Inflation Reduction Act of 2022, H.R. 5376 — Congressional Record, Senate, August 6, 2022
Summary
This is S4070 of the Congressional Record, Senate, August 6, 2022, in a document titled Inflation Reduction Act of 2022, H.R. 5376. Mr. Schumer moves to proceed to H.R. 5376, a bill to provide for reconciliation pursuant to title II of S. Con. Res. 14, and states that the bill will reduce inflation, lower costs, and fight climate change. The Senate votes on the motion to proceed, Rollcall Vote No. 287 Leg., with yeas 50 and nays 50, and the Vice President votes in the affirmative, so the motion is agreed to. Mr. Schumer then calls up amendment No. 5194, as modified, in the nature of a substitute, and the amendment text begins with Title I, Committee on Finance, Subtitle A, Deficit Reduction.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Inflation Reduction Act of 2022, H.R. 5376 — Congressional Record, Senate, August 6, 2022.”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/crec-crec-2022-08-06-crec-2022-08-06-pt1-pgs4070-2-0997b120cb/
, SHA-256 2ef7c72a6294331de403f4e85c4ec91bad5976965867e706c0c3926ab79797c4.Full text
S4070 CONGRESSIONAL RECORD — SENATE August 6, 2022
taxes owed that are not collected could duce—reduce—the deficit. It will help Van Hollen Warnock Whitehouse
Warner Warren Wyden
be as much as a trillion dollars per every citizen in this country and make
year. America a much better place. NAYS—50
We believe that the Agency ought to The time is now to move forward Barrasso Graham Portman
have the resources it needs to go after with a big, bold package for the Amer- Blackburn Grassley Risch
Blunt Hagerty Romney
sophisticated, lawbreaking tax cheats ican people; to fight inflation and Boozman Hawley Rounds
at the top. And I know that my col- make it easier for people to afford ev- Braun Hoeven Rubio
leagues on the Finance Committee join erything from trips to the doctor’s of- Burr Hyde-Smith Sasse
me in saying: We are going to watch- Capito Inhofe
fice to trips to the pharmacy; to hold Cassidy Johnson
Scott (FL)
dog the Agency very carefully and drug companies accountable and em- Scott (SC)
Collins Kennedy
Shelby
make sure the focus is on these power Medicare to negotiate the cost of Cornyn Lankford
Sullivan
wealthy tax cheats and not the typical prescription drugs; to help families pay Cotton Lee
Cramer Thune
Lummis
working person, as my colleagues on their utilities with the boldest clean Crapo Marshall Tillis
the other side of the aisle have talked energy package in American history; Cruz McConnell Toomey
about. to make sure that nurses and teachers Daines Moran Tuberville
Ernst Murkowski Wicker
So there you have it, folks. Here is and firefighters and middle-class fami- Young
Fischer Paul
what is on offer: What is on offer are lies don’t pay more in taxes than bil-
lower costs for seniors, reduced climate lion-dollar corporations; to reduce pol- (Ms. BALDWIN assumed the Chair.)
emissions, help for working families, lution, restore our coastlines, protect The VICE PRESIDENT. On this vote,
cracking down on wealthy tax cheats. our forests, and deliver to our children the yeas are 50, the nays are 50.
That is what this is all about today. and grandchildren the planet they de- The Senate being equally divided, the
That is why this legislation, I believe, serve. Vice President votes in the affirma-
is going to give public service a good Again, the time is now to move for- tive, and the motion to proceed is
name. ward with a big, bold package for the agreed to.
I yield the floor. American people. The motion was agreed to.
I suggest the absence of a quorum. Again, this historic bill—this historic f
The PRESIDING OFFICER. The bill—will reduce inflation, lower costs, INFLATION REDUCTION ACT OF
clerk will call the roll. and fight climate change. It is time to 2022
The senior assistant legislative clerk move this Nation forward.
proceeded to call the roll. Senate Democrats began this major- The VICE PRESIDENT. The clerk
Mr. CARPER. Madam President, I ity by promising to tackle the biggest will report the bill by title.
ask unanimous consent that the order challenges facing our country. The In- The legislative clerk read as follows:
for the quorum call be rescinded. flation Reduction Act will make good A bill (H.R. 5376) to provide for reconcili-
The PRESIDING OFFICER. Without ation pursuant to title II of S. Con. Res. 14.
on that promise and serve as the cap-
objection, it is so ordered. stone to one of the most productive The ACTING PRESIDENT pro tem-
The Senator from Delaware. stretches the Senate has seen in a very pore. The majority leader.
Mr. CARPER. Almost everything long time. And in the end, it will be the AMENDMENT NO. 5194, AS MODIFIED
that is good that he has just talked American people who benefit from the (Purpose: In the nature of a sub-
about came out of the Finance Com- work we do here and now. stitute.)
mittee, terrific staff work, terrific MOTION TO PROCEED Mr. SCHUMER. Madam President, I
leadership. Thank you. So I move to proceed to Calendar No. call up amendment No. 5194, as modi-
I suggest the absence of a quorum. 464, H.R. 5376. fied, with the changes at the desk, and
The PRESIDING OFFICER. The I ask that it be reported by number.
The PRESIDING OFFICER. The
clerk will call the roll. The ACTING PRESIDENT pro tem-
clerk will report the motion.
The senior assistant legislative clerk pore. Without objection, it is so or-
The senior assistant legislative clerk
proceeded to call the roll. dered.
read as follows:
Mr. SCHUMER. Madam President, I The clerk will report.
Motion to proceed to Calendar No. 464, H.R.
ask unanimous consent that the order The senior assistant legislative clerk
5376, a bill to provide for reconciliation pur-
for the quorum call be rescinded. suant to title II of S. Con. Res. 14. read as follows:
The PRESIDING OFFICER (Ms. The Senator from New York [Mr. SCHUMER]
VOTE ON MOTION
HIRONO). Without objection, it is so or- proposes an amendment numbered 5194, as
dered. The PRESIDING OFFICER. The
modified.
question is on agreeing to the motion
f The amendment is as follows:
to proceed.
INFLATION REDUCTION ACT OF Strike all after the enacting clause and in-
Mr. SCHUMER. Madam President, I sert the following:
2022—Motion to Proceed ask for the yeas and nays. SECTION 1. SHORT TITLE.
Mr. SCHUMER. Madam President, in The PRESIDING OFFICER. Is there a This Act may be cited as the ‘‘Inflation Re-
a moment, I will move to proceed to sufficient second? duction Act of 2022’’.
the Inflation Reduction Act of 2022. There appears to be a sufficient sec- TITLE I—COMMITTEE ON FINANCE
The time has come for the Senate to ond.
Subtitle A—Deficit Reduction
begin debate on this historic piece of The clerk will call the roll.
SEC. 10001. AMENDMENT OF 1986 CODE.
legislation. The legislative clerk called the roll.
The yeas and nays resulted—yeas 50, Except as otherwise expressly provided,
The Inflation Reduction Act is a whenever in this subtitle an amendment or
groundbreaking bill for the American nays 50, as follows: repeal is expressed in terms of an amend-
people—for families struggling to pay [Rollcall Vote No. 287 Leg.] ment to, or repeal of, a section or other pro-
the bills, for seniors struggling to pay YEAS—50 vision, the reference shall be considered to
for medication, for kids struggling Baldwin Hassan Murray be made to a section or other provision of
with asthma. This bill is for them. Bennet Heinrich Ossoff the Internal Revenue Code of 1986.
Blumenthal Hickenlooper Padilla PART 1—CORPORATE TAX REFORM
I thank all of my colleagues who Booker Hirono Peters
have dedicated their blood, sweat, and Brown Kaine Reed
SEC. 10101. CORPORATE ALTERNATIVE MINIMUM
tears toward shaping this outstanding Cantwell Kelly TAX.
Rosen
legislation. Cardin King Sanders (a) IMPOSITION OF TAX.—
dlhill on DSK120RN23PROD with SENATE
Carper Klobuchar (1) IN GENERAL.—Paragraph (2) of section
This is one of the most comprehen- Casey Leahy
Schatz
Schumer 55(b) is amended to read as follows:
sive and impactful bills Congress has Coons Luján
Shaheen ‘‘(2) CORPORATIONS.—
seen in decades. It will reduce infla- Cortez Masto Manchin
Sinema ‘‘(A) APPLICABLE CORPORATIONS.—In the
tion, it will lower prescription drug Duckworth Markey
Durbin Menendez Smith case of an applicable corporation, the ten-
costs, it will fight climate change, it Feinstein Merkley Stabenow tative minimum tax for the taxable year
will close tax loopholes, and it will re- Gillibrand Murphy Tester shall be the excess of—
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00020 Fmt 4637 Sfmt 0634 E:\CR\FM\G06AU6.028 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4071
‘‘(i) 15 percent of the adjusted financial section 52 (determined with the modifica- scribe rules for the application of this para-
statement income for the taxable year (as tions described in clause (ii)) shall be treated graph, including rules for the determination
determined under section 56A), over as adjusted financial statement income of of—
‘‘(ii) the corporate AMT foreign tax credit such corporation, and adjusted financial ‘‘(i) the entities (if any) which are to be to
for the taxable year. statement income of such corporation shall be treated under subparagraph (B)(iii)(II) as
‘‘(B) OTHER CORPORATIONS.—In the case of be determined without regard to paragraphs having a common parent which is a foreign
any corporation which is not an applicable (2)(D)(i) and (11) of section 56A(c). corporation,
corporation, the tentative minimum tax for ‘‘(ii) MODIFICATIONS.—For purposes of this ‘‘(ii) the entities to be included in a for-
the taxable year shall be zero.’’. subparagraph— eign-parented multinational group, and
(2) APPLICABLE CORPORATION.—Section 59 is ‘‘(I) section 52(a) shall be applied by sub- ‘‘(iii) the common parent of a foreign-par-
amended by adding at the end the following stituting ‘component members’ for ‘mem- ented multinational group.
new subsection: bers’, and ‘‘(3) REGULATIONS OR OTHER GUIDANCE.—The
‘‘(k) APPLICABLE CORPORATION.—For pur- ‘‘(II) for purposes of applying section 52(b), Secretary shall provide regulations or other
poses of this part— the term ‘trade or business’ shall include any guidance for the purposes of carrying out
‘‘(1) APPLICABLE CORPORATION DEFINED.— activity treated as a trade or business under this subsection, including regulations or
‘‘(A) IN GENERAL.—The term ‘applicable paragraph (5) or (6) of section 469(c) (deter- other guidance—
corporation’ means, with respect to any tax- mined without regard to the phrase ‘To the ‘‘(A) providing a simplified method for de-
able year, any corporation (other than an S extent provided in regulations’ in such para- termining whether a corporation meets the
corporation, a regulated investment com- graph (6)). requirements of paragraph (1), and
pany, or a real estate investment trust) ‘‘(iii) COMPONENT MEMBER.—For purposes of ‘‘’(B) addressing the application of this
which meets the average annual adjusted fi- this subparagraph, the term ‘component subsection to a corporation that experiences
nancial statement income test of subpara- member’ has the meaning given such term a change in ownership.’’.
graph (B) for one or more taxable years by section 1563(b), except that the deter- (3) REDUCTION FOR BASE EROSION AND ANTI-
which— mination shall be made without regard to ABUSE TAX.—Section 55(a)(2) is amended by
‘‘(i) are prior to such taxable year, and section 1563(b)(2). inserting ‘‘plus, in the case of an applicable
‘‘(ii) end after December 31, 2021. ‘‘(E) OTHER SPECIAL RULES.— corporation, the tax imposed by section 59A’’
‘‘(B) AVERAGE ANNUAL ADJUSTED FINANCIAL ‘‘(i) CORPORATIONS IN EXISTENCE FOR LESS before the period at the end.
STATEMENT INCOME TEST.—For purposes of THAN 3 YEARS.—If the corporation was in ex- (4) CONFORMING AMENDMENTS.—
this subsection— istence for less than 3-taxable years, sub- (A) Section 55(a) is amended by striking
‘‘(i) a corporation meets the average an- paragraph (B) shall be applied on the basis of ‘‘In the case of a taxpayer other than a cor-
nual adjusted financial statement income the period during which such corporation poration, there’’ and inserting ‘‘There’’.
test for a taxable year if the average annual was in existence. (B)(i) Section 55(b)(1) is amended—
adjusted financial statement income of such ‘‘(ii) SHORT TAXABLE YEARS.—Adjusted fi- (I) by striking so much as precedes sub-
corporation (determined without regard to nancial statement income for any taxable paragraph (A) and inserting the following:
section 56A(d)) for the 3-taxable-year period year of less than 12 months shall be ‘‘(1) NONCORPORATE TAXPAYERS.—In the
ending with such taxable year exceeds annualized by multiplying the adjusted fi- case of a taxpayer other than a corporation—
$1,000,000,000, and nancial statement income for the short pe- ’’, and
‘‘(ii) in the case of a corporation described riod by 12 and dividing the result by the (II) by adding at the end the following new
in paragraph (2), such corporation meets the number of months in the short period. subparagraph:
average annual adjusted financial statement ‘‘(iii) TREATMENT OF PREDECESSORS.—Any ‘‘(D) ALTERNATIVE MINIMUM TAXABLE IN-
income test for a taxable year if— reference in this subparagraph to a corpora- COME.—The term ‘alternative minimum tax-
‘‘(I) the corporation meets the require- tion shall include a reference to any prede- able income’ means the taxable income of
ments of clause (i) for such taxable year (de- cessor of such corporation. the taxpayer for the taxable year—
termined after the application of paragraph ‘‘(2) SPECIAL RULE FOR FOREIGN-PARENTED ‘‘(i) determined with the adjustments pro-
(2)), and MULTINATIONAL GROUPS.— vided in section 56 and section 58, and
‘‘(II) the average annual adjusted financial ‘‘(A) IN GENERAL.—If a corporation is a ‘‘(ii) increased by the amount of the items
statement income of such corporation (de- member of a foreign-parented multinational of tax preference described in section 57.
termined without regard to the application group for any taxable year, then, solely for If a taxpayer is subject to the regular tax,
of paragraph (2) and without regard to sec- purposes of determining whether such cor- such taxpayer shall be subject to the tax im-
tion 56A(d)) for the 3-taxable-year-period poration meets the average annual adjusted posed by this section (and, if the regular tax
ending with such taxable year is $100,000,000 financial statement income test under para- is determined by reference to an amount
or more. graph (1)(B)(ii)(I) for such taxable year, the other than taxable income, such amount
‘‘(C) EXCEPTION.—Notwithstanding sub- adjusted financial statement income of such shall be treated as the taxable income of
paragraph (A), the term ‘applicable corpora- corporation for such taxable year shall in- such taxpayer for purposes of the preceding
tion’ shall not include any corporation which clude the adjusted financial statement in- sentence).’’.
otherwise meets the requirements of sub- come of all members of such group. Solely (ii) Section 860E(a)(4) is amended by strik-
paragraph (A) if— for purposes of this subparagraph, adjusted ing ‘‘55(b)(2)’’ and inserting ‘‘55(b)(1)(D)’’.
‘‘(i) such corporation— financial statement income shall be deter- (iii) Section 897(a)(2)(A)(i) is amended by
‘‘(I) has a change in ownership, or mined without regard to paragraphs (2)(D)(i), striking ‘‘55(b)(2)’’ and inserting
‘‘(II) has a specified number (to be deter- (3), (4), and (11) of section 56A(c). ‘‘55(b)(1)(D)’’.
mined by the Secretary and which shall, as ‘‘(B) FOREIGN-PARENTED MULTINATIONAL (C) Section 11(d) is amended by striking
appropriate, take into account the facts and GROUP.—For purposes of subparagraph (A), ‘‘the tax imposed by subsection (a)’’ and in-
circumstances of the taxpayer) of consecu- the term ‘foreign-parented multinational serting ‘‘the taxes imposed by subsection (a)
tive taxable years, including the most recent group’ means, with respect to any taxable and section 55’’.
taxable year, in which the corporation does year, two or more entities if— (D) Section 12 is amended by adding at the
not meet the average annual adjusted finan- ‘‘(i) at least one entity is a domestic cor- end the following new paragraph:
cial statement income test of subparagraph poration and another entity is a foreign cor- ‘‘(5) For alternative minimum tax, see sec-
(B), and poration, tion 55.’’.
‘‘(ii) the Secretary determines that it ‘‘(ii) such entities are included in the same (E) Section 882(a)(1) is amended by insert-
would not be appropriate to continue to applicable financial statement with respect ing ‘‘, 55,’’ after ‘‘section 11’’.
treat such corporation as an applicable cor- to such year, and (F) Section 6425(c)(1)(A) is amended to read
poration. ‘‘(iii) either— as follows:
The preceding sentence shall not apply to ‘‘(I) the common parent of such entities is ‘‘(A) the sum of—
any corporation if, after the Secretary a foreign corporation, or ‘‘(i) the tax imposed by section 11 or sub-
makes the determination described in clause ‘‘(II) if there is no common parent, the en- chapter L of chapter 1, whichever is applica-
(ii), such corporation meets the average an- tities are treated as having a common parent ble, plus
nual adjusted financial statement income which is a foreign corporation under sub- ‘‘(ii) the tax imposed by section 55, plus
test of subparagraph (B) for any taxable year paragraph (D). ‘‘(iii) the tax imposed by section 59A,
beginning after the first taxable year for ‘‘(C) FOREIGN CORPORATIONS ENGAGED IN A over’’.
which such determination applies. TRADE OR BUSINESS WITHIN THE UNITED (G) Section 6655(e)(2) is amended by insert-
‘‘(D) SPECIAL RULES FOR DETERMINING AP- STATES.—For purposes of this paragraph, if a ing ‘‘, adjusted financial statement income
dlhill on DSK120RN23PROD with SENATE
PLICABLE CORPORATION STATUS.— foreign corporation is engaged in a trade or (as defined in section 56A),’’ before ‘‘and
‘‘(i) IN GENERAL.—Solely for purposes of de- business within the United States, such modified taxable income’’ each place it ap-
termining whether a corporation is an appli- trade or business shall be treated as a sepa- pears in subparagraphs (A)(i) and (B)(i).
cable corporation under this paragraph, all rate domestic corporation that is wholly (H) Section 6655(g)(1)(A) is amended by re-
adjusted financial statement income of per- owned by the foreign corporation. designating clauses (ii) and (iii) as clauses
sons treated as a single employer with such ‘‘(D) OTHER RULES.—The Secretary shall, (iii) and (iv), respectively, and by inserting
corporation under subsection (a) or (b) of applying the principles of this section, pre- after clause (i) the following new clause:
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00021 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4072 CONGRESSIONAL RECORD — SENATE August 6, 2022
‘‘(ii) the tax imposed by section 55,’’. the adjusted financial statement income of be appropriately adjusted to disregard any
(b) ADJUSTED FINANCIAL STATEMENT IN- such taxpayer with respect to such con- amount treated as a payment against the tax
COME.— trolled foreign corporation (as determined imposed by subtitle A pursuant to an elec-
(1) IN GENERAL.—Part VI of subchapter A of under paragraph (2)(C)) shall be adjusted to tion under section 48D(d) or 6417, to the ex-
chapter 1 is amended by inserting after sec- also take into account such taxpayer’s pro tent such amount was not otherwise taken
tion 56 the following new section: rata share (determined under rules similar to into account under paragraph (5).
‘‘SEC. 56A. ADJUSTED FINANCIAL STATEMENT IN- the rules under section 951(a)(2)) of items ‘‘(10) CONSISTENT TREATMENT OF MORTGAGE
COME. taken into account in computing the net in- SERVICING INCOME OF TAXPAYER OTHER THAN A
‘‘(a) IN GENERAL.—For purposes of this come or loss set forth on the applicable fi- REGULATED INVESTMENT COMPANY.—
part, the term ‘adjusted financial statement nancial statement (as adjusted under rules ‘‘(A) IN GENERAL.—Adjusted financial
income’ means, with respect to any corpora- similar to those that apply in determining statement income shall be adjusted so as not
tion for any taxable year, the net income or adjusted financial statement income) of each to include any item of income in connection
loss of the taxpayer set forth on the tax- such controlled foreign corporation with re- with a mortgage servicing contract any ear-
payer’s applicable financial statement for spect to which such taxpayer is a United lier than when such income is included in
such taxable year, adjusted as provided in States shareholder. gross income under any other provision of
this section. ‘‘(B) NEGATIVE ADJUSTMENTS.—In any case this chapter.
‘‘(b) APPLICABLE FINANCIAL STATEMENT.— in which the adjustment determined under ‘‘(B) RULES FOR AMOUNTS NOT REP-
For purposes of this section, the term ‘appli- subparagraph (A) would result in a negative RESENTING REASONABLE COMPENSATION.—The
cable financial statement’ means, with re- adjustment for such taxable year— Secretary shall provide regulations to pre-
spect to any taxable year, an applicable fi- ‘‘(i) no adjustment shall be made under vent the avoidance of taxes imposed by this
nancial statement (as defined in section this paragraph for such taxable year, and chapter with respect to amounts not rep-
451(b)(3) or as specified by the Secretary in ‘‘(ii) the amount of the adjustment deter- resenting reasonable compensation (as deter-
regulations or other guidance) which covers mined under this paragraph for the suc- mined by the Secretary) with respect to a
such taxable year. ceeding taxable year (determined without re- mortgage servicing contract.
‘‘(c) GENERAL ADJUSTMENTS.—
gard to this paragraph) shall be reduced by ‘‘(11) ADJUSTMENT WITH RESPECT TO DEFINED
‘‘(1) STATEMENTS COVERING DIFFERENT TAX- BENEFIT PENSIONS.—
an amount equal to the negative adjustment
ABLE YEARS.—Appropriate adjustments shall
for such taxable year. ‘‘(A) IN GENERAL.—Except as otherwise pro-
be made in adjusted financial statement in- ‘‘(4) EFFECTIVELY CONNECTED INCOME.—In vided in rules prescribed by the Secretary in
come in any case in which an applicable fi- the case of a foreign corporation, to deter- regulations or other guidance, adjusted fi-
nancial statement covers a period other than mine adjusted financial statement income, nancial statement income shall be—
the taxable year. the principles of section 882 shall apply. ‘‘(i) adjusted to disregard any amount of
‘‘(2) SPECIAL RULES FOR RELATED ENTI- ‘‘(5) ADJUSTMENTS FOR CERTAIN TAXES.—Ad- income, cost, or expense that would other-
TIES.— justed financial statement income shall be wise be included on the applicable financial
‘‘(A) CONSOLIDATED FINANCIAL STATE- appropriately adjusted to disregard any Fed- statement in connection with any covered
MENTS.—If the financial results of a taxpayer eral income taxes, or income, war profits, or benefit plan,
are reported on the applicable financial excess profits taxes (within the meaning of ‘‘(ii) increased by any amount of income in
statement for a group of entities, rules simi- section 901) with respect to a foreign country connection with any such covered benefit
lar to the rules of section 451(b)(5) shall or possession of the United States, which are plan that is included in the gross income of
apply. taken into account on the taxpayer’s appli- the corporation under any other provision of
‘‘(B) CONSOLIDATED RETURNS.—Except as cable financial statement. To the extent pro- this chapter, and
provided in regulations prescribed by the vided by the Secretary, the preceding sen- ‘‘(iii) reduced by deductions allowed under
Secretary, if the taxpayer is part of an affili- tence shall not apply to income, war profits, any other provision of this chapter with re-
ated group of corporations filing a consoli- or excess profits taxes (within the meaning spect to any such covered benefit plan.
dated return for any taxable year, adjusted of section 901) that are imposed by a foreign ‘‘(B) COVERED BENEFIT PLAN.—For purposes
financial statement income for such group country or possession of the United States of this paragraph, the term ‘covered benefit
for such taxable year shall take into account and taken into account on the taxpayer’s ap- plan’ means—
items on the group’s applicable financial plicable financial statement if the taxpayer ‘‘(i) a defined benefit plan (other than a
statement which are properly allocable to does not choose to have the benefits of sub- multiemployer plan described in section
members of such group. part A of part III of subchapter N for the tax- 414(f)) if the trust which is part of such plan
‘‘(C) TREATMENT OF DIVIDENDS AND OTHER able year. The Secretary shall prescribe such is an employees’ trust described in section
AMOUNTS.—In the case of any corporation regulations or other guidance as may be nec- 401(a) which is exempt from tax under sec-
which is not included on a consolidated re- essary and appropriate to provide for the tion 501(a),
turn with the taxpayer, adjusted financial proper treatment of current and deferred ‘‘(ii) any qualified foreign plan (as defined
statement income of the taxpayer with re- taxes for purposes of this paragraph, includ- in section 404A(e)), or
spect to such other corporation shall be de- ing the time at which such taxes are prop- ‘‘(iii) any other defined benefit plan which
termined by only taking into account the erly taken into account. provides post-employment benefits other
dividends received from such other corpora- ‘‘(6) ADJUSTMENT WITH RESPECT TO DIS- than pension benefits.
tion (reduced to the extent provided by the REGARDED ENTITIES.—Adjusted financial ‘‘(12) TAX-EXEMPT ENTITIES.—In the case of
Secretary in regulations or other guidance) statement income shall be adjusted to take an organization subject to tax under section
and other amounts which are includible in into account any adjusted financial state- 511, adjusted financial statement income
gross income or deductible as a loss under ment income of a disregarded entity owned shall be appropriately adjusted to only take
this chapter (other than amounts required to by the taxpayer. into account any adjusted financial state-
be included under sections 951 and 951A or ‘‘(7) SPECIAL RULE FOR COOPERATIVES.—In ment income—
such other amounts as provided by the Sec- the case of a cooperative to which section ‘‘(A) of an unrelated trade or business (as
retary) with respect to such other corpora- 1381 applies, the adjusted financial statement defined in section 513) of such organization,
tion. income (determined without regard to this or
‘‘(D) TREATMENT OF PARTNERSHIPS.— paragraph) shall be reduced by the amounts ‘‘(B) derived from debt-financed property
‘‘(i) IN GENERAL.—Except as provided by referred to in section 1382(b) (relating to pa- (as defined in section 514) to the extent that
the Secretary, if the taxpayer is a partner in tronage dividends and per-unit retain alloca- income from such property is treated as un-
a partnership, adjusted financial statement tions) to the extent such amounts were not related business taxable income.
income of the taxpayer with respect to such otherwise taken into account in determining ‘‘(13) DEPRECIATION.—Adjusted financial
partnership shall be adjusted to only take adjusted financial statement income. statement income shall be—
into account the taxpayer’s distributive ‘‘(8) RULES FOR ALASKA NATIVE CORPORA- ‘‘(A) reduced by depreciation deductions
share of adjusted financial statement income TIONS.—Adjusted financial statement income allowed under section 167 with respect to
of such partnership. shall be appropriately adjusted to allow— property to which section 168 applies to the
‘‘(ii) ADJUSTED FINANCIAL STATEMENT IN- ‘‘(A) cost recovery and depletion attrib- extent of the amount allowed as deductions
COME OF PARTNERSHIPS.—For the purposes of utable to property the basis of which is de- in computing taxable income for the taxable
this part, the adjusted financial statement termined under section 21(c) of the Alaska year, and
income of a partnership shall be the partner- Native Claims Settlement Act (43 U.S.C. ‘‘(B) appropriately adjusted—
ship’s net income or loss set forth on such 1620(c)), and ‘‘(i) to disregard any amount of deprecia-
partnership’s applicable financial statement ‘‘(B) deductions for amounts payable made tion expense that is taken into account on
dlhill on DSK120RN23PROD with SENATE
(adjusted under rules similar to the rules of pursuant to section 7(i) or section 7(j) of such the taxpayer’s applicable financial state-
this section). Act (43 U.S.C. 1606(i) and 1606(j)) only at such ment with respect to such property, and
‘‘(3) ADJUSTMENTS TO TAKE INTO ACCOUNT time as the deductions are allowed for tax ‘‘(ii) to take into account any other item
CERTAIN ITEMS OF FOREIGN INCOME.— purposes. specified by the Secretary in order to provide
‘‘(A) IN GENERAL.—If, for any taxable year, ‘‘(9) AMOUNTS ATTRIBUTABLE TO ELECTIONS that such property is accounted for in the
a taxpayer is a United States shareholder of FOR DIRECT PAYMENT OF CERTAIN CREDITS.— same manner as it is accounted for under
one or more controlled foreign corporations, Adjusted financial statement income shall this chapter.
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00022 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4073
‘‘(14) QUALIFIED WIRELESS SPECTRUM.— (2) CLERICAL AMENDMENT.—The table of ‘the adjusted net minimum tax imposed for
‘‘(A) IN GENERAL.—Adjusted financial sections for part VI of subchapter A of chap- all prior taxable years beginning after 1986’,
statement income shall be— ter 1 is amended by inserting after the item and
‘‘(i) reduced by amortization deductions al- relating to section 56 the following new item: ‘‘(2) the amount determined under sub-
lowed under section 197 with respect to ‘‘Sec. 56A. Adjusted financial statement in- section (c)(1) shall be increased by the
qualified wireless spectrum to the extent of come.’’. amount of tax imposed under section 59A for
the amount allowed as deductions in com- (c) CORPORATE AMT FOREIGN TAX CREDIT.— the taxable year.’’.
puting taxable income for the taxable year, Section 59, as amended by this section, is (2) CONFORMING AMENDMENTS.—Section
and amended by adding at the end the following 53(d) is amended—
‘‘(ii) appropriately adjusted— new subsection: (A) in paragraph (2), by striking ‘‘, except
‘‘(I) to disregard any amount of amortiza- ‘‘(l) CORPORATE AMT FOREIGN TAX CRED- that in the case’’ and all that follows
tion expense that is taken into account on IT.— through ‘‘treated as zero’’, and
the taxpayer’s applicable financial state- ‘‘(1) IN GENERAL.—For purposes of this (B) by striking paragraph (3).
ment with respect to such qualified wireless part, if an applicable corporation chooses to (f) EFFECTIVE DATE.—The amendments
spectrum, and have the benefits of subpart A of part III of made by this section shall apply to taxable
‘‘(II) to take into account any other item subchapter N for any taxable year, the cor- years beginning after December 31, 2022.
specified by the Secretary in order to provide porate AMT foreign tax credit for the tax- PART 2—EXCISE TAX ON REPURCHASE OF
that such qualified wireless spectrum is ac- able year of the applicable corporation is an CORPORATE STOCK
counted for in the same manner as it is ac- amount equal to sum of—
counted for under this chapter. SEC. 10201. EXCISE TAX ON REPURCHASE OF
‘‘(A) the lesser of— CORPORATE STOCK.
‘‘(B) QUALIFIED WIRELESS SPECTRUM.—For ‘‘(i) the aggregate of the applicable cor-
purposes of this paragraph, the term ‘quali- poration’s pro rata share (as determined (a) IN GENERAL.—Subtitle D is amended by
fied wireless spectrum’ means wireless spec- under section 56A(c)(3)) of the amount of in- inserting after chapter 36 the following new
trum which— come, war profits, and excess profits taxes chapter:
‘‘(i) is used in the trade or business of a (within the meaning of section 901) imposed ‘‘CHAPTER 37—REPURCHASE OF
wireless telecommunications carrier, and by any foreign country or possession of the CORPORATE STOCK
‘‘(ii) was acquired after December 31, 2007, United States which are— ‘‘Sec. 4501. Repurchase of corporate stock.
and before the date of enactment of this sec- ‘‘(I) taken into account on the applicable
tion. ‘‘SEC. 4501. REPURCHASE OF CORPORATE STOCK.
financial statement of each controlled for-
‘‘(15) SECRETARIAL AUTHORITY TO ADJUST eign corporation with respect to which the ‘‘(a) GENERAL RULE.—There is hereby im-
ITEMS.—The Secretary shall issue regula- applicable corporation is a United States posed on each covered corporation a tax
tions or other guidance to provide for such shareholder, and equal to 1 percent of the fair market value of
adjustments to adjusted financial statement ‘‘(II) paid or accrued (for Federal income any stock of the corporation which is repur-
income as the Secretary determines nec- tax purposes) by each such controlled foreign chased by such corporation during the tax-
essary to carry out the purposes of this sec- corporation, or able year.
tion, including adjustments— ‘‘(ii) the product of the amount of the ad- ‘‘(b) COVERED CORPORATION.—For purposes
‘‘(A) to prevent the omission or duplication justment under section 56A(c)(3) and the per- of this section, the term ‘covered corpora-
of any item, and centage specified in section 55(b)(2)(A)(i), and tion’ means any domestic corporation the
‘‘(B) to carry out the principles of part II ‘‘(B) in the case of an applicable corpora- stock of which is traded on an established se-
of subchapter C of this chapter (relating to tion that is a domestic corporation, the curities market (within the meaning of sec-
corporate liquidations), part III of sub- amount of income, war profits, and excess tion 7704(b)(1)).
chapter C of this chapter (relating to cor- profits taxes (within the meaning of section ‘‘(c) REPURCHASE.—For purposes of this
porate organizations and reorganizations), 901) imposed by any foreign country or pos- section—
and part II of subchapter K of this chapter session of the United States to the extent ‘‘(1) IN GENERAL.—The term ‘repurchase’
(relating to partnership contributions and such taxes are— means—
distributions). ‘‘(i) taken into account on the applicable ‘‘(A) a redemption within the meaning of
‘‘(d) DEDUCTION FOR FINANCIAL STATEMENT corporation’s applicable financial statement, section 317(b) with regard to the stock of a
NET OPERATING LOSS.— and covered corporation, and
‘‘(1) IN GENERAL.—Adjusted financial state- ‘‘(ii) paid or accrued (for Federal income ‘‘(B) any transaction determined by the
ment income (determined after application tax purposes) by the applicable corporation. Secretary to be economically similar to a
of subsection (c) and without regard to this ‘‘(2) CARRYOVER OF EXCESS TAX PAID.—For transaction described in subparagraph (A).
subsection) shall be reduced by an amount any taxable year for which an applicable cor- ‘‘(2) TREATMENT OF PURCHASES BY SPECIFIED
equal to the lesser of— poration chooses to have the benefits of sub- AFFILIATES.—
‘‘(A) the aggregate amount of financial part A of part III of subchapter N, the excess ‘‘(A) IN GENERAL.—The acquisition of stock
statement net operating loss carryovers to of the amount described in paragraph of a covered corporation by a specified affil-
the taxable year, or (1)(A)(i) over the amount described in para- iate of such covered corporation, from a per-
‘‘(B) 80 percent of adjusted financial state- graph (1)(A)(ii) shall increase the amount de- son who is not the covered corporation or a
ment income computed without regard to scribed in paragraph (1)(A)(i) in any of the specified affiliate of such covered corpora-
the deduction allowable under this sub- first 5 succeeding taxable years to the extent tion, shall be treated as a repurchase of the
section. not taken into account in a prior taxable stock of the covered corporation by such
‘‘(2) FINANCIAL STATEMENT NET OPERATING year. covered corporation.
LOSS CARRYOVER.—A financial statement net ‘‘(3) REGULATIONS OR OTHER GUIDANCE.—The ‘‘(B) SPECIFIED AFFILIATE.—For purposes of
operating loss for any taxable year shall be Secretary shall provide for such regulations this section, the term ‘specified affiliate’
a financial statement net operating loss car- or other guidance as is necessary to carry means, with respect to any corporation—
ryover to each taxable year following the out the purposes of this subsection.’’. ‘‘(i) any corporation more than 50 percent
taxable year of the loss. The portion of such (d) TREATMENT OF GENERAL BUSINESS of the stock of which is owned (by vote or by
loss which shall be carried to subsequent CREDIT.—Section 38(c)(6)(E) is amended to value), directly or indirectly, by such cor-
taxable years shall be the amount of such read as follows: poration, and
loss remaining (if any) after the application ‘‘(E) CORPORATIONS.—In the case of a cor- ‘‘(ii) any partnership more than 50 percent
of paragraph (1). poration— of the capital interests or profits interests of
‘‘(3) FINANCIAL STATEMENT NET OPERATING ‘‘(i) the first sentence of paragraph (1) shall which is held, directly or indirectly, by such
LOSS DEFINED.—For purposes of this sub- be applied by substituting ‘25 percent of the corporation.
section, the term ‘financial statement net taxpayer’s net income tax as exceeds $25,000’ ‘‘(3) ADJUSTMENT.—The amount taken into
operating loss’ means the amount of the net for ‘the greater of’ and all that follows, account under subsection (a) with respect to
loss (if any) set forth on the corporation’s ‘‘(ii) paragraph (2)(A) shall be applied with- any stock repurchased by a covered corpora-
applicable financial statement (determined out regard to clause (ii)(I) thereof, and tion shall be reduced by the fair market
after application of subsection (c) and with- ‘‘(iii) paragraph (4)(A) shall be applied value of any stock issued by the covered cor-
out regard to this subsection) for taxable without regard to clause (ii)(I) thereof.’’. poration during the taxable year, including
years ending after December 31, 2019. (e) CREDIT FOR PRIOR YEAR MINIMUM TAX the fair market value of any stock issued or
‘‘(e) REGULATIONS AND OTHER GUIDANCE.— LIABILITY.— provided to employees of such covered cor-
dlhill on DSK120RN23PROD with SENATE
The Secretary shall provide for such regula- (1) IN GENERAL.—Section 53(e) is amended poration or employees of a specified affiliate
tions and other guidance as necessary to to read as follows: of such covered corporation during the tax-
carry out the purposes of this section, in- ‘‘(e) APPLICATION TO APPLICABLE CORPORA- able year, whether or not such stock is
cluding regulations and other guidance relat- TIONS.—In the case of a corporation— issued or provided in response to the exercise
ing to the effect of the rules of this section ‘‘(1) subsection (b)(1) shall be applied by of an option to purchase such stock.
on partnerships with income taken into ac- substituting ‘the net minimum tax for all ‘‘(d) SPECIAL RULES FOR ACQUISITION OF
count by an applicable corporation.’’. prior taxable years beginning after 2022’ for STOCK OF CERTAIN FOREIGN CORPORATIONS.—
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00023 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4074 CONGRESSIONAL RECORD — SENATE August 6, 2022
‘‘(1) IN GENERAL.—In the case of an acquisi- ‘‘(5) to repurchases by a regulated invest- services as authorized by 5 U.S.C. 3109, at
tion of stock of an applicable foreign cor- ment company (as defined in section 851) or such rates as may be determined by the
poration by a specified affiliate of such cor- a real estate investment trust, or Commissioner, $25,326,400,000, to remain
poration (other than a foreign corporation or ‘‘(6) to the extent that the repurchase is available until September 30, 2031: Provided,
a foreign partnership (unless such partner- treated as a dividend for purposes of this That these amounts shall be in addition to
ship has a domestic entity as a direct or in- title. amounts otherwise available for such pur-
direct partner)) from a person who is not the ‘‘(f) REGULATIONS AND GUIDANCE.—The Sec- poses.
applicable foreign corporation or a specified retary shall prescribe such regulations and (iv) BUSINESS SYSTEMS MODERNIZATION.—
affiliate of such applicable foreign corpora- other guidance as are necessary or appro- For necessary expenses of the Internal Rev-
tion, for purposes of this section— priate to carry out, and to prevent the avoid- enue Service’s business systems moderniza-
‘‘(A) such specified affiliate shall be treat- ance of, the purposes of this section, includ- tion program, including development of call-
ed as a covered corporation with respect to ing regulations and other guidance— back technology and other technology to
such acquisition, ‘‘(1) to prevent the abuse of the exceptions provide a more personalized customer serv-
‘‘(B) such acquisition shall be treated as a provided by subsection (e), ice but not including the operation and
repurchase of stock of a covered corporation ‘‘(2) to address special classes of stock and maintenance of legacy systems, $4,750,700,000,
by such covered corporation, and preferred stock, and to remain available until September 30, 2031:
‘‘(C) the adjustment under subsection (c)(3) ‘‘(3) for the application of the rules under Provided, That these amounts shall be in ad-
shall be determined only with respect to subsection (d).’’. dition to amounts otherwise available for
(b) TAX NOT DEDUCTIBLE.—Paragraph (6) of such purposes.
stock issued or provided by such specified af-
section 275(a) is amended by inserting ‘‘37,’’ (B) TASK FORCE TO DESIGN AN IRS-RUN FREE
filiate to employees of the specified affiliate.
before ‘‘41’’. ‘‘DIRECT EFILE’’ TAX RETURN SYSTEM.—For
‘‘(2) SURROGATE FOREIGN CORPORATIONS.—In
(c) CLERICAL AMENDMENT.—The table of necessary expenses of the Internal Revenue
the case of a repurchase of stock of a covered
chapters for subtitle D is amended by insert- Service to deliver to Congress, within nine
surrogate foreign corporation by such cov- ing after the item relating to chapter 36 the months following the date of the enactment
ered surrogate foreign corporation, or an ac- following new item: of this Act, a report on (I) the cost (including
quisition of stock of a covered surrogate for- options for differential coverage based on
‘‘CHAPTER 37—REPURCHASE OF CORPORATE
eign corporation by a specified affiliate of taxpayer adjusted gross income and return
STOCK’’.
such corporation, for purposes of this sec- complexity) of developing and running a free
tion— (d) EFFECTIVE DATE.—The amendments
made by this section shall apply to repur- direct efile tax return system, including
‘‘(A) the expatriated entity with respect to costs to build and administer each release,
such covered surrogate foreign corporation chases (within the meaning of section 4501(c)
of the Internal Revenue Code of 1986, as with a focus on multi-lingual and mobile-
shall be treated as a covered corporation friendly features and safeguards for taxpayer
with respect to such repurchase or acquisi- added by this section) of stock after Decem-
ber 31, 2022. data; (II) taxpayer opinions, expectations,
tion, and level of trust, based on surveys, for such
‘‘(B) such repurchase or acquisition shall PART 3—FUNDING THE INTERNAL REV- a free direct efile system; and (III) the opin-
be treated as a repurchase of stock of a cov- ENUE SERVICE AND IMPROVING TAX- ions of an independent third-party on the
ered corporation by such covered corpora- PAYER COMPLIANCE overall feasibility, approach, schedule, cost,
tion, and SEC. 10301. ENHANCEMENT OF INTERNAL REV- organizational design, and Internal Revenue
‘‘(C) the adjustment under subsection (c)(3) ENUE SERVICE RESOURCES. Service capacity to deliver such a direct efile
shall be determined only with respect to (a) IN GENERAL.—The following sums are tax return system, $15,000,000, to remain
stock issued or provided by such expatriated appropriated, out of any money in the Treas- available until September 30, 2023: Provided,
entity to employees of the expatriated enti- ury not otherwise appropriated, for the fiscal That these amounts shall be in addition to
ty. year ending September 30, 2022: amounts otherwise available for such pur-
‘‘(3) DEFINITIONS.—For purposes of this sub- (1) INTERNAL REVENUE SERVICE.— poses.
section— (A) IN GENERAL.— (2) TREASURY INSPECTOR GENERAL FOR TAX
‘‘(A) APPLICABLE FOREIGN CORPORATION.— (i) TAXPAYER SERVICES.—For necessary ex- ADMINISTRATION.—For necessary expenses of
The term ‘applicable foreign corporation’ penses of the Internal Revenue Service to the Treasury Inspector General for Tax Ad-
means any foreign corporation the stock of provide taxpayer services, including pre-fil- ministration in carrying out the Inspector
which is traded on an established securities ing assistance and education, filing and ac- General Act of 1978, as amended, including
market (within the meaning of section count services, taxpayer advocacy services, purchase and hire of passenger motor vehi-
7704(b)(1)). and other services as authorized by 5 U.S.C. cles (31 U.S.C. 1343(b)); and services author-
‘‘(B) COVERED SURROGATE FOREIGN COR- 3109, at such rates as may be determined by ized by 5 U.S.C. 3109, at such rates as may be
PORATION.—The term ‘covered surrogate for-
the Commissioner, $3,181,500,000, to remain determined by the Inspector General for Tax
eign corporation’ means any surrogate for- available until September 30, 2031: Provided, Administration, $403,000,000, to remain avail-
eign corporation (as determined under sec- That these amounts shall be in addition to able until September 30, 2031: Provided, That
tion 7874(a)(2)(B) by substituting ‘September amounts otherwise available for such pur- these amounts shall be in addition to
20, 2021’ for ‘March 4, 2003’ each place it ap- poses. amounts otherwise available for such pur-
(ii) ENFORCEMENT.—For necessary expenses poses.
pears) the stock of which is traded on an es-
for tax enforcement activities of the Internal (3) OFFICE OF TAX POLICY.—For necessary
tablished securities market (within the
Revenue Service to determine and collect expenses of the Office of Tax Policy of the
meaning of section 7704(b)(1)), but only with
owed taxes, to provide legal and litigation Department of the Treasury to carry out
respect to taxable years which include any
support, to conduct criminal investigations functions related to promulgating regula-
portion of the applicable period with respect
(including investigative technology), to pro- tions under the Internal Revenue Code of
to such corporation under section 7874(d)(1).
vide digital asset monitoring and compliance 1986, $104,533,803, to remain available until
‘‘(C) EXPATRIATED ENTITY.—The term ‘ex-
activities, to enforce criminal statutes re- September 30, 2031: Provided, That these
patriated entity’ has the meaning given such
lated to violations of internal revenue laws amounts shall be in addition to amounts oth-
term by section 7874(a)(2)(A).
and other financial crimes, to purchase and erwise available for such purposes.
‘‘(e) EXCEPTIONS.—Subsection (a) shall not hire passenger motor vehicles (31 U.S.C. (4) UNITED STATES TAX COURT.—For nec-
apply— 1343(b)), and to provide other services as au- essary expenses of the United States Tax
‘‘(1) to the extent that the repurchase is thorized by 5 U.S.C. 3109, at such rates as Court, including contract reporting and
part of a reorganization (within the meaning may be determined by the Commissioner, other services as authorized by 5 U.S.C. 3109;
of section 368(a)) and no gain or loss is recog- $45,637,400,000, to remain available until Sep- $153,000,000, to remain available until Sep-
nized on such repurchase by the shareholder tember 30, 2031: Provided, That these tember 30, 2031: Provided, That these
under chapter 1 by reason of such reorganiza- amounts shall be in addition to amounts oth- amounts shall be in addition to amounts oth-
tion, erwise available for such purposes. erwise available for such purposes.
‘‘(2) in any case in which the stock repur- (iii) OPERATIONS SUPPORT.—For necessary (5) TREASURY DEPARTMENTAL OFFICES.—For
chased is, or an amount of stock equal to the expenses of the Internal Revenue Service to necessary expenses of the Departmental Of-
value of the stock repurchased is, contrib- support taxpayer services and enforcement fices of the Department of the Treasury to
uted to an employer-sponsored retirement programs, including rent payments; facili- provide for oversight and implementation
plan, employee stock ownership plan, or ties services; printing; postage; physical se- support for actions by the Internal Revenue
similar plan, curity; headquarters and other IRS-wide ad- Service to implement this Act and the
dlhill on DSK120RN23PROD with SENATE
‘‘(3) in any case in which the total value of ministration activities; research and statis- amendments made by this Act, $50,000,000, to
the stock repurchased during the taxable tics of income; telecommunications; infor- remain available until September 30, 2031:
year does not exceed $1,000,000, mation technology development, enhance- Provided, That these amounts shall be in ad-
‘‘(4) under regulations prescribed by the ment, operations, maintenance, and secu- dition to amounts otherwise available for
Secretary, in cases in which the repurchase rity; the hire of passenger motor vehicles (31 such purposes.
is by a dealer in securities in the ordinary U.S.C. 1343(b)); the operations of the Internal (b) NO TAX INCREASES ON CERTAIN TAX-
course of business, Revenue Service Oversight Board; and other PAYERS.—Nothing in this section is intended
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00024 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4075
to increase taxes on any taxpayer or small erage is provided under such plan for such se- ‘‘(B) in subparagraph (B), by substituting
business with a taxable income below lected drug; and ‘February 1, 2024’ for ‘the June 1 following
$400,000. Further, nothing in this section is ‘‘(B) in the case such drug is furnished or the selected drug publication date’; and
intended to increase taxes on any taxpayer administered to the individual by a hospital, ‘‘(C) in subparagraph (E), by substituting
not in the top 1 percent. physician, or other provider of services or ‘August 1, 2024’ for ‘the first day of November
Subtitle B—Prescription Drug Pricing supplier, an individual who is enrolled under following the selected drug publication date,
Reform part B of title XVIII, including an individual with respect to the initial price applicability
who is enrolled in an MA plan under part C year ’.
PART 1—LOWERING PRICES THROUGH ‘‘(6) Section 1195(a)(1) shall be applied by
DRUG PRICE NEGOTIATION of such title, if payment may be made under
part B for such selected drug. substituting ‘September 1, 2024’ for ‘Novem-
SEC. 11001. PROVIDING FOR LOWER PRICES FOR ‘‘(3) MAXIMUM FAIR PRICE.—The term ‘max- ber 30 of the year that is 2 years prior to
CERTAIN HIGH-PRICED SINGLE such initial price applicability year’.
SOURCE DRUGS. imum fair price’ means, with respect to a
year during a price applicability period and ‘‘SEC. 1192. SELECTION OF NEGOTIATION-ELIGI-
(a) PROGRAM TO LOWER PRICES FOR CER- BLE DRUGS AS SELECTED DRUGS.
with respect to a selected drug (as defined in
TAIN HIGH-PRICED SINGLE SOURCE DRUGS.— ‘‘(a) IN GENERAL.—Not later than the se-
section 1192(c)) with respect to such period,
Title XI of the Social Security Act is amend- lected drug publication date with respect to
the price negotiated pursuant to section 1194,
ed by adding after section 1184 (42 U.S.C. an initial price applicability year, in accord-
1320e–3) the following new part: and updated pursuant to section 1195(b), as
ance with subsection (b), the Secretary shall
applicable, for such drug and year.
‘‘PART E—PRICE NEGOTIATION PROGRAM select and publish a list of—
‘‘(4) REFERENCE PRODUCT.—The term ‘ref-
TO LOWER PRICES FOR CERTAIN HIGH- ‘‘(1) with respect to the initial price appli-
erence product’ has the meaning given such cability year 2026, 10 negotiation-eligible
PRICED SINGLE SOURCE DRUGS term in section 351(i) of the Public Health drugs described in subparagraph (A) of sub-
‘‘SEC. 1191. ESTABLISHMENT OF PROGRAM. Service Act. section (d)(1), but not subparagraph (B) of
‘‘(a) IN GENERAL.—The Secretary shall es- ‘‘(5) TOTAL EXPENDITURES.—The term ‘total such subsection, with respect to such year
tablish a Drug Price Negotiation Program expenditures’ includes, in the case of expend- (or, all (if such number is less than 10) such
(in this part referred to as the ‘program’). itures with respect to part D of title XVIII, negotiation-eligible drugs with respect to
Under the program, with respect to each the total gross covered prescription drug such year);
price applicability period, the Secretary costs (as defined in section 1860D–15(b)(3)). ‘‘(2) with respect to the initial price appli-
shall— The term ‘total expenditures’ excludes, in cability year 2027, 15 negotiation-eligible
‘‘(1) publish a list of selected drugs in ac- the case of expenditures with respect to part drugs described in subparagraph (A) of sub-
cordance with section 1192; B of such title, expenditures for a drug or bi- section (d)(1), but not subparagraph (B) of
‘‘(2) enter into agreements with manufac- ological product that are bundled or pack- such subsection, with respect to such year
turers of selected drugs with respect to such aged into the payment for another service. (or, all (if such number is less than 15) such
period, in accordance with section 1193; ‘‘(6) UNIT.—The term ‘unit’ means, with re- negotiation-eligible drugs with respect to
‘‘(3) negotiate and, if applicable, renego- spect to a drug or biological product, the such year);
tiate maximum fair prices for such selected lowest identifiable amount (such as a cap- ‘‘(3) with respect to the initial price appli-
drugs, in accordance with section 1194; sule or tablet, milligram of molecules, or cability year 2028, 15 negotiation-eligible
‘‘(4) carry out the publication and adminis- grams) of the drug or biological product that drugs described in subparagraph (A) or (B) of
trative duties and compliance monitoring in is dispensed or furnished. subsection (d)(1) with respect to such year
accordance with sections 1195 and 1196. (or, all (if such number is less than 15) such
‘‘(d) TIMING FOR INITIAL PRICE APPLICA-
‘‘(b) DEFINITIONS RELATING TO TIMING.—For negotiation-eligible drugs with respect to
BILITY YEAR 2026.—Notwithstanding the pro-
purposes of this part: such year); and
‘‘(1) INITIAL PRICE APPLICABILITY YEAR.— visions of this part, in the case of initial
price applicability year 2026, the following ‘‘(4) with respect to the initial price appli-
The term ‘initial price applicability year’ cability year 2029 or a subsequent year, 20
means a year (beginning with 2026). rules shall apply for purposes of imple-
negotiation-eligible drugs described in sub-
‘‘(2) PRICE APPLICABILITY PERIOD.—The menting the program: paragraph (A) or (B) of subsection (d)(1), with
term ‘price applicability period’ means, with ‘‘(1) Subsection (b)(3) shall be applied by respect to such year (or, all (if such number
respect to a qualifying single source drug, substituting ‘September 1, 2023’ for ‘, with re- is less than 20) such negotiation-eligible
the period beginning with the first initial spect to each initial price applicability year, drugs with respect to such year).
price applicability year with respect to February 1 of the year that begins 2 years Subject to subsection (c)(2) and section
which such drug is a selected drug and end- prior to such year’. 1194(f)(5), each drug published on the list pur-
ing with the last year during which the drug ‘‘(2) Subsection (b)(4) shall be applied— suant to the previous sentence shall be sub-
is a selected drug. ‘‘(A) in subparagraph (A)(ii), by sub- ject to the negotiation process under section
‘‘(3) SELECTED DRUG PUBLICATION DATE.— stituting ‘October 1, 2023’ for ‘February 28 1194 for the negotiation period with respect
The term ‘selected drug publication date’ following the selected drug publication date to such initial price applicability year (and
means, with respect to each initial price ap- with respect to such selected drug’; and the renegotiation process under such section
plicability year, February 1 of the year that ‘‘(B) in subparagraph (B), by substituting as applicable for any subsequent year during
begins 2 years prior to such year. ‘August 1, 2024’ for ‘November 1 of the year the applicable price applicability period).
‘‘(4) NEGOTIATION PERIOD.—The term ‘nego- that begins 2 years prior to the initial price ‘‘(b) SELECTION OF DRUGS.—
tiation period’ means, with respect to an ini- applicability year’. ‘‘(1) IN GENERAL.—In carrying out sub-
tial price applicability year with respect to a ‘‘(3) Section 1192 shall be applied— section (a), subject to paragraph (2), the Sec-
selected drug, the period— ‘‘(A) in subsection (b)(1)(A), by sub- retary shall, with respect to an initial price
‘‘(A) beginning on the sooner of— stituting ‘during the period beginning on applicability year, do the following:
‘‘(i) the date on which the manufacturer of June 1, 2022, and ending on May 31, 2023’ for ‘‘(A) Rank negotiation-eligible drugs de-
the drug and the Secretary enter into an ‘during the most recent period of 12 months scribed in subsection (d)(1) according to the
agreement under section 1193 with respect to prior to the selected drug publication date total expenditures for such drugs under parts
such drug; or (but ending not later than October 31 of the B and D of title XVIII, as determined by the
‘‘(ii) February 28 following the selected year prior to the year of such drug publica- Secretary, during the most recent period of
drug publication date with respect to such tion date), with respect to such year, for 12 months prior to the selected drug publica-
selected drug; and which data are available’; and tion date (but ending not later than October
‘‘(B) ending on November 1 of the year that ‘‘(B) in subsection (d)(1)(A), by substituting 31 of the year prior to the year of such drug
begins 2 years prior to the initial price appli- ‘during the period beginning on June 1, 2022, publication date), with respect to such year,
cability year. and ending on May 31, 2023’ for ‘during the for which data are available, with the nego-
‘‘(c) OTHER DEFINITIONS.—For purposes of most recent period for which data are avail- tiation-eligible drugs with the highest total
this part: able of at least 12 months prior to the se- expenditures being ranked the highest.
‘‘(1) MANUFACTURER.—The term ‘manufac- lected drug publication date (but ending no ‘‘(B) Select from such ranked drugs with
turer’ has the meaning given that term in later than October 31 of the year prior to the respect to such year the negotiation-eligible
section 1847A(c)(6)(A). year of such drug publication date), with re- drugs with the highest such rankings.
‘‘(2) MAXIMUM FAIR PRICE ELIGIBLE INDI- spect to such year’. ‘‘(2) HIGH SPEND PART D DRUGS FOR 2026 AND
VIDUAL.—The term ‘maximum fair price eli- ‘‘(4) Section 1193(a) shall be applied by sub- 2027.—With respect to the initial price appli-
gible individual’ means, with respect to a se- stituting ‘October 1, 2023’ for ‘February 28 cability year 2026 and with respect to the ini-
dlhill on DSK120RN23PROD with SENATE
lected drug— following the selected drug publication date tial price applicability year 2027, the Sec-
‘‘(A) in the case such drug is dispensed to with respect to such selected drug’. retary shall apply paragraph (1) as if the ref-
the individual at a pharmacy, by a mail ‘‘(5) Section 1194(b)(2) shall be applied— erence to ‘negotiation-eligible drugs de-
order service, or by another dispenser, an in- ‘‘(A) in subparagraph (A), by substituting scribed in subsection (d)(1)’ were a reference
dividual who is enrolled in a prescription ‘October 2, 2023’ for ‘March 1 of the year of to ‘negotiation-eligible drugs described in
drug plan under part D of title XVIII or an the selected drug publication date, with re- subsection (d)(1)(A)’ and as if the reference
MA–PD plan under part C of such title if cov- spect to the selected drug’; to ‘total expenditures for such drugs under
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00025 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4076 CONGRESSIONAL RECORD — SENATE August 6, 2022
parts B and D of title XVIII’ were a reference ‘‘(I) are equal to or less than 1 percent of ‘‘(ii) for which, as of the selected drug pub-
to ‘total expenditures for such drugs under the total expenditures under such part D, as lication date with respect to such initial
part D of title XVIII’. so determined, for all covered part D drugs price applicability year, at least 7 years will
‘‘(c) SELECTED DRUG.— (as defined in section 1860D–2(e)) during such have elapsed since the date of such approval;
‘‘(1) IN GENERAL.—For purposes of this year; and and
part, in accordance with subsection (e)(2) and ‘‘(II) are equal to at least 80 percent of the ‘‘(iii) that is not the listed drug for any
subject to paragraph (2), each negotiation-el- total expenditures under such part D, as so drug that is approved and marketed under
igible drug included on the list published determined, for all covered part D drugs for section 505(j) of such Act.
under subsection (a) with respect to an ini- which the manufacturer of the drug has an ‘‘(B) BIOLOGICAL PRODUCTS.—A biological
tial price applicability year shall be referred agreement in effect under section 1860D–14A product—
to as a ‘selected drug’ with respect to such during such year. ‘‘(i) that is licensed under section 351(a) of
year and each subsequent year beginning be- ‘‘(ii) PART B DRUGS.—The total expendi- the Public Health Service Act and is mar-
fore the first year that begins at least 9 tures for the qualifying single source drug keted under section 351 of such Act;
months after the date on which the Sec- under part B of title XVIII, as determined by ‘‘(ii) for which, as of the selected drug pub-
retary determines at least one drug or bio- the Secretary in accordance with paragraph lication date with respect to such initial
logical product— (3)(B), during 2021— price applicability year, at least 11 years will
‘‘(A) is approved or licensed (as applica- ‘‘(I) are equal to or less than 1 percent of have elapsed since the date of such licensure;
ble)— the total expenditures under such part B, as and
‘‘(i) under section 505(j) of the Federal so determined, for all qualifying single ‘‘(iii) that is not the reference product for
Food, Drug, and Cosmetic Act using such source drugs for which payment may be any biological product that is licensed and
drug as the listed drug; or made under such part B during such year; marketed under section 351(k) of such Act.
‘‘(ii) under section 351(k) of the Public and ‘‘(2) TREATMENT OF AUTHORIZED GENERIC
Health Service Act using such drug as the ‘‘(II) are equal to at least 80 percent of the DRUGS.—
reference product; and total expenditures under such part B, as so ‘‘(A) IN GENERAL.—In the case of a quali-
‘‘(B) is marketed pursuant to such ap- determined, for all qualifying single source fying single source drug described in sub-
proval or licensure. drugs of the manufacturer for which pay- paragraph (A) or (B) of paragraph (1) that is
‘‘(2) CLARIFICATION.—A negotiation-eligible ment may be made under such part B during the listed drug (as such term is used in sec-
drug— such year. tion 505(j) of the Federal Food, Drug, and
‘‘(A) that is included on the list published ‘‘(B) CLARIFICATIONS RELATING TO MANUFAC- Cosmetic Act) or a product described in
under subsection (a) with respect to an ini- TURERS.— clause (ii) of subparagraph (B), with respect
tial price applicability year; and ‘‘(i) AGGREGATION RULE.—All persons treat- to an authorized generic drug, in applying
‘‘(B) for which the Secretary makes a de- ed as a single employer under subsection (a) the provisions of this part, such authorized
termination described in paragraph (1) before or (b) of section 52 of the Internal Revenue generic drug and such listed drug or such
or during the negotiation period with respect Code of 1986 shall be treated as one manufac- product shall be treated as the same quali-
to such initial price applicability year; turer for purposes of this paragraph. fying single source drug.
shall not be subject to the negotiation proc- ‘‘(ii) LIMITATION.—A drug shall not be con- ‘‘(B) AUTHORIZED GENERIC DRUG DEFINED.—
ess under section 1194 with respect to such sidered to be a qualifying single source drug For purposes of this paragraph, the term ‘au-
negotiation period and shall continue to be described in clause (i) or (ii) of subparagraph thorized generic drug’ means—
considered a selected drug under this part (A) if the manufacturer of such drug is ac- ‘‘(i) in the case of a drug, an authorized ge-
with respect to the number of negotiation-el- quired after 2021 by another manufacturer neric drug (as such term is defined in section
igible drugs published on the list under sub- that does not meet the definition of a speci- 505(t)(3) of the Federal Food, Drug, and Cos-
section (a) with respect to such initial price fied manufacturer under section 1860D– metic Act); and
applicability year. 14C(g)(4)(B)(ii), effective at the beginning of ‘‘(ii) in the case of a biological product, a
‘‘(d) NEGOTIATION-ELIGIBLE DRUG.— the plan year immediately following such ac- product that—
‘‘(1) IN GENERAL.—For purposes of this quisition or, in the case of an acquisition be- ‘‘(I) has been licensed under section 351(a)
part, subject to paragraph (2), the term ‘ne- fore 2025, effective January 1, 2025. of such Act; and
gotiation-eligible drug’ means, with respect ‘‘(C) DRUGS NOT INCLUDED AS SMALL BIOTECH ‘‘(II) is marketed, sold, or distributed di-
to the selected drug publication date with re- DRUGS.—A new formulation, such as an ex- rectly or indirectly to retail class of trade
spect to an initial price applicability year, a tended release formulation, of a qualifying under a different labeling, packaging (other
qualifying single source drug, as defined in single source drug shall not be considered a than repackaging as the reference product in
subsection (e), that is described in either of qualifying single source drug described in blister packs, unit doses, or similar pack-
the following subparagraphs (or, with respect subparagraph (A). aging for use in institutions), product code,
to the initial price applicability year 2026 or ‘‘(3) CLARIFICATIONS AND DETERMINATIONS.— labeler code, trade name, or trade mark than
2027, that is described in subparagraph (A)): ‘‘(A) PREVIOUSLY SELECTED DRUGS AND the reference product.
‘‘(A) PART D HIGH SPEND DRUGS.—The quali- SMALL BIOTECH DRUGS EXCLUDED.—In apply- ‘‘(3) EXCLUSIONS.—In this part, the term
fying single source drug is, determined in ac- ing subparagraphs (A) and (B) of paragraph ‘qualifying single source drug’ does not in-
cordance with subsection (e)(2), among the 50 (1), the Secretary shall not consider or clude any of the following:
qualifying single source drugs with the high- count— ‘‘(A) CERTAIN ORPHAN DRUGS.—A drug that
est total expenditures under part D of title ‘‘(i) drugs that are already selected drugs; is designated as a drug for only one rare dis-
XVIII, as determined by the Secretary in ac- and ease or condition under section 526 of the
cordance with paragraph (3), during the most ‘‘(ii) for initial price applicability years Federal Food, Drug, and Cosmetic Act and
recent 12-month period for which data are 2026, 2027, and 2028, qualifying single source for which the only approved indication (or
available prior to such selected drug publica- drugs described in paragraph (2)(A). indications) is for such disease or condition.
tion date (but ending no later than October ‘‘(B) USE OF DATA.—In determining wheth- ‘‘(B) LOW SPEND MEDICARE DRUGS.—A drug
31 of the year prior to the year of such drug er a qualifying single source drug satisfies or biological product with respect to which
publication date). any of the criteria described in paragraph (1) the total expenditures under parts B and D of
‘‘(B) PART B HIGH SPEND DRUGS.—The quali- or (2), the Secretary shall use data that is title XVIII, as determined by the Secretary
fying single source drug is, determined in ac- aggregated across dosage forms and in accordance with subsection (d)(3)(B)—
cordance with subsection (e)(2), among the 50 strengths of the drug, including new formu- ‘‘(i) with respect to initial price applica-
qualifying single source drugs with the high- lations of the drug, such as an extended re- bility year 2026, is less than, during the pe-
est total expenditures under part B of title lease formulation, and not based on the spe- riod beginning on June 1, 2022, and ending on
XVIII, as determined by the Secretary in ac- cific formulation or package size or package May 31, 2023, $200,000,000;
cordance with paragraph (3), during such type of the drug. ‘‘(ii) with respect to initial price applica-
most recent 12-month period, as described in ‘‘(e) QUALIFYING SINGLE SOURCE DRUG.— bility year 2027, is less than, during the most
subparagraph (A). ‘‘(1) IN GENERAL.—For purposes of this recent 12-month period applicable under sub-
‘‘(2) EXCEPTION FOR SMALL BIOTECH part, the term ‘qualifying single source drug’ paragraphs (A) and (B) of subsection (d)(1)
DRUGS.— means, with respect to an initial price appli- for such year, the dollar amount specified in
‘‘(A) IN GENERAL.—Subject to subparagraph cability year, subject to paragraphs (2) and clause (i) increased by the annual percentage
(C), the term ‘negotiation-eligible drug’ shall (3), a covered part D drug (as defined in sec- increase in the consumer price index for all
not include, with respect to the initial price tion 1860D–2(e)) that is described in any of urban consumers (all items; United States
applicability years 2026, 2027, and 2028, a the following or a drug or biological product city average) for the period beginning on
dlhill on DSK120RN23PROD with SENATE
qualifying single source drug that meets ei- for which payment may be made under part June 1, 2023, and ending on September 30,
ther of the following: B of title XVIII that is described in any of 2024; or
‘‘(i) PART D DRUGS.—The total expenditures the following: ‘‘(iii) with respect to a subsequent initial
for the qualifying single source drug under ‘‘(A) DRUG PRODUCTS.—A drug— price applicability year, is less than, during
part D of title XVIII, as determined by the ‘‘(i) that is approved under section 505(c) of the most recent 12-month period applicable
Secretary in accordance with paragraph the Federal Food, Drug, and Cosmetic Act under subparagraphs (A) and (B) of sub-
(3)(B), during 2021— and is marketed pursuant to such approval; section (d)(1) for such year, the dollar
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00026 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4077
amount specified in this subparagraph for are dispensed such drugs), as described in ‘‘(2) renegotiate, in accordance with the
the previous initial price applicability year paragraph (1)(A) or (2)(A), as applicable; and process specified pursuant to subsection (f),
increased by the annual percentage increase ‘‘(B) hospitals, physicians, and other pro- such maximum fair price for such drug for
in such consumer price index for the 12- viders of services and suppliers with respect the purpose described in section 1193(a)(2) if
month period ending on September 30 of the to maximum fair price eligible individuals such drug is a renegotiation-eligible drug
year prior to the year of the selected drug who with respect to such drug are described under such subsection.
publication date with respect to such subse- in subparagraph (B) of such section and are ‘‘(b) NEGOTIATION PROCESS REQUIRE-
quent initial price applicability year. furnished or administered such drug, as de- MENTS.—
‘‘(C) PLASMA-DERIVED PRODUCTS.—A bio- scribed in paragraph (1)(B) or (2)(B), as appli- ‘‘(1) METHODOLOGY AND PROCESS.—The Sec-
logical product that is derived from human cable; retary shall develop and use a consistent
whole blood or plasma. ‘‘(4) the manufacturer submits to the Sec- methodology and process, in accordance with
‘‘SEC. 1193. MANUFACTURER AGREEMENTS. retary, in a form and manner specified by paragraph (2), for negotiations under sub-
‘‘(a) IN GENERAL.—For purposes of section the Secretary, for the negotiation period for section (a) that aims to achieve the lowest
1191(a)(2), the Secretary shall enter into the price applicability period (and, if appli- maximum fair price for each selected drug.
agreements with manufacturers of selected cable, before any period of renegotiation pur- ‘‘(2) SPECIFIC ELEMENTS OF NEGOTIATION
drugs with respect to a price applicability suant to section 1194(f)) with respect to such PROCESS.—As part of the negotiation process
period, by not later than February 28 fol- drug— under this section, with respect to a selected
lowing the selected drug publication date ‘‘(A) information on the non-Federal aver- drug and the negotiation period with respect
with respect to such selected drug, under age manufacturer price (as defined in section to the initial price applicability year with
which— 8126(h)(5) of title 38, United States Code) for respect to such drug, the following shall
‘‘(1) during the negotiation period for the the drug for the applicable year or period; apply:
initial price applicability year for the se- and ‘‘(A) SUBMISSION OF INFORMATION.—Not
lected drug, the Secretary and the manufac- ‘‘(B) information that the Secretary re- later than March 1 of the year of the selected
turer, in accordance with section 1194, nego- quires to carry out the negotiation (or re- drug publication date, with respect to the se-
tiate to determine (and, by not later than negotiation process) under this part; and lected drug, the manufacturer of the drug
the last date of such period, agree to) a max- ‘‘(5) the manufacturer complies with re- shall submit to the Secretary, in accordance
imum fair price for such selected drug of the quirements determined by the Secretary to with section 1193(a)(4), the information de-
manufacturer in order for the manufacturer be necessary for purposes of administering scribed in such section.
to provide access to such price— the program and monitoring compliance ‘‘(B) INITIAL OFFER BY SECRETARY.—Not
‘‘(A) to maximum fair price eligible indi- with the program. later than the June 1 following the selected
viduals who with respect to such drug are de- ‘‘(b) AGREEMENT IN EFFECT UNTIL DRUG IS drug publication date, the Secretary shall
scribed in subparagraph (A) of section NO LONGER A SELECTED DRUG.—An agree- provide the manufacturer of the selected
1191(c)(2) and are dispensed such drug (and to ment entered into under this section shall be drug with a written initial offer that con-
pharmacies, mail order services, and other effective, with respect to a selected drug, tains the Secretary’s proposal for the max-
dispensers, with respect to such maximum until such drug is no longer considered a se- imum fair price of the drug and a concise
fair price eligible individuals who are dis- lected drug under section 1192(c). justification based on the factors described
pensed such drugs) during, subject to para- ‘‘(c) CONFIDENTIALITY OF INFORMATION.—In- in section 1194(e) that were used in devel-
graph (2), the price applicability period; and formation submitted to the Secretary under oping such offer.
‘‘(B) to hospitals, physicians, and other this part by a manufacturer of a selected ‘‘(C) RESPONSE TO INITIAL OFFER.—
providers of services and suppliers with re- drug that is proprietary information of such ‘‘(i) IN GENERAL.—Not later than 30 days
spect to maximum fair price eligible individ- manufacturer (as determined by the Sec- after the date of receipt of an initial offer
uals who with respect to such drug are de- retary) shall be used only by the Secretary under subparagraph (B), the manufacturer
scribed in subparagraph (B) of such section or disclosed to and used by the Comptroller shall either accept such offer or propose a
and are furnished or administered such drug General of the United States for purposes of counteroffer to such offer.
during, subject to paragraph (2), the price ap- carrying out this part. ‘‘(ii) COUNTEROFFER REQUIREMENTS.—If a
plicability period; ‘‘(d) NONDUPLICATION WITH 340B CEILING manufacturer proposes a counteroffer, such
‘‘(2) the Secretary and the manufacturer PRICE.—Under an agreement entered into counteroffer—
shall, in accordance with section 1194, re- under this section, the manufacturer of a se- ‘‘(I) shall be in writing; and
negotiate (and, by not later than the last lected drug— ‘‘(II) shall be justified based on the factors
date of the period of renegotiation, agree to) ‘‘(1) shall not be required to provide access described in subsection (e).
the maximum fair price for such drug, in to the maximum fair price under subsection ‘‘(D) RESPONSE TO COUNTEROFFER.—After
order for the manufacturer to provide access (a)(3), with respect to such selected drug and receiving a counteroffer under subparagraph
to such maximum fair price (as so renegoti- maximum fair price eligible individuals who (C), the Secretary shall respond in writing to
ated)— are eligible to be furnished, administered, or such counteroffer.
‘‘(A) to maximum fair price eligible indi- dispensed such selected drug at a covered en- ‘‘(E) DEADLINE.—All negotiations between
viduals who with respect to such drug are de- tity described in section 340B(a)(4) of the the Secretary and the manufacturer of the
scribed in subparagraph (A) of section Public Health Service Act, to such covered selected drug shall end prior to the first day
1191(c)(2) and are dispensed such drug (and to entity if such selected drug is subject to an of November following the selected drug pub-
pharmacies, mail order services, and other agreement described in section 340B(a)(1) of lication date, with respect to the initial
dispensers, with respect to such maximum such Act and the ceiling price (defined in price applicability year.
fair price eligible individuals who are dis- section 340B(a)(1) of such Act) is lower than ‘‘(F) LIMITATIONS ON OFFER AMOUNT.—In ne-
pensed such drugs) during any year during the maximum fair price for such selected gotiating the maximum fair price of a se-
the price applicability period (beginning drug; and lected drug, with respect to the initial price
after such renegotiation) with respect to ‘‘(2) shall be required to provide access to applicability year for the selected drug, and,
such selected drug; and the maximum fair price to such covered enti- as applicable, in renegotiating the maximum
‘‘(B) to hospitals, physicians, and other ty with respect to maximum fair price eligi- fair price for such drug, with respect to a
providers of services and suppliers with re- ble individuals who are eligible to be fur- subsequent year during the price applica-
spect to maximum fair price eligible individ- nished, administered, or dispensed such se- bility period for such drug, the Secretary
uals who with respect to such drug are de- lected drug at such entity at such ceiling shall not offer (or agree to a counteroffer for)
scribed in subparagraph (B) of such section price in a nonduplicated amount to the ceil- a maximum fair price for the selected drug
and are furnished or administered such drug ing price if such maximum fair price is below that—
during any year described in subparagraph the ceiling price for such selected drug. ‘‘(i) exceeds the ceiling determined under
(A); ‘‘SEC. 1194. NEGOTIATION AND RENEGOTIATION subsection (c) for the selected drug and year;
‘‘(3) subject to subsection (d), access to the PROCESS. or
maximum fair price (including as renegoti- ‘‘(a) IN GENERAL.—For purposes of this ‘‘(ii) as applicable, is less than the floor de-
ated pursuant to paragraph (2)), with respect part, under an agreement under section 1193 termined under subsection (d) for the se-
to such a selected drug, shall be provided by between the Secretary and a manufacturer of lected drug and year.
the manufacturer to— a selected drug (or selected drugs), with re- ‘‘(c) CEILING FOR MAXIMUM FAIR PRICE.—
‘‘(A) maximum fair price eligible individ- spect to the period for which such agreement ‘‘(1) GENERAL CEILING.—
uals, who with respect to such drug are de- is in effect and in accordance with sub- ‘‘(A) IN GENERAL.—The maximum fair price
dlhill on DSK120RN23PROD with SENATE
scribed in subparagraph (A) of section sections (b), (c), and (d), the Secretary and negotiated under this section for a selected
1191(c)(2), at the pharmacy, mail order serv- the manufacturer— drug, with respect to the first initial price
ice, or other dispenser at the point-of-sale of ‘‘(1) shall during the negotiation period applicability year of the price applicability
such drug (and shall be provided by the man- with respect to such drug, in accordance period with respect to such drug, shall not
ufacturer to the pharmacy, mail order serv- with this section, negotiate a maximum fair exceed the lower of the amount under sub-
ice, or other dispenser, with respect to such price for such drug for the purpose described paragraph (B) or the amount under subpara-
maximum fair price eligible individuals who in section 1193(a)(1); and graph (C).
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00027 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4078 CONGRESSIONAL RECORD — SENATE August 6, 2022
‘‘(B) SUBPARAGRAPH (B) AMOUNT.—An percent described in this paragraph is the ‘‘(e) FACTORS.—For purposes of negotiating
amount equal to the following: following: the maximum fair price of a selected drug
‘‘(i) COVERED PART D DRUG.—In the case of ‘‘(A) SHORT-MONOPOLY DRUGS AND VAC- under this part with the manufacturer of the
a covered part D drug (as defined in section CINES.—With respect to a selected drug drug, the Secretary shall consider the fol-
1860D–2(e)), the sum of the plan specific en- (other than an extended-monopoly drug and lowing factors, as applicable to the drug, as
rollment weighted amounts for each pre- a long-monopoly drug), 75 percent. the basis for determining the offers and
scription drug plan or MA–PD plan (as deter- ‘‘(B) EXTENDED-MONOPOLY DRUGS.—With re- counteroffers under subsection (b) for the
mined under paragraph (2)). spect to an extended-monopoly drug, 65 per- drug:
‘‘(ii) PART B DRUG OR BIOLOGICAL.—In the cent. ‘‘(1) MANUFACTURER-SPECIFIC DATA.—The
case of a drug or biological product for which ‘‘(C) LONG-MONOPOLY DRUGS.—With respect following data, with respect to such selected
payment may be made under part B of title to a long-monopoly drug, 40 percent. drug, as submitted by the manufacturer:
XVIII, the payment amount under section ‘‘(4) EXTENDED-MONOPOLY DRUG DEFINED.— ‘‘(A) Research and development costs of
1847A(b)(4) for the drug or biological product ‘‘(A) IN GENERAL.—In this part, subject to the manufacturer for the drug and the extent
for the year prior to the year of the selected subparagraph (B), the term ‘extended-mo- to which the manufacturer has recouped re-
drug publication date with respect to the ini- nopoly drug’ means, with respect to an ini- search and development costs.
tial price applicability year for the drug or tial price applicability year, a selected drug ‘‘(B) Current unit costs of production and
biological product. for which at least 12 years, but fewer than 16 distribution of the drug.
‘‘(C) SUBPARAGRAPH (C) AMOUNT.—An years, have elapsed since the date of ap- ‘‘(C) Prior Federal financial support for
amount equal to the applicable percent de- proval of such drug under section 505(c) of novel therapeutic discovery and development
scribed in paragraph (3), with respect to such the Federal Food, Drug, and Cosmetic Act or with respect to the drug.
drug, of the following: since the date of licensure of such drug under ‘‘(D) Data on pending and approved patent
‘‘(i) INITIAL PRICE APPLICABILITY YEAR section 351(a) of the Public Health Service applications, exclusivities recognized by the
2026.—In the case of a selected drug with re- Act, as applicable. Food and Drug Administration, and applica-
spect to which such initial price applica- ‘‘(B) EXCLUSIONS.—The term ‘extended-mo- tions and approvals under section 505(c) of
bility year is 2026, the average non-Federal nopoly drug’ shall not include any of the fol- the Federal Food, Drug, and Cosmetic Act or
average manufacturer price for such drug for lowing: section 351(a) of the Public Health Service
2021 (or, in the case that there is not an aver- ‘‘(i) A vaccine that is licensed under sec- Act for the drug.
age non-Federal average manufacturer price tion 351 of the Public Health Service Act and ‘‘(E) Market data and revenue and sales
available for such drug for 2021, for the first marketed pursuant to such section. volume data for the drug in the United
full year following the market entry for such ‘‘(ii) A selected drug for which a manufac- States.
drug), increased by the percentage increase turer had an agreement under this part with ‘‘(2) EVIDENCE ABOUT ALTERNATIVE TREAT-
in the consumer price index for all urban the Secretary with respect to an initial price MENTS.—The following evidence, as avail-
consumers (all items; United States city av- applicability year that is before 2030. able, with respect to such selected drug and
erage) from September 2021 (or December of ‘‘(C) CLARIFICATION.—Nothing in subpara- therapeutic alternatives to such drug:
such first full year following the market graph (B)(ii) shall limit the transition of a ‘‘(A) The extent to which such drug rep-
entry), as applicable, to September of the selected drug described in paragraph (3)(A) resents a therapeutic advance as compared
year prior to the year of the selected drug to a long-monopoly drug if the selected drug to existing therapeutic alternatives and the
publication date with respect to such initial meets the definition of a long-monopoly costs of such existing therapeutic alter-
price applicability year. drug. natives.
‘‘(ii) INITIAL PRICE APPLICABILITY YEAR 2027 ‘‘(5) LONG-MONOPOLY DRUG DEFINED.— ‘‘(B) Prescribing information approved by
AND SUBSEQUENT YEARS.—In the case of a se- ‘‘(A) IN GENERAL.—In this part, subject to the Food and Drug Administration for such
lected drug with respect to which such ini- subparagraph (B), the term ‘long-monopoly drug and therapeutic alternatives to such
tial price applicability year is 2027 or a sub- drug’ means, with respect to an initial price drug.
sequent year, the lower of— applicability year, a selected drug for which ‘‘(C) Comparative effectiveness of such
‘‘(I) the average non-Federal average man- at least 16 years have elapsed since the date drug and therapeutic alternatives to such
ufacturer price for such drug for 2021 (or, in of approval of such drug under section 505(c) drug, taking into consideration the effects of
the case that there is not an average non- of the Federal Food, Drug, and Cosmetic Act such drug and therapeutic alternatives to
Federal average manufacturer price avail- or since the date of licensure of such drug such drug on specific populations, such as in-
able for such drug for 2021, for the first full under section 351(a) of the Public Health dividuals with disabilities, the elderly, the
year following the market entry for such Service Act, as applicable. terminally ill, children, and other patient
drug), increased by the percentage increase ‘‘(B) EXCLUSION.—The term ‘long-monopoly populations.
in the consumer price index for all urban drug’ shall not include a vaccine that is li- ‘‘(D) The extent to which such drug and
consumers (all items; United States city av- censed under section 351 of the Public Health therapeutic alternatives to such drug ad-
erage) from September 2021 (or December of Service Act and marketed pursuant to such dress unmet medical needs for a condition
such first full year following the market section. for which treatment or diagnosis is not ad-
entry), as applicable, to September of the ‘‘(6) AVERAGE NON-FEDERAL AVERAGE MANU- dressed adequately by available therapy.
year prior to the year of the selected drug FACTURER PRICE.—In this part, the term ‘av- In using evidence described in subparagraph
publication date with respect to such initial erage non-Federal average manufacturer (C), the Secretary shall not use evidence
price applicability year; or price’ means the average of the non-Federal from comparative clinical effectiveness re-
‘‘(II) the average non-Federal average man- average manufacturer price (as defined in search in a manner that treats extending the
ufacturer price for such drug for the year section 8126(h)(5) of title 38, United States life of an elderly, disabled, or terminally ill
prior to the selected drug publication date Code) for the 4 calendar quarters of the year individual as of lower value than extending
with respect to such initial price applica- involved. the life of an individual who is younger, non-
bility year. ‘‘(d) TEMPORARY FLOOR FOR SMALL BIOTECH disabled, or not terminally ill.
‘‘(2) PLAN SPECIFIC ENROLLMENT WEIGHTED DRUGS.—In the case of a selected drug that is ‘‘(f) RENEGOTIATION PROCESS.—
a qualifying single source drug described in
AMOUNT.—For purposes of paragraph (1)(B)(i), ‘‘(1) IN GENERAL.—In the case of a renegoti-
section 1192(d)(2) and with respect to which
the plan specific enrollment weighted ation-eligible drug (as defined in paragraph
the first initial price applicability year of
amount for a prescription drug plan or an (2)) that is selected under paragraph (3), the
the price applicability period with respect to
MA–PD plan with respect to a covered Part Secretary shall provide for a process of re-
such drug is 2029 or 2030, the maximum fair
D drug is an amount equal to the product price negotiated under this section for such negotiation (for years (beginning with 2028)
of— drug for such initial price applicability year during the price applicability period, with
‘‘(A) the negotiated price of the drug under may not be less than 66 percent of the aver- respect to such drug) of the maximum fair
such plan under part D of title XVIII, net of age non-Federal average manufacturer price price for such drug consistent with para-
all price concessions received by such plan or for such drug (as defined in subsection (c)(6)) graph (4).
pharmacy benefit managers on behalf of such for 2021 (or, in the case that there is not an ‘‘(2) RENEGOTIATION-ELIGIBLE DRUG DE-
plan, for the most recent year for which data average non-Federal average manufacturer FINED.—In this section, the term ‘renegoti-
is available; and price available for such drug for 2021, for the ation-eligible drug’ means a selected drug
‘‘(B) a fraction— first full year following the market entry for that is any of the following:
‘‘(i) the numerator of which is the total such drug), increased by the percentage in- ‘‘(A) ADDITION OF NEW INDICATION.—A se-
number of individuals enrolled in such plan crease in the consumer price index for all lected drug for which a new indication is
dlhill on DSK120RN23PROD with SENATE
in such year; and urban consumers (all items; United States added to the drug.
‘‘(ii) the denominator of which is the total city average) from September 2021 (or De- ‘‘(B) CHANGE OF STATUS TO AN EXTENDED-
number of individuals enrolled in a prescrip- cember of such first full year following the MONOPOLY DRUG.—A selected drug that—
tion drug plan or an MA–PD plan in such market entry), as applicable, to September ‘‘(i) is not an extended-monopoly or a long-
year. of the year prior to the selected drug publi- monopoly drug; and
‘‘(3) APPLICABLE PERCENT DESCRIBED.—For cation date with respect to the initial price ‘‘(ii) for which there is a change in status
purposes of this subsection, the applicable applicability year. to that of an extended-monopoly drug.
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00028 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4079
‘‘(C) CHANGE OF STATUS TO A LONG-MONOP- ‘‘(b) UPDATES.— and the date on which any subsequent agree-
OLY DRUG.—A selected drug that— ‘‘(1) SUBSEQUENT YEAR MAXIMUM FAIR ment under such program is entered into;
‘‘(i) is not a long-monopoly drug; and PRICES.—For a selected drug, for each year ‘‘(B) the date on which the Secretary re-
‘‘(ii) for which there is a change in status subsequent to the first initial price applica- ceives notification of any termination of an
to that of a long-monopoly drug. bility year of the price applicability period agreement under the manufacturer discount
‘‘(D) MATERIAL CHANGES.—A selected drug with respect to such drug, with respect to program under section 1860D-14C and the
for which the Secretary determines there has which an agreement for such drug is in effect date on which any subsequent agreement
been a material change of any of the factors under section 1193, not later than November under such program is entered into; and
described in paragraph (1) or (2) of subsection 30 of the year that is 2 years prior to such ‘‘(C) the date on which the Secretary re-
(e). subsequent year, the Secretary shall publish ceives notification of any termination of a
‘‘(3) SELECTION OF DRUGS FOR RENEGOTI- the maximum fair price applicable to such rebate agreement described in section 1927(b)
ATION.—For each year (beginning with 2028), drug and year, which shall be— and the date on which any subsequent rebate
the Secretary shall select among renegoti- ‘‘(A) subject to subparagraph (B), the agreement described in such section is en-
ation-eligible drugs for renegotiation as fol- amount equal to the maximum fair price tered into.
lows: published for such drug for the previous ‘‘(7) The establishment of procedures for
‘‘(A) ALL EXTENDED-MONOPOLY NEGOTIA- year, increased by the annual percentage in- purposes of applying section 1192(d)(2)(B).
TION-ELIGIBLE DRUGS.—The Secretary shall crease in the consumer price index for all ‘‘(b) COMPLIANCE MONITORING.—The Sec-
select all renegotiation-eligible drugs de- urban consumers (all items; United States retary shall monitor compliance by a manu-
scribed in paragraph (2)(B). city average) for the 12-month period ending facturer with the terms of an agreement
‘‘(B) ALL LONG-MONOPOLY NEGOTIATION-ELI- with the July immediately preceding such under section 1193 and establish a mecha-
GIBLE DRUGS.—The Secretary shall select all November 30; or nism through which violations of such terms
renegotiation-eligible drugs described in ‘‘(B) in the case the maximum fair price for shall be reported.
paragraph (2)(C). such drug was renegotiated, for the first year ‘‘SEC. 1197. CIVIL MONETARY PENALTIES.
‘‘(C) REMAINING DRUGS.—Among the re- for which such price as so renegotiated ap- ‘‘(a) VIOLATIONS RELATING TO OFFERING OF
maining renegotiation-eligible drugs de- plies, such renegotiated maximum fair price. MAXIMUM FAIR PRICE.—Any manufacturer of
scribed in subparagraphs (A) and (D) of para- ‘‘(2) PRICES NEGOTIATED AFTER DEADLINE.— a selected drug that has entered into an
graph (2), the Secretary shall select renego- In the case of a selected drug with respect to agreement under section 1193, with respect
tiation-eligible drugs for which the Sec- an initial price applicability year for which to a year during the price applicability pe-
retary expects renegotiation is likely to re- the maximum fair price is determined under riod with respect to such drug, that does not
sult in a significant change in the maximum provide access to a price that is equal to or
this part after the date of publication under
fair price otherwise negotiated. less than the maximum fair price for such
this section, the Secretary shall publish such
‘‘(4) RENEGOTIATION PROCESS.— drug for such year—
maximum fair price by not later than 30 days
‘‘(A) IN GENERAL.—The Secretary shall ‘‘(1) to a maximum fair price eligible indi-
after the date such maximum price is so de-
specify the process for renegotiation of max- vidual who with respect to such drug is de-
termined.
imum fair prices with the manufacturer of a scribed in subparagraph (A) of section
‘‘SEC. 1196. ADMINISTRATIVE DUTIES AND COM- 1191(c)(2) and who is dispensed such drug dur-
renegotiation-eligible drug selected for re- PLIANCE MONITORING.
negotiation under this subsection. ing such year (and to pharmacies, mail order
‘‘(B) CONSISTENT WITH NEGOTIATION PROC- ‘‘(a) ADMINISTRATIVE DUTIES.—For pur- services, and other dispensers, with respect
ESS.—The process specified under subpara-
poses of section 1191(a)(4), the administrative to such maximum fair price eligible individ-
graph (A) shall, to the extent practicable, be duties described in this section are the fol- uals who are dispensed such drugs); or
consistent with the methodology and process lowing: ‘‘(2) to a hospital, physician, or other pro-
established under subsection (b) and in ac- ‘‘(1) The establishment of procedures to en- vider of services or supplier with respect to
cordance with subsections (c), (d), and (e), sure that the maximum fair price for a se- maximum fair price eligible individuals who
and for purposes of applying subsections lected drug is applied before— with respect to such drug is described in sub-
(c)(1)(A) and (d), the reference to the first ‘‘(A) any coverage or financial assistance paragraph (B) of such section and is fur-
initial price applicability year of the price under other health benefit plans or programs nished or administered such drug by such
applicability period with respect to such that provide coverage or financial assistance hospital, physician, or provider or supplier
drug shall be treated as the first initial price for the purchase or provision of prescription during such year;
applicability year of such period for which drug coverage on behalf of maximum fair shall be subject to a civil monetary penalty
the maximum fair price established pursuant price eligible individuals; and equal to ten times the amount equal to the
to such renegotiation applies, including for ‘‘(B) any other discounts. product of the number of units of such drug
applying subsection (c)(3)(B) in the case of ‘‘(2) The establishment of procedures to so furnished, dispensed, or administered dur-
renegotiation-eligible drugs described in compute and apply the maximum fair price ing such year and the difference between the
paragraph (3)(A) of this subsection and sub- across different strengths and dosage forms price for such drug made available for such
section (c)(3)(C) in the case of renegotiation- of a selected drug and not based on the spe- year by such manufacturer with respect to
eligible drugs described in paragraph (3)(B) cific formulation or package size or package such individual or hospital, physician, pro-
of this subsection. type of such drug. vider of services, or supplier and the max-
‘‘(3) The establishment of procedures to imum fair price for such drug for such year.
‘‘(5) CLARIFICATION.—A renegotiation-eligi-
carry out the provisions of this part, as ap- ‘‘(b) VIOLATIONS OF CERTAIN TERMS OF
ble drug for which the Secretary makes a de- AGREEMENT.—Any manufacturer of a se-
termination described in section 1192(c)(1) plicable, with respect to—
‘‘(A) maximum fair price eligible individ- lected drug that has entered into an agree-
before or during the period of renegotiation ment under section 1193, with respect to a
shall not be subject to the renegotiation uals who are enrolled in a prescription drug
plan under part D of title XVIII or an MA– year during the price applicability period
process under this section. with respect to such drug, that is in viola-
‘‘(g) CLARIFICATION.—The maximum fair PD plan under part C of such title; and
‘‘(B) maximum fair price eligible individ- tion of a requirement imposed pursuant to
price for a selected drug described in sub- section 1193(a)(5), including the requirement
paragraph (A) or (B) of paragraph (1) shall uals who are enrolled under part B of such
title, including who are enrolled in an MA to submit information pursuant to section
take effect no later than the first day of the 1193(a)(4), shall be subject to a civil mone-
first calendar quarter that begins after the plan under part C of such title.
‘‘(4) The establishment of a negotiation tary penalty equal to $1,000,000 for each day
date described in subparagraph (A) or (B), as of such violation.
applicable. process and renegotiation process in accord-
‘‘(c) FALSE INFORMATION.—Any manufac-
‘‘SEC. 1195. PUBLICATION OF MAXIMUM FAIR ance with section 1194. turer that knowingly provides false informa-
PRICES. ‘‘(5) The establishment of a process for tion pursuant to section 1196(a)(7) shall be
‘‘(a) IN GENERAL.—With respect to an ini- manufacturers to submit information de- subject to a civil monetary penalty equal to
tial price applicability year and a selected scribed in section 1194(b)(2)(A). $100,000,000 for each item of such false infor-
drug with respect to such year— ‘‘(6) The sharing with the Secretary of the mation.
‘‘(1) not later than November 30 of the year Treasury of such information as is necessary ‘‘(d) APPLICATION.—The provisions of sec-
that is 2 years prior to such initial price ap- to determine the tax imposed by section tion 1128A (other than subsections (a) and
plicability year, the Secretary shall publish 5000D of the Internal Revenue Code of 1986, (b)) shall apply to a civil monetary penalty
the maximum fair price for such drug nego- including the application of such tax to a under this section in the same manner as
tiated with the manufacturer of such drug manufacturer, producer, or importer or the such provisions apply to a penalty or pro-
under this part; and determination of any date described in sec- ceeding under section 1128A(a).
dlhill on DSK120RN23PROD with SENATE
‘‘(2) not later than March 1 of the year tion 5000D(c)(1) of such Code. For purposes of ‘‘SEC. 1198. LIMITATION ON ADMINISTRATIVE
prior to such initial price applicability year, the preceding sentence, such information AND JUDICIAL REVIEW.
the Secretary shall publish, subject to sec- shall include— ‘‘There shall be no administrative or judi-
tion 1193(c), the explanation for the max- ‘‘(A) the date on which the Secretary re- cial review of any of the following:
imum fair price with respect to the factors ceives notification of any termination of an ‘‘(1) The determination of a unit, with re-
as applied under section 1194(e) for such drug agreement under the Medicare coverage gap spect to a drug or biological product, pursu-
described in paragraph (1). discount program under section 1860D-14A ant to section 1191(c)(6).
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00029 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4080 CONGRESSIONAL RECORD — SENATE August 6, 2022
‘‘(2) The selection of drugs under section price (as defined in section 1191(c)(3)) is in ef- 1191(c)(3)) for such drug with respect to such
1192(b), the determination of negotiation-eli- fect with respect to the year. period.’’.
gible drugs under section 1192(d), and the de- ‘‘(ii) CLARIFICATION.—Nothing in clause (i) (3) MAXIMUM FAIR PRICES EXCLUDED FROM
termination of qualifying single source drugs shall be construed as prohibiting a PDP AVERAGE MANUFACTURER PRICE.—Section
under section 1192(e). sponsor from removing such a selected drug 1927(k)(1)(B)(i) of the Social Security Act (42
‘‘(3) The determination of a maximum fair from a formulary if such removal would be U.S.C. 1396r–8(k)(1)(B)(i)) is amended—
price under subsection (b) or (f) of section permitted under section 423.120(b)(5)(iv) of (A) in subclause (IV) by striking ‘‘; and’’ at
1194. title 42, Code of Federal Regulations (or any the end;
‘‘(4) The determination of renegotiation-el- successor regulation).’’. (B) in subclause (V) by striking the period
igible drugs under section 1194(f)(2) and the (F) INFORMATION FROM PRESCRIPTION DRUG at the end and inserting ‘‘; and’’; and
selection of renegotiation-eligible drugs PLANS AND MA–PD PLANS REQUIRED.— (C) by adding at the end the following new
under section 1194(f)(3).’’. (i) PRESCRIPTION DRUG PLANS.—Section subclause:
(b) APPLICATION OF MAXIMUM FAIR PRICES 1860D–12(b) of the Social Security Act (42 ‘‘(VI) any reduction in price paid during
AND CONFORMING AMENDMENTS.—
U.S.C. 1395w–112(b)) is amended by adding at the rebate period to the manufacturer for a
(1) UNDER MEDICARE.— the end the following new paragraph: drug by reason of application of part E of
(A) APPLICATION TO PAYMENTS UNDER PART ‘‘(8) PROVISION OF INFORMATION RELATED TO title XI.’’.
MAXIMUM FAIR PRICES.—Each contract en- (c) IMPLEMENTATION FOR 2026 THROUGH
B.—Section 1847A(b)(1)(B) of the Social Secu-
tered into with a PDP sponsor under this 2028.—The Secretary of Health and Human
rity Act (42 U.S.C. 1395w–3a(b)(1)(B)) is
part with respect to a prescription drug plan Services shall implement this section, in-
amended by inserting ‘‘or in the case of such
offered by such sponsor shall require the cluding the amendments made by this sec-
a drug or biological product that is a se-
sponsor to provide information to the Sec- tion, for 2026, 2027, and 2028 by program in-
lected drug (as referred to in section 1192(c)), struction or other forms of program guid-
retary as requested by the Secretary for pur-
with respect to a price applicability period ance.
poses of carrying out section 1194.’’.
(as defined in section 1191(b)(2)), 106 percent
(ii) MA–PD PLANS.—Section 1857(f)(3) of the SEC. 11002. SPECIAL RULE TO DELAY SELECTION
of the maximum fair price (as defined in sec- AND NEGOTIATION OF BIOLOGICS
Social Security Act (42 U.S.C. 1395w–27(f)(3))
tion 1191(c)(3)) applicable for such drug and a is amended by adding at the end the fol- FOR BIOSIMILAR MARKET ENTRY.
year during such period’’ after ‘‘paragraph lowing new subparagraph: (a) IN GENERAL.—Part E of title XI of the
(4)’’. ‘‘(E) PROVISION OF INFORMATION RELATED TO Social Security Act, as added by section
(B) APPLICATION UNDER MA OF COST-SHARING MAXIMUM FAIR PRICES.—Section 1860D– 11001, is amended—
FOR PART B DRUGS BASED OFF OF NEGOTIATED (1) in section 1192—
12(b)(8).’’.
PRICE.—Section 1852(a)(1)(B)(iv) of the Social (A) in subsection (a), in the flush matter
(G) CONDITIONS FOR COVERAGE.—
Security Act (42 U.S.C. 1395w–22(a)(1)(B)(iv)) (i) MEDICARE PART D.—Section 1860D–43(c) following paragraph (4), by inserting ‘‘and
is amended— of the Social Security Act (42 U.S.C. 1395w– subsection (b)(3)’’ after ‘‘the previous sen-
(i) by redesignating subclause (VII) as sub- 153(c)) is amended— tence’’;
clause (VIII); and (I) by redesignating paragraphs (1) and (2) (B) in subsection (b)—
(ii) by inserting after subclause (VI) the as subparagraphs (A) and (B), respectively; (i) in paragraph (1), by adding at the end
following subclause: (II) by striking ‘‘AGREEMENTS.—Sub- the following new subparagraph:
‘‘(VII) A drug or biological product that is section’’ and inserting the following: ‘‘(C) In the case of a biological product for
a selected drug (as referred to in section ‘‘AGREEMENTS.— which the inclusion of the biological product
1192(c)).’’. ‘‘(1) IN GENERAL.—Subject to paragraph (2), as a selected drug on a list published under
(C) EXCEPTION TO PART D NON-INTER- subsection’’; and subsection (a) has been delayed under sub-
FERENCE.—Section 1860D–11(i) of the Social (III) by adding at the end the following new section (f)(2), remove such biological product
Security Act (42 U.S.C. 1395w–111(i)) is paragraph: from the rankings under subparagraph (A)
amended— ‘‘(2) EXCEPTION.—Paragraph (1)(A) shall not before making the selections under subpara-
(i) in paragraph (1), by striking ‘‘and’’ at apply to a covered part D drug of a manufac- graph (B).’’; and
the end; turer for any period described in section (ii) by adding at the end the following new
(ii) in paragraph (2), by striking ‘‘or insti- 5000D(c)(1) of the Internal Revenue Code of paragraph:
tute a price structure for the reimbursement 1986 with respect to the manufacturer.’’. ‘‘(3) INCLUSION OF DELAYED BIOLOGICAL
of covered part D drugs.’’ and inserting ‘‘, ex- (ii) MEDICAID AND MEDICARE PART B.—Sec- PRODUCTS.—Pursuant to subparagraphs
cept as provided under section 1860D– tion 1927(a)(3) of the Social Security Act (42 (B)(ii)(I) and (C)(i) of subsection (f)(2), the
4(b)(3)(l); and’’; and U.S.C. 1396r–8(a)(3)) is amended by adding at Secretary shall select and include on the list
(iii) by adding at the end the following new the end the following new sentence: ‘‘The published under subsection (a) the biological
paragraph: preceding sentence shall not apply to a sin- products described in such subparagraphs.
‘‘(3) may not institute a price structure for gle source drug or innovator multiple source Such biological products shall count towards
the reimbursement of covered part D drugs, drug of a manufacturer for any period de- the required number of drugs to be selected
except as provided under part E of title XI.’’. scribed in section 5000D(c)(1) of the Internal under subsection (a)(1).’’; and
(D) APPLICATION AS NEGOTIATED PRICE Revenue Code of 1986 with respect to the (C) by adding at the end the following new
UNDER PART D.—Section 1860D–2(d)(1) of the manufacturer.’’. subsection:
Social Security Act (42 U.S.C. 1395w– (H) DISCLOSURE OF INFORMATION UNDER ‘‘(f) SPECIAL RULE TO DELAY SELECTION
102(d)(1)) is amended— MEDICARE PART D.— AND NEGOTIATION OF BIOLOGICS FOR BIO-
(i) in subparagraph (B), by inserting ‘‘, sub- (i) CONTRACT REQUIREMENTS.—Section SIMILAR MARKET ENTRY.—
ject to subparagraph (D),’’ after ‘‘negotiated 1860D–12(b)(3)(D)(i) of the Social Security ‘‘(1) APPLICATION.—
prices’’; and Act (42 U.S.C. 1395w–112(b)(3)(D)(i)) is amend- ‘‘(A) IN GENERAL.—Subject to subparagraph
(ii) by adding at the end the following new ed by inserting ‘‘, or carrying out part E of (B), in the case of a biological product that
subparagraph: title XI’’ after ‘‘appropriate)’’. would (but for this subsection) be an ex-
‘‘(D) APPLICATION OF MAXIMUM FAIR PRICE (ii) SUBSIDIES.—Section 1860D–15(f)(2)(A)(i) tended-monopoly drug (as defined in section
FOR SELECTED DRUGS.—In applying this sec- of the Social Security Act (42 U.S.C. 1395w– 1194(c)(4)) included as a selected drug on the
tion, in the case of a covered part D drug 115(f)(2)(A)(i)) is amended by inserting ‘‘or list published under subsection (a) with re-
that is a selected drug (as referred to in sec- part E of title XI’’ after ‘‘this section’’. spect to an initial price applicability year,
tion 1192(c)), with respect to a price applica- (2) DRUG PRICE NEGOTIATION PROGRAM the rules described in paragraph (2) shall
bility period (as defined in section 1191(b)(2)), PRICES INCLUDED IN BEST PRICE.—Section apply if the Secretary determines that there
the negotiated prices used for payment (as 1927(c)(1)(C) of the Social Security Act (42 is a high likelihood (as described in para-
described in this subsection) shall be no U.S.C. 1396r–8(c)(1)(C)) is amended— graph (3)) that a biosimilar biological prod-
greater than the maximum fair price (as de- (A) in clause (i)(VI), by striking ‘‘any uct (for which such biological product will be
fined in section 1191(c)(3)) for such drug and prices charged’’ and inserting ‘‘subject to the reference product) will be licensed and
for each year during such period plus any clause (ii)(V), any prices charged’’; and marketed under section 351(k) of the Public
dispensing fees for such drug.’’. (B) in clause (ii)— Health Service Act before the date that is 2
(E) COVERAGE OF SELECTED DRUGS.—Section (i) in subclause (III), by striking ‘‘; and’’ at years after the selected drug publication
1860D–4(b)(3) of the Social Security Act (42 the end; date with respect to such initial price appli-
U.S.C. 1395w–104(b)(3)) is amended by adding (ii) in subclause (IV), by striking the pe- cability year.
at the end the following new subparagraph: riod at the end and inserting ‘‘; and’’; and ‘‘(B) REQUEST REQUIRED.—
dlhill on DSK120RN23PROD with SENATE
‘‘(I) REQUIRED INCLUSION OF SELECTED (iii) by adding at the end the following new ‘‘(i) IN GENERAL.—The Secretary shall not
DRUGS.— subclause: provide for a delay under—
‘‘(i) IN GENERAL.—For 2026 and each subse- ‘‘(V) in the case of a rebate period and a ‘‘(I) paragraph (2)(A) unless a request is
quent year, the PDP sponsor offering a pre- covered outpatient drug that is a selected made for such a delay by a manufacturer of
scription drug plan shall include each cov- drug (as referred to in section 1192(c)) during a biosimilar biological product prior to the
ered part D drug that is a selected drug such rebate period, shall be inclusive of the selected drug publication date for the list
under section 1192 for which a maximum fair maximum fair price (as defined in section published under subsection (a) with respect
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00030 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4081
to the initial price applicability year for ological product would have been included as uct would have been included as a selected
which the biological product may have been a selected drug on such list. drug but for subparagraph (B)(iii) and the se-
included as a selected drug on such list but ‘‘(B) IF NOT LICENSED AND MARKETED DURING lected drug publication date with respect to
for subparagraph (2)(A); or THE INITIAL DELAY.— the initial price applicability year that is 2
‘‘(II) paragraph (2)(B)(iii) unless a request ‘‘(i) IN GENERAL.—If, during the time period years after the initial price applicability
is made for such a delay by such a manufac- between the selected drug publication date year for which such biological product would
turer prior to the selected drug publication on which the biological product would have have been included as a selected drug on
date for the list published under subsection been included on the list as a selected drug such list but for this subsection, the Sec-
(a) with respect to the initial price applica- pursuant to subsection (a) but for subpara- retary determines that such biosimilar bio-
bility year that is 1 year after the initial graph (A) and the selected drug publication logical product has not been licensed and
price applicability year for which the bio- date with respect to the initial price applica- marketed—
logical product described in subsection (a) bility year that is 1 year after the initial ‘‘(i) the Secretary shall include such bio-
would have been included as a selected drug price applicability year for which such bio- logical product as a selected drug on such
on such list but for paragraph (2)(A). logical product would have been included as list with respect to the initial price applica-
‘‘(ii) INFORMATION AND DOCUMENTS.— a selected drug on such list, the Secretary bility year that is 2 years after the initial
‘‘(I) IN GENERAL.—A request made under determines that the biosimilar biological price applicability year for which such bio-
clause (i) shall be submitted to the Secretary product for which the manufacturer sub- logical product would have been included as
by such manufacturer at a time and in a mitted the request under paragraph a selected drug on such list; and
form and manner specified by the Secretary, (1)(B)(i)(II) (and for which the Secretary pre- ‘‘(ii) the manufacturer of such biological
and contain— viously made a high likelihood determina- product shall pay a rebate under paragraph
‘‘(aa) information and documents nec- tion under paragraph (3)) has not been li- (4) with respect to the years for which such
essary for the Secretary to make determina- censed and marketed under section 351(k) of manufacturer would have provided access to
tions under this subsection, as specified by the Public Health Service Act, the Secretary a maximum fair price for such biological
the Secretary and including, to the extent shall, at the request of such manufacturer— product but for this subsection.
available, items described in subclause (III); ‘‘(I) reevaluate whether there is a high ‘‘(D) LIMITATIONS ON DELAYS.—
and likelihood (as described in paragraph (3)) ‘‘(i) LIMITED TO 2 YEARS.—In no case shall
‘‘(bb) all agreements related to the bio- that such biosimilar biological product will the Secretary delay the inclusion of a bio-
similar biological product filed with the Fed- be licensed and marketed under such section logical product on the list published under
eral Trade Commission or the Assistant At- 351(k) before the date that is 2 years after subsection (a) for more than 2 years.
torney General pursuant to subsections (a) the selected drug publication date for which ‘‘(ii) EXCLUSION OF BIOLOGICAL PRODUCTS
and (c) of section 1112 of the Medicare Pre- such biological product would have been in- THAT TRANSITIONED TO A LONG-MONOPOLY
scription Drug, Improvement, and Mod- cluded as a selected drug on such list pub- DRUG DURING THE DELAY.—In the case of a bi-
ernization Act of 2003. lished but for subparagraph (A); and ological product for which the inclusion on
‘‘(II) ADDITIONAL INFORMATION AND DOCU- ‘‘(II) evaluate whether, on the basis of the list published pursuant to subsection (a)
MENTS.—After the Secretary has reviewed clear and convincing evidence, the manufac- was delayed by 1 year under subparagraph
the request and materials submitted under turer of such biosimilar biological product (A) and for which there would have been a
subclause (I), the manufacturer shall submit has made a significant amount of progress change in status to a long-monopoly drug (as
any additional information and documents (as determined by the Secretary) towards defined in section 1194(c)(5)) if such biologi-
requested by the Secretary necessary to both such licensure and the marketing of cal product had been a selected drug, in no
make determinations under this subsection. such biosimilar biological product (based on case may the Secretary provide for a second
‘‘(III) ITEMS DESCRIBED.—The items de- information from items described in sub- 1-year delay under subparagraph (B)(iii).
scribed in this clause are the following: clauses (I)(bb) and (II) of paragraph (1)(B)(ii)) ‘‘(iii) EXCLUSION OF BIOLOGICAL PRODUCTS IF
‘‘(aa) The manufacturing schedule for such since the receipt by the Secretary of the re- MORE THAN 1 YEAR SINCE LICENSURE.—In no
biosimilar biological product submitted to quest made by such manufacturer under case shall the Secretary delay the inclusion
the Food and Drug Administration during its paragraph (1)(B)(i)(I). of a biological product on the list published
review of the application under such section ‘‘(ii) SELECTION AND NEGOTIATION.—If the under subsection (a) if more than 1 year has
351(k). Secretary determines that there is not a elapsed since the biosimilar biological prod-
‘‘(bb) Disclosures (in filings by the manu- high likelihood that such biosimilar biologi- uct has been licensed under section 351(k) of
facturer of such biosimilar biological prod- cal product will be licensed and marketed as the Public Health Service Act and marketing
uct with the Securities and Exchange Com- described in clause (i)(I) or there has not has not commenced for such biosimilar bio-
mission required under section 12(b), 12(g), been a significant amount of progress as de- logical product.
13(a), or 15(d) of the Securities Exchange Act scribed in clause (i)(II)— ‘‘(iv) CERTAIN MANUFACTURERS OF BIO-
of 1934 about capital investment, revenue ex- ‘‘(I) the Secretary shall include the bio- SIMILAR BIOLOGICAL PRODUCTS EXCLUDED.—In
pectations, and actions taken by the manu- logical product as a selected drug on the list no case shall the Secretary delay the inclu-
facturer that are typical of the normal published under subsection (a) with respect sion of a biological product as a selected
course of business in the year (or the 2 years, to the initial price applicability year that is drug on the list published under subsection
as applicable) before marketing of a bio- 1 year after the initial price applicability (a) if Secretary determined that the manu-
similar biological product) that pertain to year for which such biological product would facturer of the biosimilar biological product
the marketing of such biosimilar biological have been included as a selected drug on described in paragraph (1)(A)—
product, or comparable documentation that such list but for subparagraph (A); and ‘‘(I) is the same as the manufacturer of the
is distributed to the shareholders of pri- ‘‘(II) the manufacturer of such biological reference product described in such para-
vately held companies. product shall pay a rebate under paragraph graph or is treated as being the same pursu-
‘‘(C) AGGREGATION RULE.— (4) with respect to the year for which such ant to paragraph (1)(C); or
‘‘(i) IN GENERAL.—All persons treated as a manufacturer would have provided access to ‘‘(II) has, based on information from items
single employer under subsection (a) or (b) of a maximum fair price for such biological described in paragraph (1)(B)(ii)(I)(bb), en-
section 52 of the Internal Revenue Code of product but for subparagraph (A). tered into any agreement described in such
1986, or in a partnership, shall be treated as ‘‘(iii) SECOND 1-YEAR DELAY.—If the Sec- paragraph with the manufacturer of the ref-
one manufacturer for purposes of paragraph retary determines that there is a high likeli- erence product described in paragraph (1)(A)
(2)(D)(iv). hood that such biosimilar biological product that—
‘‘(ii) PARTNERSHIP DEFINED.—In clause (i), will be licensed and marketed (as described ‘‘(aa) requires or incentivizes the manufac-
the term ‘partnership’ means a syndicate, in clause (i)(I)) and a significant amount of turer of the biosimilar biological product to
group, pool, joint venture, or other organiza- progress has been made by the manufacturer submit a request described in paragraph
tion through or by means of which any busi- of such biosimilar biological product towards (1)(B); or
ness, financial operation, or venture is car- such licensure and marketing (as described ‘‘(bb) restricts the quantity (either directly
ried on by the manufacturer of the biological in clause (i)(II)), the Secretary shall delay or indirectly) of the biosimilar biological
product and the manufacturer of the bio- the inclusion of the biological product as a product that may be sold in the United
similar biological product. selected drug on the list published under sub- States over a specified period of time.
‘‘(2) RULES DESCRIBED.—The rules described section (a) until the selected drug publica- ‘‘(3) HIGH LIKELIHOOD.—For purposes of this
in this paragraph are the following: tion date of such list with respect to the ini- subsection, there is a high likelihood de-
‘‘(A) DELAYED SELECTION AND NEGOTIATION tial price applicability year that is 2 years scribed in paragraph (1) or paragraph (2), as
FOR 1 YEAR.—If a determination of high like- after the initial price applicability year for applicable, if the Secretary finds that—
dlhill on DSK120RN23PROD with SENATE
lihood is made under paragraph (3), the Sec- which such biological product would have ‘‘(A) an application for licensure under sec-
retary shall delay the inclusion of the bio- been included as a selected drug on such list tion 351(k) of the Public Health Service Act
logical product as a selected drug on the list but for this subsection. for the biosimilar biological product has
published under subsection (a) until such list ‘‘(C) IF NOT LICENSED AND MARKETED DURING been accepted for review or approved by the
is published with respect to the initial price THE YEAR TWO DELAY.—If, during the time pe- Food and Drug Administration; and
applicability year that is 1 year after the ini- riod between the selected drug publication ‘‘(B) information from items described in
tial price applicability year for which the bi- date of the list for which the biological prod- sub clauses (I)(bb) and (III) of paragraph
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00031 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4082 CONGRESSIONAL RECORD — SENATE August 6, 2022
(1)(B)(ii) submitted to the Secretary by the mining the amount of the rebate for such bi- SEC. 11003. EXCISE TAX IMPOSED ON DRUG MAN-
manufacturer requesting a delay under such ological product under subparagraph (B), the UFACTURERS DURING NONCOMPLI-
paragraph provides clear and convincing evi- ANCE PERIODS.
amount described in clause (ii) shall be sub-
dence that such biosimilar biological prod- stituted for the maximum fair price de- (a) IN GENERAL.—Subtitle D of the Internal
uct will, within the time period specified scribed in clause (i)(I) or (ii)(I) of such sub- Revenue Code of 1986 is amended by adding
under paragraph (1)(A) or (2)(B)(i)(I), be mar- paragraph (B), as applicable. at the end the following new chapter:
keted. ‘‘(ii) AMOUNT DESCRIBED.—The amount de- ‘‘CHAPTER 50A—DESIGNATED DRUGS
‘‘(4) REBATE.— scribed in this clause is an amount equal to
‘‘(A) IN GENERAL.—For purposes of subpara- 65 percent of the average non-Federal aver- ‘‘Sec. 5000D. Designated drugs during non-
graphs (B)(ii)(II) and (C)(ii) of paragraph (2), age manufacturer price for the biological compliance periods.
in the case of a biological product for which product for 2021 (or, in the case that there is ‘‘SEC. 5000D. DESIGNATED DRUGS DURING NON-
the inclusion on the list under subsection (a) not an average non-Federal average manu- COMPLIANCE PERIODS.
was delayed under this subsection and for facturer price available for such biological ‘‘(a) IN GENERAL.—There is hereby imposed
which the Secretary has negotiated and en- product for 2021, for the first full year fol- on the sale by the manufacturer, producer,
tered into an agreement under section 1193 lowing the market entry for such biological or importer of any designated drug during a
with respect to such biological product, the product), increased by the percentage in- day described in subsection (b) a tax in an
manufacturer shall be required to pay a re- crease in the consumer price index for all amount such that the applicable percentage
bate to the Secretary at such time and in urban consumers (all items; United States is equal to the ratio of—
such manner as determined by the Sec- city average) from September 2021 (or De- ‘‘(1) such tax, divided by
retary. cember of such first full year following the ‘‘(2) the sum of such tax and the price for
‘‘(B) AMOUNT.—Subject to subparagraph market entry), as applicable, to September which so sold.
(C), the amount of the rebate under subpara- of the year prior to the selected drug publi- ‘‘(b) NONCOMPLIANCE PERIODS.—A day is de-
graph (A) with respect to a biological prod- cation date with respect to the initial price scribed in this subsection with respect to a
uct shall be equal to the estimated amount— applicability year that would have applied designated drug if it is a day during one of
‘‘(i) in the case of a biological product that but for this subsection. the following periods:
is a covered part D drug (as defined in sec- ‘‘(D) REBATE DEPOSITS.—Amounts paid as ‘‘(1) The period beginning on the March 1st
tion 1860D–2(e)), that is the sum of the prod- rebates under this paragraph shall be depos- (or, in the case of initial price applicability
ucts of— ited into— year 2026, the October 2nd) immediately fol-
‘‘(I) 75 percent of the amount by which— ‘‘(i) in the case payment is made for such lowing the date on which such drug is in-
‘‘(aa) the average manufacturer price, as biological product under part B of title cluded on the list published under section
reported by the manufacturer of such cov- XVIII, the Federal Supplementary Medical 1192(a) of the Social Security Act and ending
ered part D drug under section 1927 (or, if not Insurance Trust Fund established under sec- on the earlier of—
reported by such manufacturer under section tion 1841; and ‘‘(A) the first date on which the manufac-
1927, as reported by such manufacturer to the ‘‘(ii) in the case such biological product is turer of such designated drug has in place an
Secretary pursuant to the agreement under a covered part D drug (as defined in section agreement described in section 1193(a) of
section 1193(a)) for such biological product,
1860D–2(e)), the Medicare Prescription Drug such Act with respect to such drug, or
with respect to each of the calendar quarters
Account under section 1860D–16 in such Trust ‘‘(B) the date that the Secretary of Health
of the price applicability period that would
Fund. and Human Services has made a determina-
have applied but for this subsection; exceeds
‘‘(5) DEFINITIONS OF BIOSIMILAR BIOLOGICAL tion described in section 1192(c)(1) of such
‘‘(bb) in the initial price applicability year
PRODUCT.—In this subsection, the term ‘bio- Act with respect to such designated drug.
that would have applied but for a delay
similar biological product’ has the meaning ‘‘(2) The period beginning on the November
under—
given such term in section 1847A(c)(6).’’; 2nd immediately following the March 1st de-
‘‘(AA) paragraph (2)(A), the maximum fair
(2) in section 1193(a)(4)— scribed in paragraph (1) (or, in the case of
price negotiated under section 1194 for such
(A) in the matter preceding subparagraph initial price applicability year 2026, the Au-
biological product under such agreement; or
(A), by inserting ‘‘, and for section 1192(f),’’ gust 2nd immediately following the October
‘‘(BB) paragraph (2)(B)(iii), such maximum
fair price, increased as described in section after ‘‘section 1194(f))’’; 2nd described in such paragraph) and ending
1195(b)(1)(A); and (B) in subparagraph (A), by striking ‘‘and’’ on the earlier of—
‘‘(II) the number of units dispensed under at the end; ‘‘(A) the first date on which the manufac-
part D of title XVIII for such covered part D (C) by adding at the end the following new turer of such designated drug and the Sec-
drug during each such calendar quarter of subparagraph: retary of Health and Human Services have
such price applicability period; and ‘‘(C) information that the Secretary re- agreed to a maximum fair price under an
‘‘(ii) in the case of a biological product for quires to carry out section 1192(f), including agreement described in section 1193(a) of the
which payment may be made under part B of rebates under paragraph (4) of such section; Social Security Act, or
title XVIII, that is the sum of the products and’’; ‘‘(B) the date that the Secretary of Health
of— (3) in section 1196(a)(7), by striking ‘‘sec- and Human Services has made a determina-
‘‘(I) 80 percent of the amount by which— tion 1192(d)(2)(B)’’ and inserting ‘‘subsections tion described in section 1192(c)(1) of such
‘‘(aa) the payment amount for such bio- (d)(2)(B) and (f)(1)(C) of section 1192’’; Act with respect to such designated drug.
logical product under section 1847A(b), with (4) in section 1197— ‘‘(3) In the case of any designated drug
respect to each of the calendar quarters of (A) by redesignating subsections (b), (c), which is a selected drug (as defined in sec-
the price applicability period that would and (d) as subsections (c), (d), and (e), respec- tion 1192(c) of the Social Security Act) that
have applied but for this subsection; exceeds tively; and the Secretary of Health and Human Services
‘‘(bb) in the initial price applicability year (B) by inserting after subsection (a) the has selected for renegotiation under section
that would have applied but for a delay following new subsection: 1194(f) of such Act, the period beginning on
under— ‘‘(b) VIOLATIONS RELATING TO PROVIDING the November 2nd of the year that begins 2
‘‘(AA) paragraph (2)(A), the maximum fair REBATES.—Any manufacturer that fails to years prior to the first initial price applica-
price negotiated under section 1194 for such comply with the rebate requirements under bility year of the price applicability period
biological product under such agreement; or section 1192(f)(4) shall be subject to a civil for which the maximum fair price estab-
monetary penalty equal to 10 times the lished pursuant to such renegotiation applies
‘‘(BB) paragraph (2)(B)(iii), such maximum
amount of the rebate the manufacturer and ending on the earlier of—
fair price, increased as described in section
failed to pay under such section.’’; and ‘‘(A) the first date on which the manufac-
1195(b)(1)(A); and
(5) in section 1198(b)(2), by inserting ‘‘the turer of such designated drug has agreed to a
‘‘(II) the number of units (excluding units
application of section 1192(f),’’ after ‘‘section renegotiated maximum fair price under such
that are packaged into the payment amount
1192(e)’’. agreement, or
for an item or service and are not separately (b) CONFORMING AMENDMENTS FOR DISCLO-
payable under such part B) of the billing and ‘‘(B) the date that the Secretary of Health
SURE OF CERTAIN INFORMATION.—Section
payment code of such biological product ad- and Human Services has made a determina-
1927(b)(3)(D)(i) of the Social Security Act (42
ministered or furnished under such part B tion described in section 1192(c)(1) of such
U.S.C. 1396r–8(b)(3)(D)(i)) is amended by
during each such calendar quarter of such striking ‘‘or to carry out section 1847B’’ and Act with respect to such designated drug.
price applicability period. inserting ‘‘or to carry out section 1847B or ‘‘(4) With respect to information that is re-
‘‘(C) SPECIAL RULE FOR DELAYED BIOLOGICAL section 1192(f), including rebates under para- quired to be submitted to the Secretary of
PRODUCTS THAT ARE LONG-MONOPOLY DRUGS.— graph (4) of such section’’. Health and Human Services under an agree-
dlhill on DSK120RN23PROD with SENATE
‘‘(i) IN GENERAL.—In the case of a biologi- (c) IMPLEMENTATION FOR 2026 THROUGH ment described in section 1193(a) of the So-
cal product with respect to which a rebate is 2028.—The Secretary of Health and Human cial Security Act, the period beginning on
required to be paid under this paragraph, if Services shall implement this section, in- the date on which such Secretary certifies
such biological product qualifies as a long- cluding the amendments made by this sec- that such information is overdue and ending
monopoly drug (as defined in section tion, for 2026, 2027, and 2028 by program in- on the date that such information is so sub-
1194(c)(5)) at the time of its inclusion on the struction or other forms of program guid- mitted.
list published under subsection (a), in deter- ance. ‘‘(c) SUSPENSION OF TAX.—
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00032 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4083
‘‘(1) IN GENERAL.—A day shall not be taken (b) NO DEDUCTION FOR EXCISE TAX PAY- are less than, subject to subparagraph (B),
into account as a day during a period de- MENTS.—Section 275(a)(6) of the Internal $100; or
scribed in subsection (b) if such day is also a Revenue Code of 1986 is amended by inserting ‘‘(ii) that is a vaccine described in subpara-
day during the period— ‘‘50A,’’ after ‘‘46,’’. graph (A) or (B) of section 1861(s)(10).
‘‘(A) beginning on the first date on which— (c) CLERICAL AMENDMENT.—The table of ‘‘(B) INCREASE.—The dollar amount applied
‘‘(i) the notice of terminations of all appli- chapters for subtitle D of the Internal Rev- under subparagraph (A)(i)—
cable agreements of the manufacturer have enue Code of 1986 is amended by adding at ‘‘(i) for 2024, shall be the dollar amount
been received by the Secretary of Health and the end the following new item: specified under such subparagraph for 2023,
Human Services, and ‘‘CHAPTER 50A—DESIGNATED DRUGS’’. increased by the percentage increase in the
‘‘(ii) none of the drugs of the manufacturer consumer price index for all urban con-
(d) EFFECTIVE DATE.—The amendments
of the designated drug are covered by an sumers (United States city average) for the
made by this section shall apply to sales
agreement under section 1860D-14A or 1860D- 12-month period ending with June of the pre-
after the date of the enactment of this Act.
14C of the Social Security Act, and
SEC. 11004. FUNDING. vious year; and
‘‘(B) ending on the last day of February
In addition to amounts otherwise avail- ‘‘(ii) for a subsequent year, shall be the
following the earlier of—
able, there is appropriated to the Centers for dollar amount specified in this clause (or
‘‘(i) the first day after the date described in
Medicare & Medicaid Services, out of any clause (i)) for the previous year (without ap-
subparagraph (A) on which the manufacturer
enters into any subsequent applicable agree- money in the Treasury not otherwise appro- plication of subparagraph (C)), increased by
ment, or priated, $3,000,000,000 for fiscal year 2022, to the percentage increase in the consumer
‘‘(ii) the first date any drug of the manu- remain available until expended, to carry price index for all urban consumers (United
facturer of the designated drug is covered by out the provisions of, including the amend- States city average) for the 12-month period
an agreement under section 1860D-14A or ments made by, this part. ending with June of the previous year.
1860D-14C of the Social Security Act. PART 2—PRESCRIPTION DRUG INFLATION ‘‘(C) ROUNDING.—Any dollar amount deter-
‘‘(2) APPLICABLE AGREEMENT.—For purposes REBATES mined under subparagraph (B) that is not a
of this subsection, the term ‘applicable multiple of $10 shall be rounded to the near-
SEC. 11101. MEDICARE PART B REBATE BY MANU-
agreement’ means the following: FACTURERS.
est multiple of $10.
‘‘(A) An agreement under— ‘‘(3) REBATE AMOUNT.—
(a) IN GENERAL.—Section 1847A of the So-
‘‘(i) the Medicare coverage gap discount ‘‘(A) IN GENERAL.—For purposes of para-
cial Security Act (42 U.S.C. 1395w–3a) is
program under section 1860D-14A of the So- amended by redesignating subsection (i) as graph (1), the amount specified in this para-
cial Security Act, or subsection (j) and by inserting after sub- graph for a part B rebatable drug assigned to
‘‘(ii) the manufacturer discount program section (h) the following subsection: a billing and payment code for a calendar
under section 1860D-14C of such Act. ‘‘(i) REBATE BY MANUFACTURERS FOR SIN- quarter is, subject to subparagraphs (B) and
‘‘(B) A rebate agreement described in sec- GLE SOURCE DRUGS AND BIOLOGICALS WITH (G) and paragraph (4), the estimated amount
tion 1927(b) of such Act. PRICES INCREASING FASTER THAN INFLA- equal to the product of—
‘‘(d) APPLICABLE PERCENTAGE.—For pur- TION.— ‘‘(i) the total number of units determined
poses of this section, the term ‘applicable ‘‘(1) REQUIREMENTS.— under subparagraph (B) for the billing and
percentage’ means— ‘‘(A) SECRETARIAL PROVISION OF INFORMA- payment code of such drug; and
‘‘(1) in the case of sales of a designated TION.—Not later than 6 months after the end ‘‘(ii) the amount (if any) by which—
drug during the first 90 days described in of each calendar quarter beginning on or ‘‘(I) the amount equal to—
subsection (b) with respect to such drug, 65 after January 1, 2023, the Secretary shall, for ‘‘(aa) in the case of a part B rebatable drug
percent, each part B rebatable drug, report to each described in paragraph (1)(B) of subsection
‘‘(2) in the case of sales of such drug during manufacturer of such part B rebatable drug (b), 106 percent of the amount determined
the 91st day through the 180th day described the following for such calendar quarter: under paragraph (4) of such section for such
in subsection (b) with respect to such drug, ‘‘(i) Information on the total number of drug during the calendar quarter; or
75 percent, units of the billing and payment code de- ‘‘(bb) in the case of a part B rebatable drug
‘‘(3) in the case of sales of such drug during scribed in subparagraph (A)(i) of paragraph described in paragraph (1)(C) of such sub-
the 181st day through the 270th day described (3) with respect to such drug and calendar section, the payment amount under such
in subsection (b) with respect to such drug, quarter. paragraph for such drug during the calendar
85 percent, and ‘‘(ii) Information on the amount (if any) of quarter; exceeds
‘‘(4) in the case of sales of such drug during the excess average sales price increase de- ‘‘(II) the inflation-adjusted payment
any subsequent day, 95 percent. scribed in subparagraph (A)(ii) of such para-
‘‘(e) DEFINITIONS.—For purposes of this sec- amount determined under subparagraph (C)
graph for such drug and calendar quarter. for such part B rebatable drug during the
tion—
‘‘(iii) The rebate amount specified under calendar quarter.
‘‘(1) DESIGNATED DRUG.—The term ‘des-
such paragraph for such part B rebatable ‘‘(B) TOTAL NUMBER OF UNITS.—For pur-
ignated drug’ means any negotiation-eligible
drug and calendar quarter. poses of subparagraph (A)(i), the total num-
drug (as defined in section 1192(d) of the So-
‘‘(B) MANUFACTURER REQUIREMENT.—For ber of units for the billing and payment code
cial Security Act) included on the list pub-
each calendar quarter beginning on or after with respect to a part B rebatable drug fur-
lished under section 1192(a) of such Act
January 1, 2023, the manufacturer of a part B nished during a calendar quarter described in
which is manufactured or produced in the
rebatable drug shall, for such drug, not later subparagraph (A) is equal to—
United States or entered into the United
than 30 days after the date of receipt from ‘‘(i) the number of units for the billing and
States for consumption, use, or warehousing.
the Secretary of the information described payment code of such drug furnished during
‘‘(2) UNITED STATES.—The term ‘United
in subparagraph (A) for such calendar quar- such calendar quarter, minus
States’ has the meaning given such term by
ter, provide to the Secretary a rebate that is ‘‘(ii) the number of units for such billing
section 4612(a)(4).
equal to the amount specified in paragraph
‘‘(3) OTHER TERMS.—The terms ‘initial and payment code of such drug furnished
(3) for such drug for such calendar quarter.
price applicability year’, ‘price applicability during such calendar quarter—
‘‘(C) TRANSITION RULE FOR REPORTING.—The
period’, and ‘maximum fair price’ have the ‘‘(I) with respect to which the manufac-
Secretary may, for each part B rebatable
meaning given such terms in section 1191 of turer provides a discount under the program
drug, delay the timeframe for reporting the
the Social Security Act. under section 340B of the Public Health Serv-
‘‘(f) SPECIAL RULES.— information described in subparagraph (A)
for calendar quarters beginning in 2023 and ice Act or a rebate under section 1927; or
‘‘(1) COORDINATION WITH RULES FOR POSSES- ‘‘(II) that are packaged into the payment
SIONS OF THE UNITED STATES.—Rules similar 2024 until not later than September 30, 2025.
‘‘(2) PART B REBATABLE DRUG DEFINED.— amount for an item or service and are not
to the rules of paragraphs (2) and (4) of sec- separately payable.
tion 4132(c) shall apply for purposes of this ‘‘(A) IN GENERAL.—In this subsection, the
term ‘part B rebatable drug’ means a single ‘‘(C) DETERMINATION OF INFLATION-AD-
section. JUSTED PAYMENT AMOUNT.—The inflation-ad-
‘‘(2) ANTI-ABUSE RULE.—In the case of a sale source drug or biological (as defined in sub-
paragraph (D) of subsection (c)(6)), including justed payment amount determined under
which was timed for the purpose of avoiding this subparagraph for a part B rebatable
the tax imposed by this section, the Sec- a biosimilar biological product (as defined in
subparagraph (H) of such subsection) but ex- drug for a calendar quarter is—
retary may treat such sale as occurring dur-
cluding a qualifying biosimilar biological ‘‘(i) the payment amount for the billing
ing a day described in subsection (b).
‘‘(g) EXPORTS.—Rules similar to the rules product (as defined in subsection and payment code for such drug in the pay-
dlhill on DSK120RN23PROD with SENATE
of section 4662(e) (other than section (b)(8)(B)(iii)), for which payment is made ment amount benchmark quarter (as defined
4662(e)(2)(A)(ii)(II)) shall apply for purposes under this part, except such term shall not in subparagraph (D)); increased by
of this chapter. include such a drug or biological— ‘‘(ii) the percentage by which the rebate
‘‘(h) REGULATIONS.—The Secretary shall ‘‘(i) if, as determined by the Secretary, the period CPI–U (as defined in subparagraph
prescribe such regulations and other guid- average total allowed charges for such drug (F)) for the calendar quarter exceeds the
ance as may be necessary to carry out this or biological under this part for a year per benchmark period CPI–U (as defined in sub-
section.’’. individual that uses such a drug or biological paragraph (E)).
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00033 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4084 CONGRESSIONAL RECORD — SENATE August 6, 2022
‘‘(D) PAYMENT AMOUNT BENCHMARK QUAR- ment amount described in paragraph ble, that equals the difference between (i) 100
TER.—The term ‘payment amount bench- (3)(A)(ii)(I) (or, in the case of a part B percent, and (ii) the percent applied under
mark quarter’ means the calendar quarter rebatable drug that is a selected drug (as de- section 1847A(i)(5)(B)’’;
beginning July 1, 2021. fined in section 1192(c)), the payment amount (2) in subsection (i), by adding at the end
‘‘(E) BENCHMARK PERIOD CPI–U.—The term described in subsection (b)(1)(B) for such the following new paragraph:
‘benchmark period CPI–U’ means the con- drug) for a calendar quarter exceeds the in-
‘‘(9) In the case of a part B rebatable drug
sumer price index for all urban consumers flation adjusted payment for such quarter—
(as defined in paragraph (2) of section
(United States city average) for January ‘‘(A) in computing the amount of any coin-
1847A(i)) for which payment under this sub-
2021. surance applicable under this part to an indi-
section is not packaged into a payment for a
‘‘(F) REBATE PERIOD CPI–U.—The term ‘re- vidual to whom such drug is furnished, the
bate period CPI–U’ means, with respect to a computation of such coinsurance shall be service furnished on or after April 1, 2023,
calendar quarter described in subparagraph equal to 20 percent of the inflation-adjusted under the revised payment system under this
(C), the greater of the benchmark period payment amount determined under para- subsection, in lieu of calculation of coinsur-
CPI–U and the consumer price index for all graph (3)(C) for such part B rebatable drug; ance and the amount of payment otherwise
urban consumers (United States city aver- and applicable under this subsection, the provi-
age) for the first month of the calendar quar- ‘‘(B) the amount of such coinsurance for sions of section 1847A(i)(5) and paragraph
ter that is two calendar quarters prior to such calendar quarter, as computed under (1)(EE) of subsection (a), shall, as determined
such described calendar quarter. subparagraph (A), shall be applied as a per- appropriate by the Secretary, apply under
‘‘(G) REDUCTION OR WAIVER FOR SHORTAGES cent, as determined by the Secretary, to the this subsection in the same manner as such
AND SEVERE SUPPLY CHAIN DISRUPTIONS.—The payment amount that would otherwise apply provisions of section 1847A(i)(5) and sub-
Secretary shall reduce or waive the amount under subparagraphs (B) or (C) of subsection section (a) apply under such section and sub-
under subparagraph (A) with respect to a (b)(1). section.’’; and
part B rebatable drug and a calendar quar- ‘‘(6) REBATE DEPOSITS.—Amounts paid as (3) in subsection (t)(8), by adding at the end
ter— rebates under paragraph (1)(B) shall be de- the following new subparagraph:
‘‘(i) in the case of a part B rebatable drug posited into the Federal Supplementary ‘‘(F) PART B REBATABLE DRUGS.—In the case
that is described as currently in shortage on Medical Insurance Trust Fund established of a part B rebatable drug (as defined in
the shortage list in effect under section 506E under section 1841. paragraph (2) of section 1847A(i), except if
of the Federal Food, Drug, and Cosmetic Act ‘‘(7) CIVIL MONEY PENALTY.—If a manufac- such drug does not have a copayment
at any point during the calendar quarter; or turer of a part B rebatable drug has failed to amount as a result of application of subpara-
‘‘(ii) in the case of a biosimilar biological comply with the requirements under para- graph (E)) for which payment under this part
product, when the Secretary determines graph (1)(B) for such drug for a calendar is not packaged into a payment for a covered
there is a severe supply chain disruption dur- quarter, the manufacturer shall be subject OPD service (or group of services) furnished
ing the calendar quarter, such as that caused to, in accordance with a process established on or after April 1, 2023, and the payment for
by a natural disaster or other unique or un- by the Secretary pursuant to regulations, a such drug under this subsection is the same
expected event. civil money penalty in an amount equal to as the amount for a calendar quarter under
‘‘(4) SPECIAL TREATMENT OF CERTAIN DRUGS at least 125 percent of the amount specified paragraph (3)(A)(ii)(I) of section 1847A(i),
AND EXEMPTION.— in paragraph (3) for such drug for such cal- under the system under this subsection, in
‘‘(A) SUBSEQUENTLY APPROVED DRUGS.—In endar quarter. The provisions of section lieu of calculation of the copayment amount
the case of a part B rebatable drug first ap- 1128A (other than subsections (a) (with re- and the amount of payment otherwise appli-
proved or licensed by the Food and Drug Ad- spect to amounts of penalties or additional cable under this subsection (other than the
ministration after December 1, 2020, clause assessments) and (b)) shall apply to a civil application of the limitation described in
(i) of paragraph (3)(C) shall be applied as if money penalty under this paragraph in the subparagraph (C)), the provisions of section
the term ‘payment amount benchmark quar- same manner as such provisions apply to a 1847A(i)(5) and paragraph (1)(EE) of sub-
ter’ were defined under paragraph (3)(D) as penalty or proceeding under section 1128A(a). section (a), shall, as determined appropriate
the third full calendar quarter after the day ‘‘(8) LIMITATION ON ADMINISTRATIVE OR JUDI- by the Secretary, apply under this sub-
on which the drug was first marketed and CIAL REVIEW.—There shall be no administra- section in the same manner as such provi-
clause (ii) of paragraph (3)(C) shall be applied tive or judicial review of any of the fol- sions of section 1847A(i)(5) and subsection (a)
as if the term ‘benchmark period CPI–U’ lowing: apply under such section and subsection.’’.
were defined under paragraph (3)(E) as if the ‘‘(A) The determination of units under this
(c) CONFORMING AMENDMENTS.—
reference to ‘January 2021’ under such para- subsection.
(1) TO PART B ASP CALCULATION.—Section
graph were a reference to ‘the first month of ‘‘(B) The determination of whether a drug
1847A(c)(3) of the Social Security Act (42
the first full calendar quarter after the day is a part B rebatable drug under this sub-
U.S.C. 1395w–3a(c)(3)) is amended by insert-
on which the drug was first marketed’. section.
ing ‘‘subsection (i) or’’ before ‘‘section 1927’’.
‘‘(B) TIMELINE FOR PROVISION OF REBATES ‘‘(C) The calculation of the rebate amount
(2) EXCLUDING PART B DRUG INFLATION RE-
FOR SUBSEQUENTLY APPROVED DRUGS.—In the under this subsection.
BATE FROM BEST PRICE.—Section
case of a part B rebatable drug first approved ‘‘(D) The computation of coinsurance
1927(c)(1)(C)(ii)(I) of the Social Security Act
or licensed by the Food and Drug Adminis- under paragraph (5) of this subsection.
tration after December 1, 2020, paragraph (42 U.S.C. 1396r–8(c)(1)(C)(ii)(I)) is amended
‘‘(E) The computation of amounts paid
(1)(B) shall be applied as if the reference to by inserting ‘‘or section 1847A(i)’’ after ‘‘this
under section 1833(a)(1)(EE).’’.
‘January 1, 2023’ under such paragraph were section’’.
(b) AMOUNTS PAYABLE; COST-SHARING.—
a reference to ‘the later of the 6th full cal- Section 1833 of the Social Security Act (42 (3) COORDINATION WITH MEDICAID REBATE IN-
FORMATION DISCLOSURE.—Section
endar quarter after the day on which the U.S.C. 1395l) is amended—
drug was first marketed or January 1, 2023’. (1) in subsection (a)(1)— 1927(b)(3)(D)(i) of the Social Security Act (42
‘‘(C) SELECTED DRUGS.—In the case of a (A) in subparagraph (G), by inserting ‘‘, U.S.C. 1396r–8(b)(3)(D)(i)) is amended by in-
part B rebatable drug that is a selected drug subject to subsection (i)(9),’’ after ‘‘the serting ‘‘and the rebate’’ after ‘‘the payment
(as defined in section 1192(c)) with respect to amounts paid’’; amount’’.
a price applicability period (as defined in (B) in subparagraph (S), by striking ‘‘with (4) EXCLUDING PART B DRUG INFLATION RE-
BATES FROM AVERAGE MANUFACTURER PRICE.—
section 1191(b)(2)), in the case such drug is no respect to’’ and inserting ‘‘subject to sub-
longer considered to be a selected drug under paragraph (EE), with respect to’’; Section 1927(k)(1)(B)(i) of the Social Security
section 1192(c), for each applicable period (as (C) by striking ‘‘and (DD)’’ and inserting Act (42 U.S.C. 1396r–8(k)(1)(B)(i)), as amended
defined under subsection (g)(7)) beginning ‘‘(DD)’’; and by section 11001(b)(3), is amended—
after the price applicability period with re- (D) by inserting before the semicolon at (A) in subclause (V), by striking ‘‘and’’ at
spect to such drug, clause (i) of paragraph the end the following: ‘‘, and (EE) with re- the end;
(3)(C) shall be applied as if the term ‘pay- spect to a part B rebatable drug (as defined (B) in subclause (VI), by striking the pe-
ment amount benchmark quarter’ were de- in paragraph (2) of section 1847A(i)) furnished riod at the end and inserting a semicolon;
fined under paragraph (3)(D) as the calendar on or after April 1, 2023, for which the pay- and
quarter beginning January 1 of the last year ment amount for a calendar quarter under (C) by adding at the end the following new
during such price applicability period with paragraph (3)(A)(ii)(I) of such section (or, in subclause:
respect to such selected drug and clause (ii) the case of a part B rebatable drug that is a ‘‘(VII) rebates paid by manufacturers under
of paragraph (3)(C) shall be applied as if the selected drug (as defined in section 1192(c) section 1847A(i); and’’.
term ‘benchmark period CPI–U’ were defined for which, the payment amount described in (d) FUNDING.—In addition to amounts oth-
dlhill on DSK120RN23PROD with SENATE
under paragraph (3)(E) as if the reference to section 1847A(b)(1)(B)) for such drug for such erwise available, there are appropriated to
‘January 2021’ under such paragraph were a quarter exceeds the inflation-adjusted pay- the Centers for Medicare & Medicaid Serv-
reference to ‘the July of the year preceding ment under paragraph (3)(A)(ii)(II) of such ices, out of any money in the Treasury not
such last year’. section for such quarter, the amounts paid otherwise appropriated, $80,000,000 for fiscal
‘‘(5) APPLICATION TO BENEFICIARY COINSUR- shall be equal to the percent of the payment year 2022, including $12,500,000 to carry out
ANCE.—In the case of a part B rebatable drug amount under paragraph (3)(A)(ii)(I) of such the provisions of, including the amendments
furnished on or after April 1, 2023, if the pay- section or section 1847A(b)(1)(B), as applica- made by, this section in fiscal year 2022, and
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00034 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4085
$7,500,000 to carry out the provisions of, in- under subparagraph (A) with respect to a ministration after October 1, 2021, subpara-
cluding the amendments made by, this sec- part D rebatable drug and an applicable pe- graphs (A) and (B) of paragraph (4) shall be
tion in each of fiscal years 2023 through 2031, riod— applied as if the term ‘payment amount
to remain available until expended. ‘‘(i) in the case of a part D rebatable drug benchmark period’ were defined under sub-
SEC. 11102. MEDICARE PART D REBATE BY MANU- that is described as currently in shortage on section (g)(3) as the first calendar year be-
FACTURERS. the shortage list in effect under section 506E ginning after the day on which the drug was
(a) IN GENERAL.—Part D of title XVIII of of the Federal Food, Drug, and Cosmetic Act first marketed and subparagraph (B) of para-
the Social Security Act is amended by in- at any point during the applicable period; graph (3) shall be applied as if the term
serting after section 1860D–14A (42 U.S.C. ‘‘(ii) in the case of a generic part D ‘benchmark period CPI–U’ were defined
1395w–114a) the following new section: rebatable drug (described in subsection under subsection (g)(4) as if the reference to
‘‘SEC. 1860D–14B. MANUFACTURER REBATE FOR (g)(1)(C)(ii)) or a biosimilar (defined as a bio- ‘January 2021’ under such subsection were a
CERTAIN DRUGS WITH PRICES IN- logical product licensed under section 351(k) reference to ‘January of the first year begin-
CREASING FASTER THAN INFLA- of the Public Health Service Act), when the ning after the date on which the drug was
TION.
Secretary determines there is a severe sup- first marketed’.
‘‘(a) REQUIREMENTS.— ply chain disruption during the applicable ‘‘(B) TREATMENT OF NEW FORMULATIONS.—
‘‘(1) SECRETARIAL PROVISION OF INFORMA- period, such as that caused by a natural dis- ‘‘(i) IN GENERAL.—In the case of a part D
TION.—Not later than 9 months after the end
aster or other unique or unexpected event; rebatable drug that is a line extension of a
of each applicable period (as defined in sub- and part D rebatable drug that is an oral solid
section (g)(7)), subject to paragraph (3), the ‘‘(iii) in the case of a generic Part D dosage form, the Secretary shall establish a
Secretary shall, for each part D rebatable rebatable drug (as so described), if the Sec- formula for determining the rebate amount
drug, report to each manufacturer of such retary determines that without such reduc- under paragraph (1) and the inflation ad-
part D rebatable drug the following for such tion or waiver, the drug is likely to be de- justed payment amount under paragraph (3)
period: scribed as in shortage on such shortage list with respect to such part D rebatable drug
‘‘(A) The amount (if any) of the excess an- during a subsequent applicable period. and an applicable period, consistent with the
nual manufacturer price increase described ‘‘(2) DETERMINATION OF ANNUAL MANUFAC- formula applied under subsection (c)(2)(C) of
in subsection (b)(1)(A)(ii) for each dosage TURER PRICE.—The annual manufacturer section 1927 for determining a rebate obliga-
form and strength with respect to such drug price determined under this paragraph for a tion for a rebate period under such section.
and period. dosage form and strength, with respect to a ‘‘(ii) LINE EXTENSION DEFINED.—In this sub-
‘‘(B) The rebate amount specified under part D rebatable drug and an applicable pe- paragraph, the term ‘line extension’ means,
subsection (b) for each dosage form and riod, is the sum of the products of— with respect to a part D rebatable drug, a
strength with respect to such drug and pe- ‘‘(A) the average manufacturer price (as new formulation of the drug, such as an ex-
riod. defined in subsection (g)(6)) of such dosage tended release formulation, but does not in-
‘‘(2) MANUFACTURER REQUIREMENTS.—For form and strength, as calculated for a unit of clude an abuse-deterrent formulation of the
each applicable period, the manufacturer of such drug, with respect to each of the cal- drug (as determined by the Secretary), re-
a part D rebatable drug, for each dosage form endar quarters of such period; and gardless of whether such abuse-deterrent for-
and strength with respect to such drug, not ‘‘(B) the ratio of— mulation is an extended release formulation.
later than 30 days after the date of receipt ‘‘(i) the total number of units of such dos- ‘‘(C) SELECTED DRUGS.—In the case of a
from the Secretary of the information de- age form and strength reported under section part D rebatable drug that is a selected drug
scribed in paragraph (1) for such period, shall 1927 with respect to each such calendar quar- (as defined in section 1192(c)) with respect to
provide to the Secretary a rebate that is ter of such period; to a price applicability period (as defined in
equal to the amount specified in subsection ‘‘(ii) the total number of units of such dos- section 1191(b)(2)), in the case such drug is no
(b) for such dosage form and strength with age form and strength reported under section longer considered to be a selected drug under
respect to such drug for such period. 1927 with respect to such period, as deter- section 1192(c), for each applicable period (as
‘‘(3) TRANSITION RULE FOR REPORTING.—The mined by the Secretary. defined under subsection (g)(7)) beginning
Secretary may, for each rebatable covered ‘‘(3) DETERMINATION OF INFLATION-ADJUSTED after the price applicability period with re-
part D drug, delay the timeframe for report- PAYMENT AMOUNT.—The inflation-adjusted spect to such drug, subparagraphs (A) and
ing the information and rebate amount de- payment amount determined under this (B) of paragraph (4) shall be applied as if the
scribed in subparagraphs (A) and (B) of such paragraph for a dosage form and strength term ‘payment amount benchmark period’
paragraph for the applicable periods begin- with respect to a part D rebatable drug for were defined under subsection (g)(3) as the
ning October 1, 2022, and October 1, 2023, an applicable period, subject to paragraph last year beginning during such price appli-
until not later than December 31, 2025. (5), is— cability period with respect to such selected
‘‘(b) REBATE AMOUNT.— ‘‘(A) the benchmark period manufacturer drug and subparagraph (B) of paragraph (3)
‘‘(1) IN GENERAL.— price determined under paragraph (4) for shall be applied as if the term ‘benchmark
‘‘(A) CALCULATION.—For purposes of this such dosage form and strength with respect period CPI–U’ were defined under subsection
section, the amount specified in this sub- to such drug and period; increased by (g)(4) as if the reference to ‘January 2021’
section for a dosage form and strength with ‘‘(B) the percentage by which the applica- under such subsection were a reference to
respect to a part D rebatable drug and appli- ble period CPI–U (as defined in subsection ‘January of the last year beginning during
cable period is, subject to subparagraph (C), (g)(5)) for the period exceeds the benchmark such price applicability period with respect
paragraph (5)(B), and paragraph (6), the esti- period CPI–U (as defined in subsection (g)(4)). to such drug’.
mated amount equal to the product of— ‘‘(4) DETERMINATION OF BENCHMARK PERIOD ‘‘(6) RECONCILIATION IN CASE OF REVISED IN-
‘‘(i) subject to subparagraph (B) of this MANUFACTURER PRICE.—The benchmark pe-
FORMATION.—The Secretary shall provide for
paragraph, the total number of units of such riod manufacturer price determined under a method and process under which, in the
dosage form and strength for each rebatable this paragraph for a dosage form and case where a PDP sponsor of a prescription
covered part D drug dispensed under this strength, with respect to a part D rebatable drug plan or an MA organization offering an
part during the applicable period; and drug and an applicable period, is the sum of MA–PD plan submits revisions to the num-
‘‘(ii) the amount (if any) by which— the products of— ber of units of a rebatable covered part D
‘‘(I) the annual manufacturer price (as de- ‘‘(A) the average manufacturer price (as drug dispensed, the Secretary determines,
termined in paragraph (2)) paid for such dos- defined in subsection (g)(6)) of such dosage pursuant to such revisions, adjustments, if
age form and strength with respect to such form and strength, as calculated for a unit of any, to the calculation of the amount speci-
part D rebatable drug for the period; exceeds such drug, with respect to each of the cal- fied in this subsection for a dosage form and
‘‘(II) the inflation-adjusted payment endar quarters of the payment amount strength with respect to such part D
amount determined under paragraph (3) for benchmark period (as defined in subsection rebatable drug and an applicable period and
such dosage form and strength with respect (g)(3)); and reconciles any overpayments or underpay-
to such part D rebatable drug for the period. ‘‘(B) the ratio of— ments in amounts paid as rebates under this
‘‘(B) EXCLUDED UNITS.—For purposes of ‘‘(i) the total number of units reported subsection. Any identified underpayment
subparagraph (A)(i), beginning with plan under section 1927 of such dosage form and shall be rectified by the manufacturer not
year 2026, the Secretary shall exclude from strength with respect to each such calendar later than 30 days after the date of receipt
the total number of units for a dosage form quarter of such payment amount benchmark from the Secretary of information on such
and strength with respect to a part D period; to underpayment.
rebatable drug, with respect to an applicable ‘‘(ii) the total number of units reported ‘‘(c) REBATE DEPOSITS.—Amounts paid as
period, units of each dosage form and under section 1927 of such dosage form and rebates under subsection (b) shall be depos-
dlhill on DSK120RN23PROD with SENATE
strength of such part D rebatable drug for strength with respect to such payment ited into the Medicare Prescription Drug Ac-
which the manufacturer provides a discount amount benchmark period. count in the Federal Supplementary Medical
under the program under section 340B of the ‘‘(5) SPECIAL TREATMENT OF CERTAIN DRUGS Insurance Trust Fund established under sec-
Public Health Service Act. AND EXEMPTION.— tion 1841.
‘‘(C) REDUCTION OR WAIVER FOR SHORTAGES ‘‘(A) SUBSEQUENTLY APPROVED DRUGS.—In ‘‘(d) INFORMATION.—For purposes of car-
AND SEVERE SUPPLY CHAIN DISRUPTIONS.—The the case of a part D rebatable drug first ap- rying out this section, the Secretary shall
Secretary shall reduce or waive the amount proved or licensed by the Food and Drug Ad- use information submitted by—
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00035 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4086 CONGRESSIONAL RECORD — SENATE August 6, 2022
‘‘(1) manufacturers under section 1927(b)(3); Drug, and Cosmetic Act), is not being mar- under paragraph (4) of such section, or sec-
‘‘(2) States under section 1927(b)(2)(A); and keted, as identified in the Food and Drug Ad- tion 1860D–14B’’.
‘‘(3) PDP sponsors of prescription drug ministration’s National Drug Code Direc- (4) EXCLUDING PART D DRUG INFLATION RE-
plans and MA organization offering MA–PD tory; BATES FROM AVERAGE MANUFACTURER PRICE.—
plans under this part. ‘‘(II) there is no other drug approved under Section 1927(k)(1)(B)(i) of the Social Security
‘‘(e) CIVIL MONEY PENALTY.—If a manufac- section 505(j) of the Federal Food, Drug, and Act (42 U.S.C. 1396r–8(k)(1)(B)(i)), as amended
turer of a part D rebatable drug has failed to Cosmetic Act that is rated as therapeuti- by section 11001(b)(3) and section 11101(c)(4),
comply with the requirement under sub- cally equivalent (under the Food and Drug is amended by adding at the end the fol-
section (a)(2) with respect to such drug for Administration’s most recent publication of lowing new subclause:
an applicable period, the manufacturer shall ‘Approved Drug Products with Therapeutic (A) in subclause (VI), by striking ‘‘and’’ at
be subject to a civil money penalty in an Equivalence Evaluations’) and that is being the end;
amount equal to 125 percent of the amount marketed, as identified in the Food and Drug (B) in subclause (VII), by striking the pe-
specified in subsection (b) for such drug for Administration’s National Drug Code Direc- riod at the end and inserting a semicolon;
such period. The provisions of section 1128A tory; and
(other than subsections (a) (with respect to ‘‘(III) the manufacturer is not a ‘first ap- (C) by adding at the end the following new
amounts of penalties or additional assess- plicant’ during the ‘180-day exclusivity pe- subclause:
ments) and (b)) shall apply to a civil money riod’, as those terms are defined in section ‘‘(VIII) rebates paid by manufacturers
penalty under this subsection in the same 505(j)(5)(B)(iv) of the Federal Food, Drug, and under section 1860D–14B.’’.
manner as such provisions apply to a penalty (c) FUNDING.—In addition to amounts oth-
Cosmetic Act; and
or proceeding under section 1128A(a). erwise available, there are appropriated to
‘‘(f) LIMITATION ON ADMINISTRATIVE OR JU- ‘‘(IV) the manufacturer is not a ‘first ap-
proved applicant’ for a competitive generic the Centers for Medicare & Medicaid Serv-
DICIAL REVIEW.—There shall be no adminis-
trative or judicial review of any of the fol- therapy, as that term is defined in section ices, out of any money in the Treasury not
lowing: 505(j)(5)(B)(v) of the Federal Food, Drug, and otherwise appropriated, $80,000,000 for fiscal
‘‘(1) The determination of units under this Cosmetic Act; or year 2022, including $12,500,000 to carry out
section. ‘‘(iii) a biological licensed under section the provisions of, including the amendments
‘‘(2) The determination of whether a drug 351 of the Public Health Service Act. made by, this section in fiscal year 2022, and
is a part D rebatable drug under this section. ‘‘(2) UNIT.—The term ‘unit’ means, with re- $7,500,000 to carry out the provisions of, in-
‘‘(3) The calculation of the rebate amount spect to a part D rebatable drug, the lowest cluding the amendments made by, this sec-
under this section. dispensable amount (such as a capsule or tion in each of fiscal years 2023 through 2031,
‘‘(g) DEFINITIONS.—In this section: tablet, milligram of molecules, or grams) of to remain available until expended.
‘‘(1) PART D REBATABLE DRUG.— the part D rebatable drug, as reported under PART 3—PART D IMPROVEMENTS AND
‘‘(A) IN GENERAL.—Except as provided in section 1927. MAXIMUM OUT-OF-POCKET CAP FOR
subparagraph (B), the term ‘part D rebatable ‘‘(3) PAYMENT AMOUNT BENCHMARK PE- MEDICARE BENEFICIARIES
drug’ means, with respect to an applicable RIOD.—The term ‘payment amount bench- SEC. 11201. MEDICARE PART D BENEFIT REDE-
period, a drug or biological described in sub- mark period’ means the period beginning SIGN.
paragraph (C) that is a covered part D drug January 1, 2021, and ending in the month im- (a) BENEFIT STRUCTURE REDESIGN.—Section
(as such term is defined under section 1860D– mediately prior to October 1, 2021. 1860D–2(b) of the Social Security Act (42
2(e)). ‘‘(4) BENCHMARK PERIOD CPI–U.—The term U.S.C. 1395w–102(b)) is amended—
‘‘(B) EXCLUSION.— ‘benchmark period CPI–U’ means the con- (1) in paragraph (2)—
‘‘(i) IN GENERAL.—Such term shall, with re- sumer price index for all urban consumers (A) in subparagraph (A), in the matter pre-
spect to an applicable period, not include a (United States city average) for January ceding clause (i), by inserting ‘‘for a year
drug or biological if the average annual total 2021. preceding 2025 and for costs above the annual
cost under this part for such period per indi- ‘‘(5) APPLICABLE PERIOD CPI–U.—The term deductible specified in paragraph (1) and up
vidual who uses such a drug or biological, as ‘applicable period CPI–U’ means, with re- to the annual out-of-pocket threshold speci-
determined by the Secretary, is less than, spect to an applicable period, the consumer fied in paragraph (4)(B) for 2025 and each sub-
subject to clause (ii), $100, as determined by price index for all urban consumers (United sequent year’’ after ‘‘paragraph (3)’’;
the Secretary using the most recent data States city average) for the first month of (B) in subparagraph (C)—
available or, if data is not available, as esti- such applicable period. (i) in clause (i), in the matter preceding
mated by the Secretary. ‘‘(6) AVERAGE MANUFACTURER PRICE.—The subclause (I), by inserting ‘‘for a year pre-
‘‘(ii) INCREASE.—The dollar amount applied term ‘average manufacturer price’ has the ceding 2025,’’ after ‘‘paragraph (4),’’; and
under clause (i)— meaning, with respect to a part D rebatable (ii) in clause (ii)(III), by striking ‘‘and each
‘‘(I) for the applicable period beginning Oc- drug of a manufacturer, given such term in subsequent year’’ and inserting ‘‘through
tober 1, 2023, shall be the dollar amount spec- section 1927(k)(1), with respect to a covered 2024’’; and
ified under such clause for the applicable pe- outpatient drug of a manufacturer for a re- (C) in subparagraph (D)—
riod beginning October 1, 2022, increased by bate period under section 1927. (i) in clause (i)—
the percentage increase in the consumer ‘‘(7) APPLICABLE PERIOD.—The term ‘appli- (I) in the matter preceding subclause (I),
price index for all urban consumers (United cable period’ means a 12-month period begin- by inserting ‘‘for a year preceding 2025,’’
States city average) for the 12-month period ning with October 1 of a year (beginning with after ‘‘paragraph (4),’’; and
beginning with October of 2023; and October 1, 2022). (II) in subclause (I)(bb), by striking ‘‘a year
‘‘(II) for a subsequent applicable period, ‘‘(h) IMPLEMENTATION FOR 2022, 2023, AND after 2018’’ and inserting ‘‘each of years 2019
shall be the dollar amount specified in this 2024.—The Secretary shall implement this through 2024’’; and
clause for the previous applicable period, in- section for 2022, 2023, and 2024 by program in- (ii) in clause (ii)(V), by striking ‘‘2019 and
creased by the percentage increase in the struction or other forms of program guid- each subsequent year’’ and inserting ‘‘each
consumer price index for all urban con- ance.’’. of years 2019 through 2024’’;
sumers (United States city average) for the (b) CONFORMING AMENDMENTS.— (2) in paragraph (3)(A)—
12-month period beginning with October of (1) TO PART B ASP CALCULATION.—Section (A) in the matter preceding clause (i), by
the previous period. 1847A(c)(3) of the Social Security Act (42 inserting ‘‘for a year preceding 2025,’’ after
Any dollar amount specified under this U.S.C. 1395w–3a(c)(3)), as amended by section ‘‘and (4),’’; and
clause that is not a multiple of $10 shall be 11101(c)(1), is amended by striking ‘‘sub- (B) in clause (ii), by striking ‘‘for a subse-
rounded to the nearest multiple of $10. section (i) or section 1927’’ and inserting quent year’’ and inserting ‘‘for each of years
‘‘(C) DRUG OR BIOLOGICAL DESCRIBED.—A ‘‘subsection (i), section 1927, or section 2007 through 2024’’; and
drug or biological described in this subpara- 1860D–14B’’. (3) in paragraph (4)—
graph is a drug or biological that, as of the (2) EXCLUDING PART D DRUG INFLATION RE- (A) in subparagraph (A)—
first day of the applicable period involved, BATE FROM BEST PRICE.—Section (i) in clause (i)—
is— 1927(c)(1)(C)(ii)(I) of the Social Security Act (I) by redesignating subclauses (I) and (II)
‘‘(i) a drug approved under a new drug ap- (42 U.S.C. 1396r–8(c)(1)(C)(ii)(I)), as amended as items (aa) and (bb), respectively, and mov-
plication under section 505(c) of the Federal by section 11101(c)(2), is amended by striking ing the margin of each such redesignated
Food, Drug, and Cosmetic Act; ‘‘or section 1847A(i)’’ and inserting ‘‘, section item 2 ems to the right;
‘‘(ii) a drug approved under an abbreviated 1847A(i), or section 1860D–14B’’. (II) in the matter preceding item (aa), as
new drug application under section 505(j) of (3) COORDINATION WITH MEDICAID REBATE IN- redesignated by subclause (I), by striking ‘‘is
dlhill on DSK120RN23PROD with SENATE
the Federal Food, Drug, and Cosmetic Act, FORMATION DISCLOSURE.—Section equal to the greater of—’’ and inserting ‘‘is
in the case where— 1927(b)(3)(D)(i) of the Social Security Act (42 equal to—
‘‘(I) the reference listed drug approved U.S.C. 1396r–8(b)(3)(D)(i)), as amended by sec- ‘‘(I) for a year preceding 2024, the greater
under section 505(c) of the Federal Food, tions 11002(b) and 11101(c)(3), is amended by of—’’;
Drug, and Cosmetic Act, including any ‘au- striking ‘‘or section 1192(f), including rebates (III) by striking the period at the end of
thorized generic drug’ (as that term is de- under paragraph (4) of such section’’ and in- item (bb), as redesignated by subclause (I),
fined in section 505(t)(3) of the Federal Food, serting ‘‘, section 1192(f), including rebates and inserting ‘‘; and’’; and
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00036 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4087
(IV) by adding at the end the following: portion of gross covered prescription drug onstrate to the Secretary compliance with
‘‘(II) for 2024 and each succeeding year, costs as specified in paragraph (3) incurred in the requirements under the program.
$0.’’; and the coverage year after such individual has ‘‘(3) COMPLIANCE WITH REQUIREMENTS FOR
(ii) in clause (ii)— incurred costs that exceed the annual out-of- ADMINISTRATION OF PROGRAM.—Each manu-
(I) by striking ‘‘clause (i)(I)’’ and inserting pocket threshold specified in section 1860D– facturer with an agreement in effect under
‘‘clause (i)(I)(aa)’’; and 2(b)(4)(B).’’; this section shall comply with requirements
(II) by adding at the end the following new (2) in paragraph (2)— imposed by the Secretary, as applicable, for
sentence: ‘‘The Secretary shall continue to (A) by striking ‘‘COSTS.—For purposes’’ purposes of administering the program, in-
calculate the dollar amounts specified in and inserting ‘‘COSTS.— cluding any determination under subpara-
clause (i)(I)(aa), including with the adjust- ‘‘(A) IN GENERAL.—Subject to subparagraph graph (A) of subsection (c)(1) or procedures
ment under this clause, after 2023 for pur- (B), for purposes’’; and established under such subsection (c)(1).
poses of section 1860D–14(a)(1)(D)(iii).’’; (B) by adding at the end the following new ‘‘(4) LENGTH OF AGREEMENT.—
(B) in subparagraph (B)— subparagraph: ‘‘(A) IN GENERAL.—An agreement under
(i) in clause (i)— ‘‘(B) INCLUSION OF MANUFACTURER DIS- this section shall be effective for an initial
(I) in subclause (V), by striking ‘‘or’’ at the COUNTS ON APPLICABLE DRUGS.—For purposes period of not less than 12 months and shall
end; of applying subparagraph (A), the term ‘al- be automatically renewed for a period of not
(II) in subclause (VI)— lowable reinsurance costs’ shall include the less than 1 year unless terminated under sub-
(aa) by striking ‘‘for a subsequent year’’ portion of the negotiated price (as defined in paragraph (B).
and inserting ‘‘for each of years 2021 through section 1860D–14C(g)(6)) of an applicable drug
‘‘(B) TERMINATION.—
2024’’; and (as defined in section 1860D–14C(g)(2)) that
‘‘(i) BY THE SECRETARY.—The Secretary
(bb) by striking the period at the end and was paid by a manufacturer under the manu-
shall provide for termination of an agree-
inserting a semicolon; and facturer discount program under section
ment under this section for a knowing and
(III) by adding at the end the following new 1860D–14C.’’; and
willful violation of the requirements of the
subclauses: (3) in paragraph (3)—
‘‘(VII) for 2025, is equal to $2,000; or (A) in the first sentence, by striking ‘‘For agreement or other good cause shown. Such
‘‘(VIII) for a subsequent year, is equal to purposes’’ and inserting ‘‘Subject to para- termination shall not be effective earlier
the amount specified in this subparagraph graph (2)(B), for purposes’’; and than 30 days after the date of notice to the
for the previous year, increased by the an- (B) in the second sentence, by inserting manufacturer of such termination. The Sec-
nual percentage increase described in para- ‘‘(or, with respect to 2025 and subsequent retary shall provide, upon request, a manu-
graph (6) for the year involved.’’; and years, in the case of an applicable drug, as facturer with a hearing concerning such a
(ii) in clause (ii), by striking ‘‘clause defined in section 1860D–14C(g)(2), by a manu- termination, and such hearing shall take
(i)(II)’’ and inserting ‘‘clause (i)’’; facturer)’’ after ‘‘by the individual or under place prior to the effective date of the termi-
(C) in subparagraph (C)— the plan’’. nation with sufficient time for such effective
(i) in clause (i), by striking ‘‘and for (c) MANUFACTURER DISCOUNT PROGRAM.— date to be repealed if the Secretary deter-
amounts’’ and inserting ‘‘and, for a year pre- (1) IN GENERAL.—Part D of title XVIII of mines appropriate.
ceding 2025, for amounts’’; and the Social Security Act (42 U.S.C. 1395w–101 ‘‘(ii) BY A MANUFACTURER.—A manufac-
(ii) in clause (iii)— through 42 U.S.C. 1395w–153), as amended by turer may terminate an agreement under
(I) by redesignating subclauses (I) through section 11102, is amended by inserting after this section for any reason. Any such termi-
(IV) as items (aa) through (dd) and indenting section 1860D–14B the following new sections: nation shall be effective, with respect to a
appropriately; ‘‘SEC. 1860D–14C. MANUFACTURER DISCOUNT plan year—
(II) by striking ‘‘if such costs are borne or PROGRAM. ‘‘(I) if the termination occurs before Janu-
paid’’ and inserting ‘‘if such costs— ‘‘(a) ESTABLISHMENT.—The Secretary shall ary 31 of a plan year, as of the day after the
‘‘(I) are borne or paid—’’; and establish a manufacturer discount program end of the plan year; and
(III) in item (dd), by striking the period at (in this section referred to as the ‘program’). ‘‘(II) if the termination occurs on or after
the end and inserting ‘‘; or’’; and Under the program, the Secretary shall enter January 31 of a plan year, as of the day after
(IV) by adding at the end the following new into agreements described in subsection (b) the end of the succeeding plan year.
subclause: with manufacturers and provide for the per- ‘‘(iii) EFFECTIVENESS OF TERMINATION.—
‘‘(II) for 2025 and subsequent years, are re- formance of the duties described in sub- Any termination under this subparagraph
imbursed through insurance, a group health section (c). shall not affect discounts for applicable
plan, or certain other third party payment ‘‘(b) TERMS OF AGREEMENT.— drugs of the manufacturer that are due
arrangements, but not including the cov- ‘‘(1) IN GENERAL.— under the agreement before the effective
erage provided by a prescription drug plan or ‘‘(A) AGREEMENT.—An agreement under date of its termination.
an MA–PD plan that is basic prescription this section shall require the manufacturer ‘‘(5) EFFECTIVE DATE OF AGREEMENT.—An
drug coverage (as defined in subsection to provide, in accordance with this section, agreement under this section shall take ef-
(a)(3)) or any payments by a manufacturer discounted prices for applicable drugs of the fect at the start of a calendar quarter or an-
under the manufacturer discount program manufacturer that are dispensed to applica- other date specified by the Secretary.
under section 1860D–14C.’’; and ble beneficiaries on or after January 1, 2025.
(D) in subparagraph (E), by striking ‘‘In ‘‘(B) CLARIFICATION.—Nothing in this sec- ‘‘(c) DUTIES DESCRIBED.—The duties de-
applying’’ and inserting ‘‘For each of years tion shall be construed as affecting— scribed in this subsection are the following:
2011 through 2024, in applying’’. ‘‘(i) the application of a coinsurance of 25 ‘‘(1) ADMINISTRATION OF PROGRAM.—Admin-
(b) REINSURANCE PAYMENT AMOUNT.—Sec- percent of the negotiated price, as applied istering the program, including—
tion 1860D–15(b) of the Social Security Act under paragraph (2)(A) of section 1860D–2(b), ‘‘(A) the determination of the amount of
(42 U.S.C. 1395w–115(b)) is amended— for costs described in such paragraph; or the discounted price of an applicable drug of
(1) in paragraph (1)— ‘‘(ii) the application of the copayment a manufacturer;
(A) by striking ‘‘equal to 80 percent’’ and amount described in paragraph (4)(A) of such ‘‘(B) the establishment of procedures to en-
inserting ‘‘equal to— section, with respect to costs described in sure that, not later than the applicable num-
‘‘(A) for a year preceding 2025, 80 percent’’; such paragraph. ber of calendar days after the dispensing of
(B) in subparagraph (A), as added by sub- ‘‘(C) TIMING OF AGREEMENT.— an applicable drug by a pharmacy or mail
paragraph (A), by striking the period at the ‘‘(i) SPECIAL RULE FOR 2025.—In order for an order service, the pharmacy or mail order
end and inserting ‘‘; and’’; and agreement with a manufacturer to be in ef- service is reimbursed for an amount equal to
(C) by adding at the end the following new fect under this section with respect to the the difference between—
subparagraph: period beginning on January 1, 2025, and end- ‘‘(i) the negotiated price of the applicable
‘‘(B) for 2025 and each subsequent year, the ing on December 31, 2025, the manufacturer drug; and
sum of— shall enter into such agreement not later ‘‘(ii) the discounted price of the applicable
‘‘(i) with respect to applicable drugs (as de- than March 1, 2024. drug;
fined in section 1860D–14C(g)(2)), an amount ‘‘(ii) 2026 AND SUBSEQUENT YEARS.—In order ‘‘(C) the establishment of procedures to en-
equal to 20 percent of such allowable reinsur- for an agreement with a manufacturer to be sure that the discounted price for an applica-
ance costs attributable to that portion of in effect under this section with respect to ble drug under this section is applied before
gross covered prescription drug costs as spec- plan year 2026 or a subsequent plan year, the any coverage or financial assistance under
ified in paragraph (3) incurred in the cov- manufacturer shall enter into such agree- other health benefit plans or programs that
erage year after such individual has incurred ment not later than a calendar quarter or provide coverage or financial assistance for
dlhill on DSK120RN23PROD with SENATE
costs that exceed the annual out-of-pocket semi-annual deadline established by the Sec- the purchase or provision of prescription
threshold specified in section 1860D– retary. drug coverage on behalf of applicable bene-
2(b)(4)(B); and ‘‘(2) PROVISION OF APPROPRIATE DATA.— ficiaries as specified by the Secretary; and
‘‘(ii) with respect to covered part D drugs Each manufacturer with an agreement in ef- ‘‘(D) providing a reasonable dispute resolu-
that are not applicable drugs (as so defined), fect under this section shall collect and have tion mechanism to resolve disagreements be-
an amount equal to 40 percent of such allow- available appropriate data, as determined by tween manufacturers, prescription drug
able reinsurance costs attributable to that the Secretary, to ensure that it can dem- plans and MA–PD plans, and the Secretary.
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00037 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4088 CONGRESSIONAL RECORD — SENATE August 6, 2022
‘‘(2) MONITORING COMPLIANCE.—The Sec- ‘‘(B) does not include a selected drug (as plan year immediately following such acqui-
retary shall monitor compliance by a manu- referred to under section 1192(c)) during a sition or, in the case of an acquisition before
facturer with the terms of an agreement price applicability period (as defined in sec- 2025, effective January 1, 2025.
under this section. tion 1191(b)(2)) with respect to such drug. ‘‘(iii) SPECIFIED LIS PERCENT.—In this sub-
‘‘(3) COLLECTION OF DATA FROM PRESCRIP- ‘‘(3) APPLICABLE NUMBER OF CALENDAR paragraph, the ‘specified LIS percent’ means,
TION DRUG PLANS AND MA–PD PLANS.—The DAYS.—The term ‘applicable number of cal- with respect to a year—
Secretary may collect appropriate data from endar days’ means— ‘‘(I) for an applicable drug dispensed for an
prescription drug plans and MA–PD plans in ‘‘(A) with respect to claims for reimburse- applicable beneficiary described in clause (i)
a timeframe that allows for discounted ment submitted electronically, 14 days; and who has not incurred costs, as determined in
prices to be provided for applicable drugs ‘‘(B) with respect to claims for reimburse- accordance with section 1860D–2(b)(4)(C), for
under this section. ment submitted otherwise, 30 days. covered part D drugs in the year that are
‘‘(d) ADMINISTRATION.— ‘‘(4) DISCOUNTED PRICE.— equal to or exceed the annual out-of-pocket
‘‘(1) IN GENERAL.—Subject to paragraph (2), ‘‘(A) IN GENERAL.—The term ‘discounted threshold specified in section 1860D–
the Secretary shall provide for the imple- price’ means, subject to subparagraphs (B) 2(b)(4)(B)(i) for the year—
mentation of this section, including the per- and (C), with respect to an applicable drug of ‘‘(aa) for 2025, 99 percent;
formance of the duties described in sub- a manufacturer dispensed during a year to ‘‘(bb) for 2026, 98 percent;
section (c). an applicable beneficiary— ‘‘(cc) for 2027, 95 percent;
‘‘(2) LIMITATION.—In providing for the im- ‘‘(i) who has not incurred costs, as deter- ‘‘(dd) for 2028, 92 percent; and
plementation of this section, the Secretary mined in accordance with section 1860D– ‘‘(ee) for 2029 and each subsequent year, 90
shall not receive or distribute any funds of a 2(b)(4)(C), for covered part D drugs in the percent; and
manufacturer under the program. year that are equal to or exceed the annual ‘‘(II) for an applicable drug dispensed for
‘‘(e) CIVIL MONEY PENALTY.— out-of-pocket threshold specified in section an applicable beneficiary described in clause
‘‘(1) IN GENERAL.—A manufacturer that 1860D–2(b)(4)(B)(i) for the year, 90 percent of (i) who has incurred costs, as determined in
fails to provide discounted prices for applica- the negotiated price of such drug; and accordance with section 1860D–2(b)(4)(C), for
ble drugs of the manufacturer dispensed to ‘‘(ii) who has incurred such costs, as so de- covered part D drugs in the year that are
applicable beneficiaries in accordance with termined, in the year that are equal to or ex- equal to or exceed the annual out-of-pocket
an agreement in effect under this section ceed such threshold for the year, 80 percent threshold specified in section 1860D–
shall be subject to a civil money penalty for of the negotiated price of such drug. 2(b)(4)(B)(i) for the year—
each such failure in an amount the Secretary ‘‘(B) PHASE-IN FOR CERTAIN DRUGS DIS- ‘‘(aa) for 2025, 99 percent;
determines is equal to the sum of— PENSED TO LIS BENEFICIARIES.— ‘‘(bb) for 2026, 98 percent;
‘‘(A) the amount that the manufacturer ‘‘(i) IN GENERAL.—In the case of an applica- ‘‘(cc) for 2027, 95 percent;
would have paid with respect to such dis- ble drug of a specified manufacturer (as de- ‘‘(dd) for 2028, 92 percent;
counts under the agreement, which will then fined in clause (ii)) that is marketed as of ‘‘(ee) for 2029, 90 percent;
be used to pay the discounts which the man- the date of enactment of this subparagraph ‘‘(ff) for 2030, 85 percent; and
ufacturer had failed to provide; and and dispensed for an applicable beneficiary ‘‘(gg) for 2031 and each subsequent year, 80
‘‘(B) 25 percent of such amount. who is a subsidy eligible individual (as de- percent.
‘‘(2) APPLICATION.—The provisions of sec- fined in section 1860D–14(a)(3)), the term ‘dis- ‘‘(C) PHASE-IN FOR SPECIFIED SMALL MANU-
tion 1128A (other than subsections (a) and counted price’ means the specified LIS per- FACTURERS.—
(b)) shall apply to a civil money penalty cent (as defined in clause (iii)) of the nego- ‘‘(i) IN GENERAL.—In the case of an applica-
under this subsection in the same manner as tiated price of the applicable drug of the ble drug of a specified small manufacturer
such provisions apply to a penalty or pro- manufacturer. (as defined in clause (ii)) that is marketed as
ceeding under section 1128A(a). ‘‘(ii) SPECIFIED MANUFACTURER.— of the date of enactment of this subpara-
‘‘(f) CLARIFICATION REGARDING AVAIL- ‘‘(I) IN GENERAL.—In this subparagraph, graph and dispensed for an applicable bene-
ABILITY OF OTHER COVERED PART D DRUGS.— subject to subclause (II), the term ‘specified ficiary, the term ‘discounted price’ means
Nothing in this section shall prevent an ap- manufacturer’ means a manufacturer of an the specified small manufacturer percent (as
plicable beneficiary from purchasing a cov- applicable drug for which, in 2021— defined in clause (iii)) of the negotiated price
ered part D drug that is not an applicable ‘‘(aa) the manufacturer had a coverage gap of the applicable drug of the manufacturer.
drug (including a generic drug or a drug that discount agreement under section 1860D–14A; ‘‘(ii) SPECIFIED SMALL MANUFACTURER.—
is not on the formulary of the prescription ‘‘(bb) the total expenditures for all of the ‘‘(I) IN GENERAL.—In this subparagraph,
drug plan or MA–PD plan that the applicable specified drugs of the manufacturer covered subject to subclause (III), the term ‘specified
beneficiary is enrolled in). by such agreement or agreements for such small manufacturer’ means a manufacturer
‘‘(g) DEFINITIONS.—In this section: year and covered under this part during such of an applicable drug for which, in 2021—
‘‘(1) APPLICABLE BENEFICIARY.—The term year represented less than 1.0 percent of the ‘‘(aa) the manufacturer is a specified man-
‘applicable beneficiary’ means an individual total expenditures under this part for all ufacturer (as defined in subparagraph
who, on the date of dispensing a covered part covered Part D drugs during such year; and (B)(ii)); and
D drug— ‘‘(cc) the total expenditures for all of the ‘‘(bb) the total expenditures under part D
‘‘(A) is enrolled in a prescription drug plan specified drugs of the manufacturer that are for any one of the specified small manufac-
or an MA–PD plan; single source drugs and biological products turer drugs of the manufacturer that are
‘‘(B) is not enrolled in a qualified retiree for which payment may be made under part covered by the agreement or agreements
prescription drug plan; and B during such year represented less than 1.0 under section 1860D–14A of such manufac-
‘‘(C) has incurred costs, as determined in percent of the total expenditures under part turer for such year and covered under this
accordance with section 1860D–2(b)(4)(C), for B for all drugs or biological products for part during such year are equal to or more
covered part D drugs in the year that exceed which payment may be made under such part than 80 percent of the total expenditures
the annual deductible specified in section during such year. under this part for all specified small manu-
1860D–2(b)(1). ‘‘(II) SPECIFIED DRUGS.— facturer drugs of the manufacturer that are
‘‘(2) APPLICABLE DRUG.—The term ‘applica- ‘‘(aa) IN GENERAL.—For purposes of this covered by such agreement or agreements for
ble drug’, with respect to an applicable bene- clause, the term ‘specified drug’ means, with such year and covered under this part during
ficiary— respect to a specified manufacturer, for 2021, such year.
‘‘(A) means a covered part D drug— an applicable drug that is produced, pre- ‘‘(II) SPECIFIED SMALL MANUFACTURER
‘‘(i) approved under a new drug application pared, propagated, compounded, converted, DRUGS.—
under section 505(c) of the Federal Food, or processed by the manufacturer. ‘‘(aa) IN GENERAL.—For purposes of this
Drug, and Cosmetic Act or, in the case of a ‘‘(bb) AGGREGATION RULE.—All persons clause, the term ‘specified small manufac-
biologic product, licensed under section 351 treated as a single employer under sub- turer drugs’ means, with respect to a speci-
of the Public Health Service Act; and section (a) or (b) of section 52 of the Internal fied small manufacturer, for 2021, an applica-
‘‘(ii)(I) if the PDP sponsor of the prescrip- Revenue Code of 1986 shall be treated as one ble drug that is produced, prepared, propa-
tion drug plan or the MA organization offer- manufacturer for purposes of this subpara- gated, compounded, converted, or processed
ing the MA–PD plan uses a formulary, which graph. For purposes of making a determina- by the manufacturer.
is on the formulary of the prescription drug tion pursuant to the previous sentence, an ‘‘(bb) AGGREGATION RULE.—All persons
plan or MA–PD plan that the applicable ben- agreement under this section shall require treated as a single employer under sub-
eficiary is enrolled in; that a manufacturer provide and attest to section (a) or (b) of section 52 of the Internal
‘‘(II) if the PDP sponsor of the prescription such information as specified by the Sec- Revenue Code of 1986 shall be treated as one
dlhill on DSK120RN23PROD with SENATE
drug plan or the MA organization offering retary as necessary. manufacturer for purposes of this subpara-
the MA–PD plan does not use a formulary, ‘‘(III) LIMITATION.—The term ‘specified graph. For purposes of making a determina-
for which benefits are available under the manufacturer’ shall not include a manufac- tion pursuant to the previous sentence, an
prescription drug plan or MA–PD plan that turer described in subclause (I) if such manu- agreement under this section shall require
the applicable beneficiary is enrolled in; or facturer is acquired after 2021 by another that a manufacturer provide and attest to
‘‘(III) is provided through an exception or manufacturer that is not a specified manu- such information as specified by the Sec-
appeal; and facturer, effective at the beginning of the retary as necessary.
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00038 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4089
‘‘(III) LIMITATION.—The term ‘specified chemical synthesis, or by a combination of (II) in subparagraph (E)(i), by inserting ‘‘or
small manufacturer’ shall not include a man- extraction and chemical synthesis. Such (8) (as applicable)’’ after ‘‘paragraph (2)’’; and
ufacturer described in subclause (I) if such term does not include a wholesale dis- (iv) by adding at the end the following new
manufacturer is acquired after 2021 by an- tributor of drugs or a retail pharmacy li- paragraph:
other manufacturer that is not a specified censed under State law. ‘‘(8) PREMIUM STABILIZATION.—
small manufacturer, effective at the begin- ‘‘(6) NEGOTIATED PRICE.—The term ‘nego- ‘‘(A) IN GENERAL.—The base beneficiary
ning of the plan year immediately following tiated price’ has the meaning given such premium under this paragraph for a prescrip-
such acquisition or, in the case of an acquisi- term for purposes of section 1860D–2(d)(1)(B), tion drug plan for a month in 2024 through
tion before 2025, effective January 1, 2025. and, with respect to an applicable drug, such 2029 shall be computed as follows:
‘‘(iii) SPECIFIED SMALL MANUFACTURER PER- negotiated price shall include any dispensing ‘‘(i) 2024.—The base beneficiary premium
CENT.—In this subparagraph, the term ‘speci- fee and, if applicable, any vaccine adminis- for a month in 2024 shall be equal to the less-
fied small manufacturer percent’ means, tration fee for the applicable drug. er of—
with respect to a year— ‘‘(7) QUALIFIED RETIREE PRESCRIPTION DRUG ‘‘(I) the base beneficiary premium com-
‘‘(I) for an applicable drug dispensed for an PLAN.—The term ‘qualified retiree prescrip- puted under paragraph (2) for a month in 2023
applicable beneficiary who has not incurred tion drug plan’ has the meaning given such increased by 6 percent; or
costs, as determined in accordance with sec- term in section 1860D–22(a)(2). ‘‘(II) the base beneficiary premium com-
tion 1860D–2(b)(4)(C), for covered part D ‘‘SEC. 1860D–14D. SELECTED DRUG SUBSIDY PRO- puted under paragraph (2) for a month in 2024
drugs in the year that are equal to or exceed GRAM. that would have applied if this paragraph
the annual out-of-pocket threshold specified ‘‘With respect to covered part D drugs that had not been enacted.
in section 1860D–2(b)(4)(B)(i) for the year— would be applicable drugs (as defined in sec- ‘‘(ii) 2025.—The base beneficiary premium
‘‘(aa) for 2025, 99 percent; for a month in 2025 shall be equal to the less-
tion 1860D–14C(g)(2)) but for the application
‘‘(bb) for 2026, 98 percent; er of—
of subparagraph (B) of such section, the Sec-
‘‘(cc) for 2027, 95 percent; ‘‘(I) the base beneficiary premium com-
retary shall provide a process whereby, in
‘‘(dd) for 2028, 92 percent; and puted under clause (i) for a month in 2024 in-
the case of an applicable beneficiary (as de-
‘‘(ee) for 2029 and each subsequent year, 90 creased by 6 percent; or
fined in section 1860D–14C(g)(1)) who, with re-
percent; and ‘‘(II) the base beneficiary premium com-
spect to a year, is enrolled in a prescription
‘‘(II) for an applicable drug dispensed for puted under paragraph (2) for a month in 2025
drug plan or is enrolled in an MA–PD plan,
an applicable beneficiary who has incurred that would have applied if this paragraph
has not incurred costs that are equal to or
costs, as determined in accordance with sec- had not been enacted.
exceed the annual out-of-pocket threshold
tion 1860D–2(b)(4)(C), for covered part D ‘‘(iii) 2026.—The base beneficiary premium
drugs in the year that are equal to or exceed specified in section 1860D–2(b)(4)(B)(i), and is for a month in 2026 shall be equal to the less-
the annual out-of-pocket threshold specified dispensed such a drug, the Secretary (peri- er of—
in section 1860D–2(b)(4)(B)(i) for the year— odically and on a timely basis) provides the ‘‘(I) the base beneficiary premium com-
‘‘(aa) for 2025, 99 percent; PDP sponsor or the MA organization offering puted under clause (ii) for a month in 2025 in-
‘‘(bb) for 2026, 98 percent; the plan, a subsidy with respect to such drug creased by 6 percent; or
‘‘(cc) for 2027, 95 percent; that is equal to 10 percent of the negotiated ‘‘(II) the base beneficiary premium com-
‘‘(dd) for 2028, 92 percent; price (as defined in section 1860D–14C(g)(6)) of puted under paragraph (2) for a month in 2026
‘‘(ee) for 2029, 90 percent; such drug.’’. that would have applied if this paragraph
‘‘(ff) for 2030, 85 percent; and (2) SUNSET OF MEDICARE COVERAGE GAP DIS- had not been enacted.
‘‘(gg) for 2031 and each subsequent year, 80 COUNT PROGRAM.—Section 1860D–14A of the ‘‘(iv) 2027.—The base beneficiary premium
percent. Social Security Act (42 U.S.C. 1395w–114a) is for a month in 2027 shall be equal to the less-
‘‘(D) TOTAL EXPENDITURES.—For purposes amended— er of—
of this paragraph, the term ‘total expendi- (A) in subsection (a), in the first sentence, ‘‘(I) the base beneficiary premium com-
tures’ includes, in the case of expenditures by striking ‘‘The Secretary’’ and inserting puted under clause (iii) for a month in 2026
with respect to part D, the total gross cov- ‘‘Subject to subsection (h), the Secretary’’; increased by 6 percent; or
ered prescription drug costs as defined in and ‘‘(II) the base beneficiary premium com-
section 1860D–15(b)(3). The term ‘total ex- (B) by adding at the end the following new puted under paragraph (2) for a month in 2027
penditures’ excludes, in the case of expendi- subsection: that would have applied if this paragraph
tures with respect to part B, expenditures for ‘‘(h) SUNSET OF PROGRAM.— had not been enacted.
a drug or biological that are bundled or ‘‘(1) IN GENERAL.—The program shall not ‘‘(v) 2028.—The base beneficiary premium
packaged into the payment for another serv- apply with respect to applicable drugs dis- for a month in 2028 shall be equal to the less-
ice. pensed on or after January 1, 2025, and, sub- er of—
‘‘(E) SPECIAL CASE FOR CERTAIN CLAIMS.— ject to paragraph (2), agreements under this ‘‘(I) the base beneficiary premium com-
‘‘(i) CLAIMS SPANNING DEDUCTIBLE.—In the section shall be terminated as of such date. puted under clause (iv) for a month in 2027
case where the entire amount of the nego- ‘‘(2) CONTINUED APPLICATION FOR APPLICA- increased by 6 percent; or
tiated price of an individual claim for an ap- BLE DRUGS DISPENSED PRIOR TO SUNSET.—The ‘‘(II) the base beneficiary premium com-
plicable drug with respect to an applicable provisions of this section (including all re- puted under paragraph (2) for a month in 2028
beneficiary does not fall above the annual sponsibilities and duties) shall continue to that would have applied if this paragraph
deductible specified in section 1860D–2(b)(1) apply on and after January 1, 2025, with re- had not been enacted.
for the year, the manufacturer of the appli- spect to applicable drugs dispensed prior to ‘‘(vi) 2029.—The base beneficiary premium
cable drug shall provide the discounted price such date.’’. for a month in 2029 shall be equal to the less-
under this section on only the portion of the (3) SELECTED DRUG SUBSIDY PAYMENTS FROM er of—
negotiated price of the applicable drug that MEDICARE PRESCRIPTION DRUG ACCOUNT.—Sec- ‘‘(I) the base beneficiary premium com-
falls above such annual deductible. tion 1860D–16(b)(1) of the Social Security Act puted under clause (v) for a month in 2028 in-
‘‘(ii) CLAIMS SPANNING OUT-OF-POCKET (42 U.S.C. 1395w–116(b)(1)) is amended— creased by 6 percent; or
THRESHOLD.—In the case where the entire (A) in subparagraph (C), by striking ‘‘and’’ ‘‘(II) the base beneficiary premium com-
amount of the negotiated price of an indi- at the end; puted under paragraph (2) for a month in 2029
vidual claim for an applicable drug with re- (B) in subparagraph (D), by striking the pe- that would have applied if this paragraph
spect to an applicable beneficiary does not riod at the end and inserting ‘‘; and’’; and had not been enacted.
fall entirely below or entirely above the an- (C) by adding at the end the following new ‘‘(B) CLARIFICATION REGARDING 2030 AND SUB-
nual out-of-pocket threshold specified in sec- subparagraph: SEQUENT YEARS.—The base beneficiary pre-
tion 1860D–2(b)(4)(B)(i) for the year, the man- ‘‘(E) payments under section 1860D–14D (re- mium for a month in 2030 or a subsequent
ufacturer of the applicable drug shall provide lating to selected drug subsidy payments).’’. year shall be computed under paragraph (2)
the discounted price— (d) MEDICARE PART D PREMIUM STABILIZA- without regard to this paragraph.’’; and
‘‘(I) in accordance with subparagraph (A)(i) TION.— (B) in subsection (b)(3)(A)(ii), by striking
on the portion of the negotiated price of the (1) 2024 THROUGH 2029.—Section 1860D–13 of ‘‘subsection (a)(2)’’ and inserting ‘‘paragraph
applicable drug that falls below such thresh- the Social Security Act (42 U.S.C. 1395w–113) (2) or (8) of subsection (a) (as applicable)’’.
old; and is amended— (2) ADJUSTMENT TO BENEFICIARY PREMIUM
‘‘(II) in accordance with subparagraph (A) in subsection (a)— PERCENTAGE FOR 2030 AND SUBSEQUENT
(A)(ii) on the portion of such price of such (i) in paragraph (1)(A), by inserting ‘‘or (8) YEARS.—Section 1860D–13(a) of the Social Se-
drug that falls at or above such threshold. (as applicable)’’ after ‘‘paragraph (2)’’; curity Act (42 U.S.C. 1395w–113(a)), as amend-
dlhill on DSK120RN23PROD with SENATE
‘‘(5) MANUFACTURER.—The term ‘manufac- (ii) in paragraph (2), in the matter pre- ed by paragraph (1), is amended—
turer’ means any entity which is engaged in ceding subparagraph (A), by striking ‘‘The (A) in paragraph (3)(A), by inserting ‘‘(or,
the production, preparation, propagation, base’’ and inserting ‘‘Subject to paragraph for 2030 and each subsequent year, the per-
compounding, conversion, or processing of (8), the base’’; cent specified under paragraph (9))’’ after
prescription drug products, either directly or (iii) in paragraph (7)— ‘‘25.5 percent’’; and
indirectly by extraction from substances of (I) in subparagraph (B)(ii), by inserting ‘‘or (B) by adding at the end the following new
natural origin, or independently by means of (8) (as applicable)’’ after ‘‘paragraph (2)’’; and paragraph:
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00039 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4090 CONGRESSIONAL RECORD — SENATE August 6, 2022
‘‘(9) PERCENT SPECIFIED.— (iii) in subparagraph (E), by striking ‘‘The years 2022 and 2023, respectively, and
‘‘(A) IN GENERAL.—Subject to subparagraph elimination’’ and inserting ‘‘For a year pre- $32,000,000 to carry out the provisions of, in-
(B), for purposes of paragraph (3)(A), the per- ceding 2024, the elimination’’; and cluding the amendments made by, this sec-
cent specified under this paragraph for 2030 (B) in paragraph (2)(E), by striking ‘‘1860D– tion in each of fiscal years 2024 through 2031,
and each subsequent year is the percent that 2(b)(4)(A)(i)(I)’’ and inserting ‘‘1860D– to remain available until expended.
the Secretary determines is necessary to en- 2(b)(4)(A)(i)(I)(aa)’’.
sure that the base beneficiary premium com- (4) Section 1860D–21(d)(7) of the Social Se- SEC. 11202. MAXIMUM MONTHLY CAP ON COST-
puted under paragraph (2) for a month in 2030 curity Act (42 U.S.C. 1395w–131(d)(7)) is SHARING PAYMENTS UNDER PRE-
is equal to the lesser of— amended by striking ‘‘section 1860D– SCRIPTION DRUG PLANS AND MA–PD
PLANS.
‘‘(i) the base beneficiary premium com- 2(b)(4)(B)(i)’’ and inserting ‘‘section 1860D–
puted under paragraph (8)(A)(vi) for a month 2(b)(4)(C)(i)’’. (a) IN GENERAL.—Section 1860D–2(b) of the
in 2029 increased by 6 percent; or (5) Section 1860D–22(a)(2)(A) of the Social Social Security Act (42 U.S.C. 1395w–102(b)) is
‘‘(ii) the base beneficiary premium com- Security Act (42 U.S.C. 1395w–132(a)(2)(A)) is amended—
puted under paragraph (2) for a month in 2030 amended— (1) in paragraph (2)—
that would have applied if this paragraph (A) by striking ‘‘the value of any discount’’ (A) in subparagraph (A), by striking ‘‘and
had not been enacted. and inserting the following: ‘‘the value of— (D)’’ and inserting ‘‘, (D), and (E)’’; and
‘‘(B) FLOOR.—The percent specified under ‘‘(i) for years prior to 2025, any discount’’; (B) by adding at the end the following new
subparagraph (A) may not be less than 20 (B) in clause (i), as inserted by subpara- subparagraph:
percent.’’. graph (A) of this paragraph, by striking the ‘‘(E) MAXIMUM MONTHLY CAP ON COST-SHAR-
(3) CONFORMING AMENDMENTS.— period at the end and inserting ‘‘; and’’; and ING PAYMENTS.—
(A) Section 1854(b)(2)(B) of the Social Secu- (C) by adding at the end the following new ‘‘(i) IN GENERAL.—For plan years beginning
rity Act 42 U.S.C. 1395w–24(b)(2)(B)) is amend- clause: on or after January 1, 2025, each PDP sponsor
ed by striking ‘‘section 1860D–13(a)(2)’’ and ‘‘(ii) for 2025 and each subsequent year, any offering a prescription drug plan and each
inserting ‘‘paragraph (2) or (8) (as applicable) discount provided pursuant to section 1860D– MA organization offering an MA–PD plan
of section 1860D–13(a)’’. 14C.’’. shall provide to any enrollee of such plan, in-
(B) Section 1860D–11(g)(6) of the Social Se- (6) Section 1860D–41(a)(6) of the Social Se- cluding an enrollee who is a subsidy eligible
curity Act (42 U.S.C. 1395w–111(g)(6)) is curity Act (42 U.S.C. 1395w–151(a)(6)) is individual (as defined in paragraph (3) of sec-
amended by inserting ‘‘(or, for 2030 and each amended— tion 1860D–14(a)), the option to elect with re-
subsequent year, the percent specified under (A) by inserting ‘‘for a year before 2025’’ spect to a plan year to pay cost-sharing
section 1860D–13(a)(9))’’ after ‘‘25.5 percent’’. after ‘‘1860D–2(b)(3)’’; and under the plan in monthly amounts that are
(C) Section 1860D–13(a)(7)(B)(i) of the So- (B) by inserting ‘‘for such year’’ before the capped in accordance with this subpara-
cial Security Act (42 U.S.C. 1395w– period. graph.
113(a)(7)(B)(i)) is amended— (7) Section 1860D–43 of the Social Security ‘‘(ii) DETERMINATION OF MAXIMUM MONTHLY
(i) in subclause (I), by inserting ‘‘(or, for Act (42 U.S.C. 1395w–153) is amended— CAP.—For each month in the plan year for
2030 and each subsequent year, the percent (A) in subsection (a)— which an enrollee in a prescription drug plan
specified under paragraph (9))’’ after ‘‘25.5 (i) by striking paragraph (1) and inserting or an MA–PD plan has made an election pur-
percent’’; and the following: suant to clause (i), the PDP sponsor or MA
(ii) in subclause (II), by inserting ‘‘(or, for ‘‘(1) participate in— organization shall determine a maximum
2030 and each subsequent year, the percent ‘‘(A) for 2011 through 2024, the Medicare monthly cap (as defined in clause (iv)) for
specified under paragraph (9))’’ after ‘‘25.5 coverage gap discount program under section such enrollee.
percent’’. 1860D–14A; and ‘‘(iii) BENEFICIARY MONTHLY PAYMENTS.—
(D) Section 1860D–15(a) of the Social Secu- ‘‘(B) for 2025 and each subsequent year, the With respect to an enrollee who has made an
rity Act (42 U.S.C. 1395w–115(a)) is amended— manufacturer discount program under sec- election pursuant to clause (i), for each
(i) in the matter preceding paragraph (1), tion 1860D–14C;’’; month described in clause (ii), the PDP spon-
by inserting ‘‘(or, for each of 2024 through (ii) by striking paragraph (2) and inserting sor or MA organization shall bill such en-
2029, the percent applicable as a result of the the following: rollee an amount (not to exceed the max-
application of section 1860D–13(a)(8), or, for ‘‘(2) have entered into and have in effect— imum monthly cap) for the out-of-pocket
2030 and each subsequent year, 100 percent ‘‘(A) for 2011 through 2024, an agreement costs of such enrollee in such month.
minus the percent specified under section described in subsection (b) of section 1860D– ‘‘(iv) MAXIMUM MONTHLY CAP DEFINED.—In
1860D–13(a)(9))’’ after ‘‘74.5 percent’’; and 14A with the Secretary; and this subparagraph, the term ‘maximum
(ii) in paragraph (1)(B), by striking ‘‘para- ‘‘(B) for 2025 and each subsequent year, an monthly cap’ means, with respect to an en-
graph (2) of section 1860D–13(a)’’ and insert- agreement described in subsection (b) of sec- rollee—
ing ‘‘paragraph (2) or (8) of section 1860D– tion 1860D–14C with the Secretary; and’’; and ‘‘(I) for the first month for which the en-
13(a) (as applicable)’’. (iii) in paragraph (3), by striking ‘‘such sec- rollee has made an election pursuant to
(e) CONFORMING AMENDMENTS.— tion’’ and inserting ‘‘section 1860D–14A’’; and clause (i), an amount determined by calcu-
(1) Section 1860D–2 of the Social Security (B) by striking subsection (b) and inserting lating—
Act (42 U.S.C. 1395w–102) is amended— the following: ‘‘(aa) the annual out-of-pocket threshold
(A) in subsection (a)(2)(A)(i)(I), by striking ‘‘(b) EFFECTIVE DATE.—Paragraphs (1)(A), specified in paragraph (4)(B) minus the in-
‘‘, or an increase in the initial’’ and inserting (2)(A), and (3) of subsection (a) shall apply to curred costs of the enrollee as described in
‘‘or, for a year preceding 2025, an increase in covered part D drugs dispensed under this paragraph (4)(C); divided by
the initial’’; part on or after January 1, 2011, and before ‘‘(bb) the number of months remaining in
January 1, 2025, and paragraphs (1)(B) and
(B) in subsection (c)(1)(C)— the plan year; and
(2)(B) of such subsection shall apply to cov-
(i) in the subparagraph heading, by strik- ‘‘(II) for a subsequent month, an amount
ered part D drugs dispensed under this part
ing ‘‘AT INITIAL COVERAGE LIMIT’’; and determined by calculating—
on or after January 1, 2025.’’.
(ii) by inserting ‘‘for a year preceding 2025 ‘‘(aa) the sum of any remaining out-of-
(8) Section 1927 of the Social Security Act
or the annual out-of-pocket threshold speci- pocket costs owed by the enrollee from a pre-
(42 U.S.C. 1396r–8) is amended—
fied in subsection (b)(4)(B) for the year for vious month that have not yet been billed to
(A) in subsection (c)(1)(C)(i)(VI), by insert-
2025 and each subsequent year’’ after ‘‘sub- the enrollee and any additional out-of-pock-
ing before the period at the end the fol-
section (b)(3) for the year’’ each place it ap- et costs incurred by the enrollee; divided by
lowing: ‘‘or under the manufacturer discount
pears; and ‘‘(bb) the number of months remaining in
program under section 1860D–14C’’; and
(C) in subsection (d)(1)(A), by striking ‘‘or the plan year.
(B) in subsection (k)(1)(B)(i)(V), by insert-
an initial’’ and inserting ‘‘or, for a year pre- ‘‘(v) ADDITIONAL REQUIREMENTS.—The fol-
ing before the period at the end the fol-
ceding 2025, an initial’’. lowing requirements shall apply with respect
lowing: ‘‘or under section 1860D–14C’’.
(2) Section 1860D–4(a)(4)(B)(i) of the Social (f) IMPLEMENTATION FOR 2024 THROUGH to the option to make an election pursuant
Security Act (42 U.S.C. 1395w–104(a)(4)(B)(i)) 2026.—The Secretary shall implement this to clause (i) under this subparagraph:
is amended by striking ‘‘the initial’’ and in- section, including the amendments made by ‘‘(I) SECRETARIAL RESPONSIBILITIES.—The
serting ‘‘for a year preceding 2025, the ini- this section, for 2024, 2025, and 2026 by pro- Secretary shall provide information to part
tial’’. gram instruction or other forms of program D eligible individuals on the option to make
(3) Section 1860D–14(a) of the Social Secu- guidance. such election through educational materials,
rity Act (42 U.S.C. 1395w–114(a)) is amended— (g) FUNDING.—In addition to amounts oth- including through the notices provided under
dlhill on DSK120RN23PROD with SENATE
(A) in paragraph (1)— erwise available, there are appropriated to section 1804(a).
(i) in subparagraph (C), by striking ‘‘The the Centers for Medicare & Medicaid Serv- ‘‘(II) TIMING OF ELECTION.—An enrollee in a
continuation’’ and inserting ‘‘For a year pre- ices, out of any money in the Treasury not prescription drug plan or an MA–PD plan
ceding 2025, the continuation’’; otherwise appropriated, $341,000,000 for fiscal may make such an election—
(ii) in subparagraph (D)(iii), by striking year 2022, including $20,000,000 and $65,000,000 ‘‘(aa) prior to the beginning of the plan
‘‘1860D–2(b)(4)(A)(i)(I)’’ and inserting ‘‘1860D– to carry out the provisions of, including the year; or
2(b)(4)(A)(i)(I)(aa)’’; and amendments made by, this section in fiscal ‘‘(bb) in any month during the plan year.
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00040 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4091
‘‘(III) PDP SPONSOR AND MA ORGANIZATION ing the amendments made by this section, term ‘adult vaccine recommended by the Ad-
RESPONSIBILITIES.—Each PDP sponsor offer- for 2025 by program instruction or other visory Committee on Immunization Prac-
ing a prescription drug plan or MA organiza- forms of program guidance. tices’ means a covered part D drug that is a
tion offering an MA–PD plan— (d) FUNDING.—In addition to amounts oth- vaccine licensed under section 351 of the
‘‘(aa) may not limit the option for an en- erwise available, there are appropriated to Public Health Service Act for use by adult
rollee to make such an election to certain the Centers for Medicare & Medicaid Serv- populations and administered in accordance
covered part D drugs; ices, out of any money in the Treasury not with recommendations of the Advisory Com-
‘‘(bb) shall, prior to the plan year, notify otherwise appropriated, $10,000,000 for fiscal mittee on Immunization Practices of the
prospective enrollees of the option to make year 2023, to remain available until ex- Centers for Disease Control and Preven-
such an election in promotional materials; pended, to carry out the provisions of, in- tion.’’; and
‘‘(cc) shall include information on such op- cluding the amendments made by, this sec- (2) in subsection (c), by adding at the end
tion in enrollee educational materials; tion. the following new paragraph:
‘‘(dd) shall have in place a mechanism to PART 4—CONTINUED DELAY OF IMPLE- ‘‘(5) TREATMENT OF COST-SHARING FOR
notify a pharmacy during the plan year when MENTATION OF PRESCRIPTION DRUG ADULT VACCINES RECOMMENDED BY THE ADVI-
an enrollee incurs out-of-pocket costs with REBATE RULE SORY COMMITTEE ON IMMUNIZATION PRAC-
respect to covered part D drugs that make it TICES.—The coverage is in accordance with
likely the enrollee may benefit from making SEC. 11301. EXTENSION OF MORATORIUM ON IM-
subsection (b)(8).’’.
PLEMENTATION OF RULE RELATING
such an election; (b) CONFORMING AMENDMENTS TO COST-
TO ELIMINATING THE ANTI-KICK-
‘‘(ee) shall provide that a pharmacy, after SHARING FOR LOW-INCOME INDIVIDUALS.—Sec-
BACK STATUTE SAFE HARBOR PRO-
receiving a notification described in item TECTION FOR PRESCRIPTION DRUG tion 1860D–14(a) of the Social Security Act
(dd) with respect to an enrollee, informs the REBATES. (42 U.S.C. 1395w–114(a)), as amended by sec-
enrollee of such notification; The Secretary of Health and Human Serv- tion 11201, is amended—
‘‘(ff) shall ensure that such an election by ices shall not, prior to January 1, 2032, im- (1) in paragraph (1)(D), in each of clauses
an enrollee has no effect on the amount paid plement, administer, or enforce the provi- (ii) and (iii), by striking ‘‘In the case’’ and
to pharmacies (or the timing of such pay- sions of the final rule published by the Office inserting ‘‘Subject to paragraph (6), in the
ments) with respect to covered part D drugs of the Inspector General of the Department case’’;
dispensed to the enrollee; and of Health and Human Services on November (2) in paragraph (2)—
‘‘(gg) shall have in place a financial rec- 30, 2020, and titled ‘‘Fraud and Abuse; Re- (A) in subparagraph (B), by striking ‘‘A re-
onciliation process to correct inaccuracies in moval of Safe Harbor Protection for Rebates duction’’ and inserting ‘‘Subject to section
payments made by an enrollee under this Involving Prescription Pharmaceuticals and 1860D–2(b)(8), a reduction’’;
subparagraph with respect to covered part D Creation of New Safe Harbor Protection for (B) in subparagraph (D), by striking ‘‘The
drugs during the plan year. Certain Point-of-Sale Reductions in Price on substitution’’ and inserting ‘‘Subject to
‘‘(IV) FAILURE TO PAY AMOUNT BILLED.—If Prescription Pharmaceuticals and Certain paragraph (6), the substitution’’; and
an enrollee fails to pay the amount billed for Pharmacy Benefit Manager Service Fees’’ (85 (C) in subparagraph (E), by striking ‘‘sub-
a month as required under this subpara- Fed. Reg. 76666). section (c)’’ and inserting ‘‘paragraph (6) of
graph— this subsection and subsection (c)’’; and
‘‘(aa) the election of the enrollee pursuant PART 5—MISCELLANEOUS (3) by adding at the end the following new
to clause (i) shall be terminated and the en- SEC. 11401. COVERAGE OF ADULT VACCINES REC- paragraph:
rollee shall pay the cost-sharing otherwise OMMENDED BY THE ADVISORY COM- ‘‘(6) NO APPLICATION OF COST-SHARING OR
applicable for any covered part D drugs sub- MITTEE ON IMMUNIZATION PRAC-
DEDUCTIBLE FOR ADULT VACCINES REC-
TICES UNDER MEDICARE PART D.
sequently dispensed to the enrollee up to the OMMENDED BY THE ADVISORY COMMITTEE ON
annual out-of-pocket threshold specified in (a) ENSURING TREATMENT OF COST-SHARING IMMUNIZATION PRACTICES.—For plan years be-
paragraph (4)(B); and AND DEDUCTIBLE IS CONSISTENT WITH TREAT-
ginning on or after January 1, 2023, with re-
‘‘(bb) the PDP sponsor or MA organization MENT OF VACCINES UNDER MEDICARE PART
spect to an adult vaccine recommended by
may preclude the enrollee from making an B.—Section 1860D–2 of the Social Security the Advisory Committee on Immunization
election pursuant to clause (i) in a subse- Act (42 U.S.C. 1395w–102), as amended by sec- Practices (as defined in section 1860D–
quent plan year. tions 11201 and 11202, is amended— 2(b)(8)(B))—
‘‘(V) CLARIFICATION REGARDING PAST DUE (1) in subsection (b)— ‘‘(A) the deductible under section 1860D–
AMOUNTS.—Nothing in this subparagraph (A) in paragraph (1)(A), by striking ‘‘The 2(b)(1) shall not apply; and
shall be construed as prohibiting a PDP coverage’’ and inserting ‘‘Subject to para- ‘‘(B) there shall be no cost-sharing under
sponsor or an MA organization from billing graph (8), the coverage’’; this section with respect to such vaccine.’’.
an enrollee for an amount owed under this (B) in paragraph (2)— (c) TEMPORARY RETROSPECTIVE SUBSIDY.—
subparagraph. (i) in subparagraph (A), by inserting ‘‘and (1) IN GENERAL.—Section 1860D–15 of the
‘‘(VI) TREATMENT OF UNSETTLED BAL- paragraph (8)’’ after ‘‘and (E)’’; Social Security Act (42 U.S.C. 1395w–115) is
ANCES.—Any unsettled balances with respect (ii) in subparagraph (C)(i), in the matter amended by adding at the end the following
to amounts owed under this subparagraph preceding subclause (I), by striking ‘‘para- new subsection:
shall be treated as plan losses and the Sec- graph (4)’’ and inserting ‘‘paragraphs (4) and ‘‘(h) TEMPORARY RETROSPECTIVE SUBSIDY
retary shall not be liable for any such bal- (8)’’; and FOR REDUCTION IN COST-SHARING AND DEDUCT-
ances outside of those assumed as losses esti- (iii) in subparagraph (D)(i), in the matter IBLE FOR ADULT VACCINES RECOMMENDED BY
mated in plan bids.’’; and preceding subclause (I), by striking ‘‘para- THE ADVISORY COMMITTEE ON IMMUNIZATION
(2) in paragraph (4)— graph (4)’’ and inserting ‘‘paragraphs (4) and PRACTICES DURING 2023.—
(A) in subparagraph (C), by striking ‘‘sub- (8)’’; ‘‘(1) IN GENERAL.—In addition to amounts
paragraph (E)’’ and inserting ‘‘subparagraph (C) in paragraph (3)(A), in the matter pre- otherwise payable under this section to a
(E) or subparagraph (F)’’; and ceding clause (i), by striking ‘‘and (4)’’ and PDP sponsor of a prescription drug plan or
(B) by adding at the end the following new inserting ‘‘(4), and (8)’’; an MA organization offering an MA–PD plan,
subparagraph: (D) in paragraph (4)(A)(i), by striking ‘‘The for plan year 2023, the Secretary shall pro-
‘‘(F) INCLUSION OF COSTS PAID UNDER MAX- coverage’’ and inserting ‘‘Subject to para- vide the PDP sponsor or MA organization of-
IMUM MONTHLY CAP OPTION.—In applying sub- graph (8), the coverage’’; and fering the plan subsidies in an amount equal
paragraph (A), with respect to an enrollee (E) by adding at the end the following new to the aggregate reduction in cost-sharing
who has made an election pursuant to clause paragraph: and deductible by reason of the application
(i) of paragraph (2)(E), costs shall be treated ‘‘(8) TREATMENT OF COST-SHARING FOR of section 1860D–2(b)(8) for individuals under
as incurred if such costs are paid by a PDP ADULT VACCINES RECOMMENDED BY THE ADVI- the plan during the year.
sponsor or an MA organization under the op- SORY COMMITTEE ON IMMUNIZATION PRACTICES ‘‘(2) TIMING.—The Secretary shall provide a
tion provided under such paragraph.’’. CONSISTENT WITH TREATMENT OF VACCINES subsidy under paragraph (1), as applicable,
(b) APPLICATION TO ALTERNATIVE PRESCRIP- UNDER PART B.— not later than 18 months following the end of
TION DRUG COVERAGE.—Section 1860D–2(c) of ‘‘(A) IN GENERAL.—For plan years begin- the applicable plan year.’’.
the Social Security Act (42 U.S.C. 1395w– ning on or after January 1, 2023, with respect (2) TREATMENT AS INCURRED COSTS.—Sec-
102(c)) is amended by adding at the end the to an adult vaccine recommended by the Ad- tion 1860D–2(b)(4)(C)(iii)(I) of the Social Se-
following new paragraph: visory Committee on Immunization Prac- curity Act (42 U.S.C. 1395w–
‘‘(4) SAME MAXIMUM MONTHLY CAP ON COST- tices (as defined in subparagraph (B))— 102(b)(4)(C)(iii)(I)), as amended by section
SHARING.—The maximum monthly cap on ‘‘(i) the deductible under paragraph (1) 11201(a)(3)(C), is amended—
dlhill on DSK120RN23PROD with SENATE
cost-sharing payments shall apply to cov- shall not apply; and (A) in item (cc), by striking ‘‘or’’ at the
erage with respect to an enrollee who has ‘‘(ii) there shall be no coinsurance or other end; and
made an election pursuant to clause (i) of cost-sharing under this part with respect to (B) by adding at the end the following new
subsection (b)(2)(E) under the option pro- such vaccine. item:
vided under such subsection.’’. ‘‘(B) ADULT VACCINES RECOMMENDED BY THE ‘‘(dd) under section 1860D–15(h); or’’.
(c) IMPLEMENTATION FOR 2025.—The Sec- ADVISORY COMMITTEE ON IMMUNIZATION PRAC- (d) RULE OF CONSTRUCTION.—Nothing in
retary shall implement this section, includ- TICES.—For purposes of this paragraph, the this section shall be construed as limiting
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00041 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4092 CONGRESSIONAL RECORD — SENATE August 6, 2022
coverage under part D of title XVIII of the logical product described in paragraph (1)(C) ‘‘(J) vaccines described in section
Social Security Act for vaccines that are not with respect to which— 1905(a)(13)(B) and the administration of such
recommended by the Advisory Committee on ‘‘(I) in the case of a product described in vaccines; and’’.
Immunization Practices. clause (ii)(I), the average sales price under (B) APPLICATION TO ALTERNATIVE COST
(e) IMPLEMENTATION FOR 2023 THROUGH paragraph (8)(A)(i) for a calendar quarter SHARING.—Section 1916A(b)(3)(B) of the So-
2025.—The Secretary shall implement this during the 5-year period described in such cial Security Act (42 U.S.C. 1396o–1(b)(3)(B))
section, including the amendments made by clause is not more than the average sales is amended by adding at the end the fol-
this section, for 2023, 2024, and 2025, by pro- price under paragraph (4)(A) for such quarter lowing new clause:
gram instruction or other forms of program for the reference biological product; and ‘‘(xiv) Vaccines described in section
guidance. ‘‘(II) in the case of a product described in 1905(a)(13)(B) and the administration of such
SEC. 11402. PAYMENT FOR BIOSIMILAR BIOLOGI- clause (ii)(II), the average sales price under vaccines.’’.
CAL PRODUCTS DURING INITIAL PE- paragraph (8)(A)(i) for a calendar quarter (3) INCREASED FMAP FOR ADULT VACCINES
RIOD.
during the 5-year period described in such AND THEIR ADMINISTRATION.—Section 1905(b)
Section 1847A(c)(4) of the Social Security clause is not more than the average sales of the Social Security Act (42 U.S.C. 1396d(b))
Act (42 U.S.C. 1395w–3a(c)(4)) is amended— price under paragraph (4)(A) for such quarter is amended—
(1) in each of subparagraphs (A) and (B), by for the reference biological product.’’. (A) by striking ‘‘and (5)’’ and inserting
redesignating clauses (i) and (ii) as sub- SEC. 11404. EXPANDING ELIGIBILITY FOR LOW-IN- ‘‘(5)’’;
clauses (I) and (II), respectively, and moving COME SUBSIDIES UNDER PART D OF (B) by striking ‘‘services and vaccines de-
such subclauses 2 ems to the right; THE MEDICARE PROGRAM.
scribed in subparagraphs (A) and (B) of sub-
(2) by redesignating subparagraphs (A) and Section 1860D–14(a) of the Social Security section (a)(13), and prohibits cost-sharing for
(B) as clauses (i) and (ii) and moving such Act (42 U.S.C. 1395w–114(a)), as amended by
such services and vaccines’’ and inserting
clauses 2 ems to the right; sections 11201 and 11401, is amended—
‘‘services described in subsection (a)(13)(A),
(3) by striking ‘‘UNAVAILABLE.—In the (1) in the subsection heading, by striking
and prohibits cost-sharing for such services’’;
case’’ and inserting ‘‘UNAVAILABLE.— ‘‘INDIVIDUALS’’ and all that follows through
(C) by striking ‘‘medical assistance for
‘‘(A) IN GENERAL.—Subject to subparagraph ‘‘LINE’’ and inserting ‘‘CERTAIN INDIVID-
such services and vaccines’’ and inserting
(B), in the case’’; and UALS’’;
‘‘medical assistance for such services’’; and
(4) by adding at the end the following new (2) in paragraph (1)—
(D) by inserting ‘‘, and (6) during the first
subparagraph: (A) by striking the paragraph heading and
8 fiscal quarters beginning on or after the ef-
‘‘(B) LIMITATION ON PAYMENT AMOUNT FOR inserting ‘‘INDIVIDUALS WITH CERTAIN LOW IN-
COMES’’; and
fective date of this clause, in the case of a
BIOSIMILAR BIOLOGICAL PRODUCTS DURING INI-
(B) in the matter preceding subparagraph State which, as of the date of enactment of
TIAL PERIOD.—In the case of a biosimilar bio-
(A)— the Act titled ‘An Act to provide for rec-
logical product furnished on or after July 1,
(i) by inserting ‘‘(or, with respect to a plan onciliation pursuant to title II of S. Con.
2024, during the initial period described in
year beginning on or after January 1, 2024, Res. 14’, provides medical assistance for vac-
subparagraph (A) with respect to the bio-
150 percent)’’ after ‘‘135 percent’’; and cines described in subsection (a)(13)(B) and
similar biological product, the amount pay-
(ii) by inserting ‘‘(or, with respect to a their administration and prohibits cost-shar-
able under this section for the biosimilar bi-
plan year beginning on or after January 1, ing for such vaccines, the Federal medical
ological product is the lesser of the fol-
2024, paragraph (3)(E))’’ after ‘‘the resources assistance percentage, as determined under
lowing:
requirement described in paragraph (3)(D)’’; this subsection and subsection (y), shall be
‘‘(i) The amount determined under clause
and increased by 1 percentage point with respect
(ii) of such subparagraph for the biosimilar
(3) in paragraph (2)— to medical assistance for such vaccines and
biological product.
(A) by striking the paragraph heading and their administration’’ before the first period.
‘‘(ii) The amount determined under sub-
section (b)(1)(B) for the reference biological inserting ‘‘OTHER LOW-INCOME INDIVIDUALS’’; (b) CHIP.—
product.’’. and (1) REQUIRING COVERAGE OF ADULT VACCINA-
SEC. 11403. TEMPORARY INCREASE IN MEDICARE (B) in the matter preceding subparagraph TIONS.—Section 2103(c) of the Social Security
PART B PAYMENT FOR CERTAIN BIO- (A), by striking ‘‘In the case of a subsidy’’ Act (42 U.S.C. 1397cc(c)) is amended by add-
SIMILAR BIOLOGICAL PRODUCTS. and inserting ‘‘With respect to a plan year ing at the end the following paragraph:
Section 1847A(b)(8) of the Social Security beginning before January 1, 2024, in the case ‘‘(12) REQUIRED COVERAGE OF APPROVED,
Act (42 U.S.C. 1395w–3a(b)(8)) is amended— of a subsidy’’. RECOMMENDED ADULT VACCINES AND THEIR AD-
(1) by redesignating subparagraphs (A) and SEC. 11405. IMPROVING ACCESS TO ADULT VAC- MINISTRATION.—Regardless of the type of cov-
(B) as clauses (i) and (ii), respectively, and CINES UNDER MEDICAID AND CHIP. erage elected by a State under subsection
moving the margin of each such redesignated (a) MEDICAID.— (a), if the State child health plan or a waiver
clause 2 ems to the right; (1) REQUIRING COVERAGE OF ADULT VACCINA- of such plan provides child health assistance
(2) by striking ‘‘PRODUCT.—The amount’’ TIONS.— or pregnancy-related assistance (as defined
and inserting the following: ‘‘PRODUCT.— (A) IN GENERAL.—Section 1902(a)(10)(A) of in section 2112) to an individual who is 19
‘‘(A) IN GENERAL.—Subject to subparagraph the Social Security Act (42 U.S.C. years of age or older, such assistance shall
(B), the amount’’; and 1396a(a)(10)(A)) is amended in the matter pre- include coverage of vaccines described in sec-
(3) by adding at the end the following new ceding clause (i) by inserting ‘‘(13)(B),’’ after tion 1905(a)(13)(B) and their administra-
subparagraph: ‘‘(5),’’. tion.’’.
‘‘(B) TEMPORARY PAYMENT INCREASE.— (B) MEDICALLY NEEDY.—Section (2) NO COST-SHARING FOR VACCINATIONS.—
‘‘(i) IN GENERAL.—In the case of a quali- 1902(a)(10)(C)(iv) of such Act (42 U.S.C. Section 2103(e)(2) of such Act (42 U.S.C.
fying biosimilar biological product that is 1396a(a)(10)(C)(iv)) is amended by inserting ‘‘, 1397cc(e)(2)) is amended by inserting ‘‘vac-
furnished during the applicable 5-year period (13)(B),’’ after ‘‘(5)’’. cines described in subsection (c)(12) (and the
for such product, the amount specified in (2) NO COST SHARING FOR VACCINATIONS.— administration of such vaccines),’’ after ‘‘in
this paragraph for such product with respect (A) GENERAL COST-SHARING LIMITATIONS.— vitro diagnostic products described in sub-
to such period is the sum determined under Section 1916 of the Social Security Act (42 section (c)(10) (and administration of such
subparagraph (A), except that clause (ii) of U.S.C. 1396o) is amended— products),’’.
such subparagraph shall be applied by sub- (i) in subsection (a)(2)— (c) EFFECTIVE DATE.—The amendments
stituting ‘8 percent’ for ‘6 percent’. (I) in subparagraph (G), by inserting a made by this section take effect on the 1st
‘‘(ii) APPLICABLE 5-YEAR PERIOD.—For pur- comma after ‘‘State plan’’; day of the 1st fiscal quarter that begins on or
poses of clause (i), the applicable 5-year pe- (II) in subparagraph (H), by striking ‘‘; or’’ after the date that is 1 year after the date of
riod for a qualifying biosimilar biological and inserting a comma; enactment of this Act and shall apply to ex-
product is— (III) in subparagraph (I), by striking ‘‘; penditures made under a State plan or waiv-
‘‘(I) in the case of such a product for which and’’ and inserting ‘‘, or’’; and er of such plan under title XIX of the Social
payment was made under this paragraph as (IV) by adding at the end the following new Security Act (42 U.S.C. 1396 through 1396w–6)
of September 30, 2022, the 5-year period be- subparagraph: or under a State child health plan or waiver
ginning on October 1, 2022; and ‘‘(J) vaccines described in section of such plan under title XXI of such Act (42
‘‘(II) in the case of such a product for 1905(a)(13)(B) and the administration of such U.S.C. 1397aa through 1397mm) on or after
which payment is first made under this para- vaccines; and’’; and such effective date.
graph during a calendar quarter during the (ii) in subsection (b)(2)—
period beginning October 1, 2022, and ending (I) in subparagraph (G), by inserting a SEC. 11406. APPROPRIATE COST-SHARING FOR
dlhill on DSK120RN23PROD with SENATE
December 31, 2027, the 5-year period begin- comma after ‘‘State plan’’; COVERED INSULIN PRODUCTS
UNDER MEDICARE PART D.
ning on the first day of such calendar quar- (II) in subparagraph (H), by striking ‘‘; or’’
ter during which such payment is first made. and inserting a comma; (a) IN GENERAL.—Section 1860D–2 of the So-
‘‘(iii) QUALIFYING BIOSIMILAR BIOLOGICAL (III) in subparagraph (I), by striking ‘‘; cial Security Act (42 U.S.C. 1395w–102), as
PRODUCT DEFINED.—For purposes of this sub- and’’ and inserting ‘‘, or’’; and amended by sections 11201, 11202, and 11401, is
paragraph, the term ‘qualifying biosimilar (IV) by adding at the end the following new amended—
biological product’ means a biosimilar bio- subparagraph: (1) in subsection (b)—
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00042 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4093
(A) in paragraph (1)(A), by striking ‘‘para- an enrollee within 30 days for any cost-shar- SEC. 11407. LIMITATION ON MONTHLY COINSUR-
graph (8)’’ and inserting ‘‘paragraphs (8) and ing paid by such enrollee that exceeds the ANCE AND ADJUSTMENTS TO SUP-
(9)’’; PLIER PAYMENT UNDER MEDICARE
cost-sharing applied by the prescription drug PART B FOR INSULIN FURNISHED
(B) in paragraph (2)— plan or MA–PD plan under subparagraph THROUGH DURABLE MEDICAL
(i) in subparagraph (A), by striking ‘‘para- (B)(i) at the point-of-sale for such month’s EQUIPMENT.
graph (8)’’ and inserting ‘‘paragraphs (8) and supply.’’; and
(9)’’; (a) WAIVER OF DEDUCTIBLE.—The first sen-
(2) in subsection (c), by adding at the end
(ii) in subparagraph (C)(i), in the matter tence of section 1833(b) of the Social Secu-
the following new paragraph:
preceding subclause (I), by striking ‘‘and (8)’’ rity Act (42 U.S.C. 1395l(b)) is amended—
‘‘(6) TREATMENT OF COST-SHARING FOR COV-
and inserting ‘‘, (8), and (9)’’; and (1) by striking ‘‘and (12)’’ and inserting
ERED INSULIN PRODUCTS.—The coverage is
(iii) in subparagraph (D)(i), in the matter ‘‘(12)’’; and
provided in accordance with subsection
preceding subclause (I), by striking ‘‘and (8)’’ (2) by inserting before the period the fol-
(b)(9).’’. lowing: ‘‘, and (13) such deductible shall not
and inserting ‘‘, (8), and (9)’’;
(C) in paragraph (3)(A), in the matter pre- (b) CONFORMING AMENDMENTS TO COST- apply with respect to insulin furnished on or
ceding clause (i), by striking ‘‘and (8)’’ and SHARING FOR LOW-INCOME INDIVIDUALS.—Sec- after July 1, 2023, through an item of durable
inserting ‘‘(8), and (9)’’; tion 1860D–14(a) of the Social Security Act medical equipment covered under section
(D) in paragraph (4)(A)(i), by striking (42 U.S.C. 1395w–114(a)), as amended by sec- 1861(n).’’.
‘‘paragraph (8)’’ and inserting ‘‘paragraphs tions 11201, 11401, and 11404, is amended— (b) COINSURANCE.—
(8) and (9)’’; and
(1) in paragraph (1)— (1) IN GENERAL.—Section 1833(a)(1)(S) of the
(E) by adding at the end the following new
(A) in subparagraph (D)(iii), by adding at Social Security Act (42 U.S.C. 1395l(a)(1)(S))
paragraph:
the end the following new sentence: ‘‘For is amended—
‘‘(9) TREATMENT OF COST-SHARING FOR COV-
plan year 2023 and subsequent plan years, the (A) by inserting ‘‘(i) except as provided in
ERED INSULIN PRODUCTS.—
copayment amount applicable under the pre- clause (ii),’’ after ‘‘(S)’’; and
‘‘(A) NO APPLICATION OF DEDUCTIBLE.—For
ceding sentence to a month’s supply of a cov- (B) by inserting after ‘‘or 1847B),’’ the fol-
plan year 2023 and subsequent plan years, the
ered insulin product (as defined in section lowing: ‘‘and (ii) with respect to insulin fur-
deductible under paragraph (1) shall not
apply with respect to any covered insulin 1860D–2(b)(9)(C)) dispensed to the individual nished on or after July 1, 2023, through an
product. may not exceed the applicable copayment item of durable medical equipment covered
‘‘(B) APPLICATION OF COST-SHARING.— amount for the product under the prescrip- under section 1861(n), the amounts paid shall
‘‘(i) PLAN YEARS 2023 AND 2024.—For plan tion drug plan or MA–PD plan in which the be, subject to the fourth sentence of this sub-
years 2023 and 2024, the coverage provides individual is enrolled.’’; and section, 80 percent of the payment amount
benefits for any covered insulin product, re- established under section 1847A (or section
(B) in subparagraph (E), by inserting the
gardless of whether an individual has 1847B, if applicable) for such insulin,’’.
following before the period at the end: ‘‘or
reached the initial coverage limit under (2) ADJUSTMENT TO SUPPLIER PAYMENTS;
under section 1860D–2(b)(9) in the case of a
paragraph (3) or the out-of-pocket threshold LIMITATION ON MONTHLY COINSURANCE.—Sec-
covered insulin product (as defined in sub-
under paragraph (4), with cost-sharing for a tion 1833(a) of the Social Security Act (42
paragraph (C) of such section)’’; and U.S.C. 1395l(a)) is amended, in the flush mat-
month’s supply that does not exceed the ap- (2) in paragraph (2)—
plicable copayment amount. ter at the end, by adding at the end the fol-
(A) in subparagraph (B), by striking ‘‘sec- lowing new sentence: ‘‘The Secretary shall
‘‘(ii) PLAN YEAR 2025 AND SUBSEQUENT PLAN tion 1860D–2(b)(8)’’ and inserting ‘‘paragraphs
YEARS.—For a plan year beginning on or make such adjustments as may be necessary
(8) and (9) of section 1860D–2(b)’’; to the amounts paid as specified under para-
after January 1, 2025, the coverage provides
(B) in subparagraph (D), by adding at the graph (1)(S)(ii) for insulin furnished on or
benefits for any covered insulin product,
end the following new sentence: ‘‘For plan after July 1, 2023, through an item of durable
prior to an individual reaching the out-of-
pocket threshold under paragraph (4), with year 2023, the amount of the coinsurance ap- medical equipment covered under section
cost-sharing for a month’s supply that does plicable under the preceding sentence to a 1861(n), such that the amount of coinsurance
not exceed the applicable copayment month’s supply of a covered insulin product payable by an individual enrolled under this
amount. (as defined in section 1860D–2(b)(9)(C)) dis- part for a month’s supply of such insulin
‘‘(C) COVERED INSULIN PRODUCT.—In this pensed to the individual may not exceed the does not exceed $35.’’.
paragraph, the term ‘covered insulin prod- applicable copayment amount for the prod-
(c) IMPLEMENTATION.—The Secretary of
uct’ means an insulin product that is a cov- uct under the prescription drug plan or MA–
Health and Human Services shall implement
ered part D drug covered under the prescrip- PD plan in which the individual is en-
this section for 2023 by program instruction
tion drug plan or MA–PD plan that is ap- rolled.’’; and
or other forms of program guidance.
proved under section 505 of the Federal Food, (C) in subparagraph (E), by adding at the
Drug, and Cosmetic Act or licensed under end the following new sentence: ‘‘For plan SEC. 11408. SAFE HARBOR FOR ABSENCE OF DE-
section 351 of the Public Health Service Act year 2023, the amount of the copayment or DUCTIBLE FOR INSULIN.
and marketed pursuant to such approval or coinsurance applicable under the preceding (a) IN GENERAL.—Paragraph (2) of section
licensure, including any covered insulin sentence to a month’s supply of a covered in- 223(c) of the Internal Revenue Code of 1986 is
product that has been deemed to be licensed sulin product (as defined in section 1860D– amended by adding at the end the following
under section 351 of the Public Health Serv- 2(b)(9)(C)) dispensed to the individual may new subparagraph:
ice Act pursuant to section 7002(e)(4) of the not exceed the applicable copayment amount ‘‘(G) SAFE HARBOR FOR ABSENCE OF DEDUCT-
Biologics Price Competition and Innovation for the product under the prescription drug IBLE FOR CERTAIN INSULIN PRODUCTS.—
Act of 2009 and marketed pursuant to such plan or MA–PD plan in which the individual ‘‘(i) IN GENERAL.—A plan shall not fail to
section. is enrolled.’’. be treated as a high deductible health plan
‘‘(D) APPLICABLE COPAYMENT AMOUNT.—In
(c) TEMPORARY RETROSPECTIVE SUBSIDY.— by reason of failing to have a deductible for
this paragraph, the term ‘applicable copay-
Section 1860D–15(h) of the Social Security selected insulin products.
ment amount’ means, with respect to a cov-
Act (42 U.S.C. 1395w–115(h)), as added by sec- ‘‘(ii) SELECTED INSULIN PRODUCTS.—For
ered insulin product under a prescription
tion 11401(c), is amended— purposes of this subparagraph—
drug plan or an MA–PD plan dispensed—
‘‘(I) IN GENERAL.—The term ‘selected insu-
‘‘(i) during plan years 2023, 2024, and 2025, (1) in the subsection heading, by inserting
lin products’ means any dosage form (such as
$35; and ‘‘AND INSULIN’’ after ‘‘PRACTICES’’; and
vial, pump, or inhaler dosage forms) of any
‘‘(ii) during plan year 2026 and each subse- (2) in paragraph (1), by striking ‘‘section
different type (such as rapid-acting, short-
quent plan year, the lesser of— 1860D–2(b)(8)’’ and inserting ‘‘paragraph (8) or
acting, intermediate-acting, long-acting,
‘‘(I) $35; (9) of section 1860D–2(b)’’.
ultra long-acting, and premixed) of insulin.
‘‘(II) an amount equal to 25 percent of the
(d) IMPLEMENTATION FOR 2023 THROUGH ‘‘(II) INSULIN.—The term ‘insulin’ means
maximum fair price established for the cov-
2025.—The Secretary shall implement this insulin that is licensed under subsection (a)
ered insulin product in accordance with part
section for plan years 2023, 2024, and 2025 by or (k) of section 351 of the Public Health
E of title XI; or
program instruction or other forms of pro- Service Act (42 U.S.C. 262) and continues to
‘‘(III) an amount equal to 25 percent of the
gram guidance. be marketed under such section, including
negotiated price of the covered insulin prod-
any insulin product that has been deemed to
uct under the prescription drug plan or MA– (e) FUNDING.—In addition to amounts oth- be licensed under section 351(a) of such Act
PD plan. erwise available, there is appropriated to the pursuant to section 7002(e)(4) of the Biologics
dlhill on DSK120RN23PROD with SENATE
‘‘(E) SPECIAL RULE FOR FIRST 3 MONTHS OF
Centers for Medicare & Medicaid Services, Price Competition and Innovation Act of 2009
2023.—With respect to a month’s supply of a
out of any money in the Treasury not other- (Public Law 111–148) and continues to be
covered insulin product dispensed during the
wise appropriated, $1,500,000 for fiscal year marketed pursuant to such licensure.’’.
period beginning on January 1, 2023, and end-
ing on March 31, 2023, a PDP sponsor offering 2022, to remain available until expended, to (b) EFFECTIVE DATE.—The amendment
a prescription drug plan or an MA organiza- carry out the provisions of, including the made by this section shall apply to plan
tion offering an MA–PD plan shall reimburse amendments made by, this section. years beginning after December 31, 2022.
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00043 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4094 CONGRESSIONAL RECORD — SENATE August 6, 2022
Subtitle C—Affordable Care Act Subsidies following: ‘‘offshore wind facility, subpara- ‘‘(II) makes payment to the Secretary of a
SEC. 12001. IMPROVE AFFORDABILITY AND RE- graph (E) shall not apply.’’. penalty in an amount equal to the product
DUCE PREMIUM COSTS OF HEALTH (f) WAGE AND APPRENTICESHIP REQUIRE- of—
INSURANCE FOR CONSUMERS. MENTS.—Section 45(b) is amended by adding ‘‘(aa) $5,000, multiplied by
(a) IN GENERAL.—Clause (iii) of section at the end the following new paragraphs: ‘‘(bb) the total number of laborers and me-
36B(b)(3)(A) of the Internal Revenue Code of ‘‘(6) INCREASED CREDIT AMOUNT FOR QUALI- chanics who were paid wages at a rate below
1986 is amended— FIED FACILITIES.— the rate described in subparagraph (A) for
(1) by striking ‘‘in 2021 or 2022’’ and insert- ‘‘(A) IN GENERAL.—In the case of any quali- any period during such year.
ing ‘‘after December 31, 2020, and before Jan- fied facility which satisfies the requirements ‘‘(ii) DEFICIENCY PROCEDURES NOT TO
uary 1, 2026’’, and of subparagraph (B), the amount of the cred- APPLY.—Subchapter B of chapter 63 (relating
(2) by striking ‘‘2021 AND 2022’’ in the heading it determined under subsection (a) (deter- to deficiency procedures for income, estate,
and inserting ‘‘2021 THROUGH 2025’’. mined after the application of paragraphs (1) gift, and certain excise taxes) shall not apply
(b) EXTENSION THROUGH 2025 OF RULE TO through (5) and without regard to this para- with respect to the assessment or collection
ALLOW CREDIT TO TAXPAYERS WHOSE HOUSE- graph) shall be equal to such amount multi- of any penalty imposed by this paragraph.
HOLD INCOME EXCEEDS 400 PERCENT OF THE plied by 5. ‘‘(iii) INTENTIONAL DISREGARD.—If the Sec-
POVERTY LINE.—Section 36B(c)(1)(E) of the ‘‘(B) QUALIFIED FACILITY REQUIREMENTS.—A retary determines that any failure described
Internal Revenue Code of 1986 is amended— qualified facility meets the requirements of in clause (i) is due to intentional disregard of
(1) by striking ‘‘in 2021 or 2022’’ and insert- this subparagraph if it is one of the fol- the requirements under subparagraph (A),
ing ‘‘after December 31, 2020, and before Jan- lowing: such clause shall be applied—
uary 1, 2026’’, and ‘‘(i) A facility with a maximum net output ‘‘(I) in subclause (I), by substituting ‘three
(2) by striking ‘‘2021 AND 2022’’ in the heading of less than 1 megawatt (as measured in al- times the sum’ for ‘the sum’, and
and inserting ‘‘2021 THROUGH 2025’’. ternating current). ‘‘(II) in subclause (II), by substituting
(c) EFFECTIVE DATE.—The amendments ‘‘(ii) A facility the construction of which ‘$10,000’ for ‘5,000’ in item (aa) thereof.
made by this section shall apply to taxable begins prior to the date that is 60 days after ‘‘(iv) LIMITATION ON PERIOD FOR PAYMENT.—
years beginning after December 31, 2022. the Secretary publishes guidance with re- Pursuant to rules issued by the Secretary, in
Subtitle D—Energy Security spect to the requirements of paragraphs the case of a final determination by the Sec-
SEC. 13001. AMENDMENT OF 1986 CODE. (7)(A) and (8). retary with respect to any failure by the tax-
Except as otherwise expressly provided, ‘‘(iii) A facility which satisfies the require- payer to satisfy the requirement under sub-
whenever in this subtitle an amendment or ments of paragraphs (7)(A) and (8). paragraph (A), subparagraph (B)(i) shall not
repeal is expressed in terms of an amend- ‘‘(7) PREVAILING WAGE REQUIREMENTS.— apply unless the payments described in sub-
ment to, or repeal of, a section or other pro- ‘‘(A) IN GENERAL.—The requirements de- clauses (I) and (II) of such subparagraph are
vision, the reference shall be considered to scribed in this subparagraph with respect to made by the taxpayer on or before the date
be made to a section or other provision of any qualified facility are that the taxpayer which is 180 days after the date of such de-
the Internal Revenue Code of 1986. shall ensure that any laborers and mechanics termination.
PART 1—CLEAN ELECTRICITY AND employed by the taxpayer or any contractor ‘‘(8) APPRENTICESHIP REQUIREMENTS.—The
REDUCING CARBON EMISSIONS or subcontractor in— requirements described in this paragraph
‘‘(i) the construction of such facility, and with respect to the construction of any
SEC. 13101. EXTENSION AND MODIFICATION OF
CREDIT FOR ELECTRICITY PRO- ‘‘(ii) with respect to any taxable year, for qualified facility are as follows:
DUCED FROM CERTAIN RENEWABLE any portion of such taxable year which is ‘‘(A) LABOR HOURS.—
RESOURCES. within the period described in subsection ‘‘(i) PERCENTAGE OF TOTAL LABOR HOURS.—
(a) IN GENERAL.—The following provisions (a)(2)(A)(ii), the alteration or repair of such Taxpayers shall ensure that, with respect to
of section 45(d) are each amended by striking facility, the construction of any qualified facility,
‘‘January 1, 2022’’ each place it appears and shall be paid wages at rates not less than the not less than the applicable percentage of
inserting ‘‘January 1, 2025’’: prevailing rates for construction, alteration, the total labor hours of the construction, al-
(1) Paragraph (2)(A). or repair of a similar character in the local- teration, or repair work (including such
(2) Paragraph (3)(A). ity in which such facility is located as most work performed by any contractor or sub-
(3) Paragraph (6). recently determined by the Secretary of contractor) with respect to such facility
(4) Paragraph (7). Labor, in accordance with subchapter IV of shall, subject to subparagraph (B), be per-
(5) Paragraph (9). chapter 31 of title 40, United States Code. formed by qualified apprentices.
(6) Paragraph (11)(B). For purposes of determining an increased ‘‘(ii) APPLICABLE PERCENTAGE.—For pur-
(b) BASE CREDIT AMOUNT.—Section 45 is credit amount under paragraph (6)(A) for a poses of clause (i), the applicable percentage
amended— taxable year, the requirement under clause shall be—
(1) in subsection (a)(1), by striking ‘‘1.5 (ii) is applied to such taxable year in which ‘‘(I) in the case of a qualified facility the
cents’’ and inserting ‘‘0.3 cents’’, and the alteration or repair of the qualified facil- construction of which begins before January
(2) in subsection (b)(2), by striking ‘‘1.5 ity occurs.’’ 1, 2023, 10 percent,
cent’’ and inserting ‘‘0.3 cent’’. ‘‘(B) CORRECTION AND PENALTY RELATED TO ‘‘(II) in the case of a qualified facility the
(c) APPLICATION OF EXTENSION TO GEO- FAILURE TO SATISFY WAGE REQUIREMENTS.— construction of which begins after December
THERMAL AND SOLAR.—Section 45(d)(4) is ‘‘(i) IN GENERAL.—In the case of any tax- 31, 2022, and before January 1, 2024, 12.5 per-
amended by striking ‘‘and which’’ and all payer which fails to satisfy the requirement cent, and
that follows through ‘‘January 1, 2022’’ and under subparagraph (A) with respect to the ‘‘(III) in the case of a qualified facility the
inserting ‘‘and the construction of which be- construction of any qualified facility or with construction of which begins after December
gins before January 1, 2025’’. respect to the alteration or repair of a facil- 31, 2023, 15 percent.
(d) EXTENSION OF ELECTION TO TREAT ity in any year during the period described ‘‘(B) APPRENTICE TO JOURNEYWORKER
QUALIFIED FACILITIES AS ENERGY PROP- in subparagraph (A)(ii), such taxpayer shall RATIO.—The requirement under subparagraph
ERTY.—Section 48(a)(5)(C)(ii) is amended by be deemed to have satisfied such require- (A)(i) shall be subject to any applicable re-
striking ‘‘January 1, 2022’’ and inserting ment under such subparagraph with respect quirements for apprentice-to-journeyworker
‘‘January 1, 2025’’. to such facility for any year if, with respect ratios of the Department of Labor or the ap-
(e) APPLICATION OF EXTENSION TO WIND FA- to any laborer or mechanic who was paid plicable State apprenticeship agency.
CILITIES.— wages at a rate below the rate described in ‘‘(C) PARTICIPATION.—Each taxpayer, con-
(1) IN GENERAL.—Section 45(d)(1) is amend- such subparagraph for any period during tractor, or subcontractor who employs 4 or
ed by striking ‘‘January 1, 2022’’ and insert- such year, such taxpayer— more individuals to perform construction,
ing ‘‘January 1, 2025’’. ‘‘(I) makes payment to such laborer or me- alteration, or repair work with respect to
(2) APPLICATION OF PHASEOUT PERCENT- chanic in an amount equal to the sum of— the construction of a qualified facility shall
AGE.— ‘‘(aa) an amount equal to the difference be- employ 1 or more qualified apprentices to
(A) RENEWABLE ELECTRICITY PRODUCTION tween— perform such work.
CREDIT.—Section 45(b)(5) is amended by in- ‘‘(AA) the amount of wages paid to such la- ‘‘(D) EXCEPTION.—
serting ‘‘which is placed in service before borer or mechanic during such period, and ‘‘(i) IN GENERAL.—A taxpayer shall not be
January 1, 2022’’ after ‘‘using wind to ‘‘(BB) the amount of wages required to be treated as failing to satisfy the requirements
produce electricity’’. paid to such laborer or mechanic pursuant to of this paragraph if such taxpayer—
(B) ENERGY CREDIT.—Section 48(a)(5)(E) is such subparagraph during such period, plus ‘‘(I) satisfies the requirements described in
dlhill on DSK120RN23PROD with SENATE
amended by inserting ‘‘placed in service be- ‘‘(bb) interest on the amount determined clause (ii), or
fore January 1, 2022, and’’ before ‘‘treated as under item (aa) at the underpayment rate es- ‘‘(II) subject to clause (iii), in the case of
energy property’’. tablished under section 6621 (determined by any failure by the taxpayer to satisfy the re-
(3) QUALIFIED OFFSHORE WIND FACILITIES substituting ‘6 percentage points’ for ‘3 per- quirement under subparagraphs (A) and (C)
UNDER ENERGY CREDIT.—Section 48(a)(5)(F)(i) centage points’ in subsection (a)(2) of such with respect to the construction, alteration,
is amended by striking ‘‘offshore wind facil- section) for the period described in such or repair work on any qualified facility to
ity’’ and all that follows and inserting the item, and which subclause (I) does not apply, makes
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00044 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4095
payment to the Secretary of a penalty in an ‘‘(i) IN GENERAL.—The requirement de- section (a) (determined after the application
amount equal to the product of— scribed in this clause is satisfied with re- of paragraphs (1) through (10), without the
‘‘(aa) $50, multiplied by spect to any qualified facility if the taxpayer application of paragraph (9)) shall be in-
‘‘(bb) the total labor hours for which the certifies to the Secretary (at such time, and creased by an amount equal to 10 percent of
requirement described in such subparagraph in such form and manner, as the Secretary the amount so determined.
was not satisfied with respect to the con- may prescribe) that any steel, iron, or manu- ‘‘(B) ENERGY COMMUNITY.—For purposes of
struction, alteration, or repair work on such factured product which is a component of this paragraph, the term ‘energy commu-
qualified facility. such facility (upon completion of construc- nity’ means—
‘‘(ii) GOOD FAITH EFFORT.—For purposes of tion) was produced in the United States (as ‘‘(i) a brownfield site (as defined in sub-
clause (i), a taxpayer shall be deemed to determined under section 661 of title 49, Code paragraphs (A), (B), and (D)(ii)(III) of section
have satisfied the requirements under this of Federal Regulations). 101(39) of the Comprehensive Environmental
paragraph with respect to a qualified facility ‘‘(ii) STEEL AND IRON.—In the case of steel Response, Compensation, and Liability Act
if such taxpayer has requested qualified ap- or iron, clause (i) shall be applied in a man- of 1980 (42 U.S.C. 9601(39))),
prentices from a registered apprenticeship ner consistent with section 661.5 of title 49, ‘‘(ii) a metropolitan statistical area or
program, as defined in section 3131(e)(3)(B), Code of Federal Regulations. non-metropolitan statistical area which—
and— ‘‘(iii) MANUFACTURED PRODUCT.—For pur- ‘‘(I) has (or, at any time during the period
‘‘(I) such request has been denied, provided poses of clause (i), the manufactured prod- beginning after December 31, 2009, had) 0.17
that such denial is not the result of a refusal ucts which are components of a qualified fa- percent or greater direct employment or 25
by the taxpayer or any contractors or sub- cility upon completion of construction shall percent or greater local tax revenues related
contractors engaged in the performance of be deemed to have been produced in the to the extraction, processing, transport, or
construction, alteration, or repair work with United States if not less than the adjusted storage of coal, oil, or natural gas (as deter-
respect to such qualified facility to comply percentage (as determined under subpara- mined by the Secretary), and
with the established standards and require- graph (C)) of the total costs of all such man- ‘‘(II) has an unemployment rate at or
ments of the registered apprenticeship pro- ufactured products of such facility are at- above the national average unemployment
gram, or tributable to manufactured products (includ- rate for the previous year (as determined by
‘‘(II) the registered apprenticeship program ing components) which are mined, produced, the Secretary), or
fails to respond to such request within 5 or manufactured in the United States. ‘‘(iii) a census tract—
business days after the date on which such ‘‘(C) ADJUSTED PERCENTAGE.— ‘‘(I) in which—
registered apprenticeship program received ‘‘(i) IN GENERAL.—Subject to subclause (ii), ‘‘(aa) after December 31, 1999, a coal mine
such request. for purposes of subparagraph (B)(iii), the ad- has closed, or
‘‘(iii) INTENTIONAL DISREGARD.—If the Sec- justed percentage shall be 40 percent. ‘‘(bb) after December 31, 2009, a coal-fired
retary determines that any failure described ‘‘(ii) OFFSHORE WIND FACILITY.—For pur- electric generating unit has been retired, or
in subclause (i)(II) is due to intentional dis- poses of subparagraph (B)(iii), in the case of ‘‘(II) which is directly adjoining to any
regard of the requirements under subpara- a qualified facility which is an offshore wind census tract described in subclause (I).’’.
graphs (A) and (C), subclause (i)(II) shall be facility, the adjusted percentage shall be 20 (h) CREDIT REDUCED FOR TAX-EXEMPT
applied by substituting ‘$500’ for ‘$50’ in item percent. BONDS.—Section 45(b)(3) is amended to read
(aa) thereof. ‘‘(10) PHASEOUT FOR ELECTIVE PAYMENT.— as follows:
‘‘(E) DEFINITIONS.—For purposes of this ‘‘(A) IN GENERAL.—In the case of a taxpayer ‘‘(3) CREDIT REDUCED FOR TAX-EXEMPT
paragraph— making an election under section 6417 with BONDS.—The amount of the credit deter-
‘‘(i) LABOR HOURS.—The term ‘labor respect to a credit under this section, the mined under subsection (a) with respect to
hours’— amount of such credit shall be replaced any facility for any taxable year (determined
‘‘(I) means the total number of hours de- with— after the application of paragraphs (1) and
voted to the performance of construction, al- ‘‘(i) the value of such credit (determined (2)) shall be reduced by the amount which is
teration, or repair work by any individual without regard to this paragraph), multi- the product of the amount so determined for
employed by the taxpayer or by any con- plied by such year and the lesser of 15 percent or a
tractor or subcontractor, and ‘‘(ii) the applicable percentage. fraction—
‘‘(II) excludes any hours worked by— ‘‘(B) 100 PERCENT APPLICABLE PERCENTAGE ‘‘(A) the numerator of which is the sum,
‘‘(aa) foremen, FOR CERTAIN QUALIFIED FACILITIES.—In the for the taxable year and all prior taxable
‘‘(bb) superintendents, case of any qualified facility— years, of proceeds of an issue of any obliga-
‘‘(cc) owners, or ‘‘(i) which satisfies the requirements under tions the interest on which is exempt from
‘‘(dd) persons employed in a bona fide exec- paragraph (9)(B), or tax under section 103 and which is used to
utive, administrative, or professional capac- ‘‘(ii) with a maximum net output of less provide financing for the qualified facility,
ity (within the meaning of those terms in than 1 megawatt (as measured in alternating and
part 541 of title 29, Code of Federal Regula- current), ‘‘(B) the denominator of which is the ag-
tions). the applicable percentage shall be 100 per- gregate amount of additions to the capital
‘‘(ii) QUALIFIED APPRENTICE.—The term cent. account for the qualified facility for the tax-
‘qualified apprentice’ means an individual ‘‘(C) PHASED DOMESTIC CONTENT REQUIRE- able year and all prior taxable years.
who is employed by the taxpayer or by any MENT.—Subject to subparagraph (D), in the The amounts under the preceding sentence
contractor or subcontractor and who is par- case of any qualified facility which is not de- for any taxable year shall be determined as
ticipating in a registered apprenticeship pro- scribed in subparagraph (B), the applicable of the close of the taxable year.’’.
gram, as defined in section 3131(e)(3)(B). percentage shall be— (i) ROUNDING ADJUSTMENT.—
‘‘(9) REGULATIONS AND GUIDANCE.—The Sec- ‘‘(i) if construction of such facility began (1) IN GENERAL.—Section 45(b)(2) is amend-
retary shall issue such regulations or other before January 1, 2024, 100 percent, and ed by striking the second sentence and in-
guidance as the Secretary determines nec- ‘‘(ii) if construction of such facility began serting the following: ‘‘If the 0.3 cent amount
essary to carry out the purposes of this sub- in calendar year 2024, 90 percent. as increased under the preceding sentence is
section, including regulations or other guid- ‘‘(D) EXCEPTION.— not a multiple of 0.05 cent, such amount
ance which provides for requirements for rec- ‘‘(i) IN GENERAL.—For purposes of this shall be rounded to the nearest multiple of
ordkeeping or information reporting for pur- paragraph, the Secretary shall provide ex- 0.05 cent. In any other case, if an amount as
poses of administering the requirements of ceptions to the requirements under this increased under this paragraph is not a mul-
this subsection.’’. paragraph if— tiple of 0.1 cent, such amount shall be round-
(g) DOMESTIC CONTENT, PHASEOUT, AND EN- ‘‘(I) the inclusion of steel, iron, or manu- ed to the nearest multiple of 0.1 cent.’’.
ERGY COMMUNITIES.—Section 45(b), as amend- factured products which are produced in the (2) CONFORMING AMENDMENT.—Section
ed by subsection (f), is amended— United States increases the overall costs of 45(b)(4)(A) is amended by striking ‘‘last sen-
(1) by redesignating paragraph (9) as para- construction of qualified facilities by more tence’’ and inserting ‘‘last two sentences’’.
graph (12), and than 25 percent, or (j) HYDROPOWER.—
(2) by inserting after paragraph (8) the fol- ‘‘(II) relevant steel, iron, or manufactured (1) ELIMINATION OF CREDIT RATE REDUCTION
lowing: products are not produced in the United FOR QUALIFIED HYDROELECTRIC PRODUCTION
‘‘(9) DOMESTIC CONTENT BONUS CREDIT States in sufficient and reasonably available AND MARINE AND HYDROKINETIC RENEWABLE
AMOUNT.— quantities or of a satisfactory quality. ENERGY.—Section 45(b)(4)(A), as amended by
‘‘(A) IN GENERAL.—In the case of any quali- ‘‘(ii) APPLICABLE PERCENTAGE.—In any case the preceding provisions of this section, is
fied facility which satisfies the requirement in which the Secretary provides an exception amended by striking ‘‘(7), (9), or (11)’’ and in-
dlhill on DSK120RN23PROD with SENATE
under subparagraph (B)(i), the amount of the pursuant to clause (i), the applicable per- serting ‘‘or (7)’’.
credit determined under subsection (a) (de- centage shall be 100 percent. (2) MARINE AND HYDROKINETIC RENEWABLE
termined after the application of paragraphs ‘‘(11) SPECIAL RULE FOR QUALIFIED FACILITY ENERGY.—Section 45 is amended—
(1) through (8)) shall be increased by an LOCATED IN ENERGY COMMUNITY.— (A) in subsection (c)(10)(A)—
amount equal to 10 percent of the amount so ‘‘(A) IN GENERAL.—In the case of a qualified (i) in clause (iii), by striking ‘‘or’’,
determined. facility which is located in an energy com- (ii) in clause (iv), by striking the period at
‘‘(B) REQUIREMENT.— munity, the credit determined under sub- the end and inserting ‘‘, or’’ and
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00045 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4096 CONGRESSIONAL RECORD — SENATE August 6, 2022
(iii) by adding at the end the following: (e) 6 PERCENT CREDIT FOR GEOTHERMAL.— ‘‘(A) IN GENERAL.—The term ‘qualified
‘‘(v) pressurized water used in a pipeline Section 48(a)(2)(A)(i)(II) is amended by strik- biogas property’ means property comprising
(or similar man-made water conveyance) ing ‘‘paragraph (3)(A)(i)’’ and inserting a system which—
which is operated— ‘‘clause (i) or (iii) of paragraph (3)(A)’’. ‘‘(i) converts biomass (as defined in section
‘‘(I) for the distribution of water for agri- (f) ENERGY STORAGE TECHNOLOGIES; QUALI- 45K(c)(3), as in effect on the date of enact-
cultural, municipal, or industrial consump- FIED BIOGAS PROPERTY; MICROGRID CONTROL- ment of this paragraph) into a gas which—
tion, and LERS; EXTENSION OF OTHER PROPERTY.— ‘‘(I) consists of not less than 52 percent
‘‘(II) not primarily for the generation of (1) IN GENERAL.—Section 48(a)(3)(A) is methane by volume, or
electricity.’’, and amended by striking ‘‘or’’ at the end of ‘‘(II) is concentrated by such system into a
(B) in subsection (d)(11)(A), by striking clause (vii), and by adding at the end the fol- gas which consists of not less than 52 percent
‘‘150’’ and inserting ‘‘25’’. lowing new clauses: methane, and
(k) EFFECTIVE DATES.— ‘‘(ix) energy storage technology, ‘‘(ii) captures such gas for sale or produc-
(1) IN GENERAL.—Except as provided in ‘‘(x) qualified biogas property, or tive use, and not for disposal via combustion.
paragraphs (2) and (3), the amendments made ‘‘(xi) microgrid controllers,’’. ‘‘(B) INCLUSION OF CLEANING AND CONDI-
by this section shall apply to facilities (2) APPLICATION OF 6 PERCENT CREDIT.—Sec- TIONING PROPERTY.—The term ‘qualified
placed in service after December 31, 2021. tion 48(a)(2)(A)(i) is amended by striking biogas property’ includes any property which
(2) CREDIT REDUCED FOR TAX-EXEMPT ‘‘and’’ at the end of subclauses (IV) and (V) is part of such system which cleans or condi-
BONDS.—The amendment made by subsection and adding at the end the following new sub- tions such gas.
(h) shall apply to facilities the construction clauses: ‘‘(C) TERMINATION.—The term ‘qualified
of which begins after the date of enactment ‘‘(VI) energy storage technology, biogas property’ shall not include any prop-
of this Act. ‘‘(VII) qualified biogas property, erty the construction of which begins after
(3) DOMESTIC CONTENT, PHASEOUT, ENERGY ‘‘(VIII) microgrid controllers, and December 31, 2024.
COMMUNITIES, AND HYDROPOWER.—The amend- ‘‘(IX) energy property described in clauses ‘‘(8) MICROGRID CONTROLLER.—
ments made by subsections (g) and (j) shall (v) and (vii) of paragraph (3)(A), and’’. ‘‘(A) IN GENERAL.—The term ‘microgrid
apply to facilities placed in service after De- (3) DEFINITIONS.—Section 48(c) is amended controller’ means equipment which is—
cember 31, 2022. by adding at the end the following new para- ‘‘(i) part of a qualified microgrid, and
SEC. 13102. EXTENSION AND MODIFICATION OF graphs: ‘‘(ii) designed and used to monitor and con-
ENERGY CREDIT. ‘‘(6) ENERGY STORAGE TECHNOLOGY.— trol the energy resources and loads on such
(a) EXTENSION OF CREDIT.—The following ‘‘(A) IN GENERAL.—The term ‘energy stor- microgrid.
provisions of section 48 are each amended by age technology’ means— ‘‘(B) QUALIFIED MICROGRID.—The term
striking ‘‘January 1, 2024’’ each place it ap- ‘‘(i) property (other than property pri- ‘qualified microgrid’ means an electrical sys-
pears and inserting ‘‘January 1, 2025’’: marily used in the transportation of goods or tem which—
(1) Subsection (a)(2)(A)(i)(II). individuals and not for the production of ‘‘(i) includes equipment which is capable of
(2) Subsection (a)(3)(A)(ii). electricity) which receives, stores, and deliv- generating not less than 4 kilowatts and not
(3) Subsection (c)(1)(D). ers energy for conversion to electricity (or, greater than 20 megawatts of electricity,
(4) Subsection (c)(2)(D). in the case of hydrogen, which stores en- ‘‘(ii) is capable of operating—
(5) Subsection (c)(3)(A)(iv). ergy), and has a nameplate capacity of not ‘‘(I) in connection with the electrical grid
(6) Subsection (c)(4)(C). less than 5 kilowatt hours, and and as a single controllable entity with re-
(7) Subsection (c)(5)(D). ‘‘(ii) thermal energy storage property. spect to such grid, and
(b) FURTHER EXTENSION FOR CERTAIN EN- ‘‘(B) MODIFICATIONS OF CERTAIN PROP- ‘‘(II) independently (and disconnected)
ERGY PROPERTY.—Section 48(a)(3)(A)(vii) is ERTY.—In the case of any property which ei- from such grid, and
amended by striking ‘‘January 1, 2024’’ and ther— ‘‘(iii) is not part of a bulk-power system (as
inserting ‘‘January 1, 2035’’. ‘‘(i) was placed in service before the date of defined in section 215 of the Federal Power
(c) PHASEOUT OF CREDIT.—Section 48(a) is enactment of this section and would be de- Act (16 U.S.C. 824o)).
amended by striking paragraphs (6) and (7) scribed in subparagraph (A)(i), except that ‘‘(C) TERMINATION.—The term ‘microgrid
and inserting the following new paragraph: such property has a capacity of less than 5 controller’ shall not include any property
‘‘(6) PHASEOUT FOR CERTAIN ENERGY PROP- kilowatt hours and is modified in a manner the construction of which begins after De-
ERTY.—In the case of any qualified fuel cell that such property (after such modification) cember 31, 2024.’’.
property, qualified small wind property, or has a nameplate capacity of not less than 5 (4) DENIAL OF DOUBLE BENEFIT FOR QUALI-
energy property described in clause (i) or kilowatt hours, or FIED BIOGAS PROPERTY.—Section 45(e) is
clause (ii) of paragraph (3)(A) the construc- ‘‘(ii) is described in subparagraph (A)(i) and amended by adding at the end the following
tion of which begins after December 31, 2019, is modified in a manner that such property new paragraph:
and which is placed in service before January (after such modification) has an increase in ‘‘(12) COORDINATION WITH ENERGY CREDIT
1, 2022, the energy percentage determined nameplate capacity of not less than 5 kilo- FOR QUALIFIED BIOGAS PROPERTY.—The term
under paragraph (2) shall be equal to 26 per- watt hours, ‘qualified facility’ shall not include any fa-
cent.’’. such property shall be treated as described in cility which produces electricity from gas
(d) BASE ENERGY PERCENTAGE AMOUNT; subparagraph (A)(i) except that the basis of produced by qualified biogas property (as de-
PHASEOUT OF CERTAIN ENERGY PROPERTY.— any existing property prior to such modifica- fined in section 48(c)(7)) if a credit is allowed
(1) BASE ENERGY PERCENTAGE AMOUNT.— tion shall not be taken into account for pur- under section 48 with respect to such prop-
Section 48(a) is amended— poses of this section. In the case of any prop- erty for the taxable year or any prior taxable
(A) in paragraph (2)(A)— erty to which this subparagraph applies, sub- year.’’.
(i) in clause (i), by striking ‘‘30 percent’’ paragraph (D) shall be applied by sub- (5) PUBLIC UTILITY PROPERTY.—Paragraph
and inserting ‘‘6 percent’’, and stituting ‘modification’ for ‘construction’. (2) of section 50(d) is amended—
(ii) in clause (ii), by striking ‘‘10 percent’’ ‘‘(C) THERMAL ENERGY STORAGE PROP- (A) by adding after the first sentence the
and inserting ‘‘2 percent’’, and ERTY.— following new sentence: ‘‘At the election of a
(B) in paragraph (5)(A)(ii), by striking ‘‘30 ‘‘(i) IN GENERAL.—Subject to clause (ii), for taxpayer, this paragraph shall not apply to
percent’’ and inserting ‘‘6 percent’’. purposes of this paragraph, the term ‘ther- any energy storage technology (as defined in
(2) PHASEOUT OF CERTAIN ENERGY PROP- mal energy storage property’ means property section 48(c)(6)), provided—’’, and
ERTY.—Section 48(a), as amended by the pre- comprising a system which— (B) by adding the following new subpara-
ceding provisions of this Act, is amended by ‘‘(I) is directly connected to a heating, ven- graphs:
adding at the end the following new para- tilation, or air conditioning system, ‘‘(A) no election under this paragraph shall
graph: ‘‘(II) removes heat from, or adds heat to, a be permitted if the making of such election
‘‘(7) PHASEOUT FOR CERTAIN ENERGY PROP- storage medium for subsequent use, and is prohibited by a State or political subdivi-
ERTY.—In the case of any energy property de- ‘‘(III) provides energy for the heating or sion thereof, by any agency or instrumen-
scribed in clause (vii) of paragraph (3)(A), the cooling of the interior of a residential or tality of the United States, or by a public
energy percentage determined under para- commercial building. service or public utility commission or other
graph (2) shall be equal to— ‘‘(ii) EXCLUSION.—The term ‘thermal en- similar body of any State or political sub-
‘‘(A) in the case of any property the con- ergy storage property’ shall not include— division that regulates public utilities as de-
struction of which begins before January 1, ‘‘(I) a swimming pool, scribed in section 7701(a)(33)(A),
2033, and which is placed in service after De- ‘‘(II) combined heat and power system ‘‘(B) an election under this paragraph shall
cember 31, 2021, 6 percent, property, or be made separately with respect to each en-
dlhill on DSK120RN23PROD with SENATE
‘‘(B) in the case of any property the con- ‘‘(III) a building or its structural compo- ergy storage technology by the due date (in-
struction of which begins after December 31, nents. cluding extensions) of the Federal tax return
2032, and before January 1, 2034, 5.2 percent, ‘‘(D) TERMINATION.—The term ‘energy stor- for the taxable year in which the energy
and age technology’ shall not include any prop- storage technology is placed in service by
‘‘(C) in the case of any property the con- erty the construction of which begins after the taxpayer, and once made, may be re-
struction of which begins after December 31, December 31, 2024. voked only with the consent of the Sec-
2033, and before January 1, 2035, 4.4 percent.’’. ‘‘(7) QUALIFIED BIOGAS PROPERTY.— retary, and
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00046 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4097
‘‘(C) an election shall not apply with re- ‘‘(C) INTERCONNECTION AGREEMENT.—The Rules similar to the rules of section
spect to any energy storage technology if term ‘interconnection agreement’ means an 45(b)(7)(B) shall apply.
such energy storage technology has a max- agreement with a utility for the purposes of ‘‘(C) RECAPTURE.—The Secretary shall, by
imum capacity equal to or less than 500 kilo- interconnecting the energy property owned regulations or other guidance, provide for re-
watt hours.’’. by such taxpayer to the transmission or dis- capturing the benefit of any increase in the
(g) FUEL CELLS USING ELECTROMECHANICAL tribution system of such utility. credit allowed under this subsection by rea-
PROCESSES.— ‘‘(D) UTILITY.—For purposes of this para- son of this paragraph with respect to any
(1) IN GENERAL.—Section 48(c)(1) is amend- graph, the term ‘utility’ means the owner or project which does not satisfy the require-
ed— operator of an electrical transmission or dis- ments under subparagraph (A) (after applica-
(A) in subparagraph (A)(i)— tribution system which is subject to the reg- tion of subparagraph (B)) for the period de-
(i) by inserting ‘‘or electromechanical’’ ulatory authority of a State or political sub- scribed in clause (ii) of subparagraph (A) (but
after ‘‘electrochemical’’, and division thereof, any agency or instrumen- which does not cease to be investment credit
(ii) by inserting ‘‘(1 kilowatt in the case of tality of the United States, a public service property within the meaning of section
a fuel cell power plant with a linear gener- or public utility commission or other similar 50(a)). The period and percentage of such re-
ator assembly)’’ after ‘‘0.5 kilowatt’’, and body of any State or political subdivision capture shall be determined under rules
(B) in subparagraph (C)— thereof, or the governing or ratemaking similar to the rules of section 50(a).
(i) by inserting ‘‘, or linear generator as- body of an electric cooperative. ‘‘(11) APPRENTICESHIP REQUIREMENTS.—
sembly,’’ after ‘‘a fuel cell stack assembly’’, ‘‘(E) SPECIAL RULE FOR INTERCONNECTION Rules similar to the rules of section 45(b)(8)
and PROPERTY.—In the case of expenses paid or shall apply.’’.
(ii) by inserting ‘‘or electromechanical’’ incurred for interconnection property, (l) DOMESTIC CONTENT; PHASEOUT FOR ELEC-
after ‘‘electrochemical’’. amounts otherwise chargeable to capital ac- TIVE PAYMENT.—Section 48(a), as amended by
(2) LINEAR GENERATOR ASSEMBLY LIMITA- count with respect to such expenses shall be the preceding provisions of this Act, is
TION.—Section 48(c)(1) is amended by redesig- reduced under rules similar to the rules of amended by adding at the end the following
nating subparagraph (D) as subparagraph (E) section 50(c).’’. new paragraphs:
(k) ENERGY PROJECTS, WAGE REQUIRE- ‘‘(12) DOMESTIC CONTENT BONUS CREDIT
and by inserting after subparagraph (C) the
MENTS, AND APPRENTICESHIP REQUIRE- AMOUNT.—
following new subparagraph:
MENTS.—Section 48(a), as amended by the ‘‘(A) IN GENERAL.—In the case of any en-
‘‘(D) LINEAR GENERATOR ASSEMBLY.—The
preceding provisions of this Act, is amended ergy project which satisfies the requirement
term ‘linear generator assembly’ does not in-
by adding at the end the following new para- under subparagraph (B), for purposes of ap-
clude any assembly which contains rotating graphs:
parts.’’. plying paragraph (2) with respect to such
‘‘(9) INCREASED CREDIT AMOUNT FOR ENERGY property, the energy percentage shall be in-
(h) DYNAMIC GLASS.—Section 48(a)(3)(A)(ii) PROJECTS.—
is amended by inserting ‘‘, or electrochromic creased by the applicable credit rate in-
‘‘(A) IN GENERAL.— crease.
glass which uses electricity to change its ‘‘(i) RULE.—In the case of any energy
light transmittance properties in order to ‘‘(B) REQUIREMENT.—Rules similar to the
project which satisfies the requirements of rules of section 45(b)(9)(B) shall apply.
heat or cool a structure,’’ after ‘‘sunlight’’. subparagraph (B), the amount of the credit ‘‘(C) APPLICABLE CREDIT RATE INCREASE.—
(i) COORDINATION WITH LOW INCOME HOUS- determined under this subsection (deter-
ING TAX CREDIT.—Paragraph (3) of section
For purposes of subparagraph (A), the appli-
mined after the application of paragraphs (1) cable credit rate increase shall be—
50(c) is amended— through (8) and without regard to this
(1) by striking ‘‘and’’ at the end of subpara- ‘‘(i) in the case of an energy project which
clause) shall be equal to such amount multi- does not satisfy the requirements of para-
graph (A), plied by 5.
(2) by striking the period at the end of sub- graph (9)(B), 2 percentage points, and
‘‘(ii) ENERGY PROJECT DEFINED.—For pur- ‘‘(ii) in the case of an energy project which
paragraph (B) and inserting ‘‘, and’’, and poses of this subsection, the term ‘energy
(3) by adding at the end the following new satisfies the requirements of paragraph
project’ means a project consisting of one or
subparagraph: (9)(B), 10 percentage points.
more energy properties that are part of a
‘‘(C) paragraph (1) shall not apply for pur- ‘‘(13) PHASEOUT FOR ELECTIVE PAYMENT.—In
single project.
the case of a taxpayer making an election
poses of determining eligible basis under sec- ‘‘(B) PROJECT REQUIREMENTS.—A project
under section 6417 with respect to a credit
tion 42.’’. meets the requirements of this subparagraph
under this section, rules similar to the rules
(j) INTERCONNECTION PROPERTY.—Section if it is one of the following:
of section 45(b)(10) shall apply.’’.
48(a), as amended by the preceding provisions ‘‘(i) A project with a maximum net output (m) SPECIAL RULE FOR PROPERTY FINANCED
of this Act, is amended by adding at the end of less than 1 megawatt of electrical (as BY TAX-EXEMPT BONDS.—Section 48(a)(4) is
the following new paragraph: measured in alternating current) or thermal amended to read as follows:
‘‘(8) INTERCONNECTION PROPERTY.— energy. ‘‘(4) SPECIAL RULE FOR PROPERTY FINANCED
‘‘(A) IN GENERAL.—For purposes of deter- ‘‘(ii) A project the construction of which BY TAX-EXEMPT BONDS.—Rules similar to the
mining the credit under subsection (a), en- begins before the date that is 60 days after rule under section 45(b)(3) shall apply for
ergy property shall include amounts paid or the Secretary publishes guidance with re- purposes of this section.’’.
incurred by the taxpayer for qualified inter- spect to the requirements of paragraphs (n) TREATMENT OF CERTAIN CONTRACTS IN-
connection property in connection with the (10)(A) and (11). VOLVING ENERGY STORAGE.—Section 7701(e) is
installation of energy property (as defined in ‘‘(iii) A project which satisfies the require- amended—
paragraph (3)) which has a maximum net ments of paragraphs (10)(A) and (11). (1) in paragraph (3)—
output of not greater than 5 megawatts (as ‘‘(10) PREVAILING WAGE REQUIREMENTS.— (A) in subparagraph (A)(i), by striking ‘‘or’’
measured in alternating current), to provide ‘‘(A) IN GENERAL.—The requirements de- at the end of subclause (II), by striking
for the transmission or distribution of the scribed in this subparagraph with respect to ‘‘and’’ at the end of subclause (III) and in-
electricity produced or stored by such prop- any energy project are that the taxpayer serting ‘‘or’’, and by adding at the end the
erty, and which are properly chargeable to shall ensure that any laborers and mechanics following new subclause:
the capital account of the taxpayer. employed by the taxpayer or any contractor ‘‘(IV) the operation of a storage facility,
‘‘(B) QUALIFIED INTERCONNECTION PROP- or subcontractor in— and’’, and
ERTY.—The term ‘qualified interconnection ‘‘(i) the construction of such energy (B) by adding at the end the following new
property’ means, with respect to an energy project, and subparagraph:
project which is not a microgrid controller, ‘‘(ii) for the 5-year period beginning on the ‘‘(F) STORAGE FACILITY.—For purposes of
any tangible property— date such project is originally placed in serv- subparagraph (A), the term ‘storage facility’
‘‘(i) which is part of an addition, modifica- ice, the alteration or repair of such project, means a facility which uses energy storage
tion, or upgrade to a transmission or dis- shall be paid wages at rates not less than the technology within the meaning of section
tribution system which is required at or be- prevailing rates for construction, alteration, 48(c)(6).’’, and
yond the point at which the energy project or repair of a similar character in the local- (2) in paragraph (4), by striking ‘‘or water
interconnects to such transmission or dis- ity in which such project is located as most treatment works facility’’ and inserting
tribution system in order to accommodate recently determined by the Secretary of ‘‘water treatment works facility, or storage
such interconnection, Labor, in accordance with subchapter IV of facility’’.
‘‘(ii) either— chapter 31 of title 40, United States Code. (o) INCREASE IN CREDIT RATE FOR ENERGY
‘‘(I) which is constructed, reconstructed, or Subject to subparagraph (C), for purposes of COMMUNITIES.—Section 48(a), as amended by
erected by the taxpayer, or any determination under paragraph (9)(A)(i) the preceding provisions of this Act, is
dlhill on DSK120RN23PROD with SENATE
‘‘(II) for which the cost with respect to the for the taxable year in which the energy amended by adding at the end the following
construction, reconstruction, or erection of project is placed in service, the taxpayer new paragraph:
such property is paid or incurred by such shall be deemed to satisfy the requirement ‘‘(14) INCREASE IN CREDIT RATE FOR ENERGY
taxpayer, and under clause (ii) at the time such project is COMMUNITIES.—
‘‘(iii) the original use of which, pursuant to placed in service. ‘‘(A) IN GENERAL.—In the case of any en-
an interconnection agreement, commences ‘‘(B) CORRECTION AND PENALTY RELATED TO ergy project that is placed in service within
with a utility. FAILURE TO SATISFY WAGE REQUIREMENTS.— an energy community (as defined in section
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00047 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4098 CONGRESSIONAL RECORD — SENATE August 6, 2022
45(b)(11)(B), as applied by substituting ‘en- ‘‘(A) IN GENERAL.—The term ‘qualified ‘‘(C) ANNUAL CAPACITY LIMITATION.—For
ergy project’ for ‘qualified facility’ each solar and wind facility’ means any facility— purposes of this paragraph, the term ‘annual
place it appears), for purposes of applying ‘‘(i) which generates electricity solely from capacity limitation’ means 1.8 gigawatts of
paragraph (2) with respect to energy prop- property described in section 45(d)(1) or in direct current capacity for each of calendar
erty which is part of such project, the energy clause (i) or (vi) of subsection (a)(3)(A), years 2023 and 2024, and zero thereafter.
percentage shall be increased by the applica- ‘‘(ii) which has a maximum net output of ‘‘(D) CARRYOVER OF UNUSED LIMITATION.—If
ble credit rate increase. less than 5 megawatts (as measured in alter- the annual capacity limitation for any cal-
‘‘(B) APPLICABLE CREDIT RATE INCREASE.— nating current), and endar year exceeds the aggregate amount al-
For purposes of subparagraph (A), the appli- ‘‘(iii) which— located for such year under this paragraph,
cable credit rate increase shall be equal to— ‘‘(I) is located in a low-income community such limitation for the succeeding calendar
‘‘(i) in the case of any energy project which (as defined in section 45D(e)) or on Indian year shall be increased by the amount of
does not satisfy the requirements of para- land (as defined in section 2601(2) of the En- such excess. No amount may be carried
graph (9)(B), 2 percentage points, and ergy Policy Act of 1992 (25 U.S.C. 3501(2))), or under the preceding sentence to any calendar
‘‘(ii) in the case of any energy project ‘‘(II) is part of a qualified low-income resi- year after 2024 except as provided in section
which satisfies the requirements of para- dential building project or a qualified low-in- 48E(h)(4)(D)(ii).
graph (9)(B), 10 percentage points.’’. come economic benefit project. ‘‘(E) PLACED IN SERVICE DEADLINE.—
(p) REGULATIONS.—Section 48(a), as amend- ‘‘(B) QUALIFIED LOW-INCOME RESIDENTIAL ‘‘(i) IN GENERAL.—Paragraph (1) shall not
ed by the preceding provisions of this Act, is BUILDING PROJECT.—A facility shall be treat- apply with respect to any property which is
amended by adding at the end the following ed as part of a qualified low-income residen- placed in service after the date that is 4
new paragraph: tial building project if— years after the date of the allocation with
‘‘(15) REGULATIONS AND GUIDANCE.—The ‘‘(i) such facility is installed on a residen- respect to the facility of which such property
Secretary shall issue such regulations or tial rental building which participates in a is a part.
other guidance as the Secretary determines covered housing program (as defined in sec- ‘‘(ii) APPLICATION OF CARRYOVER.—Any
necessary to carry out the purposes of this tion 41411(a) of the Violence Against Women amount of environmental justice solar and
subsection, including regulations or other Act of 1994 (34 U.S.C. 12491(a)(3)), a housing wind capacity limitation which expires
guidance which provides for requirements for assistance program administered by the De- under clause (i) during any calendar year
recordkeeping or information reporting for partment of Agriculture under title V of the shall be taken into account as an excess de-
purposes of administering the requirements Housing Act of 1949, a housing program ad- scribed in subparagraph (D) (or as an in-
of this subsection.’’. ministered by a tribally designated housing crease in such excess) for such calendar year,
(q) EFFECTIVE DATES.— entity (as defined in section 4(22) of the Na- subject to the limitation imposed by the last
(1) IN GENERAL.—Except as provided in tive American Housing Assistance and Self- sentence of such subparagraph.
paragraphs (2) and (3), the amendments made Determination Act of 1996 (25 U.S.C. 4103(22))) ‘‘(5) RECAPTURE.—The Secretary shall, by
by this section shall apply to property placed or such other affordable housing programs as regulations or other guidance, provide for re-
in service after December 31, 2021. the Secretary may provide, and capturing the benefit of any increase in the
(2) OTHER PROPERTY.—The amendments ‘‘(ii) the financial benefits of the elec- credit allowed under subsection (a) by reason
made by subsections (f), (g), (h), (i), (j), (l), tricity produced by such facility are allo- of this subsection with respect to any prop-
(n), and (o) shall apply to property placed in cated equitably among the occupants of the
erty which ceases to be property eligible for
service after December 31, 2022. dwelling units of such building.
such increase (but which does not cease to be
(3) SPECIAL RULE FOR PROPERTY FINANCED ‘‘(C) QUALIFIED LOW-INCOME ECONOMIC BEN-
investment credit property within the mean-
BY TAX-EXEMPT BONDS.—The amendments EFIT PROJECT.—A facility shall be treated as
ing of section 50(a)). The period and percent-
made by subsection (m) shall apply to prop- part of a qualified low-income economic ben-
age of such recapture shall be determined
erty the construction of which begins after efit project if at least 50 percent of the finan-
under rules similar to the rules of section
the date of enactment of this Act. cial benefits of the electricity produced by
50(a). To the extent provided by the Sec-
SEC. 13103. INCREASE IN ENERGY CREDIT FOR such facility are provided to households with
retary, such recapture may not apply with
SOLAR AND WIND FACILITIES income of—
‘‘(i) less than 200 percent of the poverty respect to any property if, within 12 months
PLACED IN SERVICE IN CONNEC-
line (as defined in section 36B(d)(3)(A)) appli- after the date the taxpayer becomes aware
TION WITH LOW-INCOME COMMU-
NITIES. cable to a family of the size involved, or (or reasonably should have become aware) of
(a) IN GENERAL.—Section 48 is amended by ‘‘(ii) less than 80 percent of area median such property ceasing to be property eligible
adding at the end the following new sub- gross income (as determined under section for such increase, the eligibility of such
section: 142(d)(2)(B)). property for such increase is restored. The
‘‘(e) SPECIAL RULES FOR CERTAIN SOLAR ‘‘(D) FINANCIAL BENEFIT.—For purposes of preceding sentence shall not apply more
AND WIND FACILITIES PLACED IN SERVICE IN subparagraphs (B) and (C), electricity ac- than once with respect to any facility.’’.
CONNECTION WITH LOW-INCOME COMMU- quired at a below-market rate shall not fail (b) EFFECTIVE DATE.—The amendments
NITIES.— to be taken into account as a financial ben- made by this section shall take effect on
‘‘(1) IN GENERAL.—In the case of any quali- efit. January 1, 2023.
fied solar and wind facility with respect to ‘‘(3) ELIGIBLE PROPERTY.—For purposes of SEC. 13104. EXTENSION AND MODIFICATION OF
which the Secretary makes an allocation of this section, the term ‘eligible property’ CREDIT FOR CARBON OXIDE SE-
environmental justice solar and wind capac- means energy property which— QUESTRATION.
ity limitation under paragraph (4)— ‘‘(A) is part of a facility described in sec- (a) MODIFICATION OF CARBON OXIDE CAP-
‘‘(A) the energy percentage otherwise de- tion 45(d)(1) for which an election was made TURE REQUIREMENTS.—
termined under paragraph (2) or (5) of sub- under subsection (a)(5), or (1) IN GENERAL.—Section 45Q(d) is amended
section (a) with respect to any eligible prop- ‘‘(B) is described in clause (i) or (vi) of sub- to read as follows:
erty which is part of such facility shall be in- section (a)(3)(A), ‘‘(d) QUALIFIED FACILITY.—For purposes of
creased by— including energy storage technology (as de- this section, the term ‘qualified facility’
‘‘(i) in the case of a facility described in scribed in subsection (a)(3)(A)(ix)) installed means any industrial facility or direct air
subclause (I) of paragraph (2)(A)(iii) and not in connection with such energy property. capture facility—
described in subclause (II) of such paragraph, ‘‘(4) ALLOCATIONS.— ‘‘(1) the construction of which begins be-
10 percentage points, and ‘‘(A) IN GENERAL.—Not later than 180 days fore January 1, 2033, and either—
‘‘(ii) in the case of a facility described in after the date of enactment of this sub- ‘‘(A) construction of carbon capture equip-
subclause (II) of paragraph (2)(A)(iii), 20 per- section, the Secretary shall establish a pro- ment begins before such date, or
centage points, and gram to allocate amounts of environmental ‘‘(B) the original planning and design for
‘‘(B) the increase in the credit determined justice solar and wind capacity limitation to such facility includes installation of carbon
under subsection (a) by reason of this sub- qualified solar and wind facilities. In estab- capture equipment, and
section for any taxable year with respect to lishing such program and to carry out the ‘‘(2) which—
all property which is part of such facility purposes of this subsection, the Secretary ‘‘(A) in the case of a direct air capture fa-
shall not exceed the amount which bears the shall provide procedures to allow for an effi- cility, captures not less than 1,000 metric
same ratio to the amount of such increase cient allocation process, including, when de- tons of qualified carbon oxide during the tax-
(determined without regard to this subpara- termined appropriate, consideration of mul- able year,
graph) as— tiple projects in a single application if such ‘‘(B) in the case of an electricity gener-
‘‘(i) the environmental justice solar and projects will be placed in service by a single ating facility—
dlhill on DSK120RN23PROD with SENATE
wind capacity limitation allocated to such taxpayer. ‘‘(i) captures not less than 18,750 metric
facility, bears to ‘‘(B) LIMITATION.—The amount of environ- tons of qualified carbon oxide during the tax-
‘‘(ii) the total megawatt nameplate capac- mental justice solar and wind capacity limi- able year, and
ity of such facility, as measured in direct tation allocated by the Secretary under sub- ‘‘(ii) with respect to any carbon capture
current. paragraph (A) during any calendar year shall equipment for the applicable electric gener-
‘‘(2) QUALIFIED SOLAR AND WIND FACILITY.— not exceed the annual capacity limitation ating unit at such facility, has a capture de-
For purposes of this subsection— with respect to such year. sign capacity of not less than 75 percent of
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00048 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4099
the baseline carbon oxide production of such (1) IN GENERAL.—Section 45Q(b)(1), as ‘‘(i) subject to subparagraph (B) of para-
unit, or amended by the preceding provisions of this graph (3), the taxpayer satisfies the require-
‘‘(C) in the case of any other facility, cap- Act, is amended— ments under subparagraph (A) of such para-
tures not less than 12,500 metric tons of (A) by redesignating subparagraph (B) as graph with respect to such equipment, and
qualified carbon oxide during the taxable subparagraph (D), and ‘‘(ii) the taxpayer satisfies the require-
year.’’. (B) by inserting after subparagraph (A) the ments under paragraph (4) with respect to
(2) DEFINITIONS.— following new subparagraphs: the construction of such equipment, or
(A) IN GENERAL.—Section 45Q(e) is amend- ‘‘(B) SPECIAL RULE FOR DIRECT AIR CAPTURE ‘‘(C) the construction of carbon capture
ed— FACILITIES.—In the case of any qualified fa- equipment begins prior to the date that is 60
(i) by redesignating paragraphs (1) through cility described in subsection (d)(2)(A) which days after the Secretary publishes guidance
(3) as paragraphs (3) through (5), respec- is placed in service after December 31, 2022, with respect to the requirements of para-
tively, and the applicable dollar amount shall be an graphs (3)(A) and (4), and such equipment is
(ii) by inserting after ‘‘For purposes of this amount equal to the applicable dollar installed at a qualified facility the construc-
section—’’ the following new paragraphs: amount otherwise determined with respect tion of which begins prior to such date.
‘‘(1) APPLICABLE ELECTRIC GENERATING to such qualified facility under subparagraph ‘‘(3) PREVAILING WAGE REQUIREMENTS.—
UNIT.—The term ‘applicable electric gener- (A), except that such subparagraph shall be ‘‘(A) IN GENERAL.—The requirements de-
ating unit’ means the principal electric gen- applied— scribed in this subparagraph with respect to
erating unit for which the carbon capture ‘‘(i) by substituting ‘$36’ for ‘$17’ each place any qualified facility and any carbon capture
equipment is originally planned and de- it appears, and equipment placed in service at such facility
signed. ‘‘(ii) by substituting ‘$26’ for ‘$12’ each are that the taxpayer shall ensure that any
‘‘(2) BASELINE CARBON OXIDE PRODUCTION.— place it appears. laborers and mechanics employed by the tax-
‘‘(A) IN GENERAL.—The term ‘baseline car- ‘‘(C) APPLICABLE DOLLAR AMOUNT FOR ADDI- payer or any contractor or subcontractor
bon oxide production’ means either of the TIONAL CARBON CAPTURE EQUIPMENT.—In the in—
following: case of any qualified facility which is placed ‘‘(i) the construction of such facility or
‘‘(i) In the case of an applicable electric in service before January 1, 2023, if any addi- equipment, and
generating unit which was originally placed tional carbon capture equipment is installed ‘‘(ii) with respect to any taxable year, for
in service more than 1 year prior to the date at such facility and such equipment is placed any portion of such taxable year which is
on which construction of the carbon capture in service after December 31, 2022, the appli- within the period described in paragraph
equipment begins, the average annual carbon cable dollar amount shall be an amount (3)(A) or (4)(A) of subsection (a), the alter-
oxide production, by mass, from such unit equal to the applicable dollar amount other- ation or repair of such facility or such equip-
during— wise determined under this paragraph, ex- ment,
‘‘(I) in the case of an applicable electric cept that subparagraph (B) shall be applied— shall be paid wages at rates not less than the
generating unit which was originally placed ‘‘(i) by substituting ‘before January 1, 2023’ prevailing rates for construction, alteration,
in service more than 1 year prior to the date for ‘after December 31, 2022’, and or repair of a similar character in the local-
on which construction of the carbon capture ‘‘(ii) by substituting ‘the additional carbon ity in which such facility and equipment are
equipment begins and on or after the date capture equipment installed at such quali- located as most recently determined by the
which is 3 years prior to the date on which fied facility’ for ‘such qualified facility’.’’. Secretary of Labor, in accordance with sub-
construction of such equipment begins, the (2) CONFORMING AMENDMENTS.— chapter IV of chapter 31 of title 40, United
period beginning on the date such unit was (A) Section 45Q(b)(1)(A) is amended by States Code. For purposes of determining an
placed in service and ending on the date on striking ‘‘The applicable dollar amount’’ and increased credit amount under paragraph (1)
which construction of such equipment began, inserting ‘‘Except as provided in subpara- for a taxable year, the requirement under
and graph (B) or (C), the applicable dollar clause (ii) of this subparagraph is applied to
‘‘(II) in the case of an applicable electric amount’’. such taxable year in which the alteration or
generating unit which was originally placed (B) Section 45Q(b)(1)(D), as redesignated by repair of qualified facility occurs.
in service more than 3 years prior to the date paragraph (1)(A), is amended by striking ‘‘(B) CORRECTION AND PENALTY RELATED TO
on which construction of the carbon capture ‘‘subparagraph (A)’’ and inserting ‘‘subpara- FAILURE TO SATISFY WAGE REQUIREMENTS.—
equipment begins, the 3 years with the high- graph (A), (B), or (C)’’. Rules similar to the rules of section
(d) WAGE AND APPRENTICESHIP REQUIRE- 45(b)(7)(B) shall apply.
est annual carbon oxide production during
MENTS.—Section 45Q is amended by redesig- ‘‘(4) APPRENTICESHIP REQUIREMENTS.—Rules
the 12-year period preceding the date on
nating subsection (h) as subsection (i) and similar to the rules of section 45(b)(8) shall
which construction of such equipment began. inserting after subsection (g) following new
‘‘(ii) In the case of an applicable electric apply.
subsection: ‘‘(5) REGULATIONS AND GUIDANCE.—The Sec-
generating unit which— ‘‘(h) INCREASED CREDIT AMOUNT FOR QUALI-
‘‘(I) as of the date on which construction of retary shall issue such regulations or other
FIED FACILITIES AND CARBON CAPTURE EQUIP-
the carbon capture equipment begins, is not guidance as the Secretary determines nec-
MENT.—
yet placed in service, or essary to carry out the purposes of this sub-
‘‘(1) IN GENERAL.—In the case of any quali-
‘‘(II) was placed in service during the 1- section, including regulations or other guid-
fied facility or any carbon capture equip-
year period prior to the date on which con- ance which provides for requirements for rec-
ment which satisfy the requirements of para-
struction of the carbon capture equipment ordkeeping or information reporting for pur-
graph (2), the amount of the credit deter-
begins, poses of administering the requirements of
mined under subsection (a) shall be equal to
the designed annual carbon oxide production, this subsection.’’.
such amount (determined without regard to (e) CREDIT REDUCED FOR TAX-EXEMPT
by mass, as determined based on an assumed this sentence) multiplied by 5.
capacity factor of 60 percent. BONDS.—Section 45Q(f) is amended—
‘‘(2) REQUIREMENTS.—The requirements de- (1) by striking the second paragraph (3), as
‘‘(B) CAPACITY FACTOR.—The term ‘capac- scribed in this paragraph are that—
ity factor’ means the ratio (expressed as a added at the end of such section by section
‘‘(A) with respect to any qualified facility 80402(e) of the Infrastructure Investment and
percentage) of the actual electric output the construction of which begins on or after
from the applicable electric generating unit Jobs Act (Public Law 117-58), and
the date that is 60 days after the Secretary (2) by adding at the end the following new
to the potential electric output from such publishes guidance with respect to the re-
unit.’’. paragraph:
quirements of paragraphs (3)(A) and (4), as ‘‘(8) CREDIT REDUCED FOR TAX-EXEMPT
(B) CONFORMING AMENDMENT.—Section well as any carbon capture equipment placed BONDS.—Rules similar to the rule under sec-
142(o)(1)(B) is amended by striking ‘‘section in service at such facility—
45Q(e)(1)’’ and inserting ‘‘section 45Q(e)(3)’’. tion 45(b)(3) shall apply for purposes of this
‘‘(i) subject to subparagraph (B) of para- section.’’.
(b) MODIFIED APPLICABLE DOLLAR graph (3), the taxpayer satisfies the require- (f) APPLICATION OF SECTION FOR CERTAIN
AMOUNT.—Section 45Q(b)(1)(A) is amended— ments under subparagraph (A) of such para- CARBON CAPTURE EQUIPMENT.—Section 45Q(g)
(1) in clause (i)— graph with respect to such facility and is amended by inserting ‘‘the earlier of Janu-
(A) in subclause (I), by striking ‘‘the dollar equipment, and ary 1, 2023, and’’ before ‘‘the end of the cal-
amount’’ and all that follows through ‘‘such ‘‘(ii) the taxpayer satisfies the require- endar year’’.
period’’ and inserting ‘‘$17’’, and ments under paragraph (4) with respect to (g) ELECTION.—Section 45Q(f), as amended
(B) in subclause (II), by striking ‘‘the dol- the construction of such facility and equip- by subsection (e), is amended by adding at
lar amount’’ and all that follows through ment, the end the following new paragraph:
‘‘such period’’ and inserting ‘‘$12’’, and ‘‘(B) with respect to any carbon capture ‘‘(9) ELECTION.—For purposes of paragraphs
dlhill on DSK120RN23PROD with SENATE
(2) in clause (ii)— equipment the construction of which begins (3) and (4) of subsection (a), a person de-
(A) in subclause (I), by striking ‘‘$50’’ and on or after the date that is 60 days after the scribed in paragraph (3)(A)(ii) may elect, at
inserting ‘‘$17’’, and Secretary publishes guidance with respect to such time and in such manner as the Sec-
(B) in subclause (II), by striking ‘‘$35’’ and the requirements of paragraphs (3)(A) and retary may prescribe, to have the 12–year pe-
inserting ‘‘$12’’. (4), and which is installed at a qualified facil- riod begin on the first day of the first tax-
(c) DETERMINATION OF APPLICABLE DOLLAR ity the construction of which began prior to able year in which a credit under this section
AMOUNT.— such date— is claimed with respect to carbon capture
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00049 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4100 CONGRESSIONAL RECORD — SENATE August 6, 2022
equipment which is originally placed in serv- ‘‘(C) which is placed in service before the ‘‘(2) PREVAILING WAGE REQUIREMENTS.—
ice at a qualified facility on or after the date date of the enactment of this section. ‘‘(A) IN GENERAL.—The requirements de-
of the enactment of the Bipartisan Budget ‘‘(2) REDUCTION AMOUNT.— scribed in this subparagraph with respect to
Act of 2018 (after application of paragraph ‘‘(A) IN GENERAL.—For purposes of this sec- any qualified nuclear power facility are that
(6), where applicable) if— tion, the term ‘reduction amount’ means, the taxpayer shall ensure that any laborers
‘‘(A) no taxpayer claimed a credit under with respect to any qualified nuclear power and mechanics employed by the taxpayer or
this section with respect to such carbon cap- facility for any taxable year, the amount any contractor or subcontractor in the alter-
ture equipment for any prior taxable year, equal to the lesser of— ation or repair of such facility shall be paid
‘‘(B) the qualified facility at which such ‘‘(i) the amount determined under sub- wages at rates not less than the prevailing
carbon capture equipment is placed in serv- section (a)(1), or rates for alteration or repair of a similar
ice is located in an area affected by a feder- ‘‘(ii) the amount equal to 16 percent of the character in the locality in which such facil-
ally-declared disaster (as defined by section excess of— ity is located as most recently determined
165(i)(5)(A)) after the carbon capture equip- ‘‘(I) subject to subparagraph (B), the gross by the Secretary of Labor, in accordance
ment is originally placed in service, and receipts from any electricity produced by with subchapter IV of chapter 31 of title 40,
‘‘(C) such federally-declared disaster re- such facility (including any electricity serv- United States Code.
sults in a cessation of the operation of the ices or products provided in conjunction with ‘‘(B) CORRECTION AND PENALTY RELATED TO
qualified facility or the carbon capture the electricity produced by such facility) and FAILURE TO SATISFY WAGE REQUIREMENTS.—
equipment after such equipment is originally sold to an unrelated person during such tax- Rules similar to the rules of section
placed in service.’’. able year, over 45(b)(7)(B) shall apply.
(h) REGULATIONS FOR BASELINE CARBON ‘‘(II) the amount equal to the product of— ‘‘(3) REGULATIONS AND GUIDANCE.—The Sec-
OXIDE PRODUCTION.—Subsection (i) of section ‘‘(aa) 2.5 cents, multiplied by retary shall issue such regulations or other
45Q, as redesignated by subsection (d), is ‘‘(bb) the amount determined under sub- guidance as the Secretary determines nec-
amended— section (a)(1)(B). essary to carry out the purposes of this sub-
(1) in paragraph (1), by striking ‘‘and’’, ‘‘(B) TREATMENT OF CERTAIN RECEIPTS.— section, including regulations or other guid-
(2) in paragraph (2), by striking the period ‘‘(i) IN GENERAL.—Subject to clause (iii), ance which provides for requirements for rec-
at the end and inserting ‘‘, and’’, and the amount determined under subparagraph ordkeeping or information reporting for pur-
(3) by adding at the end the following new (A)(ii)(I) shall include any amount received poses of administering the requirements of
paragraph: by the taxpayer during the taxable year with this subsection.
‘‘(3) for purposes of subsection (d)(2)(B)(ii), respect to the qualified nuclear power facil- ‘‘(e) TERMINATION.—This section shall not
adjust the baseline carbon oxide production ity from a zero-emission credit program. For apply to taxable years beginning after De-
with respect to any applicable electric gener- purposes of determining the amount received cember 31, 2032.’’.
ating unit at any electricity generating fa- during such taxable year, the taxpayer shall (b) CONFORMING AMENDMENTS.—
cility if, after the date on which the carbon take into account any reductions required (1) Section 38(b) is amended—
capture equipment is placed in service, modi- under such program. (A) in paragraph (32), by striking ‘‘plus’’ at
fications which are chargeable to capital ac- ‘‘(ii) ZERO-EMISSION CREDIT PROGRAM.—For the end,
count are made to such unit which result in purposes of this subparagraph, the term (B) in paragraph (33), by striking the pe-
a significant increase or decrease in carbon ‘zero-emission credit program’ means any riod at the end and inserting ‘‘, plus’’, and
oxide production.’’. payments with respect to a qualified nuclear (C) by adding at the end the following new
(i) EFFECTIVE DATES.— power facility as a result of any Federal, paragraph:
(1) IN GENERAL.—Except as provided in State or local government program for, in ‘‘(34) the zero-emission nuclear power pro-
paragraphs (2), (3), and (4), the amendments whole or in part, the zero-emission, zero-car- duction credit determined under section
made by this section shall apply to facilities bon, or air quality attributes of any portion
45U(a).’’.
or equipment placed in service after Decem- of the electricity produced by such facility.
(2) The table of sections for subpart D of
ber 31, 2022. ‘‘(iii) EXCLUSION.—For purposes of clause
part IV of subchapter A of chapter 1 is
(2) MODIFICATION OF CARBON OXIDE CAPTURE (i), any amount received by the taxpayer
amended by adding at the end the following
REQUIREMENTS.—The amendments made by from a zero-emission credit program shall be
new item:
subsection (a) shall apply to facilities or excluded from the amount determined under
subparagraph (A)(ii)(I) if the full amount of ‘‘Sec. 45U. Zero-emission nuclear power pro-
equipment the construction of which begins
the credit calculated pursuant to subsection duction credit.’’.
after the date of enactment of this Act.
(a) (determined without regard to this sub- (c) EFFECTIVE DATE.—This section shall
(3) APPLICATION OF SECTION FOR CERTAIN
paragraph) is used to reduce payments from apply to electricity produced and sold after
CARBON CAPTURE EQUIPMENT.—The amend-
such zero-emission credit program. December 31, 2023, in taxable years beginning
ments made by subsection (f) shall take ef-
‘‘(3) ELECTRICITY.—For purposes of this sec- after such date.
fect on the date of enactment of this Act.
(4) ELECTION.—The amendments made by tion, the term ‘electricity’ means the energy PART 2—CLEAN FUELS
subsection (g) shall apply to carbon oxide produced by a qualified nuclear power facil- SEC. 13201. EXTENSION OF INCENTIVES FOR BIO-
captured and disposed of after December 31, ity from the conversion of nuclear fuel into DIESEL, RENEWABLE DIESEL AND
2021. electric power. ALTERNATIVE FUELS.
SEC. 13105. ZERO-EMISSION NUCLEAR POWER ‘‘(c) OTHER RULES.— (a) BIODIESEL AND RENEWABLE DIESEL
PRODUCTION CREDIT. ‘‘(1) INFLATION ADJUSTMENT.—The 0.3 cent CREDIT.—Section 40A(g) is amended by strik-
(a) IN GENERAL.—Subpart D of part IV of amount in subsection (a)(1)(A) and the 2.5 ing ‘‘December 31, 2022’’ and inserting ‘‘De-
subchapter A of chapter 1 is amended by add- cent amount in subsection (b)(2)(A)(ii)(II)(aa) cember 31, 2024’’.
ing at the end the following new section: shall each be adjusted by multiplying such (b) BIODIESEL MIXTURE CREDIT.—
‘‘SEC. 45U. ZERO-EMISSION NUCLEAR POWER amount by the inflation adjustment factor (1) IN GENERAL.—Section 6426(c)(6) is
PRODUCTION CREDIT. (as determined under section 45(e)(2), as ap- amended by striking ‘‘December 31, 2022’’ and
‘‘(a) AMOUNT OF CREDIT.—For purposes of plied by substituting ‘calendar year 2023’ for inserting ‘‘December 31, 2024’’.
section 38, the zero-emission nuclear power ‘calendar year 1992’ in subparagraph (B) (2) FUELS NOT USED FOR TAXABLE PUR-
production credit for any taxable year is an thereof) for the calendar year in which the POSES.—Section 6427(e)(6)(B) is amended by
amount equal to the amount by which— sale occurs. If the 0.3 cent amount as in- striking ‘‘December 31, 2022’’ and inserting
‘‘(1) the product of— creased under this paragraph is not a mul- ‘‘December 31, 2024’’.
‘‘(A) 0.3 cents, multiplied by tiple of 0.05 cent, such amount shall be (c) ALTERNATIVE FUEL CREDIT.—Section
‘‘(B) the kilowatt hours of electricity— rounded to the nearest multiple of 0.05 cent. 6426(d)(5) is amended by striking ‘‘December
‘‘(i) produced by the taxpayer at a qualified If the 2.5 cent amount as increased under 31, 2021’’ and inserting ‘‘December 31, 2024’’.
nuclear power facility, and this paragraph is not a multiple of 0.1 cent, (d) ALTERNATIVE FUEL MIXTURE CREDIT.—
‘‘(ii) sold by the taxpayer to an unrelated such amount shall be rounded to the nearest Section 6426(e)(3) is amended by striking
person during the taxable year, exceeds multiple of 0.1 cent. ‘‘December 31, 2021’’ and inserting ‘‘Decem-
‘‘(2) the reduction amount for such taxable ‘‘(2) SPECIAL RULES.—Rules similar to the ber 31, 2024’’.
year. rules of paragraphs (1), (3), (4), and (5) of sec- (e) PAYMENTS FOR ALTERNATIVE FUELS.—
‘‘(b) DEFINITIONS.— tion 45(e) shall apply for purposes of this sec- Section 6427(e)(6)(C) is amended by striking
‘‘(1) QUALIFIED NUCLEAR POWER FACILITY.— tion. ‘‘December 31, 2021’’ and inserting ‘‘Decem-
For purposes of this section, the term ‘quali- ‘‘(d) WAGE REQUIREMENTS.— ber 31, 2024’’.
fied nuclear power facility’ means any nu- ‘‘(1) INCREASED CREDIT AMOUNT FOR QUALI- (f) EFFECTIVE DATE.—The amendments
dlhill on DSK120RN23PROD with SENATE
clear facility— FIED NUCLEAR POWER FACILITIES.—In the case made by this section shall apply to fuel sold
‘‘(A) which is owned by the taxpayer and of any qualified nuclear power facility which or used after December 31, 2021.
which uses nuclear energy to produce elec- satisfies the requirements of paragraph (g) SPECIAL RULE.—In the case of any al-
tricity, (2)(A), the amount of the credit determined ternative fuel credit properly determined
‘‘(B) which is not an advanced nuclear under subsection (a) shall be equal to such under section 6426(d) of the Internal Revenue
power facility as defined in subsection (d)(1) amount (as determined without regard to Code of 1986 for the period beginning on Jan-
of section 45J, and this sentence) multiplied by 5. uary 1, 2022, and ending with the close of the
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00050 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4101
last calendar quarter beginning before the ‘‘(A) meets the requirements of— end of paragraph (34) and inserting ‘‘, plus’’,
date of the enactment of this Act, such cred- ‘‘(i) ASTM International Standard D7566, and by inserting after paragraph (34) the fol-
it shall be allowed, and any refund or pay- or lowing new paragraph:
ment attributable to such credit (including ‘‘(ii) the Fischer Tropsch provisions of ‘‘(35) the sustainable aviation fuel credit
any payment under section 6427(e) of such ASTM International Standard D1655, Annex determined under section 40B.’’.
Code) shall be made, only in such manner as A1, (c) COORDINATION WITH BIODIESEL INCEN-
the Secretary of the Treasury (or the Sec- ‘‘(B) is not derived from coprocessing an TIVES.—
retary’s delegate) shall provide. Such Sec- applicable material (or materials derived (1) IN GENERAL.—Section 40A(d)(1) is
retary shall issue guidance within 30 days from an applicable material) with a feed- amended by inserting ‘‘or 40B’’ after ‘‘deter-
after the date of the enactment of this Act stock which is not biomass, mined under section 40’’.
providing for a one-time submission of ‘‘(C) is not derived from palm fatty acid (2) CONFORMING AMENDMENT.—Section
claims covering periods described in the pre- distillates or petroleum, and 40A(f) is amended by striking paragraph (4).
ceding sentence. Such guidance shall provide ‘‘(D) has been certified in accordance with (d) SUSTAINABLE AVIATION FUEL ADDED TO
for a 180-day period for the submission of subsection (e) as having a lifecycle green- CREDIT FOR ALCOHOL FUEL, BIODIESEL, AND
such claims (in such manner as prescribed by house gas emissions reduction percentage of ALTERNATIVE FUEL MIXTURES.—
such Secretary) to begin not later than 30 at least 50 percent. (1) IN GENERAL.—Section 6426 is amended
by adding at the end the following new sub-
days after such guidance is issued. Such ‘‘(2) DEFINITIONS.—In this subsection—
section:
claims shall be paid by such Secretary not ‘‘(A) APPLICABLE MATERIAL.—The term ‘ap-
‘‘(k) SUSTAINABLE AVIATION FUEL CREDIT.—
later than 60 days after receipt. If such Sec- plicable material’ means—
‘‘(1) IN GENERAL.—For purposes of this sec-
retary has not paid pursuant to a claim filed ‘‘(i) monoglycerides, diglycerides, and
tion, the sustainable aviation fuel credit for
under this subsection within 60 days after triglycerides,
the taxable year is, with respect to any sale
the date of the filing of such claim, the ‘‘(ii) free fatty acids, and
or use of a qualified mixture, an amount
claim shall be paid with interest from such ‘‘(iii) fatty acid esters.
equal to the product of—
date determined by using the overpayment ‘‘(B) BIOMASS.—The term ‘biomass’ has the
‘‘(A) the number of gallons of sustainable
rate and method under section 6621 of such same meaning given such term in section
aviation fuel in such mixture, multiplied by
Code. 45K(c)(3).
‘‘(B) the sum of—
SEC. 13202. EXTENSION OF SECOND GENERATION ‘‘(e) LIFECYCLE GREENHOUSE GAS EMISSIONS
REDUCTION PERCENTAGE.—For purposes of ‘‘(i) $1.25, plus
BIOFUEL INCENTIVES.
this section, the term ‘lifecycle greenhouse ‘‘(ii) the applicable supplementary amount
(a) IN GENERAL.—Section 40(b)(6)(J)(i) is with respect to such sustainable aviation
amended by striking ‘‘2022’’ and inserting gas emissions reduction percentage’ means,
with respect to any sustainable aviation fuel.
‘‘2025’’. ‘‘(2) DEFINITIONS.—Any term used in this
(b) EFFECTIVE DATE.—The amendment fuel, the percentage reduction in lifecycle
greenhouse gas emissions achieved by such subsection which is also used in section 40B
made by subsection (a) shall apply to quali- shall have the meaning given such term by
fied second generation biofuel production fuel as compared with petroleum-based jet
fuel, as defined in accordance with— section 40B.
after December 31, 2021. ‘‘(3) REGISTRATION REQUIREMENT.—For pur-
SEC. 13203. SUSTAINABLE AVIATION FUEL CRED- ‘‘(1) the most recent Carbon Offsetting and
Reduction Scheme for International Avia- poses of this subsection, rules similar to the
IT.
tion which has been adopted by the Inter- rules of section 40B(f) shall apply.’’.
(a) IN GENERAL.—Subpart D of part IV of (2) CONFORMING AMENDMENTS.—
subchapter A of chapter 1 is amended by in- national Civil Aviation Organization with
the agreement of the United States, or (A) Section 6426 is amended—
serting after section 40A the following new (i) in subsection (a)(1), by striking ‘‘and
section: ‘‘(2) any similar methodology which satis-
fies the criteria under section 211(o)(1)(H) of (e)’’ and inserting ‘‘(e), and (k)’’, and
‘‘SEC. 40B. SUSTAINABLE AVIATION FUEL CREDIT. (ii) in subsection (h), by striking ‘‘under
the Clean Air Act (42 U.S.C. 7545(o)(1)(H)), as
‘‘(a) IN GENERAL.—For purposes of section section 40 or 40A’’ and inserting ‘‘under sec-
in effect on the date of enactment of this
38, the sustainable aviation fuel credit deter- tion 40, 40A, or 40B’’.
section.
mined under this section for the taxable year ‘‘(f) REGISTRATION OF SUSTAINABLE AVIA- (B) Section 6427(e) is amended—
is, with respect to any sale or use of a quali- TION FUEL PRODUCERS.—No credit shall be al- (i) in the heading, by striking ‘‘OR ALTER-
fied mixture which occurs during such tax- lowed under this section with respect to any NATIVE FUEL’’ and inserting, ‘‘ALTERNATIVE
able year, an amount equal to the product sustainable aviation fuel unless the producer FUEL, OR SUSTAINABLE AVIATION FUEL’’,
of— or importer of such fuel— (ii) in paragraph (1), by inserting ‘‘or the
‘‘(1) the number of gallons of sustainable ‘‘(1) is registered with the Secretary under sustainable aviation fuel mixture credit’’
aviation fuel in such mixture, multiplied by section 4101, and after ‘‘alternative fuel mixture credit’’, and
‘‘(2) the sum of— ‘‘(2) provides— (iii) in paragraph (6)—
‘‘(A) $1.25, plus ‘‘(A) certification (in such form and man- (I) in subparagraph (C), by striking ‘‘and’’
‘‘(B) the applicable supplementary amount ner as the Secretary shall prescribe) from an at the end,
with respect to such sustainable aviation unrelated party demonstrating compliance (II) in subparagraph (D), by striking the
fuel. with— period at the end and inserting ‘‘, and’’, and
‘‘(b) APPLICABLE SUPPLEMENTARY ‘‘(i) any general requirements, supply (III) by adding at the end the following new
AMOUNT.—For purposes of this section, the chain traceability requirements, and infor- subparagraph:
term ‘applicable supplementary amount’ mation transmission requirements estab- ‘‘(E) any qualified mixture of sustainable
means, with respect to any sustainable avia- lished under the Carbon Offsetting and Re- aviation fuel (as defined in section 6426(k)(3))
tion fuel, an amount equal to $0.01 for each duction Scheme for International Aviation sold or used after December 31, 2024.’’.
percentage point by which the lifecycle described in paragraph (1) of subsection (e), (C) Section 4101(a)(1) is amended by insert-
greenhouse gas emissions reduction percent- or ing ‘‘every person producing or importing
age with respect to such fuel exceeds 50 per- ‘‘(ii) in the case of any methodology estab- sustainable aviation fuel (as defined in sec-
cent. In no event shall the applicable supple- lished under paragraph (2) of such sub- tion 40B),’’ before ‘‘and every person pro-
mentary amount determined under this sub- section, requirements similar to the require- ducing second generation biofuel’’.
section exceed $0.50. ments described in clause (i), and (D) The table of sections for subpart D of
‘‘(c) QUALIFIED MIXTURE.—For purposes of ‘‘(B) such other information with respect subchapter A of chapter 1 is amended by in-
this section, the term ‘qualified mixture’ to such fuel as the Secretary may require for serting after the item relating to section 40A
means a mixture of sustainable aviation fuel purposes of carrying out this section. the following new item:
and kerosene if— ‘‘(g) COORDINATION WITH CREDIT AGAINST ‘‘Sec. 40B. Sustainable aviation fuel cred-
‘‘(1) such mixture is produced by the tax- EXCISE TAX.—The amount of the credit de- it.’’.
payer in the United States, termined under this section with respect to (e) AMOUNT OF CREDIT INCLUDED IN GROSS
‘‘(2) such mixture is used by the taxpayer any sustainable aviation fuel shall, under INCOME.—Section 87 is amended by striking
(or sold by the taxpayer for use) in an air- rules prescribed by the Secretary, be prop- ‘‘and’’ in paragraph (1), by striking the pe-
craft, erly reduced to take into account any ben- riod at the end of paragraph (2) and inserting
‘‘(3) such sale or use is in the ordinary efit provided with respect to such sustain- ‘‘, and’’, and by adding at the end the fol-
course of a trade or business of the taxpayer, able aviation fuel solely by reason of the ap- lowing new paragraph:
and plication of section 6426 or 6427(e). ‘‘(3) the sustainable aviation fuel credit de-
‘‘(4) the transfer of such mixture to the ‘‘(h) TERMINATION.—This section shall not termined with respect to the taxpayer for
dlhill on DSK120RN23PROD with SENATE
fuel tank of such aircraft occurs in the apply to any sale or use after December 31, the taxable year under section 40B(a).’’.
United States. 2024.’’. (f) EFFECTIVE DATE.—The amendments
‘‘(d) SUSTAINABLE AVIATION FUEL.— (b) CREDIT MADE PART OF GENERAL BUSI- made by this section shall apply to fuel sold
‘‘(1) IN GENERAL.—For purposes of this sec- NESS CREDIT.— Section 38(b), as amended by or used after December 31, 2022.
tion, the term ‘sustainable aviation fuel’ the preceding provisions of this Act, is SEC. 13204. CLEAN HYDROGEN.
means liquid fuel, the portion of which is not amended by striking ‘‘plus’’ at the end of (a) CREDIT FOR PRODUCTION OF CLEAN HY-
kerosene, which— paragraph (33), by striking the period at the DROGEN.—
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00051 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4102 CONGRESSIONAL RECORD — SENATE August 6, 2022
(1) IN GENERAL.—Subpart D of part IV of ‘‘(B) GREET MODEL.—The term ‘lifecycle any qualified clean hydrogen production fa-
subchapter A of chapter 1, as amended by the greenhouse gas emissions’ shall only include cility are that the taxpayer shall ensure that
preceding provisions of this Act, is amended emissions through the point of production any laborers and mechanics employed by the
by adding at the end the following new sec- (well-to-gate), as determined under the most taxpayer or any contractor or subcontractor
tion: recent Greenhouse gases, Regulated Emis- in—
‘‘SEC. 45V. CREDIT FOR PRODUCTION OF CLEAN sions, and Energy use in Transportation ‘‘(i) the construction of such facility, and
HYDROGEN. model (commonly referred to as the ‘GREET ‘‘(ii) with respect to any taxable year, for
‘‘(a) AMOUNT OF CREDIT.—For purposes of model’) developed by Argonne National Lab- any portion of such taxable year which is
section 38, the clean hydrogen production oratory, or a successor model (as determined within the period described in subsection
credit for any taxable year is an amount by the Secretary). (a)(2), the alteration or repair of such facil-
equal to the product of— ‘‘(2) QUALIFIED CLEAN HYDROGEN.— ity,
‘‘(1) the kilograms of qualified clean hydro- ‘‘(A) IN GENERAL.—The term ‘qualified shall be paid wages at rates not less than the
gen produced by the taxpayer during such clean hydrogen’ means hydrogen which is prevailing rates for construction, alteration,
taxable year at a qualified clean hydrogen produced through a process that results in a or repair of a similar character in the local-
production facility during the 10-year period lifecycle greenhouse gas emissions rate of ity in which such facility is located as most
beginning on the date such facility was origi- not greater than 4 kilograms of CO2e per recently determined by the Secretary of
nally placed in service, multiplied by kilogram of hydrogen. Labor, in accordance with subchapter IV of
‘‘(2) the applicable amount (as determined ‘‘(B) ADDITIONAL REQUIREMENTS.—Such chapter 31 of title 40, United States Code.
under subsection (b)) with respect to such term shall not include any hydrogen unless— For purposes of determining an increased
hydrogen. ‘‘(i) such hydrogen is produced— credit amount under paragraph (1) for a tax-
‘‘(b) APPLICABLE AMOUNT.— ‘‘(I) in the United States (as defined in sec- able year, the requirement under clause (ii)
‘‘(1) IN GENERAL.—For purposes of sub- tion 638(1)) or a possession of the United of this subparagraph is applied to such tax-
section (a)(2), the applicable amount shall be States (as defined in section 638(2)), able year in which the alteration or repair of
an amount equal to the applicable percent- ‘‘(II) in the ordinary course of a trade or qualified facility occurs.
age of $0.60. If any amount as determined business of the taxpayer, and ‘‘(B) CORRECTION AND PENALTY RELATED TO
under the preceding sentence is not a mul- ‘‘(III) for sale or use, and FAILURE TO SATISFY WAGE REQUIREMENTS.—
tiple of 0.1 cent, such amount shall be round- ‘‘(ii) the production and sale or use of such Rules similar to the rules of section
ed to the nearest multiple of 0.1 cent. hydrogen is verified by an unrelated party. 45(b)(7)(B) shall apply.
‘‘(2) APPLICABLE PERCENTAGE.—For pur- ‘‘(C) PROVISIONAL EMISSIONS RATE.—In the ‘‘(4) APPRENTICESHIP REQUIREMENTS.—Rules
poses of paragraph (1), the applicable per- case of any hydrogen for which a lifecycle similar to the rules of section 45(b)(8) shall
centage shall be determined as follows: greenhouse gas emissions rate has not been apply.
‘‘(A) In the case of any qualified clean hy- determined for purposes of this section, a ‘‘(5) REGULATIONS AND GUIDANCE.—The Sec-
drogen which is produced through a process taxpayer producing such hydrogen may file a retary shall issue such regulations or other
that results in a lifecycle greenhouse gas petition with the Secretary for determina- guidance as the Secretary determines nec-
emissions rate of— tion of the lifecycle greenhouse gas emis- essary to carry out the purposes of this sub-
‘‘(i) not greater than 4 kilograms of CO2e sions rate with respect to such hydrogen. section, including regulations or other guid-
per kilogram of hydrogen, and ‘‘(3) QUALIFIED CLEAN HYDROGEN PRODUC- ance which provides for requirements for rec-
‘‘(ii) not less than 2.5 kilograms of CO2e TION FACILITY.—The term ‘qualified clean hy- ordkeeping or information reporting for pur-
per kilogram of hydrogen, drogen production facility’ means a facil- poses of administering the requirements of
the applicable percentage shall be 20 percent. ity— this subsection.
‘‘(B) In the case of any qualified clean hy- ‘‘(A) owned by the taxpayer, ‘‘(f) REGULATIONS.—Not later than 1 year
drogen which is produced through a process ‘‘(B) which produces qualified clean hydro- after the date of enactment of this section,
that results in a lifecycle greenhouse gas gen, and the Secretary shall issue regulations or
emissions rate of— ‘‘(C) the construction of which begins be- other guidance to carry out the purposes of
‘‘(i) less than 2.5 kilograms of CO2e per fore January 1, 2033. this section, including regulations or other
kilogram of hydrogen, and ‘‘(d) SPECIAL RULES.— guidance for determining lifecycle green-
‘‘(ii) not less than 1.5 kilograms of CO2e ‘‘(1) TREATMENT OF FACILITIES OWNED BY house gas emissions.’’.
per kilogram of hydrogen, MORE THAN 1 TAXPAYER.—Rules similar to the (2) CREDIT REDUCED FOR TAX-EXEMPT
the applicable percentage shall be 25 percent. rules section 45(e)(3) shall apply for purposes BONDS.—Section 45V(d), as added by this sec-
‘‘(C) In the case of any qualified clean hy- of this section. tion, is amended by adding at the end the
drogen which is produced through a process ‘‘(2) COORDINATION WITH CREDIT FOR CARBON following new paragraph:
that results in a lifecycle greenhouse gas OXIDE SEQUESTRATION.—No credit shall be al- ‘‘(3) CREDIT REDUCED FOR TAX-EXEMPT
emissions rate of— lowed under this section with respect to any BONDS.—Rules similar to the rule under sec-
‘‘(i) less than 1.5 kilograms of CO2e per qualified clean hydrogen produced at a facil- tion 45(b)(3) shall apply for purposes of this
kilogram of hydrogen, and ity which includes carbon capture equipment section.’’.
‘‘(ii) not less than 0.45 kilograms of CO2e for which a credit is allowed to any taxpayer (3) MODIFICATION OF EXISTING FACILITIES.—
per kilogram of hydrogen, under section 45Q for the taxable year or any Section 45V(d), as added and amended by the
the applicable percentage shall be 33.4 per- prior taxable year. preceding provisions of this section, is
cent. ‘‘(e) INCREASED CREDIT AMOUNT FOR QUALI- amended by adding at the end the following
‘‘(D) In the case of any qualified clean hy- FIED CLEAN HYDROGEN PRODUCTION FACILI- new paragraph:
drogen which is produced through a process TIES.— ‘‘(4) MODIFICATION OF EXISTING FACILITIES.—
that results in a lifecycle greenhouse gas ‘‘(1) IN GENERAL.—In the case of any quali- For purposes of subsection (a)(1), in the case
emissions rate of less than 0.45 kilograms of fied clean hydrogen production facility of any facility which—
CO2e per kilogram of hydrogen, the applica- which satisfies the requirements of para- ‘‘(A) was originally placed in service before
ble percentage shall be 100 percent. graph (2), the amount of the credit deter- January 1, 2023, and, prior to the modifica-
‘‘(3) INFLATION ADJUSTMENT.—The $0.60 mined under subsection (a) with respect to tion described in subparagraph (B), did not
amount in paragraph (1) shall be adjusted by qualified clean hydrogen described in sub- produce qualified clean hydrogen, and
multiplying such amount by the inflation section (b)(2) shall be equal to such amount ‘‘(B) after the date such facility was origi-
adjustment factor (as determined under sec- (determined without regard to this sentence) nally placed in service—
tion 45(e)(2), determined by substituting multiplied by 5. ‘‘(i) is modified to produce qualified clean
‘2022’ for ‘1992’ in subparagraph (B) thereof) ‘‘(2) REQUIREMENTS.—A facility meets the hydrogen, and
for the calendar year in which the qualified requirements of this paragraph if it is one of ‘‘(ii) amounts paid or incurred with respect
clean hydrogen is produced. If any amount as the following: to such modification are properly chargeable
increased under the preceding sentence is ‘‘(A) A facility— to capital account of the taxpayer,
not a multiple of 0.1 cent, such amount shall ‘‘(i) the construction of which begins prior such facility shall be deemed to have been
be rounded to the nearest multiple of 0.1 to the date that is 60 days after the Sec- originally placed in service as of the date
cent. retary publishes guidance with respect to the that the property required to complete the
‘‘(c) DEFINITIONS.—For purposes of this sec- requirements of paragraphs (3)(A) and (4), modification described in subparagraph (B)
tion— and is placed in service.’’.
‘‘(1) LIFECYCLE GREENHOUSE GAS EMIS- ‘‘(ii) which meets the requirements of para- (4) CONFORMING AMENDMENTS.—
SIONS.— graph (3)(A) with respect to alteration or re- (A) Section 38(b), as amended by the pre-
dlhill on DSK120RN23PROD with SENATE
‘‘(A) IN GENERAL.—Subject to subparagraph pair of such facility which occurs after such ceding provisions of this Act, is amended—
(B), the term ‘lifecycle greenhouse gas emis- date. (i) in paragraph (34), by striking ‘‘plus’’ at
sions’ has the same meaning given such term ‘‘(B) A facility which satisfies the require- the end,
under subparagraph (H) of section 211(o)(1) of ments of paragraphs (3)(A) and (4). (ii) in paragraph (35), by striking the pe-
the Clean Air Act (42 U.S.C. 7545(o)(1)), as in ‘‘(3) PREVAILING WAGE REQUIREMENTS.— riod at the end and inserting ‘‘, plus’’, and
effect on the date of enactment of this sec- ‘‘(A) IN GENERAL.—The requirements de- (iii) by adding at the end the following new
tion. scribed in this subparagraph with respect to paragraph:
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00052 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4103
‘‘(36) the clean hydrogen production credit qualified clean hydrogen which is described ‘‘(a) ALLOWANCE OF CREDIT.—In the case of
determined under section 45V(a).’’. in a subparagraph (C) of such section, 2 per- an individual, there shall be allowed as a
(B) The table of sections for subpart D of cent, and credit against the tax imposed by this chap-
part IV of subchapter A of chapter 1, as ‘‘(IV) in the case of a facility which is de- ter for the taxable year an amount equal to
amended by the preceding provisions of this signed and reasonably expected to produce 30 percent of the sum of—
Act, is amended by adding at the end the fol- qualified clean hydrogen which is described ‘‘(1) the amount paid or incurred by the
lowing new item: in subparagraph (D) of such section, 6 per- taxpayer for qualified energy efficiency im-
‘‘Sec. 45V. Credit for production of clean hy- cent. provements installed during such taxable
drogen.’’. ‘‘(B) DENIAL OF PRODUCTION CREDIT.—No year, and
(5) EFFECTIVE DATES.— credit shall be allowed under section 45V or ‘‘(2) the amount of the residential energy
(A) IN GENERAL.—The amendments made section 45Q for any taxable year with respect property expenditures paid or incurred by
by paragraphs (1) and (4) of this subsection to any specified clean hydrogen production the taxpayer during such taxable year.’’.
shall apply to hydrogen produced after De- facility or any carbon capture equipment in-
(c) APPLICATION OF ANNUAL LIMITATION IN
cember 31, 2022. cluded at such facility.
LIEU OF LIFETIME LIMITATION.—Section
(B) CREDIT REDUCED FOR TAX-EXEMPT ‘‘(C) SPECIFIED CLEAN HYDROGEN PRODUC-
25C(b) is amended to read as follows:
BONDS.—The amendment made by paragraph TION FACILITY.—For purposes of this para-
(2) shall apply to facilities the construction graph, the term ‘specified clean hydrogen ‘‘(b) LIMITATIONS.—
of which begins after the date of enactment production facility’ means any qualified ‘‘(1) IN GENERAL.—The credit allowed under
of this Act. clean hydrogen production facility (as de- this section with respect to any taxpayer for
(C) MODIFICATION OF EXISTING FACILITIES.— fined in section 45V(c)(3))— any taxable year shall not exceed $1,200.
The amendment made by paragraph (3) shall ‘‘(i) which is placed in service after Decem- ‘‘(2) ENERGY PROPERTY.—The credit allowed
apply to modifications made after December ber 31, 2022, under this section by reason of subsection
31, 2022. ‘‘(ii) with respect to which— (a)(2) with respect to any taxpayer for any
(b) CREDIT FOR ELECTRICITY PRODUCED ‘‘(I) no credit has been allowed under sec- taxable year shall not exceed, with respect
FROM RENEWABLE RESOURCES ALLOWED IF tion 45V or 45Q, and to any item of qualified energy property,
ELECTRICITY IS USED TO PRODUCE CLEAN HY- ‘‘(II) the taxpayer makes an irrevocable $600.
DROGEN.— election to have this paragraph apply, and ‘‘(3) WINDOWS.—The credit allowed under
(1) IN GENERAL.—Section 45(e), as amended ‘‘(iii) for which an unrelated third party this section by reason of subsection (a)(1)
by the preceding provisions of this Act, is has verified (in such form or manner as the with respect to any taxpayer for any taxable
amended by adding at the end the following Secretary may prescribe) that such facility year shall not exceed, in the aggregate with
new paragraph: produces hydrogen through a process which respect to all exterior windows and sky-
‘‘(13) SPECIAL RULE FOR ELECTRICITY USED results in lifecycle greenhouse gas emissions lights, $600.
AT A QUALIFIED CLEAN HYDROGEN PRODUCTION which are consistent with the hydrogen that ‘‘(4) DOORS.—The credit allowed under this
FACILITY.—Electricity produced by the tax- section by reason of subsection (a)(1) with re-
such facility was designed and expected to
payer shall be treated as sold by such tax- produce under subparagraph (A)(ii). spect to any taxpayer for any taxable year
payer to an unrelated person during the tax- ‘‘(D) QUALIFIED CLEAN HYDROGEN.—For pur- shall not exceed—
able year if— poses of this paragraph, the term ‘qualified ‘‘(A) $250 in the case of any exterior door,
‘‘(A) such electricity is used during such clean hydrogen’ has the meaning given such and
taxable year by the taxpayer or a person re- term by section 45V(c)(2). ‘‘(B) $500 in the aggregate with respect to
lated to the taxpayer at a qualified clean hy- ‘‘(E) REGULATIONS.—The Secretary shall all exterior doors.
drogen production facility (as defined in sec- ‘‘(5) HEAT PUMP AND HEAT PUMP WATER
issue such regulations or other guidance as
tion 45V(c)(3)) to produce qualified clean hy- HEATERS; BIOMASS STOVES AND BOILERS.—Not-
the Secretary determines necessary to carry
drogen (as defined in section 45V(c)(2)), and withstanding paragraphs (1) and (2), the cred-
out the purposes of this section, including
‘‘(B) such use and production is verified (in it allowed under this section by reason of
regulations or other guidance which recap-
such form or manner as the Secretary may
tures so much of any credit allowed under subsection (a)(2) with respect to any tax-
prescribe) by an unrelated third party.’’.
this section as exceeds the amount of the payer for any taxable year shall not, in the
(2) SIMILAR RULE FOR ZERO-EMISSION NU-
credit which would have been allowed if the aggregate, exceed $2,000 with respect to
CLEAR POWER PRODUCTION CREDIT.—Sub-
expected production were consistent with amounts paid or incurred for property de-
section (c)(2) of section 45U, as added by sec-
the actual verified production (or all of the scribed in clauses (i) and (ii) of subsection
tion 13105 of this Act, is amended by striking
credit so allowed in the absence of such (d)(2)(A) and in subsection (d)(2)(B).’’.
‘‘and (5)’’ and inserting ‘‘(5), and (13)’’.
(3) EFFECTIVE DATE.—The amendments verification).’’. (d) MODIFICATIONS RELATED TO QUALIFIED
made by this subsection shall apply to elec- (2) CONFORMING AMENDMENT.—Paragraph ENERGY EFFICIENCY IMPROVEMENTS.—
tricity produced after December 31, 2022. (9)(A)(i) of section 48(a), as added by section (1) STANDARDS FOR ENERGY EFFICIENT
(c) ELECTION TO TREAT CLEAN HYDROGEN 13102, is amended by inserting ‘‘and para- BUILDING ENVELOPE COMPONENTS.—Section
PRODUCTION FACILITIES AS ENERGY PROP- graph (15)’’ after ‘‘paragraphs (1) through 25C(c)(2) is amended by striking ‘‘meets—’’
ERTY.— (8)’’. and all that follows through the period at
(1) IN GENERAL.—Section 48(a), as amended (3) EFFECTIVE DATE.—The amendments the end and inserting the following:
by the preceding provisions of this Act, is made by this subsection shall apply to prop- ‘‘meets—
amended— erty placed in service after December 31, ‘‘(A) in the case of an exterior window or
(A) by redesignating paragraph (15) as 2022, and, for any property the construction skylight, Energy Star most efficient certifi-
paragraph (16), and of which begins prior to January 1, 2023, only cation requirements,
(B) by inserting after paragraph (14) the to the extent of the basis thereof attrib- ‘‘(B) in the case of an exterior door, appli-
following new paragraph: utable to the construction, reconstruction, cable Energy Star requirements, and
‘‘(15) ELECTION TO TREAT CLEAN HYDROGEN or erection after December 31, 2022. ‘‘(C) in the case of any other component,
PRODUCTION FACILITIES AS ENERGY PROP- (d) TERMINATION OF EXCISE TAX CREDIT FOR the prescriptive criteria for such component
ERTY.— HYDROGEN.— established by the most recent International
‘‘(A) IN GENERAL.—In the case of any quali- (1) IN GENERAL.—Section 6426(d)(2) is Energy Conservation Code standard in effect
fied property (as defined in paragraph (5)(D)) amended by striking subparagraph (D) and as of the beginning of the calendar year
which is part of a specified clean hydrogen by redesignating subparagraphs (E), (F), and which is 2 years prior to the calendar year in
production facility— (G) as subparagraphs (D), (E), and (F), re- which such component is placed in service.’’.
‘‘(i) such property shall be treated as en- spectively. (2) ROOFS NOT TREATED AS BUILDING ENVE-
ergy property for purposes of this section, (2) CONFORMING AMENDMENT.—Section
LOPE COMPONENTS.—Section 25C(c)(3) is
and 6426(e)(2) is amended by striking ‘‘(F)’’ and amended by adding ‘‘and’’ at the end of sub-
‘‘(ii) the energy percentage with respect to inserting ‘‘(E)’’. paragraph (B), by striking ‘‘, and’’ at the end
such property is— (3) EFFECTIVE DATE.—The amendments of subparagraph (C) and inserting a period,
‘‘(I) in the case of a facility which is de- made by this subsection shall apply to fuel and by striking subparagraph (D).
signed and reasonably expected to produce sold or used after December 31, 2022. (3) AIR SEALING INSULATION ADDED TO DEFI-
qualified clean hydrogen which is described PART 3—CLEAN ENERGY AND EFFICIENCY NITION OF BUILDING ENVELOPE COMPONENT.—
in a subparagraph (A) of section 45V(b)(2), 1.2 INCENTIVES FOR INDIVIDUALS Section 25C(c)(3)(A) is amended by inserting
percent, SEC. 13301. EXTENSION, INCREASE, AND MODI- ‘‘, including air sealing material or system,’’
dlhill on DSK120RN23PROD with SENATE
‘‘(II) in the case of a facility which is de- FICATIONS OF NONBUSINESS EN- after ‘‘material or system’’.
signed and reasonably expected to produce ERGY PROPERTY CREDIT.
(e) MODIFICATION OF RESIDENTIAL ENERGY
qualified clean hydrogen which is described (a) EXTENSION OF CREDIT.—Section
PROPERTY EXPENDITURES.—Section 25C(d) is
in a subparagraph (B) of such section, 1.5 per- 25C(g)(2) is amended by striking ‘‘December
cent, amended to read as follows:
31, 2021’’ and inserting ‘‘December 31, 2032’’.
‘‘(III) in the case of a facility which is de- (b) ALLOWANCE OF CREDIT.—Section 25C(a) ‘‘(d) RESIDENTIAL ENERGY PROPERTY EX-
signed and reasonably expected to produce is amended to read as follows: PENDITURES.—For purposes of this section—
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00053 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4104 CONGRESSIONAL RECORD — SENATE August 6, 2022
‘‘(1) IN GENERAL.—The term ‘residential en- ‘‘(3) the amount paid or incurred by the agreement with the Secretary which pro-
ergy property expenditures’ means expendi- taxpayer during the taxable year for home vides that such manufacturer will—
tures made by the taxpayer for qualified en- energy audits.’’. ‘‘(A) assign a product identification num-
ergy property which is— (2) LIMITATION.—Section 25C(b), as amend- ber to each item of specified property pro-
‘‘(A) installed on or in connection with a ed by subsection (c), is amended adding at duced by such manufacturer utilizing a
dwelling unit located in the United States the end the following new paragraph: methodology that will ensure that such
and used as a residence by the taxpayer, and ‘‘(6) HOME ENERGY AUDITS.— number (including any alphanumeric) is
‘‘(B) originally placed in service by the ‘‘(A) DOLLAR LIMITATION.—The amount of unique to each such item (by utilizing num-
taxpayer. the credit allowed under this section by rea- bers or letters which are unique to such
Such term includes expenditures for labor son of subsection (a)(3) shall not exceed $150. manufacturer or by such other method as
costs properly allocable to the onsite prepa- ‘‘(B) SUBSTANTIATION REQUIREMENT.—No the Secretary may provide),
ration, assembly, or original installation of credit shall be allowed under this section by ‘‘(B) label such item with such number in
the property. reason of subsection (a)(3) unless the tax- such manner as the Secretary may provide,
‘‘(2) QUALIFIED ENERGY PROPERTY.—The payer includes with the taxpayer’s return of and
term ‘qualified energy property’ means any tax such information or documentation as ‘‘(C) make periodic written reports to the
of the following: the Secretary may require.’’. Secretary (at such times and in such manner
‘‘(A) Any of the following which meet or (3) HOME ENERGY AUDITS.— as the Secretary may provide) of the product
exceed the highest efficiency tier (not in- (A) IN GENERAL.—Section 25C is amended identification numbers so assigned and in-
cluding any advanced tier) established by the by redesignating subsections (e), (f), and (g), cluding such information as the Secretary
Consortium for Energy Efficiency which is in as subsections (f), (g), and (h), respectively, may require with respect to the item of spec-
effect as of the beginning of the calendar and by inserting after subsection (d) the fol- ified property to which such number was so
year in which the property is placed in serv- lowing new subsection: assigned.
ice: ‘‘(e) HOME ENERGY AUDITS.—For purposes ‘‘(4) SPECIFIED PROPERTY.—For purposes of
‘‘(i) An electric or natural gas heat pump of this section, the term ‘home energy audit’ this subsection, the term ‘specified property’
water heater. means an inspection and written report with means any qualified energy property and any
‘‘(ii) An electric or natural gas heat pump. respect to a dwelling unit located in the property described in subparagraph (B) or (C)
‘‘(iii) A central air conditioner. United States and owned or used by the tax- of subsection (c)(3).’’.
‘‘(iv) A natural gas, propane, or oil water payer as the taxpayer’s principal residence (2) OMISSION OF CORRECT PRODUCT IDENTI-
heater. (within the meaning of section 121) which— FICATION NUMBER TREATED AS MATHEMATICAL
‘‘(v) A natural gas, propane, or oil furnace OR CLERICAL ERROR.—Section 6213(g)(2), as
‘‘(1) identifies the most significant and
or hot water boiler. amended by the preceding provisions of this
cost-effective energy efficiency improve-
‘‘(B) A biomass stove or boiler which— Act, is amended—
ments with respect to such dwelling unit, in-
‘‘(i) uses the burning of biomass fuel to (A) in subparagraph (Q), by striking ‘‘and’’
cluding an estimate of the energy and cost
heat a dwelling unit located in the United at the end,
savings with respect to each such improve-
States and used as a residence by the tax- (B) in subparagraph (R), by striking the pe-
ment, and
payer, or to heat water for use in such a riod at the end and inserting ‘‘, and’’, and
‘‘(2) is conducted and prepared by a home
dwelling unit, and
energy auditor that meets the certification (C) by inserting after subparagraph (R) the
‘‘(ii) has a thermal efficiency rating of at
or other requirements specified by the Sec- following:
least 75 percent (measured by the higher
retary in regulations or other guidance (as ‘‘(S) an omission of a correct product iden-
heating value of the fuel).
prescribed by the Secretary not later than tification number required under section
‘‘(C) Any oil furnace or hot water boiler
365 days after the date of the enactment of 25C(h) (relating to credit for nonbusiness en-
which—
this subsection).’’. ergy property) to be included on a return.’’.
‘‘(i) is placed in service after December 31,
(B) CONFORMING AMENDMENT.—Section (h) ENERGY EFFICIENT HOME IMPROVEMENT
2022, and before January 1, 2027, and—
‘‘(I) meets or exceeds 2021 Energy Star effi- 1016(a)(33) is amended by striking ‘‘section CREDIT.—
ciency criteria, and 25C(f)’’ and inserting ‘‘section 25C(g)’’. (1) IN GENERAL.—The heading for section
‘‘(II) is rated by the manufacturer for use (4) LACK OF SUBSTANTIATION TREATED AS 25C is amended by striking ‘‘NONBUSINESS EN-
with fuel blends at least 20 percent of the MATHEMATICAL OR CLERICAL ERROR.—Section ERGY PROPERTY’’ and inserting ‘‘ENERGY EFFI-
volume of which consists of an eligible fuel, 6213(g)(2) is amended— CIENT HOME IMPROVEMENT CREDIT’’.
or (A) in subparagraph (P), by striking ‘‘and’’ (2) CLERICAL AMENDMENT.—The table of
‘‘(ii) is placed in service after December 31, at the end, sections for subpart A of part IV of sub-
2026, and— (B) in subparagraph (Q), by striking the pe- chapter A of chapter 1 is amended by strik-
‘‘(I) achieves an annual fuel utilization ef- riod at the end and inserting ‘‘, and’’, and ing the item relating to section 25C and in-
ficiency rate of not less than 90, and (C) by inserting after subparagraph (Q) the serting after the item relating to section 25B
‘‘(II) is rated by the manufacturer for use following: the following item:
with fuel blends at least 50 percent of the ‘‘(R) an omission of information or docu-
‘‘Sec. 25C. Energy efficient home improve-
volume of which consists of an eligible fuel. mentation required under section
ment credit.’’.
‘‘(D) Any improvement to, or replacement 25C(b)(6)(B) (relating to home energy audits)
to be included on a return.’’. (i) EFFECTIVE DATES.—
of, a panelboard, sub-panelboard, branch cir- (1) IN GENERAL.—Except as otherwise pro-
cuits, or feeders which— (g) IDENTIFICATION NUMBER REQUIREMENT.—
(1) IN GENERAL.—Section 25C, as amended vided by this subsection, the amendments
‘‘(i) is installed in a manner consistent made by this section shall apply to property
with the National Electric Code, by this section, is amended by redesignating
subsection (h) as subsection (i) and by insert- placed in service after December 31, 2022.
‘‘(ii) has a load capacity of not less than (2) EXTENSION OF CREDIT.—The amend-
200 amps, ing after subsection (g) the following new
subsection: ments made by subsection (a) shall apply to
‘‘(iii) is installed in conjunction with— property placed in service after December 31,
‘‘(I) any qualified energy efficiency im- ‘‘(h) PRODUCT IDENTIFICATION NUMBER RE-
2021.
provements, or QUIREMENT.—
(3) IDENTIFICATION NUMBER REQUIREMENT.—
‘‘(II) any qualified energy property de- ‘‘(1) IN GENERAL.—No credit shall be al-
The amendments made by subsection (g)
scribed in subparagraphs (A) through (C) for lowed under subsection (a) with respect to
shall apply to property placed in service
which a credit is allowed under this section any item of specified property placed in serv-
after December 31, 2024.
for expenditures with respect to such prop- ice after December 31, 2024, unless—
erty, and ‘‘(A) such item is produced by a qualified SEC. 13302. RESIDENTIAL CLEAN ENERGY CRED-
manufacturer, and IT.
‘‘(iv) enables the installation and use of
any property described in subclause (I) or (II) ‘‘(B) the taxpayer includes the qualified (a) EXTENSION OF CREDIT.—
of clause (iii). product identification number of such item (1) IN GENERAL.—Section 25D(h) is amended
‘‘(3) ELIGIBLE FUEL.—For purposes of para- on the return of tax for the taxable year. by striking ‘‘December 31, 2023’’ and insert-
graph (2), the term ‘eligible fuel’ means— ‘‘(2) QUALIFIED PRODUCT IDENTIFICATION ing ‘‘December 31, 2034’’.
‘‘(A) biodiesel and renewable diesel (within NUMBER.—For purposes of this section, the (2) APPLICATION OF PHASEOUT.—Section
the meaning of section 40A), and term ‘qualified product identification num- 25D(g) is amended—
‘‘(B) second generation biofuel (within the ber’ means, with respect to any item of spec- (A) in paragraph (2), by striking ‘‘before
meaning of section 40).’’. ified property, the product identification January 1, 2023, 26 percent, and’’ and insert-
dlhill on DSK120RN23PROD with SENATE
(f) HOME ENERGY AUDITS.— number assigned to such item by the quali- ing ‘‘before January 1, 2022, 26 percent,’’, and
(1) IN GENERAL.—Section 25C(a), as amend- fied manufacturer pursuant to the method- (B) by striking paragraph (3) and by insert-
ed by subsection (b), is amended by striking ology referred to in paragraph (3). ing after paragraph (2) the following new
‘‘and’’ at the end of paragraph (1), by strik- ‘‘(3) QUALIFIED MANUFACTURER.—For pur- paragraphs:
ing the period at the end of paragraph (2) and poses of this section, the term ‘qualified ‘‘(3) in the case of property placed in serv-
inserting ‘‘, and’’, and by adding at the end manufacturer’ means any manufacturer of ice after December 31, 2021, and before Janu-
the following new paragraph: specified property which enters into an ary 1, 2033, 30 percent,
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00054 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4105
‘‘(4) in the case of property placed in serv- ‘‘(B) PROPERTY REQUIREMENTS.—In the case ed by striking ‘‘paragraph (2)’’ and inserting
ice after December 31, 2032, and before Janu- of any energy efficient commercial building ‘‘paragraph (1)’’.
ary 1, 2034, 26 percent, and property, energy efficient building retrofit (iii) Paragraph (4) of section 179D(d), as re-
‘‘(5) in the case of property placed in serv- property, or property installed pursuant to a designated by subparagraph (A), is amended
ice after December 31, 2033, and before Janu- qualified retrofit plan, such property shall by striking ‘‘paragraph (3)(B)(iii)’’ and in-
ary 1, 2035, 22 percent.’’. meet the requirements of this subparagraph serting ‘‘paragraph (2)(B)(iii)’’.
(b) RESIDENTIAL CLEAN ENERGY CREDIT FOR if — (iv) Section 179D is amended by striking
BATTERY STORAGE TECHNOLOGY; CERTAIN EX- ‘‘(i) installation of such property begins subsection (f).
PENDITURES DISALLOWED.— prior to the date that is 60 days after the (v) Section 179D(h) is amended by striking
(1) ALLOWANCE OF CREDIT.—Paragraph (6) of Secretary publishes guidance with respect to ‘‘or (d)(1)(A)’’.
section 25D(a) is amended to read as follows: the requirements of paragraphs (4)(A) and (6) ALLOCATION OF DEDUCTION BY CERTAIN
‘‘(6) the qualified battery storage tech- (5), or TAX-EXEMPT ENTITIES.—Paragraph (3) of sec-
nology expenditures,’’. ‘‘(ii) installation of such property satisfies tion 179D(d), as redesignated by paragraph
(2) DEFINITION OF QUALIFIED BATTERY STOR- the requirements of paragraphs (4)(A) and (5)(A), is amended to read as follows:
AGE TECHNOLOGY EXPENDITURE.—Paragraph (5). ‘‘(3) ALLOCATION OF DEDUCTION BY CERTAIN
(6) of section 25D(d) is amended to read as TAX-EXEMPT ENTITIES.—
‘‘(4) PREVAILING WAGE REQUIREMENTS.—
follows: ‘‘(A) IN GENERAL.—The requirements de- ‘‘(A) IN GENERAL.—In the case of energy ef-
‘‘(6) QUALIFIED BATTERY STORAGE TECH- scribed in this subparagraph with respect to ficient commercial building property in-
NOLOGY EXPENDITURE.—The term ‘qualified stalled on or in property owned by a speci-
any property are that the taxpayer shall en-
battery storage technology expenditure’ fied tax-exempt entity, the Secretary shall
sure that any laborers and mechanics em-
means an expenditure for battery storage promulgate regulations or guidance to allow
ployed by the taxpayer or any contractor or
technology which— the allocation of the deduction to the person
subcontractor in the installation of any
‘‘(A) is installed in connection with a primarily responsible for designing the prop-
property shall be paid wages at rates not less
dwelling unit located in the United States erty in lieu of the owner of such property.
than the prevailing rates for construction,
and used as a residence by the taxpayer, and Such person shall be treated as the taxpayer
alteration, or repair of a similar character in
‘‘(B) has a capacity of not less than 3 kilo- for purposes of this section.
the locality in which such property is lo- ‘‘(B) SPECIFIED TAX-EXEMPT ENTITY.—For
watt hours.’’. cated as most recently determined by the
(c) CONFORMING AMENDMENTS.— purposes of this paragraph, the term ‘speci-
Secretary of Labor, in accordance with sub- fied tax-exempt entity’ means—
(1) Section 25D(d)(3) is amended by insert- chapter IV of chapter 31 of title 40, United
ing ‘‘, without regard to subparagraph (D) ‘‘(i) the United States, any State or polit-
States Code. ical subdivision thereof, any possession of
thereof’’ after ‘‘section 48(c)(1)’’. ‘‘(B) CORRECTION AND PENALTY RELATED TO
(2) The heading for section 25D is amended the United States, or any agency or instru-
FAILURE TO SATISFY WAGE REQUIREMENTS.— mentality of any of the foregoing,
by striking ‘‘ENERGY EFFICIENT PROPERTY’’ Rules similar to the rules of section
and inserting ‘‘CLEAN ENERGY CREDIT’’. ‘‘(ii) an Indian tribal government (as de-
45(b)(7)(B) shall apply. fined in section 30D(g)(9)) or Alaska Native
(3) The table of sections for subpart A of ‘‘(5) APPRENTICESHIP REQUIREMENTS.—Rules
part IV of subchapter A of chapter 1 is Corporation (as defined in section 3 of the
similar to the rules of section 45(b)(8) shall Alaska Native Claims Settlement Act (43
amended by striking the item relating to apply.
section 25D and inserting the following: U.S.C. 1602(m)), and
‘‘(6) REGULATIONS.—The Secretary shall ‘‘(iii) any organization exempt from tax
‘‘Sec. 25D. Residential clean energy credit.’’. issue such regulations or other guidance as imposed by this chapter.’’.
(d) EFFECTIVE DATES.— the Secretary determines necessary to carry (7) ALTERNATIVE DEDUCTION FOR ENERGY EF-
(1) IN GENERAL.—Except as provided in out the purposes of this subsection, includ- FICIENT BUILDING RETROFIT PROPERTY.—Sec-
paragraph (2), the amendments made by this ing regulations or other guidance which pro- tion 179D, as amended by the preceding pro-
section shall apply to expenditures made vides for requirements for recordkeeping or visions of this section, is amended by insert-
after December 31, 2021. information reporting for purposes of admin- ing after subsection (e) the following new
(2) RESIDENTIAL CLEAN ENERGY CREDIT FOR istering the requirements of this sub- subsection:
BATTERY STORAGE TECHNOLOGY; CERTAIN EX- section.’’. ‘‘(f) ALTERNATIVE DEDUCTION FOR ENERGY
PENDITURES DISALLOWED.—The amendments (2) MODIFICATION OF EFFICIENCY STAND- EFFICIENT BUILDING RETROFIT PROPERTY.—
made by subsection (b) shall apply to expend- ARD.—Section 179D(c)(1)(D) is amended by ‘‘(1) IN GENERAL.—In the case of a taxpayer
itures made after December 31, 2022. striking ‘‘50 percent’’ and inserting ‘‘25 per- which elects (at such time and in such man-
SEC. 13303. ENERGY EFFICIENT COMMERCIAL cent’’. ner as the Secretary may provide) the appli-
BUILDINGS DEDUCTION. (3) REFERENCE STANDARD.—Section cation of this subsection with respect to any
(a) IN GENERAL.— 179D(c)(2) is amended by striking ‘‘the most qualified building, there shall be allowed as
(1) MAXIMUM AMOUNT OF DEDUCTION.—Sub- recent’’ and inserting the following: ‘‘the a deduction for the taxable year which in-
section (b) of section 179D is amended to read more recent of— cludes the date of the qualifying final certifi-
as follows: ‘‘(A) Standard 90.1-2007 published by the cation with respect to the qualified retrofit
‘‘(b) MAXIMUM AMOUNT OF DEDUCTION.— American Society of Heating, Refrigerating, plan of such building, an amount equal to
‘‘(1) IN GENERAL.—The deduction under sub- and Air Conditioning Engineers and the Illu- the lesser of—
section (a) with respect to any building for minating Engineering Society of North ‘‘(A) the excess described in subsection (b)
any taxable year shall not exceed the excess America, or (determined by substituting ‘energy use in-
(if any) of— ‘‘(B) the most recent’’. tensity’ for ‘total annual energy and power
‘‘(A) the product of— (4) FINAL DETERMINATION; EXTENSION OF PE- costs’ in paragraph (2) thereof), or
‘‘(i) the applicable dollar value, and RIOD; PLACED IN SERVICE DEADLINE.—Subpara- ‘‘(B) the aggregate adjusted basis (deter-
‘‘(ii) the square footage of the building, graph (B) of section 179D(c)(2), as amended mined after taking into account all adjust-
over by paragraph (3), is amended— ments with respect to such taxable year
‘‘(B) the aggregate amount of the deduc- (A) by inserting ‘‘for which the Depart- other than the reduction under subsection
tions under subsections (a) and (f) with re- ment of Energy has issued a final determina- (e)) of energy efficient building retrofit prop-
spect to the building for the 3 taxable years tion and’’ before ‘‘which has been affirmed’’, erty placed in service by the taxpayer pursu-
immediately preceding such taxable year (or, (B) by striking ‘‘2 years’’ and inserting ‘‘4 ant to such qualified retrofit plan.
in the case of any such deduction allowable years’’, and ‘‘(2) QUALIFIED RETROFIT PLAN.—For pur-
to a person other than the taxpayer, for any (C) by striking ‘‘that construction of such poses of this subsection, the term ‘qualified
taxable year ending during the 4-taxable- property begins’’ and inserting ‘‘such prop- retrofit plan’ means a written plan prepared
year period ending with such taxable year). erty is placed in service’’. by a qualified professional which specifies
‘‘(2) APPLICABLE DOLLAR VALUE.—For pur- (5) ELIMINATION OF PARTIAL ALLOWANCE.— modifications to a building which, in the ag-
poses of paragraph (1)(A)(i), the applicable (A) IN GENERAL.—Section 179D(d) is amend- gregate, are expected to reduce such build-
dollar value shall be an amount equal to ed— ing’s energy use intensity by 25 percent or
$0.50 increased (but not above $1.00) by $0.02 (i) by striking paragraph (1), and more in comparison to the baseline energy
for each percentage point by which the total (ii) by redesignating paragraphs (2) use intensity of such building. Such plan
annual energy and power costs for the build- through (6) as paragraphs (1) through (5), re- shall provide for a qualified professional to—
ing are certified to be reduced by a percent- spectively. ‘‘(A) as of any date during the 1-year pe-
age greater than 25 percent. (B) CONFORMING AMENDMENTS.— riod ending on the date on which the prop-
dlhill on DSK120RN23PROD with SENATE
‘‘(3) INCREASED DEDUCTION AMOUNT FOR CER- (i) Section 179D(c)(1)(D) is amended— erty installed pursuant to such plan is placed
TAIN PROPERTY.— (I) by striking ‘‘subsection (d)(6)’’ and in- in service, certify the energy use intensity of
‘‘(A) IN GENERAL.—In the case of any prop- serting ‘‘subsection (d)(5)’’, and such building as of such date,
erty which satisfies the requirements of sub- (II) by striking ‘‘subsection (d)(2)’’ and in- ‘‘(B) certify the status of property in-
paragraph (B), paragraph (2) shall be applied serting ‘‘subsection (d)(1)’’. stalled pursuant to such plan as meeting the
by substituting ‘$2.50’ for ‘$0.50’, ‘$.10’ for (ii) Paragraph (2)(A) of section 179D(d), as requirements of subparagraphs (B) and (C) of
‘$.02’, and ‘$5.00’ for ‘$1.00’. redesignated by subparagraph (A), is amend- paragraph (3), and
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00055 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4106 CONGRESSIONAL RECORD — SENATE August 6, 2022
‘‘(C) as of any date that is more than 1 year (1) by striking ‘‘For purposes of computing the zero energy ready home program of the
after the date on which the property in- the earnings and profits of a corporation’’ Department of Energy as in effect on Janu-
stalled pursuant to such plan is placed in and inserting the following: ary 1, 2023 (or any successor program deter-
service, certify the energy use intensity of ‘‘(i) IN GENERAL.—For purposes of com- mined by the Secretary).
such building as of such date. puting the earnings and profits of a corpora- ‘‘(2) SINGLE-FAMILY HOME REQUIREMENTS.—
‘‘(3) ENERGY EFFICIENT BUILDING RETROFIT tion, except as provided in clause (ii)’’, and A dwelling unit meets the requirements of
PROPERTY.—For purposes of this subsection, (2) by adding at the end the following new this paragraph if—
the term ‘energy efficient building retrofit clause: ‘‘(A) such dwelling unit meets—
property’ means property— ‘‘(ii) SPECIAL RULE.—In the case of a cor- ‘‘(i)(I) in the case of a dwelling unit ac-
‘‘(A) with respect to which depreciation (or poration that is a real estate investment quired before January 1, 2025, the Energy
amortization in lieu of depreciation) is al- trust, any amount deductible under section Star Single-Family New Homes National
lowable, 179D shall be allowed in the year in which Program Requirements 3.1, or
‘‘(B) which is installed on or in any quali- the property giving rise to such deduction is ‘‘(II) in the case of a dwelling unit acquired
fied building, placed in service (or, in the case of energy ef- after December 31, 2024, the Energy Star Sin-
‘‘(C) which is installed as part of— ficient building retrofit property, the year in gle-Family New Homes National Program
‘‘(i) the interior lighting systems, which the qualifying final certification is Requirements 3.2, and
‘‘(ii) the heating, cooling, ventilation, and made).’’. ‘‘(ii) the most recent Energy Star Single-
hot water systems, or (c) CONFORMING AMENDMENT.—Paragraph Family New Homes Program Requirements
‘‘(iii) the building envelope, and (1) of section 179D(d), as redesignated by sub- applicable to the location of such dwelling
‘‘(D) which is certified in accordance with section (a)(5)(A), is amended by striking ‘‘not unit (as in effect on the latter of January 1,
paragraph (2)(B) as meeting the require- later than the date that is 2 years before the 2023, or January 1 of two calendar years prior
ments of subparagraphs (B) and (C). date that construction of such property be- to the date the dwelling unit was acquired),
‘‘(4) QUALIFIED BUILDING.—For purposes of gins’’ and inserting ‘‘not later than the date or
this subsection, the term ‘qualified building’ that is 4 years before the date such property ‘‘(B) such dwelling unit meets the most re-
means any building which— is placed in service’’. cent Energy Star Manufactured Home Na-
‘‘(A) is located in the United States, and (d) EFFECTIVE DATE.— tional program requirements as in effect on
‘‘(B) was originally placed in service not (1) IN GENERAL.—Except as otherwise pro- the latter of January 1, 2023, or January 1 of
less than 5 years before the establishment of vided in this subsection, the amendments two calendar years prior to the date such
the qualified retrofit plan with respect to made by this section shall apply to taxable dwelling unit is acquired.
such building. years beginning after December 31, 2022. ‘‘(3) MULTI-FAMILY HOME REQUIREMENTS.—A
‘‘(5) QUALIFYING FINAL CERTIFICATION.—For (2) ALTERNATIVE DEDUCTION FOR ENERGY EF- dwelling unit meets the requirements of this
purposes of this subsection, the term ‘quali- FICIENT BUILDING RETROFIT PROPERTY.—Sub- paragraph if—
fying final certification’ means, with respect section (f) of section 179D of the Internal ‘‘(A) such dwelling unit meets the most re-
to any qualified retrofit plan, the certifi- Revenue Code of 1986 (as amended by this cent Energy Star Multifamily New Construc-
cation described in paragraph (2)(C) if the en- section), and any other provision of such sec- tion National Program Requirements (as in
ergy use intensity certified in such certifi- tion solely for purposes of applying such sub- effect on either January 1, 2023, or January 1
cation is not more than 75 percent of the section, shall apply to property placed in of three calendar years prior to the date the
baseline energy use intensity of the building. service after December 31, 2022 (in taxable dwelling was acquired, whichever is later),
‘‘(6) BASELINE ENERGY USE INTENSITY.— years ending after such date) if such prop- and
‘‘(A) IN GENERAL.—For purposes of this sub- erty is placed in service pursuant to quali- ‘‘(B) such dwelling unit meets the most re-
section, the term ‘baseline energy use inten- fied retrofit plan (within the meaning of cent Energy Star Multifamily New Construc-
sity’ means the energy use intensity cer- such section) established after such date. tion Regional Program Requirements appli-
tified under paragraph (2)(A), as adjusted to SEC. 13304. EXTENSION, INCREASE, AND MODI- cable to the location of such dwelling unit
take into account weather. FICATIONS OF NEW ENERGY EFFI- (as in effect on either January 1, 2023, or Jan-
‘‘(B) DETERMINATION OF ADJUSTMENT.—For CIENT HOME CREDIT. uary 1 of three calendar years prior to the
purposes of subparagraph (A), the adjust- (a) EXTENSION OF CREDIT.—Section 45L(g) date the dwelling was acquired, whichever is
ments described in such subparagraph shall is amended by striking ‘‘December 31, 2021’’ later).’’.
be determined in such manner as the Sec- and inserting ‘‘December 31, 2032’’. (d) PREVAILING WAGE REQUIREMENT.—Sec-
retary may provide. (b) INCREASE IN CREDIT AMOUNTS.—Para- tion 45L is amended by redesignating sub-
‘‘(7) OTHER DEFINITIONS.—For purposes of graph (2) of section 45L(a) is amended to read section (g) as subsection (h) and by inserting
this subsection— as follows: after subsection (f) the following new sub-
‘‘(A) ENERGY USE INTENSITY.—The term ‘en- ‘‘(2) APPLICABLE AMOUNT.—For purposes of section:
ergy use intensity’ means the annualized, paragraph (1), the applicable amount is an ‘‘(g) PREVAILING WAGE REQUIREMENT.—
measured site energy use intensity deter- amount equal to— ‘‘(1) IN GENERAL.—In the case of a quali-
mined in accordance with such regulations ‘‘(A) in the case of a dwelling unit which is fying residence described in subsection
or other guidance as the Secretary may pro- eligible to participate in the Energy Star (a)(2)(B) meeting the prevailing wage re-
vide and measured in British thermal units. Residential New Construction Program or quirements of paragraph (2)(A), the credit
‘‘(B) QUALIFIED PROFESSIONAL.—The term the Energy Star Manufactured New Homes amount allowed with respect to such resi-
‘qualified professional’ means an individual program— dence shall be—
who is a licensed architect or a licensed en- ‘‘(i) which meets the requirements of sub- ‘‘(A) $2,500 in the case of a residence which
gineer and meets such other requirements as section (c)(1)(A) (and which does not meet meets the requirements of subparagraph (A)
the Secretary may provide. the requirements of subsection (c)(1)(B)), of subsection (c)(1) (and which does not meet
‘‘(8) COORDINATION WITH DEDUCTION OTHER- $2,500, and the requirements of subparagraph (B) of such
WISE ALLOWED UNDER SUBSECTION (a).— ‘‘(ii) which meets the requirements of sub- subsection), and
‘‘(A) IN GENERAL.—In the case of any build- section (c)(1)(B), $5,000, and ‘‘(B) $5,000 in the case of a residence which
ing with respect to which an election is made ‘‘(B) in the case of a dwelling unit which is meets the requirements of subsection
under paragraph (1), the term ‘energy effi- part of a building eligible to participate in (c)(1)(B).
cient commercial building property’ shall the Energy Star Multifamily New Construc- ‘‘(2) PREVAILING WAGE REQUIREMENTS.—
not include any energy efficient building ret- tion Program— ‘‘(A) IN GENERAL.—The requirements de-
rofit property with respect to which a deduc- ‘‘(i) which meets the requirements of sub- scribed in this subparagraph with respect to
tion is allowable under this subsection. section (c)(1)(A) (and which does not meet any qualified residence are that the taxpayer
‘‘(B) CERTAIN RULES NOT APPLICABLE.— the requirements of subsection (c)(1)(B)), shall ensure that any laborers and mechanics
‘‘(i) IN GENERAL.—Except as provided in $500, and employed by the taxpayer or any contractor
clause (ii), subsection (d) shall not apply for ‘‘(ii) which meets the requirements of sub- or subcontractor in the construction of such
purposes of this subsection. section (c)(1)(B), $1,000.’’. residence shall be paid wages at rates not
‘‘(ii) ALLOCATION OF DEDUCTION BY CERTAIN (c) MODIFICATION OF ENERGY SAVING RE- less than the prevailing rates for construc-
TAX-EXEMPT ENTITIES.—Rules similar to sub- QUIREMENTS.—Section 45L(c) is amended to tion, alteration, or repair of a similar char-
section (d)(3) shall apply for purposes of this read as follows: acter in the locality in which such residence
subsection.’’. ‘‘(c) ENERGY SAVING REQUIREMENTS.— is located as most recently determined by
(8) INFLATION ADJUSTMENT.—Section ‘‘(1) IN GENERAL.— the Secretary of Labor, in accordance with
179D(g) is amended— ‘‘(A) IN GENERAL.—A dwelling unit meets subchapter IV of chapter 31 of title 40,
dlhill on DSK120RN23PROD with SENATE
(A) by striking ‘‘2020’’ and inserting ‘‘2022’’, the requirements of this subparagraph if United States Code.
(B) by striking ‘‘or subsection (d)(1)(A)’’, such dwelling unit meets the requirements of ‘‘(B) CORRECTION AND PENALTY RELATED TO
and paragraph (2) or (3) (whichever is applicable). FAILURE TO SATISFY WAGE REQUIREMENTS.—
(C) by striking ‘‘2019’’ and inserting ‘‘2021’’. ‘‘(B) ZERO ENERGY READY HOME PROGRAM.— Rules similar to the rules of section
(b) APPLICATION TO REAL ESTATE INVEST- A dwelling unit meets the requirements of 45(b)(7)(B) shall apply.
MENT TRUST EARNINGS AND PROFITS.—Sec- this subparagraph if such dwelling unit is ‘‘(3) REGULATIONS AND GUIDANCE.—The Sec-
tion 312(k)(3)(B) is amended— certified as a zero energy ready home under retary shall issue such regulations or other
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00056 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4107
guidance as the Secretary determines nec- ‘‘(ii) the vehicle identification number of ‘‘(iv) in the case of a vehicle placed in serv-
essary to carry out the purposes of this sub- the vehicle, unless, in accordance with any ice during calendar year 2026, 70 percent, and
section, including regulations or other guid- applicable rules promulgated by the Sec- ‘‘(v) in the case of a vehicle placed in serv-
ance which provides for requirements for rec- retary of Transportation, the vehicle is not ice after December 31, 2026, 80 percent.
ordkeeping or information reporting for pur- assigned such a number, ‘‘(2) BATTERY COMPONENTS.—
poses of administering the requirements of ‘‘(iii) the battery capacity of the vehicle, ‘‘(A) IN GENERAL.—The requirement de-
this subsection.’’. ‘‘(iv) verification that original use of the scribed in this subparagraph with respect to
(e) BASIS ADJUSTMENT.—Section 45L(e) is vehicle commences with the taxpayer, and a vehicle is that, with respect to the battery
amended by inserting after the first sentence ‘‘(v) the maximum credit under this sec- from which the electric motor of such vehi-
the following: ‘‘This subsection shall not tion allowable to the taxpayer with respect cle draws electricity, the percentage of the
apply for purposes of determining the ad- to the vehicle.’’, value of the components contained in such
justed basis of any building under section (C) in paragraph (3)— battery that were manufactured or assem-
42.’’. (i) in the heading, by striking ‘‘MANUFAC- bled in North America is equal to or greater
(f) EFFECTIVE DATES.— TURER’’ and inserting ‘‘QUALIFIED MANUFAC- than the applicable percentage (as certified
(1) IN GENERAL.—Except as provided in TURER’’, by the qualified manufacturer, in such form
paragraph (2), the amendments made by this (ii) by striking ‘‘The term ‘manufacturer’ or manner as prescribed by the Secretary).
section shall apply to dwelling units ac- has the meaning given such term in’’ and in- ‘‘(B) APPLICABLE PERCENTAGE.—For pur-
quired after December 31, 2022. serting ‘‘The term ‘qualified manufacturer’ poses of subparagraph (A), the applicable
(2) EXTENSION OF CREDIT.—The amend- means any manufacturer (within the mean-
percentage shall be—
ments made by subsection (a) shall apply to ing of the’’, and
‘‘(i) in the case of a vehicle placed in serv-
dwelling units acquired after December 31, (iii) by inserting ‘‘) which enters into a
ice after the date on which the proposed
2021. written agreement with the Secretary under
guidance described in paragraph (3)(B) is
PART 4—CLEAN VEHICLES which such manufacturer agrees to make
issued by the Secretary and before January
periodic written reports to the Secretary (at
SEC. 13401. CLEAN VEHICLE CREDIT.
such times and in such manner as the Sec- 1, 2024, 50 percent,
(a) PER VEHICLE DOLLAR LIMITATION.—Sec- retary may provide) providing vehicle identi- ‘‘(ii) in the case of a vehicle placed in serv-
tion 30D(b) is amended by striking para- fication numbers and such other information ice during calendar year 2024 or 2025, 60 per-
graphs (2) and (3) and inserting the following: related to each vehicle manufactured by cent,
‘‘(2) CRITICAL MINERALS.—In the case of a such manufacturer as the Secretary may re- ‘‘(iii) in the case of a vehicle placed in
vehicle with respect to which the require- quire’’ before the period at the end, and service during calendar year 2026, 70 percent,
ment described in subsection (e)(1)(A) is sat- (D) by adding at the end the following: ‘‘(iv) in the case of a vehicle placed in serv-
isfied, the amount determined under this ‘‘(6) NEW QUALIFIED FUEL CELL MOTOR VEHI- ice during calendar year 2027, 80 percent,
paragraph is $3,750. CLE.—For purposes of this section, the term ‘‘(v) in the case of a vehicle placed in serv-
‘‘(3) BATTERY COMPONENTS.—In the case of ‘new clean vehicle’ shall include any new ice during calendar year 2028, 90 percent,
a vehicle with respect to which the require- qualified fuel cell motor vehicle (as defined ‘‘(vi) in the case of a vehicle placed in serv-
ment described in subsection (e)(2)(A) is sat- in section 30B(b)(3)) which meets the require- ice after December 31, 2028, 100 percent.
isfied, the amount determined under this ments under subparagraphs (G) and (H) of ‘‘(3) REGULATIONS AND GUIDANCE.—
paragraph is $3,750.’’. paragraph (1).’’. ‘‘(A) IN GENERAL.—The Secretary shall
(b) FINAL ASSEMBLY.—Section 30D(d) is (2) CONFORMING AMENDMENTS.—Section 30D issue such regulations or other guidance as
amended— is amended— the Secretary determines necessary to carry
(1) in paragraph (1)— (A) in subsection (a), by striking ‘‘new out the purposes of this subsection, includ-
(A) in subparagraph (E), by striking ‘‘and’’ qualified plug-in electric drive motor vehi- ing regulations or other guidance which pro-
at the end, cle’’ and inserting ‘‘new clean vehicle’’, and vides for requirements for recordkeeping or
(B) in subparagraph (F)(ii), by striking the (B) in subsection (b)(1), by striking ‘‘new information reporting for purposes of admin-
period at the end and inserting ‘‘, and’’, and qualified plug-in electric drive motor vehi- istering the requirements of this subsection.
(C) by adding at the end the following: cle’’ and inserting ‘‘new clean vehicle’’. ‘‘(B) DEADLINE FOR PROPOSED GUIDANCE.—
‘‘(G) the final assembly of which occurs (d) ELIMINATION OF LIMITATION ON NUMBER Not later than December 31, 2022, the Sec-
within North America.’’, OF VEHICLES ELIGIBLE FOR CREDIT.—Section retary shall issue proposed guidance with re-
(2) by adding at the end the following: 30D is amended by striking subsection (e). spect to the requirements under this sub-
‘‘(5) FINAL ASSEMBLY.—For purposes of (e) CRITICAL MINERAL AND BATTERY COMPO- section.’’.
paragraph (1)(G), the term ‘final assembly’ NENT REQUIREMENTS.— (2) EXCLUDED ENTITIES.—Section 30D(d), as
means the process by which a manufacturer (1) IN GENERAL.—Section 30D, as amended amended by the preceding provisions of this
produces a new clean vehicle at, or through by the preceding provisions of this section, is section, is amended by adding at the end the
the use of, a plant, factory, or other place amended by inserting after subsection (d) the following:
from which the vehicle is delivered to a deal- following: ‘‘(7) EXCLUDED ENTITIES.—For purposes of
er or importer with all component parts nec- ‘‘(e) CRITICAL MINERAL AND BATTERY COM- this section, the term ‘new clean vehicle’
essary for the mechanical operation of the PONENT REQUIREMENTS.—
shall not include—
vehicle included with the vehicle, whether or ‘‘(1) CRITICAL MINERALS REQUIREMENT.—
‘‘(A) any vehicle placed in service after De-
not the component parts are permanently in- ‘‘(A) IN GENERAL.—The requirement de-
cember 31, 2024, with respect to which any of
stalled in or on the vehicle.’’. scribed in this subparagraph with respect to
the applicable critical minerals contained in
(c) DEFINITION OF NEW CLEAN VEHICLE.— a vehicle is that, with respect to the battery
the battery of such vehicle (as described in
(1) IN GENERAL.—Section 30D(d), as amend- from which the electric motor of such vehi-
subsection (e)(1)(A)) were extracted, proc-
ed by the preceding provisions of this sec- cle draws electricity, the percentage of the
essed, or recycled by a foreign entity of con-
tion, is amended— value of the applicable critical minerals (as
cern (as defined in section 40207(a)(5) of the
(A) in the heading, by striking ‘‘QUALIFIED defined in section 45X(c)(6)) contained in
Infrastructure Investment and Jobs Act (42
PLUG-IN ELECTRIC DRIVE MOTOR’’ and insert- such battery that were—
U.S.C. 18741(a)(5))), or
ing ‘‘CLEAN’’, ‘‘(i) extracted or processed—
‘‘(B) any vehicle placed in service after De-
(B) in paragraph (1)— ‘‘(I) in the United States, or
cember 31, 2023, with respect to which any of
(i) in the matter preceding subparagraph ‘‘(II) in any country with which the United
the components contained in the battery of
(A), by striking ‘‘qualified plug-in electric States has a free trade agreement in effect,
such vehicle (as described in subsection
drive motor’’ and inserting ‘‘clean’’, or
(e)(2)(A)) were manufactured or assembled by
(ii) in subparagraph (C), by inserting ‘‘(ii) recycled in North America,
a foreign entity of concern (as so defined).’’.
‘‘qualified’’ before ‘‘manufacturer’’, is equal to or greater than the applicable
(iii) in subparagraph (F)— percentage (as certified by the qualified (f) SPECIAL RULES.—Section 30D(f) is
(I) in clause (i), by striking ‘‘4’’ and insert- manufacturer, in such form or manner as amended by adding at the end the following:
ing ‘‘7’’, and prescribed by the Secretary). ‘‘(8) ONE CREDIT PER VEHICLE.—In the case
(II) in clause (ii), by striking ‘‘and’’ at the ‘‘(B) APPLICABLE PERCENTAGE.—For pur- of any vehicle, the credit described in sub-
end, poses of subparagraph (A), the applicable section (a) shall only be allowed once with
(iv) in subparagraph (G), by striking the percentage shall be— respect to such vehicle, as determined based
period at the end and inserting ‘‘, and’’, and ‘‘(i) in the case of a vehicle placed in serv- upon the vehicle identification number of
(v) by adding at the end the following: ice after the date on which the proposed such vehicle.
dlhill on DSK120RN23PROD with SENATE
‘‘(H) for which the person who sells any ve- guidance described in paragraph (3)(B) is ‘‘(9) VIN REQUIREMENT.—No credit shall be
hicle to the taxpayer furnishes a report to issued by the Secretary and before January allowed under this section with respect to
the taxpayer and to the Secretary, at such 1, 2024, 40 percent, any vehicle unless the taxpayer includes the
time and in such manner as the Secretary ‘‘(ii) in the case of a vehicle placed in serv- vehicle identification number of such vehicle
shall provide, containing— ice during calendar year 2024, 50 percent, on the return of tax for the taxable year.
‘‘(i) the name and taxpayer identification ‘‘(iii) in the case of a vehicle placed in ‘‘(10) LIMITATION BASED ON MODIFIED AD-
number of the taxpayer, service during calendar year 2025, 60 percent, JUSTED GROSS INCOME.—
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00057 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4108 CONGRESSIONAL RECORD — SENATE August 6, 2022
‘‘(A) IN GENERAL.—No credit shall be al- ‘‘(iii) the amount provided by the dealer to ment Act (43 U.S.C. 1602(m)) to engage in the
lowed under subsection (a) for any taxable such taxpayer as a condition of the election sale of vehicles.
year if— described in paragraph (1), ‘‘(9) INDIAN TRIBAL GOVERNMENT.—For pur-
‘‘(i) the lesser of— ‘‘(C) not later than at the time of such poses of this subsection, the term ‘Indian
‘‘(I) the modified adjusted gross income of sale, made payment to such taxpayer tribal government’ means the recognized
the taxpayer for such taxable year, or (whether in cash or in the form of a partial governing body of any Indian or Alaska Na-
‘‘(II) the modified adjusted gross income of payment or down payment for the purchase tive tribe, band, nation, pueblo, village, com-
the taxpayer for the preceding taxable year, of such vehicle) in an amount equal to the munity, component band, or component res-
exceeds credit otherwise allowable to such taxpayer, ervation, individually identified (including
‘‘(ii) the threshold amount. and parenthetically) in the list published most
‘‘(B) THRESHOLD AMOUNT.—For purposes of ‘‘(D) with respect to any incentive other- recently as of the date of enactment of this
subparagraph (A)(ii), the threshold amount wise available for the purchase of a vehicle subsection pursuant to section 104 of the
shall be— for which a credit is allowed under this sec- Federally Recognized Indian Tribe List Act
‘‘(i) in the case of a joint return or a sur- tion, including any incentive in the form of of 1994 (25 U.S.C. 5131).
viving spouse (as defined in section 2(a)), a rebate or discount provided by the dealer ‘‘(10) RECAPTURE.—In the case of any tax-
$300,000, or manufacturer, ensured that— payer who has made an election described in
‘‘(ii) in the case of a head of household (as ‘‘(i) the availability or use of such incen- paragraph (1) with respect to a new clean ve-
defined in section 2(b)), $225,000, and tive shall not limit the ability of a taxpayer hicle and received a payment described in
‘‘(iii) in the case of a taxpayer not de- to make an election described in paragraph paragraph (2)(C) from an eligible entity, if
scribed in clause (i) or (ii), $150,000. (1), and the credit under subsection (a) would other-
‘‘(C) MODIFIED ADJUSTED GROSS INCOME.— ‘‘(ii) such election shall not limit the value wise (but for this subsection) not be allow-
For purposes of this paragraph, the term or use of such incentive. able to such taxpayer pursuant to the appli-
‘modified adjusted gross income’ means ad- ‘‘(3) TIMING.—An election described in cation of subsection (f)(10), the tax imposed
justed gross income increased by any paragraph (1) shall be made by the taxpayer on such taxpayer under this chapter for the
amount excluded from gross income under not later than the date on which the vehicle taxable year in which such vehicle was
section 911, 931, or 933. for which the credit is allowed under sub- placed in service shall be increased by the
‘‘(11) MANUFACTURER’S SUGGESTED RETAIL section (a) is purchased. amount of the payment received by such tax-
PRICE LIMITATION.— ‘‘(4) REVOCATION OF REGISTRATION.—Upon payer.’’.
‘‘(A) IN GENERAL.—No credit shall be al- determination by the Secretary that a dealer (2) CONFORMING AMENDMENTS.—Section 30D,
lowed under subsection (a) for a vehicle with has failed to comply with the requirements as amended by the preceding provisions of
a manufacturer’s suggested retail price in described in paragraph (2), the Secretary this section, is amended—
excess of the applicable limitation. may revoke the registration (as described in (A) in subsection (d)(1)(H) of such section—
‘‘(B) APPLICABLE LIMITATION.—For purposes subparagraph (A) of such paragraph) of such (i) in clause (iv), by striking ‘‘and’’ at the
of subparagraph (A), the applicable limita- dealer. end,
tion for each vehicle classification is as fol- ‘‘(5) TAX TREATMENT OF PAYMENTS.—With (ii) in clause (v), by striking the period at
lows: respect to any payment described in para- the end and inserting ‘‘, and’’, and
graph (2)(C), such payment— (iii) by adding at the end the following:
‘‘(i) VANS.—In the case of a van, $80,000.
‘‘(A) shall not be includible in the gross in- ‘‘(vi) in the case of a taxpayer who makes
‘‘(ii) SPORT UTILITY VEHICLES.—In the case
come of the taxpayer, and an election under subsection (g)(1), any
of a sport utility vehicle, $80,000.
‘‘(B) with respect to the dealer, shall not amount described in subsection (g)(2)(C)
‘‘(iii) PICKUP TRUCKS.—In the case of a
be deductible under this title. which has been provided to such taxpayer.’’,
pickup truck, $80,000.
‘‘(6) APPLICATION OF CERTAIN OTHER RE- and
‘‘(iv) OTHER.—In the case of any other vehi-
QUIREMENTS.—In the case of any election (B) in subsection (f)—
cle, $55,000.
under paragraph (1) with respect to any vehi- (i) by striking paragraph (3), and
‘‘(C) REGULATIONS AND GUIDANCE.—For pur-
cle— (ii) in paragraph (8), by inserting ‘‘, includ-
poses of this paragraph, the Secretary shall
‘‘(A) the requirements of paragraphs (1) ing any vehicle with respect to which the
prescribe such regulations or other guidance
and (2) of subsection (f) shall apply to the taxpayer elects the application of subsection
as the Secretary determines necessary for
taxpayer who acquired the vehicle in the (g)’’ before the period at the end.
determining vehicle classifications using cri-
teria similar to that employed by the Envi- same manner as if the credit determined (h) TERMINATION.—Section 30D is amended
ronmental Protection Agency and the De- under this section with respect to such vehi- by adding at the end the following:
partment of the Energy to determine size cle were allowed to such taxpayer, ‘‘(h) TERMINATION.—No credit shall be al-
and class of vehicles.’’. ‘‘(B) paragraph (6) of such subsection shall lowed under this section with respect to any
not apply, and vehicle placed in service after December 31,
(g) TRANSFER OF CREDIT.— ‘‘(C) the requirement of paragraph (9) of 2032.’’.
(1) IN GENERAL.—Section 30D is amended by such subsection (f) shall be treated as satis- (i) ADDITIONAL CONFORMING AMENDMENTS.—
striking subsection (g) and inserting the fol- fied if the eligible entity provides the vehicle (1) The heading of section 30D is amended
lowing: identification number of such vehicle to the by striking ‘‘NEW QUALIFIED PLUG-IN ELECTRIC
‘‘(g) TRANSFER OF CREDIT.— Secretary in such manner as the Secretary DRIVE MOTOR VEHICLES’’ and inserting ‘‘CLEAN
‘‘(1) IN GENERAL.—Subject to such regula- may provide. VEHICLE CREDIT’’.
tions or other guidance as the Secretary de- ‘‘(7) ADVANCE PAYMENT TO REGISTERED (2) Section 30B is amended—
termines necessary, if the taxpayer who ac- DEALERS.— (A) in subsection (h)(8), by striking ‘‘, ex-
quires a new clean vehicle elects the applica- ‘‘(A) IN GENERAL.—The Secretary shall es- cept that no benefit shall be recaptured if
tion of this subsection with respect to such tablish a program to make advance pay- such property ceases to be eligible for such
vehicle, the credit which would (but for this ments to any eligible entity in an amount credit by reason of conversion to a qualified
subsection) be allowed to such taxpayer with equal to the cumulative amount of the cred- plug-in electric drive motor vehicle’’, and
respect to such vehicle shall be allowed to its allowed under subsection (a) with respect (B) by striking subsection (i).
the eligible entity specified in such election to any vehicles sold by such entity for which (3) Section 38(b)(30) is amended by striking
(and not to such taxpayer). an election described in paragraph (1) has ‘‘qualified plug-in electric drive motor’’ and
‘‘(2) ELIGIBLE ENTITY.—For purposes of this been made. inserting ‘‘clean’’.
subsection, the term ‘eligible entity’ means, ‘‘(B) EXCESSIVE PAYMENTS.—Rules similar (4) Section 6213(g)(2), as amended by the
with respect to the vehicle for which the to the rules of section 6417(d)(6) shall apply preceding provisions of this Act, is amend-
credit is allowed under subsection (a), the for purposes of this paragraph. ed—
dealer which sold such vehicle to the tax- ‘‘(C) TREATMENT OF ADVANCE PAYMENTS.— (A) in subparagraph (R), by striking ‘‘and’’
payer and has— For purposes of section 1324 of title 31, at the end,
‘‘(A) subject to paragraph (4), registered United States Code, the payments under sub- (B) in subparagraph (S), by striking the pe-
with the Secretary for purposes of this para- paragraph (A) shall be treated in the same riod at the end and inserting ‘‘, and’’, and
graph, at such time, and in such form and manner as a refund due from a credit provi- (C) by inserting after subparagraph (S) the
manner, as the Secretary may prescribe, sion referred to in subsection (b)(2) of such following:
‘‘(B) prior to the election described in para- section. ‘‘(T) an omission of a correct vehicle iden-
graph (1) and not later than at the time of ‘‘(8) DEALER.—For purposes of this sub- tification number required under section
dlhill on DSK120RN23PROD with SENATE
such sale, disclosed to the taxpayer pur- section, the term ‘dealer’ means a person li- 30D(f)(9) (relating to credit for new clean ve-
chasing such vehicle— censed by a State, the District of Columbia, hicles) to be included on a return.’’.
‘‘(i) the manufacturer’s suggested retail the Commonwealth of Puerto Rico, any (5) Section 6501(m) is amended by striking
price, other territory or possession of the United ‘‘30D(e)(4)’’ and inserting ‘‘30D(f)(6)’’.
‘‘(ii) the value of the credit allowed and States, an Indian tribal government, or any (6) The table of sections for subpart B of
any other incentive available for the pur- Alaska Native Corporation (as defined in sec- part IV of subchapter A of chapter 1 is
chase of such vehicle, and tion 3 of the Alaska Native Claims Settle- amended by striking the item relating to
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00058 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4109
section 30D and inserting after the item re- ‘‘(B) the threshold amount. ‘‘(f) TRANSFER OF CREDIT.—Rules similar to
lating to section 30C the following item: ‘‘(2) THRESHOLD AMOUNT.—For purposes of the rules of section 30D(g) shall apply.’’.
‘‘Sec. 30D. Clean vehicle credit.’’. paragraph (1)(B), the threshold amount shall (c) CONFORMING AMENDMENTS.—Section
(j) GROSS-UP OF DIRECT SPENDING.—Begin- be— 6213(g)(2), as amended by the preceding provi-
ning in fiscal year 2023 and each fiscal year ‘‘(A) in the case of a joint return or a sur- sions of this Act, is amended—
thereafter, the portion of any credit allowed viving spouse (as defined in section 2(a)), (1) in subparagraph (S), by striking ‘‘and’’
to an eligible entity (as defined in section $150,000, at the end,
30D(g)(2) of the Internal Revenue Code of ‘‘(B) in the case of a head of household (as (2) in subparagraph (T), by striking the pe-
1986) pursuant to an election made under sec- defined in section 2(b)), $112,500, and riod at the end and inserting ‘‘, and’’, and
tion 30D(g) of the Internal Revenue Code of ‘‘(C) in the case of a taxpayer not described (3) by inserting after subparagraph (T) the
1986 that is direct spending shall be increased in subparagraph (A) or (B), $75,000. following:
by 6.0445 percent. ‘‘(3) MODIFIED ADJUSTED GROSS INCOME.— ‘‘(U) an omission of a correct vehicle iden-
(k) EFFECTIVE DATES.— For purposes of this subsection, the term tification number required under section
(1) IN GENERAL.—Except as provided in ‘modified adjusted gross income’ means ad- 25E(d) (relating to credit for previously-
paragraphs (2), (3), (4), and (5), the amend- justed gross income increased by any owned clean vehicles) to be included on a re-
ments made by this section shall apply to ve- amount excluded from gross income under turn.’’.
hicles placed in service after December 31, section 911, 931, or 933. (d) CLERICAL AMENDMENT.—The table of
2022. ‘‘(c) DEFINITIONS.—For purposes of this sec- sections for subpart A of part IV of sub-
tion— chapter A of chapter 1 is amended by insert-
(2) FINAL ASSEMBLY.—The amendments
‘‘(1) PREVIOUSLY-OWNED CLEAN VEHICLE.— ing after the item relating to section 25D the
made by subsection (b) shall apply to vehi-
The term ‘previously-owned clean vehicle’ following new item:
cles sold after the date of enactment of this
Act. means, with respect to a taxpayer, a motor ‘‘Sec. 25E. Previously-owned clean vehi-
(3) PER VEHICLE DOLLAR LIMITATION AND RE- vehicle— cles.’’.
LATED REQUIREMENTS.—The amendments ‘‘(A) the model year of which is at least 2 (e) EFFECTIVE DATE.—
made by subsections (a) and (e) shall apply years earlier than the calendar year in which (1) IN GENERAL.—Except as provided in
to vehicles placed in service after the date the taxpayer acquires such vehicle, paragraph (2), the amendments made by this
on which the proposed guidance described in ‘‘(B) the original use of which commences section shall apply to vehicles acquired after
paragraph (3)(B) of section 30D(e) of the In- with a person other than the taxpayer, December 31, 2022.
ternal Revenue Code of 1986 (as added by sub- ‘‘(C) which is acquired by the taxpayer in a (2) TRANSFER OF CREDIT.—The amendments
section (e)) is issued by the Secretary of the qualified sale, and made by subsection (b) shall apply to vehi-
Treasury (or the Secretary’s delegate). ‘‘(D) which— cles acquired after December 31, 2023.
‘‘(i) meets the requirements of subpara- SEC. 13403. QUALIFIED COMMERCIAL CLEAN VE-
(4) TRANSFER OF CREDIT.—The amendments
graphs (C), (D), (E), (F), and (H) (except for HICLES.
made by subsection (g) shall apply to vehi-
clause (iv) thereof) of section 30D(d)(1), or (a) IN GENERAL.—Subpart D of part IV of
cles placed in service after December 31, 2023.
‘‘(ii) is a motor vehicle which— subchapter A of chapter 1, as amended by the
(5) ELIMINATION OF MANUFACTURER LIMITA-
‘‘(I) satisfies the requirements under sub- preceding provisions of this Act, is amended
TION.—The amendment made by subsection
paragraphs (A) and (B) of section 30B(b)(3), by adding at the end the following new sec-
(d) shall apply to vehicles sold after Decem-
and tion:
ber 31, 2022.
‘‘(II) has a gross vehicle weight rating of ‘‘SEC. 45W. CREDIT FOR QUALIFIED COMMERCIAL
(l) TRANSITION RULE.—Solely for purposes CLEAN VEHICLES.
of the application of section 30D of the Inter- less than 14,000 pounds.
‘‘(2) QUALIFIED SALE.—The term ‘qualified ‘‘(a) IN GENERAL.—For purposes of section
nal Revenue Code of 1986, in the case of a 38, the qualified commercial clean vehicle
taxpayer that— sale’ means a sale of a motor vehicle—
‘‘(A) by a dealer (as defined in section credit for any taxable year is an amount
(1) after December 31, 2021, and before the equal to the sum of the credit amounts de-
date of enactment of this Act, purchased, or 30D(g)(8)),
‘‘(B) for a sale price which does not exceed termined under subsection (b) with respect
entered into a written binding contract to to each qualified commercial clean vehicle
purchase, a new qualified plug-in electric $25,000, and
‘‘(C) which is the first transfer since the placed in service by the taxpayer during the
drive motor vehicle (as defined in section taxable year.
30D(d)(1) of the Internal Revenue Code of date of the enactment of this section to a
‘‘(b) PER VEHICLE AMOUNT.—
1986, as in effect on the day before the date qualified buyer other than the person with
‘‘(1) IN GENERAL.—Subject to paragraph (4),
of enactment of this Act), and whom the original use of such vehicle com-
the amount determined under this sub-
(2) placed such vehicle in service on or menced.
section with respect to any qualified com-
after the date of enactment of this Act, ‘‘(3) QUALIFIED BUYER.—The term ‘qualified
mercial clean vehicle shall be equal to the
such taxpayer may elect (at such time, and buyer’ means, with respect to a sale of a
lesser of—
in such form and manner, as the Secretary of motor vehicle, a taxpayer—
‘‘(A) 15 percent of the basis of such vehicle
the Treasury, or the Secretary’s delegate, ‘‘(A) who is an individual,
(30 percent in the case of a vehicle not pow-
may prescribe) to treat such vehicle as hav- ‘‘(B) who purchases such vehicle for use
ered by a gasoline or diesel internal combus-
ing been placed in service on the day before and not for resale,
tion engine), or
the date of enactment of this Act. ‘‘(C) with respect to whom no deduction is
‘‘(B) the incremental cost of such vehicle.
SEC. 13402. CREDIT FOR PREVIOUSLY-OWNED allowable with respect to another taxpayer
‘‘(2) INCREMENTAL COST.—For purposes of
CLEAN VEHICLES. under section 151, and
paragraph (1)(B), the incremental cost of any
(a) IN GENERAL.—Subpart A of part IV of ‘‘(D) who has not been allowed a credit
qualified commercial clean vehicle is an
subchapter A of chapter 1 is amended by in- under this section for any sale during the 3-
amount equal to the excess of the purchase
serting after section 25D the following new year period ending on the date of the sale of
price for such vehicle over such price of a
section: such vehicle.
comparable vehicle.
‘‘SEC. 25E. PREVIOUSLY-OWNED CLEAN VEHI-
‘‘(4) MOTOR VEHICLE; CAPACITY.—The terms
‘‘(3) COMPARABLE VEHICLE.—For purposes of
CLES. ‘motor vehicle’ and ‘capacity’ have the
this subsection, the term ‘comparable vehi-
‘‘(a) ALLOWANCE OF CREDIT.—In the case of meaning given such terms in paragraphs (2)
cle’ means, with respect to any qualified
a qualified buyer who during a taxable year and (4) of section 30D(d), respectively.
‘‘(d) VIN NUMBER REQUIREMENT.—No credit commercial clean vehicle, any vehicle which
places in service a previously-owned clean is powered solely by a gasoline or diesel in-
shall be allowed under subsection (a) with re-
vehicle, there shall be allowed as a credit ternal combustion engine and which is com-
spect to any vehicle unless the taxpayer in-
against the tax imposed by this chapter for cludes the vehicle identification number of parable in size and use to such vehicle.
the taxable year an amount equal to the such vehicle on the return of tax for the tax- ‘‘(4) LIMITATION.—The amount determined
lesser of— able year. under this subsection with respect to any
‘‘(1) $4,000, or ‘‘(e) APPLICATION OF CERTAIN RULES.—For qualified commercial clean vehicle shall not
‘‘(2) the amount equal to 30 percent of the purposes of this section, rules similar to the exceed—
sale price with respect to such vehicle. rules of section 30D(f) (without regard to ‘‘(A) in the case of a vehicle which has a
‘‘(b) LIMITATION BASED ON MODIFIED AD- paragraph (10) or (11) thereof) shall apply for gross vehicle weight rating of less than 14,000
JUSTED GROSS INCOME.— purposes of this section. pounds, $7,500, and
‘‘(1) IN GENERAL.—No credit shall be al- ‘‘(f) TERMINATION.—No credit shall be al- ‘‘(B) in the case of a vehicle not described
lowed under subsection (a) for any taxable lowed under this section with respect to any in subparagraph (A), $40,000.
dlhill on DSK120RN23PROD with SENATE
year if— vehicle acquired after December 31, 2032.’’. ‘‘(c) QUALIFIED COMMERCIAL CLEAN VEHI-
‘‘(A) the lesser of— (b) TRANSFER OF CREDIT.—Section 25E, as CLE.—For purposes of this section, the term
‘‘(i) the modified adjusted gross income of added by subsection (a), is amended— ‘qualified commercial clean vehicle’ means
the taxpayer for such taxable year, or (1) by redesignating subsection (f) as sub- any vehicle which—
‘‘(ii) the modified adjusted gross income of section (g), and ‘‘(1) meets the requirements of section
the taxpayer for the preceding taxable year, (2) by inserting after subsection (e) the fol- 30D(d)(1)(C) and is acquired for use or lease
exceeds lowing: by the taxpayer and not for resale,
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00059 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4110 CONGRESSIONAL RECORD — SENATE August 6, 2022
‘‘(2) either— ‘‘Sec. 45W. Qualified commercial clean vehi- ‘‘(B) is of a character subject to deprecia-
‘‘(A) meets the requirements of subpara- cle credit.’’. tion.
graph (D) of section 30D(d)(1) and is manufac- (c) EFFECTIVE DATE.—The amendments ‘‘(2) MOTOR VEHICLE.—A motor vehicle is
tured primarily for use on public streets, made by this section shall apply to vehicles described in this paragraph if the motor ve-
roads, and highways (not including a vehicle acquired after December 31, 2022. hicle—
operated exclusively on a rail or rails), or SEC. 13404. ALTERNATIVE FUEL REFUELING ‘‘(A) is manufactured primarily for use on
‘‘(B) is mobile machinery, as defined in PROPERTY CREDIT. public streets, roads, or highways (not in-
section 4053(8) (including vehicles that are (a) IN GENERAL.—Section 30C(g) is amended cluding a vehicle operated exclusively on a
not designed to perform a function of trans- by striking ‘‘December 31, 2021’’ and insert- rail or rails),
porting a load over the public highways), ing ‘‘December 31, 2032’’. ‘‘(B) has 2 or 3 wheels, and
‘‘(3) either— (b) CREDIT FOR PROPERTY OF A CHARACTER ‘‘(C) is propelled by electricity.’’.
‘‘(A) is propelled to a significant extent by SUBJECT TO DEPRECIATION.—
(d) WAGE AND APPRENTICESHIP REQUIRE-
an electric motor which draws electricity (1) IN GENERAL.—Section 30C(a) is amended
MENTS.—Section 30C, as amended by this sec-
by inserting ‘‘(6 percent in the case of prop-
from a battery which has a capacity of not tion, is further amended by redesignating
erty of a character subject to depreciation)’’
less than 15 kilowatt hours (or, in the case of subsections (g) and (h) as subsections (h) and
after ‘‘30 percent’’.
a vehicle which has a gross vehicle weight (i) and by inserting after subsection (f) the
(2) MODIFICATION OF CREDIT LIMITATION.—
rating of less than 14,000 pounds, 7 kilowatt following new subsection:
Subsection (b) of section 30C is amended—
hours) and is capable of being recharged from ‘‘(g) WAGE AND APPRENTICESHIP REQUIRE-
(A) in the matter preceding paragraph (1)—
an external source of electricity, or MENTS.—
(i) by striking ‘‘with respect to all’’ and in-
‘‘(B) is a motor vehicle which satisfies the ‘‘(1) INCREASED CREDIT AMOUNT.—
serting ‘‘with respect to any single item of’’,
requirements under subparagraphs (A) and ‘‘(A) IN GENERAL.—In the case of any quali-
and
(B) of section 30B(b)(3), and fied alternative fuel vehicle refueling project
(ii) by striking ‘‘at a location’’, and
‘‘(4) is of a character subject to the allow- (B) in paragraph (1), by striking ‘‘$30,000 in which satisfies the requirements of subpara-
ance for depreciation. the case of a property’’ and inserting graph (C), the amount of the credit deter-
‘‘(d) SPECIAL RULES.— ‘‘$100,000 in the case of any such item of mined under subsection (a) for any qualified
‘‘(1) IN GENERAL.—Rules similar to the property’’. alternative fuel vehicle refueling property of
rules under subsection (f) of section 30D (3) BIDIRECTIONAL CHARGING EQUIPMENT IN- a character subject to an allowance for de-
(without regard to paragraph (10) or (11) CLUDED AS QUALIFIED ALTERNATIVE FUEL VEHI- preciation which is part of such project shall
thereof) shall apply for purposes of this sec- CLE REFUELING PROPERTY.—Section 30C(c) is be equal to such amount (determined with-
tion. amended to read as follows: out regard to this sentence) multiplied by 5.
‘‘(2) VEHICLES PLACED IN SERVICE BY TAX- ‘‘(c) QUALIFIED ALTERNATIVE FUEL VEHICLE ‘‘(B) QUALIFIED ALTERNATIVE FUEL VEHICLE
EXEMPT ENTITIES.—Subsection (c)(4) shall not REFUELING PROPERTY.—For purposes of this REFUELING PROJECT.—For purposes of this
apply to any vehicle which is not subject to section— subsection, the term ‘qualified alternative
a lease and which is placed in service by a ‘‘(1) IN GENERAL.—The term ‘qualified al- fuel vehicle refueling project’ means a
tax-exempt entity described in clause (i), (ii), ternative fuel vehicle refueling property’ has project consisting of one or more properties
or (iv) of section 168(h)(2)(A). the same meaning as the term ‘qualified that are part of a single project.
‘‘(3) NO DOUBLE BENEFIT.—No credit shall clean-fuel vehicle refueling property’ would ‘‘(C) PROJECT REQUIREMENTS.—A project
be allowed under this section with respect to have under section 179A if— meets the requirements of this subparagraph
any vehicle for which a credit was allowed ‘‘(A) paragraph (1) of section 179A(d) did if it is one of the following:
under section 30D. not apply to property installed on property ‘‘(i) A project the construction of which be-
‘‘(e) VIN NUMBER REQUIREMENT.—No credit which is used as the principal residence gins prior to the date that is 60 days after
shall be determined under subsection (a) (within the meaning of section 121) of the the Secretary publishes guidance with re-
with respect to any vehicle unless the tax- taxpayer, and spect to the requirements of paragraphs
payer includes the vehicle identification ‘‘(B) only the following were treated as (2)(A) and (3).
number of such vehicle on the return of tax clean-burning fuels for purposes of section ‘‘(ii) A project which satisfies the require-
for the taxable year. 179A(d): ments of paragraphs (2)(A) and (3).
‘‘(f) REGULATIONS AND GUIDANCE.—The Sec- ‘‘(i) Any fuel at least 85 percent of the vol- ‘‘(2) PREVAILING WAGE REQUIREMENTS.—
retary shall issue such regulations or other ume of which consists of one or more of the ‘‘(A) IN GENERAL.—The requirements de-
guidance as the Secretary determines nec- following: ethanol, natural gas, compressed scribed in this subparagraph with respect to
essary to carry out the purposes of this sec- natural gas, liquified natural gas, liquefied any qualified alternative fuel vehicle refuel-
tion, including regulations or other guidance petroleum gas, or hydrogen. ing project are that the taxpayer shall en-
relating to determination of the incremental ‘‘(ii) Any mixture— sure that any laborers and mechanics em-
cost of any qualified commercial clean vehi- ‘‘(I) which consists of two or more of the ployed by the taxpayer or any contractor or
cle. following: biodiesel (as defined in section subcontractor in the construction of any
‘‘(g) TERMINATION.—No credit shall be de- 40A(d)(1)), diesel fuel (as defined in section qualified alternative fuel vehicle refueling
termined under this section with respect to 4083(a)(3)), or kerosene, and property which is part of such project shall
any vehicle acquired after December 31, ‘‘(II) at least 20 percent of the volume of be paid wages at rates not less than the pre-
2032.’’. which consists of biodiesel (as so defined) de- vailing rates for construction, alteration, or
(b) CONFORMING AMENDMENTS.— termined without regard to any kerosene in repair of a similar character in the locality
(1) Section 38(b), as amended by the pre- such mixture. in which such project is located as most re-
ceding provisions of this Act, is amended— ‘‘(iii) Electricity. cently determined by the Secretary of Labor,
(A) in paragraph (35), by striking ‘‘plus’’ at ‘‘(2) BIDIRECTIONAL CHARGING EQUIPMENT.— in accordance with subchapter IV of chapter
the end, Property shall not fail to be treated as quali- 31 of title 40, United States Code.
fied alternative fuel vehicle refueling prop- ‘‘(B) CORRECTION AND PENALTY RELATED TO
(B) in paragraph (36), by striking the pe-
erty solely because such property— FAILURE TO SATISFY WAGE REQUIREMENTS.—
riod at the end and inserting ‘‘, plus’’, and
‘‘(A) is capable of charging the battery of a Rules similar to the rules of section
(C) by adding at the end the following new
motor vehicle propelled by electricity, and 45(b)(7)(B) shall apply.
paragraph:
‘‘(B) allows discharging electricity from ‘‘(3) APPRENTICESHIP REQUIREMENTS.—Rules
‘‘(37) the qualified commercial clean vehi-
such battery to an electric load external to similar to the rules of section 45(b)(8) shall
cle credit determined under section 45W.’’.
such motor vehicle.’’. apply.
(2) Section 6213(g)(2), as amended by the (c) CERTAIN ELECTRIC CHARGING STATIONS
preceding provisions of this Act, is amend- INCLUDED AS QUALIFIED ALTERNATIVE FUEL ‘‘(4) REGULATIONS AND GUIDANCE.—The Sec-
ed— VEHICLE REFUELING PROPERTY.—Section 30C retary shall issue such regulations or other
(A) in subparagraph (T), by striking ‘‘and’’ is amended by redesignating subsections (f) guidance as the Secretary determines nec-
at the end, and (g) as subsections (g) and (h), respec- essary to carry out the purposes of this sub-
(B) in subparagraph (U), by striking the pe- tively, and by inserting after subsection (e) section, including regulations or other guid-
riod at the end and inserting ‘‘, and’’, and the following: ance which provides for requirements for rec-
(C) by inserting after subparagraph (U) the ‘‘(f) SPECIAL RULE FOR ELECTRIC CHARGING ordkeeping or information reporting for pur-
following: STATIONS FOR CERTAIN VEHICLES WITH 2 OR 3 poses of administering the requirements of
‘‘(V) an omission of a correct vehicle iden- WHEELS.—For purposes of this section— this subsection.’’.
tification number required under section ‘‘(1) IN GENERAL.—The term ‘qualified al- (e) ELIGIBLE CENSUS TRACTS.—Subsection
dlhill on DSK120RN23PROD with SENATE
45W(e) (relating to commercial clean vehicle ternative fuel vehicle refueling property’ in- (c) of section 30C, as amended by subsection
credit) to be included on a return.’’. cludes any property described in subsection (b)(3), is amended by adding at the end the
(3) The table of sections for subpart D of (c) for the recharging of a motor vehicle de- following:
part IV of subchapter A of chapter 1, as scribed in paragraph (2), but only if such ‘‘(3) PROPERTY REQUIRED TO BE LOCATED IN
amended by the preceding provisions of this property— ELIGIBLE CENSUS TRACTS.—
Act, is amended by adding at the end the fol- ‘‘(A) meets the requirements of subsection ‘‘(A) IN GENERAL.—Property shall not be
lowing new item: (a)(2), and treated as qualified alternative fuel vehicle
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00060 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4111
refueling property unless such property is ‘‘(A) BASE RATE.—For purposes of alloca- as well as technologies, components, or ma-
placed in service in an eligible census tract. tions under this subsection, the amount of terials for such vehicles, or’’, and
‘‘(B) ELIGIBLE CENSUS TRACT.— the credit determined under subsection (a) (J) in subclause (IX), as so redesignated, by
‘‘(i) IN GENERAL.—For purposes of this shall be determined by substituting ‘6 per- striking ‘‘and’’ at the end, and
paragraph, the term ‘eligible census tract’ cent’ for ‘30 percent’. (3) by striking clause (ii) and inserting the
means any population census tract which— ‘‘(B) ALTERNATIVE RATE.—In the case of following:
‘‘(I) is described in section 45D(e), or any project which satisfies the requirements ‘‘(ii) which re-equips an industrial or man-
‘‘(II) is not an urban area. of paragraphs (5)(A) and (6), subparagraph ufacturing facility with equipment designed
‘‘(ii) URBAN AREA.—For purposes of clause (A) shall not apply. to reduce greenhouse gas emissions by at
(i)(II), the term ‘urban area’ means a census ‘‘(5) PREVAILING WAGE REQUIREMENTS.— least 20 percent through the installation of—
tract (as defined by the Bureau of the Cen- ‘‘(A) IN GENERAL.—The requirements de- ‘‘(I) low- or zero-carbon process heat sys-
sus) which, according to the most recent de- scribed in this subparagraph with respect to tems,
cennial census, has been designated as an a project are that the taxpayer shall ensure ‘‘(II) carbon capture, transport, utilization
urban area by the Secretary of Commerce.’’. that any laborers and mechanics employed and storage systems,
(f) EFFECTIVE DATE.— by the taxpayer or any contractor or subcon- ‘‘(III) energy efficiency and reduction in
(1) IN GENERAL.—Except as provided in tractor in the re-equipping, expansion, or es- waste from industrial processes, or
paragraph (2), the amendments made by this tablishment of a manufacturing facility ‘‘(IV) any other industrial technology de-
section shall apply to property placed in shall be paid wages at rates not less than the signed to reduce greenhouse gas emissions,
service after December 31, 2022. prevailing rates for construction, alteration, as determined by the Secretary, or
(2) EXTENSION.—The amendments made by or repair of a similar character in the local- ‘‘(iii) which re-equips, expands, or estab-
subsection (a) shall apply to property placed ity in which such project is located as most lishes an industrial facility for the proc-
in service after December 31, 2021. recently determined by the Secretary of essing, refining, or recycling of critical ma-
PART 5—INVESTMENT IN CLEAN ENERGY Labor, in accordance with subchapter IV of terials (as defined in section 7002(a) of the
MANUFACTURING AND ENERGY SECU- chapter 31 of title 40, United States Code. Energy Act of 2020 (30 U.S.C. 1606(a)).’’.
RITY ‘‘(B) CORRECTION AND PENALTY RELATED TO
FAILURE TO SATISFY WAGE REQUIREMENTS.—
(c) CONFORMING AMENDMENT.—Subpara-
SEC. 13501. EXTENSION OF THE ADVANCED EN- graph (A) of section 48C(c)(2) is amended to
ERGY PROJECT CREDIT. Rules similar to the rules of section
45(b)(7)(B) shall apply. read as follows:
(a) EXTENSION OF CREDIT.—Section 48C is
‘‘(6) APPRENTICESHIP REQUIREMENTS.—Rules ‘‘(A) which is necessary for—
amended by redesignating subsection (e) as
similar to the rules of section 45(b)(8) shall ‘‘(i) the production or recycling of property
subsection (f) and by inserting after sub-
apply. described in clause (i) of paragraph (1)(A),
section (d) the following new subsection:
‘‘(e) ADDITIONAL ALLOCATIONS.— ‘‘(7) DISCLOSURE OF ALLOCATIONS.—The Sec- ‘‘(ii) re-equipping an industrial or manu-
‘‘(1) IN GENERAL.—Not later than 180 days retary shall, upon making a certification facturing facility described in clause (ii) of
after the date of enactment of this sub- under this subsection, publicly disclose the such paragraph, or
section, the Secretary shall establish a pro- identity of the applicant and the amount of ‘‘(iii) re-equipping, expanding, or estab-
gram to consider and award certifications for the credit with respect to such applicant.’’. lishing an industrial facility described in
qualified investments eligible for credits (b) MODIFICATION OF QUALIFYING ADVANCED clause (iii) of such paragraph,’’.
under this section to qualifying advanced en- ENERGY PROJECTS.—Section 48C(c)(1)(A) is (d) DENIAL OF DOUBLE BENEFIT.—48C(f), as
ergy project sponsors. amended— redesignated by this section, is amended by
‘‘(2) LIMITATION.—The total amount of (1) by inserting ‘‘, any portion of the quali- striking ‘‘or 48B’’ and inserting ‘‘48B, 48E,
credits which may be allocated under the fied investment of which is certified by the 45Q, or 45V’’.
program established under paragraph (1) Secretary under subsection (e) as eligible for
(e) EFFECTIVE DATE.—The amendments
shall not exceed $10,000,000,000, of which not a credit under this section’’ after ‘‘means a
made by this section shall take effect on
greater than $6,000,000,000 may be allocated project’’,
January 1, 2023.
to qualified investments which are not lo- (2) in clause (i)—
cated within a census tract which— (A) by striking ‘‘a manufacturing facility SEC. 13502. ADVANCED MANUFACTURING PRO-
‘‘(A) is described in clause (iii) of section for the production of’’ and inserting ‘‘an in- DUCTION CREDIT.
45(b)(11)(B), and dustrial or manufacturing facility for the (a) IN GENERAL.—Subpart D of part IV of
‘‘(B) prior to the date of enactment of this production or recycling of’’, subchapter A of chapter 1, as amended by the
subsection, had no project which received a (B) in clause (I), by inserting ‘‘water,’’ preceding provisions of this Act, is amended
certification and allocation of credits under after ‘‘sun,’’, by adding at the end the following new sec-
subsection (d). (C) in clause (II), by striking ‘‘an energy tion:
‘‘(3) CERTIFICATIONS.— storage system for use with electric or hy-
brid-electric motor vehicles’’ and inserting ‘‘SEC. 45X. ADVANCED MANUFACTURING PRO-
‘‘(A) APPLICATION REQUIREMENT.—Each ap-
DUCTION CREDIT.
plicant for certification under this sub- ‘‘energy storage systems and components’’,
section shall submit an application at such (D) in clause (III), by striking ‘‘grids to ‘‘(a) IN GENERAL.—
time and containing such information as the support the transmission of intermittent ‘‘(1) ALLOWANCE OF CREDIT.—For purposes
Secretary may require. sources of renewable energy, including stor- of section 38, the advanced manufacturing
‘‘(B) TIME TO MEET CRITERIA FOR CERTIFI- age of such energy’’ and inserting ‘‘grid mod- production credit for any taxable year is an
CATION.—Each applicant for certification ernization equipment or components’’, amount equal to the sum of the credit
shall have 2 years from the date of accept- (E) in subclause (IV), by striking ‘‘and se- amounts determined under subsection (b)
ance by the Secretary of the application dur- quester carbon dioxide emissions’’ and in- with respect to each eligible component
ing which to provide to the Secretary evi- serting ‘‘, remove, use, or sequester carbon which is—
dence that the requirements of the certifi- oxide emissions’’, ‘‘(A) produced by the taxpayer, and
cation have been met. (F) by striking subclause (V) and inserting ‘‘(B) during the taxable year, sold by such
‘‘(C) PERIOD OF ISSUANCE.—An applicant the following: taxpayer to an unrelated person.
which receives a certification shall have 2 ‘‘(V) equipment designed to refine, ‘‘(2) PRODUCTION AND SALE MUST BE IN
years from the date of issuance of the certifi- electrolyze, or blend any fuel, chemical, or TRADE OR BUSINESS.—Any eligible component
cation in order to place the project in service product which is— produced and sold by the taxpayer shall be
and to notify the Secretary that such project ‘‘(aa) renewable, or taken into account only if the production
has been so placed in service, and if such ‘‘(bb) low-carbon and low-emission,’’, and sale described in paragraph (1) is in a
project is not placed in service by that time (G) by striking subclause (VI), trade or business of the taxpayer.
period, then the certification shall no longer (H) by redesignating subclause (VII) as sub- ‘‘(3) UNRELATED PERSON.—
be valid. If any certification is revoked clause (IX), ‘‘(A) IN GENERAL.—For purposes of this sub-
under this subparagraph, the amount of the (I) by inserting after subclause (V) the fol- section, a taxpayer shall be treated as selling
limitation under paragraph (2) shall be in- lowing new subclauses: components to an unrelated person if such
creased by the amount of the credit with re- ‘‘(VI) property designed to produce energy component is sold to such person by a person
spect to such revoked certification. conservation technologies (including resi- related to the taxpayer.
‘‘(D) LOCATION OF PROJECT.—In the case of dential, commercial, and industrial applica- ‘‘(B) ELECTION.—
an applicant which receives a certification, tions), ‘‘(i) IN GENERAL.—At the election of the
if the Secretary determines that the project ‘‘(VII) light-, medium-, or heavy-duty elec- taxpayer (in such form and manner as the
dlhill on DSK120RN23PROD with SENATE
has been placed in service at a location tric or fuel cell vehicles, as well as— Secretary may prescribe), a sale of compo-
which is materially different than the loca- ‘‘(aa) technologies, components, or mate- nents by such taxpayer to a related person
tion specified in the application for such rials for such vehicles, and shall be deemed to have been made to an un-
project, the certification shall no longer be ‘‘(bb) associated charging or refueling in- related person.
valid. frastructure, ‘‘(ii) REQUIREMENT.—As a condition of, and
‘‘(4) CREDIT RATE CONDITIONED UPON WAGE ‘‘(VIII) hybrid vehicles with a gross vehicle prior to, any election described in clause (i),
AND APPRENTICESHIP REQUIREMENTS.— weight rating of not less than 14,000 pounds, the Secretary may require such information
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00061 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4112 CONGRESSIONAL RECORD — SENATE August 6, 2022
or registration as the Secretary deems nec- ‘‘(B) INVERTERS.—For purposes of para- kilowatts (expressed on a per alternating
essary for purposes of preventing duplica- graph (1)(I), the applicable amount with re- current watt basis).
tion, fraud, or any improper or excessive spect to any inverter shall be— ‘‘(C) COMMERCIAL INVERTER.—The term
amount determined under paragraph (1). ‘‘(i) in the case of a central inverter, 0.25 ‘commercial inverter’ means an inverter
‘‘(b) CREDIT AMOUNT.— cents, which—
‘‘(1) IN GENERAL.—Subject to paragraph (3), ‘‘(ii) in the case of a utility inverter, 1.5 ‘‘(i) is suitable for commercial or utility-
the amount determined under this sub- cents, scale applications,
section with respect to any eligible compo- ‘‘(iii) in the case of a commercial inverter, ‘‘(ii) has a rated output of 208, 480, 600, or
nent, including any eligible component it in- 2 cents, 800 volt three-phase power, and
corporates, shall be equal to— ‘‘(iv) in the case of a residential inverter, ‘‘(iii) has a capacity which is not less than
‘‘(A) in the case of a thin film photovoltaic 6.5 cents, and 20 kilowatts and not greater than 125 kilo-
cell or a crystalline photovoltaic cell, an ‘‘(v) in the case of a microinverter or a dis- watts (expressed on a per alternating current
amount equal to the product of— tributed wind inverter, 11 cents. watt basis).
‘‘(i) 4 cents, multiplied by ‘‘(3) PHASE OUT.— ‘‘(D) DISTRIBUTED WIND INVERTER.—
‘‘(ii) the capacity of such cell (expressed on ‘‘(A) IN GENERAL.—Subject to subparagraph ‘‘(i) IN GENERAL.—The term ‘distributed
a per direct current watt basis), (C), in the case of any eligible component wind inverter’ means an inverter which—
‘‘(B) in the case of a photovoltaic wafer, $12 sold after December 31, 2029, the amount de- ‘‘(I) is used in a residential or non-residen-
per square meter, termined under this subsection with respect tial system which utilizes 1 or more certified
‘‘(C) in the case of solar grade polysilicon, to such component shall be equal to the distributed wind energy systems, and
$3 per kilogram, product of— ‘‘(II) has a rated output of not greater than
‘‘(D) in the case of a polymeric backsheet, ‘‘(i) the amount determined under para- 150 kilowatts.
40 cents per square meter, graph (1) with respect to such component, as ‘‘(ii) CERTIFIED DISTRIBUTED WIND ENERGY
‘‘(E) in the case of a solar module, an determined without regard to this para- SYSTEM.—The term ‘certified distributed
amount equal to the product of— graph, multiplied by wind energy system’ means a wind energy
‘‘(i) 7 cents, multiplied by ‘‘(ii) the phase out percentage under sub- system which is certified by an accredited
‘‘(ii) the capacity of such module (ex- paragraph (B). certification agency to meet Standard 9.1-
pressed on a per direct current watt basis), ‘‘(B) PHASE OUT PERCENTAGE.—The phase 2009 of the American Wind Energy Associa-
‘‘(F) in the case of a wind energy compo- out percentage under this subparagraph is tion (including any subsequent revisions to
nent— equal to— or modifications of such Standard which
‘‘(i) if such component is a related offshore have been approved by the American Na-
‘‘(i) in the case of an eligible component
wind vessel, an amount equal to 10 percent of tional Standards Institute).
sold during calendar year 2030, 75 percent,
the sales price of such vessel, and ‘‘(E) MICROINVERTER.—The term ‘micro-
‘‘(ii) in the case of an eligible component
‘‘(ii) if such component is not described in inverter’ means an inverter which—
sold during calendar year 2031, 50 percent,
clause (i), an amount equal to the product ‘‘(i) is suitable to connect with one solar
‘‘(iii) in the case of an eligible component
of— module,
sold during calendar year 2032, 25 percent,
‘‘(I) the applicable amount with respect to ‘‘(ii) has a rated output of—
‘‘(iv) in the case of an eligible component
such component (as determined under para- ‘‘(I) 120 or 240 volt single-phase power, or
sold after December 31, 2032, 0 percent.
graph (2)(A)), multiplied by ‘‘(II) 208 or 480 volt three-phase power, and
‘‘(C) EXCEPTION.—For purposes of deter-
‘‘(II) the total rated capacity (expressed on ‘‘(iii) has a capacity which is not greater
a per watt basis) of the completed wind tur- mining the amount under this subsection
than 650 watts (expressed on a per alter-
bine for which such component is designed, with respect to any applicable critical min-
nating current watt basis).
‘‘(G) in the case of a torque tube, 87 cents eral, this paragraph shall not apply.
‘‘(F) RESIDENTIAL INVERTER.—The term
per kilogram, ‘‘(4) LIMITATION ON CAPACITY OF BATTERY
‘residential inverter’ means an inverter
CELLS AND BATTERY MODULES.—
‘‘(H) in the case of a structural fastener, which—
$2.28 per kilogram, ‘‘(A) IN GENERAL.—For purposes of subpara-
‘‘(i) is suitable for a residence,
‘‘(I) in the case of an inverter, an amount graph (K)(ii) or (L)(ii) of paragraph (1), the
‘‘(ii) has a rated output of 120 or 240 volt
equal to the product of— capacity determined under either subpara- single-phase power, and
‘‘(i) the applicable amount with respect to graph with respect to a battery cell or bat- ‘‘(iii) has a capacity which is not greater
such inverter (as determined under para- tery module shall not exceed a capacity-to- than 20 kilowatts (expressed on a per alter-
graph (2)(B)), multiplied by power ratio of 100:1. nating current watt basis).
‘‘(ii) the capacity of such inverter (ex- ‘‘(B) CAPACITY-TO-POWER RATIO.—For pur- ‘‘(G) UTILITY INVERTER.—The term ‘utility
pressed on a per alternating current watt poses of this paragraph, the term ‘capacity- inverter’ means an inverter which—
basis), to-power ratio’ means, with respect to a bat- ‘‘(i) is suitable for commercial or utility-
‘‘(J) in the case of electrode active mate- tery cell or battery module, the ratio of the scale systems,
rials, an amount equal to 10 percent of the capacity of such cell or module to the max- ‘‘(ii) has a rated output of not less than 600
costs incurred by the taxpayer with respect imum discharge amount of such cell or mod- volt three-phase power, and
to production of such materials, ule. ‘‘(iii) has a capacity which is greater than
‘‘(K) in the case of a battery cell, an ‘‘(c) DEFINITIONS.—For purposes of this sec- 125 kilowatts and not greater than 1000 kilo-
amount equal to the product of— tion— watts (expressed on a per alternating current
‘‘(i) $35, multiplied by ‘‘(1) ELIGIBLE COMPONENT.— watt basis)
‘‘(ii) subject to paragraph (4), the capacity ‘‘(A) IN GENERAL.—The term ‘eligible com- ‘‘(3) SOLAR ENERGY COMPONENT.—
of such battery cell (expressed on a kilowatt- ponent’ means— ‘‘(A) IN GENERAL.—The term ‘solar energy
hour basis), ‘‘(i) any solar energy component, component’ means any of the following:
‘‘(L) in the case of a battery module, an ‘‘(ii) any wind energy component, ‘‘(i) Solar modules.
amount equal to the product of— ‘‘(iii) any inverter described in subpara- ‘‘(ii) Photovoltaic cells.
‘‘(i) $10 (or, in the case of a battery module graphs (B) through (G) of paragraph (2), ‘‘(iii) Photovoltaic wafers.
which does not use battery cells, $45), multi- ‘‘(iv) any qualifying battery component, ‘‘(iv) Solar grade polysilicon.
plied by and ‘‘(v) Torque tubes or structural fasteners.
‘‘(ii) subject to paragraph (4), the capacity ‘‘(v) any applicable critical mineral. ‘‘(vi) Polymeric backsheets.
of such battery module (expressed on a kilo- ‘‘(B) APPLICATION WITH OTHER CREDITS.— ‘‘(B) ASSOCIATED DEFINITIONS.—
watt-hour basis), and The term ‘eligible component’ shall not in- ‘‘(i) PHOTOVOLTAIC CELL.—The term ‘photo-
‘‘(M) in the case of any applicable critical clude any property which is produced at a fa- voltaic cell’ means the smallest semicon-
mineral, an amount equal to 10 percent of cility if the basis of any property which is ductor element of a solar module which per-
the costs incurred by the taxpayer with re- part of such facility is taken into account forms the immediate conversion of light into
spect to production of such mineral. for purposes of the credit allowed under sec- electricity.
‘‘(2) APPLICABLE AMOUNTS.— tion 48C after the date of the enactment of ‘‘(ii) PHOTOVOLTAIC WAFER.—The term ‘pho-
‘‘(A) WIND ENERGY COMPONENTS.—For pur- this section. tovoltaic wafer’ means a thin slice, sheet, or
poses of paragraph (1)(F)(ii), the applicable ‘‘(2) INVERTERS.— layer of semiconductor material of at least
amount with respect to any wind energy ‘‘(A) IN GENERAL.—The term ‘inverter’ 240 square centimeters—
component shall be— means an end product which is suitable to ‘‘(I) produced by a single manufacturer ei-
‘‘(i) in the case of a blade, 2 cents, convert direct current electricity from 1 or ther—
dlhill on DSK120RN23PROD with SENATE
‘‘(ii) in the case of a nacelle, 5 cents, more solar modules or certified distributed ‘‘(aa) directly from molten or evaporated
‘‘(iii) in the case of a tower, 3 cents, and wind energy systems into alternating cur- solar grade polysilicon or deposition of solar
‘‘(iv) in the case of an offshore wind foun- rent electricity. grade thin film semiconductor photon ab-
dation— ‘‘(B) CENTRAL INVERTER.—The term ‘cen- sorber layer, or
‘‘(I) which uses a fixed platform, 2 cents, or tral inverter’ means an inverter which is ‘‘(bb) through formation of an ingot from
‘‘(II) which uses a floating platform, 4 suitable for large utility-scale systems and molten polysilicon and subsequent slicing,
cents. has a capacity which is greater than 1,000 and
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00062 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4113
‘‘(II) which comprises the substrate or ab- transport, installation, operation, or mainte- ‘‘(J) EUROPIUM.—Europium which is—
sorber layer of one or more photovoltaic nance of offshore wind energy components. ‘‘(i) converted to europium oxide which is
cells. ‘‘(v) TOWER.—The term ‘tower’ means a tu- purified to a minimum purity of 99.9 percent
‘‘(iii) POLYMERIC BACKSHEET.—The term bular or lattice structure which supports the europium oxide by mass, or
‘polymeric backsheet’ means a sheet on the nacelle and rotor of a wind turbine. ‘‘(ii) purified to a minimum purity of 99
back of a solar module which acts as an elec- ‘‘(5) QUALIFYING BATTERY COMPONENT.— percent by mass.
tric insulator and protects the inner compo- ‘‘(A) IN GENERAL.—The term ‘qualifying ‘‘(K) FLUORSPAR.—Fluorspar which is—
nents of such module from the surrounding battery component’ means any of the fol- ‘‘(i) converted to fluorspar which is puri-
environment. lowing: fied to a minimum purity of 97 percent cal-
‘‘(iv) SOLAR GRADE POLYSILICON.—The term ‘‘(i) Electrode active materials. cium fluoride by mass, or
‘solar grade polysilicon’ means silicon which ‘‘(ii) Battery cells. ‘‘(ii) purified to a minimum purity of 99
is— ‘‘(iii) Battery modules. percent fluorspar by mass.
‘‘(I) suitable for use in photovoltaic manu- ‘‘(B) ASSOCIATED DEFINITIONS.— ‘‘(L) GADOLINIUM.—Gadolinium which is—
facturing, and ‘‘(i) ELECTRODE ACTIVE MATERIAL.—The ‘‘(i) converted to gadolinium oxide which is
‘‘(II) purified to a minimum purity of term ‘electrode active material’ means cath- purified to a minimum purity of 99.9 percent
99.999999 percent silicon by mass. ode materials, anode materials, anode foils, gadolinium oxide by mass, or
‘‘(v) SOLAR MODULE.—The term ‘solar mod- and electrochemically active materials, in- ‘‘(ii) purified to a minimum purity of 99
ule’ means the connection and lamination of cluding solvents, additives, and electrolyte percent gadolinium by mass.
salts that contribute to the electrochemical ‘‘(M) GERMANIUM.—Germanium which is—
photovoltaic cells into an environmentally
processes necessary for energy storage . ‘‘(i) converted to germanium tetrachloride,
protected final assembly which is—
‘‘(ii) BATTERY CELL.—The term ‘battery or
‘‘(I) suitable to generate electricity when
cell’ means an electrochemical cell— ‘‘(ii) purified to a minimum purity of 99.99
exposed to sunlight, and
‘‘(I) comprised of 1 or more positive elec- percent germanium by mass.
‘‘(II) ready for installation without an ad-
trodes and 1 or more negative electrodes, ‘‘(N) GRAPHITE.—Graphite which is purified
ditional manufacturing process.
‘‘(II) with an energy density of not less to a minimum purity of 99.9 percent gra-
‘‘(vi) SOLAR TRACKER.—The term ‘solar
than 100 watt-hours per liter, and phitic carbon by mass.
tracker’ means a mechanical system that ‘‘(III) capable of storing at least 12 watt- ‘‘(O) INDIUM.—Indium which is—
moves solar modules according to the posi- hours of energy. ‘‘(i) converted to—
tion of the sun and to increase energy out- ‘‘(iii) BATTERY MODULE.—The term ‘battery ‘‘(I) indium tin oxide, or
put. module’ means a module— ‘‘(II) indium oxide which is purified to a
‘‘(vii) SOLAR TRACKER COMPONENTS.— ‘‘(I)(aa) in the case of a module using bat- minimum purity of 99.9 percent indium oxide
‘‘(I) TORQUE TUBE.—The term ‘torque tube’ tery cells, with 2 or more battery cells which by mass, or
means a structural steel support element (in- are configured electrically, in series or par- ‘‘(ii) purified to a minimum purity of 99
cluding longitudinal purlins) which— allel, to create voltage or current, as appro- percent indium by mass.
‘‘(aa) is part of a solar tracker, priate, to a specified end use, or ‘‘(P) LITHIUM.—Lithium which is—
‘‘(bb) is of any cross-sectional shape, ‘‘(bb) with no battery cells, and ‘‘(i) converted to lithium carbonate or lith-
‘‘(cc) may be assembled from individually ‘‘(II) with an aggregate capacity of not less ium hydroxide, or
manufactured segments, than 7 kilowatt-hours (or, in the case of a ‘‘(ii) purified to a minimum purity of 99.9
‘‘(dd) spans longitudinally between founda- module for a hydrogen fuel cell vehicle, not percent lithium by mass.
tion posts, less than 1 kilowatt-hour). ‘‘(Q) MANGANESE.—Manganese which is—
‘‘(ee) supports solar panels and is con- ‘‘(6) APPLICABLE CRITICAL MINERALS.—The ‘‘(i) converted to manganese sulphate, or
nected to a mounting attachment for solar term ‘applicable critical mineral’ means any ‘‘(ii) purified to a minimum purity of 99.7
panels (with or without separate module of the following: percent manganese by mass.
interface rails), and ‘‘(A) ALUMINUM.—Aluminum which is— ‘‘(R) NEODYMIUM.—Neodymium which is—
‘‘(ff) is rotated by means of a drive system. ‘‘(i) converted from bauxite to a minimum ‘‘(i) converted to neodymium-praseo-
‘‘(II) STRUCTURAL FASTENER.—The term purity of 99 percent alumina by mass, or dymium oxide which is purified to a min-
‘structural fastener’ means a component ‘‘(ii) purified to a minimum purity of 99.9 imum purity of 99 percent neodymium-pra-
which is used— percent aluminum by mass. seodymium oxide by mass,
‘‘(aa) to connect the mechanical and drive ‘‘(B) ANTIMONY.—Antimony which is— ‘‘(ii) converted to neodymium oxide which
system components of a solar tracker to the ‘‘(i) converted to antimony trisulfide con- is purified to a minimum purity of 99.5 per-
foundation of such solar tracker, centrate with a minimum purity of 90 per- cent neodymium oxide by mass
‘‘(bb) to connect torque tubes to drive as- cent antimony trisulfide by mass, or ‘‘(iii) purified to a minimum purity of 99.9
semblies, or ‘‘(ii) purified to a minimum purity of 99.65 percent neodymium by mass.
‘‘(cc) to connect segments of torque tubes percent antimony by mass. ‘‘(S) NICKEL.—Nickel which is—
to one another. ‘‘(C) BARITE.—Barite which is barium sul- ‘‘(i) converted to nickel sulphate, or
‘‘(4) WIND ENERGY COMPONENT.— fate purified to a minimum purity of 80 per- ‘‘(ii) purified to a minimum purity of 99
‘‘(A) IN GENERAL.—The term ‘wind energy cent barite by mass. percent nickel by mass.
component’ means any of the following: ‘‘(D) BERYLLIUM.—Beryllium which is— ‘‘(T) NIOBIUM.—Niobium which is—
‘‘(i) Blades. ‘‘(i) converted to copper-beryllium master ‘‘(i) converted to ferronibium, or
‘‘(ii) Nacelles. alloy, or ‘‘(ii) purified to a minimum purity of 99
‘‘(iii) Towers. ‘‘(ii) purified to a minimum purity of 99 percent niobium by mass.
‘‘(iv) Offshore wind foundations. percent beryllium by mass. ‘‘(U) TELLURIUM.—Tellurium which is—
‘‘(v) Related offshore wind vessels. ‘‘(E) CERIUM.—Cerium which is— ‘‘(i) converted to cadmium telluride, or
‘‘(B) ASSOCIATED DEFINITIONS.— ‘‘(i) converted to cerium oxide which is pu- ‘‘(ii) purified to a minimum purity of 99
‘‘(i) BLADE.—The term ‘blade’ means an rified to a minimum purity of 99.9 percent percent tellurium by mass.
airfoil-shaped blade which is responsible for cerium oxide by mass, or ‘‘(V) TIN.—Tin which is purified to low
converting wind energy to low-speed rota- ‘‘(ii) purified to a minimum purity of 99 alpha emitting tin which—
tional energy. percent cerium by mass. ‘‘(i) has a purity of greater than 99.99 per-
‘‘(ii) OFFSHORE WIND FOUNDATION.—The ‘‘(F) CESIUM.—Cesium which is— cent by mass, and
term ‘offshore wind foundation’ means the ‘‘(i) converted to cesium formate or cesium ‘‘(ii) possesses an alpha emission rate of
component (including transition piece) carbonate, or not greater than 0.01 counts per hour per
which secures an offshore wind tower and ‘‘(ii) purified to a minimum purity of 99 centimeter square.
any above-water turbine components to the percent cesium by mass. ‘‘(W) TUNGSTEN.—Tungsten which is con-
seafloor using— ‘‘(G) CHROMIUM.—Chromium which is— verted to ammonium paratungstate or
‘‘(I) fixed platforms, such as offshore wind ‘‘(i) converted to ferrochromium consisting ferrotungsten.
monopiles, jackets, or gravity-based founda- of not less than 60 percent chromium by ‘‘(X) VANADIUM.—Vanadium which is con-
tions, or mass, or verted to ferrovanadium or vanadium pent-
‘‘(II) floating platforms and associated ‘‘(ii) purified to a minimum purity of 99 oxide.
mooring systems. percent chromium by mass. ‘‘(Y) YTTRIUM.—Yttrium which is—
‘‘(iii) NACELLE.—The term ‘nacelle’ means ‘‘(H) COBALT.—Cobalt which is— ‘‘(i) converted to yttrium oxide which is
the assembly of the drivetrain and other ‘‘(i) converted to cobalt sulfate, or purified to a minimum purity of 99.999 per-
dlhill on DSK120RN23PROD with SENATE
tower-top components of a wind turbine ‘‘(ii) purified to a minimum purity of 99.6 cent yttrium oxide by mass, or
(with the exception of the blades and the percent cobalt by mass. ‘‘(ii) purified to a minimum purity of 99.9
hub) within their cover housing. ‘‘(I) DYSPROSIUM.—Dysprosium which is— percent yttrium by mass.
‘‘(iv) RELATED OFFSHORE WIND VESSEL.— ‘‘(i) converted to not less than 99 percent ‘‘(Z) OTHER MINERALS.—Any of the fol-
The term ‘related offshore wind vessel’ pure dysprosium iron alloy by mass, or lowing minerals, provided that such mineral
means any vessel which is purpose-built or ‘‘(ii) purified to a minimum purity of 99 is purified to a minimum purity of 99 percent
retrofitted for purposes of the development, percent dysprosium by mass. by mass:
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00063 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4114 CONGRESSIONAL RECORD — SENATE August 6, 2022
‘‘(i) Arsenic. ‘‘(3) ADJUSTMENT FOR INFLATION.— ‘‘(iii) for which the greenhouse gas emis-
‘‘(ii) Bismuth. ‘‘(A) IN GENERAL.—In the case of a year be- sions rate (as determined under paragraph
‘‘(iii) Erbium. ginning after 2023, the amount in paragraph (2)) is not greater than zero.
‘‘(iv) Gallium. (2)(A) shall be increased by an amount equal ‘‘(B) 10-YEAR PRODUCTION CREDIT.—For pur-
‘‘(v) Hafnium. to— poses of this section, a facility shall only be
‘‘(vi) Holmium. ‘‘(i) such amount, multiplied by treated as a qualified facility during the 10-
‘‘(vii) Iridium. ‘‘(ii) the cost-of-living adjustment deter- year period beginning on the date the facil-
‘‘(viii) Lanthanum. mined under section 1(f)(3) for the calendar ity was originally placed in service.
‘‘(ix) Lutetium. year, determined by substituting ‘calendar ‘‘(C) EXPANSION OF FACILITY; INCREMENTAL
‘‘(x) Magnesium. year 2022’ for ‘calendar year 2016’ in subpara- PRODUCTION.—The term ‘qualified facility’
‘‘(xi) Palladium. graph (A)(ii) thereof. shall include either of the following in con-
‘‘(xii) Platinum. ‘‘(B) ROUNDING.—If any amount as adjusted nection with a facility described in subpara-
‘‘(xiii) Praseodymium. under subparagraph (A) is not a multiple of graph (A) (without regard to clause (ii) of
‘‘(xiv) Rhodium. $0.01, such amount shall be rounded to the such subparagraph) which was placed in serv-
‘‘(xv) Rubidium. next lowest multiple of $0.01.’’. ice before January 1, 2025, but only to the ex-
‘‘(xvi) Ruthenium. (b) AUTHORITY FOR ADVANCES.—Section tent of the increased amount of electricity
‘‘(xvii) Samarium. 9507(d)(3)(B) is amended by striking ‘‘Decem- produced at the facility by reason of the fol-
‘‘(xviii) Scandium. ber 31, 1995’’ and inserting ‘‘December 31, lowing:
‘‘(xix) Tantalum. 2032’’. ‘‘(i) A new unit which is placed in service
‘‘(xx) Terbium. (c) EFFECTIVE DATE.—The amendments after December 31, 2024.
‘‘(xxi) Thulium. made by this section shall take effect on ‘‘(ii) Any additions of capacity which are
‘‘(xxii) Titanium. January 1, 2023. placed in service after December 31, 2024.
‘‘(xxiii) Ytterbium. ‘‘(D) COORDINATION WITH OTHER CREDITS.—
PART 7—INCENTIVES FOR CLEAN ELEC- The term ‘qualified facility’ shall not in-
‘‘(xxiv) Zinc.
TRICITY AND CLEAN TRANSPORTATION clude any facility for which a credit deter-
‘‘(xxv) Zirconium.
‘‘(d) SPECIAL RULES.—In this section— SEC. 13701. CLEAN ELECTRICITY PRODUCTION mined under section 45, 45J, 45Q, 45U, 48, 48A,
‘‘(1) RELATED PERSONS.—Persons shall be CREDIT. or 48E is allowed under section 38 for the tax-
treated as related to each other if such per- (a) IN GENERAL.—Subpart D of part IV of able year or any prior taxable year.
sons would be treated as a single employer subchapter A of chapter 1, as amended by the ‘‘(2) GREENHOUSE GAS EMISSIONS RATE.—
under the regulations prescribed under sec- preceding provisions of this Act, is amended ‘‘(A) IN GENERAL.—For purposes of this sec-
tion 52(b). by adding at the end the following new sec- tion, the term ‘greenhouse gas emissions
‘‘(2) ONLY PRODUCTION IN THE UNITED tion: rate’ means the amount of greenhouse gases
STATES TAKEN INTO ACCOUNT.—Sales shall be emitted into the atmosphere by a facility in
‘‘SEC. 45Y. CLEAN ELECTRICITY PRODUCTION
taken into account under this section only CREDIT.
the production of electricity, expressed as
with respect to eligible components the pro- grams of CO2e per KWh.
‘‘(a) AMOUNT OF CREDIT.— ‘‘(B) FUEL COMBUSTION AND GASIFICATION.—
duction of which is within— ‘‘(1) IN GENERAL.—For purposes of section
‘‘(A) the United States (within the mean- In the case of a facility which produces elec-
38, the clean electricity production credit for tricity through combustion or gasification,
ing of section 638(1)), or any taxable year is an amount equal to the
‘‘(B) a possession of the United States the greenhouse gas emissions rate for such
product of— facility shall be equal to the net rate of
(within the meaning of section 638(2)). ‘‘(A) the kilowatt hours of electricity—
‘‘(3) PASS-THRU IN THE CASE OF ESTATES AND greenhouse gases emitted into the atmos-
‘‘(i) produced by the taxpayer at a qualified phere by such facility (taking into account
TRUSTS.—Under regulations prescribed by facility, and
the Secretary, rules similar to the rules of lifecycle greenhouse gas emissions, as de-
‘‘(ii)(I) sold by the taxpayer to an unre- scribed in section 211(o)(1)(H) of the Clean
subsection (d) of section 52 shall apply. lated person during the taxable year, or Air Act (42 U.S.C. 7545(o)(1)(H))) in the pro-
‘‘(4) SALE OF INTEGRATED COMPONENTS.— ‘‘(II) in the case of a qualified facility duction of electricity, expressed as grams of
For purposes of this section, a person shall which is equipped with a metering device CO2e per KWh.
be treated as having sold an eligible compo- which is owned and operated by an unrelated ‘‘(C) ESTABLISHMENT OF EMISSIONS RATES
nent to an unrelated person if such compo- person, sold, consumed, or stored by the tax- FOR FACILITIES.—
nent is integrated, incorporated, or assem- payer during the taxable year, multiplied by ‘‘(i) PUBLISHING EMISSIONS RATES.—The
bled into another eligible component which ‘‘(B) the applicable amount with respect to Secretary shall annually publish a table that
is sold to an unrelated person.’’. such qualified facility. sets forth the greenhouse gas emissions rates
(b) CONFORMING AMENDMENTS.— ‘‘(2) APPLICABLE AMOUNT.— for types or categories of facilities, which a
(1) Section 38(b) of the Internal Revenue ‘‘(A) BASE AMOUNT.—Subject to subsection taxpayer shall use for purposes of this sec-
Code of 1986, as amended by the preceding (g)(7), in the case of any qualified facility tion.
provisions of this Act, is amended— which is not described in clause (i) or (ii) of ‘‘(ii) PROVISIONAL EMISSIONS RATE.—In the
(A) in paragraph (36), by striking ‘‘plus’’ at subparagraph (B) and does not satisfy the re- case of any facility for which an emissions
the end, quirements described in clause (iii) of such rate has not been established by the Sec-
(B) in paragraph (37), by striking the pe- subparagraph, the applicable amount shall retary, a taxpayer which owns such facility
riod at the end and inserting ‘‘, plus’’, and be 0.3 cents. may file a petition with the Secretary for de-
(C) by adding at the end the following new ‘‘(B) ALTERNATIVE AMOUNT.—Subject to termination of the emissions rate with re-
paragraph: subsection (g)(7), in the case of any qualified spect to such facility.
‘‘(38) the advanced manufacturing produc- facility— ‘‘(D) CARBON CAPTURE AND SEQUESTRATION
tion credit determined under section ‘‘(i) with a maximum net output of less EQUIPMENT.—For purposes of this subsection,
45X(a).’’. than 1 megawatt (as measured in alternating the amount of greenhouse gases emitted into
(2) The table of sections for subpart D of current), the atmosphere by a facility in the produc-
part IV of subchapter A of chapter 1, as ‘‘(ii) the construction of which begins prior tion of electricity shall not include any
amended by the preceding provisions of this to the date that is 60 days after the Sec- qualified carbon dioxide that is captured by
Act, is amended by adding at the end the fol- retary publishes guidance with respect to the the taxpayer and—
lowing new item: requirements of paragraphs (9) and (10) of ‘‘(i) pursuant to any regulations estab-
‘‘Sec. 45X. Advanced manufacturing produc- subsection (g), or lished under paragraph (2) of section 45Q(f),
tion credit.’’. ‘‘(iii) which— disposed of by the taxpayer in secure geo-
(c) EFFECTIVE DATE.—The amendments ‘‘(I) satisfies the requirements under para- logical storage, or
made by this section shall apply to compo- graph (9) of subsection (g), and ‘‘(ii) utilized by the taxpayer in a manner
nents produced and sold after December 31, ‘‘(II) with respect to the construction of described in paragraph (5) of such section.
2022. such facility, satisfies the requirements ‘‘(c) INFLATION ADJUSTMENT.—
PART 6—SUPERFUND under paragraph (10) of subsection (g), ‘‘(1) IN GENERAL.—In the case of a calendar
SEC. 13601. REINSTATEMENT OF SUPERFUND. the applicable amount shall be 1.5 cents. year beginning after 2024, the 0.3 cent
(a) HAZARDOUS SUBSTANCE SUPERFUND FI- ‘‘(b) QUALIFIED FACILITY.— amount in paragraph (2)(A) of subsection (a)
NANCING RATE.— ‘‘(1) IN GENERAL.— and the 1.5 cent amount in paragraph (2)(B)
(1) EXTENSION.—Section 4611 is amended by ‘‘(A) DEFINITION.—Subject to subpara- of such subsection shall each be adjusted by
dlhill on DSK120RN23PROD with SENATE
striking subsection (e). graphs (B), (C), and (D), the term ‘qualified multiplying such amount by the inflation
(2) ADJUSTMENT FOR INFLATION.— facility’ means a facility owned by the tax- adjustment factor for the calendar year in
(A) Section 4611(c)(2)(A) is amended by payer— which the sale, consumption, or storage of
striking ‘‘9.7 cents’’ and inserting ‘‘16.4 ‘‘(i) which is used for the generation of the electricity occurs. If the 0.3 cent amount
cents’’. electricity, as increased under this paragraph is not a
(B) Section 4611(c) is amended by adding at ‘‘(ii) which is placed in service after De- multiple of 0.05 cent, such amount shall be
the end the following: cember 31, 2024, and rounded to the nearest multiple of 0.05 cent.
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00064 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4115
If the 1.5 cent amount as increased under ing of section 638(1)) or a possession of the credit determined under subsection (a) for
this paragraph is not a multiple of 0.1 cent, United States (within the meaning of section the taxable year may, at the election of the
such amount shall be rounded to the nearest 638(2)). organization, be apportioned among patrons
multiple of 0.1 cent. ‘‘(f) GUIDANCE.—Not later than January 1, of the organization on the basis of the
‘‘(2) ANNUAL COMPUTATION.—The Secretary 2025, the Secretary shall issue guidance re- amount of business done by the patrons dur-
shall, not later than April 1 of each calendar garding implementation of this section, in- ing the taxable year.
year, determine and publish in the Federal cluding calculation of greenhouse gas emis- ‘‘(ii) FORM AND EFFECT OF ELECTION.—An
Register the inflation adjustment factor for sion rates for qualified facilities and deter- election under clause (i) for any taxable year
such calendar year in accordance with this mination of clean electricity production
shall be made on a timely filed return for
subsection. credits under this section.
‘‘(g) SPECIAL RULES.— such year. Such election, once made, shall be
‘‘(3) INFLATION ADJUSTMENT FACTOR.—The irrevocable for such taxable year. Such elec-
term ‘inflation adjustment factor’ means, ‘‘(1) ONLY PRODUCTION IN THE UNITED
STATES TAKEN INTO ACCOUNT.—Consumption, tion shall not take effect unless the organi-
with respect to a calendar year, a fraction
sales, or storage shall be taken into account zation designates the apportionment as such
the numerator of which is the GDP implicit
under this section only with respect to elec- in a written notice mailed to its patrons dur-
price deflator for the preceding calendar
tricity the production of which is within— ing the payment period described in section
year and the denominator of which is the
GDP implicit price deflator for the calendar ‘‘(A) the United States (within the mean- 1382(d).
year 1992. The term ‘GDP implicit price ing of section 638(1)), or ‘‘(B) TREATMENT OF ORGANIZATIONS AND PA-
‘‘(B) a possession of the United States TRONS.—The amount of the credit appor-
deflator’ means the most recent revision of
the implicit price deflator for the gross do- (within the meaning of section 638(2)). tioned to any patrons under subparagraph
mestic product as computed and published ‘‘(2) COMBINED HEAT AND POWER SYSTEM (A)—
by the Department of Commerce before PROPERTY.— ‘‘(i) shall not be included in the amount de-
March 15 of the calendar year. ‘‘(A) IN GENERAL.—For purposes of sub- termined under subsection (a) with respect
‘‘(d) CREDIT PHASE-OUT.— section (a)— to the organization for the taxable year, and
‘‘(1) IN GENERAL.—The amount of the clean ‘‘(i) the kilowatt hours of electricity pro- ‘‘(ii) shall be included in the amount deter-
electricity production credit under sub- duced by a taxpayer at a qualified facility mined under subsection (a) for the first tax-
section (a) for any qualified facility the con- shall include any production in the form of able year of each patron ending on or after
struction of which begins during a calendar useful thermal energy by any combined heat the last day of the payment period (as de-
year described in paragraph (2) shall be equal and power system property within such facil- fined in section 1382(d)) for the taxable year
to the product of— ity, and of the organization or, if earlier, for the tax-
‘‘(A) the amount of the credit determined ‘‘(ii) the amount of greenhouse gases emit- able year of each patron ending on or after
under subsection (a) without regard to this ted into the atmosphere by such facility in the date on which the patron receives notice
subsection, multiplied by the production of such useful thermal energy from the cooperative of the apportionment.
‘‘(B) the phase-out percentage under para- shall be included for purposes of determining ‘‘(C) SPECIAL RULES FOR DECREASE IN CRED-
graph (2). the greenhouse gas emissions rate for such ITS FOR TAXABLE YEAR.—If the amount of the
‘‘(2) PHASE-OUT PERCENTAGE.—The phase- facility. credit of a cooperative organization deter-
out percentage under this paragraph is equal ‘‘(B) COMBINED HEAT AND POWER SYSTEM mined under subsection (a) for a taxable year
to— PROPERTY.—For purposes of this paragraph, is less than the amount of such credit shown
‘‘(A) for a facility the construction of the term ‘combined heat and power system on the return of the cooperative organization
which begins during the first calendar year property’ has the same meaning given such for such year, an amount equal to the excess
following the applicable year, 100 percent, term by section 48(c)(3) (without regard to of—
‘‘(B) for a facility the construction of subparagraphs (A)(iv), (B), and (D) thereof).
‘‘(i) such reduction, over
which begins during the second calendar ‘‘(C) CONVERSION FROM BTU TO KWH.—
‘‘(ii) the amount not apportioned to such
year following the applicable year, 75 per- ‘‘(i) IN GENERAL.—For purposes of subpara-
patrons under subparagraph (A) for the tax-
cent, graph (A)(i), the amount of kilowatt hours of
able year,
‘‘(C) for a facility the construction of electricity produced in the form of useful
shall be treated as an increase in tax im-
which begins during the third calendar year thermal energy shall be equal to the
posed by this chapter on the organization.
following the applicable year, 50 percent, and quotient of—
Such increase shall not be treated as tax im-
‘‘(D) for a facility the construction of ‘‘(I) the total useful thermal energy pro-
posed by this chapter for purposes of deter-
which begins during any calendar year subse- duced by the combined heat and power sys-
mining the amount of any credit under this
quent to the calendar year described in sub- tem property within the qualified facility,
chapter.
paragraph (C), 0 percent. divided by
‘‘(D) ELIGIBLE COOPERATIVE DEFINED.—For
‘‘(3) APPLICABLE YEAR.—For purposes of ‘‘(II) the heat rate for such facility.
‘‘(ii) HEAT RATE.—For purposes of this sub- purposes of this section, the term ‘eligible
this subsection, the term ‘applicable year’
paragraph, the term ‘heat rate’ means the cooperative’ means a cooperative organiza-
means the later of—
amount of energy used by the qualified facil- tion described in section 1381(a) which is
‘‘(A) the calendar year in which the Sec-
ity to generate 1 kilowatt hour of elec- owned more than 50 percent by agricultural
retary determines that the annual green-
tricity, expressed as British thermal units producers or by entities owned by agricul-
house gas emissions from the production of
per net kilowatt hour generated. tural producers. For this purpose an entity
electricity in the United States are equal to
‘‘(3) PRODUCTION ATTRIBUTABLE TO THE TAX- owned by an agricultural producer is one
or less than 25 percent of the annual green-
PAYER.—In the case of a qualified facility in that is more than 50 percent owned by agri-
house gas emissions from the production of
which more than 1 person has an ownership cultural producers.
electricity in the United States for calendar
interest, except to the extent provided in ‘‘(7) INCREASE IN CREDIT IN ENERGY COMMU-
year 2022, or
regulations prescribed by the Secretary, pro- NITIES.—In the case of any qualified facility
‘‘(B) 2032.
‘‘(e) DEFINITIONS.—For purposes of this sec- duction from the facility shall be allocated which is located in an energy community (as
tion: among such persons in proportion to their defined in section 45(b)(11)(B)), for purposes
‘‘(1) CO2e PER KWh.—The term ‘CO2e per respective ownership interests in the gross of determining the amount of the credit
KWh’ means, with respect to any greenhouse sales from such facility. under subsection (a) with respect to any
gas, the equivalent carbon dioxide (as deter- ‘‘(4) RELATED PERSONS.—Persons shall be electricity produced by the taxpayer at such
mined based on global warming potential) treated as related to each other if such per- facility during the taxable year, the applica-
per kilowatt hour of electricity produced. sons would be treated as a single employer ble amount under paragraph (2) of such sub-
‘‘(2) GREENHOUSE GAS.—The term ‘green- under the regulations prescribed under sec- section shall be increased by an amount
house gas’ has the same meaning given such tion 52(b). In the case of a corporation which equal to 10 percent of the amount otherwise
term under section 211(o)(1)(G) of the Clean is a member of an affiliated group of cor- in effect under such paragraph.
Air Act (42 U.S.C. 7545(o)(1)(G)), as in effect porations filing a consolidated return, such ‘‘(8) CREDIT REDUCED FOR TAX-EXEMPT
on the date of the enactment of this section. corporation shall be treated as selling elec- BONDS.—Rules similar to the rules of section
‘‘(3) QUALIFIED CARBON DIOXIDE.—The term tricity to an unrelated person if such elec- 45(b)(3) shall apply.
‘qualified carbon dioxide’ means carbon diox- tricity is sold to such a person by another ‘‘(9) WAGE REQUIREMENTS.—Rules similar to
ide captured from an industrial source member of such group. the rules of section 45(b)(7) shall apply.
which— ‘‘(5) PASS-THRU IN THE CASE OF ESTATES AND ‘‘(10) APPRENTICESHIP REQUIREMENTS.—
‘‘(A) would otherwise be released into the TRUSTS.—Under regulations prescribed by Rules similar to the rules of section 45(b)(8)
dlhill on DSK120RN23PROD with SENATE
atmosphere as industrial emission of green- the Secretary, rules similar to the rules of shall apply.
house gas, subsection (d) of section 52 shall apply. ‘‘(11) DOMESTIC CONTENT BONUS CREDIT
‘‘(B) is measured at the source of capture ‘‘(6) ALLOCATION OF CREDIT TO PATRONS OF AMOUNT.—
and verified at the point of disposal or utili- AGRICULTURAL COOPERATIVE.— ‘‘(A) IN GENERAL.—In the case of any quali-
zation, and ‘‘(A) ELECTION TO ALLOCATE.— fied facility which satisfies the requirement
‘‘(C) is captured and disposed or utilized ‘‘(i) IN GENERAL.—In the case of an eligible under subparagraph (B)(i), the amount of the
within the United States (within the mean- cooperative organization, any portion of the credit determined under subsection (a) shall
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00065 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4116 CONGRESSIONAL RECORD — SENATE August 6, 2022
be increased by an amount equal to 10 per- case of any qualified facility which is not de- ‘‘(III) which—
cent of the amount so determined (as deter- scribed in subparagraph (B), the applicable ‘‘(aa) satisfies the requirements of sub-
mined without application of paragraph (7)). percentage shall be— section (d)(3), and
‘‘(B) REQUIREMENT.— ‘‘(i) if construction of such facility began ‘‘(bb) with respect to the construction of
‘‘(i) IN GENERAL.—The requirement de- before January 1, 2024, 100 percent, such facility, satisfies the requirements of
scribed in this subclause is satisfied with re- ‘‘(ii) if construction of such facility began subsection (d)(4),
spect to any qualified facility if the taxpayer in calendar year 2024, 90 percent, the applicable percentage shall be 30 percent.
certifies to the Secretary (at such time, and ‘‘(iii) if construction of such facility began ‘‘(B) ENERGY STORAGE TECHNOLOGY.—Sub-
in such form and manner, as the Secretary in calendar year 2025, 85 percent, and ject to paragraph (3)—
may prescribe) that any steel, iron, or manu- ‘‘(iv) if construction of such facility began ‘‘(i) BASE RATE.—In the case of any energy
factured product which is a component of after December 31, 2025, 0 percent. storage technology which is not described in
such facility (upon completion of construc- ‘‘(D) EXCEPTION.— subclause (I) or (II) of clause (ii) and does not
tion) was produced in the United States (as ‘‘(i) IN GENERAL.—For purposes of this satisfy the requirements described in sub-
determined under section 661 of title 49, Code paragraph, the Secretary shall provide ex- clause (III) of such clause, the applicable per-
of Federal Regulations). ceptions to the requirements under this centage shall be 6 percent.
‘‘(ii) STEEL AND IRON.—In the case of steel paragraph if— ‘‘(ii) ALTERNATIVE RATE.—In the case of
or iron, clause (i) shall be applied in a man- ‘‘(I) the inclusion of steel, iron, or manu- any energy storage technology—
ner consistent with section 661.5 of title 49, factured products which are produced in the ‘‘(I) with a capacity of less than 1 mega-
Code of Federal Regulations. United States increases the overall costs of watt,
‘‘(iii) MANUFACTURED PRODUCT.—For pur- construction of qualified facilities by more ‘‘(II) the construction of which begins prior
poses of clause (i), the manufactured prod- than 25 percent, or to the date that is 60 days after the Sec-
ucts which are components of a qualified fa- ‘‘(II) relevant steel, iron, or manufactured retary publishes guidance with respect to the
cility upon completion of construction shall products are not produced in the United requirements of paragraphs (3) and (4) of sub-
be deemed to have been produced in the States in sufficient and reasonably available section (d), or
United States if not less than the adjusted quantities or of a satisfactory quality. ‘‘(III) which—
percentage (as determined under subpara- ‘‘(ii) APPLICABLE PERCENTAGE.—In any case ‘‘(aa) satisfies the requirements of sub-
graph (C)) of the total costs of all such man- in which the Secretary provides an exception section (d)(3), and
ufactured products of such facility are at- pursuant to clause (i), the applicable per- ‘‘(bb) with respect to the construction of
tributable to manufactured products (includ- centage shall be 100 percent.’’. such property, satisfies the requirements of
ing components) which are mined, produced, (b) CONFORMING AMENDMENTS.—
subsection (d)(4),
or manufactured in the United States. (1) Section 38(b), as amended by the pre-
the applicable percentage shall be 30 percent.
‘‘(C) ADJUSTED PERCENTAGE.— ceding provisions of this Act, is amended—
‘‘(3) INCREASE IN CREDIT RATE IN CERTAIN
‘‘(i) IN GENERAL.—Subject to subclause (ii), (A) in paragraph (37), by striking ‘‘plus’’ at
CASES.—
for purposes of subparagraph (B)(iii), the ad- the end,
‘‘(A) ENERGY COMMUNITIES.—
justed percentage shall be— (B) in paragraph (38), by striking the pe-
‘‘(i) IN GENERAL.—In the case of any quali-
‘‘(I) in the case of a facility the construc- riod at the end and inserting ‘‘, plus’’, and
fied investment with respect to a qualified
tion of which begins before January 1, 2025, (C) by adding at the end the following new
facility or with respect to energy storage
40 percent, paragraph:
technology which is placed in service within
‘‘(II) in the case of a facility the construc- ‘‘(39) the clean electricity production cred-
an energy community (as defined in section
tion of which begins after December 31, 2024, it determined under section 45Y(a).’’.
45(b)(11)(B)), for purposes of applying para-
and before January 1, 2026, 45 percent, (2) The table of sections for subpart D of
graph (2) with respect to such property or in-
‘‘(III) in the case of a facility the construc- part IV of subchapter A of chapter 1, as
vestment, the applicable percentage shall be
tion of which begins after December 31, 2025, amended by the preceding provisions of this
increased by the applicable credit rate in-
and before January 1, 2027, 50 percent, and Act, is amended by adding at the end the fol-
crease.
‘‘(IV) in the case of a facility the construc- lowing new item:
tion of which begins after December 31, 2026, ‘‘(ii) APPLICABLE CREDIT RATE INCREASE.—
‘‘Sec. 45Y. Clean electricity production cred- For purposes of clause (i), the applicable
55 percent. it.’’.
‘‘(ii) OFFSHORE WIND FACILITY.—For pur- credit rate increase shall be an amount equal
(c) EFFECTIVE DATE.—The amendments to—
poses of subparagraph (B)(iii), in the case of made by this section shall apply to facilities
a qualified facility which is an offshore wind ‘‘(I) in the case of any qualified investment
placed in service after December 31, 2024.
facility, the adjusted percentage shall be— with respect to a qualified facility described
SEC. 13702. CLEAN ELECTRICITY INVESTMENT
‘‘(I) in the case of a facility the construc- CREDIT.
in paragraph (2)(A)(i) or with respect to en-
tion of which begins before January 1, 2025, ergy storage technology described in para-
(a) IN GENERAL.—Subpart E of part IV of
20 percent, subchapter A of chapter 1, as amended by graph (2)(B)(i), 2 percentage points, and
‘‘(II) in the case of a facility the construc- section 107(a) of the CHIPS Act of 2022, is ‘‘(II) in the case of any qualified invest-
tion of which begins after December 31, 2024, amended by inserting after section 48D the ment with respect to a qualified facility de-
and before January 1, 2026, 27.5 percent, following new section: scribed in paragraph (2)(A)(ii) or with respect
‘‘(III) in the case of a facility the construc- ‘‘SEC. 48E. CLEAN ELECTRICITY INVESTMENT to energy storage technology described in
tion of which begins after December 31, 2025, CREDIT. paragraph (2)(B)(ii), 10 percentage points.
and before January 1, 2027, 35 percent, ‘‘(a) INVESTMENT CREDIT FOR QUALIFIED ‘‘(B) DOMESTIC CONTENT.—Rules similar to
‘‘(IV) in the case of a facility the construc- PROPERTY.— the rules of section 48(a)(12) shall apply.
tion of which begins after December 31, 2026, ‘‘(1) IN GENERAL.—For purposes of section ‘‘(b) QUALIFIED INVESTMENT WITH RESPECT
and before January 1, 2028, 45 percent, and 46, the clean electricity investment credit TO A QUALIFIED FACILITY.—
‘‘(V) in the case of a facility the construc- for any taxable year is an amount equal to ‘‘(1) IN GENERAL.—For purposes of sub-
tion of which begins after December 31, 2027, the applicable percentage of the qualified in- section (a), the qualified investment with re-
55 percent. vestment for such taxable year with respect spect to any qualified facility for any tax-
‘‘(12) PHASEOUT FOR ELECTIVE PAYMENT.— to— able year is the sum of—
‘‘(A) IN GENERAL.—In the case of a taxpayer ‘‘(A) any qualified facility, and ‘‘(A) the basis of any qualified property
making an election under section 6417 with ‘‘(B) any energy storage technology. placed in service by the taxpayer during such
respect to a credit under this section, the ‘‘(2) APPLICABLE PERCENTAGE.— taxable year which is part of a qualified fa-
amount of such credit shall be replaced ‘‘(A) QUALIFIED FACILITIES.—Subject to cility, plus
with— paragraph (3)— ‘‘(B) the amount of any expenditures which
‘‘(i) the value of such credit (determined ‘‘(i) BASE RATE.—In the case of any quali- are—
without regard to this paragraph), multi- fied facility which is not described in sub- ‘‘(i) paid or incurred by the taxpayer for
plied by clause (I) or (II) of clause (ii) and does not qualified interconnection property—
‘‘(ii) the applicable percentage. satisfy the requirements described in sub- ‘‘(I) in connection with a qualified facility
‘‘(B) 100 PERCENT APPLICABLE PERCENTAGE clause (III) of such clause, the applicable per- which has a maximum net output of not
FOR CERTAIN QUALIFIED FACILITIES.—In the centage shall be 6 percent. greater than 5 megawatts (as measured in al-
case of any qualified facility— ‘‘(ii) ALTERNATIVE RATE.—In the case of ternating current), and
‘‘(i) which satisfies the requirements under any qualified facility— ‘‘(II) placed in service during the taxable
paragraph (11)(B), or ‘‘(I) with a maximum net output of less year of the taxpayer, and
dlhill on DSK120RN23PROD with SENATE
‘‘(ii) with a maximum net output of less than 1 megawatt (as measured in alternating ‘‘(ii) properly chargeable to capital ac-
than 1 megawatt (as measured in alternating current), count of the taxpayer.
current), ‘‘(II) the construction of which begins prior ‘‘(2) QUALIFIED PROPERTY.—For purposes of
the applicable percentage shall be 100 per- to the date that is 60 days after the Sec- this section, the term ‘qualified property’
cent. retary publishes guidance with respect to the means property—
‘‘(C) PHASED DOMESTIC CONTENT REQUIRE- requirements of paragraphs (3) and (4) of sub- ‘‘(A) which is—
MENT.—Subject to subparagraph (D), in the section (d), or ‘‘(i) tangible personal property, or
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00066 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4117
‘‘(ii) other tangible property (not including of 1990) shall apply for purposes of subsection ‘‘(ii) in the case of a facility described in
a building or its structural components), but (a). subclause (II) of paragraph (2)(A)(iii), 20 per-
only if such property is used as an integral ‘‘(2) SPECIAL RULE FOR PROPERTY FINANCED centage points, and
part of the qualified facility, BY SUBSIDIZED ENERGY FINANCING OR PRIVATE ‘‘(B) the increase in the credit determined
‘‘(B) with respect to which depreciation (or ACTIVITY BONDS.—Rules similar to the rules under subsection (a) by reason of this sub-
amortization in lieu of depreciation) is al- of section 45(b)(3) shall apply. section for any taxable year with respect to
lowable, and ‘‘(3) PREVAILING WAGE REQUIREMENTS.— all property which is part of such facility
‘‘(C)(i) the construction, reconstruction, or Rules similar to the rules of section 48(a)(10) shall not exceed the amount which bears the
erection of which is completed by the tax- shall apply. same ratio to the amount of such increase
payer, or ‘‘(4) APPRENTICESHIP REQUIREMENTS.—Rules (determined without regard to this subpara-
‘‘(ii) which is acquired by the taxpayer if similar to the rules of section 45(b)(8) shall graph) as—
the original use of such property commences apply. ‘‘(i) the environmental justice capacity
with the taxpayer. ‘‘(5) DOMESTIC CONTENT REQUIREMENT FOR limitation allocated to such facility, bears
‘‘(3) QUALIFIED FACILITY.— ELECTIVE PAYMENT.—In the case of a tax- to
‘‘(A) IN GENERAL.—For purposes of this sec- payer making an election under section 6417 ‘‘(ii) the total megawatt nameplate capac-
tion, the term ‘qualified facility’ means a fa- with respect to a credit under this section, ity of such facility, as measured in direct
cility— rules similar to the rules of section current.
‘‘(i) which is used for the generation of 45Y(g)(12) shall apply. ‘‘(2) APPLICABLE FACILITY.—For purposes of
electricity, ‘‘(e) CREDIT PHASE-OUT.— this subsection—
‘‘(ii) which is placed in service after De- ‘‘(1) IN GENERAL.—The amount of the clean ‘‘(A) IN GENERAL.—The term ‘applicable fa-
cember 31, 2024, and electricity investment credit under sub- cility’ means any qualified facility—
‘‘(iii) for which the anticipated greenhouse section (a) for any qualified investment with ‘‘(i) which is not described in section
gas emissions rate (as determined under sub- respect to any qualified facility or energy 45Y(b)(2)(B),
paragraph (B)(ii)) is not greater than zero. storage technology the construction of ‘‘(ii) which has a maximum net output of
‘‘(B) ADDITIONAL RULES.— which begins during a calendar year de- less than 5 megawatts (as measured in alter-
‘‘(i) EXPANSION OF FACILITY; INCREMENTAL scribed in paragraph (2) shall be equal to the nating current), and
PRODUCTION.—Rules similar to the rules of product of— ‘‘(iii) which—
section 45Y(b)(1)(C) shall apply for purposes ‘‘(A) the amount of the credit determined ‘‘(I) is located in a low-income community
of this paragraph. under subsection (a) without regard to this (as defined in section 45D(e)) or on Indian
‘‘(ii) GREENHOUSE GAS EMISSIONS RATE.— subsection, multiplied by land (as defined in section 2601(2) of the En-
Rules similar to the rules of section 45Y(b)(2) ‘‘(B) the phase-out percentage under para- ergy Policy Act of 1992 (25 U.S.C. 3501(2))), or
shall apply for purposes of this paragraph. graph (2). ‘‘(II) is part of a qualified low-income resi-
‘‘(C) EXCLUSION.—The term ‘qualified facil- ‘‘(2) PHASE-OUT PERCENTAGE.—The phase- dential building project or a qualified low-in-
ity’ shall not include any facility for which— out percentage under this paragraph is equal come economic benefit project.
‘‘(i) a renewable electricity production to— ‘‘(B) QUALIFIED LOW-INCOME RESIDENTIAL
credit determined under section 45, ‘‘(A) for any qualified investment with re- BUILDING PROJECT.—A facility shall be treat-
‘‘(ii) an advanced nuclear power facility spect to any qualified facility or energy stor- ed as part of a qualified low-income residen-
production credit determined under section age technology the construction of which be- tial building project if—
45J, gins during the first calendar year following ‘‘(i) such facility is installed on a residen-
‘‘(iii) a carbon oxide sequestration credit the applicable year, 100 percent, tial rental building which participates in a
determined under section 45Q, ‘‘(B) for any qualified investment with re- covered housing program (as defined in sec-
‘‘(iv) a zero-emission nuclear power pro- spect to any qualified facility or energy stor- tion 41411(a) of the Violence Against Women
duction credit determined under section 45U, age technology the construction of which be- Act of 1994 (34 U.S.C. 12491(a)(3)), a housing
‘‘(v) a clean electricity production credit gins during the second calendar year fol- assistance program administered by the De-
determined under section 45Y, lowing the applicable year, 75 percent, partment of Agriculture under title V of the
‘‘(vi) an energy credit determined under ‘‘(C) for any qualified investment with re- Housing Act of 1949, a housing program ad-
section 48, or spect to any qualified facility or energy stor- ministered by a tribally designated housing
‘‘(vii) a qualifying advanced coal project entity (as defined in section 4(22) of the Na-
age technology the construction of which be-
credit under section 48A, tive American Housing Assistance and Self-
gins during the third calendar year following
is allowed under section 38 for the taxable Determination Act of 1996 (25 U.S.C. 4103(22)))
the applicable year, 50 percent, and
year or any prior taxable year. or such other affordable housing programs as
‘‘(D) for any qualified investment with re-
‘‘(4) QUALIFIED INTERCONNECTION PROP- the Secretary may provide, and
spect to any qualified facility or energy stor-
ERTY.—For purposes of this paragraph, the ‘‘(ii) the financial benefits of the elec-
age technology the construction of which be-
term ‘qualified interconnection property’ tricity produced by such facility are allo-
gins during any calendar year subsequent to
has the meaning given such term in section cated equitably among the occupants of the
the calendar year described in subparagraph
48(a)(8)(B). dwelling units of such building.
(C), 0 percent.
‘‘(5) COORDINATION WITH REHABILITATION ‘‘(C) QUALIFIED LOW-INCOME ECONOMIC BEN-
‘‘(3) APPLICABLE YEAR.—For purposes of EFIT PROJECT.—A facility shall be treated as
CREDIT.—The qualified investment with re-
this subsection, the term ‘applicable year’ part of a qualified low-income economic ben-
spect to any qualified facility for any tax- has the same meaning given such term in
able year shall not include that portion of efit project if at least 50 percent of the finan-
section 45Y(d)(3). cial benefits of the electricity produced by
the basis of any property which is attrib- ‘‘(f) GREENHOUSE GAS.—In this section, the
utable to qualified rehabilitation expendi- such facility are provided to households with
term ‘greenhouse gas’ has the same meaning
tures (as defined in section 47(c)(2)). income of—
given such term under section 45Y(e)(2).
‘‘(6) DEFINITIONS.—For purposes of this sub- ‘‘(g) RECAPTURE OF CREDIT.—For purposes ‘‘(i) less than 200 percent of the poverty
section, the terms ‘CO2e per KWh’ and of section 50, if the Secretary determines line (as defined in section 36B(d)(3)(A)) appli-
‘greenhouse gas emissions rate’ have the that the greenhouse gas emissions rate for a cable to a family of the size involved, or
same meaning given such terms under sec- qualified facility is greater than 10 grams of ‘‘(ii) less than 80 percent of area median
tion 45Y. CO2e per KWh, any property for which a gross income (as determined under section
‘‘(c) QUALIFIED INVESTMENT WITH RESPECT credit was allowed under this section with 142(d)(2)(B)).
TO ENERGY STORAGE TECHNOLOGY.— respect to such facility shall cease to be in- ‘‘(D) FINANCIAL BENEFIT.—For purposes of
‘‘(1) QUALIFIED INVESTMENT.—For purposes vestment credit property in the taxable year subparagraphs (B) and (C), electricity ac-
of subsection (a), the qualified investment in which the determination is made. quired at a below-market rate shall not fail
with respect to energy storage technology ‘‘(h) SPECIAL RULES FOR CERTAIN FACILI- to be taken into account as a financial ben-
for any taxable year is the basis of any en- TIES PLACED IN SERVICE IN CONNECTION WITH efit.
ergy storage technology placed in service by LOW-INCOME COMMUNITIES.— ‘‘(3) ELIGIBLE PROPERTY.—For purposes of
the taxpayer during such taxable year. ‘‘(1) IN GENERAL.—In the case of any appli- this subsection, the term ‘eligible property’
‘‘(2) ENERGY STORAGE TECHNOLOGY.—For cable facility with respect to which the Sec- means a qualified investment with respect to
purposes of this section, the term ‘energy retary makes an allocation of environmental any applicable facility.
storage technology’ has the meaning given justice capacity limitation under paragraph ‘‘(4) ALLOCATIONS.—
such term in section 48(c)(6) (except that (4)— ‘‘(A) IN GENERAL.—Not later than January
subparagraph (D) of such section shall not ‘‘(A) the applicable percentage otherwise 1, 2025, the Secretary shall establish a pro-
dlhill on DSK120RN23PROD with SENATE
apply). determined under subsection (a)(2) with re- gram to allocate amounts of environmental
‘‘(d) SPECIAL RULES.— spect to any eligible property which is part justice capacity limitation to applicable fa-
‘‘(1) CERTAIN PROGRESS EXPENDITURE RULES of such facility shall be increased by— cilities. In establishing such program and to
MADE APPLICABLE.—Rules similar to the rules ‘‘(i) in the case of a facility described in carry out the purposes of this subsection, the
of subsections (c)(4) and (d) of section 46 (as subclause (I) of paragraph (2)(A)(iii) and not Secretary shall provide procedures to allow
in effect on the day before the date of the en- described in subclause (II) of such paragraph, for an efficient allocation process, including,
actment of the Revenue Reconciliation Act 10 percentage points, and when determined appropriate, consideration
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00067 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4118 CONGRESSIONAL RECORD — SENATE August 6, 2022
of multiple projects in a single application if ‘‘(7) the clean electricity investment cred- under paragraphs (6) and (7) of subsection (f),
such projects will be placed in service by a it.’’. the applicable amount shall be $1.00.
single taxpayer. (2) Section 49(a)(1)(C), as amended by sec- ‘‘(3) SPECIAL RATE FOR SUSTAINABLE AVIA-
‘‘(B) LIMITATION.—The amount of environ- tion 107(d) of the CHIPS Act of 2022, is TION FUEL.—
mental justice capacity limitation allocated amended— ‘‘(A) IN GENERAL.—In the case of a trans-
by the Secretary under subparagraph (A) (A) by striking ‘‘and’’ at the end of clause portation fuel which is sustainable aviation
during any calendar year shall not exceed (v), fuel, paragraph (2) shall be applied—
the annual capacity limitation with respect (B) by striking the period at the end of ‘‘(i) in the case of fuel produced at a quali-
to such year. clause (vi) and inserting a comma, and fied facility described in paragraph (2)(A), by
‘‘(C) ANNUAL CAPACITY LIMITATION.—For (C) by adding at the end the following new substituting ‘35 cents’ for ‘20 cents’, and
purposes of this paragraph, the term ‘annual clauses: ‘‘(ii) in the case of fuel produced at a quali-
capacity limitation’ means 1.8 gigawatts of ‘‘(vii) the basis of any qualified property fied facility described in paragraph (2)(B), by
direct current capacity for each calendar which is part of a qualified facility under substituting ‘$1.75’ for ‘$1.00’.
year during the period beginning on January section 48E, and ‘‘(B) SUSTAINABLE AVIATION FUEL.—For pur-
1, 2025, and ending on December 31 of the ap- ‘‘(viii) the basis of any energy storage poses of this subparagraph (A), the term ‘sus-
plicable year (as defined in section 45Y(d)(3)), technology under section 48E.’’. tainable aviation fuel’ means liquid fuel, the
and zero thereafter. (3) Section 50(a)(2)(E), as amended by sec- portion of which is not kerosene, which is
‘‘(D) CARRYOVER OF UNUSED LIMITATION.— tion 107(d) of the CHIPS Act of 2022, is sold for use in an aircraft and which—
‘‘(i) IN GENERAL.—If the annual capacity amended by striking ‘‘or 48D(b)(5)’’ and in- ‘‘(i) meets the requirements of—
limitation for any calendar year exceeds the serting ‘‘48D(b)(5), or 48E(e)’’. ‘‘(I) ASTM International Standard D7566,
aggregate amount allocated for such year (4) Section 50(c)(3) is amended by inserting or
under this paragraph, such limitation for the ‘‘or clean electricity investment credit’’ ‘‘(II) the Fischer Tropsch provisions of
succeeding calendar year shall be increased after ‘‘In the case of any energy credit’’. ASTM International Standard D1655, Annex
by the amount of such excess. No amount (5) The table of sections for subpart E of A1, and
may be carried under the preceding sentence part IV of subchapter A of chapter 1, as ‘‘(ii) is not derived from palm fatty acid
to any calendar year after the third calendar amended by section 107(d) of the CHIPS Act distillates or petroleum.
year following the applicable year (as de- of 2022, is amended by inserting after the ‘‘(4) SALE.—For purposes of paragraph (1),
fined in section 45Y(d)(3)). item relating to section 48D the following the transportation fuel is sold in a manner
‘‘(ii) CARRYOVER FROM SECTION 48 FOR CAL- new item: described in this paragraph if such fuel is
ENDAR YEAR 2025.—If the annual capacity lim- ‘‘48E. Clean electricity investment credit.’’. sold by the taxpayer to an unrelated per-
itation for calendar year 2024 under section (c) EFFECTIVE DATE.—The amendments son—
48(e)(4)(D) exceeds the aggregate amount al- made by this section shall apply to property ‘‘(A) for use by such person in the produc-
located for such year under such section, placed in service after December 31, 2024. tion of a fuel mixture,
such excess amount may be carried over and SEC. 13703. COST RECOVERY FOR QUALIFIED FA- ‘‘(B) for use by such person in a trade or
applied to the annual capacity limitation CILITIES, QUALIFIED PROPERTY, business, or
under this subsection for calendar year 2025. AND ENERGY STORAGE TECH- ‘‘(C) who sells such fuel at retail to an-
The annual capacity limitation for calendar NOLOGY. other person and places such fuel in the fuel
year 2025 shall be increased by the amount of (a) IN GENERAL.—Section 168(e)(3)(B) is tank of such other person.
such excess. amended— ‘‘(5) ROUNDING.—If any amount determined
‘‘(E) PLACED IN SERVICE DEADLINE.— (1) in clause (vi)(III), by striking ‘‘and’’ at under paragraph (1) is not a multiple of 1
‘‘(i) IN GENERAL.—Paragraph (1) shall not the end, cent, such amount shall be rounded to the
apply with respect to any property which is (2) in clause (vii), by striking the period at nearest cent.
placed in service after the date that is 4 the end and inserting ‘‘, and’’, and ‘‘(b) EMISSIONS FACTORS.—
years after the date of the allocation with (3) by inserting after clause (vii) the fol- ‘‘(1) EMISSIONS FACTOR.—
respect to the facility of which such property lowing: ‘‘(A) CALCULATION.—
is a part. ‘‘(viii) any qualified facility (as defined in ‘‘(i) IN GENERAL.—The emissions factor of a
‘‘(ii) APPLICATION OF CARRYOVER.—Any section 45Y(b)(1)(A)), any qualified property transportation fuel shall be an amount equal
amount of environmental justice capacity (as defined in subsection (b)(2) of section 48E) to the quotient of—
limitation which expires under clause (i) which is a qualified investment (as defined in ‘‘(I) an amount equal to—
during any calendar year shall be taken into subsection (b)(1) of such section), or any en- ‘‘(aa) 50 kilograms of CO2e per mmBTU,
account as an excess described in subpara- ergy storage technology (as defined in sub- minus
graph (D)(i) (or as an increase in such excess) section (c)(2) of such section).’’. ‘‘(bb) the emissions rate for such fuel, di-
for such calendar year, subject to the limita- (b) EFFECTIVE DATE.—The amendments vided by
tion imposed by the last sentence of such made by this section shall apply to facilities ‘‘(II) 50 kilograms of CO2e per mmBTU.
subparagraph. and property placed in service after Decem- ‘‘(B) ESTABLISHMENT OF EMISSIONS RATE.—
‘‘(5) RECAPTURE.—The Secretary shall, by ber 31, 2024. ‘‘(i) IN GENERAL.—Subject to clauses (ii)
regulations or other guidance, provide for re- SEC. 13704. CLEAN FUEL PRODUCTION CREDIT. and (iii), the Secretary shall annually pub-
capturing the benefit of any increase in the (a) IN GENERAL.—Subpart D of part IV of lish a table which sets forth the emissions
credit allowed under subsection (a) by reason subchapter A of chapter 1, as amended by the rate for similar types and categories of
of this subsection with respect to any prop- preceding provisions of this Act, is amended transportation fuels based on the amount of
erty which ceases to be property eligible for by adding at the end the following new sec- lifecycle greenhouse gas emissions (as de-
such increase (but which does not cease to be tion: scribed in section 211(o)(1)(H) of the Clean
investment credit property within the mean- ‘‘SEC. 45Z. CLEAN FUEL PRODUCTION CREDIT. Air Act (42 U.S.C. 7545(o)(1)(H)), as in effect
ing of section 50(a)). The period and percent- ‘‘(a) AMOUNT OF CREDIT.— on the date of the enactment of this section)
age of such recapture shall be determined ‘‘(1) IN GENERAL.—For purposes of section for such fuels, expressed as kilograms of
under rules similar to the rules of section 38, the clean fuel production credit for any CO2e per mmBTU, which a taxpayer shall use
50(a). To the extent provided by the Sec- taxable year is an amount equal to the prod- for purposes of this section.
retary, such recapture may not apply with uct of— ‘‘(ii) NON-AVIATION FUEL.—In the case of
respect to any property if, within 12 months ‘‘(A) the applicable amount per gallon (or any transportation fuel which is not a sus-
after the date the taxpayer becomes aware gallon equivalent) with respect to any trans- tainable aviation fuel, the lifecycle green-
(or reasonably should have become aware) of portation fuel which is— house gas emissions of such fuel shall be
such property ceasing to be property eligible ‘‘(i) produced by the taxpayer at a qualified based on the most recent determinations
for such increase, the eligibility of such facility, and under the Greenhouse gases, Regulated
property for such increase is restored. The ‘‘(ii) sold by the taxpayer in a manner de- Emissions, and Energy use in Transportation
preceding sentence shall not apply more scribed in paragraph (4) during the taxable model developed by Argonne National Lab-
than once with respect to any facility. year, and oratory, or a successor model (as determined
‘‘(i) GUIDANCE.—Not later than January 1, ‘‘(B) the emissions factor for such fuel (as by the Secretary).
2025, the Secretary shall issue guidance re- determined under subsection (b)). ‘‘(iii) AVIATION FUEL.—In the case of any
garding implementation of this section.’’. ‘‘(2) APPLICABLE AMOUNT.— transportation fuel which is a sustainable
(b) CONFORMING AMENDMENTS.— ‘‘(A) BASE AMOUNT.—In the case of any aviation fuel, the lifecycle greenhouse gas
dlhill on DSK120RN23PROD with SENATE
(1) Section 46, as amended by section 107(d) transportation fuel produced at a qualified emissions of such fuel shall be determined in
of the CHIPS Act of 2022, is amended— facility which does not satisfy the require- accordance with—
(A) in paragraph (5), by striking ‘‘and’’ at ments described in subparagraph (B), the ap- ‘‘(I) the most recent Carbon Offsetting and
the end, plicable amount shall be 20 cents. Reduction Scheme for International Avia-
(B) in paragraph (6), by striking the period ‘‘(B) ALTERNATIVE AMOUNT.—In the case of tion which has been adopted by the Inter-
at the end and inserting ‘‘, and’’, and any transportation fuel produced at a quali- national Civil Aviation Organization with
(C) by adding at the end the following: fied facility which satisfies the requirements the agreement of the United States, or
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00068 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
August 6, 2022 CONGRESSIONAL RECORD — SENATE S4119
‘‘(II) any similar methodology which satis- from an applicable material) with a feed- ‘‘(B) SPECIAL RULE FOR FACILITIES PLACED
fies the criteria under section 211(o)(1)(H) of stock which is not biomass. IN SERVICE BEFORE JANUARY 1, 2025.—For pur-
the Clean Air Act (42 U.S.C. 7545(o)(1)(H)), as ‘‘(B) DEFINITIONS.—In this paragraph— poses of subparagraph (A), in the case of any
in effect on the date of enactment of this ‘‘(i) APPLICABLE MATERIAL.—The term ‘ap- qualified facility placed in service before
section. plicable material’ means— January 1, 2025—
‘‘(C) ROUNDING OF EMISSIONS RATE.— ‘‘(I) monoglycerides, diglycerides, and ‘‘(i) clause (i) of section 45(b)(7)(A) shall
‘‘(i) IN GENERAL.—Subject to clause (ii), the triglycerides, not apply, and
Secretary may round the emissions rates ‘‘(II) free fatty acids, and ‘‘(ii) clause (ii) of such section shall be ap-
under subparagraph (B) to the nearest mul- ‘‘(III) fatty acid esters. plied by substituting ‘with respect to any
tiple of 5 kilograms of CO2e per mmBTU. ‘‘(ii) BIOMASS.—The term ‘biomass’ has the taxable year beginning after December 31,
‘‘(ii) EXCEPTION.—In the case of an emis- same meaning given such term in section 2024, for which the credit is allowed under
sions rate that is between 2.5 kilograms of 45K(c)(3). this section’ for ‘with respect to any taxable
CO2e per mmBTU and -2.5 kilograms of CO2e ‘‘(e) GUIDANCE.—Not later than January 1, year, for any portion of such taxable year
per mmBTU, the Secretary may round such 2025, the Secretary shall issue guidance re- which is within the period described in sub-
rate to zero. garding implementation of this section, in- section (a)(2)(A)(ii)’.
‘‘(D) PROVISIONAL EMISSIONS RATE.—In the cluding calculation of emissions factors for ‘‘(7) APPRENTICESHIP REQUIREMENTS.—Rules
case of any transportation fuel for which an transportation fuel, the table described in similar to the rules of section 45(b)(8) shall
emissions rate has not been established subsection (b)(1)(B)(i), and the determination apply.
under subparagraph (B), a taxpayer pro- of clean fuel production credits under this ‘‘(g) TERMINATION.—This section shall not
ducing such fuel may file a petition with the section. apply to transportation fuel sold after De-
Secretary for determination of the emissions ‘‘(f) SPECIAL RULES.—
cember 31, 2027.’’.
rate with respect to such fuel. ‘‘(1) ONLY REGISTERED PRODUCTION IN THE
(b) CONFORMING AMENDMENTS.—
‘‘(2) ROUNDING.—If any amount determined UNITED STATES TAKEN INTO ACCOUNT.—
(1) Section 25C(d)(3), as amended by the
under paragraph (1)(A) is not a multiple of ‘‘(A) IN GENERAL.—No clean fuel production
preceding provisions of this Act, is amend-
0.1, such amount shall be rounded to the credit shall be determined under subsection
ed—
nearest multiple of 0.1. (a) with respect to any transportation fuel
(A) in subparagraph (A), by striking ‘‘and’’
‘‘(c) INFLATION ADJUSTMENT.— unless—
at the end,
‘‘(1) IN GENERAL.—In the case of calendar ‘‘(i) the taxpayer—
(B) in subparagraph (B), by striking the pe-
years beginning after 2024, the 20 cent ‘‘(I) is registered as a producer of clean fuel
riod at the end and inserting ‘‘, and’’, and
amount in subsection (a)(2)(A), the $1.00 under section 4101 at the time of production,
(C) by adding at the end the following new
amount in subsection (a)(2)(B), the 35 cent and
‘‘(II) in the case of any transportation fuel subparagraph:
amount in subsection (a)(3)(A)(i), and the ‘‘(C) transportation fuel (as defined in sec-
$1.75 amount in subsection (a)(3)(A)(ii) shall which is a sustainable aviation fuel, pro-
vides— tion 45Z(d)(5)).’’.
each be adjusted by multiplying such (2) Section 30C(c)(1)(B), as amended by the
amount by the inflation adjustment factor ‘‘(aa) certification (in such form and man-
ner as the Secretary shall prescribe) from an preceding provisions of this Act, is amended
for the calendar year in which the sale of the
unrelated party demonstrating compliance by adding at the end the following new
transportation fuel occurs. If any amount as
with— clause:
increased under the preceding sentence is
‘‘(AA) any general requirements, supply ‘‘(iv) Any transportation fuel (as defined in
not a multiple of 1 cent, such amount shall
chain traceability requirements, and infor- section 45Z(d)(5)).’’.
be rounded to the nearest multiple of 1 cent.
mation transmission requirements estab- (3) Section 38(b), as amended by the pre-
‘‘(2) INFLATION ADJUSTMENT FACTOR.—For
lished under the Carbon Offsetting and Re- ceding provisions of this Act, is amended—
purposes of paragraph (1), the inflation ad-
duction Scheme for International Aviation (A) in paragraph (38), by striking ‘‘plus’’ at
justment factor shall be the inflation adjust-
described in subclause (I) of subsection the end,
ment factor determined and published by the
Secretary pursuant to section 45Y(c), deter- (b)(1)(B)(iii), or (B) in paragraph (39), by striking the pe-
mined by substituting ‘calendar year 2022’ ‘‘(BB) in the case of any methodology de- riod at the end and inserting ‘‘, plus’’, and
for ‘calendar year 1992’ in paragraph (3) scribed in subclause (II) of such subsection, (C) by adding at the end the following new
thereof. requirements similar to the requirements de- paragraph:
‘‘(d) DEFINITIONS.—In this section: scribed in subitem (AA), and ‘‘(40) the clean fuel production credit de-
‘‘(1) mmBTU.—The term ‘mmBTU’ means ‘‘(bb) such other information with respect termined under section 45Z(a).’’.
1,000,000 British thermal units. to such fuel as the Secretary may require for (4) The table of sections for subpart D of
‘‘(2) CO2e.—The term ‘CO2e’ means, with re- purposes of carrying out this section, and part IV of subchapter A of chapter 1, as
spect to any greenhouse gas, the equivalent ‘‘(ii) such fuel is produced in the United amended by the preceding provisions of this
carbon dioxide (as determined based on rel- States. Act, is amended by adding at the end the fol-
ative global warming potential). ‘‘(B) UNITED STATES.—For purposes of this lowing new item:
‘‘(3) GREENHOUSE GAS.—The term ‘green- paragraph, the term ‘United States’ includes ‘‘Sec. 45Z. Clean fuel production credit.’’.
house gas’ has the same meaning given that any possession of the United States. (5) Section 4101(a)(1), as amended by the
term under section 211(o)(1)(G) of the Clean ‘‘(2) PRODUCTION ATTRIBUTABLE TO THE TAX- preceding provisions of this Act, is amended
Air Act (42 U.S.C. 7545(o)(1)(G)), as in effect PAYER.—In the case of a facility in which by inserting ‘‘every person producing a fuel
on the date of the enactment of this section. more than 1 person has an ownership inter- eligible for the clean fuel production credit
‘‘(4) QUALIFIED FACILITY.—The term ‘quali- est, except to the extent provided in regula- (pursuant to section 45Z),’’ after ‘‘section
fied facility’— tions prescribed by the Secretary, produc- 6426(k)(3)),’’.
‘‘(A) means a facility used for the produc- tion from the facility shall be allocated (c) EFFECTIVE DATE.—The amendments
tion of transportation fuels, and among such persons in proportion to their made by this section shall apply to transpor-
‘‘(B) does not include any facility for which respective ownership interests in the gross tation fuel produced after December 31, 2024.
one of the following credits is allowed under sales from such facility. PART 8—CREDIT MONETIZATION AND
section 38 for the taxable year: ‘‘(3) RELATED PERSONS.—Persons shall be APPROPRIATIONS
‘‘(i) The credit for production of clean hy- treated as related to each other if such per- SEC. 13801. ELECTIVE PAYMENT FOR ENERGY
drogen under section 45V. sons would be treated as a single employer PROPERTY AND ELECTRICITY PRO-
‘‘(ii) The credit determined under section under the regulations prescribed under sec- DUCED FROM CERTAIN RENEWABLE
46 to the extent that such credit is attrib- tion 52(b). In the case of a corporation which RESOURCES, ETC.
utable to the energy credit determined under is a member of an affiliated group of cor- (a) IN GENERAL.—Subchapter B of chapter
section 48 with respect to any specified clean porations filing a consolidated return, such 65 is amended by inserting after section 6416
hydrogen production facility for which an corporation shall be treated as selling fuel to the following new section:
election is made under subsection (a)(15) of an unrelated person if such fuel is sold to ‘‘SEC. 6417. ELECTIVE PAYMENT OF APPLICABLE
such section. such a person by another member of such CREDITS.
‘‘(iii) The credit for carbon oxide seques- group. ‘‘(a) IN GENERAL.—In the case of an appli-
tration under section 45Q. ‘‘(4) PASS-THRU IN THE CASE OF ESTATES AND cable entity making an election (at such
‘‘(5) TRANSPORTATION FUEL.— TRUSTS.—Under regulations prescribed by time and in such manner as the Secretary
‘‘(A) IN GENERAL.—The term ‘transpor- the Secretary, rules similar to the rules of may provide) under this section with respect
tation fuel’ means a fuel which— subsection (d) of section 52 shall apply. to any applicable credit determined with re-
dlhill on DSK120RN23PROD with SENATE
‘‘(i) is suitable for use as a fuel in a high- ‘‘(5) ALLOCATION OF CREDIT TO PATRONS OF spect to such entity, such entity shall be
way vehicle or aircraft, AGRICULTURAL COOPERATIVE.—Rules similar treated as making a payment against the tax
‘‘(ii) has an emissions rate which is not to the rules of section 45Y(g)(6) shall apply. imposed by subtitle A (for the taxable year
greater than 50 kilograms of CO2e per ‘‘(6) PREVAILING WAGE REQUIREMENTS.— with respect to which such credit was deter-
mmBTU, and ‘‘(A) IN GENERAL.—Subject to subparagraph mined) equal to the amount of such credit.
‘‘(iii) is not derived from coprocessing an (B), rules similar to the rules of section ‘‘(b) APPLICABLE CREDIT.—The term ‘appli-
applicable material (or materials derived 45(b)(7) shall apply. cable credit’ means each of the following:
VerDate Sep 11 2014 03:24 Aug 08, 2022 Jkt 029060 PO 00000 Frm 00069 Fmt 4637 Sfmt 0634 E:\CR\FM\A06AU6.004 S06AUPT1
S4120 CONGRESSIONAL RECORD — SENATE August 6, 2022
‘‘(1) So much of the credit for alternative ‘‘(i) any organization exempt from the tax ‘‘(A) without regard to paragraphs (3) and
fuel vehicle refueling property allowed under imposed by subtitle A, (4)(A)(i) of section 50(b), and
section 30C which, pursuant to subsection ‘‘(ii) any State or political subdivision ‘‘(B) by treating any property with respect
(d)(1) of such section, is treated as a credit thereof, to which such credit is determined as used in
listed in section 38(b). ‘‘(iii) the Tennessee Valley Authority, a trade or business of the applicable entity.
‘‘(2) So much of the renewable electricity ‘‘(iv) an Indian tribal government (as de- ‘‘(3) ELECTIONS.—
production credit determined under section fined in section 30D(g)(9)), ‘‘(A) IN GENERAL.—
45(a) as is attributable to qualified facilities ‘‘(v) any Alaska Native Corporation (as de- ‘‘(i) DUE DATE.—Any election under sub-
which are originally placed in service after fined in section 3 of the Alaska Native section (a) shall be made not later than—
December 31, 2022. Claims Settlement Act (43 U.S.C. 1602(m)), or ‘‘(I) in the case of any government, or po-
‘‘(3) So much of the credit for carbon oxide ‘‘(vi) any corporation operating on a coop- litical subdivision, described in paragraph (1)
sequestration determined under section erative basis which is engaged in furnishing and for which no return is required under
45Q(a) as is attributable to carbon capture electric energy to persons in rural areas. section 6011 or 6033(a), such date as is deter-
equipment which is originally placed in serv- ‘‘(B) ELECTION WITH RESPECT TO CREDIT FOR mined appropriate by the Secretary, or
ice after December 31, 2022. PRODUCTION OF CLEAN HYDROGEN.—If a tax- ‘‘(II) in any other case, the due date (in-
‘‘(4) The zero-emission nuclear power pro- payer other than an entity described in sub- cluding extensions of time) for the return of
duction credit determined under section paragraph (A) makes an election under this tax for the taxable year for which the elec-
45U(a). subparagraph with respect to any taxable tion is made, but in no event earlier than 180
‘‘(5) So much of the credit for production of year in which such taxpayer has placed in
days after the date of the enactment of this
clean hydrogen determined under section service a qualified clean hydrogen produc-
section.
45V(a) as is attributable to qualified clean tion facility (as defined in section 45V(c)(3)),
‘‘(ii) ADDITIONAL RULES.—Any election
hydrogen production facilities which are such taxpayer shall be treated as an applica-
under subsection (a), once made, shall be ir-
originally placed in service after December ble entity for purposes of this section for
revocable and shall apply (except as other-
31, 2012. such taxable year, but only with respect to
wise provided in this paragraph) with respect
‘‘(6) In the case of a tax-exempt entity de- the credit described in subsection (b)(5).
to any credit for the taxable year for which
scribed in clause (i), (ii), or (iv) of section ‘‘(C) ELECTION WITH RESPECT TO CREDIT FOR
CARBON OXIDE SEQUESTRATION.—If a taxpayer
the election is made.
168(h)(2)(A), the credit for qualified commer- ‘‘(B) RENEWABLE ELECTRICITY PRODUCTION
cial vehicles determined under section 45W other than an entity described in subpara-
CREDIT.—In the case of the credit described
by reason of subsection (d)(3) thereof. graph (A) makes an election under this sub-
paragraph with respect to any taxable year in subsection (b)(2), any election under sub-
‘‘(7) The credit for advanced manufacturing section (a) shall—
production under section 45X(a). in which such taxpayer has, after December
31, 2022, placed in service carbon capture ‘‘(i) apply separately with respect to each
‘‘(8) The clean electricity production credit qualified facility,
determined under section 45Y(a). equipment at a qualified facility (as defined
in section 45Q(d)), such taxpayer shall be ‘‘(ii) be made for the taxable year in which
‘‘(9) The clean fuel production credit deter- such qualified facility is originally placed in
mined under section 45Z(a). treated as an applicable entity for purposes
of this section for such taxable year, but service, and
‘‘(10) The energy credit determined under ‘‘(iii) shall apply to such taxable year and
only with respect to the credit described in
section 48. to any subsequent taxable year which is
subsection (b)(3).
‘‘(11) The qualifying advanced energy within the period described in subsection
‘‘(D) ELECTION WITH RESPECT TO ADVANCED
project credit determined under section 48C. (a)(2)(A)(ii) of section 45 with respect to such
MANUFACTURING PRODUCTION CREDIT.—
‘‘(12) The clean electricity investment qualified facility.
‘‘(i) IN GENERAL.—If a taxpayer other than
credit determined under section 48E. ‘‘(C) CREDIT FOR CARBON OXIDE SEQUESTRA-
an entity described in subparagraph (A)
‘‘(c) APPLICATION TO PARTNERSHIPS AND S makes an election under this subparagraph TION.—
CORPORATIONS.— with respect to any taxable year in which ‘‘(i) IN GENERAL.—In the case of the credit
‘‘(1) IN GENERAL.—In the case of any appli- such taxpayer has, after December 31, 2022, described in subsection (b)(3), any election
cable credit determined with respect to any produced eligible components (as defined in under subsection (a) shall—
facility or property held directly by a part- section 45X(c)(1)), such taxpayer shall be ‘‘(I) apply separately with respect to the
nership or S corporation, any election under treated as an applicable entity for purposes carbon capture equipment originally placed
subsection (a) shall be made by such partner- of this section for such taxable year, but in service by the applicable entity during a
ship or S corporation. If such partnership or only with respect to the credit described in taxable year, and
S corporation makes an election under such subsection (b)(7). ‘‘(II)(aa) in the case of a taxpayer who
subsection (in such manner as the Secretary ‘‘(ii) LIMITATION.— makes an election described in paragraph
may provide) with respect to such credit— ‘‘(I) IN GENERAL.—Except as provided in (1)(C), apply to the taxable year in which
‘‘(A) the Secretary shall make a payment subclause (II), if a taxpayer makes an elec- such equipment is placed in service and the
to such partnership or S corporation equal to tion under this subparagraph with respect to 4 subsequent taxable years with respect to
the amount of such credit, any taxable year, such taxpayer shall be such equipment which end before January 1,
‘‘(B) subsection (e) shall be applied with re- treated as having made such election for 2033, and
spect to such credit before determining any each of the 4 succeeding taxable years ending ‘‘(bb) in any other case, apply to such tax-
partner’s distributive share, or shareholder’s before January 1, 2033. able year and to any subsequent taxable year
pro rata share, of such credit, ‘‘(II) EXCEPTION.—A taxpayer may elect to which is within the period described in para-
‘‘(C) any amount with respect to which the revoke the application of the election made graph (3)(A) or (4)(A) of section 45Q(a) with
election in subsection (a) is made shall be under this subparagraph to any taxable year respect to such equipment.
treated as tax exempt income for purposes of described in subclause (I). Any such election, ‘‘(ii) PROHIBITION ON TRANSFER.—For any
sections 705 and 1366, and if made, shall apply to the applicable year taxable year described in clause (i)(II)(aa)
‘‘(D) a partner’s distributive share of such specified in such election and each subse- with respect to carbon capture equipment,
tax exempt income shall be based on such quent taxable year within the period de- no election may be made by the taxpayer
partner’s distributive share of the otherwise scribed in subclause (I). Any election under under section 6418(a) for such taxable year
applicable credit for each taxable year. this subclause may not be subsequently re- with respect to such equipment for purposes
‘‘(2) COORDINATION WITH APPLICATION AT voked. of the credit described in subsection (b)(3).
PARTNER OR SHAREHOLDER LEVEL.—In the ‘‘(iii) PROHIBITION ON TRANSFER.—For any ‘‘(iii) REVOCATION OF ELECTION.—In the case
case of any facility or property held directly taxable year described in clause (ii)(I), no of a taxpayer who makes an election de-
by a partnership or S corporation, no elec- election may be made by the taxpayer under scribed in paragraph (1)(C) with respect to
tion by any partner or shareholder shall be section 6418(a) for such taxable year with re- carbon capture equipment, such taxpayer
allowed under subsection (a) with respect to spect to eligible components for purposes of may, at any time during the period described
any applicable credit determined with re- the credit described in subsection (b)(7). in clause (i)(II)(aa), revoke the application of
spect to such facility or property. ‘‘(E) OTHER RULES.— such election with respect to such equipment
‘‘(3) TREATMENT OF PAYMENTS TO PARTNER- ‘‘(i) IN GENERAL.—An election made under for any subsequent taxable years during such
SHIPS AND S CORPORATIONS.—For purposes of subparagraph (B), (C), or (D) shall be made at period. Any such election, if made, shall
section 1324 of title 31, United States Code, such time and in such manner as the Sec- apply to the applicable year specified in such
the payments under paragraph (1)(A) shall be retary may provide. election and each subsequent taxable year
treated in the same manner as a refund due ‘‘(ii) LIMITATION.—No election may be within the period described in clause
dlhill on DSK120RN23PROD with SENATE
from a credit provision referred to in sub- made under subparagraph (B), (C), or (D) (i)(II)(aa). Any election under this subclause
section (b)(2) of such section. with respect to any taxable year beginning may not be subsequently revoked.
‘‘(d) SPECIAL RULES.—For purposes of this after December 31, 2032. ‘‘(D) CREDIT FOR PRODUCTION OF CLEAN HY-
section— ‘‘(2) APPLICATION.—In the case of any appli- DROGEN.—
‘‘(1) APPLICABLE ENTITY.— cable entity which makes the election de- ‘‘(i) IN GENERAL.—In the case of the credit
‘‘(A) IN GENERAL.—The term ‘applicable en- scribed in subsection (a), any applicable described in subsection (b)(5), any election
tity’ means— credit shall be determined— under subsection (a) shall—
Full text truncated for size; the complete document is in the PDF above.File and source
- File
- CREC_crec-2022-08-06_crec-2022-08-06-pt1-pgs4070-2.pdf
- Size
- 1,300,456 bytes
- SHA-256
- 2ef7c72a6294331de403f4e85c4ec91bad5976965867e706c0c3926ab79797c4
- Original
- www.govinfo.gov