S.Amdt. 3587

SA 3587. Mr. WHITEHOUSE submitted an amendment intended to be
proposed to amendment SA 3464 submitted by Mr. Thune (for himself and
Mr. Nelson) to the bill H.R. 636, to amend the Internal Revenue Code of
1986 to permanently extend increased expensing limitations, and for
other purposes; which was ordered to lie on the table; as follows:

At the appropriate place, insert the following:

SEC. ___. GREENHOUSE GAS USE AND REUSE CREDIT.

(a) Short Title.--This section may be cited as the
``Greenhouse Gas Biological Use and Reuse Act of 2016''.
(b) In General.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new section:

``SEC. 45S. CREDIT FOR GREENHOUSE GAS USE AND REUSE.

``(a) Allowance of Credit.--For purposes of section 38, the
greenhouse gas use and reuse credit determined under this
section for any taxable year is an amount equal to the sum
of--
``(1) 30 percent of the qualified investment for such
taxable year with respect to greenhouse gas use and reuse
equipment, plus
``(2) the applicable amount (as determined under subsection
(g)) per metric ton of carbon dioxide equivalent of
greenhouse gas emissions--
``(A) for a facility--
``(i) in which greenhouse gas use and reuse equipment has
been placed in service,
``(ii) for which the Secretary has determined that the
property described in clause (i) satisfies the requirements
under subsection (b)(2), and
``(iii) which is located within the United States (within
the meaning of section 638(1)) or a possession of the United
States (within the meaning of section 638(2)), and
``(B) which the taxpayer demonstrates, based upon an
analysis of lifecycle greenhouse gas emissions (as described
in section 211(o)(1)(H) of the Clean Air Act (42 U.S.C.
7545(o)(1)(H)), as in effect on the date of the enactment of
this section) and subject to such requirements as the
Secretary, in consultation with the Secretary of Energy,
determines appropriate, were avoided through the use of the
property described in subparagraph (A)(i).
``(b) Qualified Investment With Respect to Greenhouse Gas
Use and Reuse Equipment.--
``(1) In general.--For purposes of subsection (a)(1), the
qualified investment with respect to greenhouse gas use and
reuse equipment for any taxable year is the basis of any
greenhouse gas use and reuse equipment placed in service at a
facility by the taxpayer during such taxable year.

[[Page S1863]]

``(2) Greenhouse gas use and reuse equipment.--The term
`greenhouse gas use and reuse equipment' means property--
``(A) installed in an industrial facility which is owned by
the taxpayer,
``(B) which captures and diverts qualified greenhouse
gases,
``(C) which results in a significant reduction in the
greenhouse gas emissions rate for such facility as compared
to such rate prior to the installation of such property
through the use and reuse of the qualified greenhouse gases
captured and diverted at such facility,
``(D) with respect to which depreciation is allowable,
``(E) which is constructed, reconstructed, erected, or
acquired by the taxpayer,
``(F) the original use of which commences with the
taxpayer, and
``(G) which is placed in service before the date which is
15 years after the date of the enactment of the Greenhouse
Gas Biological Use and Reuse Act of 2016.
``(3) Capture, transportation, and storage
infrastructure.--For purposes of paragraph (2), greenhouse
gas use and reuse equipment shall include infrastructure for
the purification, transportation, and storage of qualified
greenhouse gas, such as pipelines, wells, and monitoring
systems.
``(c) Certain Progress Expenditure Rules Made Applicable.--
Rules similar to the rules of subsections (c)(4) and (d) of
section 46 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990) shall
apply for purposes of subsection (a)(1).
``(d) 10-year Limitation on Credit for Use and Reuse.--
``(1) In general.--For purposes of paragraph (2) of
subsection (a), the credit allowed under such subsection
shall be not be applicable to any emissions avoided through
the use of greenhouse gas use and reuse equipment installed
at a facility following the applicable credit period.
``(2) Applicable credit period.--For purposes of paragraph
(1), the `applicable credit period' is the 10-year period
beginning in the first taxable year in which a credit is
allowed under paragraph (2) of subsection (a) for such
facility.
``(e) Recapture.--The Secretary, in consultation with the
Secretary of Energy, shall provide for recapturing the
benefit of any credit allowable under subsection (a) with
respect to any project which fails to attain or maintain the
applicable requirements under this section.
``(f) Person to Whom Credit Is Allowable.--
``(1) In general.--Except as provided in paragraph (2) or
in regulations prescribed by the Secretary, for purposes of
paragraph (2) of subsection (a), any credit under such
subsection shall be allowed to the taxpayer who--
``(A) captures and diverts the qualified greenhouse gas,
and
``(B) through contract or otherwise, uses or reuses the
qualified greenhouse gas in a manner meeting the requirements
of subparagraph (B) of subsection (a)(2).
``(2) Election to allow credit to person disposing of
carbon dioxide.--If the person described in paragraph (1)
makes an election under this paragraph in such manner as the
Secretary may prescribe by regulations, the credit under this
section--
``(A) shall be allowable to the person that uses or reuses
the qualified greenhouse gas in a manner meeting the
requirements of subparagraph (B) of subsection (a)(2), and
``(B) shall not be allowable to the person described in
paragraph (1).
``(g) Applicable Amount.--
``(1) In general.--For purposes of paragraph (2) of
subsection (a), the applicable amount is--
``(A) for calendar year 2016, $45, and
``(B) for any calendar year beginning after 2016, the sum
of--
``(i) the product of the amount in effect under this
subparagraph for the preceding calendar year and 102 percent,
and
``(ii) the inflation adjustment amount determined under
paragraph (2).
``(2) Inflation adjustment amount.--The inflation
adjustment amount for any calendar year shall be an amount
(not less than zero) equal to the product of--
``(A) the amount determined under paragraph (1)(B)(i), and
``(B) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 2015'
for `calendar year 1992' in subparagraph (B) thereof.
``(3) Rounding.--The applicable amount determined under
this subsection shall be rounded to the nearest dollar.
``(h) Definitions.--In this section:
``(1) Carbon dioxide equivalent.--The term `carbon dioxide
equivalent' means, with respect to a greenhouse gas, the
quantity of such gas that has a global warming potential
equivalent to 1 metric ton of carbon dioxide, as determined
by the Administrator of the Environmental Protection Agency.
``(2) Greenhouse gas.--The term `greenhouse gas' has the
same meaning given such term under section 211(o)(1)(G) of
the Clean Air Act, as in effect on the date of the enactment
of this section.
``(3) Qualified greenhouse gas.--The term `qualified
greenhouse gas' means a greenhouse gas captured from an
industrial source which--
``(A) would otherwise be released into the atmosphere as
industrial emission of greenhouse gas, and
``(B) is measured at the source of capture and verified at
the point of sequestration.
``(4) Use and reuse.--The term `use and reuse' means a
process consisting of the biofixation of greenhouse gas
through photosynthesis or chemosynthesis, such as through the
growing of algae or bacteria.''.
(c) Conforming Amendments.--
(1) Table of sections.--The table of sections for subpart D
of part IV of subchapter A of chapter 1 of such Code is
amended by adding at the end the following new item:

``Sec. 45S. Credit for greenhouse gas use and reuse.''.
(2) General business credit.--Section 38(b) of such Code is
amended by striking ``plus'' at the end of paragraph (35), by
striking the period at the end of paragraph (36) and
inserting ``, plus'', and by adding at the end the following
new paragraph:
``(37) the credit for greenhouse gas use and reuse
determined under section 45S(a),''.
(d) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
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