “December 31, 2009,”.

(b) EFFECTIVE DATE. — The amendments made by this section shall apply to property purchased after the date of the enactment of this Act.

SEC. 413. EXTENSION OF SECOND GENERATION BIOFUEL PRODUCER CREDIT.

(a) IN GENERAL. — Clause (i) of section 40(b)(6)(J) of the Internal Revenue Code of 1986 is amended by striking “January 1, 2017” and inserting “January 1, 2025”.

(b) EFFECTIVE DATE. — The amendment made by this subsection shall apply to qualified second generation biofuel production after December 31, 2016.

SEC. 414. EXTENSION OF SPECIAL ALLOWANCE FOR SECOND GENERATION BIOFUEL PLANT PROPERTY.

(a) IN GENERAL. — Subparagraph (D) of section 168(l)(2) of the Internal Revenue Code of 1986 is amended to read as follows:

“(D) the construction of which begins before January 1, 2025.”.

(b) EFFECTIVE DATE. — The amendment made by this section shall apply to property placed in service after December 31, 2016.

SEC. 415. EXTENSION AND MODIFICATION OF THE ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

(a) IN GENERAL. — Section 30C of the Internal Revenue Code of 1986 is amended —

(1) by amending subsection (c) to read as follows:

“(c) QUALIFIED ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY. — For purposes of this section, the term ‘qualified alternative fuel vehicle refueling property’ means any of the following:

“(1) A pump or blender pump that is capable of dispensing a fuel mixture that is at least 50 percent ethanol.

“(2) A pump or blender pump that is capable of dispensing a fuel mixture that is at least 50 percent biodiesel or renewable diesel.

“(3) A pump that is capable of dispensing a biofuel and petroleum blend, at least 50 percent of which is a renewable fuel (as defined in section 211(o)(1) of the Clean Air Act (42 U.S.C. 7545(o)(1))).

“(4) A direct current electric charging station with a power rating of at least 40 kilowatts.

“(5) An alternating current electric charging station with a voltage rating between 208 volts and 240 volts and a power rating between 2.5 kilowatts and 20 kilowatts.

“(6) Hydrogen fuel-cell refilling infrastructure. “(7) Any other infrastructure that the Administrator may prescribe by regulation that is capable of dispensing a fuel that is not less than a 50-percent mixture of a renewable fuel (as defined in section 211(o)(1) of the Clean Air Act (42 U.S.C. 7545(o)(1))).”,

(2) in subsection (e) —

(A) by striking paragraphs (5) through (7), and

(B) by inserting after paragraph (4) the following new paragraph:

“(5) RECAPTURE RULES. — The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit.”, and

(3) by amending subsection (g) to read as follows:

“(g) TERMINATION. — This section shall not apply to any property placed in service after December 31, 2024.”.

(4) EFFECTIVE DATE. — The amendments made by this section shall apply to property placed in service after December 31, 2016.

* * *

Subtitle B — Ending Fossil Fuel Subsidies

SEC. 511. TERMINATION OF VARIOUS TAX EXPENDITURES RELATING TO FOSSIL FUELS.

(a) IN GENERAL. — Subchapter C of chapter 80 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

“SEC. 7875. TERMINATION OF CERTAIN PROVISIONS RELATING TO FOSSIL-FUEL INCENTIVES.

“(a) IN GENERAL. — The following provisions shall not apply to taxable years beginning after the date of the enactment of this section:

“(1) Section 43 (relating to enhanced oil recovery credit).

“(2) Section 45I (relating to credit for producing oil and natural gas from marginal wells).

“(3) Section 45K (relating to credit for producing fuel from a nonconventional source).

“(4) Section 193 (relating to tertiary injectants).

“(5) Section 199(d)(9) (relating to special rule for taxpayers with oil related qualified production activities income).

“(6) Section 461(i)(2) (relating to special rule for spudding of oil or natural gas wells).

“(7) Section 469(c)(3) (relating to working interests in oil and natural gas property).

“(8) Section 613A (relating to limitations on percentage depletion in case of oil and natural gas wells).

“(9) Section 617 (relating to deduction and recapture of certain mining exploration expenditures).

“(b) PROVISIONS RELATING TO PROPERTY. — The following provisions shall not apply to property placed in service after the date of the enactment of this section:

“(1) Subparagraph (C)(iii) of section 168(e)(3) (relating to classification of certain property).

“(2) Section 169 (relating to amortization of pollution control facilities) with respect to any atmospheric pollution control facility.

“(c) PROVISIONS RELATING TO COSTS AND EXPENSES. — The following provisions shall not apply to costs or expenses paid or incurred after the date of the enactment of this section:

“(1) Section 179B (relating to deduction for capital costs incurred in complying with Environmental Protection Agency sulfur regulations).

“(2) Section 263(c) (relating to intangible drilling and development costs) with respect to costs in the case of oil and natural gas wells.

“(3) Section 468 (relating to special rules for mining and solid waste reclamation and closing costs).

“(d) 5-YEAR CARRYBACK FOR MARGINAL OIL AND NATURAL GAS WELL PRODUCTION CREDIT. — Section 39(a)(3) (relating to 5-year carryback for marginal oil and natural gas well production credit) shall not apply to credits determined in taxable years beginning after the date of the enactment of the this section.

“(e) CREDIT FOR CARBON DIOXIDE SEQUESTRATION. — Section 45Q (relating to credit for carbon dioxide sequestration) shall not apply to carbon dioxide captured after the date of the enactment of this section.

“(f) ALLOCATED CREDITS. — No new credits shall be certified under section 48A (relating to qualifying advanced coal project credit) or section 48B (relating to qualifying gasification project credit) after the date of the enactment of this section.

“(g) ARBITRAGE BONDS. — Section 148(b)(4) (relating to safe harbor for prepaid natural gas) shall not apply to obligations issued after the date of the enactment of this section.”.

(b) CONFORMING AMENDMENT. — The table of sections for subchapter C of chapter 90 is amended by adding at the end the following new item:

“Sec. 7875. Termination of certain provisions.”.

SEC. 512. UNIFORM 7-YEAR AMORTIZATION FOR GEOLOGICAL AND GEOPHYSICAL EXPENDITURES.

(a) IN GENERAL. — Section 167(h) of the Internal Revenue Code of 1986 is amended —

(1) by striking “24-month period” each place it appears in paragraphs (1) and (4) and inserting “7year period”, and

(2) by striking paragraph (5).

(b) EFFECTIVE DATE. — The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.

SEC. 513. NATURAL GAS GATHERING LINES TREATED AS 15YEAR PROPERTY.

(a) IN GENERAL. — Subparagraph (E) of section 168(e)(3) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of clause (viii), by striking the period at the end of clause (ix) and inserting “, and”, and by adding at the end the following new clause:

“(x) any natural gas gathering line the original use of which commences with the taxpayer after the date of the enactment of this clause.”.

(b) ALTERNATIVE SYSTEM. — The table contained in section 168(g)(3)(B) of the Internal Revenue Code of 1986 is amended by inserting after the item relating to subparagraph (E)(ix) the following new item:

“(E)(x)

22”.

(c) CONFORMING AMENDMENT. — Clause (iv) of section 168(e)(3)(C) of the Internal Revenue Code of 1986 is amended by inserting “and on or before the date of the enactment of subparagraph (E)(x)” after “April 11, 2005”.

(d) EFFECTIVE DATE. —

(1) IN GENERAL. — The amendments made by this section shall apply to property placed in service on and after the date of the enactment of this Act.

(2) EXCEPTION. — The amendments made by this section shall not apply to any property with respect to which the taxpayer or a related party has entered into a binding contract for the construction thereof on or before the date of the enactment of this Act, or, in the case of self-constructed property, has started construction on or before such date.

SEC. 514. REPEAL OF DOMESTIC MANUFACTURING DEDUCTION FOR HARD MINERAL MINING.

(a) IN GENERAL. — Subparagraph (B) of section 199(c)(4) of the Internal Revenue Code of 1986 is amended by striking “or” at the end of clause (ii), by striking the period at the end of clause (iii) and inserting “, or”, and by adding at the end the following new clause:

“(iv) the mining of any hard mineral.”.

(b) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

SEC. 515. LIMITATION ON DEDUCTION FOR INCOME ATTRIBUTABLE TO DOMESTIC PRODUCTION OF OIL, NATURAL GAS, OR PRIMARY PRODUCTS THEREOF.

(a) DENIAL OF DEDUCTION. — Paragraph (4) of section 199(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

“(E) SPECIAL RULE FOR OIL, NATURAL GAS, AND COAL INCOME. — The term ‘domestic production gross receipts’ shall not include gross receipts from the production, refining, processing, transportation, or distribution of oil, natural gas, or coal, or any primary product (within the meaning of subsection (d)(9)) thereof.”.

(b) EFFECTIVE DATE. — The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

SEC. 516. TERMINATION OF LAST-IN, FIRST-OUT METHOD OF INVENTORY FOR OIL, NATURAL GAS, AND COAL COMPANIES.

(a) IN GENERAL. — Section 472 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

“(h) TERMINATION FOR OIL, NATURAL GAS, AND COAL COMPANIES. — Subsection (a) shall not apply to any taxpayer that is in the trade or business of the production, refining, processing, transportation, or distribution of oil, natural gas, or coal for any taxable year beginning after the date of enactment of this subsection.”.

(b) ADDITIONAL TERMINATION. — Section 473 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

“(h) TERMINATION FOR OIL, NATURAL GAS, AND COAL COMPANIES. — This section shall not apply to any taxpayer that is in the trade or business of the production, refining, processing, transportation, or distribution of oil, natural gas, or coal for any taxable year beginning after the date of enactment of this subsection.”.

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after the date of enactment of this Act.

SEC. 517. REPEAL OF PERCENTAGE DEPLETION FOR COAL AND HARD MINERAL FOSSIL FUELS.

(a) IN GENERAL. — Section 613 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

“(f) TERMINATION WITH RESPECT TO COAL AND HARD MINERAL FOSSIL FUELS. — In the case of coal, lignite, and oil shale (other than oil shale described in subsection (b)(5)), the allowance for depletion shall be computed without reference to this section for any taxable year beginning after the date of the enactment of this subsection.”.

(b) CONFORMING AMENDMENTS. —

(1) COAL AND LIGNITE. — Section 613(b)(4) of the Internal Revenue Code of 1986 is amended by striking “coal, lignite,”.

(2) OIL SHALE. — Section 613(b)(2) of such Code is amended to read as follows:

“(2) 15 PERCENT. — If, from deposits in the United States, gold, silver, copper, and iron ore.”.

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

SEC. 518. TERMINATION OF CAPITAL GAINS TREATMENT FOR ROYALTIES FROM COAL.

(a) IN GENERAL. — Subsection (c) of section 631 of the Internal Revenue Code of 1986 is amended —

(1) by striking “coal (including lignite), or iron ore” and inserting “iron ore”,

(2) by striking “coal or iron ore” each place it appears and inserting “iron ore”,

(3) by striking “iron ore or coal” each place it appears and inserting “iron ore”, and

(4) by striking “COAL OR” in the heading.

(b) CONFORMING AMENDMENT. — The heading of section 631 of the Internal Revenue Code of 1986 is amended by striking “, COAL,”.

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to dispositions after the date of the enactment of this Act.

SEC. 519. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO OIL, NATURAL GAS, AND COAL COMPANIES WHICH ARE DUAL CAPACITY TAXPAYERS.

(a) IN GENERAL. — Section 901 of the Internal Revenue Code of 1986 is amended by redesignating subsection (n) as subsection (o) and by inserting after subsection (m) the following new subsection:

“(n) SPECIAL RULES RELATING TO OIL, NATURAL GAS, AND COAL COMPANIES WHICH ARE DUAL CAPACITY TAXPAYERS. —

“(1) GENERAL RULE. — Notwithstanding any other provision of this chapter, any amount paid or accrued to a foreign country or possession of the United States for any period by a dual capacity taxpayer which is in the trade or business of the production, refining, processing, transportation, or distribution of oil, natural gas, or coal shall not be considered a tax —

“(A) if, for such period, the foreign country or possession does not impose a generally applicable income tax, or

“(B) to the extent such amount exceeds the amount (determined in accordance with regulations) which —

“(i) is paid by such dual capacity taxpayer pursuant to the generally applicable income tax imposed by the country or possession, or

“(ii) would be paid if the generally applicable income tax imposed by the country or possession were applicable to such dual capacity taxpayer.

Nothing in this paragraph shall be construed to imply the proper treatment of any such amount not in excess of the amount determined under subparagraph (B).

“(2) DUAL CAPACITY TAXPAYER. — For purposes of this subsection, the term ‘dual capacity taxpayer’ means, with respect to any foreign country or possession of the United States, a person who —

“(A) is subject to a levy of such country or possession, and

“(B) receives (or will receive) directly or indirectly a specific economic benefit (as determined in accordance with regulations) from such country or possession.

“(3) GENERALLY APPLICABLE INCOME TAX. — For purposes of this subsection —

“(A) IN GENERAL. — The term ‘generally applicable income tax’ means an income tax (or a series of income taxes) which is generally imposed under the laws of a foreign country or possession on income derived from the conduct of a trade or business within such country or possession.

“(B) EXCEPTIONS. — Such term shall not include a tax unless it has substantial application, by its terms and in practice, to —

“(i) persons who are not dual capacity taxpayers, and

“(ii) persons who are citizens or residents of the foreign country or possession.”.

(b) EFFECTIVE DATE. —

(1) IN GENERAL. — The amendments made by this section shall apply to taxes paid or accrued in taxable years beginning after the date of the enactment of this Act.

(2) CONTRARY TREATY OBLIGATIONS UPHELD. — The amendments made by this section shall not apply to the extent contrary to any treaty obligation of the United States.

SEC. 520. INCREASE IN OIL SPILL LIABILITY TRUST FUND FINANCING RATE.

(a) IN GENERAL. — Subparagraph (B) of section 4611(c)(2) of the Internal Revenue Code of 1986 is amended —

(1) by striking “and” at the end of clause (i),

(2) in clause (ii) —

(A) by inserting “and before January 1, 2018,” after “December 31, 2016,”, and

(B) by striking the period and inserting “, and”, and

(3) by adding at the end the following new clause:

“(iii) in the case of crude oil received or petroleum products entered after December 31, 2017, 10 cents a barrel.”.

(b) EFFECTIVE DATE. — The amendments made by this section shall apply to crude oil received and petroleum products entered after the date of the enactment of this Act.

SEC. 521. APPLICATION OF CERTAIN ENVIRONMENTAL TAXES TO SYNTHETIC CRUDE OIL.

(a) IN GENERAL. — Paragraph (1) of section 4612(a) of the Internal Revenue Code of 1986 is amended to read as follows:

“(1) CRUDE OIL. —

“(A) IN GENERAL. — The term ‘crude oil’ includes crude oil condensates, natural gasoline, and synthetic crude oil.

“(B) SYNTHETIC CRUDE OIL. — For purposes of subparagraph (A), the term ‘synthetic crude oil’ means any bitumen and bituminous mixtures, any oil manufactured from bitumen and bituminous mixtures, and any liquid fuel manufactured from coal.”.

(b) EFFECTIVE DATE. — The amendment made by this section shall apply to oil and petroleum products received or entered during calendar quarters beginning more than 60 days after the date of the enactment of this Act.

SEC. 522. DENIAL OF DEDUCTION FOR REMOVAL COSTS AND DAMAGES FOR CERTAIN OIL SPILLS.

(a) IN GENERAL. — Part IX of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

“SEC. 280I. EXPENSES FOR REMOVAL COSTS AND DAMAGES RELATING TO CERTAIN OIL SPILL LIABILITY.

“No deduction shall be allowed under this chapter for any amount paid or incurred with respect to any costs or damages for which the taxpayer is liable under section 1002 of the Oil Pollution Act of 1990 (33 U.S.C. 2702).”.

(b) CLERICAL AMENDMENT. — The table of sections for part IX of subchapter B of chapter 1 of such Code is amended by adding at the end the following new item:

“Sec. 280I. Expenses for removal costs and damages relating to certain oil spill liability.”.

(c) EFFECTIVE DATE. — The amendments made by this section shall apply with respect to any liability arising in taxable years ending after the date of the enactment of this Act.

SEC. 523. TAX ON CRUDE OIL AND NATURAL GAS PRODUCED FROM THE OUTER CONTINENTAL SHELF IN THE GULF OF MEXICO.

(a) IN GENERAL. — Subtitle E of the Internal Revenue Code of 1986 is amended by adding at the end the following new chapter:

“CHAPTER 56 — TAX ON SEVERANCE OF CRUDE OIL AND NATURAL GAS
FROM THE OUTER CONTINENTAL SHELF IN THE GULF OF MEXICO

“Sec. 5901. Imposition of tax.

“Sec. 5902. Taxable crude oil or natural gas and removal price.

“Sec. 5903. Special rules and definitions.

“SEC. 5901. IMPOSITION OF TAX.

“(a) IN GENERAL. — In addition to any other tax imposed under this title, there is hereby imposed a tax equal to 13 percent of the removal price of any taxable crude oil or natural gas removed from the premises during any taxable period.

“(b) CREDIT FOR FEDERAL ROYALTIES PAID. —

“(1) IN GENERAL. — There shall be allowed as a credit against the tax imposed by subsection (a) with respect to the production of any taxable crude oil or natural gas an amount equal to the aggregate amount of royalties paid under Federal law with respect to such production.

“(2) LIMITATION. — The aggregate amount of credits allowed under paragraph (1) to any taxpayer for any taxable period shall not exceed the amount of tax imposed by subsection (a) for such taxable period.

“(c) TAX PAID BY PRODUCER. — The tax imposed by this section shall be paid by the producer of the taxable crude oil or natural gas.

“SEC. 5902. TAXABLE CRUDE OIL OR NATURAL GAS AND REMOVAL PRICE.

“(a) TAXABLE CRUDE OIL OR NATURAL GAS. — For purposes of this chapter, the term ‘taxable crude oil or natural gas’ means crude oil or natural gas which is produced from Federal submerged lands on the outer Continental Shelf in the Gulf of Mexico pursuant to a lease entered into with the United States which authorizes the production.

“(b) REMOVAL PRICE. — For purposes of this chapter —

“(1) IN GENERAL. — Except as otherwise provided in this subsection, the term ‘removal price’ means —

“(A) in the case of taxable crude oil, the amount for which a barrel of such crude oil is sold, and

“(B) in the case of taxable natural gas, the amount per 1,000 cubic feet for which such natural gas is sold.

“(2) SALES BETWEEN RELATED PERSONS. — In the case of a sale between related persons, the removal price shall not be less than the constructive sales price for purposes of determining gross income from the property under section 613.

“(3) OIL OR NATURAL GAS REMOVED FROM PROPERTY BEFORE SALE. — If crude oil or natural gas is removed from the property before it is sold, the removal price shall be the constructive sales price for purposes of determining gross income from the property under section 613.

“(4) REFINING BEGUN ON PROPERTY. — If the manufacture or conversion of crude oil into refined products begins before such oil is removed from the property —

“(A) such oil shall be treated as removed on the day such manufacture or conversion begins, and

“(B) the removal price shall be the constructive sales price for purposes of determining gross income from the property under section 613.

“(5) PROPERTY. — The term ‘property’ has the meaning given such term by section 614.

“SEC. 5903. SPECIAL RULES AND DEFINITIONS.

“(a) ADMINISTRATIVE REQUIREMENTS. —

“(1) WITHHOLDING AND DEPOSIT OF TAX. — The Secretary shall provide for the withholding and deposit of the tax imposed under section 5901 on a quarterly basis.

“(2) RECORDS AND INFORMATION. — Each taxpayer liable for tax under section 5901 shall keep such records, make such returns, and furnish such information (to the Secretary and to other persons having an interest in the taxable crude oil or natural gas) with respect to such oil as the Secretary may by regulations prescribe.

“(3) TAXABLE PERIODS; RETURN OF TAX. —

“(A) TAXABLE PERIOD. — Except as provided by the Secretary, each calendar year shall constitute a taxable period.

“(B) RETURNS. — The Secretary shall provide for the filing, and the time for filing, of the return of the tax imposed under section 5901.

“(b) DEFINITIONS. — For purposes of this chapter —

“(1) PRODUCER. — The term ‘producer’ means the holder of the economic interest with respect to the crude oil or natural gas.

“(2) CRUDE OIL. — The term ‘crude oil’ includes crude oil condensates and natural gasoline.

“(3) PREMISES AND CRUDE OIL PRODUCT. — The terms ‘premises’ and ‘crude oil product’ have the same meanings as when used for purposes of determining gross income from the property under section 613.

“(c) ADJUSTMENT OF REMOVAL PRICE. — In determining the removal price of oil or natural gas from a property in the case of any transaction, the Secretary may adjust the removal price to reflect clearly the fair market value of oil or natural gas removed.

“(d) REGULATIONS. — The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this chapter.”.

(b) DEDUCTIBILITY OF TAX. — The first sentence of section 164(a) of the Internal Revenue Code of 1986 is amended by inserting after paragraph (4) the following new paragraph:

“(5) The tax imposed by section 5901(a) (after application of section 5901(b)) on the severance of crude oil or natural gas from the outer Continental Shelf in the Gulf of Mexico.”.

(c) CLERICAL AMENDMENT. — The table of chapters for subtitle E is amended by adding at the end the following new item:

“CHAPTER 56. Tax on severance of crude oil and natural gas
from the outer Continental Shelf in the Gulf of Mexico.”.

(d) EFFECTIVE DATE. — The amendments made by this section shall apply to crude oil or natural gas removed after December 31, 2017.

SEC. 524. REPEAL OF CORPORATE INCOME TAX EXEMPTION FOR PUBLICLY TRADED PARTNERSHIPS WITH QUALIFYING INCOME AND GAINS FROM ACTIVITIES RELATING TO FOSSIL FUELS.

(a) IN GENERAL. — Section 7704(d)(1) of the Internal Revenue Code of 1986 is amended —

(1) by striking subparagraph (E),

(2) by redesignating subparagraphs (F) and

(A) as subparagraphs (E) and (F), respectively, and

(3) by striking the flush matter at the end.

(b) CONFORMING AMENDMENT. — Section 988(c)(1)(E)(iii)(III) of the Internal Revenue Code of 1986 is amended by striking “or (G)” and inserting “or (F)”.

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

* * *

TITLE VIII — MISCELLANEOUS

SEC. 801. TAX AMENDMENTS REVIEW.

Not later than December 31, 2035, the Secretary, in consultation with the Secretary of the Treasury, shall —

(1) review the amendments to the Internal Revenue Code of 1986 made by this Act to determine if the amendments are effective and should continue; and

(2) report to Congress any recommended modifications to the amendments.