S. 4970 - Hydrogen Utilization and Sustainability Act

116TH CONGRESS
2D SESSION

S. 4970

To amend the Internal Revenue Code of 1986
to expand the renewable electricity production credit
to include electricity produced from hydrogen.

IN THE SENATE OF THE UNITED STATES

DECEMBER 7, 2020

Mr. YOUNG (for himself and Mr. WHITEHOUSE)
introduced the following bill; which was read twice
and referred to the Committee on _____

A BILL

To amend the Internal Revenue Code of 1986 to expand the renewable electricity production credit to include electricity produced from hydrogen.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the "Hydrogen Utilization and Sustainability Act".

SEC. 2. EXPANSION OF RENEWABLE ELECTRICITY PRODUCTION CREDIT TO INCLUDE ELECTRICITY PRODUCED FROM HYDROGEN.

(a) IN GENERAL. — Section 45 of the Internal Revenue Code of 1986 is amended —

(1) in subsection (c) —

(A) in paragraph (1) —

(i) in subparagraph (H), by striking "and" at the end,

(ii) in subparagraph (I), by striking the period at the end and inserting ", and", and

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

"(J) qualified hydrogen.", and

(B) by adding at the end the following new paragraph:

"(11) QUALIFIED HYDROGEN. — The term 'qualified hydrogen' means, with respect to any taxable year, hydrogen fuel which has been certified prior to such year by Secretary of Energy (in consultation with the Secretary) as having non-positive carbon intensity, as determined based on a lifecycle analysis.", and

(2) in subsection (d), by adding at the end the following new paragraph:

"(12) HYDROGEN FACILITY. —

"(A) IN GENERAL. — In the case of a facility using qualified hydrogen to produce electricity, the term 'qualified facility' means any facility owned by the taxpayer —

"(i) for which not less than 70 percent of the electricity produced at such facility during any taxable year is attributable to the use of qualified hydrogen, and

"(ii)(I) the construction of which begins before January 1, 2022, or

"(II) which —

"(aa) was originally placed in service before the date of enactment of this paragraph and, prior to the modification described in item (bb), did not use hydrogen to produce electricity, and "(bb) before January 1, 2022, is modified to use qualified hydrogen to produce electricity.

"(B) MODIFICATION. — For purposes of subparagraph (A)(ii)(II)(bb), a facility shall be treated as modified before January 1, 2022, if the construction of such modification begins before such date.

"(C) ELECTION. — If the owner of the facility described in subparagraph (A) makes an election under this subparagraph in such time and manner as the Secretary may prescribe by regulations, the credit under this section —

"(i) shall be allowable to the person that leases and operates such facility, and

"(ii) shall not be allowable to the owner of such facility.

"(D) SPECIAL RULES. —

"(i) EXCLUSION OF ELECTRICITY NOT PRODUCED FROM QUALIFIED HYDROGEN. — For purposes of subsection (a)(2), the total amount of kilowatt hours of electricity produced by the taxpayer at a qualified facility described in subparagraph (A) for any taxable year shall be equal to the product of —

"(I) the total amount of kilowatt hours of electricity produced by the taxpayer at such facility for such taxable year, multiplied by "(II) an amount equal to the quotient of —

"(aa) the amount of qualified hydrogen used at such facility to produce such electricity (as determined on the basis of Btu content), divided by

"(bb) the total amount of fuel used at such facility to produce such electricity (as determined on the basis of Btu content).

"(ii) ADJUSTMENT FOR NEGATIVE CARBON INTENSITY. —

"(I) IN GENERAL. — For purposes of subsection (a)(2), the total amount of kilowatt hours of electricity produced by the taxpayer at a qualified facility described in subparagraph (A) for any taxable year (as determined after application of clause (i)) shall be increased by an amount equal to the applicable percentage of such total amount.

"(II) APPLICABLE PERCENTAGE. — For purposes of subclause (I), the applicable percentage for a qualified facility for any taxable year is the amount (expressed as a percentage) equal to the product of —

"(aa) 1 percentage point, multiplied by

"(bb) an amount equal to the quotient of —

"(AA) the total amount of carbon dioxide (expressed in metric tons) which is removed from the atmosphere during such taxable year through the use of qualified hydrogen (as determined pursuant to a certification of negative carbon intensity for such hydrogen under subsection (c)(11)) at such qualified facility, divided by "(BB) 1,000.".

(b) EFFECTIVE DATE. — The amendments made by this section shall take effect on the date of enactment of this Act.