Senate Amendment to H.R. 5376 — Congressional Record, House, August 12, 2022
Summary
This is H7577 of the Congressional Record, House, August 12, 2022, in a document titled Senate Amendment to H.R. 5376. The opening page prints the end of a roll call vote that lists NAYS-208 and Members recorded by proxy, followed by the Clerk reading the title of the bill and designating the Senate amendment. The Senate amendment text strikes all after the enacting clause and begins with Title I, Committee on Finance, Subtitle A, Deficit Reduction. It includes Part 1, Corporate Tax Reform, with a section on the corporate alternative minimum tax and 15 percent of adjusted financial statement income.
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
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“Senate Amendment to H.R. 5376 — Congressional Record, House, August 12, 2022.”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/crec-crec-2022-08-12-crec-2022-08-12-pt1-pgh7577-2-b7c7f3b333/
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7577
Veasey Waters Wild Cárdenas Johnson (GA) Panetta (Correa) The Clerk read the title of the bill.
Velázquez Watson Coleman Williams (GA) (Correa) (Pallone) Payne (Pallone)
Wasserman Welch Wilson (FL) Carter (TX) Johnson (SD)
The SPEAKER pro tempore. The
Phillips (Pappas)
Schultz Wexton Yarmuth (Weber (TX)) (Reschenthaler) Pingree (Kuster)
Clerk will designate the Senate amend-
Cawthorn Johnson (TX) Porter (Wexton) ment.
NAYS—208 (Boebert) (Jeffries) Senate amendment:
Pressley
Aderholt Garbarino Meuser Cherfilus- Joyce (PA) (Bowman) Strike all after the anacting clause and in-
Allen Garcia (CA) Miller (IL) McCormick (Keller) Price (NC)
(Takano) Kahele (Correa)
sert the following:
Amodei Gibbs Miller (WV) (Butterfield)
Armstrong Gimenez Miller-Meeks Cicilline (Foster) Keating (Pappas) TITLE I—COMMITTEE ON FINANCE
Rice (SC)
Arrington Gohmert Moolenaar Cohen (Beyer) Kelly (IL) (Blunt (Gonzalez Subtitle A—Deficit Reduction
Babin Gonzales, Tony Mooney Comer (Guthrie) Rochester) (OH)) SEC. 10001. AMENDMENT OF 1986 CODE.
Bacon Gonzalez (OH) Moore (AL) Connolly (Beyer) Khanna (Pappas)
Rodgers (WA) Except as otherwise expressly provided, when-
Baird Good (VA) Moore (UT) Cooper (Blunt Kilmer
(Bilirakis) ever in this subtitle an amendment or repeal is
Balderson Gooden (TX) Mullin Rochester) (Strickland)
Rogers (KY) expressed in terms of an amendment to, or re-
Banks Gosar Murphy (NC) Crist Kim (CA)
(Reschenthaler)
Barr Granger Nehls (Wasserman (Miller-Meeks) peal of, a section or other provision, the ref-
Schultz) Kirkpatrick Roybal-Allard
Bentz Graves (LA) Newhouse (Correa)
erence shall be considered to be made to a sec-
Bergman Graves (MO) Norman Curtis (Stewart) (Pallone) tion or other provision of the Internal Revenue
DeFazio Krishnamoorthi Rush (Blunt
Bice (OK) Green (TN) Obernolte Code of 1986.
(Pallone) (Neguse) Rochester)
Biggs Greene (GA) Owens
Bilirakis Griffith DeGette LaHood Sánchez PART 1—CORPORATE TAX REFORM
Palazzo (Perlmutter)
Bishop (NC) Grothman Palmer (Perlmutter) (Reschenthaler) SEC. 10101. CORPORATE ALTERNATIVE MINIMUM
Boebert Guest DeLauro LaMalfa Sarbanes TAX.
Perry (Ruppersberger)
Bost Guthrie Pfluger (Courtney) (Fleischmann) I(a) mposition of Tax.—
Brady Harris DeSaulnier Lamborn Schakowsky
Posey (1) In general.—Paragraph (2) of section 55(b)
Brooks Harshbarger (Perlmutter) (Fleischmann) (Bowman)
Reschenthaler Sherman (Beyer)
is amended to read as follows:
Buchanan Hartzler DesJarlais Langevin
Rice (SC)
(Fleischmann) (Lynch) Sires (Pallone) ‘‘(2) Corporations.—
Buck Hern Rodgers (WA)
Bucshon Herrell Deutch (Rice Lawrence Smith (NJ) ‘‘(A) Applicable corporations.—In the case of
Rogers (AL) an applicable corporation, the tentative min-
Budd Herrera Beutler (NY)) (Stevens) (Kelly (PA))
Rogers (KY) imum tax for the taxable year shall be the excess
Burchett Hice (GA) Diaz-Balart Lawson (FL) Smith (WA)
Rose
Burgess Higgins (LA) Rosendale
(Salazar) (Soto) (Courtney) of—
Calvert Hill Doggett Leger Fernandez Steel (Miller- ‘‘(i) 15 percent of the adjusted financial state-
Rouzer
Cammack Hinson (Takano) (Correa) Meeks) ment income for the taxable year (as determined
Roy
Carey Hollingsworth Doyle, Michael Lesko Steube
Rutherford under section 56A), over
Carl Hudson F. (Bowman) (Fleischmann) (Franklin, C.
Salazar Dunn (Cammack) Letlow (Tenney) Scott)
‘‘(ii) the corporate AMT foreign tax credit for
Carter (GA) Huizenga
Carter (TX) Issa
Scalise Escobar (Garcia Levin (MI) Suozzi the taxable year.
Schweikert (TX)) (Correa) ‘‘(B) Other corporations.—In the case of any
Cawthorn Jackson (Perlmutter)
Scott, Austin Fallon Lieu (Takano) corporation which is not an applicable corpora-
Chabot Jacobs (NY) Swalwell
Sessions
Cheney Johnson (LA) (Gohmert) Lucas (Bice (Stevens) tion, the tentative minimum tax for the taxable
Simpson Flores (Pfluger) (OK))
Cline Johnson (OH)
Smith (MO)
Taylor (Burgess) year shall be zero.’’.
Cloud Johnson (SD) Frankel, Lois Luetkemeyer Thompson (CA) (2) Applicable corporation.—Section 59 is
Smith (NE) (Kuster) (Meuser)
Clyde Jordan (Eshoo) amended by adding at the end the following
Smith (NJ) Garbarino Manning
Cole Joyce (OH) Thompson (PA) new subsection:
Comer Joyce (PA) Smucker (Fleischmann) (Wexton) (Keller) ‘‘(k) APPLICABLE CORPORATION.—For pur-
Conway Katko Spartz Gibbs Matsui (Eshoo) Timmons poses of this part—
Crawford Keller Stauber (Balderson) McBath (Blunt (Donalds) ‘‘(1) APPLICABLE CORPORATION DEFINED.—
Crenshaw Kelly (MS) Steel Gomez (Correa) Rochester)
Stefanik Titus (Pallone) ‘‘(A) IN GENERAL.—The term ‘applicable cor-
Curtis Kelly (PA) Gonzales, Tony McEachin Tlaib (Dingell)
Davidson Kim (CA) Steil (Gimenez) (Beyer) poration’ means, with respect to any taxable
Steube Tonko (Pallone)
Davis, Rodney Kustoff Gosar McHenry year, any corporation (other than an S corpora-
Stewart Torres (NY)
DesJarlais LaHood (Reschenthaler) (Cammack) tion, a regulated investment company, or a real
Taylor (Strickland)
Diaz-Balart LaMalfa Gottheimer McNerney estate investment trust) which meets the average
Tenney Trahan (Lynch)
Donalds Lamborn (Neguse) (Correa) annual adjusted financial statement income test
Thompson (PA) Granger (Weber Meng (Kuster) Trone (Beyer)
Duncan Latta of subparagraph (B) for one or more taxable
Tiffany (TX)) Miller (WV) Van Drew
Dunn LaTurner
Ellzey Lesko Timmons Graves (MO) (Mooney) (Tenney) years which—
Emmer Letlow Turner (Guthrie) Moore (UT) Van Duyne ‘‘(i) are prior to such taxable year, and
Estes Long Upton Green (TN) (Stewart) (Babin) ‘‘(ii) end after December 31, 2021.
Fallon Loudermilk Valadao (Fleischmann) Moore (WI) Vargas (Takano) ‘‘(B) AVERAGE ANNUAL ADJUSTED FINANCIAL
Feenstra Lucas Van Drew Harder (CA) (Beyer) Wagner (Guthrie) STATEMENT INCOME TEST.—For purposes of this
Ferguson Luetkemeyer Van Duyne (Beyer) Moulton (Correa) Walberg subsection—
Finstad Mace Wagner Hartzler Napolitano (Bergman) ‘‘(i) a corporation meets the average annual
Fischbach Malliotakis Walberg (Tenney) (Correa) Watson Coleman adjusted financial statement income test for a
Fitzgerald Mann Waltz Herrell (Norman) Nehls (Bowman)
taxable year if the average annual adjusted fi-
Fitzpatrick Massie Weber (TX) Herrera Beutler (Reschenthaler) Welch (Pallone)
(Stewart) Ocasio-Cortez Wenstrup nancial statement income of such corporation
Fleischmann Mast Webster (FL)
Flood McCarthy Wenstrup Huffman (Beyer) (Bowman) (Guthrie) (determined without regard to section 56A(d))
Flores McCaul Westerman Jackson Omar (Bowman) Wilson (FL) for the 3-taxable-year period ending with such
Foxx McClain Williams (TX) (Burgess) Owens (Donalds) (Soto) taxable year exceeds $1,000,000,000, and
Franklin, C. McClintock Wilson (SC) Jacobs (NY) Palazzo Wilson (SC) ‘‘(ii) in the case of a corporation described in
Scott McHenry Wittman (Fleischmann) (Fleischmann) (Duncan) paragraph (2), such corporation meets the aver-
Fulcher McKinley Womack age annual adjusted financial statement income
f
Gaetz Meijer Zeldin test for a taxable year if—
NOT VOTING—3 REMOVAL OF NAME OF MEMBER ‘‘(I) the corporation meets the requirements of
AS COSPONSOR OF H.R. 8525 clause (i) for such taxable year (determined
Gallagher Kinzinger Pence
after the application of paragraph (2)), and
Mr. GIMENEZ. Mr. Speaker, I hereby ‘‘(II) the average annual adjusted financial
b 1148 remove my name as a cosponsor of H.R. statement income of such corporation (deter-
So the resolution was agreed to. 8525. mined without regard to the application of
The SPEAKER pro tempore (Mr. paragraph (2) and without regard to section
The result of the vote was announced 56A(d)) for the 3-taxable-year-period ending
as above recorded. COURTNEY). The gentleman’s request is
accepted. with such taxable year is $100,000,000 or more.
A motion to reconsider was laid on ‘‘(C) EXCEPTION.—Notwithstanding subpara-
the table. f graph (A), the term ‘applicable corporation’
shall not include any corporation which other-
MEMBERS RECORDED PURSUANT TO HOUSE BUILD BACK BETTER ACT
RESOLUTION 8, 117TH CONGRESS wise meets the requirements of subparagraph
Mr. YARMUTH. Mr. Speaker, pursu- (A) if—
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Amodei (Keller) Bentz Buchanan ‘‘(i) such corporation—
Axne (Wexton) (Fitzgerald) (Franklin, C.
ant to House Resolution 1316, I call up
the bill (H.R. 5376) to provide for rec- ‘‘(I) has a change in ownership, or
Bacon (Stauber) Bera (Beyer) Scott) ‘‘(II) has a specified number (to be determined
Baird (Mooney) Bonamici (Beyer) Bucshon (Banks) onciliation pursuant to title II of S. by the Secretary and which shall, as appro-
Barr (Guthrie) Bost (Miller- Budd (Donalds) Con. Res. 14, with the Senate amend-
Barragán (Blunt Meeks) Bush (Bowman) priate, take into account the facts and cir-
Rochester) Brownley Calvert ment thereto, and ask for its imme- cumstances of the taxpayer) of consecutive tax-
Bass (Kuster) (Kuster) (Valadao) diate consideration. able years, including the most recent taxable
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H7578 CONGRESSIONAL RECORD — HOUSE August 12, 2022
year, in which the corporation does not meet the ‘‘(I) the common parent of such entities is a ‘‘(iii) the tax imposed by section 59A, over’’.
average annual adjusted financial statement in- foreign corporation, or (G) Section 6655(e)(2) is amended by inserting
come test of subparagraph (B), and ‘‘(II) if there is no common parent, the entities ‘‘, adjusted financial statement income (as de-
‘‘(ii) the Secretary determines that it would are treated as having a common parent which is fined in section 56A),’’ before ‘‘and modified
not be appropriate to continue to treat such cor- a foreign corporation under subparagraph (D). taxable income’’ each place it appears in sub-
poration as an applicable corporation. ‘‘(C) FOREIGN CORPORATIONS ENGAGED IN A paragraphs (A)(i) and (B)(i).
The preceding sentence shall not apply to any TRADE OR BUSINESS WITHIN THE UNITED (H) Section 6655(g)(1)(A) is amended by redes-
corporation if, after the Secretary makes the de- STATES.—For purposes of this paragraph, if a ignating clauses (ii) and (iii) as clauses (iii) and
termination described in clause (ii), such cor- foreign corporation is engaged in a trade or (iv), respectively, and by inserting after clause
poration meets the average annual adjusted fi- business within the United States, such trade or (i) the following new clause:
nancial statement income test of subparagraph business shall be treated as a separate domestic ‘‘(ii) the tax imposed by section 55,’’.
(B) for any taxable year beginning after the corporation that is wholly owned by the foreign (b) ADJUSTED FINANCIAL STATEMENT IN-
first taxable year for which such determination corporation. COME.—
applies. ‘‘(D) OTHER RULES.—The Secretary shall, ap- (1) IN GENERAL.—Part VI of subchapter A of
‘‘(D) SPECIAL RULES FOR DETERMINING APPLI- plying the principles of this section, prescribe chapter 1 is amended by inserting after section
CABLE CORPORATION STATUS.— rules for the application of this paragraph, in- 56 the following new section:
‘‘(i) IN GENERAL.—Solely for purposes of deter- ‘‘SEC. 56A. ADJUSTED FINANCIAL STATEMENT IN-
cluding rules for the determination of—
COME.
mining whether a corporation is an applicable ‘‘(i) the entities (if any) which are to be to be
corporation under this paragraph, all adjusted ‘‘(a) IN GENERAL.—For purposes of this part,
treated under subparagraph (B)(iii)(II) as hav-
financial statement income of persons treated as the term ‘adjusted financial statement income’
ing a common parent which is a foreign cor-
a single employer with such corporation under means, with respect to any corporation for any
poration,
subsection (a) or (b) of section 52 (determined taxable year, the net income or loss of the tax-
‘‘(ii) the entities to be included in a foreign-
with the modifications described in clause (ii)) payer set forth on the taxpayer’s applicable fi-
parented multinational group, and
shall be treated as adjusted financial statement ‘‘(iii) the common parent of a foreign-parented nancial statement for such taxable year, ad-
income of such corporation, and adjusted finan- multinational group. justed as provided in this section.
‘‘(b) APPLICABLE FINANCIAL STATEMENT.—For
cial statement income of such corporation shall ‘‘(3) REGULATIONS OR OTHER GUIDANCE.—The
purposes of this section, the term ‘applicable fi-
be determined without regard to paragraphs Secretary shall provide regulations or other
nancial statement’ means, with respect to any
(2)(D)(i) and (11) of section 56A(c). guidance for the purposes of carrying out this
‘‘(ii) MODIFICATIONS.—For purposes of this taxable year, an applicable financial statement
subsection, including regulations or other guid-
subparagraph— (as defined in section 451(b)(3) or as specified by
ance—
‘‘(I) section 52(a) shall be applied by sub- the Secretary in regulations or other guidance)
‘‘(A) providing a simplified method for deter-
stituting ‘component members’ for ‘members’, which covers such taxable year.
mining whether a corporation meets the require- ‘‘(c) GENERAL ADJUSTMENTS.—
and ments of paragraph (1), and ‘‘(1) STATEMENTS COVERING DIFFERENT TAX-
‘‘(II) for purposes of applying section 52(b), ‘‘’(B) addressing the application of this sub- ABLE YEARS.—Appropriate adjustments shall be
the term ‘trade or business’ shall include any section to a corporation that experiences a made in adjusted financial statement income in
activity treated as a trade or business under change in ownership.’’. any case in which an applicable financial state-
paragraph (5) or (6) of section 469(c) (deter- (3) REDUCTION FOR BASE EROSION AND ANTI- ment covers a period other than the taxable
mined without regard to the phrase ‘To the ex- ABUSE TAX.—Section 55(a)(2) is amended by in-
year.
tent provided in regulations’ in such paragraph serting ‘‘plus, in the case of an applicable cor- ‘‘(2) SPECIAL RULES FOR RELATED ENTITIES.—
(6)). poration, the tax imposed by section 59A’’ before ‘‘(A) CONSOLIDATED FINANCIAL STATEMENTS.—
‘‘(iii) COMPONENT MEMBER.—For purposes of the period at the end. If the financial results of a taxpayer are re-
this subparagraph, the term ‘component mem- (4) CONFORMING AMENDMENTS.— ported on the applicable financial statement for
ber’ has the meaning given such term by section (A) Section 55(a) is amended by striking ‘‘In a group of entities, rules similar to the rules of
1563(b), except that the determination shall be the case of a taxpayer other than a corporation, section 451(b)(5) shall apply.
made without regard to section 1563(b)(2). there’’ and inserting ‘‘There’’. ‘‘(B) CONSOLIDATED RETURNS.—Except as pro-
‘‘(E) OTHER SPECIAL RULES.— (B)(i) Section 55(b)(1) is amended— vided in regulations prescribed by the Secretary,
‘‘(i) CORPORATIONS IN EXISTENCE FOR LESS (I) by striking so much as precedes subpara- if the taxpayer is part of an affiliated group of
THAN 3 YEARS.—If the corporation was in exist- graph (A) and inserting the following: corporations filing a consolidated return for any
ence for less than 3-taxable years, subparagraph ‘‘(1) NONCORPORATE TAXPAYERS.—In the case taxable year, adjusted financial statement in-
(B) shall be applied on the basis of the period of a taxpayer other than a corporation—’’, and come for such group for such taxable year shall
during which such corporation was in existence. (II) by adding at the end the following new take into account items on the group’s applica-
‘‘(ii) SHORT TAXABLE YEARS.—Adjusted finan- subparagraph: ble financial statement which are properly allo-
cial statement income for any taxable year of ‘‘(D) ALTERNATIVE MINIMUM TAXABLE IN- cable to members of such group.
less than 12 months shall be annualized by mul- COME.—The term ‘alternative minimum taxable ‘‘(C) TREATMENT OF DIVIDENDS AND OTHER
tiplying the adjusted financial statement income income’ means the taxable income of the tax- AMOUNTS.—In the case of any corporation
for the short period by 12 and dividing the result payer for the taxable year— which is not included on a consolidated return
by the number of months in the short period. ‘‘(i) determined with the adjustments provided with the taxpayer, adjusted financial statement
‘‘(iii) TREATMENT OF PREDECESSORS.—Any ref- in section 56 and section 58, and income of the taxpayer with respect to such
erence in this subparagraph to a corporation ‘‘(ii) increased by the amount of the items of other corporation shall be determined by only
shall include a reference to any predecessor of tax preference described in section 57. taking into account the dividends received from
such corporation. If a taxpayer is subject to the regular tax, such such other corporation (reduced to the extent
‘‘(2) SPECIAL RULE FOR FOREIGN-PARENTED taxpayer shall be subject to the tax imposed by provided by the Secretary in regulations or
MULTINATIONAL GROUPS.— this section (and, if the regular tax is deter- other guidance) and other amounts which are
‘‘(A) IN GENERAL.—If a corporation is a mem- mined by reference to an amount other than includible in gross income or deductible as a loss
ber of a foreign-parented multinational group taxable income, such amount shall be treated as under this chapter (other than amounts re-
for any taxable year, then, solely for purposes the taxable income of such taxpayer for pur- quired to be included under sections 951 and
of determining whether such corporation meets poses of the preceding sentence).’’. 951A or such other amounts as provided by the
the average annual adjusted financial statement (ii) Section 860E(a)(4) is amended by striking Secretary) with respect to such other corpora-
income test under paragraph (1)(B)(ii)(I) for ‘‘55(b)(2)’’ and inserting ‘‘55(b)(1)(D)’’. tion.
such taxable year, the adjusted financial state- (iii) Section 897(a)(2)(A)(i) is amended by ‘‘(D) TREATMENT OF PARTNERSHIPS.—
ment income of such corporation for such tax- striking ‘‘55(b)(2)’’ and inserting ‘‘55(b)(1)(D)’’. ‘‘(i) IN GENERAL.—Except as provided by the
able year shall include the adjusted financial (C) Section 11(d) is amended by striking ‘‘the Secretary, if the taxpayer is a partner in a part-
statement income of all members of such group. tax imposed by subsection (a)’’ and inserting nership, adjusted financial statement income of
Solely for purposes of this subparagraph, ad- ‘‘the taxes imposed by subsection (a) and section the taxpayer with respect to such partnership
justed financial statement income shall be deter- 55’’. shall be adjusted to only take into account the
mined without regard to paragraphs (2)(D)(i), (D) Section 12 is amended by adding at the taxpayer’s distributive share of adjusted finan-
(3), (4), and (11) of section 56A(c). end the following new paragraph: cial statement income of such partnership.
‘‘(B) FOREIGN-PARENTED MULTINATIONAL ‘‘(5) For alternative minimum tax, see section ‘‘(ii) ADJUSTED FINANCIAL STATEMENT INCOME
GROUP.—For purposes of subparagraph (A), the 55.’’. OF PARTNERSHIPS.—For the purposes of this
term ‘foreign-parented multinational group’ (E) Section 882(a)(1) is amended by inserting part, the adjusted financial statement income of
means, with respect to any taxable year, two or ‘‘, 55,’’ after ‘‘section 11’’. a partnership shall be the partnership’s net in-
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more entities if— (F) Section 6425(c)(1)(A) is amended to read as come or loss set forth on such partnership’s ap-
‘‘(i) at least one entity is a domestic corpora- follows: plicable financial statement (adjusted under
tion and another entity is a foreign corporation, ‘‘(A) the sum of— rules similar to the rules of this section).
‘‘(ii) such entities are included in the same ap- ‘‘(i) the tax imposed by section 11 or sub- ‘‘(3) ADJUSTMENTS TO TAKE INTO ACCOUNT
plicable financial statement with respect to such chapter L of chapter 1, whichever is applicable, CERTAIN ITEMS OF FOREIGN INCOME.—
year, and plus ‘‘(A) IN GENERAL.—If, for any taxable year, a
‘‘(iii) either— ‘‘(ii) the tax imposed by section 55, plus taxpayer is a United States shareholder of one
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7579
or more controlled foreign corporations, the ad- not otherwise taken into account under para- ‘‘(II) to take into account any other item spec-
justed financial statement income of such tax- graph (5). ified by the Secretary in order to provide that
payer with respect to such controlled foreign ‘‘(10) CONSISTENT TREATMENT OF MORTGAGE such qualified wireless spectrum is accounted
corporation (as determined under paragraph SERVICING INCOME OF TAXPAYER OTHER THAN A for in the same manner as it is accounted for
(2)(C)) shall be adjusted to also take into ac- REGULATED INVESTMENT COMPANY.— under this chapter.
count such taxpayer’s pro rata share (deter- ‘‘(A) IN GENERAL.—Adjusted financial state- ‘‘(B) QUALIFIED WIRELESS SPECTRUM.—For
mined under rules similar to the rules under sec- ment income shall be adjusted so as not to in- purposes of this paragraph, the term ‘qualified
tion 951(a)(2)) of items taken into account in clude any item of income in connection with a wireless spectrum’ means wireless spectrum
computing the net income or loss set forth on mortgage servicing contract any earlier than which—
the applicable financial statement (as adjusted when such income is included in gross income ‘‘(i) is used in the trade or business of a wire-
under rules similar to those that apply in deter- under any other provision of this chapter. less telecommunications carrier, and
mining adjusted financial statement income) of ‘‘(B) RULES FOR AMOUNTS NOT REPRESENTING ‘‘(ii) was acquired after December 31, 2007,
each such controlled foreign corporation with REASONABLE COMPENSATION.—The Secretary and before the date of enactment of this section.
respect to which such taxpayer is a United shall provide regulations to prevent the avoid- ‘‘(15) SECRETARIAL AUTHORITY TO ADJUST
ance of taxes imposed by this chapter with re- ITEMS.—The Secretary shall issue regulations or
States shareholder.
‘‘(B) NEGATIVE ADJUSTMENTS.—In any case in spect to amounts not representing reasonable other guidance to provide for such adjustments
which the adjustment determined under sub- compensation (as determined by the Secretary) to adjusted financial statement income as the
paragraph (A) would result in a negative ad- with respect to a mortgage servicing contract. Secretary determines necessary to carry out the
justment for such taxable year— ‘‘(11) ADJUSTMENT WITH RESPECT TO DEFINED purposes of this section, including adjust-
‘‘(i) no adjustment shall be made under this BENEFIT PENSIONS.— ments—
paragraph for such taxable year, and ‘‘(A) IN GENERAL.—Except as otherwise pro- ‘‘(A) to prevent the omission or duplication of
‘‘(ii) the amount of the adjustment determined vided in rules prescribed by the Secretary in reg- any item, and
under this paragraph for the succeeding taxable ulations or other guidance, adjusted financial ‘‘(B) to carry out the principles of part II of
year (determined without regard to this para- statement income shall be— subchapter C of this chapter (relating to cor-
graph) shall be reduced by an amount equal to ‘‘(i) adjusted to disregard any amount of in- porate liquidations), part III of subchapter C of
the negative adjustment for such taxable year. come, cost, or expense that would otherwise be this chapter (relating to corporate organizations
‘‘(4) EFFECTIVELY CONNECTED INCOME.—In the included on the applicable financial statement and reorganizations), and part II of subchapter
case of a foreign corporation, to determine ad- in connection with any covered benefit plan, K of this chapter (relating to partnership con-
justed financial statement income, the principles ‘‘(ii) increased by any amount of income in tributions and distributions).
of section 882 shall apply. connection with any such covered benefit plan ‘‘(d) DEDUCTION FOR FINANCIAL STATEMENT
‘‘(5) ADJUSTMENTS FOR CERTAIN TAXES.—Ad- that is included in the gross income of the cor- NET OPERATING LOSS.—
justed financial statement income shall be ap- poration under any other provision of this chap- ‘‘(1) IN GENERAL.—Adjusted financial state-
propriately adjusted to disregard any Federal ter, and ment income (determined after application of
income taxes, or income, war profits, or excess ‘‘(iii) reduced by deductions allowed under subsection (c) and without regard to this sub-
profits taxes (within the meaning of section 901) any other provision of this chapter with respect section) shall be reduced by an amount equal to
with respect to a foreign country or possession to any such covered benefit plan. the lesser of—
‘‘(B) COVERED BENEFIT PLAN.—For purposes ‘‘(A) the aggregate amount of financial state-
of the United States, which are taken into ac-
of this paragraph, the term ‘covered benefit ment net operating loss carryovers to the taxable
count on the taxpayer’s applicable financial
plan’ means— year, or
statement. To the extent provided by the Sec- ‘‘(B) 80 percent of adjusted financial state-
retary, the preceding sentence shall not apply to ‘‘(i) a defined benefit plan (other than a mul-
tiemployer plan described in section 414(f)) if the ment income computed without regard to the de-
income, war profits, or excess profits taxes duction allowable under this subsection.
(within the meaning of section 901) that are im- trust which is part of such plan is an employees’
trust described in section 401(a) which is exempt ‘‘(2) FINANCIAL STATEMENT NET OPERATING
posed by a foreign country or possession of the LOSS CARRYOVER.—A financial statement net op-
United States and taken into account on the from tax under section 501(a),
‘‘(ii) any qualified foreign plan (as defined in erating loss for any taxable year shall be a fi-
taxpayer’s applicable financial statement if the nancial statement net operating loss carryover
section 404A(e)), or
taxpayer does not choose to have the benefits of to each taxable year following the taxable year
‘‘(iii) any other defined benefit plan which
subpart A of part III of subchapter N for the of the loss. The portion of such loss which shall
provides post-employment benefits other than
taxable year. The Secretary shall prescribe such be carried to subsequent taxable years shall be
pension benefits.
regulations or other guidance as may be nec- ‘‘(12) TAX-EXEMPT ENTITIES.—In the case of the amount of such loss remaining (if any) after
essary and appropriate to provide for the proper an organization subject to tax under section 511, the application of paragraph (1).
treatment of current and deferred taxes for pur- adjusted financial statement income shall be ap- ‘‘(3) FINANCIAL STATEMENT NET OPERATING
poses of this paragraph, including the time at propriately adjusted to only take into account LOSS DEFINED.—For purposes of this subsection,
which such taxes are properly taken into ac- any adjusted financial statement income— the term ‘financial statement net operating loss’
count. ‘‘(A) of an unrelated trade or business (as de- means the amount of the net loss (if any) set
‘‘(6) ADJUSTMENT WITH RESPECT TO DIS- fined in section 513) of such organization, or forth on the corporation’s applicable financial
REGARDED ENTITIES.—Adjusted financial state- ‘‘(B) derived from debt-financed property (as statement (determined after application of sub-
ment income shall be adjusted to take into ac- defined in section 514) to the extent that income section (c) and without regard to this sub-
count any adjusted financial statement income from such property is treated as unrelated busi- section) for taxable years ending after December
of a disregarded entity owned by the taxpayer. ness taxable income. 31, 2019.
‘‘(7) SPECIAL RULE FOR COOPERATIVES.—In the ‘‘(13) DEPRECIATION.—Adjusted financial ‘‘(e) REGULATIONS AND OTHER GUIDANCE.—
case of a cooperative to which section 1381 ap- statement income shall be— The Secretary shall provide for such regulations
plies, the adjusted financial statement income ‘‘(A) reduced by depreciation deductions al- and other guidance as necessary to carry out
(determined without regard to this paragraph) lowed under section 167 with respect to property the purposes of this section, including regula-
shall be reduced by the amounts referred to in to which section 168 applies to the extent of the tions and other guidance relating to the effect of
section 1382(b) (relating to patronage dividends amount allowed as deductions in computing tax- the rules of this section on partnerships with in-
and per-unit retain allocations) to the extent able income for the taxable year, and come taken into account by an applicable cor-
such amounts were not otherwise taken into ac- ‘‘(B) appropriately adjusted— poration.’’.
count in determining adjusted financial state- ‘‘(i) to disregard any amount of depreciation (2) CLERICAL AMENDMENT.—The table of sec-
ment income. expense that is taken into account on the tax- tions for part VI of subchapter A of chapter 1 is
‘‘(8) RULES FOR ALASKA NATIVE CORPORA- payer’s applicable financial statement with re- amended by inserting after the item relating to
TIONS.—Adjusted financial statement income spect to such property, and section 56 the following new item:
shall be appropriately adjusted to allow— ‘‘(ii) to take into account any other item spec- ‘‘Sec. 56A. Adjusted financial statement in-
‘‘(A) cost recovery and depletion attributable ified by the Secretary in order to provide that come.’’.
to property the basis of which is determined such property is accounted for in the same man- (c) CORPORATE AMT FOREIGN TAX CREDIT.—
under section 21(c) of the Alaska Native Claims ner as it is accounted for under this chapter. Section 59, as amended by this section, is
Settlement Act (43 U.S.C. 1620(c)), and ‘‘(14) QUALIFIED WIRELESS SPECTRUM.— amended by adding at the end the following
‘‘(B) deductions for amounts payable made ‘‘(A) IN GENERAL.—Adjusted financial state- new subsection:
pursuant to section 7(i) or section 7(j) of such ment income shall be— ‘‘(l) CORPORATE AMT FOREIGN TAX CREDIT.—
Act (43 U.S.C. 1606(i) and 1606(j)) only at such ‘‘(i) reduced by amortization deductions al- ‘‘(1) IN GENERAL.—For purposes of this part, if
time as the deductions are allowed for tax pur- lowed under section 197 with respect to qualified an applicable corporation chooses to have the
poses. wireless spectrum to the extent of the amount benefits of subpart A of part III of subchapter N
ctelli on DSK11ZRN23PROD with HOUSE
‘‘(9) AMOUNTS ATTRIBUTABLE TO ELECTIONS allowed as deductions in computing taxable in- for any taxable year, the corporate AMT foreign
FOR DIRECT PAYMENT OF CERTAIN CREDITS.—Ad- come for the taxable year, and tax credit for the taxable year of the applicable
justed financial statement income shall be ap- ‘‘(ii) appropriately adjusted— corporation is an amount equal to sum of—
propriately adjusted to disregard any amount ‘‘(I) to disregard any amount of amortization ‘‘(A) the lesser of—
treated as a payment against the tax imposed by expense that is taken into account on the tax- ‘‘(i) the aggregate of the applicable corpora-
subtitle A pursuant to an election under section payer’s applicable financial statement with re- tion’s pro rata share (as determined under sec-
48D(d) or 6417, to the extent such amount was spect to such qualified wireless spectrum, and tion 56A(c)(3)) of the amount of income, war
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H7580 CONGRESSIONAL RECORD — HOUSE August 12, 2022
profits, and excess profits taxes (within the percent of the fair market value of any stock of issued or provided by such expatriated entity to
meaning of section 901) imposed by any foreign the corporation which is repurchased by such employees of the expatriated entity.
country or possession of the United States corporation during the taxable year. ‘‘(3) DEFINITIONS.—For purposes of this sub-
which are— ‘‘(b) COVERED CORPORATION.—For purposes of section—
‘‘(I) taken into account on the applicable fi- this section, the term ‘covered corporation’ ‘‘(A) APPLICABLE FOREIGN CORPORATION.—
nancial statement of each controlled foreign cor- means any domestic corporation the stock of The term ‘applicable foreign corporation’ means
poration with respect to which the applicable which is traded on an established securities any foreign corporation the stock of which is
corporation is a United States shareholder, and market (within the meaning of section traded on an established securities market
‘‘(II) paid or accrued (for Federal income tax 7704(b)(1)). (within the meaning of section 7704(b)(1)).
purposes) by each such controlled foreign cor- ‘‘(c) REPURCHASE.—For purposes of this sec- ‘‘(B) COVERED SURROGATE FOREIGN CORPORA-
poration, or tion— TION.—The term ‘covered surrogate foreign cor-
‘‘(ii) the product of the amount of the adjust- ‘‘(1) IN GENERAL.—The term ‘repurchase’
poration’ means any surrogate foreign corpora-
ment under section 56A(c)(3) and the percentage means—
tion (as determined under section 7874(a)(2)(B)
specified in section 55(b)(2)(A)(i), and ‘‘(A) a redemption within the meaning of sec-
by substituting ‘September 20, 2021’ for ‘March
‘‘(B) in the case of an applicable corporation tion 317(b) with regard to the stock of a covered
4, 2003’ each place it appears) the stock of which
that is a domestic corporation, the amount of in- corporation, and
‘‘(B) any transaction determined by the Sec- is traded on an established securities market
come, war profits, and excess profits taxes
retary to be economically similar to a trans- (within the meaning of section 7704(b)(1)), but
(within the meaning of section 901) imposed by
action described in subparagraph (A). only with respect to taxable years which include
any foreign country or possession of the United
‘‘(2) TREATMENT OF PURCHASES BY SPECIFIED any portion of the applicable period with re-
States to the extent such taxes are—
‘‘(i) taken into account on the applicable cor- AFFILIATES.— spect to such corporation under section
poration’s applicable financial statement, and ‘‘(A) IN GENERAL.—The acquisition of stock of 7874(d)(1).
‘‘(ii) paid or accrued (for Federal income tax a covered corporation by a specified affiliate of ‘‘(C) EXPATRIATED ENTITY.—The term ‘expa-
purposes) by the applicable corporation. such covered corporation, from a person who is triated entity’ has the meaning given such term
‘‘(2) CARRYOVER OF EXCESS TAX PAID.—For not the covered corporation or a specified affil- by section 7874(a)(2)(A).
any taxable year for which an applicable cor- iate of such covered corporation, shall be treat- ‘‘(e) EXCEPTIONS.—Subsection (a) shall not
poration chooses to have the benefits of subpart ed as a repurchase of the stock of the covered apply—
A of part III of subchapter N, the excess of the corporation by such covered corporation. ‘‘(1) to the extent that the repurchase is part
amount described in paragraph (1)(A)(i) over ‘‘(B) SPECIFIED AFFILIATE.—For purposes of of a reorganization (within the meaning of sec-
the amount described in paragraph (1)(A)(ii) this section, the term ‘specified affiliate’ means, tion 368(a)) and no gain or loss is recognized on
shall increase the amount described in para- with respect to any corporation— such repurchase by the shareholder under chap-
graph (1)(A)(i) in any of the first 5 succeeding ‘‘(i) any corporation more than 50 percent of ter 1 by reason of such reorganization,
taxable years to the extent not taken into ac- the stock of which is owned (by vote or by ‘‘(2) in any case in which the stock repur-
count in a prior taxable year. value), directly or indirectly, by such corpora- chased is, or an amount of stock equal to the
‘‘(3) REGULATIONS OR OTHER GUIDANCE.—The tion, and value of the stock repurchased is, contributed to
Secretary shall provide for such regulations or ‘‘(ii) any partnership more than 50 percent of an employer-sponsored retirement plan, em-
other guidance as is necessary to carry out the the capital interests or profits interests of which ployee stock ownership plan, or similar plan,
purposes of this subsection.’’. is held, directly or indirectly, by such corpora- ‘‘(3) in any case in which the total value of
(d) TREATMENT OF GENERAL BUSINESS CRED- tion. the stock repurchased during the taxable year
IT.—Section 38(c)(6)(E) is amended to read as ‘‘(3) ADJUSTMENT.—The amount taken into does not exceed $1,000,000,
follows: account under subsection (a) with respect to
‘‘(4) under regulations prescribed by the Sec-
‘‘(E) CORPORATIONS.—In the case of a cor- any stock repurchased by a covered corporation
retary, in cases in which the repurchase is by a
poration— shall be reduced by the fair market value of any
dealer in securities in the ordinary course of
‘‘(i) the first sentence of paragraph (1) shall stock issued by the covered corporation during
business,
be applied by substituting ‘25 percent of the tax- the taxable year, including the fair market
‘‘(5) to repurchases by a regulated investment
payer’s net income tax as exceeds $25,000’ for value of any stock issued or provided to employ-
company (as defined in section 851) or a real es-
‘the greater of’ and all that follows, ees of such covered corporation or employees of
tate investment trust, or
‘‘(ii) paragraph (2)(A) shall be applied with- a specified affiliate of such covered corporation
during the taxable year, whether or not such ‘‘(6) to the extent that the repurchase is treat-
out regard to clause (ii)(I) thereof, and
‘‘(iii) paragraph (4)(A) shall be applied with- stock is issued or provided in response to the ex- ed as a dividend for purposes of this title.
out regard to clause (ii)(I) thereof.’’. ercise of an option to purchase such stock. ‘‘(f) REGULATIONS AND GUIDANCE.—The Sec-
(e) CREDIT FOR PRIOR YEAR MINIMUM TAX LI- ‘‘(d) SPECIAL RULES FOR ACQUISITION OF retary shall prescribe such regulations and
ABILITY.— STOCK OF CERTAIN FOREIGN CORPORATIONS.— other guidance as are necessary or appropriate
(1) IN GENERAL.—Section 53(e) is amended to ‘‘(1) IN GENERAL.—In the case of an acquisi- to carry out, and to prevent the avoidance of,
read as follows: tion of stock of an applicable foreign corpora- the purposes of this section, including regula-
‘‘(e) APPLICATION TO APPLICABLE CORPORA- tion by a specified affiliate of such corporation tions and other guidance—
TIONS.—In the case of a corporation— (other than a foreign corporation or a foreign ‘‘(1) to prevent the abuse of the exceptions
‘‘(1) subsection (b)(1) shall be applied by sub- partnership (unless such partnership has a do- provided by subsection (e),
stituting ‘the net minimum tax for all prior tax- mestic entity as a direct or indirect partner)) ‘‘(2) to address special classes of stock and
able years beginning after 2022’ for ‘the adjusted from a person who is not the applicable foreign preferred stock, and
net minimum tax imposed for all prior taxable corporation or a specified affiliate of such appli- ‘‘(3) for the application of the rules under
years beginning after 1986’, and cable foreign corporation, for purposes of this subsection (d).’’.
‘‘(2) the amount determined under subsection section— (b) TAX NOT DEDUCTIBLE.—Paragraph (6) of
(c)(1) shall be increased by the amount of tax ‘‘(A) such specified affiliate shall be treated as section 275(a) is amended by inserting ‘‘37,’’ be-
imposed under section 59A for the taxable a covered corporation with respect to such ac- fore ‘‘41’’.
year.’’. quisition, (c) CLERICAL AMENDMENT.—The table of
(2) CONFORMING AMENDMENTS.—Section 53(d) ‘‘(B) such acquisition shall be treated as a re- chapters for subtitle D is amended by inserting
is amended— purchase of stock of a covered corporation by after the item relating to chapter 36 the fol-
(A) in paragraph (2), by striking ‘‘, except such covered corporation, and lowing new item:
that in the case’’ and all that follows through ‘‘(C) the adjustment under subsection (c)(3)
‘‘treated as zero’’, and shall be determined only with respect to stock ‘‘CHAPTER 37—REPURCHASE OF CORPORATE
(B) by striking paragraph (3). issued or provided by such specified affiliate to STOCK’’.
(f) EFFECTIVE DATE.—The amendments made employees of the specified affiliate. (d) EFFECTIVE DATE.—The amendments made
by this section shall apply to taxable years be- ‘‘(2) SURROGATE FOREIGN CORPORATIONS.—In by this section shall apply to repurchases (with-
ginning after December 31, 2022. the case of a repurchase of stock of a covered in the meaning of section 4501(c) of the Internal
PART 2—EXCISE TAX ON REPURCHASE OF surrogate foreign corporation by such covered Revenue Code of 1986, as added by this section)
CORPORATE STOCK surrogate foreign corporation, or an acquisition of stock after December 31, 2022.
SEC. 10201. EXCISE TAX ON REPURCHASE OF COR- of stock of a covered surrogate foreign corpora- PART 3—FUNDING THE INTERNAL REV-
PORATE STOCK. tion by a specified affiliate of such corporation, ENUE SERVICE AND IMPROVING TAX-
(a) IN GENERAL.—Subtitle D is amended by in- for purposes of this section— PAYER COMPLIANCE
serting after chapter 36 the following new chap- ‘‘(A) the expatriated entity with respect to
such covered surrogate foreign corporation shall SEC. 10301. ENHANCEMENT OF INTERNAL REV-
ter: ENUE SERVICE RESOURCES.
ctelli on DSK11ZRN23PROD with HOUSE
be treated as a covered corporation with respect
‘‘CHAPTER 37—REPURCHASE OF IN GENERAL.—The following sums are appro-
to such repurchase or acquisition,
CORPORATE STOCK ‘‘(B) such repurchase or acquisition shall be priated, out of any money in the Treasury not
‘‘Sec. 4501. Repurchase of corporate stock. treated as a repurchase of stock of a covered otherwise appropriated, for the fiscal year end-
‘‘SEC. 4501. REPURCHASE OF CORPORATE STOCK. corporation by such covered corporation, and ing September 30, 2022:
‘‘(a) GENERAL RULE.—There is hereby imposed ‘‘(C) the adjustment under subsection (c)(3) (1) INTERNAL REVENUE SERVICE.—
on each covered corporation a tax equal to 1 shall be determined only with respect to stock (A) IN GENERAL.—
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7581
(i) TAXPAYER SERVICES.—For necessary ex- Inspector General for Tax Administration, ment under section 1193 with respect to such
penses of the Internal Revenue Service to pro- $403,000,000, to remain available until September drug; or
vide taxpayer services, including pre-filing as- 30, 2031: Provided, That these amounts shall be ‘‘(ii) February 28 following the selected drug
sistance and education, filing and account serv- in addition to amounts otherwise available for publication date with respect to such selected
ices, taxpayer advocacy services, and other serv- such purposes. drug; and
ices as authorized by 5 U.S.C. 3109, at such rates (3) OFFICE OF TAX POLICY.—For necessary ex- ‘‘(B) ending on November 1 of the year that
as may be determined by the Commissioner, penses of the Office of Tax Policy of the Depart- begins 2 years prior to the initial price applica-
$3,181,500,000, to remain available until Sep- ment of the Treasury to carry out functions re- bility year.
tember 30, 2031: Provided, That these amounts lated to promulgating regulations under the In- ‘‘(c) OTHER DEFINITIONS.—For purposes of
shall be in addition to amounts otherwise avail- ternal Revenue Code of 1986, $104,533,803, to re- this part:
able for such purposes. main available until September 30, 2031: Pro- ‘‘(1) MANUFACTURER.—The term ‘manufac-
(ii) ENFORCEMENT.—For necessary expenses vided, That these amounts shall be in addition turer’ has the meaning given that term in sec-
for tax enforcement activities of the Internal to amounts otherwise available for such pur- tion 1847A(c)(6)(A).
Revenue Service to determine and collect owed ‘‘(2) MAXIMUM FAIR PRICE ELIGIBLE INDI-
poses.
taxes, to provide legal and litigation support, to VIDUAL.—The term ‘maximum fair price eligible
(4) UNITED STATES TAX COURT.—For necessary
conduct criminal investigations (including in- individual’ means, with respect to a selected
expenses of the United States Tax Court, includ-
vestigative technology), to provide digital asset drug—
ing contract reporting and other services as au- ‘‘(A) in the case such drug is dispensed to the
monitoring and compliance activities, to enforce thorized by 5 U.S.C. 3109; $153,000,000, to remain
criminal statutes related to violations of internal individual at a pharmacy, by a mail order serv-
available until September 30, 2031: Provided, ice, or by another dispenser, an individual who
revenue laws and other financial crimes, to pur- That these amounts shall be in addition to
chase and hire passenger motor vehicles (31 is enrolled in a prescription drug plan under
amounts otherwise available for such purposes. part D of title XVIII or an MA–PD plan under
U.S.C. 1343(b)), and to provide other services as (5) TREASURY DEPARTMENTAL OFFICES.—For
authorized by 5 U.S.C. 3109, at such rates as part C of such title if coverage is provided under
necessary expenses of the Departmental Offices such plan for such selected drug; and
may be determined by the Commissioner, of the Department of the Treasury to provide for
$45,637,400,000, to remain available until Sep- ‘‘(B) in the case such drug is furnished or ad-
oversight and implementation support for ac- ministered to the individual by a hospital, phy-
tember 30, 2031: Provided, That these amounts tions by the Internal Revenue Service to imple-
shall be in addition to amounts otherwise avail- sician, or other provider of services or supplier,
ment this Act and the amendments made by this an individual who is enrolled under part B of
able for such purposes. Act, $50,000,000, to remain available until Sep-
(iii) OPERATIONS SUPPORT.—For necessary ex- title XVIII, including an individual who is en-
tember 30, 2031: Provided, That these amounts rolled in an MA plan under part C of such title,
penses of the Internal Revenue Service to sup-
shall be in addition to amounts otherwise avail- if payment may be made under part B for such
port taxpayer services and enforcement pro-
able for such purposes. selected drug.
grams, including rent payments; facilities serv-
ices; printing; postage; physical security; head- Subtitle B—Prescription Drug Pricing Reform ‘‘(3) MAXIMUM FAIR PRICE.—The term ‘max-
quarters and other IRS-wide administration ac- PART 1—LOWERING PRICES THROUGH imum fair price’ means, with respect to a year
tivities; research and statistics of income; tele- DRUG PRICE NEGOTIATION during a price applicability period and with re-
communications; information technology devel- spect to a selected drug (as defined in section
SEC. 11001. PROVIDING FOR LOWER PRICES FOR
opment, enhancement, operations, maintenance, CERTAIN HIGH-PRICED SINGLE
1192(c)) with respect to such period, the price
and security; the hire of passenger motor vehi- SOURCE DRUGS. negotiated pursuant to section 1194, and up-
cles (31 U.S.C. 1343(b)); the operations of the In- (a) PROGRAM TO LOWER PRICES FOR CERTAIN dated pursuant to section 1195(b), as applicable,
ternal Revenue Service Oversight Board; and HIGH-PRICED SINGLE SOURCE DRUGS.—Title XI for such drug and year.
‘‘(4) REFERENCE PRODUCT.—The term ‘ref-
other services as authorized by 5 U.S.C. 3109, at of the Social Security Act is amended by adding
erence product’ has the meaning given such
such rates as may be determined by the Commis- after section 1184 (42 U.S.C. 1320e–3) the fol-
term in section 351(i) of the Public Health Serv-
sioner, $25,326,400,000, to remain available until lowing new part:
ice Act.
September 30, 2031: Provided, That these ‘‘PART E—PRICE NEGOTIATION PROGRAM ‘‘(5) TOTAL EXPENDITURES.—The term ‘total
amounts shall be in addition to amounts other- TO LOWER PRICES FOR CERTAIN HIGH- expenditures’ includes, in the case of expendi-
wise available for such purposes. PRICED SINGLE SOURCE DRUGS tures with respect to part D of title XVIII, the
(iv) BUSINESS SYSTEMS MODERNIZATION.—For
‘‘SEC. 1191. ESTABLISHMENT OF PROGRAM. total gross covered prescription drug costs (as
necessary expenses of the Internal Revenue
‘‘(a) IN GENERAL.—The Secretary shall estab- defined in section 1860D–15(b)(3)). The term
Service’s business systems modernization pro-
lish a Drug Price Negotiation Program (in this ‘total expenditures’ excludes, in the case of ex-
gram, including development of callback tech-
part referred to as the ‘program’). Under the penditures with respect to part B of such title,
nology and other technology to provide a more
program, with respect to each price applicability expenditures for a drug or biological product
personalized customer service but not including
period, the Secretary shall— that are bundled or packaged into the payment
the operation and maintenance of legacy sys-
‘‘(1) publish a list of selected drugs in accord- for another service.
tems, $4,750,700,000, to remain available until
ance with section 1192; ‘‘(6) UNIT.—The term ‘unit’ means, with re-
September 30, 2031: Provided, That these
‘‘(2) enter into agreements with manufacturers spect to a drug or biological product, the lowest
amounts shall be in addition to amounts other-
of selected drugs with respect to such period, in identifiable amount (such as a capsule or tablet,
wise available for such purposes.
accordance with section 1193; milligram of molecules, or grams) of the drug or
(B) TASK FORCE TO DESIGN AN IRS-RUN FREE
‘‘(3) negotiate and, if applicable, renegotiate biological product that is dispensed or fur-
‘‘DIRECT EFILE’’ TAX RETURN SYSTEM.—For nec-
maximum fair prices for such selected drugs, in nished.
essary expenses of the Internal Revenue Service
‘‘(d) TIMING FOR INITIAL PRICE APPLICABILITY
to deliver to Congress, within nine months fol- accordance with section 1194;
YEAR 2026.—Notwithstanding the provisions of
lowing the date of the enactment of this Act, a ‘‘(4) carry out the publication and administra-
this part, in the case of initial price applica-
report on (I) the cost (including options for dif- tive duties and compliance monitoring in ac-
bility year 2026, the following rules shall apply
ferential coverage based on taxpayer adjusted cordance with sections 1195 and 1196.
for purposes of implementing the program:
gross income and return complexity) of devel- ‘‘(b) DEFINITIONS RELATING TO TIMING.—For
‘‘(1) Subsection (b)(3) shall be applied by sub-
oping and running a free direct efile tax return purposes of this part:
stituting ‘September 1, 2023’ for ‘, with respect to
system, including costs to build and administer ‘‘(1) INITIAL PRICE APPLICABILITY YEAR.—The
each initial price applicability year, February 1
each release, with a focus on multi-lingual and term ‘initial price applicability year’ means a
of the year that begins 2 years prior to such
mobile-friendly features and safeguards for tax- year (beginning with 2026).
year’.
payer data; (II) taxpayer opinions, expecta- ‘‘(2) PRICE APPLICABILITY PERIOD.—The term ‘‘(2) Subsection (b)(4) shall be applied—
tions, and level of trust, based on surveys, for ‘price applicability period’ means, with respect ‘‘(A) in subparagraph (A)(ii), by substituting
such a free direct efile system; and (III) the to a qualifying single source drug, the period be- ‘October 1, 2023’ for ‘February 28 following the
opinions of an independent third-party on the ginning with the first initial price applicability selected drug publication date with respect to
overall feasibility, approach, schedule, cost, or- year with respect to which such drug is a se- such selected drug’; and
ganizational design, and Internal Revenue Serv- lected drug and ending with the last year dur- ‘‘(B) in subparagraph (B), by substituting
ice capacity to deliver such a direct efile tax re- ing which the drug is a selected drug. ‘August 1, 2024’ for ‘November 1 of the year that
turn system, $15,000,000, to remain available ‘‘(3) SELECTED DRUG PUBLICATION DATE.—The begins 2 years prior to the initial price applica-
until September 30, 2023: Provided, That these term ‘selected drug publication date’ means, bility year’.
amounts shall be in addition to amounts other- with respect to each initial price applicability ‘‘(3) Section 1192 shall be applied—
wise available for such purposes. year, February 1 of the year that begins 2 years ‘‘(A) in subsection (b)(1)(A), by substituting
(2) TREASURY INSPECTOR GENERAL FOR TAX prior to such year. ‘during the period beginning on June 1, 2022,
ctelli on DSK11ZRN23PROD with HOUSE
ADMINISTRATION.—For necessary expenses of the ‘‘(4) NEGOTIATION PERIOD.—The term ‘negotia- and ending on May 31, 2023’ for ‘during the
Treasury Inspector General for Tax Administra- tion period’ means, with respect to an initial most recent period of 12 months prior to the se-
tion in carrying out the Inspector General Act price applicability year with respect to a se- lected drug publication date (but ending not
of 1978, as amended, including purchase and lected drug, the period— later than October 31 of the year prior to the
hire of passenger motor vehicles (31 U.S.C. ‘‘(A) beginning on the sooner of— year of such drug publication date), with re-
1343(b)); and services authorized by 5 U.S.C. ‘‘(i) the date on which the manufacturer of spect to such year, for which data are avail-
3109, at such rates as may be determined by the the drug and the Secretary enter into an agree- able’; and
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H7582 CONGRESSIONAL RECORD — HOUSE August 12, 2022
‘‘(B) in subsection (d)(1)(A), by substituting ‘‘(B) Select from such ranked drugs with re- single source drug that meets either of the fol-
‘during the period beginning on June 1, 2022, spect to such year the negotiation-eligible drugs lowing:
and ending on May 31, 2023’ for ‘during the with the highest such rankings. ‘‘(i) PART D DRUGS.—The total expenditures
most recent period for which data are available ‘‘(2) HIGH SPEND PART D DRUGS FOR 2026 AND for the qualifying single source drug under part
of at least 12 months prior to the selected drug 2027.—With respect to the initial price applica- D of title XVIII, as determined by the Secretary
publication date (but ending no later than Octo- bility year 2026 and with respect to the initial in accordance with paragraph (3)(B), during
ber 31 of the year prior to the year of such drug price applicability year 2027, the Secretary shall 2021—
publication date), with respect to such year’. apply paragraph (1) as if the reference to ‘nego- ‘‘(I) are equal to or less than 1 percent of the
‘‘(4) Section 1193(a) shall be applied by sub- tiation-eligible drugs described in subsection total expenditures under such part D, as so de-
stituting ‘October 1, 2023’ for ‘February 28 fol- (d)(1)’ were a reference to ‘negotiation-eligible termined, for all covered part D drugs (as de-
lowing the selected drug publication date with drugs described in subsection (d)(1)(A)’ and as if fined in section 1860D–2(e)) during such year;
respect to such selected drug’. the reference to ‘total expenditures for such and
‘‘(5) Section 1194(b)(2) shall be applied— drugs under parts B and D of title XVIII’ were ‘‘(II) are equal to at least 80 percent of the
‘‘(A) in subparagraph (A), by substituting a reference to ‘total expenditures for such drugs total expenditures under such part D, as so de-
‘October 2, 2023’ for ‘March 1 of the year of the under part D of title XVIII’. termined, for all covered part D drugs for which
selected drug publication date, with respect to ‘‘(c) SELECTED DRUG.— the manufacturer of the drug has an agreement
the selected drug’; ‘‘(1) IN GENERAL.—For purposes of this part, in effect under section 1860D–14A during such
‘‘(B) in subparagraph (B), by substituting in accordance with subsection (e)(2) and subject year.
‘February 1, 2024’ for ‘the June 1 following the to paragraph (2), each negotiation-eligible drug ‘‘(ii) PART B DRUGS.—The total expenditures
selected drug publication date’; and included on the list published under subsection for the qualifying single source drug under part
‘‘(C) in subparagraph (E), by substituting B of title XVIII, as determined by the Secretary
(a) with respect to an initial price applicability
‘August 1, 2024’ for ‘the first day of November in accordance with paragraph (3)(B), during
year shall be referred to as a ‘selected drug’
following the selected drug publication date, 2021—
with respect to the initial price applicability with respect to such year and each subsequent
year beginning before the first year that begins ‘‘(I) are equal to or less than 1 percent of the
year ’. total expenditures under such part B, as so de-
‘‘(6) Section 1195(a)(1) shall be applied by sub- at least 9 months after the date on which the
Secretary determines at least one drug or bio- termined, for all qualifying single source drugs
stituting ‘September 1, 2024’ for ‘November 30 of for which payment may be made under such
the year that is 2 years prior to such initial logical product—
‘‘(A) is approved or licensed (as applicable)— part B during such year; and
price applicability year’. ‘‘(II) are equal to at least 80 percent of the
‘‘SEC. 1192. SELECTION OF NEGOTIATION-ELIGI-
‘‘(i) under section 505(j) of the Federal Food,
Drug, and Cosmetic Act using such drug as the total expenditures under such part B, as so de-
BLE DRUGS AS SELECTED DRUGS.
listed drug; or termined, for all qualifying single source drugs
‘‘(a) IN GENERAL.—Not later than the selected of the manufacturer for which payment may be
drug publication date with respect to an initial ‘‘(ii) under section 351(k) of the Public Health
Service Act using such drug as the reference made under such part B during such year.
price applicability year, in accordance with sub- ‘‘(B) CLARIFICATIONS RELATING TO MANUFAC-
section (b), the Secretary shall select and pub- product; and
‘‘(B) is marketed pursuant to such approval or TURERS.—
lish a list of— ‘‘(i) AGGREGATION RULE.—All persons treated
‘‘(1) with respect to the initial price applica- licensure.
‘‘(2) CLARIFICATION.—A negotiation-eligible as a single employer under subsection (a) or (b)
bility year 2026, 10 negotiation-eligible drugs de- of section 52 of the Internal Revenue Code of
scribed in subparagraph (A) of subsection (d)(1), drug—
‘‘(A) that is included on the list published 1986 shall be treated as one manufacturer for
but not subparagraph (B) of such subsection, purposes of this paragraph.
with respect to such year (or, all (if such num- under subsection (a) with respect to an initial
price applicability year; and ‘‘(ii) LIMITATION.—A drug shall not be consid-
ber is less than 10) such negotiation-eligible ered to be a qualifying single source drug de-
‘‘(B) for which the Secretary makes a deter-
drugs with respect to such year); scribed in clause (i) or (ii) of subparagraph (A)
‘‘(2) with respect to the initial price applica- mination described in paragraph (1) before or
during the negotiation period with respect to if the manufacturer of such drug is acquired
bility year 2027, 15 negotiation-eligible drugs de- after 2021 by another manufacturer that does
scribed in subparagraph (A) of subsection (d)(1), such initial price applicability year;
shall not be subject to the negotiation process not meet the definition of a specified manufac-
but not subparagraph (B) of such subsection, turer under section 1860D–14C(g)(4)(B)(ii), effec-
with respect to such year (or, all (if such num- under section 1194 with respect to such negotia-
tion period and shall continue to be considered tive at the beginning of the plan year imme-
ber is less than 15) such negotiation-eligible diately following such acquisition or, in the case
drugs with respect to such year); a selected drug under this part with respect to
the number of negotiation-eligible drugs pub- of an acquisition before 2025, effective January
‘‘(3) with respect to the initial price applica- 1, 2025.
bility year 2028, 15 negotiation-eligible drugs de- lished on the list under subsection (a) with re-
‘‘(C) DRUGS NOT INCLUDED AS SMALL BIOTECH
scribed in subparagraph (A) or (B) of subsection spect to such initial price applicability year.
DRUGS.—A new formulation, such as an ex-
(d)(1) with respect to such year (or, all (if such ‘‘(d) NEGOTIATION-ELIGIBLE DRUG.—
‘‘(1) IN GENERAL.—For purposes of this part, tended release formulation, of a qualifying sin-
number is less than 15) such negotiation-eligible gle source drug shall not be considered a quali-
drugs with respect to such year); and subject to paragraph (2), the term ‘negotiation-
eligible drug’ means, with respect to the selected fying single source drug described in subpara-
‘‘(4) with respect to the initial price applica- graph (A).
bility year 2029 or a subsequent year, 20 negotia- drug publication date with respect to an initial
‘‘(3) CLARIFICATIONS AND DETERMINATIONS.—
tion-eligible drugs described in subparagraph price applicability year, a qualifying single
‘‘(A) PREVIOUSLY SELECTED DRUGS AND SMALL
(A) or (B) of subsection (d)(1), with respect to source drug, as defined in subsection (e), that is
BIOTECH DRUGS EXCLUDED.—In applying sub-
such year (or, all (if such number is less than described in either of the following subpara-
paragraphs (A) and (B) of paragraph (1), the
20) such negotiation-eligible drugs with respect graphs (or, with respect to the initial price ap-
Secretary shall not consider or count—
to such year). plicability year 2026 or 2027, that is described in ‘‘(i) drugs that are already selected drugs; and
Subject to subsection (c)(2) and section subparagraph (A)): ‘‘(ii) for initial price applicability years 2026,
1194(f)(5), each drug published on the list pursu- ‘‘(A) PART D HIGH SPEND DRUGS.—The quali- 2027, and 2028, qualifying single source drugs
ant to the previous sentence shall be subject to fying single source drug is, determined in ac- described in paragraph (2)(A).
the negotiation process under section 1194 for cordance with subsection (e)(2), among the 50 ‘‘(B) USE OF DATA.—In determining whether a
the negotiation period with respect to such ini- qualifying single source drugs with the highest qualifying single source drug satisfies any of the
tial price applicability year (and the renegoti- total expenditures under part D of title XVIII, criteria described in paragraph (1) or (2), the
ation process under such section as applicable as determined by the Secretary in accordance Secretary shall use data that is aggregated
for any subsequent year during the applicable with paragraph (3), during the most recent 12- across dosage forms and strengths of the drug,
price applicability period). month period for which data are available prior including new formulations of the drug, such as
‘‘(b) SELECTION OF DRUGS.— to such selected drug publication date (but end- an extended release formulation, and not based
‘‘(1) IN GENERAL.—In carrying out subsection ing no later than October 31 of the year prior to on the specific formulation or package size or
(a), subject to paragraph (2), the Secretary the year of such drug publication date). package type of the drug.
shall, with respect to an initial price applica- ‘‘(B) PART B HIGH SPEND DRUGS.—The quali- ‘‘(e) QUALIFYING SINGLE SOURCE DRUG.—
bility year, do the following: fying single source drug is, determined in ac- ‘‘(1) IN GENERAL.—For purposes of this part,
‘‘(A) Rank negotiation-eligible drugs described cordance with subsection (e)(2), among the 50 the term ‘qualifying single source drug’ means,
in subsection (d)(1) according to the total ex- qualifying single source drugs with the highest with respect to an initial price applicability
penditures for such drugs under parts B and D total expenditures under part B of title XVIII, year, subject to paragraphs (2) and (3), a cov-
of title XVIII, as determined by the Secretary, as determined by the Secretary in accordance ered part D drug (as defined in section 1860D–
during the most recent period of 12 months prior with paragraph (3), during such most recent 12- 2(e)) that is described in any of the following or
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to the selected drug publication date (but ending month period, as described in subparagraph (A). a drug or biological product for which payment
not later than October 31 of the year prior to the ‘‘(2) EXCEPTION FOR SMALL BIOTECH DRUGS.— may be made under part B of title XVIII that is
year of such drug publication date), with re- described in any of the following:
spect to such year, for which data are available, ‘‘(A) IN GENERAL.—Subject to subparagraph ‘‘(A) DRUG PRODUCTS.—A drug—
with the negotiation-eligible drugs with the (C), the term ‘negotiation-eligible drug’ shall not ‘‘(i) that is approved under section 505(c) of
highest total expenditures being ranked the include, with respect to the initial price applica- the Federal Food, Drug, and Cosmetic Act and
highest. bility years 2026, 2027, and 2028, a qualifying is marketed pursuant to such approval;
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7583
‘‘(ii) for which, as of the selected drug publi- publication date with respect to such subsequent Secretary, for the negotiation period for the
cation date with respect to such initial price ap- initial price applicability year. price applicability period (and, if applicable, be-
plicability year, at least 7 years will have ‘‘(C) PLASMA-DERIVED PRODUCTS.—A biologi- fore any period of renegotiation pursuant to sec-
elapsed since the date of such approval; and cal product that is derived from human whole tion 1194(f)) with respect to such drug—
‘‘(iii) that is not the listed drug for any drug blood or plasma. ‘‘(A) information on the non-Federal average
that is approved and marketed under section ‘‘SEC. 1193. MANUFACTURER AGREEMENTS. manufacturer price (as defined in section
505(j) of such Act. ‘‘(a) IN GENERAL.—For purposes of section 8126(h)(5) of title 38, United States Code) for the
‘‘(B) BIOLOGICAL PRODUCTS.—A biological 1191(a)(2), the Secretary shall enter into agree- drug for the applicable year or period; and
product— ‘‘(B) information that the Secretary requires
ments with manufacturers of selected drugs with
‘‘(i) that is licensed under section 351(a) of the to carry out the negotiation (or renegotiation
respect to a price applicability period, by not
Public Health Service Act and is marketed under process) under this part; and
later than February 28 following the selected ‘‘(5) the manufacturer complies with require-
section 351 of such Act; drug publication date with respect to such se-
‘‘(ii) for which, as of the selected drug publi- ments determined by the Secretary to be nec-
lected drug, under which— essary for purposes of administering the pro-
cation date with respect to such initial price ap-
‘‘(1) during the negotiation period for the ini- gram and monitoring compliance with the pro-
plicability year, at least 11 years will have
tial price applicability year for the selected gram.
elapsed since the date of such licensure; and
drug, the Secretary and the manufacturer, in ‘‘(b) AGREEMENT IN EFFECT UNTIL DRUG IS NO
‘‘(iii) that is not the reference product for any
accordance with section 1194, negotiate to deter- LONGER A SELECTED DRUG.—An agreement en-
biological product that is licensed and marketed
mine (and, by not later than the last date of tered into under this section shall be effective,
under section 351(k) of such Act.
such period, agree to) a maximum fair price for with respect to a selected drug, until such drug
‘‘(2) TREATMENT OF AUTHORIZED GENERIC
such selected drug of the manufacturer in order is no longer considered a selected drug under
DRUGS.—
‘‘(A) IN GENERAL.—In the case of a qualifying for the manufacturer to provide access to such section 1192(c).
single source drug described in subparagraph price— ‘‘(c) CONFIDENTIALITY OF INFORMATION.—In-
(A) or (B) of paragraph (1) that is the listed ‘‘(A) to maximum fair price eligible individ- formation submitted to the Secretary under this
drug (as such term is used in section 505(j) of uals who with respect to such drug are described part by a manufacturer of a selected drug that
the Federal Food, Drug, and Cosmetic Act) or a in subparagraph (A) of section 1191(c)(2) and is proprietary information of such manufacturer
product described in clause (ii) of subparagraph are dispensed such drug (and to pharmacies, (as determined by the Secretary) shall be used
mail order services, and other dispensers, with only by the Secretary or disclosed to and used
(B), with respect to an authorized generic drug,
respect to such maximum fair price eligible indi- by the Comptroller General of the United States
in applying the provisions of this part, such au-
viduals who are dispensed such drugs) during, for purposes of carrying out this part.
thorized generic drug and such listed drug or ‘‘(d) NONDUPLICATION WITH 340B CEILING
such product shall be treated as the same quali- subject to paragraph (2), the price applicability
period; and PRICE.—Under an agreement entered into under
fying single source drug. this section, the manufacturer of a selected
‘‘(B) AUTHORIZED GENERIC DRUG DEFINED.— ‘‘(B) to hospitals, physicians, and other pro-
viders of services and suppliers with respect to drug—
For purposes of this paragraph, the term ‘au- ‘‘(1) shall not be required to provide access to
thorized generic drug’ means— maximum fair price eligible individuals who
with respect to such drug are described in sub- the maximum fair price under subsection (a)(3),
‘‘(i) in the case of a drug, an authorized ge- with respect to such selected drug and maximum
neric drug (as such term is defined in section paragraph (B) of such section and are furnished
or administered such drug during, subject to fair price eligible individuals who are eligible to
505(t)(3) of the Federal Food, Drug, and Cos- be furnished, administered, or dispensed such
metic Act); and paragraph (2), the price applicability period;
‘‘(2) the Secretary and the manufacturer selected drug at a covered entity described in
‘‘(ii) in the case of a biological product, a section 340B(a)(4) of the Public Health Service
product that— shall, in accordance with section 1194, renego-
tiate (and, by not later than the last date of the Act, to such covered entity if such selected drug
‘‘(I) has been licensed under section 351(a) of is subject to an agreement described in section
such Act; and period of renegotiation, agree to) the maximum
fair price for such drug, in order for the manu- 340B(a)(1) of such Act and the ceiling price (de-
‘‘(II) is marketed, sold, or distributed directly
facturer to provide access to such maximum fair fined in section 340B(a)(1) of such Act) is lower
or indirectly to retail class of trade under a dif-
price (as so renegotiated)— than the maximum fair price for such selected
ferent labeling, packaging (other than repack-
‘‘(A) to maximum fair price eligible individ- drug; and
aging as the reference product in blister packs, ‘‘(2) shall be required to provide access to the
unit doses, or similar packaging for use in insti- uals who with respect to such drug are described
in subparagraph (A) of section 1191(c)(2) and maximum fair price to such covered entity with
tutions), product code, labeler code, trade name, respect to maximum fair price eligible individ-
or trade mark than the reference product. are dispensed such drug (and to pharmacies,
mail order services, and other dispensers, with uals who are eligible to be furnished, adminis-
‘‘(3) EXCLUSIONS.—In this part, the term tered, or dispensed such selected drug at such
‘qualifying single source drug’ does not include respect to such maximum fair price eligible indi-
viduals who are dispensed such drugs) during entity at such ceiling price in a nonduplicated
any of the following: amount to the ceiling price if such maximum fair
‘‘(A) CERTAIN ORPHAN DRUGS.—A drug that is any year during the price applicability period
(beginning after such renegotiation) with re- price is below the ceiling price for such selected
designated as a drug for only one rare disease or drug.
condition under section 526 of the Federal Food, spect to such selected drug; and
‘‘SEC. 1194. NEGOTIATION AND RENEGOTIATION
Drug, and Cosmetic Act and for which the only ‘‘(B) to hospitals, physicians, and other pro-
PROCESS.
approved indication (or indications) is for such viders of services and suppliers with respect to
‘‘(a) IN GENERAL.—For purposes of this part,
disease or condition. maximum fair price eligible individuals who
under an agreement under section 1193 between
‘‘(B) LOW SPEND MEDICARE DRUGS.—A drug or with respect to such drug are described in sub-
the Secretary and a manufacturer of a selected
biological product with respect to which the paragraph (B) of such section and are furnished
drug (or selected drugs), with respect to the pe-
total expenditures under parts B and D of title or administered such drug during any year de-
riod for which such agreement is in effect and in
XVIII, as determined by the Secretary in ac- scribed in subparagraph (A);
accordance with subsections (b), (c), and (d),
cordance with subsection (d)(3)(B)— ‘‘(3) subject to subsection (d), access to the
the Secretary and the manufacturer—
‘‘(i) with respect to initial price applicability maximum fair price (including as renegotiated ‘‘(1) shall during the negotiation period with
year 2026, is less than, during the period begin- pursuant to paragraph (2)), with respect to such respect to such drug, in accordance with this
ning on June 1, 2022, and ending on May 31, a selected drug, shall be provided by the manu- section, negotiate a maximum fair price for such
2023, $200,000,000; facturer to— drug for the purpose described in section
‘‘(ii) with respect to initial price applicability ‘‘(A) maximum fair price eligible individuals, 1193(a)(1); and
year 2027, is less than, during the most recent who with respect to such drug are described in ‘‘(2) renegotiate, in accordance with the proc-
12-month period applicable under subpara- subparagraph (A) of section 1191(c)(2), at the ess specified pursuant to subsection (f), such
graphs (A) and (B) of subsection (d)(1) for such pharmacy, mail order service, or other dispenser maximum fair price for such drug for the pur-
year, the dollar amount specified in clause (i) at the point-of-sale of such drug (and shall be pose described in section 1193(a)(2) if such drug
increased by the annual percentage increase in provided by the manufacturer to the pharmacy, is a renegotiation-eligible drug under such sub-
the consumer price index for all urban con- mail order service, or other dispenser, with re- section.
sumers (all items; United States city average) for spect to such maximum fair price eligible indi- ‘‘(b) NEGOTIATION PROCESS REQUIREMENTS.—
the period beginning on June 1, 2023, and end- viduals who are dispensed such drugs), as de- ‘‘(1) METHODOLOGY AND PROCESS.—The Sec-
ing on September 30, 2024; or scribed in paragraph (1)(A) or (2)(A), as appli- retary shall develop and use a consistent meth-
‘‘(iii) with respect to a subsequent initial price cable; and odology and process, in accordance with para-
applicability year, is less than, during the most ‘‘(B) hospitals, physicians, and other pro- graph (2), for negotiations under subsection (a)
recent 12-month period applicable under sub- viders of services and suppliers with respect to that aims to achieve the lowest maximum fair
ctelli on DSK11ZRN23PROD with HOUSE
paragraphs (A) and (B) of subsection (d)(1) for maximum fair price eligible individuals who price for each selected drug.
such year, the dollar amount specified in this with respect to such drug are described in sub- ‘‘(2) SPECIFIC ELEMENTS OF NEGOTIATION
subparagraph for the previous initial price ap- paragraph (B) of such section and are furnished PROCESS.—As part of the negotiation process
plicability year increased by the annual per- or administered such drug, as described in para- under this section, with respect to a selected
centage increase in such consumer price index graph (1)(B) or (2)(B), as applicable; drug and the negotiation period with respect to
for the 12-month period ending on September 30 ‘‘(4) the manufacturer submits to the Sec- the initial price applicability year with respect
of the year prior to the year of the selected drug retary, in a form and manner specified by the to such drug, the following shall apply:
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H7584 CONGRESSIONAL RECORD — HOUSE August 12, 2022
‘‘(A) SUBMISSION OF INFORMATION.—Not later that there is not an average non-Federal aver- lected drug described in paragraph (3)(A) to a
than March 1 of the year of the selected drug age manufacturer price available for such drug long-monopoly drug if the selected drug meets
publication date, with respect to the selected for 2021, for the first full year following the the definition of a long-monopoly drug.
drug, the manufacturer of the drug shall submit market entry for such drug), increased by the ‘‘(5) LONG-MONOPOLY DRUG DEFINED.—
to the Secretary, in accordance with section percentage increase in the consumer price index ‘‘(A) IN GENERAL.—In this part, subject to sub-
1193(a)(4), the information described in such for all urban consumers (all items; United States paragraph (B), the term ‘long-monopoly drug’
section. city average) from September 2021 (or December means, with respect to an initial price applica-
‘‘(B) INITIAL OFFER BY SECRETARY.—Not later of such first full year following the market bility year, a selected drug for which at least 16
than the June 1 following the selected drug pub- entry), as applicable, to September of the year years have elapsed since the date of approval of
lication date, the Secretary shall provide the prior to the year of the selected drug publication such drug under section 505(c) of the Federal
manufacturer of the selected drug with a writ- date with respect to such initial price applica- Food, Drug, and Cosmetic Act or since the date
ten initial offer that contains the Secretary’s bility year. of licensure of such drug under section 351(a) of
proposal for the maximum fair price of the drug ‘‘(ii) INITIAL PRICE APPLICABILITY YEAR 2027 the Public Health Service Act, as applicable.
and a concise justification based on the factors AND SUBSEQUENT YEARS.—In the case of a se- ‘‘(B) EXCLUSION.—The term ‘long-monopoly
described in section 1194(e) that were used in de- lected drug with respect to which such initial drug’ shall not include a vaccine that is licensed
veloping such offer. price applicability year is 2027 or a subsequent under section 351 of the Public Health Service
‘‘(C) RESPONSE TO INITIAL OFFER.— year, the lower of— Act and marketed pursuant to such section.
‘‘(i) IN GENERAL.—Not later than 30 days after ‘‘(I) the average non-Federal average manu- ‘‘(6) AVERAGE NON-FEDERAL AVERAGE MANU-
facturer price for such drug for 2021 (or, in the FACTURER PRICE.—In this part, the term ‘aver-
the date of receipt of an initial offer under sub-
paragraph (B), the manufacturer shall either case that there is not an average non-Federal age non-Federal average manufacturer price’
accept such offer or propose a counteroffer to average manufacturer price available for such means the average of the non-Federal average
such offer. drug for 2021, for the first full year following manufacturer price (as defined in section
‘‘(ii) COUNTEROFFER REQUIREMENTS.—If a the market entry for such drug), increased by 8126(h)(5) of title 38, United States Code) for the
manufacturer proposes a counteroffer, such the percentage increase in the consumer price 4 calendar quarters of the year involved.
‘‘(d) TEMPORARY FLOOR FOR SMALL BIOTECH
counteroffer— index for all urban consumers (all items; United
‘‘(I) shall be in writing; and DRUGS.—In the case of a selected drug that is a
States city average) from September 2021 (or De-
‘‘(II) shall be justified based on the factors de- qualifying single source drug described in sec-
cember of such first full year following the mar-
scribed in subsection (e). tion 1192(d)(2) and with respect to which the
ket entry), as applicable, to September of the
‘‘(D) RESPONSE TO COUNTEROFFER.—After re- first initial price applicability year of the price
year prior to the year of the selected drug publi-
ceiving a counteroffer under subparagraph (C), applicability period with respect to such drug is
cation date with respect to such initial price ap-
the Secretary shall respond in writing to such 2029 or 2030, the maximum fair price negotiated
plicability year; or
counteroffer. ‘‘(II) the average non-Federal average manu- under this section for such drug for such initial
‘‘(E) DEADLINE.—All negotiations between the facturer price for such drug for the year prior to price applicability year may not be less than 66
Secretary and the manufacturer of the selected the selected drug publication date with respect percent of the average non-Federal average
drug shall end prior to the first day of November to such initial price applicability year. manufacturer price for such drug (as defined in
following the selected drug publication date, ‘‘(2) PLAN SPECIFIC ENROLLMENT WEIGHTED subsection (c)(6)) for 2021 (or, in the case that
with respect to the initial price applicability AMOUNT.—For purposes of paragraph (1)(B)(i), there is not an average non-Federal average
year. the plan specific enrollment weighted amount manufacturer price available for such drug for
‘‘(F) LIMITATIONS ON OFFER AMOUNT.—In ne- for a prescription drug plan or an MA–PD plan 2021, for the first full year following the market
gotiating the maximum fair price of a selected with respect to a covered Part D drug is an entry for such drug), increased by the percent-
drug, with respect to the initial price applica- amount equal to the product of— age increase in the consumer price index for all
bility year for the selected drug, and, as appli- ‘‘(A) the negotiated price of the drug under urban consumers (all items; United States city
cable, in renegotiating the maximum fair price such plan under part D of title XVIII, net of all average) from September 2021 (or December of
for such drug, with respect to a subsequent year price concessions received by such plan or phar- such first full year following the market entry),
during the price applicability period for such macy benefit managers on behalf of such plan, as applicable, to September of the year prior to
drug, the Secretary shall not offer (or agree to for the most recent year for which data is avail- the selected drug publication date with respect
a counteroffer for) a maximum fair price for the able; and to the initial price applicability year.
selected drug that— ‘‘(B) a fraction— ‘‘(e) FACTORS.—For purposes of negotiating
‘‘(i) exceeds the ceiling determined under sub- ‘‘(i) the numerator of which is the total num- the maximum fair price of a selected drug under
section (c) for the selected drug and year; or ber of individuals enrolled in such plan in such this part with the manufacturer of the drug, the
‘‘(ii) as applicable, is less than the floor deter- year; and Secretary shall consider the following factors, as
mined under subsection (d) for the selected drug ‘‘(ii) the denominator of which is the total applicable to the drug, as the basis for deter-
and year. number of individuals enrolled in a prescription mining the offers and counteroffers under sub-
‘‘(c) CEILING FOR MAXIMUM FAIR PRICE.— drug plan or an MA–PD plan in such year. section (b) for the drug:
‘‘(1) GENERAL CEILING.— ‘‘(3) APPLICABLE PERCENT DESCRIBED.—For ‘‘(1) MANUFACTURER-SPECIFIC DATA.—The fol-
‘‘(A) IN GENERAL.—The maximum fair price purposes of this subsection, the applicable per- lowing data, with respect to such selected drug,
negotiated under this section for a selected cent described in this paragraph is the fol- as submitted by the manufacturer:
drug, with respect to the first initial price appli- lowing: ‘‘(A) Research and development costs of the
cability year of the price applicability period ‘‘(A) SHORT-MONOPOLY DRUGS AND VAC- manufacturer for the drug and the extent to
CINES.—With respect to a selected drug (other which the manufacturer has recouped research
with respect to such drug, shall not exceed the
than an extended-monopoly drug and a long- and development costs.
lower of the amount under subparagraph (B) or
monopoly drug), 75 percent. ‘‘(B) Current unit costs of production and dis-
the amount under subparagraph (C).
‘‘(B) EXTENDED-MONOPOLY DRUGS.—With re- tribution of the drug.
‘‘(B) SUBPARAGRAPH (B) AMOUNT.—An
spect to an extended-monopoly drug, 65 percent. ‘‘(C) Prior Federal financial support for novel
amount equal to the following: ‘‘(C) LONG-MONOPOLY DRUGS.—With respect to therapeutic discovery and development with re-
‘‘(i) COVERED PART D DRUG.—In the case of a
a long-monopoly drug, 40 percent. spect to the drug.
covered part D drug (as defined in section ‘‘(4) EXTENDED-MONOPOLY DRUG DEFINED.— ‘‘(D) Data on pending and approved patent
1860D–2(e)), the sum of the plan specific enroll- ‘‘(A) IN GENERAL.—In this part, subject to sub- applications, exclusivities recognized by the
ment weighted amounts for each prescription paragraph (B), the term ‘extended-monopoly Food and Drug Administration, and applica-
drug plan or MA–PD plan (as determined under drug’ means, with respect to an initial price ap- tions and approvals under section 505(c) of the
paragraph (2)). plicability year, a selected drug for which at Federal Food, Drug, and Cosmetic Act or section
‘‘(ii) PART B DRUG OR BIOLOGICAL.—In the least 12 years, but fewer than 16 years, have 351(a) of the Public Health Service Act for the
case of a drug or biological product for which elapsed since the date of approval of such drug drug.
payment may be made under part B of title under section 505(c) of the Federal Food, Drug, ‘‘(E) Market data and revenue and sales vol-
XVIII, the payment amount under section and Cosmetic Act or since the date of licensure ume data for the drug in the United States.
1847A(b)(4) for the drug or biological product for of such drug under section 351(a) of the Public ‘‘(2) EVIDENCE ABOUT ALTERNATIVE TREAT-
the year prior to the year of the selected drug Health Service Act, as applicable. MENTS.—The following evidence, as available,
publication date with respect to the initial price ‘‘(B) EXCLUSIONS.—The term ‘extended-mo- with respect to such selected drug and thera-
applicability year for the drug or biological nopoly drug’ shall not include any of the fol- peutic alternatives to such drug:
product. lowing: ‘‘(A) The extent to which such drug represents
‘‘(C) SUBPARAGRAPH (C) AMOUNT.—An amount ‘‘(i) A vaccine that is licensed under section a therapeutic advance as compared to existing
equal to the applicable percent described in 351 of the Public Health Service Act and mar- therapeutic alternatives and the costs of such
ctelli on DSK11ZRN23PROD with HOUSE
paragraph (3), with respect to such drug, of the keted pursuant to such section. existing therapeutic alternatives.
following: ‘‘(ii) A selected drug for which a manufac- ‘‘(B) Prescribing information approved by the
‘‘(i) INITIAL PRICE APPLICABILITY YEAR 2026.— turer had an agreement under this part with the Food and Drug Administration for such drug
In the case of a selected drug with respect to Secretary with respect to an initial price appli- and therapeutic alternatives to such drug.
which such initial price applicability year is cability year that is before 2030. ‘‘(C) Comparative effectiveness of such drug
2026, the average non-Federal average manufac- ‘‘(C) CLARIFICATION.—Nothing in subpara- and therapeutic alternatives to such drug, tak-
turer price for such drug for 2021 (or, in the case graph (B)(ii) shall limit the transition of a se- ing into consideration the effects of such drug
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7585
and therapeutic alternatives to such drug on (3)(A) of this subsection and subsection (c)(3)(C) ‘‘(A) maximum fair price eligible individuals
specific populations, such as individuals with in the case of renegotiation-eligible drugs de- who are enrolled in a prescription drug plan
disabilities, the elderly, the terminally ill, chil- scribed in paragraph (3)(B) of this subsection. under part D of title XVIII or an MA–PD plan
dren, and other patient populations. ‘‘(5) CLARIFICATION.—A renegotiation-eligible under part C of such title; and
‘‘(D) The extent to which such drug and drug for which the Secretary makes a deter- ‘‘(B) maximum fair price eligible individuals
therapeutic alternatives to such drug address mination described in section 1192(c)(1) before or who are enrolled under part B of such title, in-
unmet medical needs for a condition for which during the period of renegotiation shall not be cluding who are enrolled in an MA plan under
treatment or diagnosis is not addressed ade- subject to the renegotiation process under this part C of such title.
quately by available therapy. section. ‘‘(4) The establishment of a negotiation proc-
In using evidence described in subparagraph ‘‘(g) CLARIFICATION.—The maximum fair price ess and renegotiation process in accordance
(C), the Secretary shall not use evidence from for a selected drug described in subparagraph with section 1194.
comparative clinical effectiveness research in a (A) or (B) of paragraph (1) shall take effect no ‘‘(5) The establishment of a process for manu-
manner that treats extending the life of an el- later than the first day of the first calendar facturers to submit information described in sec-
derly, disabled, or terminally ill individual as of quarter that begins after the date described in tion 1194(b)(2)(A).
lower value than extending the life of an indi- subparagraph (A) or (B), as applicable. ‘‘(6) The sharing with the Secretary of the
vidual who is younger, nondisabled, or not ter- ‘‘SEC. 1195. PUBLICATION OF MAXIMUM FAIR Treasury of such information as is necessary to
minally ill. PRICES. determine the tax imposed by section 5000D of
‘‘(f) RENEGOTIATION PROCESS.— ‘‘(a) IN GENERAL.—With respect to an initial the Internal Revenue Code of 1986, including
‘‘(1) IN GENERAL.—In the case of a renegoti- price applicability year and a selected drug with the application of such tax to a manufacturer,
ation-eligible drug (as defined in paragraph (2)) respect to such year— producer, or importer or the determination of
that is selected under paragraph (3), the Sec- ‘‘(1) not later than November 30 of the year any date described in section 5000D(c)(1) of such
retary shall provide for a process of renegoti- that is 2 years prior to such initial price applica- Code. For purposes of the preceding sentence,
ation (for years (beginning with 2028) during bility year, the Secretary shall publish the max- such information shall include—
the price applicability period, with respect to imum fair price for such drug negotiated with ‘‘(A) the date on which the Secretary receives
such drug) of the maximum fair price for such the manufacturer of such drug under this part; notification of any termination of an agreement
drug consistent with paragraph (4). and under the Medicare coverage gap discount pro-
‘‘(2) RENEGOTIATION-ELIGIBLE DRUG DE- ‘‘(2) not later than March 1 of the year prior gram under section 1860D-14A and the date on
FINED.—In this section, the term ‘renegotiation- to such initial price applicability year, the Sec- which any subsequent agreement under such
eligible drug’ means a selected drug that is any retary shall publish, subject to section 1193(c), program is entered into;
of the following: the explanation for the maximum fair price with ‘‘(B) the date on which the Secretary receives
‘‘(A) ADDITION OF NEW INDICATION.—A se- respect to the factors as applied under section notification of any termination of an agreement
lected drug for which a new indication is added 1194(e) for such drug described in paragraph (1). under the manufacturer discount program
to the drug. ‘‘(b) UPDATES.— under section 1860D-14C and the date on which
‘‘(B) CHANGE OF STATUS TO AN EXTENDED-MO- ‘‘(1) SUBSEQUENT YEAR MAXIMUM FAIR any subsequent agreement under such program
NOPOLY DRUG.—A selected drug that— PRICES.—For a selected drug, for each year sub- is entered into; and
‘‘(i) is not an extended-monopoly or a long- sequent to the first initial price applicability ‘‘(C) the date on which the Secretary receives
monopoly drug; and year of the price applicability period with re- notification of any termination of a rebate
‘‘(ii) for which there is a change in status to spect to such drug, with respect to which an agreement described in section 1927(b) and the
that of an extended-monopoly drug. agreement for such drug is in effect under sec- date on which any subsequent rebate agreement
‘‘(C) CHANGE OF STATUS TO A LONG-MONOPOLY tion 1193, not later than November 30 of the year described in such section is entered into.
DRUG.—A selected drug that— that is 2 years prior to such subsequent year, ‘‘(7) The establishment of procedures for pur-
‘‘(i) is not a long-monopoly drug; and the Secretary shall publish the maximum fair poses of applying section 1192(d)(2)(B).
‘‘(ii) for which there is a change in status to price applicable to such drug and year, which ‘‘(b) COMPLIANCE MONITORING.—The Sec-
that of a long-monopoly drug. shall be— retary shall monitor compliance by a manufac-
‘‘(D) MATERIAL CHANGES.—A selected drug for ‘‘(A) subject to subparagraph (B), the amount turer with the terms of an agreement under sec-
which the Secretary determines there has been a equal to the maximum fair price published for tion 1193 and establish a mechanism through
material change of any of the factors described such drug for the previous year, increased by which violations of such terms shall be reported.
in paragraph (1) or (2) of subsection (e). the annual percentage increase in the consumer ‘‘SEC. 1197. CIVIL MONETARY PENALTIES.
‘‘(3) SELECTION OF DRUGS FOR RENEGOTI- price index for all urban consumers (all items; ‘‘(a) VIOLATIONS RELATING TO OFFERING OF
ATION.—For each year (beginning with 2028), United States city average) for the 12-month pe- MAXIMUM FAIR PRICE.—Any manufacturer of a
the Secretary shall select among renegotiation- riod ending with the July immediately preceding selected drug that has entered into an agree-
eligible drugs for renegotiation as follows: such November 30; or ment under section 1193, with respect to a year
‘‘(A) ALL EXTENDED-MONOPOLY NEGOTIATION- ‘‘(B) in the case the maximum fair price for during the price applicability period with re-
ELIGIBLE DRUGS.—The Secretary shall select all such drug was renegotiated, for the first year spect to such drug, that does not provide access
renegotiation-eligible drugs described in para- for which such price as so renegotiated applies, to a price that is equal to or less than the max-
graph (2)(B). such renegotiated maximum fair price. imum fair price for such drug for such year—
‘‘(B) ALL LONG-MONOPOLY NEGOTIATION-ELIGI- ‘‘(2) PRICES NEGOTIATED AFTER DEADLINE.—In ‘‘(1) to a maximum fair price eligible indi-
BLE DRUGS.—The Secretary shall select all re- the case of a selected drug with respect to an vidual who with respect to such drug is de-
negotiation-eligible drugs described in para- initial price applicability year for which the scribed in subparagraph (A) of section 1191(c)(2)
graph (2)(C). maximum fair price is determined under this and who is dispensed such drug during such
‘‘(C) REMAINING DRUGS.—Among the remain- part after the date of publication under this sec- year (and to pharmacies, mail order services,
ing renegotiation-eligible drugs described in sub- tion, the Secretary shall publish such maximum and other dispensers, with respect to such max-
paragraphs (A) and (D) of paragraph (2), the fair price by not later than 30 days after the imum fair price eligible individuals who are dis-
Secretary shall select renegotiation-eligible date such maximum price is so determined. pensed such drugs); or
drugs for which the Secretary expects renegoti- ‘‘SEC. 1196. ADMINISTRATIVE DUTIES AND COM- ‘‘(2) to a hospital, physician, or other provider
ation is likely to result in a significant change PLIANCE MONITORING. of services or supplier with respect to maximum
in the maximum fair price otherwise negotiated. ‘‘(a) ADMINISTRATIVE DUTIES.—For purposes fair price eligible individuals who with respect
‘‘(4) RENEGOTIATION PROCESS.— of section 1191(a)(4), the administrative duties to such drug is described in subparagraph (B) of
‘‘(A) IN GENERAL.—The Secretary shall specify described in this section are the following: such section and is furnished or administered
the process for renegotiation of maximum fair ‘‘(1) The establishment of procedures to ensure such drug by such hospital, physician, or pro-
prices with the manufacturer of a renegotiation- that the maximum fair price for a selected drug vider or supplier during such year;
eligible drug selected for renegotiation under is applied before— shall be subject to a civil monetary penalty
this subsection. ‘‘(A) any coverage or financial assistance equal to ten times the amount equal to the prod-
‘‘(B) CONSISTENT WITH NEGOTIATION PROC- under other health benefit plans or programs uct of the number of units of such drug so fur-
ESS.—The process specified under subparagraph that provide coverage or financial assistance for nished, dispensed, or administered during such
(A) shall, to the extent practicable, be consistent the purchase or provision of prescription drug year and the difference between the price for
with the methodology and process established coverage on behalf of maximum fair price eligi- such drug made available for such year by such
under subsection (b) and in accordance with ble individuals; and manufacturer with respect to such individual or
subsections (c), (d), and (e), and for purposes of ‘‘(B) any other discounts. hospital, physician, provider of services, or sup-
applying subsections (c)(1)(A) and (d), the ref- ‘‘(2) The establishment of procedures to com- plier and the maximum fair price for such drug
erence to the first initial price applicability year pute and apply the maximum fair price across for such year.
ctelli on DSK11ZRN23PROD with HOUSE
of the price applicability period with respect to different strengths and dosage forms of a se- ‘‘(b) VIOLATIONS OF CERTAIN TERMS OF
such drug shall be treated as the first initial lected drug and not based on the specific formu- AGREEMENT.—Any manufacturer of a selected
price applicability year of such period for which lation or package size or package type of such drug that has entered into an agreement under
the maximum fair price established pursuant to drug. section 1193, with respect to a year during the
such renegotiation applies, including for apply- ‘‘(3) The establishment of procedures to carry price applicability period with respect to such
ing subsection (c)(3)(B) in the case of renegoti- out the provisions of this part, as applicable, drug, that is in violation of a requirement im-
ation-eligible drugs described in paragraph with respect to— posed pursuant to section 1193(a)(5), including
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H7586 CONGRESSIONAL RECORD — HOUSE August 12, 2022
the requirement to submit information pursuant defined in section 1191(b)(2)), the negotiated (A) in clause (i)(VI), by striking ‘‘any prices
to section 1193(a)(4), shall be subject to a civil prices used for payment (as described in this charged’’ and inserting ‘‘subject to clause
monetary penalty equal to $1,000,000 for each subsection) shall be no greater than the max- (ii)(V), any prices charged’’; and
day of such violation. imum fair price (as defined in section 1191(c)(3)) (B) in clause (ii)—
‘‘(c) FALSE INFORMATION.—Any manufacturer for such drug and for each year during such pe- (i) in subclause (III), by striking ‘‘; and’’ at
that knowingly provides false information pur- riod plus any dispensing fees for such drug.’’. the end;
suant to section 1196(a)(7) shall be subject to a (E) COVERAGE OF SELECTED DRUGS.—Section (ii) in subclause (IV), by striking the period at
civil monetary penalty equal to $100,000,000 for 1860D–4(b)(3) of the Social Security Act (42 the end and inserting ‘‘; and’’; and
each item of such false information. U.S.C. 1395w–104(b)(3)) is amended by adding at (iii) by adding at the end the following new
‘‘(d) APPLICATION.—The provisions of section the end the following new subparagraph: subclause:
1128A (other than subsections (a) and (b)) shall ‘‘(I) REQUIRED INCLUSION OF SELECTED ‘‘(V) in the case of a rebate period and a cov-
apply to a civil monetary penalty under this DRUGS.— ered outpatient drug that is a selected drug (as
section in the same manner as such provisions ‘‘(i) IN GENERAL.—For 2026 and each subse- referred to in section 1192(c)) during such rebate
apply to a penalty or proceeding under section quent year, the PDP sponsor offering a prescrip- period, shall be inclusive of the maximum fair
1128A(a). tion drug plan shall include each covered part D price (as defined in section 1191(c)(3)) for such
‘‘SEC. 1198. LIMITATION ON ADMINISTRATIVE drug that is a selected drug under section 1192 drug with respect to such period.’’.
AND JUDICIAL REVIEW. for which a maximum fair price (as defined in (3) MAXIMUM FAIR PRICES EXCLUDED FROM AV-
section 1191(c)(3)) is in effect with respect to the ERAGE MANUFACTURER PRICE.—Section
‘‘There shall be no administrative or judicial
review of any of the following: year. 1927(k)(1)(B)(i) of the Social Security Act (42
‘‘(1) The determination of a unit, with respect ‘‘(ii) CLARIFICATION.—Nothing in clause (i) U.S.C. 1396r–8(k)(1)(B)(i)) is amended—
shall be construed as prohibiting a PDP sponsor (A) in subclause (IV) by striking ‘‘; and’’ at
to a drug or biological product, pursuant to sec-
from removing such a selected drug from a for- the end;
tion 1191(c)(6).
(B) in subclause (V) by striking the period at
‘‘(2) The selection of drugs under section mulary if such removal would be permitted
the end and inserting ‘‘; and’’; and
1192(b), the determination of negotiation-eligible under section 423.120(b)(5)(iv) of title 42, Code of
(C) by adding at the end the following new
drugs under section 1192(d), and the determina- Federal Regulations (or any successor regula-
subclause:
tion of qualifying single source drugs under sec- tion).’’. ‘‘(VI) any reduction in price paid during the
tion 1192(e). (F) INFORMATION FROM PRESCRIPTION DRUG rebate period to the manufacturer for a drug by
‘‘(3) The determination of a maximum fair PLANS AND MA–PD PLANS REQUIRED.—
reason of application of part E of title XI.’’.
price under subsection (b) or (f) of section 1194. (i) PRESCRIPTION DRUG PLANS.—Section 1860D– (c) IMPLEMENTATION FOR 2026 THROUGH
‘‘(4) The determination of renegotiation-eligi- 12(b) of the Social Security Act (42 U.S.C. 2028.—The Secretary of Health and Human
ble drugs under section 1194(f)(2) and the selec- 1395w–112(b)) is amended by adding at the end Services shall implement this section, including
tion of renegotiation-eligible drugs under section the following new paragraph: the amendments made by this section, for 2026,
1194(f)(3).’’. ‘‘(8) PROVISION OF INFORMATION RELATED TO
2027, and 2028 by program instruction or other
(b) APPLICATION OF MAXIMUM FAIR PRICES MAXIMUM FAIR PRICES.—Each contract entered
forms of program guidance.
AND CONFORMING AMENDMENTS.— into with a PDP sponsor under this part with
SEC. 11002. SPECIAL RULE TO DELAY SELECTION
(1) UNDER MEDICARE.— respect to a prescription drug plan offered by AND NEGOTIATION OF BIOLOGICS
(A) APPLICATION TO PAYMENTS UNDER PART such sponsor shall require the sponsor to pro- FOR BIOSIMILAR MARKET ENTRY.
B.—Section 1847A(b)(1)(B) of the Social Security vide information to the Secretary as requested (a) IN GENERAL.—Part E of title XI of the So-
Act (42 U.S.C. 1395w–3a(b)(1)(B)) is amended by by the Secretary for purposes of carrying out cial Security Act, as added by section 11001, is
inserting ‘‘or in the case of such a drug or bio- section 1194.’’. amended—
logical product that is a selected drug (as re- (ii) MA–PD PLANS.—Section 1857(f)(3) of the (1) in section 1192—
ferred to in section 1192(c)), with respect to a Social Security Act (42 U.S.C. 1395w–27(f)(3)) is (A) in subsection (a), in the flush matter fol-
price applicability period (as defined in section amended by adding at the end the following lowing paragraph (4), by inserting ‘‘and sub-
1191(b)(2)), 106 percent of the maximum fair new subparagraph: section (b)(3)’’ after ‘‘the previous sentence’’;
price (as defined in section 1191(c)(3)) applicable ‘‘(E) PROVISION OF INFORMATION RELATED TO (B) in subsection (b)—
for such drug and a year during such period’’ MAXIMUM FAIR PRICES.—Section 1860D– (i) in paragraph (1), by adding at the end the
after ‘‘paragraph (4)’’. 12(b)(8).’’. following new subparagraph:
(B) APPLICATION UNDER MA OF COST-SHARING (G) CONDITIONS FOR COVERAGE.— ‘‘(C) In the case of a biological product for
FOR PART B DRUGS BASED OFF OF NEGOTIATED (i) MEDICARE PART D.—Section 1860D–43(c) of which the inclusion of the biological product as
PRICE.—Section 1852(a)(1)(B)(iv) of the Social the Social Security Act (42 U.S.C. 1395w–153(c)) a selected drug on a list published under sub-
Security Act (42 U.S.C. 1395w–22(a)(1)(B)(iv)) is is amended— section (a) has been delayed under subsection
amended— (I) by redesignating paragraphs (1) and (2) as (f)(2), remove such biological product from the
(i) by redesignating subclause (VII) as sub- subparagraphs (A) and (B), respectively; rankings under subparagraph (A) before making
clause (VIII); and (II) by striking ‘‘AGREEMENTS.—Subsection’’ the selections under subparagraph (B).’’; and
(ii) by inserting after subclause (VI) the fol- and inserting the following: ‘‘AGREEMENTS.— (ii) by adding at the end the following new
lowing subclause: ‘‘(1) IN GENERAL.—Subject to paragraph (2), paragraph:
‘‘(VII) A drug or biological product that is a subsection’’; and ‘‘(3) INCLUSION OF DELAYED BIOLOGICAL PROD-
selected drug (as referred to in section (III) by adding at the end the following new UCTS.—Pursuant to subparagraphs (B)(ii)(I)
1192(c)).’’. paragraph: and (C)(i) of subsection (f)(2), the Secretary
(C) EXCEPTION TO PART D NON-INTER- ‘‘(2) EXCEPTION.—Paragraph (1)(A) shall not shall select and include on the list published
FERENCE.—Section 1860D–11(i) of the Social Se- apply to a covered part D drug of a manufac- under subsection (a) the biological products de-
curity Act (42 U.S.C. 1395w–111(i)) is amended— turer for any period described in section scribed in such subparagraphs. Such biological
(i) in paragraph (1), by striking ‘‘and’’ at the 5000D(c)(1) of the Internal Revenue Code of 1986 products shall count towards the required num-
end; with respect to the manufacturer.’’. ber of drugs to be selected under subsection
(ii) in paragraph (2), by striking ‘‘or institute (ii) MEDICAID AND MEDICARE PART B.—Section (a)(1).’’; and
a price structure for the reimbursement of cov- 1927(a)(3) of the Social Security Act (42 U.S.C. (C) by adding at the end the following new
ered part D drugs.’’ and inserting ‘‘, except as 1396r–8(a)(3)) is amended by adding at the end subsection:
provided under section 1860D–4(b)(3)(l); and’’; the following new sentence: ‘‘The preceding sen- ‘‘(f) SPECIAL RULE TO DELAY SELECTION AND
and tence shall not apply to a single source drug or NEGOTIATION OF BIOLOGICS FOR BIOSIMILAR
(iii) by adding at the end the following new innovator multiple source drug of a manufac- MARKET ENTRY.—
paragraph: turer for any period described in section ‘‘(1) APPLICATION.—
‘‘(3) may not institute a price structure for the 5000D(c)(1) of the Internal Revenue Code of 1986 ‘‘(A) IN GENERAL.—Subject to subparagraph
reimbursement of covered part D drugs, except with respect to the manufacturer.’’. (B), in the case of a biological product that
as provided under part E of title XI.’’. (H) DISCLOSURE OF INFORMATION UNDER MEDI- would (but for this subsection) be an extended-
(D) APPLICATION AS NEGOTIATED PRICE UNDER CARE PART D.— monopoly drug (as defined in section 1194(c)(4))
PART D.—Section 1860D–2(d)(1) of the Social Se- (i) CONTRACT REQUIREMENTS.—Section 1860D– included as a selected drug on the list published
curity Act (42 U.S.C. 1395w–102(d)(1)) is amend- 12(b)(3)(D)(i) of the Social Security Act (42 under subsection (a) with respect to an initial
ed— U.S.C. 1395w–112(b)(3)(D)(i)) is amended by in- price applicability year, the rules described in
(i) in subparagraph (B), by inserting ‘‘, sub- serting ‘‘, or carrying out part E of title XI’’ paragraph (2) shall apply if the Secretary deter-
ject to subparagraph (D),’’ after ‘‘negotiated after ‘‘appropriate)’’. mines that there is a high likelihood (as de-
prices’’; and (ii) SUBSIDIES.—Section 1860D–15(f)(2)(A)(i) of scribed in paragraph (3)) that a biosimilar bio-
ctelli on DSK11ZRN23PROD with HOUSE
(ii) by adding at the end the following new the Social Security Act (42 U.S.C. 1395w– logical product (for which such biological prod-
subparagraph: 115(f)(2)(A)(i)) is amended by inserting ‘‘or part uct will be the reference product) will be li-
‘‘(D) APPLICATION OF MAXIMUM FAIR PRICE E of title XI’’ after ‘‘this section’’. censed and marketed under section 351(k) of the
FOR SELECTED DRUGS.—In applying this section, (2) DRUG PRICE NEGOTIATION PROGRAM PRICES Public Health Service Act before the date that is
in the case of a covered part D drug that is a se- INCLUDED IN BEST PRICE.—Section 1927(c)(1)(C) 2 years after the selected drug publication date
lected drug (as referred to in section 1192(c)), of the Social Security Act (42 U.S.C. 1396r– with respect to such initial price applicability
with respect to a price applicability period (as 8(c)(1)(C)) is amended— year.
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7587
‘‘(B) REQUEST REQUIRED.— with respect to the initial price applicability for subparagraph (B)(iii) and the selected drug
‘‘(i) IN GENERAL.—The Secretary shall not pro- year that is 1 year after the initial price appli- publication date with respect to the initial price
vide for a delay under— cability year for which the biological product applicability year that is 2 years after the initial
‘‘(I) paragraph (2)(A) unless a request is made would have been included as a selected drug on price applicability year for which such biologi-
for such a delay by a manufacturer of a bio- such list. cal product would have been included as a se-
similar biological product prior to the selected ‘‘(B) IF NOT LICENSED AND MARKETED DURING lected drug on such list but for this subsection,
drug publication date for the list published THE INITIAL DELAY.— the Secretary determines that such biosimilar bi-
under subsection (a) with respect to the initial ‘‘(i) IN GENERAL.—If, during the time period ological product has not been licensed and mar-
price applicability year for which the biological between the selected drug publication date on keted—
product may have been included as a selected which the biological product would have been ‘‘(i) the Secretary shall include such biological
drug on such list but for subparagraph (2)(A); included on the list as a selected drug pursuant product as a selected drug on such list with re-
or to subsection (a) but for subparagraph (A) and spect to the initial price applicability year that
‘‘(II) paragraph (2)(B)(iii) unless a request is the selected drug publication date with respect is 2 years after the initial price applicability
made for such a delay by such a manufacturer to the initial price applicability year that is 1 year for which such biological product would
prior to the selected drug publication date for year after the initial price applicability year for have been included as a selected drug on such
the list published under subsection (a) with re- which such biological product would have been list; and
spect to the initial price applicability year that included as a selected drug on such list, the Sec- ‘‘(ii) the manufacturer of such biological prod-
is 1 year after the initial price applicability year retary determines that the biosimilar biological uct shall pay a rebate under paragraph (4) with
for which the biological product described in product for which the manufacturer submitted respect to the years for which such manufac-
subsection (a) would have been included as a se- the request under paragraph (1)(B)(i)(II) (and turer would have provided access to a maximum
lected drug on such list but for paragraph for which the Secretary previously made a high fair price for such biological product but for this
(2)(A). likelihood determination under paragraph (3)) subsection.
‘‘(ii) INFORMATION AND DOCUMENTS.— has not been licensed and marketed under sec- ‘‘(D) LIMITATIONS ON DELAYS.—
‘‘(I) IN GENERAL.—A request made under ‘‘(i) LIMITED TO 2 YEARS.—In no case shall the
tion 351(k) of the Public Health Service Act, the
clause (i) shall be submitted to the Secretary by Secretary delay the inclusion of a biological
Secretary shall, at the request of such manufac-
such manufacturer at a time and in a form and product on the list published under subsection
turer—
manner specified by the Secretary, and con- ‘‘(I) reevaluate whether there is a high likeli- (a) for more than 2 years.
‘‘(ii) EXCLUSION OF BIOLOGICAL PRODUCTS
tain— hood (as described in paragraph (3)) that such
THAT TRANSITIONED TO A LONG-MONOPOLY DRUG
‘‘(aa) information and documents necessary biosimilar biological product will be licensed and
DURING THE DELAY.—In the case of a biological
for the Secretary to make determinations under marketed under such section 351(k) before the
product for which the inclusion on the list pub-
this subsection, as specified by the Secretary date that is 2 years after the selected drug publi- lished pursuant to subsection (a) was delayed
and including, to the extent available, items de- cation date for which such biological product by 1 year under subparagraph (A) and for
scribed in subclause (III); and would have been included as a selected drug on which there would have been a change in status
‘‘(bb) all agreements related to the biosimilar such list published but for subparagraph (A); to a long-monopoly drug (as defined in section
biological product filed with the Federal Trade and 1194(c)(5)) if such biological product had been a
Commission or the Assistant Attorney General ‘‘(II) evaluate whether, on the basis of clear
selected drug, in no case may the Secretary pro-
pursuant to subsections (a) and (c) of section and convincing evidence, the manufacturer of
vide for a second 1-year delay under subpara-
1112 of the Medicare Prescription Drug, Im- such biosimilar biological product has made a
graph (B)(iii).
provement, and Modernization Act of 2003. significant amount of progress (as determined by ‘‘(iii) EXCLUSION OF BIOLOGICAL PRODUCTS IF
‘‘(II) ADDITIONAL INFORMATION AND DOCU- the Secretary) towards both such licensure and MORE THAN 1 YEAR SINCE LICENSURE.—In no case
MENTS.—After the Secretary has reviewed the the marketing of such biosimilar biological prod- shall the Secretary delay the inclusion of a bio-
request and materials submitted under subclause uct (based on information from items described logical product on the list published under sub-
(I), the manufacturer shall submit any addi- in subclauses (I)(bb) and (II) of paragraph section (a) if more than 1 year has elapsed since
tional information and documents requested by (1)(B)(ii)) since the receipt by the Secretary of the biosimilar biological product has been li-
the Secretary necessary to make determinations the request made by such manufacturer under censed under section 351(k) of the Public Health
under this subsection. paragraph (1)(B)(i)(I). Service Act and marketing has not commenced
‘‘(III) ITEMS DESCRIBED.—The items described ‘‘(ii) SELECTION AND NEGOTIATION.—If the Sec-
for such biosimilar biological product.
in this clause are the following: retary determines that there is not a high likeli- ‘‘(iv) CERTAIN MANUFACTURERS OF BIOSIMILAR
‘‘(aa) The manufacturing schedule for such hood that such biosimilar biological product will BIOLOGICAL PRODUCTS EXCLUDED.—In no case
biosimilar biological product submitted to the be licensed and marketed as described in clause shall the Secretary delay the inclusion of a bio-
Food and Drug Administration during its review (i)(I) or there has not been a significant amount logical product as a selected drug on the list
of the application under such section 351(k). of progress as described in clause (i)(II)— published under subsection (a) if Secretary de-
‘‘(bb) Disclosures (in filings by the manufac- ‘‘(I) the Secretary shall include the biological
termined that the manufacturer of the biosimilar
turer of such biosimilar biological product with product as a selected drug on the list published
biological product described in paragraph
the Securities and Exchange Commission re- under subsection (a) with respect to the initial
(1)(A)—
quired under section 12(b), 12(g), 13(a), or 15(d) price applicability year that is 1 year after the ‘‘(I) is the same as the manufacturer of the
of the Securities Exchange Act of 1934 about initial price applicability year for which such reference product described in such paragraph
capital investment, revenue expectations, and biological product would have been included as or is treated as being the same pursuant to
actions taken by the manufacturer that are typ- a selected drug on such list but for subpara- paragraph (1)(C); or
ical of the normal course of business in the year graph (A); and ‘‘(II) has, based on information from items de-
(or the 2 years, as applicable) before marketing ‘‘(II) the manufacturer of such biological scribed in paragraph (1)(B)(ii)(I)(bb), entered
of a biosimilar biological product) that pertain product shall pay a rebate under paragraph (4) into any agreement described in such paragraph
to the marketing of such biosimilar biological with respect to the year for which such manu- with the manufacturer of the reference product
product, or comparable documentation that is facturer would have provided access to a max- described in paragraph (1)(A) that—
distributed to the shareholders of privately held imum fair price for such biological product but ‘‘(aa) requires or incentivizes the manufac-
companies. for subparagraph (A). turer of the biosimilar biological product to sub-
‘‘(C) AGGREGATION RULE.— ‘‘(iii) SECOND 1-YEAR DELAY.—If the Secretary mit a request described in paragraph (1)(B); or
‘‘(i) IN GENERAL.—All persons treated as a sin- determines that there is a high likelihood that ‘‘(bb) restricts the quantity (either directly or
gle employer under subsection (a) or (b) of sec- such biosimilar biological product will be li- indirectly) of the biosimilar biological product
tion 52 of the Internal Revenue Code of 1986, or censed and marketed (as described in clause that may be sold in the United States over a
in a partnership, shall be treated as one manu- (i)(I)) and a significant amount of progress has specified period of time.
facturer for purposes of paragraph (2)(D)(iv). been made by the manufacturer of such bio- ‘‘(3) HIGH LIKELIHOOD.—For purposes of this
‘‘(ii) PARTNERSHIP DEFINED.—In clause (i), the similar biological product towards such licen- subsection, there is a high likelihood described
term ‘partnership’ means a syndicate, group, sure and marketing (as described in clause in paragraph (1) or paragraph (2), as applica-
pool, joint venture, or other organization (i)(II)), the Secretary shall delay the inclusion ble, if the Secretary finds that—
through or by means of which any business, fi- of the biological product as a selected drug on ‘‘(A) an application for licensure under sec-
nancial operation, or venture is carried on by the list published under subsection (a) until the tion 351(k) of the Public Health Service Act for
the manufacturer of the biological product and selected drug publication date of such list with the biosimilar biological product has been ac-
the manufacturer of the biosimilar biological respect to the initial price applicability year cepted for review or approved by the Food and
product. that is 2 years after the initial price applica- Drug Administration; and
‘‘(2) RULES DESCRIBED.—The rules described bility year for which such biological product ‘‘(B) information from items described in sub
ctelli on DSK11ZRN23PROD with HOUSE
in this paragraph are the following: would have been included as a selected drug on clauses (I)(bb) and (III) of paragraph (1)(B)(ii)
‘‘(A) DELAYED SELECTION AND NEGOTIATION such list but for this subsection. submitted to the Secretary by the manufacturer
FOR 1 YEAR.—If a determination of high likeli- ‘‘(C) IF NOT LICENSED AND MARKETED DURING requesting a delay under such paragraph pro-
hood is made under paragraph (3), the Secretary THE YEAR TWO DELAY.—If, during the time pe- vides clear and convincing evidence that such
shall delay the inclusion of the biological prod- riod between the selected drug publication date biosimilar biological product will, within the
uct as a selected drug on the list published of the list for which the biological product time period specified under paragraph (1)(A) or
under subsection (a) until such list is published would have been included as a selected drug but (2)(B)(i)(I), be marketed.
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H7588 CONGRESSIONAL RECORD — HOUSE August 12, 2022
‘‘(4) REBATE.— first full year following the market entry for ‘‘(1) such tax, divided by
‘‘(A) IN GENERAL.—For purposes of subpara- such biological product), increased by the per- ‘‘(2) the sum of such tax and the price for
graphs (B)(ii)(II) and (C)(ii) of paragraph (2), centage increase in the consumer price index for which so sold.
in the case of a biological product for which the all urban consumers (all items; United States ‘‘(b) NONCOMPLIANCE PERIODS.—A day is de-
inclusion on the list under subsection (a) was city average) from September 2021 (or December scribed in this subsection with respect to a des-
delayed under this subsection and for which the of such first full year following the market ignated drug if it is a day during one of the fol-
Secretary has negotiated and entered into an entry), as applicable, to September of the year lowing periods:
agreement under section 1193 with respect to prior to the selected drug publication date with ‘‘(1) The period beginning on the March 1st
such biological product, the manufacturer shall respect to the initial price applicability year (or, in the case of initial price applicability year
be required to pay a rebate to the Secretary at that would have applied but for this subsection. 2026, the October 2nd) immediately following the
such time and in such manner as determined by ‘‘(D) REBATE DEPOSITS.—Amounts paid as re- date on which such drug is included on the list
the Secretary. bates under this paragraph shall be deposited published under section 1192(a) of the Social Se-
‘‘(B) AMOUNT.—Subject to subparagraph (C), into— curity Act and ending on the earlier of—
the amount of the rebate under subparagraph ‘‘(i) in the case payment is made for such bio- ‘‘(A) the first date on which the manufacturer
(A) with respect to a biological product shall be logical product under part B of title XVIII, the of such designated drug has in place an agree-
equal to the estimated amount— Federal Supplementary Medical Insurance ment described in section 1193(a) of such Act
‘‘(i) in the case of a biological product that is Trust Fund established under section 1841; and with respect to such drug, or
a covered part D drug (as defined in section ‘‘(ii) in the case such biological product is a ‘‘(B) the date that the Secretary of Health
1860D–2(e)), that is the sum of the products of— covered part D drug (as defined in section and Human Services has made a determination
‘‘(I) 75 percent of the amount by which— 1860D–2(e)), the Medicare Prescription Drug Ac- described in section 1192(c)(1) of such Act with
‘‘(aa) the average manufacturer price, as re- count under section 1860D–16 in such Trust respect to such designated drug.
ported by the manufacturer of such covered part ‘‘(2) The period beginning on the November
Fund.
D drug under section 1927 (or, if not reported by ‘‘(5) DEFINITIONS OF BIOSIMILAR BIOLOGICAL 2nd immediately following the March 1st de-
such manufacturer under section 1927, as re- PRODUCT.—In this subsection, the term ‘bio-
scribed in paragraph (1) (or, in the case of ini-
ported by such manufacturer to the Secretary similar biological product’ has the meaning tial price applicability year 2026, the August 2nd
pursuant to the agreement under section given such term in section 1847A(c)(6).’’; immediately following the October 2nd described
1193(a)) for such biological product, with respect (2) in section 1193(a)(4)— in such paragraph) and ending on the earlier
to each of the calendar quarters of the price ap- (A) in the matter preceding subparagraph (A), of—
plicability period that would have applied but ‘‘(A) the first date on which the manufacturer
by inserting ‘‘, and for section 1192(f),’’ after
for this subsection; exceeds of such designated drug and the Secretary of
‘‘section 1194(f))’’;
‘‘(bb) in the initial price applicability year (B) in subparagraph (A), by striking ‘‘and’’ at Health and Human Services have agreed to a
that would have applied but for a delay under— the end; maximum fair price under an agreement de-
‘‘(AA) paragraph (2)(A), the maximum fair (C) by adding at the end the following new scribed in section 1193(a) of the Social Security
price negotiated under section 1194 for such bio- subparagraph: Act, or
logical product under such agreement; or ‘‘(B) the date that the Secretary of Health
‘‘(C) information that the Secretary requires
‘‘(BB) paragraph (2)(B)(iii), such maximum and Human Services has made a determination
to carry out section 1192(f), including rebates
fair price, increased as described in section described in section 1192(c)(1) of such Act with
under paragraph (4) of such section; and’’;
1195(b)(1)(A); and respect to such designated drug.
(3) in section 1196(a)(7), by striking ‘‘section ‘‘(3) In the case of any designated drug which
‘‘(II) the number of units dispensed under 1192(d)(2)(B)’’ and inserting ‘‘subsections
part D of title XVIII for such covered part D is a selected drug (as defined in section 1192(c)
(d)(2)(B) and (f)(1)(C) of section 1192’’; of the Social Security Act) that the Secretary of
drug during each such calendar quarter of such (4) in section 1197—
price applicability period; and Health and Human Services has selected for re-
(A) by redesignating subsections (b), (c), and
‘‘(ii) in the case of a biological product for negotiation under section 1194(f) of such Act,
(d) as subsections (c), (d), and (e), respectively;
which payment may be made under part B of the period beginning on the November 2nd of the
and
title XVIII, that is the sum of the products of— year that begins 2 years prior to the first initial
(B) by inserting after subsection (a) the fol-
‘‘(I) 80 percent of the amount by which— price applicability year of the price applicability
lowing new subsection:
‘‘(aa) the payment amount for such biological period for which the maximum fair price estab-
‘‘(b) VIOLATIONS RELATING TO PROVIDING RE-
product under section 1847A(b), with respect to lished pursuant to such renegotiation applies
BATES.—Any manufacturer that fails to comply
each of the calendar quarters of the price appli- and ending on the earlier of—
with the rebate requirements under section ‘‘(A) the first date on which the manufacturer
cability period that would have applied but for 1192(f)(4) shall be subject to a civil monetary
this subsection; exceeds of such designated drug has agreed to a renego-
penalty equal to 10 times the amount of the re- tiated maximum fair price under such agree-
‘‘(bb) in the initial price applicability year bate the manufacturer failed to pay under such
that would have applied but for a delay under— ment, or
section.’’; and ‘‘(B) the date that the Secretary of Health
‘‘(AA) paragraph (2)(A), the maximum fair (5) in section 1198(b)(2), by inserting ‘‘the ap-
price negotiated under section 1194 for such bio- and Human Services has made a determination
plication of section 1192(f),’’ after ‘‘section described in section 1192(c)(1) of such Act with
logical product under such agreement; or 1192(e)’’.
‘‘(BB) paragraph (2)(B)(iii), such maximum respect to such designated drug.
(b) CONFORMING AMENDMENTS FOR DISCLO- ‘‘(4) With respect to information that is re-
fair price, increased as described in section SURE OF CERTAIN INFORMATION.—Section quired to be submitted to the Secretary of Health
1195(b)(1)(A); and 1927(b)(3)(D)(i) of the Social Security Act (42
‘‘(II) the number of units (excluding units and Human Services under an agreement de-
U.S.C. 1396r–8(b)(3)(D)(i)) is amended by strik- scribed in section 1193(a) of the Social Security
that are packaged into the payment amount for ing ‘‘or to carry out section 1847B’’ and insert-
an item or service and are not separately pay- Act, the period beginning on the date on which
ing ‘‘or to carry out section 1847B or section such Secretary certifies that such information is
able under such part B) of the billing and pay- 1192(f), including rebates under paragraph (4) of
ment code of such biological product adminis- overdue and ending on the date that such infor-
such section’’. mation is so submitted.
tered or furnished under such part B during (c) IMPLEMENTATION FOR 2026 THROUGH ‘‘(c) SUSPENSION OF TAX.—
each such calendar quarter of such price appli- 2028.—The Secretary of Health and Human ‘‘(1) IN GENERAL.—A day shall not be taken
cability period. Services shall implement this section, including into account as a day during a period described
‘‘(C) SPECIAL RULE FOR DELAYED BIOLOGICAL the amendments made by this section, for 2026, in subsection (b) if such day is also a day dur-
PRODUCTS THAT ARE LONG-MONOPOLY DRUGS.—
2027, and 2028 by program instruction or other ing the period—
‘‘(i) IN GENERAL.—In the case of a biological forms of program guidance. ‘‘(A) beginning on the first date on which—
product with respect to which a rebate is re- ‘‘(i) the notice of terminations of all applica-
SEC. 11003. EXCISE TAX IMPOSED ON DRUG MAN-
quired to be paid under this paragraph, if such UFACTURERS DURING NONCOMPLI- ble agreements of the manufacturer have been
biological product qualifies as a long-monopoly ANCE PERIODS. received by the Secretary of Health and Human
drug (as defined in section 1194(c)(5)) at the (a) IN GENERAL.—Subtitle D of the Internal Services, and
time of its inclusion on the list published under Revenue Code of 1986 is amended by adding at ‘‘(ii) none of the drugs of the manufacturer of
subsection (a), in determining the amount of the the end the following new chapter: the designated drug are covered by an agree-
rebate for such biological product under sub- ment under section 1860D-14A or 1860D-14C of
paragraph (B), the amount described in clause ‘‘CHAPTER 50A—DESIGNATED DRUGS
the Social Security Act, and
(ii) shall be substituted for the maximum fair ‘‘Sec. 5000D. Designated drugs during non- ‘‘(B) ending on the last day of February fol-
price described in clause (i)(I) or (ii)(I) of such compliance periods. lowing the earlier of—
subparagraph (B), as applicable. ‘‘SEC. 5000D. DESIGNATED DRUGS DURING NON- ‘‘(i) the first day after the date described in
ctelli on DSK11ZRN23PROD with HOUSE
‘‘(ii) AMOUNT DESCRIBED.—The amount de- COMPLIANCE PERIODS. subparagraph (A) on which the manufacturer
scribed in this clause is an amount equal to 65 ‘‘(a) IN GENERAL.—There is hereby imposed on enters into any subsequent applicable agree-
percent of the average non-Federal average the sale by the manufacturer, producer, or im- ment, or
manufacturer price for the biological product for porter of any designated drug during a day de- ‘‘(ii) the first date any drug of the manufac-
2021 (or, in the case that there is not an average scribed in subsection (b) a tax in an amount turer of the designated drug is covered by an
non-Federal average manufacturer price avail- such that the applicable percentage is equal to agreement under section 1860D-14A or 1860D-14C
able for such biological product for 2021, for the the ratio of— of the Social Security Act.
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7589
‘‘(2) APPLICABLE AGREEMENT.—For purposes redesignating subsection (i) as subsection (j) and ‘‘(i) the total number of units determined
of this subsection, the term ‘applicable agree- by inserting after subsection (h) the following under subparagraph (B) for the billing and pay-
ment’ means the following: subsection: ment code of such drug; and
‘‘(A) An agreement under— ‘‘(i) REBATE BY MANUFACTURERS FOR SINGLE ‘‘(ii) the amount (if any) by which—
‘‘(i) the Medicare coverage gap discount pro- SOURCE DRUGS AND BIOLOGICALS WITH PRICES ‘‘(I) the amount equal to—
gram under section 1860D-14A of the Social Se- INCREASING FASTER THAN INFLATION.— ‘‘(aa) in the case of a part B rebatable drug
curity Act, or ‘‘(1) REQUIREMENTS.— described in paragraph (1)(B) of subsection (b),
‘‘(ii) the manufacturer discount program ‘‘(A) SECRETARIAL PROVISION OF INFORMA- 106 percent of the amount determined under
under section 1860D-14C of such Act. TION.—Not later than 6 months after the end of paragraph (4) of such section for such drug dur-
‘‘(B) A rebate agreement described in section each calendar quarter beginning on or after ing the calendar quarter; or
1927(b) of such Act. January 1, 2023, the Secretary shall, for each ‘‘(bb) in the case of a part B rebatable drug
‘‘(d) APPLICABLE PERCENTAGE.—For purposes part B rebatable drug, report to each manufac- described in paragraph (1)(C) of such sub-
of this section, the term ‘applicable percentage’
turer of such part B rebatable drug the fol- section, the payment amount under such para-
means—
lowing for such calendar quarter: graph for such drug during the calendar quar-
‘‘(1) in the case of sales of a designated drug
‘‘(i) Information on the total number of units ter; exceeds
during the first 90 days described in subsection
of the billing and payment code described in ‘‘(II) the inflation-adjusted payment amount
(b) with respect to such drug, 65 percent,
‘‘(2) in the case of sales of such drug during subparagraph (A)(i) of paragraph (3) with re- determined under subparagraph (C) for such
the 91st day through the 180th day described in spect to such drug and calendar quarter. part B rebatable drug during the calendar quar-
subsection (b) with respect to such drug, 75 per- ‘‘(ii) Information on the amount (if any) of ter.
cent, the excess average sales price increase described ‘‘(B) TOTAL NUMBER OF UNITS.—For purposes
‘‘(3) in the case of sales of such drug during in subparagraph (A)(ii) of such paragraph for of subparagraph (A)(i), the total number of
the 181st day through the 270th day described in such drug and calendar quarter. units for the billing and payment code with re-
subsection (b) with respect to such drug, 85 per- ‘‘(iii) The rebate amount specified under such spect to a part B rebatable drug furnished dur-
cent, and paragraph for such part B rebatable drug and ing a calendar quarter described in subpara-
‘‘(4) in the case of sales of such drug during calendar quarter. graph (A) is equal to—
any subsequent day, 95 percent. ‘‘(B) MANUFACTURER REQUIREMENT.—For ‘‘(i) the number of units for the billing and
‘‘(e) DEFINITIONS.—For purposes of this sec- each calendar quarter beginning on or after payment code of such drug furnished during
tion— January 1, 2023, the manufacturer of a part B such calendar quarter, minus
‘‘(1) DESIGNATED DRUG.—The term ‘designated rebatable drug shall, for such drug, not later ‘‘(ii) the number of units for such billing and
drug’ means any negotiation-eligible drug (as than 30 days after the date of receipt from the payment code of such drug furnished during
defined in section 1192(d) of the Social Security Secretary of the information described in sub- such calendar quarter—
Act) included on the list published under section paragraph (A) for such calendar quarter, pro- ‘‘(I) with respect to which the manufacturer
1192(a) of such Act which is manufactured or vide to the Secretary a rebate that is equal to provides a discount under the program under
produced in the United States or entered into the amount specified in paragraph (3) for such section 340B of the Public Health Service Act or
the United States for consumption, use, or drug for such calendar quarter. a rebate under section 1927; or
warehousing. ‘‘(C) TRANSITION RULE FOR REPORTING.—The ‘‘(II) that are packaged into the payment
‘‘(2) UNITED STATES.—The term ‘United States’ Secretary may, for each part B rebatable drug, amount for an item or service and are not sepa-
has the meaning given such term by section delay the timeframe for reporting the informa- rately payable.
4612(a)(4). tion described in subparagraph (A) for calendar ‘‘(C) DETERMINATION OF INFLATION-ADJUSTED
‘‘(3) OTHER TERMS.—The terms ‘initial price quarters beginning in 2023 and 2024 until not PAYMENT AMOUNT.—The inflation-adjusted pay-
applicability year’, ‘price applicability period’, later than September 30, 2025. ment amount determined under this subpara-
and ‘maximum fair price’ have the meaning ‘‘(2) PART B REBATABLE DRUG DEFINED.— graph for a part B rebatable drug for a calendar
given such terms in section 1191 of the Social Se- ‘‘(A) IN GENERAL.—In this subsection, the term quarter is—
curity Act. ‘part B rebatable drug’ means a single source ‘‘(i) the payment amount for the billing and
‘‘(f) SPECIAL RULES.— drug or biological (as defined in subparagraph payment code for such drug in the payment
‘‘(1) COORDINATION WITH RULES FOR POSSES- (D) of subsection (c)(6)), including a biosimilar amount benchmark quarter (as defined in sub-
SIONS OF THE UNITED STATES.—Rules similar to biological product (as defined in subparagraph paragraph (D)); increased by
the rules of paragraphs (2) and (4) of section (H) of such subsection) but excluding a quali- ‘‘(ii) the percentage by which the rebate pe-
4132(c) shall apply for purposes of this section. fying biosimilar biological product (as defined in riod CPI–U (as defined in subparagraph (F)) for
‘‘(2) ANTI-ABUSE RULE.—In the case of a sale the calendar quarter exceeds the benchmark pe-
subsection (b)(8)(B)(iii)), for which payment is
which was timed for the purpose of avoiding the riod CPI–U (as defined in subparagraph (E)).
made under this part, except such term shall not
tax imposed by this section, the Secretary may ‘‘(D) PAYMENT AMOUNT BENCHMARK QUAR-
include such a drug or biological—
treat such sale as occurring during a day de- ‘‘(i) if, as determined by the Secretary, the av- TER.—The term ‘payment amount benchmark
scribed in subsection (b). erage total allowed charges for such drug or bio- quarter’ means the calendar quarter beginning
‘‘(g) EXPORTS.—Rules similar to the rules of
logical under this part for a year per individual July 1, 2021.
section 4662(e) (other than section
that uses such a drug or biological are less than, ‘‘(E) BENCHMARK PERIOD CPI–U.—The term
4662(e)(2)(A)(ii)(II)) shall apply for purposes of ‘benchmark period CPI–U’ means the consumer
subject to subparagraph (B), $100; or
this chapter. price index for all urban consumers (United
‘‘(h) REGULATIONS.—The Secretary shall pre- ‘‘(ii) that is a vaccine described in subpara-
graph (A) or (B) of section 1861(s)(10). States city average) for January 2021.
scribe such regulations and other guidance as
‘‘(B) INCREASE.—The dollar amount applied ‘‘(F) REBATE PERIOD CPI–U.—The term ‘rebate
may be necessary to carry out this section.’’.
(b) NO DEDUCTION FOR EXCISE TAX PAY- under subparagraph (A)(i)— period CPI–U’ means, with respect to a calendar
MENTS.—Section 275(a)(6) of the Internal Rev-
‘‘(i) for 2024, shall be the dollar amount speci- quarter described in subparagraph (C), the
enue Code of 1986 is amended by inserting fied under such subparagraph for 2023, in- greater of the benchmark period CPI–U and the
‘‘50A,’’ after ‘‘46,’’. creased by the percentage increase in the con- consumer price index for all urban consumers
(c) CLERICAL AMENDMENT.—The table of sumer price index for all urban consumers (United States city average) for the first month
chapters for subtitle D of the Internal Revenue (United States city average) for the 12-month of the calendar quarter that is two calendar
Code of 1986 is amended by adding at the end period ending with June of the previous year; quarters prior to such described calendar quar-
the following new item: and ter.
‘‘(ii) for a subsequent year, shall be the dollar ‘‘(G) REDUCTION OR WAIVER FOR SHORTAGES
‘‘CHAPTER 50A—DESIGNATED DRUGS’’.
amount specified in this clause (or clause (i)) for AND SEVERE SUPPLY CHAIN DISRUPTIONS.—The
(d) EFFECTIVE DATE.—The amendments made the previous year (without application of sub- Secretary shall reduce or waive the amount
by this section shall apply to sales after the date paragraph (C)), increased by the percentage in- under subparagraph (A) with respect to a part
of the enactment of this Act. crease in the consumer price index for all urban B rebatable drug and a calendar quarter—
SEC. 11004. FUNDING. consumers (United States city average) for the ‘‘(i) in the case of a part B rebatable drug
In addition to amounts otherwise available, 12-month period ending with June of the pre- that is described as currently in shortage on the
there is appropriated to the Centers for Medi- vious year. shortage list in effect under section 506E of the
care & Medicaid Services, out of any money in ‘‘(C) ROUNDING.—Any dollar amount deter- Federal Food, Drug, and Cosmetic Act at any
the Treasury not otherwise appropriated, mined under subparagraph (B) that is not a point during the calendar quarter; or
$3,000,000,000 for fiscal year 2022, to remain multiple of $10 shall be rounded to the nearest ‘‘(ii) in the case of a biosimilar biological
available until expended, to carry out the provi- multiple of $10. product, when the Secretary determines there is
sions of, including the amendments made by, ‘‘(3) REBATE AMOUNT.— a severe supply chain disruption during the cal-
this part.
ctelli on DSK11ZRN23PROD with HOUSE
‘‘(A) IN GENERAL.—For purposes of paragraph endar quarter, such as that caused by a natural
PART 2—PRESCRIPTION DRUG INFLATION (1), the amount specified in this paragraph for disaster or other unique or unexpected event.
REBATES a part B rebatable drug assigned to a billing ‘‘(4) SPECIAL TREATMENT OF CERTAIN DRUGS
SEC. 11101. MEDICARE PART B REBATE BY MANU- and payment code for a calendar quarter is, AND EXEMPTION.—
FACTURERS. subject to subparagraphs (B) and (G) and para- ‘‘(A) SUBSEQUENTLY APPROVED DRUGS.—In the
(a) IN GENERAL.—Section 1847A of the Social graph (4), the estimated amount equal to the case of a part B rebatable drug first approved or
Security Act (42 U.S.C. 1395w–3a) is amended by product of— licensed by the Food and Drug Administration
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H7590 CONGRESSIONAL RECORD — HOUSE August 12, 2022
after December 1, 2020, clause (i) of paragraph ‘‘(A) The determination of units under this (2) EXCLUDING PART B DRUG INFLATION RE-
(3)(C) shall be applied as if the term ‘payment subsection. BATE FROM BEST PRICE.—Section
amount benchmark quarter’ were defined under ‘‘(B) The determination of whether a drug is 1927(c)(1)(C)(ii)(I) of the Social Security Act (42
paragraph (3)(D) as the third full calendar a part B rebatable drug under this subsection. U.S.C. 1396r–8(c)(1)(C)(ii)(I)) is amended by in-
quarter after the day on which the drug was ‘‘(C) The calculation of the rebate amount serting ‘‘or section 1847A(i)’’ after ‘‘this sec-
first marketed and clause (ii) of paragraph under this subsection. tion’’.
(3)(C) shall be applied as if the term ‘benchmark ‘‘(D) The computation of coinsurance under (3) COORDINATION WITH MEDICAID REBATE IN-
period CPI–U’ were defined under paragraph paragraph (5) of this subsection. FORMATION DISCLOSURE.—Section
(3)(E) as if the reference to ‘January 2021’ under ‘‘(E) The computation of amounts paid under 1927(b)(3)(D)(i) of the Social Security Act (42
such paragraph were a reference to ‘the first section 1833(a)(1)(EE).’’. U.S.C. 1396r–8(b)(3)(D)(i)) is amended by insert-
month of the first full calendar quarter after the (b) AMOUNTS PAYABLE; COST-SHARING.—Sec- ing ‘‘and the rebate’’ after ‘‘the payment
day on which the drug was first marketed’. tion 1833 of the Social Security Act (42 U.S.C. amount’’.
‘‘(B) TIMELINE FOR PROVISION OF REBATES FOR 1395l) is amended— (4) EXCLUDING PART B DRUG INFLATION RE-
SUBSEQUENTLY APPROVED DRUGS.—In the case of (1) in subsection (a)(1)— BATES FROM AVERAGE MANUFACTURER PRICE.—
a part B rebatable drug first approved or li- (A) in subparagraph (G), by inserting ‘‘, sub- Section 1927(k)(1)(B)(i) of the Social Security
censed by the Food and Drug Administration ject to subsection (i)(9),’’ after ‘‘the amounts Act (42 U.S.C. 1396r–8(k)(1)(B)(i)), as amended
after December 1, 2020, paragraph (1)(B) shall paid’’; by section 11001(b)(3), is amended—
be applied as if the reference to ‘January 1, (B) in subparagraph (S), by striking ‘‘with re- (A) in subclause (V), by striking ‘‘and’’ at the
2023’ under such paragraph were a reference to spect to’’ and inserting ‘‘subject to subpara- end;
‘the later of the 6th full calendar quarter after graph (EE), with respect to’’; (B) in subclause (VI), by striking the period at
the day on which the drug was first marketed or (C) by striking ‘‘and (DD)’’ and inserting the end and inserting a semicolon; and
January 1, 2023’. ‘‘(DD)’’; and (C) by adding at the end the following new
‘‘(C) SELECTED DRUGS.—In the case of a part (D) by inserting before the semicolon at the subclause:
B rebatable drug that is a selected drug (as de- end the following: ‘‘, and (EE) with respect to a ‘‘(VII) rebates paid by manufacturers under
fined in section 1192(c)) with respect to a price part B rebatable drug (as defined in paragraph section 1847A(i); and’’.
applicability period (as defined in section (2) of section 1847A(i)) furnished on or after (d) FUNDING.—In addition to amounts other-
1191(b)(2)), in the case such drug is no longer April 1, 2023, for which the payment amount for wise available, there are appropriated to the
considered to be a selected drug under section a calendar quarter under paragraph (3)(A)(ii)(I) Centers for Medicare & Medicaid Services, out
1192(c), for each applicable period (as defined of such section (or, in the case of a part B of any money in the Treasury not otherwise ap-
under subsection (g)(7)) beginning after the rebatable drug that is a selected drug (as de- propriated, $80,000,000 for fiscal year 2022, in-
price applicability period with respect to such fined in section 1192(c) for which, the payment cluding $12,500,000 to carry out the provisions
drug, clause (i) of paragraph (3)(C) shall be ap- amount described in section 1847A(b)(1)(B)) for of, including the amendments made by, this sec-
plied as if the term ‘payment amount benchmark such drug for such quarter exceeds the infla- tion in fiscal year 2022, and $7,500,000 to carry
quarter’ were defined under paragraph (3)(D) as tion-adjusted payment under paragraph out the provisions of, including the amendments
the calendar quarter beginning January 1 of the (3)(A)(ii)(II) of such section for such quarter, made by, this section in each of fiscal years 2023
last year during such price applicability period the amounts paid shall be equal to the percent through 2031, to remain available until ex-
with respect to such selected drug and clause (ii) of the payment amount under paragraph pended.
of paragraph (3)(C) shall be applied as if the (3)(A)(ii)(I) of such section or section SEC. 11102. MEDICARE PART D REBATE BY MANU-
term ‘benchmark period CPI–U’ were defined 1847A(b)(1)(B), as applicable, that equals the FACTURERS.
under paragraph (3)(E) as if the reference to difference between (i) 100 percent, and (ii) the (a) IN GENERAL.—Part D of title XVIII of the
‘January 2021’ under such paragraph were a percent applied under section 1847A(i)(5)(B)’’; Social Security Act is amended by inserting
reference to ‘the July of the year preceding such (2) in subsection (i), by adding at the end the after section 1860D–14A (42 U.S.C. 1395w–114a)
last year’. following new paragraph: the following new section:
‘‘(5) APPLICATION TO BENEFICIARY COINSUR- ‘‘(9) In the case of a part B rebatable drug (as ‘‘SEC. 1860D–14B. MANUFACTURER REBATE FOR
ANCE.—In the case of a part B rebatable drug defined in paragraph (2) of section 1847A(i)) for CERTAIN DRUGS WITH PRICES IN-
furnished on or after April 1, 2023, if the pay- CREASING FASTER THAN INFLATION.
which payment under this subsection is not
ment amount described in paragraph packaged into a payment for a service furnished ‘‘(a) REQUIREMENTS.—
(3)(A)(ii)(I) (or, in the case of a part B rebatable ‘‘(1) SECRETARIAL PROVISION OF INFORMA-
on or after April 1, 2023, under the revised pay-
drug that is a selected drug (as defined in sec- TION.—Not later than 9 months after the end of
ment system under this subsection, in lieu of
tion 1192(c)), the payment amount described in each applicable period (as defined in subsection
calculation of coinsurance and the amount of
subsection (b)(1)(B) for such drug) for a cal- (g)(7)), subject to paragraph (3), the Secretary
payment otherwise applicable under this sub-
endar quarter exceeds the inflation adjusted shall, for each part D rebatable drug, report to
section, the provisions of section 1847A(i)(5) and
payment for such quarter— each manufacturer of such part D rebatable
paragraph (1)(EE) of subsection (a), shall, as
‘‘(A) in computing the amount of any coinsur- drug the following for such period:
determined appropriate by the Secretary, apply ‘‘(A) The amount (if any) of the excess annual
ance applicable under this part to an individual under this subsection in the same manner as
to whom such drug is furnished, the computa- manufacturer price increase described in sub-
such provisions of section 1847A(i)(5) and sub- section (b)(1)(A)(ii) for each dosage form and
tion of such coinsurance shall be equal to 20
section (a) apply under such section and sub- strength with respect to such drug and period.
percent of the inflation-adjusted payment
section.’’; and ‘‘(B) The rebate amount specified under sub-
amount determined under paragraph (3)(C) for
(3) in subsection (t)(8), by adding at the end section (b) for each dosage form and strength
such part B rebatable drug; and
the following new subparagraph: with respect to such drug and period.
‘‘(B) the amount of such coinsurance for such
‘‘(F) PART B REBATABLE DRUGS.—In the case ‘‘(2) MANUFACTURER REQUIREMENTS.—For
calendar quarter, as computed under subpara-
of a part B rebatable drug (as defined in para- each applicable period, the manufacturer of a
graph (A), shall be applied as a percent, as de-
graph (2) of section 1847A(i), except if such drug part D rebatable drug, for each dosage form and
termined by the Secretary, to the payment
does not have a copayment amount as a result strength with respect to such drug, not later
amount that would otherwise apply under sub-
paragraphs (B) or (C) of subsection (b)(1). of application of subparagraph (E)) for which than 30 days after the date of receipt from the
‘‘(6) REBATE DEPOSITS.—Amounts paid as re- payment under this part is not packaged into a Secretary of the information described in para-
bates under paragraph (1)(B) shall be deposited payment for a covered OPD service (or group of graph (1) for such period, shall provide to the
into the Federal Supplementary Medical Insur- services) furnished on or after April 1, 2023, and Secretary a rebate that is equal to the amount
ance Trust Fund established under section 1841. the payment for such drug under this subsection specified in subsection (b) for such dosage form
‘‘(7) CIVIL MONEY PENALTY.—If a manufac- is the same as the amount for a calendar quar- and strength with respect to such drug for such
turer of a part B rebatable drug has failed to ter under paragraph (3)(A)(ii)(I) of section period.
comply with the requirements under paragraph 1847A(i), under the system under this sub- ‘‘(3) TRANSITION RULE FOR REPORTING.—The
(1)(B) for such drug for a calendar quarter, the section, in lieu of calculation of the copayment Secretary may, for each rebatable covered part
manufacturer shall be subject to, in accordance amount and the amount of payment otherwise D drug, delay the timeframe for reporting the
with a process established by the Secretary pur- applicable under this subsection (other than the information and rebate amount described in
suant to regulations, a civil money penalty in application of the limitation described in sub- subparagraphs (A) and (B) of such paragraph
an amount equal to at least 125 percent of the paragraph (C)), the provisions of section for the applicable periods beginning October 1,
amount specified in paragraph (3) for such drug 1847A(i)(5) and paragraph (1)(EE) of subsection 2022, and October 1, 2023, until not later than
for such calendar quarter. The provisions of sec- (a), shall, as determined appropriate by the Sec- December 31, 2025.
tion 1128A (other than subsections (a) (with re- retary, apply under this subsection in the same ‘‘(b) REBATE AMOUNT.—
spect to amounts of penalties or additional as- manner as such provisions of section 1847A(i)(5) ‘‘(1) IN GENERAL.—
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sessments) and (b)) shall apply to a civil money and subsection (a) apply under such section and ‘‘(A) CALCULATION.—For purposes of this sec-
penalty under this paragraph in the same man- subsection.’’. tion, the amount specified in this subsection for
ner as such provisions apply to a penalty or (c) CONFORMING AMENDMENTS.— a dosage form and strength with respect to a
proceeding under section 1128A(a). (1) TO PART B ASP CALCULATION.—Section part D rebatable drug and applicable period is,
‘‘(8) LIMITATION ON ADMINISTRATIVE OR JUDI- 1847A(c)(3) of the Social Security Act (42 U.S.C. subject to subparagraph (C), paragraph (5)(B),
CIAL REVIEW.—There shall be no administrative 1395w–3a(c)(3)) is amended by inserting ‘‘sub- and paragraph (6), the estimated amount equal
or judicial review of any of the following: section (i) or’’ before ‘‘section 1927’’. to the product of—
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7591
‘‘(i) subject to subparagraph (B) of this para- ‘‘(A) the average manufacturer price (as de- part D rebatable drug and an applicable period
graph, the total number of units of such dosage fined in subsection (g)(6)) of such dosage form and reconciles any overpayments or underpay-
form and strength for each rebatable covered and strength, as calculated for a unit of such ments in amounts paid as rebates under this
part D drug dispensed under this part during drug, with respect to each of the calendar quar- subsection. Any identified underpayment shall
the applicable period; and ters of the payment amount benchmark period be rectified by the manufacturer not later than
‘‘(ii) the amount (if any) by which— (as defined in subsection (g)(3)); and 30 days after the date of receipt from the Sec-
‘‘(I) the annual manufacturer price (as deter- ‘‘(B) the ratio of— retary of information on such underpayment.
mined in paragraph (2)) paid for such dosage ‘‘(i) the total number of units reported under ‘‘(c) REBATE DEPOSITS.—Amounts paid as re-
form and strength with respect to such part D section 1927 of such dosage form and strength bates under subsection (b) shall be deposited
rebatable drug for the period; exceeds with respect to each such calendar quarter of into the Medicare Prescription Drug Account in
‘‘(II) the inflation-adjusted payment amount such payment amount benchmark period; to the Federal Supplementary Medical Insurance
determined under paragraph (3) for such dosage ‘‘(ii) the total number of units reported under Trust Fund established under section 1841.
form and strength with respect to such part D section 1927 of such dosage form and strength ‘‘(d) INFORMATION.—For purposes of carrying
rebatable drug for the period. with respect to such payment amount bench- out this section, the Secretary shall use informa-
‘‘(B) EXCLUDED UNITS.—For purposes of sub- mark period. tion submitted by—
paragraph (A)(i), beginning with plan year ‘‘(5) SPECIAL TREATMENT OF CERTAIN DRUGS ‘‘(1) manufacturers under section 1927(b)(3);
2026, the Secretary shall exclude from the total AND EXEMPTION.— ‘‘(2) States under section 1927(b)(2)(A); and
number of units for a dosage form and strength ‘‘(A) SUBSEQUENTLY APPROVED DRUGS.—In the ‘‘(3) PDP sponsors of prescription drug plans
with respect to a part D rebatable drug, with re- case of a part D rebatable drug first approved or and MA organization offering MA–PD plans
spect to an applicable period, units of each dos- licensed by the Food and Drug Administration under this part.
age form and strength of such part D rebatable after October 1, 2021, subparagraphs (A) and (B) ‘‘(e) CIVIL MONEY PENALTY.—If a manufac-
drug for which the manufacturer provides a dis- of paragraph (4) shall be applied as if the term turer of a part D rebatable drug has failed to
count under the program under section 340B of ‘payment amount benchmark period’ were de- comply with the requirement under subsection
the Public Health Service Act. fined under subsection (g)(3) as the first cal- (a)(2) with respect to such drug for an applica-
‘‘(C) REDUCTION OR WAIVER FOR SHORTAGES endar year beginning after the day on which ble period, the manufacturer shall be subject to
AND SEVERE SUPPLY CHAIN DISRUPTIONS.—The the drug was first marketed and subparagraph a civil money penalty in an amount equal to 125
Secretary shall reduce or waive the amount (B) of paragraph (3) shall be applied as if the percent of the amount specified in subsection (b)
under subparagraph (A) with respect to a part term ‘benchmark period CPI–U’ were defined for such drug for such period. The provisions of
D rebatable drug and an applicable period— under subsection (g)(4) as if the reference to section 1128A (other than subsections (a) (with
‘‘(i) in the case of a part D rebatable drug ‘January 2021’ under such subsection were a ref- respect to amounts of penalties or additional as-
that is described as currently in shortage on the erence to ‘January of the first year beginning sessments) and (b)) shall apply to a civil money
shortage list in effect under section 506E of the after the date on which the drug was first mar- penalty under this subsection in the same man-
Federal Food, Drug, and Cosmetic Act at any keted’. ner as such provisions apply to a penalty or
point during the applicable period; ‘‘(B) TREATMENT OF NEW FORMULATIONS.— proceeding under section 1128A(a).
‘‘(ii) in the case of a generic part D rebatable ‘‘(i) IN GENERAL.—In the case of a part D ‘‘(f) LIMITATION ON ADMINISTRATIVE OR JUDI-
drug (described in subsection (g)(1)(C)(ii)) or a rebatable drug that is a line extension of a part CIAL REVIEW.—There shall be no administrative
biosimilar (defined as a biological product li- D rebatable drug that is an oral solid dosage or judicial review of any of the following:
censed under section 351(k) of the Public Health form, the Secretary shall establish a formula for ‘‘(1) The determination of units under this
Service Act), when the Secretary determines determining the rebate amount under paragraph section.
there is a severe supply chain disruption during (1) and the inflation adjusted payment amount ‘‘(2) The determination of whether a drug is a
the applicable period, such as that caused by a under paragraph (3) with respect to such part D part D rebatable drug under this section.
natural disaster or other unique or unexpected rebatable drug and an applicable period, con- ‘‘(3) The calculation of the rebate amount
event; and sistent with the formula applied under sub- under this section.
‘‘(iii) in the case of a generic Part D rebatable section (c)(2)(C) of section 1927 for determining ‘‘(g) DEFINITIONS.—In this section:
drug (as so described), if the Secretary deter- a rebate obligation for a rebate period under ‘‘(1) PART D REBATABLE DRUG.—
mines that without such reduction or waiver, such section. ‘‘(A) IN GENERAL.—Except as provided in sub-
the drug is likely to be described as in shortage ‘‘(ii) LINE EXTENSION DEFINED.—In this sub- paragraph (B), the term ‘part D rebatable drug’
on such shortage list during a subsequent appli- paragraph, the term ‘line extension’ means, with means, with respect to an applicable period, a
cable period. respect to a part D rebatable drug, a new formu- drug or biological described in subparagraph (C)
‘‘(2) DETERMINATION OF ANNUAL MANUFAC- lation of the drug, such as an extended release that is a covered part D drug (as such term is
TURER PRICE.—The annual manufacturer price formulation, but does not include an abuse-de- defined under section 1860D–2(e)).
determined under this paragraph for a dosage terrent formulation of the drug (as determined ‘‘(B) EXCLUSION.—
form and strength, with respect to a part D by the Secretary), regardless of whether such ‘‘(i) IN GENERAL.—Such term shall, with re-
rebatable drug and an applicable period, is the abuse-deterrent formulation is an extended re- spect to an applicable period, not include a drug
sum of the products of— lease formulation. or biological if the average annual total cost
‘‘(A) the average manufacturer price (as de- ‘‘(C) SELECTED DRUGS.—In the case of a part under this part for such period per individual
fined in subsection (g)(6)) of such dosage form D rebatable drug that is a selected drug (as de- who uses such a drug or biological, as deter-
and strength, as calculated for a unit of such fined in section 1192(c)) with respect to a price mined by the Secretary, is less than, subject to
drug, with respect to each of the calendar quar- applicability period (as defined in section clause (ii), $100, as determined by the Secretary
ters of such period; and 1191(b)(2)), in the case such drug is no longer
‘‘(B) the ratio of— using the most recent data available or, if data
‘‘(i) the total number of units of such dosage considered to be a selected drug under section is not available, as estimated by the Secretary.
form and strength reported under section 1927 1192(c), for each applicable period (as defined ‘‘(ii) INCREASE.—The dollar amount applied
with respect to each such calendar quarter of under subsection (g)(7)) beginning after the under clause (i)—
such period; to price applicability period with respect to such ‘‘(I) for the applicable period beginning Octo-
‘‘(ii) the total number of units of such dosage drug, subparagraphs (A) and (B) of paragraph ber 1, 2023, shall be the dollar amount specified
form and strength reported under section 1927 (4) shall be applied as if the term ‘payment under such clause for the applicable period be-
with respect to such period, as determined by amount benchmark period’ were defined under ginning October 1, 2022, increased by the per-
the Secretary. subsection (g)(3) as the last year beginning dur- centage increase in the consumer price index for
‘‘(3) DETERMINATION OF INFLATION-ADJUSTED ing such price applicability period with respect all urban consumers (United States city aver-
PAYMENT AMOUNT.—The inflation-adjusted pay- to such selected drug and subparagraph (B) of age) for the 12-month period beginning with Oc-
ment amount determined under this paragraph paragraph (3) shall be applied as if the term tober of 2023; and
for a dosage form and strength with respect to ‘benchmark period CPI–U’ were defined under ‘‘(II) for a subsequent applicable period, shall
a part D rebatable drug for an applicable pe- subsection (g)(4) as if the reference to ‘January be the dollar amount specified in this clause for
riod, subject to paragraph (5), is— 2021’ under such subsection were a reference to the previous applicable period, increased by the
‘‘(A) the benchmark period manufacturer ‘January of the last year beginning during such percentage increase in the consumer price index
price determined under paragraph (4) for such price applicability period with respect to such for all urban consumers (United States city av-
dosage form and strength with respect to such drug’. erage) for the 12-month period beginning with
drug and period; increased by ‘‘(6) RECONCILIATION IN CASE OF REVISED IN- October of the previous period.
‘‘(B) the percentage by which the applicable FORMATION.—The Secretary shall provide for a Any dollar amount specified under this clause
period CPI–U (as defined in subsection (g)(5)) method and process under which, in the case that is not a multiple of $10 shall be rounded to
for the period exceeds the benchmark period where a PDP sponsor of a prescription drug the nearest multiple of $10.
ctelli on DSK11ZRN23PROD with HOUSE
CPI–U (as defined in subsection (g)(4)). plan or an MA organization offering an MA–PD ‘‘(C) DRUG OR BIOLOGICAL DESCRIBED.—A
‘‘(4) DETERMINATION OF BENCHMARK PERIOD plan submits revisions to the number of units of drug or biological described in this subpara-
MANUFACTURER PRICE.—The benchmark period a rebatable covered part D drug dispensed, the graph is a drug or biological that, as of the first
manufacturer price determined under this para- Secretary determines, pursuant to such revi- day of the applicable period involved, is—
graph for a dosage form and strength, with re- sions, adjustments, if any, to the calculation of ‘‘(i) a drug approved under a new drug appli-
spect to a part D rebatable drug and an applica- the amount specified in this subsection for a cation under section 505(c) of the Federal Food,
ble period, is the sum of the products of— dosage form and strength with respect to such Drug, and Cosmetic Act;
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H7592 CONGRESSIONAL RECORD — HOUSE August 12, 2022
‘‘(ii) a drug approved under an abbreviated under paragraph (4) of such section’’ and in- (IV) by adding at the end the following:
new drug application under section 505(j) of the serting ‘‘, section 1192(f), including rebates ‘‘(II) for 2024 and each succeeding year, $0.’’;
Federal Food, Drug, and Cosmetic Act, in the under paragraph (4) of such section, or section and
case where— 1860D–14B’’. (ii) in clause (ii)—
‘‘(I) the reference listed drug approved under (4) EXCLUDING PART D DRUG INFLATION RE- (I) by striking ‘‘clause (i)(I)’’ and inserting
section 505(c) of the Federal Food, Drug, and BATES FROM AVERAGE MANUFACTURER PRICE.— ‘‘clause (i)(I)(aa)’’; and
Cosmetic Act, including any ‘authorized generic Section 1927(k)(1)(B)(i) of the Social Security (II) by adding at the end the following new
drug’ (as that term is defined in section 505(t)(3) Act (42 U.S.C. 1396r–8(k)(1)(B)(i)), as amended sentence: ‘‘The Secretary shall continue to cal-
of the Federal Food, Drug, and Cosmetic Act), is by section 11001(b)(3) and section 11101(c)(4), is culate the dollar amounts specified in clause
not being marketed, as identified in the Food amended by adding at the end the following (i)(I)(aa), including with the adjustment under
and Drug Administration’s National Drug Code new subclause: this clause, after 2023 for purposes of section
Directory; (A) in subclause (VI), by striking ‘‘and’’ at 1860D–14(a)(1)(D)(iii).’’;
‘‘(II) there is no other drug approved under the end; (B) in subparagraph (B)—
section 505(j) of the Federal Food, Drug, and (B) in subclause (VII), by striking the period (i) in clause (i)—
Cosmetic Act that is rated as therapeutically at the end and inserting a semicolon; and (I) in subclause (V), by striking ‘‘or’’ at the
equivalent (under the Food and Drug Adminis- (C) by adding at the end the following new end;
tration’s most recent publication of ‘Approved subclause: (II) in subclause (VI)—
Drug Products with Therapeutic Equivalence ‘‘(VIII) rebates paid by manufacturers under (aa) by striking ‘‘for a subsequent year’’ and
Evaluations’) and that is being marketed, as section 1860D–14B.’’. inserting ‘‘for each of years 2021 through 2024’’;
identified in the Food and Drug Administra- (c) FUNDING.—In addition to amounts other- and
tion’s National Drug Code Directory; wise available, there are appropriated to the (bb) by striking the period at the end and in-
‘‘(III) the manufacturer is not a ‘first appli- Centers for Medicare & Medicaid Services, out serting a semicolon; and
cant’ during the ‘180-day exclusivity period’, as of any money in the Treasury not otherwise ap- (III) by adding at the end the following new
those terms are defined in section 505(j)(5)(B)(iv) propriated, $80,000,000 for fiscal year 2022, in- subclauses:
of the Federal Food, Drug, and Cosmetic Act; cluding $12,500,000 to carry out the provisions ‘‘(VII) for 2025, is equal to $2,000; or
and of, including the amendments made by, this sec- ‘‘(VIII) for a subsequent year, is equal to the
‘‘(IV) the manufacturer is not a ‘first ap- tion in fiscal year 2022, and $7,500,000 to carry amount specified in this subparagraph for the
proved applicant’ for a competitive generic ther- out the provisions of, including the amendments previous year, increased by the annual percent-
apy, as that term is defined in section made by, this section in each of fiscal years 2023 age increase described in paragraph (6) for the
505(j)(5)(B)(v) of the Federal Food, Drug, and through 2031, to remain available until ex- year involved.’’; and
Cosmetic Act; or pended. (ii) in clause (ii), by striking ‘‘clause (i)(II)’’
‘‘(iii) a biological licensed under section 351 of PART 3—PART D IMPROVEMENTS AND and inserting ‘‘clause (i)’’;
the Public Health Service Act. MAXIMUM OUT-OF-POCKET CAP FOR (C) in subparagraph (C)—
‘‘(2) UNIT.—The term ‘unit’ means, with re- MEDICARE BENEFICIARIES (i) in clause (i), by striking ‘‘and for
spect to a part D rebatable drug, the lowest dis- amounts’’ and inserting ‘‘and, for a year pre-
SEC. 11201. MEDICARE PART D BENEFIT REDE-
pensable amount (such as a capsule or tablet, SIGN. ceding 2025, for amounts’’; and
milligram of molecules, or grams) of the part D (ii) in clause (iii)—
(a) BENEFIT STRUCTURE REDESIGN.—Section
rebatable drug, as reported under section 1927. (I) by redesignating subclauses (I) through
1860D–2(b) of the Social Security Act (42 U.S.C.
‘‘(3) PAYMENT AMOUNT BENCHMARK PERIOD.— (IV) as items (aa) through (dd) and indenting
1395w–102(b)) is amended—
The term ‘payment amount benchmark period’ appropriately;
(1) in paragraph (2)—
means the period beginning January 1, 2021, (A) in subparagraph (A), in the matter pre- (II) by striking ‘‘if such costs are borne or
and ending in the month immediately prior to ceding clause (i), by inserting ‘‘for a year pre- paid’’ and inserting ‘‘if such costs—
October 1, 2021. ‘‘(I) are borne or paid—’’; and
ceding 2025 and for costs above the annual de-
‘‘(4) BENCHMARK PERIOD CPI–U.—The term (III) in item (dd), by striking the period at the
ductible specified in paragraph (1) and up to the
‘benchmark period CPI–U’ means the consumer end and inserting ‘‘; or’’; and
annual out-of-pocket threshold specified in
price index for all urban consumers (United (IV) by adding at the end the following new
paragraph (4)(B) for 2025 and each subsequent
States city average) for January 2021. subclause:
year’’ after ‘‘paragraph (3)’’;
‘‘(5) APPLICABLE PERIOD CPI–U.—The term ‘‘(II) for 2025 and subsequent years, are reim-
(B) in subparagraph (C)—
‘applicable period CPI–U’ means, with respect to (i) in clause (i), in the matter preceding sub- bursed through insurance, a group health plan,
an applicable period, the consumer price index clause (I), by inserting ‘‘for a year preceding or certain other third party payment arrange-
for all urban consumers (United States city av- 2025,’’ after ‘‘paragraph (4),’’; and ments, but not including the coverage provided
erage) for the first month of such applicable pe- (ii) in clause (ii)(III), by striking ‘‘and each by a prescription drug plan or an MA–PD plan
riod. subsequent year’’ and inserting ‘‘through 2024’’; that is basic prescription drug coverage (as de-
‘‘(6) AVERAGE MANUFACTURER PRICE.—The and fined in subsection (a)(3)) or any payments by a
term ‘average manufacturer price’ has the (C) in subparagraph (D)— manufacturer under the manufacturer discount
meaning, with respect to a part D rebatable (i) in clause (i)— program under section 1860D–14C.’’; and
drug of a manufacturer, given such term in sec- (I) in the matter preceding subclause (I), by (D) in subparagraph (E), by striking ‘‘In ap-
tion 1927(k)(1), with respect to a covered out- inserting ‘‘for a year preceding 2025,’’ after plying’’ and inserting ‘‘For each of years 2011
patient drug of a manufacturer for a rebate pe- ‘‘paragraph (4),’’; and through 2024, in applying’’.
riod under section 1927. (II) in subclause (I)(bb), by striking ‘‘a year (b) REINSURANCE PAYMENT AMOUNT.—Section
‘‘(7) APPLICABLE PERIOD.—The term ‘applica- after 2018’’ and inserting ‘‘each of years 2019 1860D–15(b) of the Social Security Act (42 U.S.C.
ble period’ means a 12-month period beginning through 2024’’; and 1395w–115(b)) is amended—
with October 1 of a year (beginning with Octo- (ii) in clause (ii)(V), by striking ‘‘2019 and (1) in paragraph (1)—
ber 1, 2022). each subsequent year’’ and inserting ‘‘each of (A) by striking ‘‘equal to 80 percent’’ and in-
‘‘(h) IMPLEMENTATION FOR 2022, 2023, AND years 2019 through 2024’’; serting ‘‘equal to—
2024.—The Secretary shall implement this sec- (2) in paragraph (3)(A)— ‘‘(A) for a year preceding 2025, 80 percent’’;
tion for 2022, 2023, and 2024 by program instruc- (A) in the matter preceding clause (i), by in- (B) in subparagraph (A), as added by sub-
tion or other forms of program guidance.’’. serting ‘‘for a year preceding 2025,’’ after ‘‘and paragraph (A), by striking the period at the end
(b) CONFORMING AMENDMENTS.— (4),’’; and and inserting ‘‘; and’’; and
(1) TO PART B ASP CALCULATION.—Section (B) in clause (ii), by striking ‘‘for a subse- (C) by adding at the end the following new
1847A(c)(3) of the Social Security Act (42 U.S.C. quent year’’ and inserting ‘‘for each of years subparagraph:
1395w–3a(c)(3)), as amended by section 2007 through 2024’’; and ‘‘(B) for 2025 and each subsequent year, the
11101(c)(1), is amended by striking ‘‘subsection (3) in paragraph (4)— sum of—
(i) or section 1927’’ and inserting ‘‘subsection (i), (A) in subparagraph (A)— ‘‘(i) with respect to applicable drugs (as de-
section 1927, or section 1860D–14B’’. (i) in clause (i)— fined in section 1860D–14C(g)(2)), an amount
(2) EXCLUDING PART D DRUG INFLATION RE- (I) by redesignating subclauses (I) and (II) as equal to 20 percent of such allowable reinsur-
BATE FROM BEST PRICE.—Section items (aa) and (bb), respectively, and moving ance costs attributable to that portion of gross
1927(c)(1)(C)(ii)(I) of the Social Security Act (42 the margin of each such redesignated item 2 ems covered prescription drug costs as specified in
U.S.C. 1396r–8(c)(1)(C)(ii)(I)), as amended by to the right; paragraph (3) incurred in the coverage year
section 11101(c)(2), is amended by striking ‘‘or (II) in the matter preceding item (aa), as re- after such individual has incurred costs that ex-
section 1847A(i)’’ and inserting ‘‘, section designated by subclause (I), by striking ‘‘is ceed the annual out-of-pocket threshold speci-
ctelli on DSK11ZRN23PROD with HOUSE
1847A(i), or section 1860D–14B’’. equal to the greater of—’’ and inserting ‘‘is fied in section 1860D–2(b)(4)(B); and
(3) COORDINATION WITH MEDICAID REBATE IN- equal to— ‘‘(ii) with respect to covered part D drugs that
FORMATION DISCLOSURE.—Section ‘‘(I) for a year preceding 2024, the greater of— are not applicable drugs (as so defined), an
1927(b)(3)(D)(i) of the Social Security Act (42 ’’; amount equal to 40 percent of such allowable re-
U.S.C. 1396r–8(b)(3)(D)(i)), as amended by sec- (III) by striking the period at the end of item insurance costs attributable to that portion of
tions 11002(b) and 11101(c)(3), is amended by (bb), as redesignated by subclause (I), and in- gross covered prescription drug costs as specified
striking ‘‘or section 1192(f), including rebates serting ‘‘; and’’; and in paragraph (3) incurred in the coverage year
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7593
after such individual has incurred costs that ex- ministering the program, including any deter- ‘‘(2) LIMITATION.—In providing for the imple-
ceed the annual out-of-pocket threshold speci- mination under subparagraph (A) of subsection mentation of this section, the Secretary shall
fied in section 1860D–2(b)(4)(B).’’; (c)(1) or procedures established under such sub- not receive or distribute any funds of a manu-
(2) in paragraph (2)— section (c)(1). facturer under the program.
(A) by striking ‘‘COSTS.—For purposes’’ and ‘‘(4) LENGTH OF AGREEMENT.— ‘‘(e) CIVIL MONEY PENALTY.—
inserting ‘‘COSTS.— ‘‘(A) IN GENERAL.—An agreement under this ‘‘(1) IN GENERAL.—A manufacturer that fails
‘‘(A) IN GENERAL.—Subject to subparagraph section shall be effective for an initial period of to provide discounted prices for applicable drugs
(B), for purposes’’; and not less than 12 months and shall be automati- of the manufacturer dispensed to applicable
(B) by adding at the end the following new cally renewed for a period of not less than 1 beneficiaries in accordance with an agreement
subparagraph: year unless terminated under subparagraph (B). in effect under this section shall be subject to a
‘‘(B) INCLUSION OF MANUFACTURER DISCOUNTS ‘‘(B) TERMINATION.— civil money penalty for each such failure in an
ON APPLICABLE DRUGS.—For purposes of apply- ‘‘(i) BY THE SECRETARY.—The Secretary shall amount the Secretary determines is equal to the
ing subparagraph (A), the term ‘allowable rein- provide for termination of an agreement under sum of—
surance costs’ shall include the portion of the this section for a knowing and willful violation ‘‘(A) the amount that the manufacturer would
negotiated price (as defined in section 1860D– of the requirements of the agreement or other have paid with respect to such discounts under
14C(g)(6)) of an applicable drug (as defined in good cause shown. Such termination shall not the agreement, which will then be used to pay
section 1860D–14C(g)(2)) that was paid by a be effective earlier than 30 days after the date of the discounts which the manufacturer had
manufacturer under the manufacturer discount notice to the manufacturer of such termination. failed to provide; and
program under section 1860D–14C.’’; and The Secretary shall provide, upon request, a ‘‘(B) 25 percent of such amount.
(3) in paragraph (3)— manufacturer with a hearing concerning such a ‘‘(2) APPLICATION.—The provisions of section
(A) in the first sentence, by striking ‘‘For pur- termination, and such hearing shall take place 1128A (other than subsections (a) and (b)) shall
poses’’ and inserting ‘‘Subject to paragraph prior to the effective date of the termination apply to a civil money penalty under this sub-
(2)(B), for purposes’’; and with sufficient time for such effective date to be section in the same manner as such provisions
(B) in the second sentence, by inserting ‘‘(or, repealed if the Secretary determines appro- apply to a penalty or proceeding under section
with respect to 2025 and subsequent years, in priate. 1128A(a).
the case of an applicable drug, as defined in sec- ‘‘(ii) BY A MANUFACTURER.—A manufacturer ‘‘(f) CLARIFICATION REGARDING AVAILABILITY
tion 1860D–14C(g)(2), by a manufacturer)’’ after may terminate an agreement under this section OF OTHER COVERED PART D DRUGS.—Nothing in
‘‘by the individual or under the plan’’. for any reason. Any such termination shall be this section shall prevent an applicable bene-
(c) MANUFACTURER DISCOUNT PROGRAM.— effective, with respect to a plan year— ficiary from purchasing a covered part D drug
(1) IN GENERAL.—Part D of title XVIII of the ‘‘(I) if the termination occurs before January that is not an applicable drug (including a ge-
Social Security Act (42 U.S.C. 1395w–101 31 of a plan year, as of the day after the end of neric drug or a drug that is not on the for-
through 42 U.S.C. 1395w–153), as amended by the plan year; and mulary of the prescription drug plan or MA–PD
section 11102, is amended by inserting after sec- ‘‘(II) if the termination occurs on or after Jan- plan that the applicable beneficiary is enrolled
tion 1860D–14B the following new sections: uary 31 of a plan year, as of the day after the in).
‘‘SEC. 1860D–14C. MANUFACTURER DISCOUNT end of the succeeding plan year. ‘‘(g) DEFINITIONS.—In this section:
PROGRAM. ‘‘(iii) EFFECTIVENESS OF TERMINATION.—Any ‘‘(1) APPLICABLE BENEFICIARY.—The term ‘ap-
‘‘(a) ESTABLISHMENT.—The Secretary shall es- termination under this subparagraph shall not plicable beneficiary’ means an individual who,
tablish a manufacturer discount program (in affect discounts for applicable drugs of the man- on the date of dispensing a covered part D
this section referred to as the ‘program’). Under ufacturer that are due under the agreement be- drug—
the program, the Secretary shall enter into fore the effective date of its termination. ‘‘(A) is enrolled in a prescription drug plan or
‘‘(5) EFFECTIVE DATE OF AGREEMENT.—An
agreements described in subsection (b) with an MA–PD plan;
agreement under this section shall take effect at ‘‘(B) is not enrolled in a qualified retiree pre-
manufacturers and provide for the performance
the start of a calendar quarter or another date scription drug plan; and
of the duties described in subsection (c).
‘‘(b) TERMS OF AGREEMENT.— specified by the Secretary. ‘‘(C) has incurred costs, as determined in ac-
‘‘(c) DUTIES DESCRIBED.—The duties described
‘‘(1) IN GENERAL.— cordance with section 1860D–2(b)(4)(C), for cov-
‘‘(A) AGREEMENT.—An agreement under this in this subsection are the following:
ered part D drugs in the year that exceed the
‘‘(1) ADMINISTRATION OF PROGRAM.—Admin-
section shall require the manufacturer to pro- annual deductible specified in section 1860D–
istering the program, including—
vide, in accordance with this section, discounted ‘‘(A) the determination of the amount of the 2(b)(1).
prices for applicable drugs of the manufacturer discounted price of an applicable drug of a man- ‘‘(2) APPLICABLE DRUG.—The term ‘applicable
that are dispensed to applicable beneficiaries on ufacturer; drug’, with respect to an applicable bene-
or after January 1, 2025. ‘‘(B) the establishment of procedures to ensure ficiary—
‘‘(B) CLARIFICATION.—Nothing in this section that, not later than the applicable number of ‘‘(A) means a covered part D drug—
shall be construed as affecting— calendar days after the dispensing of an appli- ‘‘(i) approved under a new drug application
‘‘(i) the application of a coinsurance of 25 per- cable drug by a pharmacy or mail order service, under section 505(c) of the Federal Food, Drug,
cent of the negotiated price, as applied under the pharmacy or mail order service is reimbursed and Cosmetic Act or, in the case of a biologic
paragraph (2)(A) of section 1860D–2(b), for costs for an amount equal to the difference between— product, licensed under section 351 of the Public
described in such paragraph; or ‘‘(i) the negotiated price of the applicable Health Service Act; and
‘‘(ii) the application of the copayment amount drug; and ‘‘(ii)(I) if the PDP sponsor of the prescription
described in paragraph (4)(A) of such section, ‘‘(ii) the discounted price of the applicable drug plan or the MA organization offering the
with respect to costs described in such para- drug; MA–PD plan uses a formulary, which is on the
graph. ‘‘(C) the establishment of procedures to ensure formulary of the prescription drug plan or MA–
‘‘(C) TIMING OF AGREEMENT.— that the discounted price for an applicable drug PD plan that the applicable beneficiary is en-
‘‘(i) SPECIAL RULE FOR 2025.—In order for an under this section is applied before any coverage rolled in;
agreement with a manufacturer to be in effect or financial assistance under other health ben- ‘‘(II) if the PDP sponsor of the prescription
under this section with respect to the period be- efit plans or programs that provide coverage or drug plan or the MA organization offering the
ginning on January 1, 2025, and ending on De- financial assistance for the purchase or provi- MA–PD plan does not use a formulary, for
cember 31, 2025, the manufacturer shall enter sion of prescription drug coverage on behalf of which benefits are available under the prescrip-
into such agreement not later than March 1, applicable beneficiaries as specified by the Sec- tion drug plan or MA–PD plan that the applica-
2024. retary; and ble beneficiary is enrolled in; or
‘‘(ii) 2026 AND SUBSEQUENT YEARS.—In order ‘‘(D) providing a reasonable dispute resolution ‘‘(III) is provided through an exception or ap-
for an agreement with a manufacturer to be in mechanism to resolve disagreements between peal; and
effect under this section with respect to plan manufacturers, prescription drug plans and ‘‘(B) does not include a selected drug (as re-
year 2026 or a subsequent plan year, the manu- MA–PD plans, and the Secretary. ferred to under section 1192(c)) during a price
facturer shall enter into such agreement not ‘‘(2) MONITORING COMPLIANCE.—The Secretary applicability period (as defined in section
later than a calendar quarter or semi-annual shall monitor compliance by a manufacturer 1191(b)(2)) with respect to such drug.
deadline established by the Secretary. with the terms of an agreement under this sec- ‘‘(3) APPLICABLE NUMBER OF CALENDAR
‘‘(2) PROVISION OF APPROPRIATE DATA.—Each tion. DAYS.—The term ‘applicable number of calendar
manufacturer with an agreement in effect under ‘‘(3) COLLECTION OF DATA FROM PRESCRIPTION days’ means—
this section shall collect and have available ap- DRUG PLANS AND MA–PD PLANS.—The Secretary ‘‘(A) with respect to claims for reimbursement
propriate data, as determined by the Secretary, may collect appropriate data from prescription submitted electronically, 14 days; and
to ensure that it can demonstrate to the Sec- drug plans and MA–PD plans in a timeframe ‘‘(B) with respect to claims for reimbursement
ctelli on DSK11ZRN23PROD with HOUSE
retary compliance with the requirements under that allows for discounted prices to be provided submitted otherwise, 30 days.
the program. for applicable drugs under this section. ‘‘(4) DISCOUNTED PRICE.—
‘‘(3) COMPLIANCE WITH REQUIREMENTS FOR AD- ‘‘(d) ADMINISTRATION.— ‘‘(A) IN GENERAL.—The term ‘discounted price’
MINISTRATION OF PROGRAM.—Each manufac- ‘‘(1) IN GENERAL.—Subject to paragraph (2), means, subject to subparagraphs (B) and (C),
turer with an agreement in effect under this sec- the Secretary shall provide for the implementa- with respect to an applicable drug of a manu-
tion shall comply with requirements imposed by tion of this section, including the performance facturer dispensed during a year to an applica-
the Secretary, as applicable, for purposes of ad- of the duties described in subsection (c). ble beneficiary—
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H7594 CONGRESSIONAL RECORD — HOUSE August 12, 2022
‘‘(i) who has not incurred costs, as determined who has incurred costs, as determined in ac- ‘‘(II) for an applicable drug dispensed for an
in accordance with section 1860D–2(b)(4)(C), for cordance with section 1860D–2(b)(4)(C), for cov- applicable beneficiary who has incurred costs,
covered part D drugs in the year that are equal ered part D drugs in the year that are equal to as determined in accordance with section 1860D–
to or exceed the annual out-of-pocket threshold or exceed the annual out-of-pocket threshold 2(b)(4)(C), for covered part D drugs in the year
specified in section 1860D–2(b)(4)(B)(i) for the specified in section 1860D–2(b)(4)(B)(i) for the that are equal to or exceed the annual out-of-
year, 90 percent of the negotiated price of such year— pocket threshold specified in section 1860D–
drug; and ‘‘(aa) for 2025, 99 percent; 2(b)(4)(B)(i) for the year—
‘‘(ii) who has incurred such costs, as so deter- ‘‘(bb) for 2026, 98 percent; ‘‘(aa) for 2025, 99 percent;
mined, in the year that are equal to or exceed ‘‘(cc) for 2027, 95 percent; ‘‘(bb) for 2026, 98 percent;
such threshold for the year, 80 percent of the ‘‘(dd) for 2028, 92 percent; ‘‘(cc) for 2027, 95 percent;
negotiated price of such drug. ‘‘(ee) for 2029, 90 percent; ‘‘(dd) for 2028, 92 percent;
‘‘(B) PHASE-IN FOR CERTAIN DRUGS DISPENSED ‘‘(ff) for 2030, 85 percent; and ‘‘(ee) for 2029, 90 percent;
TO LIS BENEFICIARIES.— ‘‘(gg) for 2031 and each subsequent year, 80 ‘‘(ff) for 2030, 85 percent; and
‘‘(i) IN GENERAL.—In the case of an applicable percent. ‘‘(gg) for 2031 and each subsequent year, 80
drug of a specified manufacturer (as defined in ‘‘(C) PHASE-IN FOR SPECIFIED SMALL MANUFAC- percent.
clause (ii)) that is marketed as of the date of en- TURERS.— ‘‘(D) TOTAL EXPENDITURES.—For purposes of
actment of this subparagraph and dispensed for ‘‘(i) IN GENERAL.—In the case of an applicable this paragraph, the term ‘total expenditures’ in-
an applicable beneficiary who is a subsidy eligi- drug of a specified small manufacturer (as de- cludes, in the case of expenditures with respect
ble individual (as defined in section 1860D– fined in clause (ii)) that is marketed as of the to part D, the total gross covered prescription
14(a)(3)), the term ‘discounted price’ means the date of enactment of this subparagraph and dis- drug costs as defined in section 1860D–15(b)(3).
specified LIS percent (as defined in clause (iii)) pensed for an applicable beneficiary, the term The term ‘total expenditures’ excludes, in the
of the negotiated price of the applicable drug of ‘discounted price’ means the specified small case of expenditures with respect to part B, ex-
the manufacturer. manufacturer percent (as defined in clause (iii)) penditures for a drug or biological that are bun-
‘‘(ii) SPECIFIED MANUFACTURER.— of the negotiated price of the applicable drug of dled or packaged into the payment for another
‘‘(I) IN GENERAL.—In this subparagraph, sub- the manufacturer. service.
ject to subclause (II), the term ‘specified manu- ‘‘(ii) SPECIFIED SMALL MANUFACTURER.— ‘‘(E) SPECIAL CASE FOR CERTAIN CLAIMS.—
facturer’ means a manufacturer of an applicable ‘‘(I) IN GENERAL.—In this subparagraph, sub- ‘‘(i) CLAIMS SPANNING DEDUCTIBLE.—In the
drug for which, in 2021— ject to subclause (III), the term ‘specified small case where the entire amount of the negotiated
‘‘(aa) the manufacturer had a coverage gap manufacturer’ means a manufacturer of an ap- price of an individual claim for an applicable
discount agreement under section 1860D–14A; plicable drug for which, in 2021— drug with respect to an applicable beneficiary
‘‘(bb) the total expenditures for all of the spec- ‘‘(aa) the manufacturer is a specified manu- does not fall above the annual deductible speci-
ified drugs of the manufacturer covered by such facturer (as defined in subparagraph (B)(ii)); fied in section 1860D–2(b)(1) for the year, the
agreement or agreements for such year and cov- and manufacturer of the applicable drug shall pro-
ered under this part during such year rep- ‘‘(bb) the total expenditures under part D for
vide the discounted price under this section on
resented less than 1.0 percent of the total ex- any one of the specified small manufacturer
only the portion of the negotiated price of the
penditures under this part for all covered Part drugs of the manufacturer that are covered by
applicable drug that falls above such annual de-
D drugs during such year; and the agreement or agreements under section
ductible.
‘‘(cc) the total expenditures for all of the spec- 1860D–14A of such manufacturer for such year ‘‘(ii) CLAIMS SPANNING OUT-OF-POCKET
ified drugs of the manufacturer that are single and covered under this part during such year THRESHOLD.—In the case where the entire
source drugs and biological products for which are equal to or more than 80 percent of the total amount of the negotiated price of an individual
payment may be made under part B during such expenditures under this part for all specified claim for an applicable drug with respect to an
year represented less than 1.0 percent of the small manufacturer drugs of the manufacturer applicable beneficiary does not fall entirely
total expenditures under part B for all drugs or that are covered by such agreement or agree- below or entirely above the annual out-of-pock-
biological products for which payment may be ments for such year and covered under this part et threshold specified in section 1860D–
made under such part during such year. during such year. 2(b)(4)(B)(i) for the year, the manufacturer of
‘‘(II) SPECIFIED DRUGS.— ‘‘(II) SPECIFIED SMALL MANUFACTURER
the applicable drug shall provide the discounted
‘‘(aa) IN GENERAL.—For purposes of this DRUGS.—
‘‘(aa) IN GENERAL.—For purposes of this price—
clause, the term ‘specified drug’ means, with re- ‘‘(I) in accordance with subparagraph (A)(i)
spect to a specified manufacturer, for 2021, an clause, the term ‘specified small manufacturer
on the portion of the negotiated price of the ap-
applicable drug that is produced, prepared, drugs’ means, with respect to a specified small
plicable drug that falls below such threshold;
propagated, compounded, converted, or proc- manufacturer, for 2021, an applicable drug that
and
essed by the manufacturer. is produced, prepared, propagated, compounded,
‘‘(II) in accordance with subparagraph (A)(ii)
‘‘(bb) AGGREGATION RULE.—All persons treat- converted, or processed by the manufacturer.
on the portion of such price of such drug that
ed as a single employer under subsection (a) or ‘‘(bb) AGGREGATION RULE.—All persons treat-
falls at or above such threshold.
(b) of section 52 of the Internal Revenue Code of ed as a single employer under subsection (a) or
‘‘(5) MANUFACTURER.—The term ‘manufac-
1986 shall be treated as one manufacturer for (b) of section 52 of the Internal Revenue Code of
turer’ means any entity which is engaged in the
purposes of this subparagraph. For purposes of 1986 shall be treated as one manufacturer for
production, preparation, propagation,
making a determination pursuant to the pre- purposes of this subparagraph. For purposes of
compounding, conversion, or processing of pre-
vious sentence, an agreement under this section making a determination pursuant to the pre-
scription drug products, either directly or indi-
shall require that a manufacturer provide and vious sentence, an agreement under this section
rectly by extraction from substances of natural
attest to such information as specified by the shall require that a manufacturer provide and
origin, or independently by means of chemical
Secretary as necessary. attest to such information as specified by the
synthesis, or by a combination of extraction and
‘‘(III) LIMITATION.—The term ‘specified manu- Secretary as necessary.
‘‘(III) LIMITATION.—The term ‘specified small chemical synthesis. Such term does not include
facturer’ shall not include a manufacturer de- a wholesale distributor of drugs or a retail phar-
scribed in subclause (I) if such manufacturer is manufacturer’ shall not include a manufacturer
described in subclause (I) if such manufacturer macy licensed under State law.
acquired after 2021 by another manufacturer ‘‘(6) NEGOTIATED PRICE.—The term ‘negotiated
that is not a specified manufacturer, effective at is acquired after 2021 by another manufacturer
price’ has the meaning given such term for pur-
the beginning of the plan year immediately fol- that is not a specified small manufacturer, effec-
poses of section 1860D–2(d)(1)(B), and, with re-
lowing such acquisition or, in the case of an ac- tive at the beginning of the plan year imme-
spect to an applicable drug, such negotiated
quisition before 2025, effective January 1, 2025. diately following such acquisition or, in the case
price shall include any dispensing fee and, if
‘‘(iii) SPECIFIED LIS PERCENT.—In this sub- of an acquisition before 2025, effective January
applicable, any vaccine administration fee for
paragraph, the ‘specified LIS percent’ means, 1, 2025.
‘‘(iii) SPECIFIED SMALL MANUFACTURER PER- the applicable drug.
with respect to a year— ‘‘(7) QUALIFIED RETIREE PRESCRIPTION DRUG
‘‘(I) for an applicable drug dispensed for an CENT.—In this subparagraph, the term ‘specified
PLAN.—The term ‘qualified retiree prescription
applicable beneficiary described in clause (i) small manufacturer percent’ means, with respect
drug plan’ has the meaning given such term in
who has not incurred costs, as determined in ac- to a year—
‘‘(I) for an applicable drug dispensed for an section 1860D–22(a)(2).
cordance with section 1860D–2(b)(4)(C), for cov-
applicable beneficiary who has not incurred ‘‘SEC. 1860D–14D. SELECTED DRUG SUBSIDY PRO-
ered part D drugs in the year that are equal to GRAM.
or exceed the annual out-of-pocket threshold costs, as determined in accordance with section
1860D–2(b)(4)(C), for covered part D drugs in the ‘‘With respect to covered part D drugs that
specified in section 1860D–2(b)(4)(B)(i) for the
year that are equal to or exceed the annual out- would be applicable drugs (as defined in section
year—
of-pocket threshold specified in section 1860D– 1860D–14C(g)(2)) but for the application of sub-
‘‘(aa) for 2025, 99 percent;
ctelli on DSK11ZRN23PROD with HOUSE
‘‘(bb) for 2026, 98 percent; 2(b)(4)(B)(i) for the year— paragraph (B) of such section, the Secretary
‘‘(cc) for 2027, 95 percent; ‘‘(aa) for 2025, 99 percent; shall provide a process whereby, in the case of
‘‘(dd) for 2028, 92 percent; and ‘‘(bb) for 2026, 98 percent; an applicable beneficiary (as defined in section
‘‘(ee) for 2029 and each subsequent year, 90 ‘‘(cc) for 2027, 95 percent; 1860D–14C(g)(1)) who, with respect to a year, is
percent; and ‘‘(dd) for 2028, 92 percent; and enrolled in a prescription drug plan or is en-
‘‘(II) for an applicable drug dispensed for an ‘‘(ee) for 2029 and each subsequent year, 90 rolled in an MA–PD plan, has not incurred costs
applicable beneficiary described in clause (i) percent; and that are equal to or exceed the annual out-of-
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7595
pocket threshold specified in section 1860D– would have applied if this paragraph had not (D) Section 1860D–15(a) of the Social Security
2(b)(4)(B)(i), and is dispensed such a drug, the been enacted. Act (42 U.S.C. 1395w–115(a)) is amended—
Secretary (periodically and on a timely basis) ‘‘(iv) 2027.—The base beneficiary premium for (i) in the matter preceding paragraph (1), by
provides the PDP sponsor or the MA organiza- a month in 2027 shall be equal to the lesser of— inserting ‘‘(or, for each of 2024 through 2029, the
tion offering the plan, a subsidy with respect to ‘‘(I) the base beneficiary premium computed percent applicable as a result of the application
such drug that is equal to 10 percent of the ne- under clause (iii) for a month in 2026 increased of section 1860D–13(a)(8), or, for 2030 and each
gotiated price (as defined in section 1860D– by 6 percent; or subsequent year, 100 percent minus the percent
14C(g)(6)) of such drug.’’. ‘‘(II) the base beneficiary premium computed specified under section 1860D–13(a)(9))’’ after
(2) SUNSET OF MEDICARE COVERAGE GAP DIS- under paragraph (2) for a month in 2027 that ‘‘74.5 percent’’; and
COUNT PROGRAM.—Section 1860D–14A of the So- would have applied if this paragraph had not (ii) in paragraph (1)(B), by striking ‘‘para-
cial Security Act (42 U.S.C. 1395w–114a) is been enacted. graph (2) of section 1860D–13(a)’’ and inserting
amended— ‘‘(v) 2028.—The base beneficiary premium for ‘‘paragraph (2) or (8) of section 1860D–13(a) (as
(A) in subsection (a), in the first sentence, by a month in 2028 shall be equal to the lesser of— applicable)’’.
striking ‘‘The Secretary’’ and inserting ‘‘Subject ‘‘(I) the base beneficiary premium computed (e) CONFORMING AMENDMENTS.—
to subsection (h), the Secretary’’; and under clause (iv) for a month in 2027 increased (1) Section 1860D–2 of the Social Security Act
(B) by adding at the end the following new by 6 percent; or (42 U.S.C. 1395w–102) is amended—
subsection: ‘‘(II) the base beneficiary premium computed (A) in subsection (a)(2)(A)(i)(I), by striking ‘‘,
‘‘(h) SUNSET OF PROGRAM.— under paragraph (2) for a month in 2028 that or an increase in the initial’’ and inserting ‘‘or,
‘‘(1) IN GENERAL.—The program shall not would have applied if this paragraph had not for a year preceding 2025, an increase in the ini-
apply with respect to applicable drugs dispensed been enacted. tial’’;
on or after January 1, 2025, and, subject to ‘‘(vi) 2029.—The base beneficiary premium for (B) in subsection (c)(1)(C)—
paragraph (2), agreements under this section a month in 2029 shall be equal to the lesser of— (i) in the subparagraph heading, by striking
shall be terminated as of such date. ‘‘(I) the base beneficiary premium computed ‘‘AT INITIAL COVERAGE LIMIT’’; and
‘‘(2) CONTINUED APPLICATION FOR APPLICABLE under clause (v) for a month in 2028 increased (ii) by inserting ‘‘for a year preceding 2025 or
DRUGS DISPENSED PRIOR TO SUNSET.—The provi- by 6 percent; or the annual out-of-pocket threshold specified in
sions of this section (including all responsibil- ‘‘(II) the base beneficiary premium computed subsection (b)(4)(B) for the year for 2025 and
ities and duties) shall continue to apply on and under paragraph (2) for a month in 2029 that each subsequent year’’ after ‘‘subsection (b)(3)
after January 1, 2025, with respect to applicable would have applied if this paragraph had not for the year’’ each place it appears; and
drugs dispensed prior to such date.’’. been enacted. (C) in subsection (d)(1)(A), by striking ‘‘or an
(3) SELECTED DRUG SUBSIDY PAYMENTS FROM ‘‘(B) CLARIFICATION REGARDING 2030 AND SUB- initial’’ and inserting ‘‘or, for a year preceding
MEDICARE PRESCRIPTION DRUG ACCOUNT.—Sec- SEQUENT YEARS.—The base beneficiary premium 2025, an initial’’.
tion 1860D–16(b)(1) of the Social Security Act (42 for a month in 2030 or a subsequent year shall (2) Section 1860D–4(a)(4)(B)(i) of the Social
U.S.C. 1395w–116(b)(1)) is amended— be computed under paragraph (2) without re- Security Act (42 U.S.C. 1395w–104(a)(4)(B)(i)) is
(A) in subparagraph (C), by striking ‘‘and’’ at gard to this paragraph.’’; and amended by striking ‘‘the initial’’ and inserting
the end; (B) in subsection (b)(3)(A)(ii), by striking ‘‘for a year preceding 2025, the initial’’.
(B) in subparagraph (D), by striking the pe- ‘‘subsection (a)(2)’’ and inserting ‘‘paragraph (3) Section 1860D–14(a) of the Social Security
riod at the end and inserting ‘‘; and’’; and (2) or (8) of subsection (a) (as applicable)’’. Act (42 U.S.C. 1395w–114(a)) is amended—
(C) by adding at the end the following new (2) ADJUSTMENT TO BENEFICIARY PREMIUM (A) in paragraph (1)—
subparagraph: PERCENTAGE FOR 2030 AND SUBSEQUENT YEARS.— (i) in subparagraph (C), by striking ‘‘The con-
‘‘(E) payments under section 1860D–14D (re- Section 1860D–13(a) of the Social Security Act tinuation’’ and inserting ‘‘For a year preceding
lating to selected drug subsidy payments).’’. (42 U.S.C. 1395w–113(a)), as amended by para- 2025, the continuation’’;
(d) MEDICARE PART D PREMIUM STABILIZA- graph (1), is amended— (ii) in subparagraph (D)(iii), by striking
TION.— (A) in paragraph (3)(A), by inserting ‘‘(or, for ‘‘1860D–2(b)(4)(A)(i)(I)’’ and inserting ‘‘1860D–
(1) 2024 THROUGH 2029.—Section 1860D–13 of 2030 and each subsequent year, the percent 2(b)(4)(A)(i)(I)(aa)’’; and
the Social Security Act (42 U.S.C. 1395w–113) is specified under paragraph (9))’’ after ‘‘25.5 per- (iii) in subparagraph (E), by striking ‘‘The
amended— cent’’; and elimination’’ and inserting ‘‘For a year pre-
(A) in subsection (a)— (B) by adding at the end the following new ceding 2024, the elimination’’; and
(i) in paragraph (1)(A), by inserting ‘‘or (8) (B) in paragraph (2)(E), by striking ‘‘1860D–
paragraph:
(as applicable)’’ after ‘‘paragraph (2)’’; 2(b)(4)(A)(i)(I)’’ and inserting ‘‘1860D–
‘‘(9) PERCENT SPECIFIED.—
(ii) in paragraph (2), in the matter preceding 2(b)(4)(A)(i)(I)(aa)’’.
‘‘(A) IN GENERAL.—Subject to subparagraph
subparagraph (A), by striking ‘‘The base’’ and (4) Section 1860D–21(d)(7) of the Social Secu-
(B), for purposes of paragraph (3)(A), the per-
inserting ‘‘Subject to paragraph (8), the base’’; rity Act (42 U.S.C. 1395w–131(d)(7)) is amended
cent specified under this paragraph for 2030 and
(iii) in paragraph (7)— by striking ‘‘section 1860D–2(b)(4)(B)(i)’’ and in-
(I) in subparagraph (B)(ii), by inserting ‘‘or each subsequent year is the percent that the
Secretary determines is necessary to ensure that serting ‘‘section 1860D–2(b)(4)(C)(i)’’.
(8) (as applicable)’’ after ‘‘paragraph (2)’’; and (5) Section 1860D–22(a)(2)(A) of the Social Se-
(II) in subparagraph (E)(i), by inserting ‘‘or the base beneficiary premium computed under
curity Act (42 U.S.C. 1395w–132(a)(2)(A)) is
(8) (as applicable)’’ after ‘‘paragraph (2)’’; and paragraph (2) for a month in 2030 is equal to the
amended—
(iv) by adding at the end the following new lesser of—
(A) by striking ‘‘the value of any discount’’
paragraph: ‘‘(i) the base beneficiary premium computed
and inserting the following: ‘‘the value of—
‘‘(8) PREMIUM STABILIZATION.— under paragraph (8)(A)(vi) for a month in 2029
‘‘(i) for years prior to 2025, any discount’’;
‘‘(A) IN GENERAL.—The base beneficiary pre- increased by 6 percent; or (B) in clause (i), as inserted by subparagraph
mium under this paragraph for a prescription ‘‘(ii) the base beneficiary premium computed (A) of this paragraph, by striking the period at
drug plan for a month in 2024 through 2029 shall under paragraph (2) for a month in 2030 that the end and inserting ‘‘; and’’; and
be computed as follows: would have applied if this paragraph had not (C) by adding at the end the following new
‘‘(i) 2024.—The base beneficiary premium for a been enacted. clause:
month in 2024 shall be equal to the lesser of— ‘‘(B) FLOOR.—The percent specified under ‘‘(ii) for 2025 and each subsequent year, any
‘‘(I) the base beneficiary premium computed subparagraph (A) may not be less than 20 per- discount provided pursuant to section 1860D–
under paragraph (2) for a month in 2023 in- cent.’’. 14C.’’.
creased by 6 percent; or (3) CONFORMING AMENDMENTS.— (6) Section 1860D–41(a)(6) of the Social Secu-
‘‘(II) the base beneficiary premium computed (A) Section 1854(b)(2)(B) of the Social Security rity Act (42 U.S.C. 1395w–151(a)(6)) is amend-
under paragraph (2) for a month in 2024 that Act 42 U.S.C. 1395w–24(b)(2)(B)) is amended by ed—
would have applied if this paragraph had not striking ‘‘section 1860D–13(a)(2)’’ and inserting (A) by inserting ‘‘for a year before 2025’’ after
been enacted. ‘‘paragraph (2) or (8) (as applicable) of section ‘‘1860D–2(b)(3)’’; and
‘‘(ii) 2025.—The base beneficiary premium for 1860D–13(a)’’. (B) by inserting ‘‘for such year’’ before the pe-
a month in 2025 shall be equal to the lesser of— (B) Section 1860D–11(g)(6) of the Social Secu- riod.
‘‘(I) the base beneficiary premium computed rity Act (42 U.S.C. 1395w–111(g)(6)) is amended (7) Section 1860D–43 of the Social Security Act
under clause (i) for a month in 2024 increased by by inserting ‘‘(or, for 2030 and each subsequent (42 U.S.C. 1395w–153) is amended—
6 percent; or year, the percent specified under section 1860D– (A) in subsection (a)—
‘‘(II) the base beneficiary premium computed 13(a)(9))’’ after ‘‘25.5 percent’’. (i) by striking paragraph (1) and inserting the
under paragraph (2) for a month in 2025 that (C) Section 1860D–13(a)(7)(B)(i) of the Social following:
would have applied if this paragraph had not Security Act (42 U.S.C. 1395w–113(a)(7)(B)(i)) is ‘‘(1) participate in—
been enacted. amended— ‘‘(A) for 2011 through 2024, the Medicare cov-
ctelli on DSK11ZRN23PROD with HOUSE
‘‘(iii) 2026.—The base beneficiary premium for (i) in subclause (I), by inserting ‘‘(or, for 2030 erage gap discount program under section
a month in 2026 shall be equal to the lesser of— and each subsequent year, the percent specified 1860D–14A; and
‘‘(I) the base beneficiary premium computed under paragraph (9))’’ after ‘‘25.5 percent’’; and ‘‘(B) for 2025 and each subsequent year, the
under clause (ii) for a month in 2025 increased (ii) in subclause (II), by inserting ‘‘(or, for manufacturer discount program under section
by 6 percent; or 2030 and each subsequent year, the percent 1860D–14C;’’;
‘‘(II) the base beneficiary premium computed specified under paragraph (9))’’ after ‘‘25.5 per- (ii) by striking paragraph (2) and inserting
under paragraph (2) for a month in 2026 that cent’’. the following:
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H7596 CONGRESSIONAL RECORD — HOUSE August 12, 2022
‘‘(2) have entered into and have in effect— ‘‘(I) for the first month for which the enrollee as plan losses and the Secretary shall not be lia-
‘‘(A) for 2011 through 2024, an agreement de- has made an election pursuant to clause (i), an ble for any such balances outside of those as-
scribed in subsection (b) of section 1860D–14A amount determined by calculating— sumed as losses estimated in plan bids.’’; and
with the Secretary; and ‘‘(aa) the annual out-of-pocket threshold (2) in paragraph (4)—
‘‘(B) for 2025 and each subsequent year, an specified in paragraph (4)(B) minus the incurred (A) in subparagraph (C), by striking ‘‘sub-
agreement described in subsection (b) of section costs of the enrollee as described in paragraph paragraph (E)’’ and inserting ‘‘subparagraph
1860D–14C with the Secretary; and’’; and (4)(C); divided by (E) or subparagraph (F)’’; and
(iii) in paragraph (3), by striking ‘‘such sec- ‘‘(bb) the number of months remaining in the (B) by adding at the end the following new
tion’’ and inserting ‘‘section 1860D–14A’’; and plan year; and subparagraph:
(B) by striking subsection (b) and inserting ‘‘(II) for a subsequent month, an amount de- ‘‘(F) INCLUSION OF COSTS PAID UNDER MAX-
the following: termined by calculating— IMUM MONTHLY CAP OPTION.—In applying sub-
‘‘(b) EFFECTIVE DATE.—Paragraphs (1)(A), ‘‘(aa) the sum of any remaining out-of-pocket paragraph (A), with respect to an enrollee who
(2)(A), and (3) of subsection (a) shall apply to costs owed by the enrollee from a previous has made an election pursuant to clause (i) of
covered part D drugs dispensed under this part month that have not yet been billed to the en- paragraph (2)(E), costs shall be treated as in-
on or after January 1, 2011, and before January rollee and any additional out-of-pocket costs in- curred if such costs are paid by a PDP sponsor
1, 2025, and paragraphs (1)(B) and (2)(B) of curred by the enrollee; divided by or an MA organization under the option pro-
such subsection shall apply to covered part D ‘‘(bb) the number of months remaining in the vided under such paragraph.’’.
drugs dispensed under this part on or after Jan- plan year. (b) APPLICATION TO ALTERNATIVE PRESCRIP-
uary 1, 2025.’’. ‘‘(v) ADDITIONAL REQUIREMENTS.—The fol- TION DRUG COVERAGE.—Section 1860D–2(c) of
(8) Section 1927 of the Social Security Act (42 lowing requirements shall apply with respect to the Social Security Act (42 U.S.C. 1395w–102(c))
U.S.C. 1396r–8) is amended— the option to make an election pursuant to is amended by adding at the end the following
(A) in subsection (c)(1)(C)(i)(VI), by inserting clause (i) under this subparagraph: new paragraph:
before the period at the end the following: ‘‘or ‘‘(I) SECRETARIAL RESPONSIBILITIES.—The Sec- ‘‘(4) SAME MAXIMUM MONTHLY CAP ON COST-
under the manufacturer discount program retary shall provide information to part D eligi- SHARING.—The maximum monthly cap on cost-
under section 1860D–14C’’; and ble individuals on the option to make such elec- sharing payments shall apply to coverage with
(B) in subsection (k)(1)(B)(i)(V), by inserting tion through educational materials, including respect to an enrollee who has made an election
before the period at the end the following: ‘‘or through the notices provided under section pursuant to clause (i) of subsection (b)(2)(E)
under section 1860D–14C’’. 1804(a). under the option provided under such sub-
(f) IMPLEMENTATION FOR 2024 THROUGH ‘‘(II) TIMING OF ELECTION.—An enrollee in a section.’’.
2026.—The Secretary shall implement this sec- prescription drug plan or an MA–PD plan may (c) IMPLEMENTATION FOR 2025.—The Secretary
tion, including the amendments made by this make such an election— shall implement this section, including the
section, for 2024, 2025, and 2026 by program in- ‘‘(aa) prior to the beginning of the plan year; amendments made by this section, for 2025 by
struction or other forms of program guidance. or program instruction or other forms of program
(g) FUNDING.—In addition to amounts other- ‘‘(bb) in any month during the plan year. guidance.
wise available, there are appropriated to the ‘‘(III) PDP SPONSOR AND MA ORGANIZATION RE- (d) FUNDING.—In addition to amounts other-
Centers for Medicare & Medicaid Services, out SPONSIBILITIES.—Each PDP sponsor offering a
wise available, there are appropriated to the
of any money in the Treasury not otherwise ap- prescription drug plan or MA organization of- Centers for Medicare & Medicaid Services, out
propriated, $341,000,000 for fiscal year 2022, in- fering an MA–PD plan— of any money in the Treasury not otherwise ap-
cluding $20,000,000 and $65,000,000 to carry out ‘‘(aa) may not limit the option for an enrollee propriated, $10,000,000 for fiscal year 2023, to re-
the provisions of, including the amendments to make such an election to certain covered part main available until expended, to carry out the
made by, this section in fiscal years 2022 and D drugs; provisions of, including the amendments made
2023, respectively, and $32,000,000 to carry out ‘‘(bb) shall, prior to the plan year, notify pro- by, this section.
the provisions of, including the amendments spective enrollees of the option to make such an PART 4—CONTINUED DELAY OF IMPLE-
made by, this section in each of fiscal years 2024 election in promotional materials; MENTATION OF PRESCRIPTION DRUG
through 2031, to remain available until ex- ‘‘(cc) shall include information on such option REBATE RULE
pended. in enrollee educational materials; SEC. 11301. EXTENSION OF MORATORIUM ON IM-
SEC. 11202. MAXIMUM MONTHLY CAP ON COST- ‘‘(dd) shall have in place a mechanism to no- PLEMENTATION OF RULE RELATING
SHARING PAYMENTS UNDER PRE- tify a pharmacy during the plan year when an TO ELIMINATING THE ANTI-KICK-
SCRIPTION DRUG PLANS AND MA–PD enrollee incurs out-of-pocket costs with respect BACK STATUTE SAFE HARBOR PRO-
PLANS. TECTION FOR PRESCRIPTION DRUG
to covered part D drugs that make it likely the REBATES.
(a) IN GENERAL.—Section 1860D–2(b) of the enrollee may benefit from making such an elec-
The Secretary of Health and Human Services
Social Security Act (42 U.S.C. 1395w–102(b)) is tion;
shall not, prior to January 1, 2032, implement,
amended— ‘‘(ee) shall provide that a pharmacy, after re-
administer, or enforce the provisions of the final
(1) in paragraph (2)— ceiving a notification described in item (dd) with
rule published by the Office of the Inspector
(A) in subparagraph (A), by striking ‘‘and respect to an enrollee, informs the enrollee of
General of the Department of Health and
(D)’’ and inserting ‘‘, (D), and (E)’’; and such notification;
Human Services on November 30, 2020, and titled
(B) by adding at the end the following new ‘‘(ff) shall ensure that such an election by an
‘‘Fraud and Abuse; Removal of Safe Harbor
subparagraph: enrollee has no effect on the amount paid to
Protection for Rebates Involving Prescription
‘‘(E) MAXIMUM MONTHLY CAP ON COST-SHAR- pharmacies (or the timing of such payments)
Pharmaceuticals and Creation of New Safe Har-
ING PAYMENTS.— with respect to covered part D drugs dispensed
‘‘(i) IN GENERAL.—For plan years beginning bor Protection for Certain Point-of-Sale Reduc-
to the enrollee; and
on or after January 1, 2025, each PDP sponsor tions in Price on Prescription Pharmaceuticals
‘‘(gg) shall have in place a financial reconcili-
offering a prescription drug plan and each MA and Certain Pharmacy Benefit Manager Service
ation process to correct inaccuracies in pay-
organization offering an MA–PD plan shall pro- Fees’’ (85 Fed. Reg. 76666).
ments made by an enrollee under this subpara-
vide to any enrollee of such plan, including an graph with respect to covered part D drugs dur- PART 5—MISCELLANEOUS
enrollee who is a subsidy eligible individual (as ing the plan year. SEC. 11401. COVERAGE OF ADULT VACCINES REC-
defined in paragraph (3) of section 1860D–14(a)), ‘‘(IV) FAILURE TO PAY AMOUNT BILLED.—If an OMMENDED BY THE ADVISORY COM-
MITTEE ON IMMUNIZATION PRAC-
the option to elect with respect to a plan year to enrollee fails to pay the amount billed for a
TICES UNDER MEDICARE PART D.
pay cost-sharing under the plan in monthly month as required under this subparagraph—
(a) ENSURING TREATMENT OF COST-SHARING
amounts that are capped in accordance with ‘‘(aa) the election of the enrollee pursuant to
AND DEDUCTIBLE IS CONSISTENT WITH TREAT-
this subparagraph. clause (i) shall be terminated and the enrollee
MENT OF VACCINES UNDER MEDICARE PART B.—
‘‘(ii) DETERMINATION OF MAXIMUM MONTHLY shall pay the cost-sharing otherwise applicable
Section 1860D–2 of the Social Security Act (42
CAP.—For each month in the plan year for for any covered part D drugs subsequently dis-
U.S.C. 1395w–102), as amended by sections 11201
which an enrollee in a prescription drug plan or pensed to the enrollee up to the annual out-of-
and 11202, is amended—
an MA–PD plan has made an election pursuant pocket threshold specified in paragraph (4)(B); (1) in subsection (b)—
to clause (i), the PDP sponsor or MA organiza- and (A) in paragraph (1)(A), by striking ‘‘The cov-
tion shall determine a maximum monthly cap (as ‘‘(bb) the PDP sponsor or MA organization erage’’ and inserting ‘‘Subject to paragraph (8),
defined in clause (iv)) for such enrollee. may preclude the enrollee from making an elec- the coverage’’;
‘‘(iii) BENEFICIARY MONTHLY PAYMENTS.—With tion pursuant to clause (i) in a subsequent plan (B) in paragraph (2)—
respect to an enrollee who has made an election year. (i) in subparagraph (A), by inserting ‘‘and
pursuant to clause (i), for each month described ‘‘(V) CLARIFICATION REGARDING PAST DUE paragraph (8)’’ after ‘‘and (E)’’;
ctelli on DSK11ZRN23PROD with HOUSE
in clause (ii), the PDP sponsor or MA organiza- AMOUNTS.—Nothing in this subparagraph shall (ii) in subparagraph (C)(i), in the matter pre-
tion shall bill such enrollee an amount (not to be construed as prohibiting a PDP sponsor or an ceding subclause (I), by striking ‘‘paragraph
exceed the maximum monthly cap) for the out- MA organization from billing an enrollee for an (4)’’ and inserting ‘‘paragraphs (4) and (8)’’;
of-pocket costs of such enrollee in such month. amount owed under this subparagraph. and
‘‘(iv) MAXIMUM MONTHLY CAP DEFINED.—In ‘‘(VI) TREATMENT OF UNSETTLED BALANCES.— (iii) in subparagraph (D)(i), in the matter pre-
this subparagraph, the term ‘maximum monthly Any unsettled balances with respect to amounts ceding subclause (I), by striking ‘‘paragraph
cap’ means, with respect to an enrollee— owed under this subparagraph shall be treated (4)’’ and inserting ‘‘paragraphs (4) and (8)’’;
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7597
(C) in paragraph (3)(A), in the matter pre- sponsor or MA organization offering the plan for a qualifying biosimilar biological product
ceding clause (i), by striking ‘‘and (4)’’ and in- subsidies in an amount equal to the aggregate is—
serting ‘‘(4), and (8)’’; reduction in cost-sharing and deductible by rea- ‘‘(I) in the case of such a product for which
(D) in paragraph (4)(A)(i), by striking ‘‘The son of the application of section 1860D–2(b)(8) payment was made under this paragraph as of
coverage’’ and inserting ‘‘Subject to paragraph for individuals under the plan during the year. September 30, 2022, the 5-year period beginning
(8), the coverage’’; and ‘‘(2) TIMING.—The Secretary shall provide a on October 1, 2022; and
(E) by adding at the end the following new subsidy under paragraph (1), as applicable, not ‘‘(II) in the case of such a product for which
paragraph: later than 18 months following the end of the payment is first made under this paragraph dur-
‘‘(8) TREATMENT OF COST-SHARING FOR ADULT applicable plan year.’’. ing a calendar quarter during the period begin-
VACCINES RECOMMENDED BY THE ADVISORY COM- (2) TREATMENT AS INCURRED COSTS.—Section ning October 1, 2022, and ending December 31,
MITTEE ON IMMUNIZATION PRACTICES CONSISTENT 1860D–2(b)(4)(C)(iii)(I) of the Social Security Act 2027, the 5-year period beginning on the first
WITH TREATMENT OF VACCINES UNDER PART B.— (42 U.S.C. 1395w–102(b)(4)(C)(iii)(I)), as amend- day of such calendar quarter during which such
ed by section 11201(a)(3)(C), is amended— payment is first made.
‘‘(A) IN GENERAL.—For plan years beginning (A) in item (cc), by striking ‘‘or’’ at the end; ‘‘(iii) QUALIFYING BIOSIMILAR BIOLOGICAL
on or after January 1, 2023, with respect to an and PRODUCT DEFINED.—For purposes of this sub-
adult vaccine recommended by the Advisory (B) by adding at the end the following new paragraph, the term ‘qualifying biosimilar bio-
Committee on Immunization Practices (as de- item: logical product’ means a biosimilar biological
fined in subparagraph (B))— ‘‘(dd) under section 1860D–15(h); or’’. product described in paragraph (1)(C) with re-
‘‘(i) the deductible under paragraph (1) shall (d) RULE OF CONSTRUCTION.—Nothing in this spect to which—
not apply; and section shall be construed as limiting coverage ‘‘(I) in the case of a product described in
‘‘(ii) there shall be no coinsurance or other under part D of title XVIII of the Social Secu- clause (ii)(I), the average sales price under
cost-sharing under this part with respect to rity Act for vaccines that are not recommended paragraph (8)(A)(i) for a calendar quarter dur-
such vaccine. by the Advisory Committee on Immunization ing the 5-year period described in such clause is
‘‘(B) ADULT VACCINES RECOMMENDED BY THE Practices. not more than the average sales price under
ADVISORY COMMITTEE ON IMMUNIZATION PRAC- (e) IMPLEMENTATION FOR 2023 THROUGH paragraph (4)(A) for such quarter for the ref-
TICES.—For purposes of this paragraph, the 2025.—The Secretary shall implement this sec- erence biological product; and
term ‘adult vaccine recommended by the Advi- tion, including the amendments made by this ‘‘(II) in the case of a product described in
sory Committee on Immunization Practices’ section, for 2023, 2024, and 2025, by program in- clause (ii)(II), the average sales price under
means a covered part D drug that is a vaccine struction or other forms of program guidance. paragraph (8)(A)(i) for a calendar quarter dur-
licensed under section 351 of the Public Health SEC. 11402. PAYMENT FOR BIOSIMILAR BIOLOGI- ing the 5-year period described in such clause is
Service Act for use by adult populations and ad- CAL PRODUCTS DURING INITIAL PE- not more than the average sales price under
ministered in accordance with recommendations RIOD. paragraph (4)(A) for such quarter for the ref-
of the Advisory Committee on Immunization Section 1847A(c)(4) of the Social Security Act erence biological product.’’.
Practices of the Centers for Disease Control and (42 U.S.C. 1395w–3a(c)(4)) is amended— SEC. 11404. EXPANDING ELIGIBILITY FOR LOW-IN-
Prevention.’’; and (1) in each of subparagraphs (A) and (B), by COME SUBSIDIES UNDER PART D OF
(2) in subsection (c), by adding at the end the redesignating clauses (i) and (ii) as subclauses THE MEDICARE PROGRAM.
following new paragraph: (I) and (II), respectively, and moving such sub- Section 1860D–14(a) of the Social Security Act
‘‘(5) TREATMENT OF COST-SHARING FOR ADULT clauses 2 ems to the right; (42 U.S.C. 1395w–114(a)), as amended by sections
VACCINES RECOMMENDED BY THE ADVISORY COM- (2) by redesignating subparagraphs (A) and 11201 and 11401, is amended—
MITTEE ON IMMUNIZATION PRACTICES.—The cov- (B) as clauses (i) and (ii) and moving such (1) in the subsection heading, by striking ‘‘IN-
erage is in accordance with subsection (b)(8).’’. clauses 2 ems to the right; DIVIDUALS’’ and all that follows through ‘‘LINE’’
(b) CONFORMING AMENDMENTS TO COST-SHAR- (3) by striking ‘‘UNAVAILABLE.—In the case’’ and inserting ‘‘CERTAIN INDIVIDUALS’’;
ING FOR LOW-INCOME INDIVIDUALS.—Section and inserting ‘‘UNAVAILABLE.— (2) in paragraph (1)—
1860D–14(a) of the Social Security Act (42 U.S.C. ‘‘(A) IN GENERAL.—Subject to subparagraph (A) by striking the paragraph heading and in-
1395w–114(a)), as amended by section 11201, is (B), in the case’’; and serting ‘‘INDIVIDUALS WITH CERTAIN LOW IN-
(4) by adding at the end the following new COMES’’; and
amended—
(1) in paragraph (1)(D), in each of clauses (ii) subparagraph: (B) in the matter preceding subparagraph
and (iii), by striking ‘‘In the case’’ and inserting ‘‘(B) LIMITATION ON PAYMENT AMOUNT FOR (A)—
BIOSIMILAR BIOLOGICAL PRODUCTS DURING INI-
(i) by inserting ‘‘(or, with respect to a plan
‘‘Subject to paragraph (6), in the case’’;
(2) in paragraph (2)— TIAL PERIOD.—In the case of a biosimilar bio-
year beginning on or after January 1, 2024, 150
(A) in subparagraph (B), by striking ‘‘A re- logical product furnished on or after July 1, percent)’’ after ‘‘135 percent’’; and
(ii) by inserting ‘‘(or, with respect to a plan
duction’’ and inserting ‘‘Subject to section 2024, during the initial period described in sub-
year beginning on or after January 1, 2024,
1860D–2(b)(8), a reduction’’; paragraph (A) with respect to the biosimilar bio-
(B) in subparagraph (D), by striking ‘‘The paragraph (3)(E))’’ after ‘‘the resources require-
logical product, the amount payable under this
substitution’’ and inserting ‘‘Subject to para- ment described in paragraph (3)(D)’’; and
section for the biosimilar biological product is
(3) in paragraph (2)—
graph (6), the substitution’’; and the lesser of the following: (A) by striking the paragraph heading and in-
(C) in subparagraph (E), by striking ‘‘sub- ‘‘(i) The amount determined under clause (ii) serting ‘‘OTHER LOW-INCOME INDIVIDUALS’’; and
section (c)’’ and inserting ‘‘paragraph (6) of this of such subparagraph for the biosimilar biologi- (B) in the matter preceding subparagraph (A),
subsection and subsection (c)’’; and cal product. by striking ‘‘In the case of a subsidy’’ and in-
(3) by adding at the end the following new ‘‘(ii) The amount determined under subsection serting ‘‘With respect to a plan year beginning
paragraph: (b)(1)(B) for the reference biological product.’’. before January 1, 2024, in the case of a sub-
‘‘(6) NO APPLICATION OF COST-SHARING OR DE- SEC. 11403. TEMPORARY INCREASE IN MEDICARE sidy’’.
DUCTIBLE FOR ADULT VACCINES RECOMMENDED PART B PAYMENT FOR CERTAIN BIO-
SEC. 11405. IMPROVING ACCESS TO ADULT VAC-
BY THE ADVISORY COMMITTEE ON IMMUNIZATION SIMILAR BIOLOGICAL PRODUCTS.
CINES UNDER MEDICAID AND CHIP.
PRACTICES.—For plan years beginning on or Section 1847A(b)(8) of the Social Security Act
(a) MEDICAID.—
after January 1, 2023, with respect to an adult (42 U.S.C. 1395w–3a(b)(8)) is amended— (1) REQUIRING COVERAGE OF ADULT VACCINA-
vaccine recommended by the Advisory Com- (1) by redesignating subparagraphs (A) and TIONS.—
mittee on Immunization Practices (as defined in (B) as clauses (i) and (ii), respectively, and mov- (A) IN GENERAL.—Section 1902(a)(10)(A) of the
section 1860D–2(b)(8)(B))— ing the margin of each such redesignated clause Social Security Act (42 U.S.C. 1396a(a)(10)(A)) is
‘‘(A) the deductible under section 1860D– 2 ems to the right; amended in the matter preceding clause (i) by
2(b)(1) shall not apply; and (2) by striking ‘‘PRODUCT.—The amount’’ and inserting ‘‘(13)(B),’’ after ‘‘(5),’’.
‘‘(B) there shall be no cost-sharing under this inserting the following: ‘‘PRODUCT.— (B) MEDICALLY NEEDY.—Section
section with respect to such vaccine.’’. ‘‘(A) IN GENERAL.—Subject to subparagraph 1902(a)(10)(C)(iv) of such Act (42 U.S.C.
(c) TEMPORARY RETROSPECTIVE SUBSIDY.— (B), the amount’’; and 1396a(a)(10)(C)(iv)) is amended by inserting ‘‘,
(1) IN GENERAL.—Section 1860D–15 of the So- (3) by adding at the end the following new (13)(B),’’ after ‘‘(5)’’.
cial Security Act (42 U.S.C. 1395w–115) is subparagraph: (2) NO COST SHARING FOR VACCINATIONS.—
amended by adding at the end the following ‘‘(B) TEMPORARY PAYMENT INCREASE.— (A) GENERAL COST-SHARING LIMITATIONS.—
new subsection: ‘‘(i) IN GENERAL.—In the case of a qualifying Section 1916 of the Social Security Act (42 U.S.C.
‘‘(h) TEMPORARY RETROSPECTIVE SUBSIDY FOR biosimilar biological product that is furnished 1396o) is amended—
REDUCTION IN COST-SHARING AND DEDUCTIBLE during the applicable 5-year period for such (i) in subsection (a)(2)—
FOR ADULT VACCINES RECOMMENDED BY THE product, the amount specified in this paragraph (I) in subparagraph (G), by inserting a comma
ctelli on DSK11ZRN23PROD with HOUSE
ADVISORY COMMITTEE ON IMMUNIZATION PRAC- for such product with respect to such period is after ‘‘State plan’’;
TICES DURING 2023.— the sum determined under subparagraph (A), (II) in subparagraph (H), by striking ‘‘; or’’
‘‘(1) IN GENERAL.—In addition to amounts oth- except that clause (ii) of such subparagraph and inserting a comma;
erwise payable under this section to a PDP shall be applied by substituting ‘8 percent’ for ‘6 (III) in subparagraph (I), by striking ‘‘; and’’
sponsor of a prescription drug plan or an MA percent’. and inserting ‘‘, or’’; and
organization offering an MA–PD plan, for plan ‘‘(ii) APPLICABLE 5-YEAR PERIOD.—For pur- (IV) by adding at the end the following new
year 2023, the Secretary shall provide the PDP poses of clause (i), the applicable 5-year period subparagraph:
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H7598 CONGRESSIONAL RECORD — HOUSE August 12, 2022
‘‘(J) vaccines described in section amended by sections 11201, 11202, and 11401, is applied by the prescription drug plan or MA–PD
1905(a)(13)(B) and the administration of such amended— plan under subparagraph (B)(i) at the point-of-
vaccines; and’’; and (1) in subsection (b)— sale for such month’s supply.’’; and
(ii) in subsection (b)(2)— (A) in paragraph (1)(A), by striking ‘‘para- (2) in subsection (c), by adding at the end the
(I) in subparagraph (G), by inserting a comma graph (8)’’ and inserting ‘‘paragraphs (8) and following new paragraph:
after ‘‘State plan’’; (9)’’; ‘‘(6) TREATMENT OF COST-SHARING FOR COV-
(II) in subparagraph (H), by striking ‘‘; or’’ (B) in paragraph (2)— ERED INSULIN PRODUCTS.—The coverage is pro-
and inserting a comma; (i) in subparagraph (A), by striking ‘‘para- vided in accordance with subsection (b)(9).’’.
(III) in subparagraph (I), by striking ‘‘; and’’ graph (8)’’ and inserting ‘‘paragraphs (8) and (b) CONFORMING AMENDMENTS TO COST-SHAR-
and inserting ‘‘, or’’; and (9)’’; ING FOR LOW-INCOME INDIVIDUALS.—Section
(IV) by adding at the end the following new (ii) in subparagraph (C)(i), in the matter pre- 1860D–14(a) of the Social Security Act (42 U.S.C.
subparagraph: ceding subclause (I), by striking ‘‘and (8)’’ and
‘‘(J) vaccines described in section 1395w–114(a)), as amended by sections 11201,
inserting ‘‘, (8), and (9)’’; and 11401, and 11404, is amended—
1905(a)(13)(B) and the administration of such
(iii) in subparagraph (D)(i), in the matter pre- (1) in paragraph (1)—
vaccines; and’’.
(B) APPLICATION TO ALTERNATIVE COST SHAR- ceding subclause (I), by striking ‘‘and (8)’’ and (A) in subparagraph (D)(iii), by adding at the
ING.—Section 1916A(b)(3)(B) of the Social Secu-
inserting ‘‘, (8), and (9)’’; end the following new sentence: ‘‘For plan year
rity Act (42 U.S.C. 1396o–1(b)(3)(B)) is amended (C) in paragraph (3)(A), in the matter pre- 2023 and subsequent plan years, the copayment
by adding at the end the following new clause: ceding clause (i), by striking ‘‘and (8)’’ and in- amount applicable under the preceding sentence
‘‘(xiv) Vaccines described in section serting ‘‘(8), and (9)’’; to a month’s supply of a covered insulin product
1905(a)(13)(B) and the administration of such (D) in paragraph (4)(A)(i), by striking ‘‘para- (as defined in section 1860D–2(b)(9)(C)) dis-
vaccines.’’. graph (8)’’ and inserting ‘‘paragraphs (8) and pensed to the individual may not exceed the ap-
(3) INCREASED FMAP FOR ADULT VACCINES AND (9)’’; and plicable copayment amount for the product
THEIR ADMINISTRATION.—Section 1905(b) of the (E) by adding at the end the following new under the prescription drug plan or MA–PD
Social Security Act (42 U.S.C. 1396d(b)) is paragraph: plan in which the individual is enrolled.’’; and
amended— ‘‘(9) TREATMENT OF COST-SHARING FOR COV- (B) in subparagraph (E), by inserting the fol-
(A) by striking ‘‘and (5)’’ and inserting ‘‘(5)’’; ERED INSULIN PRODUCTS.— lowing before the period at the end: ‘‘or under
(B) by striking ‘‘services and vaccines de- ‘‘(A) NO APPLICATION OF DEDUCTIBLE.—For section 1860D–2(b)(9) in the case of a covered in-
scribed in subparagraphs (A) and (B) of sub- plan year 2023 and subsequent plan years, the sulin product (as defined in subparagraph (C) of
section (a)(13), and prohibits cost-sharing for deductible under paragraph (1) shall not apply such section)’’; and
such services and vaccines’’ and inserting ‘‘serv- with respect to any covered insulin product. (2) in paragraph (2)—
ices described in subsection (a)(13)(A), and pro- ‘‘(B) APPLICATION OF COST-SHARING.— (A) in subparagraph (B), by striking ‘‘section
hibits cost-sharing for such services’’; ‘‘(i) PLAN YEARS 2023 AND 2024.—For plan years 1860D–2(b)(8)’’ and inserting ‘‘paragraphs (8)
(C) by striking ‘‘medical assistance for such 2023 and 2024, the coverage provides benefits for and (9) of section 1860D–2(b)’’;
services and vaccines’’ and inserting ‘‘medical any covered insulin product, regardless of (B) in subparagraph (D), by adding at the end
assistance for such services’’; and whether an individual has reached the initial the following new sentence: ‘‘For plan year
(D) by inserting ‘‘, and (6) during the first 8 coverage limit under paragraph (3) or the out- 2023, the amount of the coinsurance applicable
fiscal quarters beginning on or after the effec- of-pocket threshold under paragraph (4), with under the preceding sentence to a month’s sup-
tive date of this clause, in the case of a State cost-sharing for a month’s supply that does not ply of a covered insulin product (as defined in
which, as of the date of enactment of the Act ti- exceed the applicable copayment amount. section 1860D–2(b)(9)(C)) dispensed to the indi-
tled ‘An Act to provide for reconciliation pursu- ‘‘(ii) PLAN YEAR 2025 AND SUBSEQUENT PLAN vidual may not exceed the applicable copayment
ant to title II of S. Con. Res. 14’, provides med- YEARS.—For a plan year beginning on or after amount for the product under the prescription
ical assistance for vaccines described in sub- January 1, 2025, the coverage provides benefits drug plan or MA–PD plan in which the indi-
section (a)(13)(B) and their administration and for any covered insulin product, prior to an in- vidual is enrolled.’’; and
prohibits cost-sharing for such vaccines, the dividual reaching the out-of-pocket threshold (C) in subparagraph (E), by adding at the end
Federal medical assistance percentage, as deter- under paragraph (4), with cost-sharing for a the following new sentence: ‘‘For plan year
mined under this subsection and subsection (y), month’s supply that does not exceed the appli- 2023, the amount of the copayment or coinsur-
shall be increased by 1 percentage point with re- cable copayment amount. ance applicable under the preceding sentence to
spect to medical assistance for such vaccines ‘‘(C) COVERED INSULIN PRODUCT.—In this a month’s supply of a covered insulin product
and their administration’’ before the first pe- paragraph, the term ‘covered insulin product’ (as defined in section 1860D–2(b)(9)(C)) dis-
riod. means an insulin product that is a covered part
(b) CHIP.— pensed to the individual may not exceed the ap-
D drug covered under the prescription drug plan plicable copayment amount for the product
(1) REQUIRING COVERAGE OF ADULT VACCINA- or MA–PD plan that is approved under section
TIONS.—Section 2103(c) of the Social Security under the prescription drug plan or MA–PD
505 of the Federal Food, Drug, and Cosmetic Act plan in which the individual is enrolled.’’.
Act (42 U.S.C. 1397cc(c)) is amended by adding or licensed under section 351 of the Public
at the end the following paragraph: (c) TEMPORARY RETROSPECTIVE SUBSIDY.—
Health Service Act and marketed pursuant to Section 1860D–15(h) of the Social Security Act
‘‘(12) REQUIRED COVERAGE OF APPROVED, REC-
such approval or licensure, including any cov- (42 U.S.C. 1395w–115(h)), as added by section
OMMENDED ADULT VACCINES AND THEIR ADMINIS-
TRATION.—Regardless of the type of coverage
ered insulin product that has been deemed to be 11401(c), is amended—
elected by a State under subsection (a), if the licensed under section 351 of the Public Health (1) in the subsection heading, by inserting
State child health plan or a waiver of such plan Service Act pursuant to section 7002(e)(4) of the ‘‘AND INSULIN’’ after ‘‘PRACTICES’’; and
provides child health assistance or pregnancy- Biologics Price Competition and Innovation Act (2) in paragraph (1), by striking ‘‘section
related assistance (as defined in section 2112) to of 2009 and marketed pursuant to such section. 1860D–2(b)(8)’’ and inserting ‘‘paragraph (8) or
an individual who is 19 years of age or older, ‘‘(D) APPLICABLE COPAYMENT AMOUNT.—In (9) of section 1860D–2(b)’’.
such assistance shall include coverage of vac- this paragraph, the term ‘applicable copayment (d) IMPLEMENTATION FOR 2023 THROUGH
cines described in section 1905(a)(13)(B) and amount’ means, with respect to a covered insu- 2025.—The Secretary shall implement this sec-
their administration.’’. lin product under a prescription drug plan or an tion for plan years 2023, 2024, and 2025 by pro-
(2) NO COST-SHARING FOR VACCINATIONS.—Sec- MA–PD plan dispensed— gram instruction or other forms of program
tion 2103(e)(2) of such Act (42 U.S.C. ‘‘(i) during plan years 2023, 2024, and 2025, guidance.
1397cc(e)(2)) is amended by inserting ‘‘vaccines $35; and (e) FUNDING.—In addition to amounts other-
described in subsection (c)(12) (and the adminis- ‘‘(ii) during plan year 2026 and each subse- wise available, there is appropriated to the Cen-
tration of such vaccines),’’ after ‘‘in vitro diag- quent plan year, the lesser of— ters for Medicare & Medicaid Services, out of
nostic products described in subsection (c)(10) ‘‘(I) $35; any money in the Treasury not otherwise appro-
(and administration of such products),’’. ‘‘(II) an amount equal to 25 percent of the priated, $1,500,000 for fiscal year 2022, to remain
(c) EFFECTIVE DATE.—The amendments made maximum fair price established for the covered available until expended, to carry out the provi-
by this section take effect on the 1st day of the insulin product in accordance with part E of sions of, including the amendments made by,
1st fiscal quarter that begins on or after the date title XI; or this section.
that is 1 year after the date of enactment of this ‘‘(III) an amount equal to 25 percent of the
SEC. 11407. LIMITATION ON MONTHLY COINSUR-
Act and shall apply to expenditures made under negotiated price of the covered insulin product ANCE AND ADJUSTMENTS TO SUP-
a State plan or waiver of such plan under title under the prescription drug plan or MA–PD PLIER PAYMENT UNDER MEDICARE
XIX of the Social Security Act (42 U.S.C. 1396 plan. PART B FOR INSULIN FURNISHED
through 1396w–6) or under a State child health ‘‘(E) SPECIAL RULE FOR FIRST 3 MONTHS OF THROUGH DURABLE MEDICAL
plan or waiver of such plan under title XXI of 2023.—With respect to a month’s supply of a cov- EQUIPMENT.
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such Act (42 U.S.C. 1397aa through 1397mm) on ered insulin product dispensed during the period (a) WAIVER OF DEDUCTIBLE.—The first sen-
or after such effective date. beginning on January 1, 2023, and ending on tence of section 1833(b) of the Social Security
SEC. 11406. APPROPRIATE COST-SHARING FOR March 31, 2023, a PDP sponsor offering a pre- Act (42 U.S.C. 1395l(b)) is amended—
COVERED INSULIN PRODUCTS scription drug plan or an MA organization of- (1) by striking ‘‘and (12)’’ and inserting
UNDER MEDICARE PART D. fering an MA–PD plan shall reimburse an en- ‘‘(12)’’; and
(a) IN GENERAL.—Section 1860D–2 of the So- rollee within 30 days for any cost-sharing paid (2) by inserting before the period the fol-
cial Security Act (42 U.S.C. 1395w–102), as by such enrollee that exceeds the cost-sharing lowing: ‘‘, and (13) such deductible shall not
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7599
apply with respect to insulin furnished on or (1) by striking ‘‘in 2021 or 2022’’ and inserting ‘‘(ii) A facility the construction of which be-
after July 1, 2023, through an item of durable ‘‘after December 31, 2020, and before January 1, gins prior to the date that is 60 days after the
medical equipment covered under section 2026’’, and Secretary publishes guidance with respect to the
1861(n).’’. (2) by striking ‘‘2021 AND 2022’’ in the heading requirements of paragraphs (7)(A) and (8).
(b) COINSURANCE.— and inserting ‘‘2021 THROUGH 2025’’. ‘‘(iii) A facility which satisfies the require-
(1) IN GENERAL.—Section 1833(a)(1)(S) of the (c) EFFECTIVE DATE.—The amendments made ments of paragraphs (7)(A) and (8).
Social Security Act (42 U.S.C. 1395l(a)(1)(S)) is by this section shall apply to taxable years be- ‘‘(7) PREVAILING WAGE REQUIREMENTS.—
amended— ginning after December 31, 2022. ‘‘(A) IN GENERAL.—The requirements described
(A) by inserting ‘‘(i) except as provided in Subtitle D—Energy Security in this subparagraph with respect to any quali-
clause (ii),’’ after ‘‘(S)’’; and SEC. 13001. AMENDMENT OF 1986 CODE. fied facility are that the taxpayer shall ensure
(B) by inserting after ‘‘or 1847B),’’ the fol- Except as otherwise expressly provided, when- that any laborers and mechanics employed by
lowing: ‘‘and (ii) with respect to insulin fur- the taxpayer or any contractor or subcontractor
ever in this subtitle an amendment or repeal is
nished on or after July 1, 2023, through an item in—
expressed in terms of an amendment to, or re-
of durable medical equipment covered under sec- ‘‘(i) the construction of such facility, and
peal of, a section or other provision, the ref-
tion 1861(n), the amounts paid shall be, subject ‘‘(ii) with respect to any taxable year, for any
erence shall be considered to be made to a sec-
to the fourth sentence of this subsection, 80 per- portion of such taxable year which is within the
tion or other provision of the Internal Revenue
cent of the payment amount established under period described in subsection (a)(2)(A)(ii), the
Code of 1986.
section 1847A (or section 1847B, if applicable) for alteration or repair of such facility,
such insulin,’’. PART 1—CLEAN ELECTRICITY AND shall be paid wages at rates not less than the
(2) ADJUSTMENT TO SUPPLIER PAYMENTS; LIMI- REDUCING CARBON EMISSIONS prevailing rates for construction, alteration, or
TATION ON MONTHLY COINSURANCE.—Section SEC. 13101. EXTENSION AND MODIFICATION OF repair of a similar character in the locality in
1833(a) of the Social Security Act (42 U.S.C. CREDIT FOR ELECTRICITY PRO-
which such facility is located as most recently
DUCED FROM CERTAIN RENEWABLE
1395l(a)) is amended, in the flush matter at the determined by the Secretary of Labor, in accord-
RESOURCES.
end, by adding at the end the following new ance with subchapter IV of chapter 31 of title
(a) IN GENERAL.—The following provisions of
sentence: ‘‘The Secretary shall make such ad- 40, United States Code. For purposes of deter-
section 45(d) are each amended by striking
justments as may be necessary to the amounts mining an increased credit amount under para-
‘‘January 1, 2022’’ each place it appears and in-
paid as specified under paragraph (1)(S)(ii) for graph (6)(A) for a taxable year, the requirement
serting ‘‘January 1, 2025’’:
insulin furnished on or after July 1, 2023, (1) Paragraph (2)(A). under clause (ii) is applied to such taxable year
through an item of durable medical equipment (2) Paragraph (3)(A). in which the alteration or repair of the qualified
covered under section 1861(n), such that the (3) Paragraph (6). facility occurs.’’
amount of coinsurance payable by an individual (4) Paragraph (7). ‘‘(B) CORRECTION AND PENALTY RELATED TO
enrolled under this part for a month’s supply of (5) Paragraph (9). FAILURE TO SATISFY WAGE REQUIREMENTS.—
such insulin does not exceed $35.’’. (6) Paragraph (11)(B). ‘‘(i) IN GENERAL.—In the case of any taxpayer
(c) IMPLEMENTATION.—The Secretary of (b) BASE CREDIT AMOUNT.—Section 45 is which fails to satisfy the requirement under
Health and Human Services shall implement this amended— subparagraph (A) with respect to the construc-
section for 2023 by program instruction or other (1) in subsection (a)(1), by striking ‘‘1.5 cents’’ tion of any qualified facility or with respect to
forms of program guidance. and inserting ‘‘0.3 cents’’, and the alteration or repair of a facility in any year
SEC. 11408. SAFE HARBOR FOR ABSENCE OF DE- (2) in subsection (b)(2), by striking ‘‘1.5 cent’’ during the period described in subparagraph
DUCTIBLE FOR INSULIN. and inserting ‘‘0.3 cent’’. (A)(ii), such taxpayer shall be deemed to have
(a) IN GENERAL.—Paragraph (2) of section (c) APPLICATION OF EXTENSION TO GEO- satisfied such requirement under such subpara-
223(c) of the Internal Revenue Code of 1986 is THERMAL AND SOLAR.—Section 45(d)(4) is graph with respect to such facility for any year
amended by adding at the end the following amended by striking ‘‘and which’’ and all that if, with respect to any laborer or mechanic who
new subparagraph: follows through ‘‘January 1, 2022’’ and inserting was paid wages at a rate below the rate de-
‘‘(G) SAFE HARBOR FOR ABSENCE OF DEDUCT- ‘‘and the construction of which begins before scribed in such subparagraph for any period
IBLE FOR CERTAIN INSULIN PRODUCTS.— January 1, 2025’’. during such year, such taxpayer—
‘‘(i) IN GENERAL.—A plan shall not fail to be (d) EXTENSION OF ELECTION TO TREAT QUALI-
‘‘(I) makes payment to such laborer or me-
treated as a high deductible health plan by rea- FIED FACILITIES AS ENERGY PROPERTY.—Section
chanic in an amount equal to the sum of—
son of failing to have a deductible for selected 48(a)(5)(C)(ii) is amended by striking ‘‘January ‘‘(aa) an amount equal to the difference be-
insulin products. 1, 2022’’ and inserting ‘‘January 1, 2025’’. tween—
‘‘(ii) SELECTED INSULIN PRODUCTS.—For pur- (e) APPLICATION OF EXTENSION TO WIND FA-
‘‘(AA) the amount of wages paid to such la-
poses of this subparagraph— CILITIES.—
borer or mechanic during such period, and
‘‘(I) IN GENERAL.—The term ‘selected insulin (1) IN GENERAL.—Section 45(d)(1) is amended
‘‘(BB) the amount of wages required to be
products’ means any dosage form (such as vial, by striking ‘‘January 1, 2022’’ and inserting
paid to such laborer or mechanic pursuant to
pump, or inhaler dosage forms) of any different ‘‘January 1, 2025’’.
(2) APPLICATION OF PHASEOUT PERCENTAGE.— such subparagraph during such period, plus
type (such as rapid-acting, short-acting, inter- ‘‘(bb) interest on the amount determined
mediate-acting, long-acting, ultra long-acting, under item (aa) at the underpayment rate estab-
(A) RENEWABLE ELECTRICITY PRODUCTION
and premixed) of insulin. lished under section 6621 (determined by sub-
CREDIT.—Section 45(b)(5) is amended by insert-
‘‘(II) INSULIN.—The term ‘insulin’ means insu- stituting ‘6 percentage points’ for ‘3 percentage
ing ‘‘which is placed in service before January
lin that is licensed under subsection (a) or (k) of points’ in subsection (a)(2) of such section) for
1, 2022’’ after ‘‘using wind to produce elec-
section 351 of the Public Health Service Act (42 the period described in such item, and
tricity’’.
U.S.C. 262) and continues to be marketed under ‘‘(II) makes payment to the Secretary of a
(B) ENERGY CREDIT.—Section 48(a)(5)(E) is
such section, including any insulin product that penalty in an amount equal to the product of—
amended by inserting ‘‘placed in service before
has been deemed to be licensed under section ‘‘(aa) $5,000, multiplied by
January 1, 2022, and’’ before ‘‘treated as energy
351(a) of such Act pursuant to section 7002(e)(4) ‘‘(bb) the total number of laborers and me-
property’’.
of the Biologics Price Competition and Innova- (3) QUALIFIED OFFSHORE WIND FACILITIES chanics who were paid wages at a rate below
tion Act of 2009 (Public Law 111–148) and con- UNDER ENERGY CREDIT.—Section 48(a)(5)(F)(i) is the rate described in subparagraph (A) for any
tinues to be marketed pursuant to such licen- amended by striking ‘‘offshore wind facility’’ period during such year.
sure.’’. and all that follows and inserting the following: ‘‘(ii) DEFICIENCY PROCEDURES NOT TO APPLY.—
(b) EFFECTIVE DATE.—The amendment made ‘‘offshore wind facility, subparagraph (E) shall Subchapter B of chapter 63 (relating to defi-
by this section shall apply to plan years begin- ciency procedures for income, estate, gift, and
not apply.’’.
ning after December 31, 2022. (f) WAGE AND APPRENTICESHIP REQUIRE- certain excise taxes) shall not apply with respect
Subtitle C—Affordable Care Act Subsidies MENTS.—Section 45(b) is amended by adding at to the assessment or collection of any penalty
SEC. 12001. IMPROVE AFFORDABILITY AND RE- the end the following new paragraphs: imposed by this paragraph.
DUCE PREMIUM COSTS OF HEALTH ‘‘(6) INCREASED CREDIT AMOUNT FOR QUALI- ‘‘(iii) INTENTIONAL DISREGARD.—If the Sec-
INSURANCE FOR CONSUMERS. FIED FACILITIES.— retary determines that any failure described in
(a) IN GENERAL.—Clause (iii) of section ‘‘(A) IN GENERAL.—In the case of any quali- clause (i) is due to intentional disregard of the
36B(b)(3)(A) of the Internal Revenue Code of fied facility which satisfies the requirements of requirements under subparagraph (A), such
1986 is amended— subparagraph (B), the amount of the credit de- clause shall be applied—
(1) by striking ‘‘in 2021 or 2022’’ and inserting termined under subsection (a) (determined after ‘‘(I) in subclause (I), by substituting ‘three
‘‘after December 31, 2020, and before January 1, the application of paragraphs (1) through (5) times the sum’ for ‘the sum’, and
2026’’, and and without regard to this paragraph) shall be ‘‘(II) in subclause (II), by substituting
ctelli on DSK11ZRN23PROD with HOUSE
(2) by striking ‘‘2021 AND 2022’’ in the heading equal to such amount multiplied by 5. ‘$10,000’ for ‘5,000’ in item (aa) thereof.
and inserting ‘‘2021 THROUGH 2025’’. ‘‘(B) QUALIFIED FACILITY REQUIREMENTS.—A ‘‘(iv) LIMITATION ON PERIOD FOR PAYMENT.—
(b) EXTENSION THROUGH 2025 OF RULE TO qualified facility meets the requirements of this Pursuant to rules issued by the Secretary, in the
ALLOW CREDIT TO TAXPAYERS WHOSE HOUSE- subparagraph if it is one of the following: case of a final determination by the Secretary
HOLD INCOME EXCEEDS 400 PERCENT OF THE ‘‘(i) A facility with a maximum net output of with respect to any failure by the taxpayer to
POVERTY LINE.—Section 36B(c)(1)(E) of the In- less than 1 megawatt (as measured in alter- satisfy the requirement under subparagraph (A),
ternal Revenue Code of 1986 is amended— nating current). subparagraph (B)(i) shall not apply unless the
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H7600 CONGRESSIONAL RECORD — HOUSE August 12, 2022
payments described in subclauses (I) and (II) of ‘‘(E) DEFINITIONS.—For purposes of this para- ‘‘(B) 100 PERCENT APPLICABLE PERCENTAGE
such subparagraph are made by the taxpayer on graph— FOR CERTAIN QUALIFIED FACILITIES.—In the case
or before the date which is 180 days after the ‘‘(i) LABOR HOURS.—The term ‘labor hours’— of any qualified facility—
date of such determination. ‘‘(I) means the total number of hours devoted ‘‘(i) which satisfies the requirements under
‘‘(8) APPRENTICESHIP REQUIREMENTS.—The re- to the performance of construction, alteration, paragraph (9)(B), or
quirements described in this paragraph with re- or repair work by any individual employed by ‘‘(ii) with a maximum net output of less than
spect to the construction of any qualified facil- the taxpayer or by any contractor or subcon- 1 megawatt (as measured in alternating cur-
ity are as follows: tractor, and rent),
‘‘(A) LABOR HOURS.— ‘‘(II) excludes any hours worked by— the applicable percentage shall be 100 percent.
‘‘(i) PERCENTAGE OF TOTAL LABOR HOURS.— ‘‘(aa) foremen, ‘‘(C) PHASED DOMESTIC CONTENT REQUIRE-
Taxpayers shall ensure that, with respect to the ‘‘(bb) superintendents, MENT.—Subject to subparagraph (D), in the case
construction of any qualified facility, not less ‘‘(cc) owners, or of any qualified facility which is not described
than the applicable percentage of the total labor ‘‘(dd) persons employed in a bona fide execu- in subparagraph (B), the applicable percentage
hours of the construction, alteration, or repair tive, administrative, or professional capacity shall be—
work (including such work performed by any (within the meaning of those terms in part 541 ‘‘(i) if construction of such facility began be-
contractor or subcontractor) with respect to of title 29, Code of Federal Regulations). fore January 1, 2024, 100 percent, and
such facility shall, subject to subparagraph (B), ‘‘(ii) QUALIFIED APPRENTICE.—The term ‘‘(ii) if construction of such facility began in
be performed by qualified apprentices. ‘qualified apprentice’ means an individual who calendar year 2024, 90 percent.
‘‘(ii) APPLICABLE PERCENTAGE.—For purposes is employed by the taxpayer or by any con- ‘‘(D) EXCEPTION.—
of clause (i), the applicable percentage shall tractor or subcontractor and who is partici- ‘‘(i) IN GENERAL.—For purposes of this para-
be— pating in a registered apprenticeship program, graph, the Secretary shall provide exceptions to
‘‘(I) in the case of a qualified facility the con- as defined in section 3131(e)(3)(B). the requirements under this paragraph if—
struction of which begins before January 1, ‘‘(9) REGULATIONS AND GUIDANCE.—The Sec- ‘‘(I) the inclusion of steel, iron, or manufac-
2023, 10 percent, retary shall issue such regulations or other tured products which are produced in the
‘‘(II) in the case of a qualified facility the guidance as the Secretary determines necessary United States increases the overall costs of con-
construction of which begins after December 31, to carry out the purposes of this subsection, in- struction of qualified facilities by more than 25
2022, and before January 1, 2024, 12.5 percent, cluding regulations or other guidance which percent, or
and provides for requirements for recordkeeping or ‘‘(II) relevant steel, iron, or manufactured
‘‘(III) in the case of a qualified facility the information reporting for purposes of admin- products are not produced in the United States
construction of which begins after December 31, istering the requirements of this subsection.’’. in sufficient and reasonably available quantities
2023, 15 percent. (g) DOMESTIC CONTENT, PHASEOUT, AND EN- or of a satisfactory quality.
‘‘(B) APPRENTICE TO JOURNEYWORKER
ERGY COMMUNITIES.—Section 45(b), as amended ‘‘(ii) APPLICABLE PERCENTAGE.—In any case
RATIO.—The requirement under subparagraph
by subsection (f), is amended— in which the Secretary provides an exception
(A)(i) shall be subject to any applicable require- (1) by redesignating paragraph (9) as para- pursuant to clause (i), the applicable percentage
ments for apprentice-to-journeyworker ratios of graph (12), and shall be 100 percent.
the Department of Labor or the applicable State (2) by inserting after paragraph (8) the fol- ‘‘(11) SPECIAL RULE FOR QUALIFIED FACILITY
apprenticeship agency. lowing: LOCATED IN ENERGY COMMUNITY.—
‘‘(C) PARTICIPATION.—Each taxpayer, con- ‘‘(9) DOMESTIC CONTENT BONUS CREDIT ‘‘(A) IN GENERAL.—In the case of a qualified
tractor, or subcontractor who employs 4 or more AMOUNT.— facility which is located in an energy commu-
individuals to perform construction, alteration, ‘‘(A) IN GENERAL.—In the case of any quali- nity, the credit determined under subsection (a)
or repair work with respect to the construction fied facility which satisfies the requirement (determined after the application of paragraphs
of a qualified facility shall employ 1 or more under subparagraph (B)(i), the amount of the (1) through (10), without the application of
qualified apprentices to perform such work. credit determined under subsection (a) (deter- paragraph (9)) shall be increased by an amount
‘‘(D) EXCEPTION.—
‘‘(i) IN GENERAL.—A taxpayer shall not be mined after the application of paragraphs (1) equal to 10 percent of the amount so determined.
treated as failing to satisfy the requirements of through (8)) shall be increased by an amount ‘‘(B) ENERGY COMMUNITY.—For purposes of
this paragraph if such taxpayer— equal to 10 percent of the amount so determined. this paragraph, the term ‘energy community’
‘‘(I) satisfies the requirements described in ‘‘(B) REQUIREMENT.— means—
clause (ii), or ‘‘(i) IN GENERAL.—The requirement described ‘‘(i) a brownfield site (as defined in subpara-
‘‘(II) subject to clause (iii), in the case of any in this clause is satisfied with respect to any graphs (A), (B), and (D)(ii)(III) of section
failure by the taxpayer to satisfy the require- qualified facility if the taxpayer certifies to the 101(39) of the Comprehensive Environmental Re-
ment under subparagraphs (A) and (C) with re- Secretary (at such time, and in such form and sponse, Compensation, and Liability Act of 1980
spect to the construction, alteration, or repair manner, as the Secretary may prescribe) that (42 U.S.C. 9601(39))),
work on any qualified facility to which sub- any steel, iron, or manufactured product which ‘‘(ii) a metropolitan statistical area or non-
clause (I) does not apply, makes payment to the is a component of such facility (upon completion metropolitan statistical area which—
Secretary of a penalty in an amount equal to of construction) was produced in the United ‘‘(I) has (or, at any time during the period be-
the product of— States (as determined under section 661 of title ginning after December 31, 2009, had) 0.17 per-
‘‘(aa) $50, multiplied by 49, Code of Federal Regulations). cent or greater direct employment or 25 percent
‘‘(bb) the total labor hours for which the re- ‘‘(ii) STEEL AND IRON.—In the case of steel or or greater local tax revenues related to the ex-
quirement described in such subparagraph was iron, clause (i) shall be applied in a manner traction, processing, transport, or storage of
not satisfied with respect to the construction, al- consistent with section 661.5 of title 49, Code of coal, oil, or natural gas (as determined by the
teration, or repair work on such qualified facil- Federal Regulations. Secretary), and
ity. ‘‘(iii) MANUFACTURED PRODUCT.—For pur- ‘‘(II) has an unemployment rate at or above
‘‘(ii) GOOD FAITH EFFORT.—For purposes of poses of clause (i), the manufactured products the national average unemployment rate for the
clause (i), a taxpayer shall be deemed to have which are components of a qualified facility previous year (as determined by the Secretary),
satisfied the requirements under this paragraph upon completion of construction shall be deemed or
with respect to a qualified facility if such tax- to have been produced in the United States if ‘‘(iii) a census tract—
payer has requested qualified apprentices from a not less than the adjusted percentage (as deter- ‘‘(I) in which—
registered apprenticeship program, as defined in mined under subparagraph (C)) of the total ‘‘(aa) after December 31, 1999, a coal mine has
section 3131(e)(3)(B), and— costs of all such manufactured products of such closed, or
‘‘(I) such request has been denied, provided facility are attributable to manufactured prod- ‘‘(bb) after December 31, 2009, a coal-fired
that such denial is not the result of a refusal by ucts (including components) which are mined, electric generating unit has been retired, or
the taxpayer or any contractors or subcontrac- produced, or manufactured in the United States. ‘‘(II) which is directly adjoining to any census
tors engaged in the performance of construction, ‘‘(C) ADJUSTED PERCENTAGE.— tract described in subclause (I).’’.
alteration, or repair work with respect to such ‘‘(i) IN GENERAL.—Subject to subclause (ii), for (h) CREDIT REDUCED FOR TAX-EXEMPT
qualified facility to comply with the established purposes of subparagraph (B)(iii), the adjusted BONDS.—Section 45(b)(3) is amended to read as
standards and requirements of the registered ap- percentage shall be 40 percent. follows:
prenticeship program, or ‘‘(ii) OFFSHORE WIND FACILITY.—For purposes ‘‘(3) CREDIT REDUCED FOR TAX-EXEMPT
‘‘(II) the registered apprenticeship program of subparagraph (B)(iii), in the case of a quali- BONDS.—The amount of the credit determined
fails to respond to such request within 5 busi- fied facility which is an offshore wind facility, under subsection (a) with respect to any facility
ness days after the date on which such reg- the adjusted percentage shall be 20 percent. for any taxable year (determined after the appli-
istered apprenticeship program received such re- ‘‘(10) PHASEOUT FOR ELECTIVE PAYMENT.— cation of paragraphs (1) and (2)) shall be re-
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quest. ‘‘(A) IN GENERAL.—In the case of a taxpayer duced by the amount which is the product of the
‘‘(iii) INTENTIONAL DISREGARD.—If the Sec- making an election under section 6417 with re- amount so determined for such year and the
retary determines that any failure described in spect to a credit under this section, the amount lesser of 15 percent or a fraction—
subclause (i)(II) is due to intentional disregard of such credit shall be replaced with— ‘‘(A) the numerator of which is the sum, for
of the requirements under subparagraphs (A) ‘‘(i) the value of such credit (determined with- the taxable year and all prior taxable years, of
and (C), subclause (i)(II) shall be applied by out regard to this paragraph), multiplied by proceeds of an issue of any obligations the inter-
substituting ‘$500’ for ‘$50’ in item (aa) thereof. ‘‘(ii) the applicable percentage. est on which is exempt from tax under section
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7601
103 and which is used to provide financing for which begins after December 31, 2019, and which existing property prior to such modification
the qualified facility, and is placed in service before January 1, 2022, the shall not be taken into account for purposes of
‘‘(B) the denominator of which is the aggre- energy percentage determined under paragraph this section. In the case of any property to
gate amount of additions to the capital account (2) shall be equal to 26 percent.’’. which this subparagraph applies, subparagraph
for the qualified facility for the taxable year (d) BASE ENERGY PERCENTAGE AMOUNT; (D) shall be applied by substituting ‘modifica-
and all prior taxable years. PHASEOUT OF CERTAIN ENERGY PROPERTY.— tion’ for ‘construction’.
The amounts under the preceding sentence for (1) BASE ENERGY PERCENTAGE AMOUNT.—Sec- ‘‘(C) THERMAL ENERGY STORAGE PROPERTY.—
any taxable year shall be determined as of the tion 48(a) is amended— ‘‘(i) IN GENERAL.—Subject to clause (ii), for
close of the taxable year.’’. (A) in paragraph (2)(A)— purposes of this paragraph, the term ‘thermal
(i) ROUNDING ADJUSTMENT.— (i) in clause (i), by striking ‘‘30 percent’’ and energy storage property’ means property com-
(1) IN GENERAL.—Section 45(b)(2) is amended inserting ‘‘6 percent’’, and prising a system which—
by striking the second sentence and inserting (ii) in clause (ii), by striking ‘‘10 percent’’ and ‘‘(I) is directly connected to a heating, ven-
the following: ‘‘If the 0.3 cent amount as in- inserting ‘‘2 percent’’, and tilation, or air conditioning system,
creased under the preceding sentence is not a (B) in paragraph (5)(A)(ii), by striking ‘‘30 ‘‘(II) removes heat from, or adds heat to, a
multiple of 0.05 cent, such amount shall be percent’’ and inserting ‘‘6 percent’’. storage medium for subsequent use, and
rounded to the nearest multiple of 0.05 cent. In (2) PHASEOUT OF CERTAIN ENERGY PROP- ‘‘(III) provides energy for the heating or cool-
any other case, if an amount as increased under ERTY.—Section 48(a), as amended by the pre- ing of the interior of a residential or commercial
this paragraph is not a multiple of 0.1 cent, such ceding provisions of this Act, is amended by building.
amount shall be rounded to the nearest multiple adding at the end the following new paragraph: ‘‘(ii) EXCLUSION.—The term ‘thermal energy
of 0.1 cent.’’. ‘‘(7) PHASEOUT FOR CERTAIN ENERGY PROP- storage property’ shall not include—
(2) CONFORMING AMENDMENT.—Section ERTY.—In the case of any energy property de- ‘‘(I) a swimming pool,
45(b)(4)(A) is amended by striking ‘‘last sen- scribed in clause (vii) of paragraph (3)(A), the ‘‘(II) combined heat and power system prop-
tence’’ and inserting ‘‘last two sentences’’. energy percentage determined under paragraph erty, or
(j) HYDROPOWER.— (2) shall be equal to— ‘‘(III) a building or its structural components.
(1) ELIMINATION OF CREDIT RATE REDUCTION ‘‘(A) in the case of any property the construc- ‘‘(D) TERMINATION.—The term ‘energy storage
FOR QUALIFIED HYDROELECTRIC PRODUCTION AND tion of which begins before January 1, 2033, and technology’ shall not include any property the
MARINE AND HYDROKINETIC RENEWABLE EN- which is placed in service after December 31, construction of which begins after December 31,
ERGY.—Section 45(b)(4)(A), as amended by the 2021, 6 percent, 2024.
preceding provisions of this section, is amended ‘‘(B) in the case of any property the construc- ‘‘(7) QUALIFIED BIOGAS PROPERTY.—
by striking ‘‘(7), (9), or (11)’’ and inserting ‘‘or tion of which begins after December 31, 2032, ‘‘(A) IN GENERAL.—The term ‘qualified biogas
(7)’’. and before January 1, 2034, 5.2 percent, and property’ means property comprising a system
(2) MARINE AND HYDROKINETIC RENEWABLE EN- ‘‘(C) in the case of any property the construc- which—
ERGY.—Section 45 is amended— tion of which begins after December 31, 2033, ‘‘(i) converts biomass (as defined in section
(A) in subsection (c)(10)(A)— and before January 1, 2035, 4.4 percent.’’. 45K(c)(3), as in effect on the date of enactment
(i) in clause (iii), by striking ‘‘or’’, (e) 6 PERCENT CREDIT FOR GEOTHERMAL.—Sec- of this paragraph) into a gas which—
(ii) in clause (iv), by striking the period at the tion 48(a)(2)(A)(i)(II) is amended by striking ‘‘(I) consists of not less than 52 percent meth-
end and inserting ‘‘, or’’ and ‘‘paragraph (3)(A)(i)’’ and inserting ‘‘clause (i) ane by volume, or
(iii) by adding at the end the following: or (iii) of paragraph (3)(A)’’. ‘‘(II) is concentrated by such system into a
‘‘(v) pressurized water used in a pipeline (or (f) ENERGY STORAGE TECHNOLOGIES; QUALI- gas which consists of not less than 52 percent
similar man-made water conveyance) which is FIED BIOGAS PROPERTY; MICROGRID CONTROL- methane, and
operated— LERS; EXTENSION OF OTHER PROPERTY.— ‘‘(ii) captures such gas for sale or productive
‘‘(I) for the distribution of water for agricul- (1) IN GENERAL.—Section 48(a)(3)(A) is amend- use, and not for disposal via combustion.
tural, municipal, or industrial consumption, ed by striking ‘‘or’’ at the end of clause (vii), ‘‘(B) INCLUSION OF CLEANING AND CONDI-
and and by adding at the end the following new TIONING PROPERTY.—The term ‘qualified biogas
‘‘(II) not primarily for the generation of elec- clauses: property’ includes any property which is part of
tricity.’’, and ‘‘(ix) energy storage technology, such system which cleans or conditions such
(B) in subsection (d)(11)(A), by striking ‘‘150’’ ‘‘(x) qualified biogas property, or gas.
and inserting ‘‘25’’. ‘‘(xi) microgrid controllers,’’. ‘‘(C) TERMINATION.—The term ‘qualified
(k) EFFECTIVE DATES.— (2) APPLICATION OF 6 PERCENT CREDIT.—Sec- biogas property’ shall not include any property
(1) IN GENERAL.—Except as provided in para- tion 48(a)(2)(A)(i) is amended by striking ‘‘and’’ the construction of which begins after December
graphs (2) and (3), the amendments made by at the end of subclauses (IV) and (V) and add- 31, 2024.
this section shall apply to facilities placed in ing at the end the following new subclauses: ‘‘(8) MICROGRID CONTROLLER.—
service after December 31, 2021. ‘‘(VI) energy storage technology, ‘‘(A) IN GENERAL.—The term ‘microgrid con-
(2) CREDIT REDUCED FOR TAX-EXEMPT ‘‘(VII) qualified biogas property, troller’ means equipment which is—
BONDS.—The amendment made by subsection (h) ‘‘(VIII) microgrid controllers, and ‘‘(i) part of a qualified microgrid, and
shall apply to facilities the construction of ‘‘(IX) energy property described in clauses (v) ‘‘(ii) designed and used to monitor and control
which begins after the date of enactment of this and (vii) of paragraph (3)(A), and’’. the energy resources and loads on such
Act. (3) DEFINITIONS.—Section 48(c) is amended by microgrid.
(3) DOMESTIC CONTENT, PHASEOUT, ENERGY adding at the end the following new para- ‘‘(B) QUALIFIED MICROGRID.—The term ‘quali-
COMMUNITIES, AND HYDROPOWER.—The amend- graphs: fied microgrid’ means an electrical system
ments made by subsections (g) and (j) shall ‘‘(6) ENERGY STORAGE TECHNOLOGY.— which—
apply to facilities placed in service after Decem- ‘‘(A) IN GENERAL.—The term ‘energy storage ‘‘(i) includes equipment which is capable of
ber 31, 2022. technology’ means— generating not less than 4 kilowatts and not
SEC. 13102. EXTENSION AND MODIFICATION OF ‘‘(i) property (other than property primarily greater than 20 megawatts of electricity,
ENERGY CREDIT. used in the transportation of goods or individ- ‘‘(ii) is capable of operating—
(a) EXTENSION OF CREDIT.—The following pro- uals and not for the production of electricity) ‘‘(I) in connection with the electrical grid and
visions of section 48 are each amended by strik- which receives, stores, and delivers energy for as a single controllable entity with respect to
ing ‘‘January 1, 2024’’ each place it appears and conversion to electricity (or, in the case of hy- such grid, and
inserting ‘‘January 1, 2025’’: drogen, which stores energy), and has a name- ‘‘(II) independently (and disconnected) from
(1) Subsection (a)(2)(A)(i)(II). plate capacity of not less than 5 kilowatt hours, such grid, and
(2) Subsection (a)(3)(A)(ii). and ‘‘(iii) is not part of a bulk-power system (as
(3) Subsection (c)(1)(D). ‘‘(ii) thermal energy storage property. defined in section 215 of the Federal Power Act
(4) Subsection (c)(2)(D). ‘‘(B) MODIFICATIONS OF CERTAIN PROPERTY.— (16 U.S.C. 824o)).
(5) Subsection (c)(3)(A)(iv). In the case of any property which either— ‘‘(C) TERMINATION.—The term ‘microgrid con-
(6) Subsection (c)(4)(C). ‘‘(i) was placed in service before the date of troller’ shall not include any property the con-
(7) Subsection (c)(5)(D). enactment of this section and would be de- struction of which begins after December 31,
(b) FURTHER EXTENSION FOR CERTAIN ENERGY scribed in subparagraph (A)(i), except that such 2024.’’.
PROPERTY.—Section 48(a)(3)(A)(vii) is amended property has a capacity of less than 5 kilowatt (4) DENIAL OF DOUBLE BENEFIT FOR QUALIFIED
by striking ‘‘January 1, 2024’’ and inserting hours and is modified in a manner that such BIOGAS PROPERTY.—Section 45(e) is amended by
‘‘January 1, 2035’’. property (after such modification) has a name- adding at the end the following new paragraph:
(c) PHASEOUT OF CREDIT.—Section 48(a) is plate capacity of not less than 5 kilowatt hours, ‘‘(12) COORDINATION WITH ENERGY CREDIT FOR
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amended by striking paragraphs (6) and (7) and or QUALIFIED BIOGAS PROPERTY.—The term ‘quali-
inserting the following new paragraph: ‘‘(ii) is described in subparagraph (A)(i) and is fied facility’ shall not include any facility
‘‘(6) PHASEOUT FOR CERTAIN ENERGY PROP- modified in a manner that such property (after which produces electricity from gas produced by
ERTY.—In the case of any qualified fuel cell such modification) has an increase in nameplate qualified biogas property (as defined in section
property, qualified small wind property, or en- capacity of not less than 5 kilowatt hours, 48(c)(7)) if a credit is allowed under section 48
ergy property described in clause (i) or clause such property shall be treated as described in with respect to such property for the taxable
(ii) of paragraph (3)(A) the construction of subparagraph (A)(i) except that the basis of any year or any prior taxable year.’’.
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H7602 CONGRESSIONAL RECORD — HOUSE August 12, 2022
(5) PUBLIC UTILITY PROPERTY.—Paragraph (2) project which is not a microgrid controller, any ance with subchapter IV of chapter 31 of title
of section 50(d) is amended— tangible property— 40, United States Code. Subject to subparagraph
(A) by adding after the first sentence the fol- ‘‘(i) which is part of an addition, modifica- (C), for purposes of any determination under
lowing new sentence: ‘‘At the election of a tax- tion, or upgrade to a transmission or distribu- paragraph (9)(A)(i) for the taxable year in
payer, this paragraph shall not apply to any tion system which is required at or beyond the which the energy project is placed in service, the
energy storage technology (as defined in section point at which the energy project interconnects taxpayer shall be deemed to satisfy the require-
48(c)(6)), provided—’’, and to such transmission or distribution system in ment under clause (ii) at the time such project
(B) by adding the following new subpara- order to accommodate such interconnection, is placed in service.
graphs: ‘‘(ii) either— ‘‘(B) CORRECTION AND PENALTY RELATED TO
‘‘(A) no election under this paragraph shall be ‘‘(I) which is constructed, reconstructed, or FAILURE TO SATISFY WAGE REQUIREMENTS.—
permitted if the making of such election is pro- erected by the taxpayer, or Rules similar to the rules of section 45(b)(7)(B)
hibited by a State or political subdivision there- ‘‘(II) for which the cost with respect to the shall apply.
of, by any agency or instrumentality of the construction, reconstruction, or erection of such ‘‘(C) RECAPTURE.—The Secretary shall, by
United States, or by a public service or public property is paid or incurred by such taxpayer, regulations or other guidance, provide for recap-
utility commission or other similar body of any and turing the benefit of any increase in the credit
State or political subdivision that regulates pub- ‘‘(iii) the original use of which, pursuant to allowed under this subsection by reason of this
lic utilities as described in section 7701(a)(33)(A), an interconnection agreement, commences with paragraph with respect to any project which
‘‘(B) an election under this paragraph shall a utility. does not satisfy the requirements under sub-
be made separately with respect to each energy ‘‘(C) INTERCONNECTION AGREEMENT.—The term paragraph (A) (after application of subpara-
storage technology by the due date (including ‘interconnection agreement’ means an agree- graph (B)) for the period described in clause (ii)
extensions) of the Federal tax return for the ment with a utility for the purposes of inter- of subparagraph (A) (but which does not cease
taxable year in which the energy storage tech- connecting the energy property owned by such to be investment credit property within the
nology is placed in service by the taxpayer, and taxpayer to the transmission or distribution sys- meaning of section 50(a)). The period and per-
once made, may be revoked only with the con- tem of such utility. centage of such recapture shall be determined
sent of the Secretary, and ‘‘(D) UTILITY.—For purposes of this para- under rules similar to the rules of section 50(a).
‘‘(C) an election shall not apply with respect graph, the term ‘utility’ means the owner or op- ‘‘(11) APPRENTICESHIP REQUIREMENTS.—Rules
to any energy storage technology if such energy erator of an electrical transmission or distribu- similar to the rules of section 45(b)(8) shall
storage technology has a maximum capacity tion system which is subject to the regulatory apply.’’.
equal to or less than 500 kilowatt hours.’’. authority of a State or political subdivision (l) DOMESTIC CONTENT; PHASEOUT FOR ELEC-
(g) FUEL CELLS USING ELECTROMECHANICAL thereof, any agency or instrumentality of the TIVE PAYMENT.—Section 48(a), as amended by
PROCESSES.— United States, a public service or public utility the preceding provisions of this Act, is amended
(1) IN GENERAL.—Section 48(c)(1) is amended— commission or other similar body of any State or by adding at the end the following new para-
(A) in subparagraph (A)(i)— political subdivision thereof, or the governing or graphs:
(i) by inserting ‘‘or electromechanical’’ after ratemaking body of an electric cooperative. ‘‘(12) DOMESTIC CONTENT BONUS CREDIT
‘‘electrochemical’’, and ‘‘(E) SPECIAL RULE FOR INTERCONNECTION AMOUNT.—
(ii) by inserting ‘‘(1 kilowatt in the case of a PROPERTY.—In the case of expenses paid or in- ‘‘(A) IN GENERAL.—In the case of any energy
fuel cell power plant with a linear generator as- curred for interconnection property, amounts project which satisfies the requirement under
sembly)’’ after ‘‘0.5 kilowatt’’, and otherwise chargeable to capital account with re- subparagraph (B), for purposes of applying
(B) in subparagraph (C)— spect to such expenses shall be reduced under paragraph (2) with respect to such property, the
(i) by inserting ‘‘, or linear generator assem- rules similar to the rules of section 50(c).’’. energy percentage shall be increased by the ap-
bly,’’ after ‘‘a fuel cell stack assembly’’, and (k) ENERGY PROJECTS, WAGE REQUIREMENTS, plicable credit rate increase.
(ii) by inserting ‘‘or electromechanical’’ after AND APPRENTICESHIP REQUIREMENTS.—Section ‘‘(B) REQUIREMENT.—Rules similar to the
‘‘electrochemical’’. 48(a), as amended by the preceding provisions of rules of section 45(b)(9)(B) shall apply.
(2) LINEAR GENERATOR ASSEMBLY LIMITA- this Act, is amended by adding at the end the ‘‘(C) APPLICABLE CREDIT RATE INCREASE.—For
TION.—Section 48(c)(1) is amended by redesig- following new paragraphs: purposes of subparagraph (A), the applicable
nating subparagraph (D) as subparagraph (E) ‘‘(9) INCREASED CREDIT AMOUNT FOR ENERGY credit rate increase shall be—
and by inserting after subparagraph (C) the fol- PROJECTS.—
‘‘(i) in the case of an energy project which
lowing new subparagraph: ‘‘(A) IN GENERAL.— does not satisfy the requirements of paragraph
‘‘(D) LINEAR GENERATOR ASSEMBLY.—The term ‘‘(i) RULE.—In the case of any energy project (9)(B), 2 percentage points, and
‘linear generator assembly’ does not include any which satisfies the requirements of subpara- ‘‘(ii) in the case of an energy project which
assembly which contains rotating parts.’’. graph (B), the amount of the credit determined satisfies the requirements of paragraph (9)(B),
(h) DYNAMIC GLASS.—Section 48(a)(3)(A)(ii) is under this subsection (determined after the ap- 10 percentage points.
amended by inserting ‘‘, or electrochromic glass ‘‘(13) PHASEOUT FOR ELECTIVE PAYMENT.—In
plication of paragraphs (1) through (8) and
the case of a taxpayer making an election under
which uses electricity to change its light trans- without regard to this clause) shall be equal to
section 6417 with respect to a credit under this
mittance properties in order to heat or cool a such amount multiplied by 5.
section, rules similar to the rules of section
structure,’’ after ‘‘sunlight’’. ‘‘(ii) ENERGY PROJECT DEFINED.—For purposes
(i) COORDINATION WITH LOW INCOME HOUSING 45(b)(10) shall apply.’’.
of this subsection, the term ‘energy project’
(m) SPECIAL RULE FOR PROPERTY FINANCED
TAX CREDIT.—Paragraph (3) of section 50(c) is means a project consisting of one or more energy BY TAX-EXEMPT BONDS.—Section 48(a)(4) is
amended— properties that are part of a single project. amended to read as follows:
(1) by striking ‘‘and’’ at the end of subpara- ‘‘(B) PROJECT REQUIREMENTS.—A project ‘‘(4) SPECIAL RULE FOR PROPERTY FINANCED BY
graph (A), meets the requirements of this subparagraph if it TAX-EXEMPT BONDS.—Rules similar to the rule
(2) by striking the period at the end of sub- is one of the following: under section 45(b)(3) shall apply for purposes
paragraph (B) and inserting ‘‘, and’’, and ‘‘(i) A project with a maximum net output of of this section.’’.
(3) by adding at the end the following new less than 1 megawatt of electrical (as measured (n) TREATMENT OF CERTAIN CONTRACTS IN-
subparagraph: in alternating current) or thermal energy. VOLVING ENERGY STORAGE.—Section 7701(e) is
‘‘(C) paragraph (1) shall not apply for pur- ‘‘(ii) A project the construction of which be- amended—
poses of determining eligible basis under section gins before the date that is 60 days after the (1) in paragraph (3)—
42.’’. Secretary publishes guidance with respect to the (A) in subparagraph (A)(i), by striking ‘‘or’’
(j) INTERCONNECTION PROPERTY.—Section requirements of paragraphs (10)(A) and (11). at the end of subclause (II), by striking ‘‘and’’
48(a), as amended by the preceding provisions of ‘‘(iii) A project which satisfies the require- at the end of subclause (III) and inserting ‘‘or’’,
this Act, is amended by adding at the end the ments of paragraphs (10)(A) and (11). and by adding at the end the following new
following new paragraph: ‘‘(10) PREVAILING WAGE REQUIREMENTS.— subclause:
‘‘(8) INTERCONNECTION PROPERTY.— ‘‘(A) IN GENERAL.—The requirements described ‘‘(IV) the operation of a storage facility,
‘‘(A) IN GENERAL.—For purposes of deter- in this subparagraph with respect to any energy and’’, and
mining the credit under subsection (a), energy project are that the taxpayer shall ensure that (B) by adding at the end the following new
property shall include amounts paid or incurred any laborers and mechanics employed by the subparagraph:
by the taxpayer for qualified interconnection taxpayer or any contractor or subcontractor ‘‘(F) STORAGE FACILITY.—For purposes of sub-
property in connection with the installation of in— paragraph (A), the term ‘storage facility’ means
energy property (as defined in paragraph (3)) ‘‘(i) the construction of such energy project, a facility which uses energy storage technology
which has a maximum net output of not greater and within the meaning of section 48(c)(6).’’, and
than 5 megawatts (as measured in alternating ‘‘(ii) for the 5-year period beginning on the (2) in paragraph (4), by striking ‘‘or water
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current), to provide for the transmission or dis- date such project is originally placed in service, treatment works facility’’ and inserting ‘‘water
tribution of the electricity produced or stored by the alteration or repair of such project, treatment works facility, or storage facility’’.
such property, and which are properly charge- shall be paid wages at rates not less than the (o) INCREASE IN CREDIT RATE FOR ENERGY
able to the capital account of the taxpayer. prevailing rates for construction, alteration, or COMMUNITIES.—Section 48(a), as amended by
‘‘(B) QUALIFIED INTERCONNECTION PROP- repair of a similar character in the locality in the preceding provisions of this Act, is amended
ERTY.—The term ‘qualified interconnection which such project is located as most recently by adding at the end the following new para-
property’ means, with respect to an energy determined by the Secretary of Labor, in accord- graph:
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7603
‘‘(14) INCREASE IN CREDIT RATE FOR ENERGY ‘‘(ii) which has a maximum net output of less such year under this paragraph, such limitation
COMMUNITIES.— than 5 megawatts (as measured in alternating for the succeeding calendar year shall be in-
‘‘(A) IN GENERAL.—In the case of any energy current), and creased by the amount of such excess. No
project that is placed in service within an en- ‘‘(iii) which— amount may be carried under the preceding sen-
ergy community (as defined in section ‘‘(I) is located in a low-income community (as tence to any calendar year after 2024 except as
45(b)(11)(B), as applied by substituting ‘energy defined in section 45D(e)) or on Indian land (as provided in section 48E(h)(4)(D)(ii).
project’ for ‘qualified facility’ each place it ap- defined in section 2601(2) of the Energy Policy ‘‘(E) PLACED IN SERVICE DEADLINE.—
pears), for purposes of applying paragraph (2) Act of 1992 (25 U.S.C. 3501(2))), or ‘‘(i) IN GENERAL.—Paragraph (1) shall not
with respect to energy property which is part of ‘‘(II) is part of a qualified low-income residen- apply with respect to any property which is
such project, the energy percentage shall be in- tial building project or a qualified low-income placed in service after the date that is 4 years
creased by the applicable credit rate increase. economic benefit project. after the date of the allocation with respect to
‘‘(B) APPLICABLE CREDIT RATE INCREASE.—For ‘‘(B) QUALIFIED LOW-INCOME RESIDENTIAL the facility of which such property is a part.
purposes of subparagraph (A), the applicable BUILDING PROJECT.—A facility shall be treated ‘‘(ii) APPLICATION OF CARRYOVER.—Any
credit rate increase shall be equal to— as part of a qualified low-income residential amount of environmental justice solar and wind
‘‘(i) in the case of any energy project which building project if— capacity limitation which expires under clause
does not satisfy the requirements of paragraph ‘‘(i) such facility is installed on a residential (i) during any calendar year shall be taken into
(9)(B), 2 percentage points, and rental building which participates in a covered account as an excess described in subparagraph
‘‘(ii) in the case of any energy project which housing program (as defined in section 41411(a) (D) (or as an increase in such excess) for such
satisfies the requirements of paragraph (9)(B), of the Violence Against Women Act of 1994 (34 calendar year, subject to the limitation imposed
10 percentage points.’’. U.S.C. 12491(a)(3)), a housing assistance pro-
(p) REGULATIONS.—Section 48(a), as amended by the last sentence of such subparagraph.
gram administered by the Department of Agri- ‘‘(5) RECAPTURE.—The Secretary shall, by reg-
by the preceding provisions of this Act, is
culture under title V of the Housing Act of 1949, ulations or other guidance, provide for recap-
amended by adding at the end the following
a housing program administered by a tribally turing the benefit of any increase in the credit
new paragraph:
‘‘(15) REGULATIONS AND GUIDANCE.—The Sec- designated housing entity (as defined in section allowed under subsection (a) by reason of this
retary shall issue such regulations or other 4(22) of the Native American Housing Assistance subsection with respect to any property which
guidance as the Secretary determines necessary and Self-Determination Act of 1996 (25 U.S.C. ceases to be property eligible for such increase
to carry out the purposes of this subsection, in- 4103(22))) or such other affordable housing pro- (but which does not cease to be investment cred-
cluding regulations or other guidance which grams as the Secretary may provide, and it property within the meaning of section 50(a)).
provides for requirements for recordkeeping or ‘‘(ii) the financial benefits of the electricity The period and percentage of such recapture
information reporting for purposes of admin- produced by such facility are allocated equi- shall be determined under rules similar to the
istering the requirements of this subsection.’’. tably among the occupants of the dwelling units rules of section 50(a). To the extent provided by
(q) EFFECTIVE DATES.— of such building. the Secretary, such recapture may not apply
(1) IN GENERAL.—Except as provided in para- ‘‘(C) QUALIFIED LOW-INCOME ECONOMIC BEN- with respect to any property if, within 12
graphs (2) and (3), the amendments made by EFIT PROJECT.—A facility shall be treated as months after the date the taxpayer becomes
this section shall apply to property placed in part of a qualified low-income economic benefit aware (or reasonably should have become
service after December 31, 2021. project if at least 50 percent of the financial aware) of such property ceasing to be property
(2) OTHER PROPERTY.—The amendments made benefits of the electricity produced by such fa- eligible for such increase, the eligibility of such
by subsections (f), (g), (h), (i), (j), (l), (n), and cility are provided to households with income property for such increase is restored. The pre-
(o) shall apply to property placed in service of— ceding sentence shall not apply more than once
after December 31, 2022. ‘‘(i) less than 200 percent of the poverty line with respect to any facility.’’.
(3) SPECIAL RULE FOR PROPERTY FINANCED BY (as defined in section 36B(d)(3)(A)) applicable to (b) EFFECTIVE DATE.—The amendments made
TAX-EXEMPT BONDS.—The amendments made by a family of the size involved, or by this section shall take effect on January 1,
subsection (m) shall apply to property the con- ‘‘(ii) less than 80 percent of area median gross 2023.
struction of which begins after the date of en- income (as determined under section SEC. 13104. EXTENSION AND MODIFICATION OF
actment of this Act. 142(d)(2)(B)). CREDIT FOR CARBON OXIDE SE-
SEC. 13103. INCREASE IN ENERGY CREDIT FOR ‘‘(D) FINANCIAL BENEFIT.—For purposes of QUESTRATION.
SOLAR AND WIND FACILITIES subparagraphs (B) and (C), electricity acquired (a) MODIFICATION OF CARBON OXIDE CAPTURE
PLACED IN SERVICE IN CONNECTION at a below-market rate shall not fail to be taken REQUIREMENTS.—
WITH LOW-INCOME COMMUNITIES. into account as a financial benefit. (1) IN GENERAL.—Section 45Q(d) is amended to
(a) IN GENERAL.—Section 48 is amended by ‘‘(3) ELIGIBLE PROPERTY.—For purposes of read as follows:
adding at the end the following new subsection: this section, the term ‘eligible property’ means ‘‘(d) QUALIFIED FACILITY.—For purposes of
‘‘(e) SPECIAL RULES FOR CERTAIN SOLAR AND energy property which— this section, the term ‘qualified facility’ means
WIND FACILITIES PLACED IN SERVICE IN CONNEC- ‘‘(A) is part of a facility described in section any industrial facility or direct air capture fa-
TION WITH LOW-INCOME COMMUNITIES.— 45(d)(1) for which an election was made under cility—
‘‘(1) IN GENERAL.—In the case of any qualified subsection (a)(5), or ‘‘(1) the construction of which begins before
solar and wind facility with respect to which ‘‘(B) is described in clause (i) or (vi) of sub- January 1, 2033, and either—
the Secretary makes an allocation of environ- section (a)(3)(A), ‘‘(A) construction of carbon capture equip-
mental justice solar and wind capacity limita- including energy storage technology (as de- ment begins before such date, or
tion under paragraph (4)— scribed in subsection (a)(3)(A)(ix)) installed in ‘‘(B) the original planning and design for
‘‘(A) the energy percentage otherwise deter- connection with such energy property. such facility includes installation of carbon cap-
mined under paragraph (2) or (5) of subsection ‘‘(4) ALLOCATIONS.— ture equipment, and
(a) with respect to any eligible property which ‘‘(A) IN GENERAL.—Not later than 180 days ‘‘(2) which—
is part of such facility shall be increased by— after the date of enactment of this subsection, ‘‘(A) in the case of a direct air capture facil-
‘‘(i) in the case of a facility described in sub- the Secretary shall establish a program to allo- ity, captures not less than 1,000 metric tons of
clause (I) of paragraph (2)(A)(iii) and not de- cate amounts of environmental justice solar and qualified carbon oxide during the taxable year,
scribed in subclause (II) of such paragraph, 10 wind capacity limitation to qualified solar and ‘‘(B) in the case of an electricity generating
percentage points, and wind facilities. In establishing such program
‘‘(ii) in the case of a facility described in sub- facility—
and to carry out the purposes of this subsection, ‘‘(i) captures not less than 18,750 metric tons
clause (II) of paragraph (2)(A)(iii), 20 percent-
the Secretary shall provide procedures to allow of qualified carbon oxide during the taxable
age points, and
‘‘(B) the increase in the credit determined for an efficient allocation process, including, year, and
under subsection (a) by reason of this subsection when determined appropriate, consideration of ‘‘(ii) with respect to any carbon capture
for any taxable year with respect to all property multiple projects in a single application if such equipment for the applicable electric generating
which is part of such facility shall not exceed projects will be placed in service by a single tax- unit at such facility, has a capture design ca-
the amount which bears the same ratio to the payer. pacity of not less than 75 percent of the baseline
amount of such increase (determined without re- ‘‘(B) LIMITATION.—The amount of environ- carbon oxide production of such unit, or
gard to this subparagraph) as— mental justice solar and wind capacity limita- ‘‘(C) in the case of any other facility, captures
‘‘(i) the environmental justice solar and wind tion allocated by the Secretary under subpara- not less than 12,500 metric tons of qualified car-
capacity limitation allocated to such facility, graph (A) during any calendar year shall not bon oxide during the taxable year.’’.
bears to exceed the annual capacity limitation with re- (2) DEFINITIONS.—
‘‘(ii) the total megawatt nameplate capacity of spect to such year. (A) IN GENERAL.—Section 45Q(e) is amended—
such facility, as measured in direct current. ‘‘(C) ANNUAL CAPACITY LIMITATION.—For pur- (i) by redesignating paragraphs (1) through
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‘‘(2) QUALIFIED SOLAR AND WIND FACILITY.— poses of this paragraph, the term ‘annual ca- (3) as paragraphs (3) through (5), respectively,
For purposes of this subsection— pacity limitation’ means 1.8 gigawatts of direct and
‘‘(A) IN GENERAL.—The term ‘qualified solar current capacity for each of calendar years 2023 (ii) by inserting after ‘‘For purposes of this
and wind facility’ means any facility— and 2024, and zero thereafter. section—’’ the following new paragraphs:
‘‘(i) which generates electricity solely from ‘‘(D) CARRYOVER OF UNUSED LIMITATION.—If ‘‘(1) APPLICABLE ELECTRIC GENERATING
property described in section 45(d)(1) or in the annual capacity limitation for any calendar UNIT.—The term ‘applicable electric generating
clause (i) or (vi) of subsection (a)(3)(A), year exceeds the aggregate amount allocated for unit’ means the principal electric generating
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H7604 CONGRESSIONAL RECORD — HOUSE August 12, 2022
unit for which the carbon capture equipment is carbon capture equipment is installed at such shall be paid wages at rates not less than the
originally planned and designed. facility and such equipment is placed in service prevailing rates for construction, alteration, or
‘‘(2) BASELINE CARBON OXIDE PRODUCTION.— after December 31, 2022, the applicable dollar repair of a similar character in the locality in
‘‘(A) IN GENERAL.—The term ‘baseline carbon amount shall be an amount equal to the appli- which such facility and equipment are located
oxide production’ means either of the following: cable dollar amount otherwise determined under as most recently determined by the Secretary of
‘‘(i) In the case of an applicable electric gener- this paragraph, except that subparagraph (B) Labor, in accordance with subchapter IV of
ating unit which was originally placed in serv- shall be applied— chapter 31 of title 40, United States Code. For
ice more than 1 year prior to the date on which ‘‘(i) by substituting ‘before January 1, 2023’ purposes of determining an increased credit
construction of the carbon capture equipment for ‘after December 31, 2022’, and amount under paragraph (1) for a taxable year,
begins, the average annual carbon oxide pro- ‘‘(ii) by substituting ‘the additional carbon the requirement under clause (ii) of this sub-
duction, by mass, from such unit during— capture equipment installed at such qualified paragraph is applied to such taxable year in
‘‘(I) in the case of an applicable electric gener- facility’ for ‘such qualified facility’.’’. which the alteration or repair of qualified facil-
ating unit which was originally placed in serv- (2) CONFORMING AMENDMENTS.— ity occurs.
ice more than 1 year prior to the date on which (A) Section 45Q(b)(1)(A) is amended by strik- ‘‘(B) CORRECTION AND PENALTY RELATED TO
construction of the carbon capture equipment ing ‘‘The applicable dollar amount’’ and insert- FAILURE TO SATISFY WAGE REQUIREMENTS.—
begins and on or after the date which is 3 years ing ‘‘Except as provided in subparagraph (B) or Rules similar to the rules of section 45(b)(7)(B)
prior to the date on which construction of such (C), the applicable dollar amount’’. shall apply.
equipment begins, the period beginning on the (B) Section 45Q(b)(1)(D), as redesignated by ‘‘(4) APPRENTICESHIP REQUIREMENTS.—Rules
date such unit was placed in service and ending paragraph (1)(A), is amended by striking ‘‘sub- similar to the rules of section 45(b)(8) shall
on the date on which construction of such paragraph (A)’’ and inserting ‘‘subparagraph apply.
equipment began, and (A), (B), or (C)’’. ‘‘(5) REGULATIONS AND GUIDANCE.—The Sec-
‘‘(II) in the case of an applicable electric gen- (d) WAGE AND APPRENTICESHIP REQUIRE- retary shall issue such regulations or other
erating unit which was originally placed in MENTS.—Section 45Q is amended by redesig- guidance as the Secretary determines necessary
service more than 3 years prior to the date on nating subsection (h) as subsection (i) and in- to carry out the purposes of this subsection, in-
which construction of the carbon capture equip- serting after subsection (g) following new sub- cluding regulations or other guidance which
ment begins, the 3 years with the highest an- section: provides for requirements for recordkeeping or
nual carbon oxide production during the 12-year ‘‘(h) INCREASED CREDIT AMOUNT FOR QUALI- information reporting for purposes of admin-
period preceding the date on which construction FIED FACILITIES AND CARBON CAPTURE EQUIP- istering the requirements of this subsection.’’.
of such equipment began. MENT.— (e) CREDIT REDUCED FOR TAX-EXEMPT
‘‘(ii) In the case of an applicable electric gen- ‘‘(1) IN GENERAL.—In the case of any qualified BONDS.—Section 45Q(f) is amended—
erating unit which— facility or any carbon capture equipment which (1) by striking the second paragraph (3), as
‘‘(I) as of the date on which construction of satisfy the requirements of paragraph (2), the added at the end of such section by section
the carbon capture equipment begins, is not yet amount of the credit determined under sub- 80402(e) of the Infrastructure Investment and
placed in service, or section (a) shall be equal to such amount (deter- Jobs Act (Public Law 117-58), and
‘‘(II) was placed in service during the 1-year mined without regard to this sentence) multi- (2) by adding at the end the following new
period prior to the date on which construction plied by 5. paragraph:
of the carbon capture equipment begins, ‘‘(2) REQUIREMENTS.—The requirements de- ‘‘(8) CREDIT REDUCED FOR TAX-EXEMPT
the designed annual carbon oxide production, scribed in this paragraph are that— BONDS.—Rules similar to the rule under section
by mass, as determined based on an assumed ca- ‘‘(A) with respect to any qualified facility the 45(b)(3) shall apply for purposes of this sec-
pacity factor of 60 percent. construction of which begins on or after the tion.’’.
‘‘(B) CAPACITY FACTOR.—The term ‘capacity date that is 60 days after the Secretary pub- (f) APPLICATION OF SECTION FOR CERTAIN
factor’ means the ratio (expressed as a percent- lishes guidance with respect to the requirements CARBON CAPTURE EQUIPMENT.—Section 45Q(g)
age) of the actual electric output from the appli- of paragraphs (3)(A) and (4), as well as any car- is amended by inserting ‘‘the earlier of January
cable electric generating unit to the potential bon capture equipment placed in service at such 1, 2023, and’’ before ‘‘the end of the calendar
electric output from such unit.’’. facility— year’’.
(B) CONFORMING AMENDMENT.—Section ‘‘(i) subject to subparagraph (B) of paragraph (g) ELECTION.—Section 45Q(f), as amended by
142(o)(1)(B) is amended by striking ‘‘section (3), the taxpayer satisfies the requirements subsection (e), is amended by adding at the end
45Q(e)(1)’’ and inserting ‘‘section 45Q(e)(3)’’. under subparagraph (A) of such paragraph with the following new paragraph:
(b) MODIFIED APPLICABLE DOLLAR AMOUNT.— respect to such facility and equipment, and ‘‘(9) ELECTION.—For purposes of paragraphs
Section 45Q(b)(1)(A) is amended— ‘‘(ii) the taxpayer satisfies the requirements (3) and (4) of subsection (a), a person described
(1) in clause (i)— under paragraph (4) with respect to the con- in paragraph (3)(A)(ii) may elect, at such time
(A) in subclause (I), by striking ‘‘the dollar struction of such facility and equipment, and in such manner as the Secretary may pre-
amount’’ and all that follows through ‘‘such pe- ‘‘(B) with respect to any carbon capture scribe, to have the 12–year period begin on the
riod’’ and inserting ‘‘$17’’, and equipment the construction of which begins on first day of the first taxable year in which a
(B) in subclause (II), by striking ‘‘the dollar or after the date that is 60 days after the Sec- credit under this section is claimed with respect
amount’’ and all that follows through ‘‘such pe- retary publishes guidance with respect to the re- to carbon capture equipment which is originally
riod’’ and inserting ‘‘$12’’, and quirements of paragraphs (3)(A) and (4), and placed in service at a qualified facility on or
(2) in clause (ii)— which is installed at a qualified facility the con- after the date of the enactment of the Bipar-
(A) in subclause (I), by striking ‘‘$50’’ and in- struction of which began prior to such date— tisan Budget Act of 2018 (after application of
serting ‘‘$17’’, and ‘‘(i) subject to subparagraph (B) of paragraph paragraph (6), where applicable) if—
(B) in subclause (II), by striking ‘‘$35’’ and (3), the taxpayer satisfies the requirements ‘‘(A) no taxpayer claimed a credit under this
inserting ‘‘$12’’. under subparagraph (A) of such paragraph with section with respect to such carbon capture
(c) DETERMINATION OF APPLICABLE DOLLAR respect to such equipment, and equipment for any prior taxable year,
AMOUNT.— ‘‘(ii) the taxpayer satisfies the requirements ‘‘(B) the qualified facility at which such car-
(1) IN GENERAL.—Section 45Q(b)(1), as amend- under paragraph (4) with respect to the con- bon capture equipment is placed in service is lo-
ed by the preceding provisions of this Act, is struction of such equipment, or cated in an area affected by a federally-declared
amended— ‘‘(C) the construction of carbon capture equip- disaster (as defined by section 165(i)(5)(A)) after
(A) by redesignating subparagraph (B) as sub- ment begins prior to the date that is 60 days the carbon capture equipment is originally
paragraph (D), and after the Secretary publishes guidance with re- placed in service, and
(B) by inserting after subparagraph (A) the spect to the requirements of paragraphs (3)(A) ‘‘(C) such federally-declared disaster results
following new subparagraphs: and (4), and such equipment is installed at a in a cessation of the operation of the qualified
‘‘(B) SPECIAL RULE FOR DIRECT AIR CAPTURE qualified facility the construction of which be- facility or the carbon capture equipment after
FACILITIES.—In the case of any qualified facility gins prior to such date. such equipment is originally placed in service.’’.
described in subsection (d)(2)(A) which is placed ‘‘(3) PREVAILING WAGE REQUIREMENTS.— (h) REGULATIONS FOR BASELINE CARBON
in service after December 31, 2022, the applicable ‘‘(A) IN GENERAL.—The requirements described OXIDE PRODUCTION.—Subsection (i) of section
dollar amount shall be an amount equal to the in this subparagraph with respect to any quali- 45Q, as redesignated by subsection (d), is
applicable dollar amount otherwise determined fied facility and any carbon capture equipment amended—
with respect to such qualified facility under placed in service at such facility are that the (1) in paragraph (1), by striking ‘‘and’’,
subparagraph (A), except that such subpara- taxpayer shall ensure that any laborers and me- (2) in paragraph (2), by striking the period at
graph shall be applied— chanics employed by the taxpayer or any con- the end and inserting ‘‘, and’’, and
‘‘(i) by substituting ‘$36’ for ‘$17’ each place it tractor or subcontractor in— (3) by adding at the end the following new
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appears, and ‘‘(i) the construction of such facility or equip- paragraph:
‘‘(ii) by substituting ‘$26’ for ‘$12’ each place ment, and ‘‘(3) for purposes of subsection (d)(2)(B)(ii),
it appears. ‘‘(ii) with respect to any taxable year, for any adjust the baseline carbon oxide production
‘‘(C) APPLICABLE DOLLAR AMOUNT FOR ADDI- portion of such taxable year which is within the with respect to any applicable electric gener-
TIONAL CARBON CAPTURE EQUIPMENT.—In the period described in paragraph (3)(A) or (4)(A) of ating unit at any electricity generating facility
case of any qualified facility which is placed in subsection (a), the alteration or repair of such if, after the date on which the carbon capture
service before January 1, 2023, if any additional facility or such equipment, equipment is placed in service, modifications
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7605
which are chargeable to capital account are emission credit program’ means any payments (2) The table of sections for subpart D of part
made to such unit which result in a significant with respect to a qualified nuclear power facil- IV of subchapter A of chapter 1 is amended by
increase or decrease in carbon oxide produc- ity as a result of any Federal, State or local gov- adding at the end the following new item:
tion.’’. ernment program for, in whole or in part, the ‘‘Sec. 45U. Zero-emission nuclear power pro-
(i) EFFECTIVE DATES.— zero-emission, zero-carbon, or air quality at- duction credit.’’.
(1) IN GENERAL.—Except as provided in para- tributes of any portion of the electricity pro- (c) EFFECTIVE DATE.—This section shall apply
graphs (2), (3), and (4), the amendments made duced by such facility. to electricity produced and sold after December
by this section shall apply to facilities or equip- ‘‘(iii) EXCLUSION.—For purposes of clause (i), 31, 2023, in taxable years beginning after such
ment placed in service after December 31, 2022. any amount received by the taxpayer from a date.
(2) MODIFICATION OF CARBON OXIDE CAPTURE zero-emission credit program shall be excluded PART 2—CLEAN FUELS
REQUIREMENTS.—The amendments made by sub- from the amount determined under subpara-
SEC. 13201. EXTENSION OF INCENTIVES FOR BIO-
section (a) shall apply to facilities or equipment graph (A)(ii)(I) if the full amount of the credit DIESEL, RENEWABLE DIESEL AND
the construction of which begins after the date calculated pursuant to subsection (a) (deter- ALTERNATIVE FUELS.
of enactment of this Act. mined without regard to this subparagraph) is (a) BIODIESEL AND RENEWABLE DIESEL CRED-
(3) APPLICATION OF SECTION FOR CERTAIN CAR- used to reduce payments from such zero-emis- IT.—Section 40A(g) is amended by striking ‘‘De-
BON CAPTURE EQUIPMENT.—The amendments sion credit program. cember 31, 2022’’ and inserting ‘‘December 31,
made by subsection (f) shall take effect on the ‘‘(3) ELECTRICITY.—For purposes of this sec- 2024’’.
date of enactment of this Act. tion, the term ‘electricity’ means the energy pro- (b) BIODIESEL MIXTURE CREDIT.—
(4) ELECTION.—The amendments made by sub- duced by a qualified nuclear power facility from (1) IN GENERAL.—Section 6426(c)(6) is amended
section (g) shall apply to carbon oxide captured the conversion of nuclear fuel into electric by striking ‘‘December 31, 2022’’ and inserting
and disposed of after December 31, 2021. power. ‘‘December 31, 2024’’.
SEC. 13105. ZERO-EMISSION NUCLEAR POWER
‘‘(c) OTHER RULES.— (2) FUELS NOT USED FOR TAXABLE PURPOSES.—
PRODUCTION CREDIT.
‘‘(1) INFLATION ADJUSTMENT.—The 0.3 cent Section 6427(e)(6)(B) is amended by striking
amount in subsection (a)(1)(A) and the 2.5 cent ‘‘December 31, 2022’’ and inserting ‘‘December
(a) IN GENERAL.—Subpart D of part IV of sub-
amount in subsection (b)(2)(A)(ii)(II)(aa) shall 31, 2024’’.
chapter A of chapter 1 is amended by adding at
each be adjusted by multiplying such amount by (c) ALTERNATIVE FUEL CREDIT.—Section
the end the following new section:
the inflation adjustment factor (as determined 6426(d)(5) is amended by striking ‘‘December 31,
‘‘SEC. 45U.
ZERO-EMISSION NUCLEAR POWER under section 45(e)(2), as applied by substituting
PRODUCTION CREDIT.
2021’’ and inserting ‘‘December 31, 2024’’.
‘calendar year 2023’ for ‘calendar year 1992’ in (d) ALTERNATIVE FUEL MIXTURE CREDIT.—
‘‘(a) AMOUNT OF CREDIT.—For purposes of subparagraph (B) thereof) for the calendar year Section 6426(e)(3) is amended by striking ‘‘De-
section 38, the zero-emission nuclear power pro- in which the sale occurs. If the 0.3 cent amount cember 31, 2021’’ and inserting ‘‘December 31,
duction credit for any taxable year is an as increased under this paragraph is not a mul- 2024’’.
amount equal to the amount by which— tiple of 0.05 cent, such amount shall be rounded (e) PAYMENTS FOR ALTERNATIVE FUELS.—Sec-
‘‘(1) the product of— to the nearest multiple of 0.05 cent. If the 2.5 tion 6427(e)(6)(C) is amended by striking ‘‘De-
‘‘(A) 0.3 cents, multiplied by cent amount as increased under this paragraph cember 31, 2021’’ and inserting ‘‘December 31,
‘‘(B) the kilowatt hours of electricity— is not a multiple of 0.1 cent, such amount shall 2024’’.
‘‘(i) produced by the taxpayer at a qualified be rounded to the nearest multiple of 0.1 cent. (f) EFFECTIVE DATE.—The amendments made
nuclear power facility, and ‘‘(2) SPECIAL RULES.—Rules similar to the by this section shall apply to fuel sold or used
‘‘(ii) sold by the taxpayer to an unrelated per- rules of paragraphs (1), (3), (4), and (5) of sec- after December 31, 2021.
son during the taxable year, exceeds tion 45(e) shall apply for purposes of this sec- (g) SPECIAL RULE.—In the case of any alter-
‘‘(2) the reduction amount for such taxable tion. native fuel credit properly determined under
year. ‘‘(d) WAGE REQUIREMENTS.— section 6426(d) of the Internal Revenue Code of
‘‘(b) DEFINITIONS.— ‘‘(1) INCREASED CREDIT AMOUNT FOR QUALI- 1986 for the period beginning on January 1,
‘‘(1) QUALIFIED NUCLEAR POWER FACILITY.— FIED NUCLEAR POWER FACILITIES.—In the case of 2022, and ending with the close of the last cal-
For purposes of this section, the term ‘qualified any qualified nuclear power facility which sat- endar quarter beginning before the date of the
nuclear power facility’ means any nuclear facil- isfies the requirements of paragraph (2)(A), the enactment of this Act, such credit shall be al-
ity— amount of the credit determined under sub- lowed, and any refund or payment attributable
‘‘(A) which is owned by the taxpayer and section (a) shall be equal to such amount (as de- to such credit (including any payment under
which uses nuclear energy to produce elec- termined without regard to this sentence) multi- section 6427(e) of such Code) shall be made, only
tricity, plied by 5. in such manner as the Secretary of the Treasury
‘‘(B) which is not an advanced nuclear power ‘‘(2) PREVAILING WAGE REQUIREMENTS.— (or the Secretary’s delegate) shall provide. Such
facility as defined in subsection (d)(1) of section ‘‘(A) IN GENERAL.—The requirements described Secretary shall issue guidance within 30 days
45J, and in this subparagraph with respect to any quali- after the date of the enactment of this Act pro-
‘‘(C) which is placed in service before the date fied nuclear power facility are that the taxpayer viding for a one-time submission of claims cov-
of the enactment of this section. shall ensure that any laborers and mechanics ering periods described in the preceding sen-
‘‘(2) REDUCTION AMOUNT.— employed by the taxpayer or any contractor or tence. Such guidance shall provide for a 180-day
‘‘(A) IN GENERAL.—For purposes of this sec- subcontractor in the alteration or repair of such period for the submission of such claims (in such
tion, the term ‘reduction amount’ means, with facility shall be paid wages at rates not less manner as prescribed by such Secretary) to
respect to any qualified nuclear power facility than the prevailing rates for alteration or repair begin not later than 30 days after such guidance
for any taxable year, the amount equal to the of a similar character in the locality in which is issued. Such claims shall be paid by such Sec-
lesser of— such facility is located as most recently deter- retary not later than 60 days after receipt. If
‘‘(i) the amount determined under subsection mined by the Secretary of Labor, in accordance such Secretary has not paid pursuant to a claim
(a)(1), or with subchapter IV of chapter 31 of title 40, filed under this subsection within 60 days after
‘‘(ii) the amount equal to 16 percent of the ex- United States Code. the date of the filing of such claim, the claim
cess of— ‘‘(B) CORRECTION AND PENALTY RELATED TO shall be paid with interest from such date deter-
‘‘(I) subject to subparagraph (B), the gross re- FAILURE TO SATISFY WAGE REQUIREMENTS.— mined by using the overpayment rate and meth-
ceipts from any electricity produced by such fa- Rules similar to the rules of section 45(b)(7)(B) od under section 6621 of such Code.
cility (including any electricity services or prod- shall apply. SEC. 13202. EXTENSION OF SECOND GENERATION
ucts provided in conjunction with the electricity ‘‘(3) REGULATIONS AND GUIDANCE.—The Sec- BIOFUEL INCENTIVES.
produced by such facility) and sold to an unre- retary shall issue such regulations or other (a) IN GENERAL.—Section 40(b)(6)(J)(i) is
lated person during such taxable year, over guidance as the Secretary determines necessary amended by striking ‘‘2022’’ and inserting
‘‘(II) the amount equal to the product of— to carry out the purposes of this subsection, in- ‘‘2025’’.
‘‘(aa) 2.5 cents, multiplied by cluding regulations or other guidance which (b) EFFECTIVE DATE.—The amendment made
‘‘(bb) the amount determined under subsection provides for requirements for recordkeeping or by subsection (a) shall apply to qualified second
(a)(1)(B). information reporting for purposes of admin- generation biofuel production after December 31,
‘‘(B) TREATMENT OF CERTAIN RECEIPTS.— istering the requirements of this subsection. 2021.
‘‘(e) TERMINATION.—This section shall not
‘‘(i) IN GENERAL.—Subject to clause (iii), the SEC. 13203. SUSTAINABLE AVIATION FUEL CRED-
apply to taxable years beginning after December IT.
amount determined under subparagraph
31, 2032.’’. (a) IN GENERAL.—Subpart D of part IV of sub-
(A)(ii)(I) shall include any amount received by
(b) CONFORMING AMENDMENTS.—
the taxpayer during the taxable year with re- (1) Section 38(b) is amended— chapter A of chapter 1 is amended by inserting
spect to the qualified nuclear power facility (A) in paragraph (32), by striking ‘‘plus’’ at after section 40A the following new section:
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from a zero-emission credit program. For pur- the end, ‘‘SEC. 40B. SUSTAINABLE AVIATION FUEL CREDIT.
poses of determining the amount received during (B) in paragraph (33), by striking the period ‘‘(a) IN GENERAL.—For purposes of section 38,
such taxable year, the taxpayer shall take into at the end and inserting ‘‘, plus’’, and the sustainable aviation fuel credit determined
account any reductions required under such (C) by adding at the end the following new under this section for the taxable year is, with
program. paragraph: respect to any sale or use of a qualified mixture
‘‘(ii) ZERO-EMISSION CREDIT PROGRAM.—For ‘‘(34) the zero-emission nuclear power produc- which occurs during such taxable year, an
purposes of this subparagraph, the term ‘zero- tion credit determined under section 45U(a).’’. amount equal to the product of—
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H7606 CONGRESSIONAL RECORD — HOUSE August 12, 2022
‘‘(1) the number of gallons of sustainable transmission requirements established under the able aviation fuel (as defined in section 40B),’’
aviation fuel in such mixture, multiplied by Carbon Offsetting and Reduction Scheme for before ‘‘and every person producing second gen-
‘‘(2) the sum of— International Aviation described in paragraph eration biofuel’’.
‘‘(A) $1.25, plus (1) of subsection (e), or (D) The table of sections for subpart D of sub-
‘‘(B) the applicable supplementary amount ‘‘(ii) in the case of any methodology estab- chapter A of chapter 1 is amended by inserting
with respect to such sustainable aviation fuel. lished under paragraph (2) of such subsection, after the item relating to section 40A the fol-
‘‘(b) APPLICABLE SUPPLEMENTARY AMOUNT.— requirements similar to the requirements de- lowing new item:
For purposes of this section, the term ‘applicable scribed in clause (i), and ‘‘Sec. 40B. Sustainable aviation fuel credit.’’.
supplementary amount’ means, with respect to ‘‘(B) such other information with respect to (e) AMOUNT OF CREDIT INCLUDED IN GROSS IN-
any sustainable aviation fuel, an amount equal such fuel as the Secretary may require for pur- COME.—Section 87 is amended by striking ‘‘and’’
to $0.01 for each percentage point by which the poses of carrying out this section. in paragraph (1), by striking the period at the
lifecycle greenhouse gas emissions reduction ‘‘(g) COORDINATION WITH CREDIT AGAINST EX- end of paragraph (2) and inserting ‘‘, and’’, and
percentage with respect to such fuel exceeds 50 CISE TAX.—The amount of the credit determined by adding at the end the following new para-
percent. In no event shall the applicable supple- under this section with respect to any sustain- graph:
mentary amount determined under this sub- able aviation fuel shall, under rules prescribed ‘‘(3) the sustainable aviation fuel credit deter-
section exceed $0.50. by the Secretary, be properly reduced to take mined with respect to the taxpayer for the tax-
‘‘(c) QUALIFIED MIXTURE.—For purposes of into account any benefit provided with respect able year under section 40B(a).’’.
this section, the term ‘qualified mixture’ means to such sustainable aviation fuel solely by rea- (f) EFFECTIVE DATE.—The amendments made
a mixture of sustainable aviation fuel and ker- son of the application of section 6426 or 6427(e). by this section shall apply to fuel sold or used
osene if— ‘‘(h) TERMINATION.—This section shall not after December 31, 2022.
‘‘(1) such mixture is produced by the taxpayer apply to any sale or use after December 31, SEC. 13204. CLEAN HYDROGEN.
in the United States, 2024.’’.
‘‘(2) such mixture is used by the taxpayer (or (a) CREDIT FOR PRODUCTION OF CLEAN HY-
(b) CREDIT MADE PART OF GENERAL BUSINESS DROGEN.—
sold by the taxpayer for use) in an aircraft, CREDIT.— Section 38(b), as amended by the pre-
‘‘(3) such sale or use is in the ordinary course (1) IN GENERAL.—Subpart D of part IV of sub-
ceding provisions of this Act, is amended by chapter A of chapter 1, as amended by the pre-
of a trade or business of the taxpayer, and striking ‘‘plus’’ at the end of paragraph (33), by
‘‘(4) the transfer of such mixture to the fuel ceding provisions of this Act, is amended by
striking the period at the end of paragraph (34) adding at the end the following new section:
tank of such aircraft occurs in the United and inserting ‘‘, plus’’, and by inserting after
States. ‘‘SEC. 45V. CREDIT FOR PRODUCTION OF CLEAN
paragraph (34) the following new paragraph: HYDROGEN.
‘‘(d) SUSTAINABLE AVIATION FUEL.—
‘‘(35) the sustainable aviation fuel credit de- ‘‘(a) AMOUNT OF CREDIT.—For purposes of
‘‘(1) IN GENERAL.—For purposes of this sec-
termined under section 40B.’’. section 38, the clean hydrogen production credit
tion, the term ‘sustainable aviation fuel’ means
(c) COORDINATION WITH BIODIESEL INCEN- for any taxable year is an amount equal to the
liquid fuel, the portion of which is not kerosene,
TIVES.— product of—
which—
(1) IN GENERAL.—Section 40A(d)(1) is amended ‘‘(1) the kilograms of qualified clean hydrogen
‘‘(A) meets the requirements of—
‘‘(i) ASTM International Standard D7566, or by inserting ‘‘or 40B’’ after ‘‘determined under produced by the taxpayer during such taxable
‘‘(ii) the Fischer Tropsch provisions of ASTM section 40’’. year at a qualified clean hydrogen production
International Standard D1655, Annex A1, (2) CONFORMING AMENDMENT.—Section 40A(f) facility during the 10-year period beginning on
‘‘(B) is not derived from coprocessing an ap- is amended by striking paragraph (4). the date such facility was originally placed in
plicable material (or materials derived from an (d) SUSTAINABLE AVIATION FUEL ADDED TO service, multiplied by
applicable material) with a feedstock which is CREDIT FOR ALCOHOL FUEL, BIODIESEL, AND AL- ‘‘(2) the applicable amount (as determined
not biomass, TERNATIVE FUEL MIXTURES.— under subsection (b)) with respect to such hy-
‘‘(C) is not derived from palm fatty acid dis- (1) IN GENERAL.—Section 6426 is amended by drogen.
tillates or petroleum, and adding at the end the following new subsection: ‘‘(b) APPLICABLE AMOUNT.—
‘‘(D) has been certified in accordance with ‘‘(k) SUSTAINABLE AVIATION FUEL CREDIT.— ‘‘(1) IN GENERAL.—For purposes of subsection
subsection (e) as having a lifecycle greenhouse ‘‘(1) IN GENERAL.—For purposes of this sec- (a)(2), the applicable amount shall be an
gas emissions reduction percentage of at least 50 tion, the sustainable aviation fuel credit for the amount equal to the applicable percentage of
percent. taxable year is, with respect to any sale or use $0.60. If any amount as determined under the
‘‘(2) DEFINITIONS.—In this subsection— of a qualified mixture, an amount equal to the preceding sentence is not a multiple of 0.1 cent,
‘‘(A) APPLICABLE MATERIAL.—The term ‘appli- product of— such amount shall be rounded to the nearest
cable material’ means— ‘‘(A) the number of gallons of sustainable multiple of 0.1 cent.
‘‘(i) monoglycerides, diglycerides, and aviation fuel in such mixture, multiplied by ‘‘(2) APPLICABLE PERCENTAGE.—For purposes
triglycerides, ‘‘(B) the sum of— of paragraph (1), the applicable percentage
‘‘(ii) free fatty acids, and ‘‘(i) $1.25, plus shall be determined as follows:
‘‘(iii) fatty acid esters. ‘‘(ii) the applicable supplementary amount ‘‘(A) In the case of any qualified clean hydro-
‘‘(B) BIOMASS.—The term ‘biomass’ has the with respect to such sustainable aviation fuel. gen which is produced through a process that
same meaning given such term in section ‘‘(2) DEFINITIONS.—Any term used in this sub- results in a lifecycle greenhouse gas emissions
45K(c)(3). section which is also used in section 40B shall rate of—
‘‘(e) LIFECYCLE GREENHOUSE GAS EMISSIONS have the meaning given such term by section ‘‘(i) not greater than 4 kilograms of CO2e per
REDUCTION PERCENTAGE.—For purposes of this 40B. kilogram of hydrogen, and
section, the term ‘lifecycle greenhouse gas emis- ‘‘(3) REGISTRATION REQUIREMENT.—For pur- ‘‘(ii) not less than 2.5 kilograms of CO2e per
sions reduction percentage’ means, with respect poses of this subsection, rules similar to the kilogram of hydrogen,
to any sustainable aviation fuel, the percentage rules of section 40B(f) shall apply.’’. the applicable percentage shall be 20 percent.
reduction in lifecycle greenhouse gas emissions (2) CONFORMING AMENDMENTS.— ‘‘(B) In the case of any qualified clean hydro-
achieved by such fuel as compared with petro- (A) Section 6426 is amended— gen which is produced through a process that
leum-based jet fuel, as defined in accordance (i) in subsection (a)(1), by striking ‘‘and (e)’’ results in a lifecycle greenhouse gas emissions
with— and inserting ‘‘(e), and (k)’’, and rate of—
‘‘(1) the most recent Carbon Offsetting and (ii) in subsection (h), by striking ‘‘under sec- ‘‘(i) less than 2.5 kilograms of CO2e per kilo-
Reduction Scheme for International Aviation tion 40 or 40A’’ and inserting ‘‘under section 40, gram of hydrogen, and
which has been adopted by the International 40A, or 40B’’. ‘‘(ii) not less than 1.5 kilograms of CO2e per
Civil Aviation Organization with the agreement (B) Section 6427(e) is amended— kilogram of hydrogen,
of the United States, or (i) in the heading, by striking ‘‘OR ALTER- the applicable percentage shall be 25 percent.
‘‘(2) any similar methodology which satisfies NATIVE FUEL’’ and inserting, ‘‘ALTERNATIVE ‘‘(C) In the case of any qualified clean hydro-
the criteria under section 211(o)(1)(H) of the FUEL, OR SUSTAINABLE AVIATION FUEL’’, gen which is produced through a process that
Clean Air Act (42 U.S.C. 7545(o)(1)(H)), as in ef- (ii) in paragraph (1), by inserting ‘‘or the sus- results in a lifecycle greenhouse gas emissions
fect on the date of enactment of this section. tainable aviation fuel mixture credit’’ after ‘‘al- rate of—
‘‘(f) REGISTRATION OF SUSTAINABLE AVIATION ternative fuel mixture credit’’, and ‘‘(i) less than 1.5 kilograms of CO2e per kilo-
FUEL PRODUCERS.—No credit shall be allowed (iii) in paragraph (6)— gram of hydrogen, and
under this section with respect to any sustain- (I) in subparagraph (C), by striking ‘‘and’’ at ‘‘(ii) not less than 0.45 kilograms of CO2e per
able aviation fuel unless the producer or im- the end, kilogram of hydrogen,
porter of such fuel— (II) in subparagraph (D), by striking the pe- the applicable percentage shall be 33.4 percent.
‘‘(1) is registered with the Secretary under sec- riod at the end and inserting ‘‘, and’’, and ‘‘(D) In the case of any qualified clean hydro-
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tion 4101, and (III) by adding at the end the following new gen which is produced through a process that
‘‘(2) provides— subparagraph: results in a lifecycle greenhouse gas emissions
‘‘(A) certification (in such form and manner ‘‘(E) any qualified mixture of sustainable rate of less than 0.45 kilograms of CO2e per kilo-
as the Secretary shall prescribe) from an unre- aviation fuel (as defined in section 6426(k)(3)) gram of hydrogen, the applicable percentage
lated party demonstrating compliance with— sold or used after December 31, 2024.’’. shall be 100 percent.
‘‘(i) any general requirements, supply chain (C) Section 4101(a)(1) is amended by inserting ‘‘(3) INFLATION ADJUSTMENT.—The $0.60
traceability requirements, and information ‘‘every person producing or importing sustain- amount in paragraph (1) shall be adjusted by
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7607
multiplying such amount by the inflation ad- ‘‘(A) A facility— (A) Section 38(b), as amended by the pre-
justment factor (as determined under section ‘‘(i) the construction of which begins prior to ceding provisions of this Act, is amended—
45(e)(2), determined by substituting ‘2022’ for the date that is 60 days after the Secretary pub- (i) in paragraph (34), by striking ‘‘plus’’ at
‘1992’ in subparagraph (B) thereof) for the cal- lishes guidance with respect to the requirements the end,
endar year in which the qualified clean hydro- of paragraphs (3)(A) and (4), and (ii) in paragraph (35), by striking the period
gen is produced. If any amount as increased ‘‘(ii) which meets the requirements of para- at the end and inserting ‘‘, plus’’, and
under the preceding sentence is not a multiple of graph (3)(A) with respect to alteration or repair (iii) by adding at the end the following new
0.1 cent, such amount shall be rounded to the of such facility which occurs after such date. paragraph:
nearest multiple of 0.1 cent. ‘‘(B) A facility which satisfies the require- ‘‘(36) the clean hydrogen production credit de-
‘‘(c) DEFINITIONS.—For purposes of this sec- ments of paragraphs (3)(A) and (4). termined under section 45V(a).’’.
tion— ‘‘(3) PREVAILING WAGE REQUIREMENTS.— (B) The table of sections for subpart D of part
‘‘(1) LIFECYCLE GREENHOUSE GAS EMISSIONS.— ‘‘(A) IN GENERAL.—The requirements described IV of subchapter A of chapter 1, as amended by
in this subparagraph with respect to any quali- the preceding provisions of this Act, is amended
‘‘(A) IN GENERAL.—Subject to subparagraph fied clean hydrogen production facility are that by adding at the end the following new item:
(B), the term ‘lifecycle greenhouse gas emis- the taxpayer shall ensure that any laborers and
‘‘Sec. 45V. Credit for production of clean hy-
sions’ has the same meaning given such term mechanics employed by the taxpayer or any
drogen.’’.
under subparagraph (H) of section 211(o)(1) of contractor or subcontractor in—
(5) EFFECTIVE DATES.—
the Clean Air Act (42 U.S.C. 7545(o)(1)), as in ef- ‘‘(i) the construction of such facility, and
(A) IN GENERAL.—The amendments made by
fect on the date of enactment of this section. ‘‘(ii) with respect to any taxable year, for any
‘‘(B) GREET MODEL.—The term ‘lifecycle paragraphs (1) and (4) of this subsection shall
portion of such taxable year which is within the
greenhouse gas emissions’ shall only include apply to hydrogen produced after December 31,
period described in subsection (a)(2), the alter-
emissions through the point of production (well- 2022.
ation or repair of such facility,
to-gate), as determined under the most recent (B) CREDIT REDUCED FOR TAX-EXEMPT
shall be paid wages at rates not less than the
BONDS.—The amendment made by paragraph (2)
Greenhouse gases, Regulated Emissions, and prevailing rates for construction, alteration, or
Energy use in Transportation model (commonly shall apply to facilities the construction of
repair of a similar character in the locality in
referred to as the ‘GREET model’) developed by which begins after the date of enactment of this
which such facility is located as most recently
Argonne National Laboratory, or a successor Act.
determined by the Secretary of Labor, in accord-
model (as determined by the Secretary). (C) MODIFICATION OF EXISTING FACILITIES.—
ance with subchapter IV of chapter 31 of title
‘‘(2) QUALIFIED CLEAN HYDROGEN.— The amendment made by paragraph (3) shall
40, United States Code. For purposes of deter-
‘‘(A) IN GENERAL.—The term ‘qualified clean apply to modifications made after December 31,
mining an increased credit amount under para-
hydrogen’ means hydrogen which is produced 2022.
graph (1) for a taxable year, the requirement
through a process that results in a lifecycle (b) CREDIT FOR ELECTRICITY PRODUCED FROM
under clause (ii) of this subparagraph is applied
greenhouse gas emissions rate of not greater RENEWABLE RESOURCES ALLOWED IF ELEC-
to such taxable year in which the alteration or
than 4 kilograms of CO2e per kilogram of hydro- TRICITY IS USED TO PRODUCE CLEAN HYDRO-
repair of qualified facility occurs.
gen. GEN.—
‘‘(B) CORRECTION AND PENALTY RELATED TO
‘‘(B) ADDITIONAL REQUIREMENTS.—Such term FAILURE TO SATISFY WAGE REQUIREMENTS.—
(1) IN GENERAL.—Section 45(e), as amended by
shall not include any hydrogen unless— Rules similar to the rules of section 45(b)(7)(B) the preceding provisions of this Act, is amended
‘‘(i) such hydrogen is produced— shall apply. by adding at the end the following new para-
‘‘(I) in the United States (as defined in section ‘‘(4) APPRENTICESHIP REQUIREMENTS.—Rules graph:
638(1)) or a possession of the United States (as similar to the rules of section 45(b)(8) shall ‘‘(13) SPECIAL RULE FOR ELECTRICITY USED AT
defined in section 638(2)), A QUALIFIED CLEAN HYDROGEN PRODUCTION FA-
apply.
‘‘(II) in the ordinary course of a trade or busi- ‘‘(5) REGULATIONS AND GUIDANCE.—The Sec- CILITY.—Electricity produced by the taxpayer
ness of the taxpayer, and retary shall issue such regulations or other shall be treated as sold by such taxpayer to an
‘‘(III) for sale or use, and unrelated person during the taxable year if—
guidance as the Secretary determines necessary
‘‘(ii) the production and sale or use of such ‘‘(A) such electricity is used during such tax-
to carry out the purposes of this subsection, in-
hydrogen is verified by an unrelated party. able year by the taxpayer or a person related to
‘‘(C) PROVISIONAL EMISSIONS RATE.—In the cluding regulations or other guidance which
provides for requirements for recordkeeping or the taxpayer at a qualified clean hydrogen pro-
case of any hydrogen for which a lifecycle duction facility (as defined in section 45V(c)(3))
greenhouse gas emissions rate has not been de- information reporting for purposes of admin-
istering the requirements of this subsection. to produce qualified clean hydrogen (as defined
termined for purposes of this section, a taxpayer in section 45V(c)(2)), and
‘‘(f) REGULATIONS.—Not later than 1 year
producing such hydrogen may file a petition ‘‘(B) such use and production is verified (in
after the date of enactment of this section, the
with the Secretary for determination of the such form or manner as the Secretary may pre-
Secretary shall issue regulations or other guid-
lifecycle greenhouse gas emissions rate with re- scribe) by an unrelated third party.’’.
ance to carry out the purposes of this section,
spect to such hydrogen. (2) SIMILAR RULE FOR ZERO-EMISSION NUCLEAR
‘‘(3) QUALIFIED CLEAN HYDROGEN PRODUCTION including regulations or other guidance for de-
termining lifecycle greenhouse gas emissions.’’. POWER PRODUCTION CREDIT.—Subsection (c)(2)
FACILITY.—The term ‘qualified clean hydrogen of section 45U, as added by section 13105 of this
production facility’ means a facility— (2) CREDIT REDUCED FOR TAX-EXEMPT
BONDS.—Section 45V(d), as added by this sec- Act, is amended by striking ‘‘and (5)’’ and in-
‘‘(A) owned by the taxpayer, serting ‘‘(5), and (13)’’.
‘‘(B) which produces qualified clean hydro- tion, is amended by adding at the end the fol-
lowing new paragraph: (3) EFFECTIVE DATE.—The amendments made
gen, and
‘‘(3) CREDIT REDUCED FOR TAX-EXEMPT by this subsection shall apply to electricity pro-
‘‘(C) the construction of which begins before
BONDS.—Rules similar to the rule under section duced after December 31, 2022.
January 1, 2033.
‘‘(d) SPECIAL RULES.— 45(b)(3) shall apply for purposes of this sec- (c) ELECTION TO TREAT CLEAN HYDROGEN
‘‘(1) TREATMENT OF FACILITIES OWNED BY tion.’’. PRODUCTION FACILITIES AS ENERGY PROP-
MORE THAN 1 TAXPAYER.—Rules similar to the (3) MODIFICATION OF EXISTING FACILITIES.— ERTY.—
rules section 45(e)(3) shall apply for purposes of Section 45V(d), as added and amended by the (1) IN GENERAL.—Section 48(a), as amended by
this section. preceding provisions of this section, is amended the preceding provisions of this Act, is amend-
‘‘(2) COORDINATION WITH CREDIT FOR CARBON by adding at the end the following new para- ed—
OXIDE SEQUESTRATION.—No credit shall be al- graph: (A) by redesignating paragraph (15) as para-
lowed under this section with respect to any ‘‘(4) MODIFICATION OF EXISTING FACILITIES.— graph (16), and
qualified clean hydrogen produced at a facility For purposes of subsection (a)(1), in the case of (B) by inserting after paragraph (14) the fol-
which includes carbon capture equipment for any facility which— lowing new paragraph:
which a credit is allowed to any taxpayer under ‘‘(A) was originally placed in service before ‘‘(15) ELECTION TO TREAT CLEAN HYDROGEN
section 45Q for the taxable year or any prior January 1, 2023, and, prior to the modification PRODUCTION FACILITIES AS ENERGY PROPERTY.—
taxable year. described in subparagraph (B), did not produce
‘‘(e) INCREASED CREDIT AMOUNT FOR QUALI- qualified clean hydrogen, and ‘‘(A) IN GENERAL.—In the case of any quali-
FIED CLEAN HYDROGEN PRODUCTION FACILI- ‘‘(B) after the date such facility was origi- fied property (as defined in paragraph (5)(D))
TIES.— nally placed in service— which is part of a specified clean hydrogen pro-
‘‘(1) IN GENERAL.—In the case of any qualified ‘‘(i) is modified to produce qualified clean hy- duction facility—
clean hydrogen production facility which satis- drogen, and ‘‘(i) such property shall be treated as energy
fies the requirements of paragraph (2), the ‘‘(ii) amounts paid or incurred with respect to property for purposes of this section, and
amount of the credit determined under sub- such modification are properly chargeable to ‘‘(ii) the energy percentage with respect to
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section (a) with respect to qualified clean hydro- capital account of the taxpayer, such property is—
gen described in subsection (b)(2) shall be equal such facility shall be deemed to have been origi- ‘‘(I) in the case of a facility which is designed
to such amount (determined without regard to nally placed in service as of the date that the and reasonably expected to produce qualified
this sentence) multiplied by 5. property required to complete the modification clean hydrogen which is described in a subpara-
‘‘(2) REQUIREMENTS.—A facility meets the re- described in subparagraph (B) is placed in serv- graph (A) of section 45V(b)(2), 1.2 percent,
quirements of this paragraph if it is one of the ice.’’. ‘‘(II) in the case of a facility which is de-
following: (4) CONFORMING AMENDMENTS.— signed and reasonably expected to produce
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H7608 CONGRESSIONAL RECORD — HOUSE August 12, 2022
qualified clean hydrogen which is described in a ‘‘(a) ALLOWANCE OF CREDIT.—In the case of Such term includes expenditures for labor costs
subparagraph (B) of such section, 1.5 percent, an individual, there shall be allowed as a credit properly allocable to the onsite preparation, as-
‘‘(III) in the case of a facility which is de- against the tax imposed by this chapter for the sembly, or original installation of the property.
signed and reasonably expected to produce taxable year an amount equal to 30 percent of ‘‘(2) QUALIFIED ENERGY PROPERTY.—The term
qualified clean hydrogen which is described in a the sum of— ‘qualified energy property’ means any of the fol-
subparagraph (C) of such section, 2 percent, ‘‘(1) the amount paid or incurred by the tax- lowing:
and payer for qualified energy efficiency improve- ‘‘(A) Any of the following which meet or ex-
‘‘(IV) in the case of a facility which is de- ments installed during such taxable year, and ceed the highest efficiency tier (not including
signed and reasonably expected to produce ‘‘(2) the amount of the residential energy any advanced tier) established by the Consor-
qualified clean hydrogen which is described in property expenditures paid or incurred by the tium for Energy Efficiency which is in effect as
subparagraph (D) of such section, 6 percent. taxpayer during such taxable year.’’. of the beginning of the calendar year in which
‘‘(B) DENIAL OF PRODUCTION CREDIT.—No (c) APPLICATION OF ANNUAL LIMITATION IN the property is placed in service:
credit shall be allowed under section 45V or sec- LIEU OF LIFETIME LIMITATION.—Section 25C(b) ‘‘(i) An electric or natural gas heat pump
tion 45Q for any taxable year with respect to is amended to read as follows: water heater.
any specified clean hydrogen production facility ‘‘(b) LIMITATIONS.— ‘‘(ii) An electric or natural gas heat pump.
or any carbon capture equipment included at ‘‘(1) IN GENERAL.—The credit allowed under ‘‘(iii) A central air conditioner.
this section with respect to any taxpayer for ‘‘(iv) A natural gas, propane, or oil water
such facility.
any taxable year shall not exceed $1,200. heater.
‘‘(C) SPECIFIED CLEAN HYDROGEN PRODUCTION
‘‘(2) ENERGY PROPERTY.—The credit allowed ‘‘(v) A natural gas, propane, or oil furnace or
FACILITY.—For purposes of this paragraph, the
under this section by reason of subsection (a)(2) hot water boiler.
term ‘specified clean hydrogen production facil- ‘‘(B) A biomass stove or boiler which—
ity’ means any qualified clean hydrogen pro- with respect to any taxpayer for any taxable
year shall not exceed, with respect to any item ‘‘(i) uses the burning of biomass fuel to heat
duction facility (as defined in section a dwelling unit located in the United States and
45V(c)(3))— of qualified energy property, $600.
‘‘(3) WINDOWS.—The credit allowed under this used as a residence by the taxpayer, or to heat
‘‘(i) which is placed in service after December water for use in such a dwelling unit, and
section by reason of subsection (a)(1) with re-
31, 2022, ‘‘(ii) has a thermal efficiency rating of at least
spect to any taxpayer for any taxable year shall
‘‘(ii) with respect to which— 75 percent (measured by the higher heating
not exceed, in the aggregate with respect to all
‘‘(I) no credit has been allowed under section value of the fuel).
exterior windows and skylights, $600.
45V or 45Q, and ‘‘(C) Any oil furnace or hot water boiler
‘‘(4) DOORS.—The credit allowed under this
‘‘(II) the taxpayer makes an irrevocable elec- which—
section by reason of subsection (a)(1) with re-
tion to have this paragraph apply, and ‘‘(i) is placed in service after December 31,
spect to any taxpayer for any taxable year shall
‘‘(iii) for which an unrelated third party has 2022, and before January 1, 2027, and—
not exceed—
verified (in such form or manner as the Sec- ‘‘(A) $250 in the case of any exterior door, and ‘‘(I) meets or exceeds 2021 Energy Star effi-
retary may prescribe) that such facility pro- ‘‘(B) $500 in the aggregate with respect to all ciency criteria, and
duces hydrogen through a process which results ‘‘(II) is rated by the manufacturer for use
exterior doors.
in lifecycle greenhouse gas emissions which are ‘‘(5) HEAT PUMP AND HEAT PUMP WATER HEAT- with fuel blends at least 20 percent of the vol-
consistent with the hydrogen that such facility ERS; BIOMASS STOVES AND BOILERS.—Notwith-
ume of which consists of an eligible fuel, or
was designed and expected to produce under ‘‘(ii) is placed in service after December 31,
standing paragraphs (1) and (2), the credit al-
subparagraph (A)(ii). 2026, and—
lowed under this section by reason of subsection
‘‘(D) QUALIFIED CLEAN HYDROGEN.—For pur- ‘‘(I) achieves an annual fuel utilization effi-
(a)(2) with respect to any taxpayer for any tax-
poses of this paragraph, the term ‘qualified ciency rate of not less than 90, and
able year shall not, in the aggregate, exceed ‘‘(II) is rated by the manufacturer for use
clean hydrogen’ has the meaning given such $2,000 with respect to amounts paid or incurred
term by section 45V(c)(2). with fuel blends at least 50 percent of the vol-
for property described in clauses (i) and (ii) of ume of which consists of an eligible fuel.
‘‘(E) REGULATIONS.—The Secretary shall issue subsection (d)(2)(A) and in subsection
such regulations or other guidance as the Sec- ‘‘(D) Any improvement to, or replacement of,
(d)(2)(B).’’. a panelboard, sub-panelboard, branch circuits,
retary determines necessary to carry out the (d) MODIFICATIONS RELATED TO QUALIFIED
purposes of this section, including regulations or feeders which—
ENERGY EFFICIENCY IMPROVEMENTS.— ‘‘(i) is installed in a manner consistent with
or other guidance which recaptures so much of (1) STANDARDS FOR ENERGY EFFICIENT BUILD- the National Electric Code,
any credit allowed under this section as exceeds ING ENVELOPE COMPONENTS.—Section 25C(c)(2) is ‘‘(ii) has a load capacity of not less than 200
the amount of the credit which would have been amended by striking ‘‘meets—’’ and all that fol- amps,
allowed if the expected production were con- lows through the period at the end and insert- ‘‘(iii) is installed in conjunction with—
sistent with the actual verified production (or ing the following: ‘‘meets— ‘‘(I) any qualified energy efficiency improve-
all of the credit so allowed in the absence of ‘‘(A) in the case of an exterior window or sky- ments, or
such verification).’’. light, Energy Star most efficient certification re- ‘‘(II) any qualified energy property described
(2) CONFORMING AMENDMENT.—Paragraph quirements, in subparagraphs (A) through (C) for which a
(9)(A)(i) of section 48(a), as added by section ‘‘(B) in the case of an exterior door, applica- credit is allowed under this section for expendi-
13102, is amended by inserting ‘‘and paragraph ble Energy Star requirements, and tures with respect to such property, and
(15)’’ after ‘‘paragraphs (1) through (8)’’. ‘‘(C) in the case of any other component, the ‘‘(iv) enables the installation and use of any
(3) EFFECTIVE DATE.—The amendments made prescriptive criteria for such component estab- property described in subclause (I) or (II) of
by this subsection shall apply to property placed lished by the most recent International Energy clause (iii).
in service after December 31, 2022, and, for any Conservation Code standard in effect as of the ‘‘(3) ELIGIBLE FUEL.—For purposes of para-
property the construction of which begins prior beginning of the calendar year which is 2 years graph (2), the term ‘eligible fuel’ means—
to January 1, 2023, only to the extent of the prior to the calendar year in which such compo- ‘‘(A) biodiesel and renewable diesel (within
basis thereof attributable to the construction, nent is placed in service.’’. the meaning of section 40A), and
reconstruction, or erection after December 31, (2) ROOFS NOT TREATED AS BUILDING ENVE- ‘‘(B) second generation biofuel (within the
2022. LOPE COMPONENTS.—Section 25C(c)(3) is amend- meaning of section 40).’’.
(d) TERMINATION OF EXCISE TAX CREDIT FOR ed by adding ‘‘and’’ at the end of subparagraph (f) HOME ENERGY AUDITS.—
HYDROGEN.— (B), by striking ‘‘, and’’ at the end of subpara- (1) IN GENERAL.—Section 25C(a), as amended
(1) IN GENERAL.—Section 6426(d)(2) is amended graph (C) and inserting a period, and by strik- by subsection (b), is amended by striking ‘‘and’’
by striking subparagraph (D) and by redesig- ing subparagraph (D). at the end of paragraph (1), by striking the pe-
nating subparagraphs (E), (F), and (G) as sub- (3) AIR SEALING INSULATION ADDED TO DEFINI- riod at the end of paragraph (2) and inserting ‘‘,
paragraphs (D), (E), and (F), respectively. TION OF BUILDING ENVELOPE COMPONENT.—Sec- and’’, and by adding at the end the following
(2) CONFORMING AMENDMENT.—Section tion 25C(c)(3)(A) is amended by inserting ‘‘, in- new paragraph:
6426(e)(2) is amended by striking ‘‘(F)’’ and in- cluding air sealing material or system,’’ after ‘‘(3) the amount paid or incurred by the tax-
serting ‘‘(E)’’. ‘‘material or system’’. payer during the taxable year for home energy
(3) EFFECTIVE DATE.—The amendments made (e) MODIFICATION OF RESIDENTIAL ENERGY audits.’’.
by this subsection shall apply to fuel sold or PROPERTY EXPENDITURES.—Section 25C(d) is (2) LIMITATION.—Section 25C(b), as amended
used after December 31, 2022. amended to read as follows: by subsection (c), is amended adding at the end
‘‘(d) RESIDENTIAL ENERGY PROPERTY EXPEND- the following new paragraph:
PART 3—CLEAN ENERGY AND EFFICIENCY ITURES.—For purposes of this section— ‘‘(6) HOME ENERGY AUDITS.—
INCENTIVES FOR INDIVIDUALS ‘‘(1) IN GENERAL.—The term ‘residential en- ‘‘(A) DOLLAR LIMITATION.—The amount of the
SEC. 13301. EXTENSION, INCREASE, AND MODI- ergy property expenditures’ means expenditures credit allowed under this section by reason of
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FICATIONS OF NONBUSINESS EN- made by the taxpayer for qualified energy prop- subsection (a)(3) shall not exceed $150.
ERGY PROPERTY CREDIT. erty which is— ‘‘(B) SUBSTANTIATION REQUIREMENT.—No
(a) EXTENSION OF CREDIT.—Section 25C(g)(2) ‘‘(A) installed on or in connection with a credit shall be allowed under this section by rea-
is amended by striking ‘‘December 31, 2021’’ and dwelling unit located in the United States and son of subsection (a)(3) unless the taxpayer in-
inserting ‘‘December 31, 2032’’. used as a residence by the taxpayer, and cludes with the taxpayer’s return of tax such in-
(b) ALLOWANCE OF CREDIT.—Section 25C(a) is ‘‘(B) originally placed in service by the tax- formation or documentation as the Secretary
amended to read as follows: payer. may require.’’.
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7609
(3) HOME ENERGY AUDITS.— ‘‘(4) SPECIFIED PROPERTY.—For purposes of (c) CONFORMING AMENDMENTS.—
(A) IN GENERAL.—Section 25C is amended by this subsection, the term ‘specified property’ (1) Section 25D(d)(3) is amended by inserting
redesignating subsections (e), (f), and (g), as means any qualified energy property and any ‘‘, without regard to subparagraph (D) thereof’’
subsections (f), (g), and (h), respectively, and by property described in subparagraph (B) or (C) of after ‘‘section 48(c)(1)’’.
inserting after subsection (d) the following new subsection (c)(3).’’. (2) The heading for section 25D is amended by
subsection: (2) OMISSION OF CORRECT PRODUCT IDENTI- striking ‘‘ENERGY EFFICIENT PROPERTY’’ and in-
‘‘(e) HOME ENERGY AUDITS.—For purposes of FICATION NUMBER TREATED AS MATHEMATICAL serting ‘‘CLEAN ENERGY CREDIT’’.
this section, the term ‘home energy audit’ means OR CLERICAL ERROR.—Section 6213(g)(2), as (3) The table of sections for subpart A of part
an inspection and written report with respect to amended by the preceding provisions of this Act, IV of subchapter A of chapter 1 is amended by
a dwelling unit located in the United States and is amended— striking the item relating to section 25D and in-
owned or used by the taxpayer as the taxpayer’s (A) in subparagraph (Q), by striking ‘‘and’’ at serting the following:
principal residence (within the meaning of sec- the end, ‘‘Sec. 25D. Residential clean energy credit.’’.
tion 121) which— (B) in subparagraph (R), by striking the pe- (d) EFFECTIVE DATES.—
‘‘(1) identifies the most significant and cost-ef- riod at the end and inserting ‘‘, and’’, and (1) IN GENERAL.—Except as provided in para-
fective energy efficiency improvements with re- (C) by inserting after subparagraph (R) the graph (2), the amendments made by this section
spect to such dwelling unit, including an esti- following: shall apply to expenditures made after December
mate of the energy and cost savings with respect ‘‘(S) an omission of a correct product identi- 31, 2021.
to each such improvement, and fication number required under section 25C(h) (2) RESIDENTIAL CLEAN ENERGY CREDIT FOR
‘‘(2) is conducted and prepared by a home en- (relating to credit for nonbusiness energy prop- BATTERY STORAGE TECHNOLOGY; CERTAIN EX-
ergy auditor that meets the certification or other erty) to be included on a return.’’. PENDITURES DISALLOWED.—The amendments
requirements specified by the Secretary in regu- (h) ENERGY EFFICIENT HOME IMPROVEMENT made by subsection (b) shall apply to expendi-
lations or other guidance (as prescribed by the CREDIT.— tures made after December 31, 2022.
Secretary not later than 365 days after the date (1) IN GENERAL.—The heading for section 25C SEC. 13303. ENERGY EFFICIENT COMMERCIAL
of the enactment of this subsection).’’. is amended by striking ‘‘NONBUSINESS ENERGY BUILDINGS DEDUCTION.
(B) CONFORMING AMENDMENT.—Section PROPERTY’’ and inserting ‘‘ENERGY EFFICIENT
(a) IN GENERAL.—
1016(a)(33) is amended by striking ‘‘section HOME IMPROVEMENT CREDIT’’.
(1) MAXIMUM AMOUNT OF DEDUCTION.—Sub-
25C(f)’’ and inserting ‘‘section 25C(g)’’. (2) CLERICAL AMENDMENT.—The table of sec- section (b) of section 179D is amended to read as
(4) LACK OF SUBSTANTIATION TREATED AS tions for subpart A of part IV of subchapter A follows:
MATHEMATICAL OR CLERICAL ERROR.—Section of chapter 1 is amended by striking the item re- ‘‘(b) MAXIMUM AMOUNT OF DEDUCTION.—
6213(g)(2) is amended— lating to section 25C and inserting after the item ‘‘(1) IN GENERAL.—The deduction under sub-
(A) in subparagraph (P), by striking ‘‘and’’ at relating to section 25B the following item: section (a) with respect to any building for any
the end, ‘‘Sec. 25C. Energy efficient home improvement taxable year shall not exceed the excess (if any)
(B) in subparagraph (Q), by striking the pe-
credit.’’. of—
riod at the end and inserting ‘‘, and’’, and (i) EFFECTIVE DATES.—
(C) by inserting after subparagraph (Q) the ‘‘(A) the product of—
(1) IN GENERAL.—Except as otherwise provided ‘‘(i) the applicable dollar value, and
following:
by this subsection, the amendments made by this ‘‘(ii) the square footage of the building, over
‘‘(R) an omission of information or docu-
section shall apply to property placed in service ‘‘(B) the aggregate amount of the deductions
mentation required under section 25C(b)(6)(B)
after December 31, 2022. under subsections (a) and (f) with respect to the
(relating to home energy audits) to be included
(2) EXTENSION OF CREDIT.—The amendments building for the 3 taxable years immediately pre-
on a return.’’.
made by subsection (a) shall apply to property ceding such taxable year (or, in the case of any
(g) IDENTIFICATION NUMBER REQUIREMENT.—
placed in service after December 31, 2021. such deduction allowable to a person other than
(1) IN GENERAL.—Section 25C, as amended by
(3) IDENTIFICATION NUMBER REQUIREMENT.— the taxpayer, for any taxable year ending dur-
this section, is amended by redesignating sub-
The amendments made by subsection (g) shall ing the 4-taxable-year period ending with such
section (h) as subsection (i) and by inserting
apply to property placed in service after Decem- taxable year).
after subsection (g) the following new sub-
ber 31, 2024. ‘‘(2) APPLICABLE DOLLAR VALUE.—For pur-
section:
‘‘(h) PRODUCT IDENTIFICATION NUMBER RE- SEC. 13302. RESIDENTIAL CLEAN ENERGY CREDIT. poses of paragraph (1)(A)(i), the applicable dol-
QUIREMENT.— (a) EXTENSION OF CREDIT.— lar value shall be an amount equal to $0.50 in-
‘‘(1) IN GENERAL.—No credit shall be allowed (1) IN GENERAL.—Section 25D(h) is amended creased (but not above $1.00) by $0.02 for each
under subsection (a) with respect to any item of by striking ‘‘December 31, 2023’’ and inserting percentage point by which the total annual en-
specified property placed in service after Decem- ‘‘December 31, 2034’’. ergy and power costs for the building are cer-
ber 31, 2024, unless— (2) APPLICATION OF PHASEOUT.—Section tified to be reduced by a percentage greater than
‘‘(A) such item is produced by a qualified 25D(g) is amended— 25 percent.
manufacturer, and (A) in paragraph (2), by striking ‘‘before Jan- ‘‘(3) INCREASED DEDUCTION AMOUNT FOR CER-
‘‘(B) the taxpayer includes the qualified prod- uary 1, 2023, 26 percent, and’’ and inserting TAIN PROPERTY.—
uct identification number of such item on the re- ‘‘before January 1, 2022, 26 percent,’’, and ‘‘(A) IN GENERAL.—In the case of any property
turn of tax for the taxable year. (B) by striking paragraph (3) and by inserting which satisfies the requirements of subpara-
‘‘(2) QUALIFIED PRODUCT IDENTIFICATION NUM- after paragraph (2) the following new para- graph (B), paragraph (2) shall be applied by
BER.—For purposes of this section, the term graphs: substituting ‘$2.50’ for ‘$0.50’, ‘$.10’ for ‘$.02’,
‘qualified product identification number’ means, ‘‘(3) in the case of property placed in service and ‘$5.00’ for ‘$1.00’.
with respect to any item of specified property, after December 31, 2021, and before January 1, ‘‘(B) PROPERTY REQUIREMENTS.—In the case
the product identification number assigned to 2033, 30 percent, of any energy efficient commercial building
such item by the qualified manufacturer pursu- ‘‘(4) in the case of property placed in service property, energy efficient building retrofit prop-
ant to the methodology referred to in paragraph after December 31, 2032, and before January 1, erty, or property installed pursuant to a quali-
(3). 2034, 26 percent, and fied retrofit plan, such property shall meet the
‘‘(3) QUALIFIED MANUFACTURER.—For pur- ‘‘(5) in the case of property placed in service requirements of this subparagraph if —
poses of this section, the term ‘qualified manu- after December 31, 2033, and before January 1, ‘‘(i) installation of such property begins prior
facturer’ means any manufacturer of specified 2035, 22 percent.’’. to the date that is 60 days after the Secretary
property which enters into an agreement with (b) RESIDENTIAL CLEAN ENERGY CREDIT FOR publishes guidance with respect to the require-
the Secretary which provides that such manu- BATTERY STORAGE TECHNOLOGY; CERTAIN EX- ments of paragraphs (4)(A) and (5), or
facturer will— PENDITURES DISALLOWED.— ‘‘(ii) installation of such property satisfies the
‘‘(A) assign a product identification number to (1) ALLOWANCE OF CREDIT.—Paragraph (6) of requirements of paragraphs (4)(A) and (5).
each item of specified property produced by section 25D(a) is amended to read as follows: ‘‘(4) PREVAILING WAGE REQUIREMENTS.—
such manufacturer utilizing a methodology that ‘‘(6) the qualified battery storage technology ‘‘(A) IN GENERAL.—The requirements described
will ensure that such number (including any al- expenditures,’’. in this subparagraph with respect to any prop-
phanumeric) is unique to each such item (by uti- (2) DEFINITION OF QUALIFIED BATTERY STOR- erty are that the taxpayer shall ensure that any
lizing numbers or letters which are unique to AGE TECHNOLOGY EXPENDITURE.—Paragraph (6) laborers and mechanics employed by the tax-
such manufacturer or by such other method as of section 25D(d) is amended to read as follows: payer or any contractor or subcontractor in the
the Secretary may provide), ‘‘(6) QUALIFIED BATTERY STORAGE TECH- installation of any property shall be paid wages
‘‘(B) label such item with such number in NOLOGY EXPENDITURE.—The term ‘qualified bat- at rates not less than the prevailing rates for
such manner as the Secretary may provide, and tery storage technology expenditure’ means an construction, alteration, or repair of a similar
ctelli on DSK11ZRN23PROD with HOUSE
‘‘(C) make periodic written reports to the Sec- expenditure for battery storage technology character in the locality in which such property
retary (at such times and in such manner as the which— is located as most recently determined by the
Secretary may provide) of the product identi- ‘‘(A) is installed in connection with a dwelling Secretary of Labor, in accordance with sub-
fication numbers so assigned and including such unit located in the United States and used as a chapter IV of chapter 31 of title 40, United
information as the Secretary may require with residence by the taxpayer, and States Code.
respect to the item of specified property to which ‘‘(B) has a capacity of not less than 3 kilowatt ‘‘(B) CORRECTION AND PENALTY RELATED TO
such number was so assigned. hours.’’. FAILURE TO SATISFY WAGE REQUIREMENTS.—
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H7610 CONGRESSIONAL RECORD — HOUSE August 12, 2022
Rules similar to the rules of section 45(b)(7)(B) ‘‘(iii) any organization exempt from tax im- means the energy use intensity certified under
shall apply. posed by this chapter.’’. paragraph (2)(A), as adjusted to take into ac-
‘‘(5) APPRENTICESHIP REQUIREMENTS.—Rules (7) ALTERNATIVE DEDUCTION FOR ENERGY EFFI- count weather.
similar to the rules of section 45(b)(8) shall CIENT BUILDING RETROFIT PROPERTY.—Section ‘‘(B) DETERMINATION OF ADJUSTMENT.—For
apply. 179D, as amended by the preceding provisions of purposes of subparagraph (A), the adjustments
‘‘(6) REGULATIONS.—The Secretary shall issue this section, is amended by inserting after sub- described in such subparagraph shall be deter-
such regulations or other guidance as the Sec- section (e) the following new subsection: mined in such manner as the Secretary may pro-
retary determines necessary to carry out the ‘‘(f) ALTERNATIVE DEDUCTION FOR ENERGY EF- vide.
purposes of this subsection, including regula- FICIENT BUILDING RETROFIT PROPERTY.—
‘‘(7) OTHER DEFINITIONS.—For purposes of this
tions or other guidance which provides for re- ‘‘(1) IN GENERAL.—In the case of a taxpayer
subsection—
quirements for recordkeeping or information re- which elects (at such time and in such manner
as the Secretary may provide) the application of ‘‘(A) ENERGY USE INTENSITY.—The term ‘en-
porting for purposes of administering the re- ergy use intensity’ means the annualized, meas-
quirements of this subsection.’’. this subsection with respect to any qualified
building, there shall be allowed as a deduction ured site energy use intensity determined in ac-
(2) MODIFICATION OF EFFICIENCY STANDARD.—
for the taxable year which includes the date of cordance with such regulations or other guid-
Section 179D(c)(1)(D) is amended by striking ‘‘50
the qualifying final certification with respect to ance as the Secretary may provide and meas-
percent’’ and inserting ‘‘25 percent’’.
the qualified retrofit plan of such building, an ured in British thermal units.
(3) REFERENCE STANDARD.—Section 179D(c)(2)
is amended by striking ‘‘the most recent’’ and amount equal to the lesser of— ‘‘(B) QUALIFIED PROFESSIONAL.—The term
inserting the following: ‘‘the more recent of— ‘‘(A) the excess described in subsection (b) (de- ‘qualified professional’ means an individual
‘‘(A) Standard 90.1-2007 published by the termined by substituting ‘energy use intensity’ who is a licensed architect or a licensed engi-
American Society of Heating, Refrigerating, and for ‘total annual energy and power costs’ in neer and meets such other requirements as the
Air Conditioning Engineers and the Illu- paragraph (2) thereof), or Secretary may provide.
minating Engineering Society of North America, ‘‘(B) the aggregate adjusted basis (determined ‘‘(8) COORDINATION WITH DEDUCTION OTHER-
or after taking into account all adjustments with WISE ALLOWED UNDER SUBSECTION (a).—
‘‘(B) the most recent’’. respect to such taxable year other than the re- ‘‘(A) IN GENERAL.—In the case of any building
(4) FINAL DETERMINATION; EXTENSION OF PE- duction under subsection (e)) of energy efficient with respect to which an election is made under
RIOD; PLACED IN SERVICE DEADLINE.—Subpara- building retrofit property placed in service by paragraph (1), the term ‘energy efficient com-
graph (B) of section 179D(c)(2), as amended by the taxpayer pursuant to such qualified retrofit mercial building property’ shall not include any
paragraph (3), is amended— plan. energy efficient building retrofit property with
(A) by inserting ‘‘for which the Department of ‘‘(2) QUALIFIED RETROFIT PLAN.—For purposes respect to which a deduction is allowable under
Energy has issued a final determination and’’ of this subsection, the term ‘qualified retrofit this subsection.
before ‘‘which has been affirmed’’, plan’ means a written plan prepared by a quali- ‘‘(B) CERTAIN RULES NOT APPLICABLE.—
(B) by striking ‘‘2 years’’ and inserting ‘‘4 fied professional which specifies modifications ‘‘(i) IN GENERAL.—Except as provided in
years’’, and to a building which, in the aggregate, are ex- clause (ii), subsection (d) shall not apply for
(C) by striking ‘‘that construction of such pected to reduce such building’s energy use in- purposes of this subsection.
property begins’’ and inserting ‘‘such property tensity by 25 percent or more in comparison to ‘‘(ii) ALLOCATION OF DEDUCTION BY CERTAIN
is placed in service’’. the baseline energy use intensity of such build- TAX-EXEMPT ENTITIES.—Rules similar to sub-
(5) ELIMINATION OF PARTIAL ALLOWANCE.— ing. Such plan shall provide for a qualified pro- section (d)(3) shall apply for purposes of this
(A) IN GENERAL.—Section 179D(d) is amend- fessional to— subsection.’’.
ed— ‘‘(A) as of any date during the 1-year period
ending on the date on which the property in- (8) INFLATION ADJUSTMENT.—Section 179D(g)
(i) by striking paragraph (1), and is amended—
(ii) by redesignating paragraphs (2) through stalled pursuant to such plan is placed in serv-
ice, certify the energy use intensity of such (A) by striking ‘‘2020’’ and inserting ‘‘2022’’,
(6) as paragraphs (1) through (5), respectively.
(B) CONFORMING AMENDMENTS.— building as of such date, (B) by striking ‘‘or subsection (d)(1)(A)’’, and
(i) Section 179D(c)(1)(D) is amended— ‘‘(B) certify the status of property installed (C) by striking ‘‘2019’’ and inserting ‘‘2021’’.
(I) by striking ‘‘subsection (d)(6)’’ and insert- pursuant to such plan as meeting the require- (b) APPLICATION TO REAL ESTATE INVESTMENT
ing ‘‘subsection (d)(5)’’, and ments of subparagraphs (B) and (C) of para- TRUST EARNINGS AND PROFITS.—Section
(II) by striking ‘‘subsection (d)(2)’’ and insert- graph (3), and 312(k)(3)(B) is amended—
ing ‘‘subsection (d)(1)’’. ‘‘(C) as of any date that is more than 1 year (1) by striking ‘‘For purposes of computing the
(ii) Paragraph (2)(A) of section 179D(d), as re- after the date on which the property installed earnings and profits of a corporation’’ and in-
designated by subparagraph (A), is amended by pursuant to such plan is placed in service, cer- serting the following:
striking ‘‘paragraph (2)’’ and inserting ‘‘para- tify the energy use intensity of such building as ‘‘(i) IN GENERAL.—For purposes of computing
graph (1)’’. of such date. the earnings and profits of a corporation, except
(iii) Paragraph (4) of section 179D(d), as re- ‘‘(3) ENERGY EFFICIENT BUILDING RETROFIT as provided in clause (ii)’’, and
designated by subparagraph (A), is amended by PROPERTY.—For purposes of this subsection, the
(2) by adding at the end the following new
striking ‘‘paragraph (3)(B)(iii)’’ and inserting term ‘energy efficient building retrofit property’
clause:
‘‘paragraph (2)(B)(iii)’’. means property—
‘‘(A) with respect to which depreciation (or ‘‘(ii) SPECIAL RULE.—In the case of a corpora-
(iv) Section 179D is amended by striking sub- tion that is a real estate investment trust, any
section (f). amortization in lieu of depreciation) is allow-
able, amount deductible under section 179D shall be
(v) Section 179D(h) is amended by striking ‘‘or
‘‘(B) which is installed on or in any qualified allowed in the year in which the property giving
(d)(1)(A)’’.
building, rise to such deduction is placed in service (or, in
(6) ALLOCATION OF DEDUCTION BY CERTAIN
‘‘(C) which is installed as part of— the case of energy efficient building retrofit
TAX-EXEMPT ENTITIES.—Paragraph (3) of section
‘‘(i) the interior lighting systems, property, the year in which the qualifying final
179D(d), as redesignated by paragraph (5)(A), is
‘‘(ii) the heating, cooling, ventilation, and hot certification is made).’’.
amended to read as follows:
water systems, or (c) CONFORMING AMENDMENT.—Paragraph (1)
‘‘(3) ALLOCATION OF DEDUCTION BY CERTAIN ‘‘(iii) the building envelope, and
TAX-EXEMPT ENTITIES.—
of section 179D(d), as redesignated by subsection
‘‘(D) which is certified in accordance with (a)(5)(A), is amended by striking ‘‘not later than
‘‘(A) IN GENERAL.—In the case of energy effi- paragraph (2)(B) as meeting the requirements of
cient commercial building property installed on the date that is 2 years before the date that con-
subparagraphs (B) and (C). struction of such property begins’’ and inserting
or in property owned by a specified tax-exempt ‘‘(4) QUALIFIED BUILDING.—For purposes of
entity, the Secretary shall promulgate regula- ‘‘not later than the date that is 4 years before
this subsection, the term ‘qualified building’ the date such property is placed in service’’.
tions or guidance to allow the allocation of the means any building which—
deduction to the person primarily responsible for (d) EFFECTIVE DATE.—
‘‘(A) is located in the United States, and
designing the property in lieu of the owner of ‘‘(B) was originally placed in service not less (1) IN GENERAL.—Except as otherwise provided
such property. Such person shall be treated as than 5 years before the establishment of the in this subsection, the amendments made by this
the taxpayer for purposes of this section. qualified retrofit plan with respect to such section shall apply to taxable years beginning
‘‘(B) SPECIFIED TAX-EXEMPT ENTITY.—For building. after December 31, 2022.
purposes of this paragraph, the term ‘specified ‘‘(5) QUALIFYING FINAL CERTIFICATION.—For (2) ALTERNATIVE DEDUCTION FOR ENERGY EFFI-
tax-exempt entity’ means— purposes of this subsection, the term ‘qualifying CIENT BUILDING RETROFIT PROPERTY.—Sub-
‘‘(i) the United States, any State or political final certification’ means, with respect to any section (f) of section 179D of the Internal Rev-
subdivision thereof, any possession of the qualified retrofit plan, the certification de- enue Code of 1986 (as amended by this section),
ctelli on DSK11ZRN23PROD with HOUSE
United States, or any agency or instrumentality scribed in paragraph (2)(C) if the energy use in- and any other provision of such section solely
of any of the foregoing, tensity certified in such certification is not more for purposes of applying such subsection, shall
‘‘(ii) an Indian tribal government (as defined than 75 percent of the baseline energy use inten- apply to property placed in service after Decem-
in section 30D(g)(9)) or Alaska Native Corpora- sity of the building. ber 31, 2022 (in taxable years ending after such
tion (as defined in section 3 of the Alaska Na- ‘‘(6) BASELINE ENERGY USE INTENSITY.— date) if such property is placed in service pursu-
tive Claims Settlement Act (43 U.S.C. 1602(m)), ‘‘(A) IN GENERAL.—For purposes of this sub- ant to qualified retrofit plan (within the mean-
and section, the term ‘baseline energy use intensity’ ing of such section) established after such date.
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7611
SEC. 13304. EXTENSION, INCREASE, AND MODI- as subsection (h) and by inserting after sub- operation of the vehicle included with the vehi-
FICATIONS OF NEW ENERGY EFFI- section (f) the following new subsection: cle, whether or not the component parts are per-
CIENT HOME CREDIT. ‘‘(g) PREVAILING WAGE REQUIREMENT.— manently installed in or on the vehicle.’’.
(a) EXTENSION OF CREDIT.—Section 45L(g) is ‘‘(1) IN GENERAL.—In the case of a qualifying (c) DEFINITION OF NEW CLEAN VEHICLE.—
amended by striking ‘‘December 31, 2021’’ and residence described in subsection (a)(2)(B) meet- (1) IN GENERAL.—Section 30D(d), as amended
inserting ‘‘December 31, 2032’’. ing the prevailing wage requirements of para- by the preceding provisions of this section, is
(b) INCREASE IN CREDIT AMOUNTS.—Para- graph (2)(A), the credit amount allowed with re- amended—
graph (2) of section 45L(a) is amended to read as spect to such residence shall be— (A) in the heading, by striking ‘‘QUALIFIED
follows: ‘‘(A) $2,500 in the case of a residence which PLUG-IN ELECTRIC DRIVE MOTOR’’ and inserting
‘‘(2) APPLICABLE AMOUNT.—For purposes of meets the requirements of subparagraph (A) of ‘‘CLEAN’’,
paragraph (1), the applicable amount is an subsection (c)(1) (and which does not meet the (B) in paragraph (1)—
amount equal to— requirements of subparagraph (B) of such sub- (i) in the matter preceding subparagraph (A),
‘‘(A) in the case of a dwelling unit which is el- section), and by striking ‘‘qualified plug-in electric drive
igible to participate in the Energy Star Residen- ‘‘(B) $5,000 in the case of a residence which motor’’ and inserting ‘‘clean’’,
tial New Construction Program or the Energy meets the requirements of subsection (c)(1)(B). (ii) in subparagraph (C), by inserting ‘‘quali-
Star Manufactured New Homes program— ‘‘(2) PREVAILING WAGE REQUIREMENTS.— fied’’ before ‘‘manufacturer’’,
‘‘(i) which meets the requirements of sub- ‘‘(A) IN GENERAL.—The requirements described (iii) in subparagraph (F)—
section (c)(1)(A) (and which does not meet the in this subparagraph with respect to any quali- (I) in clause (i), by striking ‘‘4’’ and inserting
requirements of subsection (c)(1)(B)), $2,500, and fied residence are that the taxpayer shall ensure ‘‘7’’, and
‘‘(ii) which meets the requirements of sub- that any laborers and mechanics employed by (II) in clause (ii), by striking ‘‘and’’ at the
section (c)(1)(B), $5,000, and the taxpayer or any contractor or subcontractor end,
‘‘(B) in the case of a dwelling unit which is (iv) in subparagraph (G), by striking the pe-
in the construction of such residence shall be
part of a building eligible to participate in the riod at the end and inserting ‘‘, and’’, and
paid wages at rates not less than the prevailing
Energy Star Multifamily New Construction Pro- (v) by adding at the end the following:
rates for construction, alteration, or repair of a ‘‘(H) for which the person who sells any vehi-
gram— similar character in the locality in which such
‘‘(i) which meets the requirements of sub- cle to the taxpayer furnishes a report to the tax-
residence is located as most recently determined payer and to the Secretary, at such time and in
section (c)(1)(A) (and which does not meet the by the Secretary of Labor, in accordance with
requirements of subsection (c)(1)(B)), $500, and such manner as the Secretary shall provide,
subchapter IV of chapter 31 of title 40, United containing—
‘‘(ii) which meets the requirements of sub- States Code.
section (c)(1)(B), $1,000.’’. ‘‘(i) the name and taxpayer identification
‘‘(B) CORRECTION AND PENALTY RELATED TO number of the taxpayer,
(c) MODIFICATION OF ENERGY SAVING RE- FAILURE TO SATISFY WAGE REQUIREMENTS.—
QUIREMENTS.—Section 45L(c) is amended to read ‘‘(ii) the vehicle identification number of the
Rules similar to the rules of section 45(b)(7)(B) vehicle, unless, in accordance with any applica-
as follows: shall apply.
‘‘(c) ENERGY SAVING REQUIREMENTS.— ble rules promulgated by the Secretary of Trans-
‘‘(3) REGULATIONS AND GUIDANCE.—The Sec- portation, the vehicle is not assigned such a
‘‘(1) IN GENERAL.— retary shall issue such regulations or other
‘‘(A) IN GENERAL.—A dwelling unit meets the number,
guidance as the Secretary determines necessary ‘‘(iii) the battery capacity of the vehicle,
requirements of this subparagraph if such dwell- to carry out the purposes of this subsection, in-
ing unit meets the requirements of paragraph (2) ‘‘(iv) verification that original use of the vehi-
cluding regulations or other guidance which cle commences with the taxpayer, and
or (3) (whichever is applicable). provides for requirements for recordkeeping or
‘‘(B) ZERO ENERGY READY HOME PROGRAM.—A ‘‘(v) the maximum credit under this section al-
information reporting for purposes of admin- lowable to the taxpayer with respect to the vehi-
dwelling unit meets the requirements of this sub-
istering the requirements of this subsection.’’. cle.’’,
paragraph if such dwelling unit is certified as a (e) BASIS ADJUSTMENT.—Section 45L(e) is (C) in paragraph (3)—
zero energy ready home under the zero energy amended by inserting after the first sentence the (i) in the heading, by striking ‘‘MANUFAC-
ready home program of the Department of En- following: ‘‘This subsection shall not apply for TURER’’ and inserting ‘‘QUALIFIED MANUFAC-
ergy as in effect on January 1, 2023 (or any suc- purposes of determining the adjusted basis of TURER’’,
cessor program determined by the Secretary). any building under section 42.’’. (ii) by striking ‘‘The term ‘manufacturer’ has
‘‘(2) SINGLE-FAMILY HOME REQUIREMENTS.—A (f) EFFECTIVE DATES.— the meaning given such term in’’ and inserting
dwelling unit meets the requirements of this (1) IN GENERAL.—Except as provided in para- ‘‘The term ‘qualified manufacturer’ means any
paragraph if— graph (2), the amendments made by this section manufacturer (within the meaning of the’’, and
‘‘(A) such dwelling unit meets—
shall apply to dwelling units acquired after De- (iii) by inserting ‘‘) which enters into a writ-
‘‘(i)(I) in the case of a dwelling unit acquired
cember 31, 2022. ten agreement with the Secretary under which
before January 1, 2025, the Energy Star Single-
(2) EXTENSION OF CREDIT.—The amendments such manufacturer agrees to make periodic writ-
Family New Homes National Program Require-
made by subsection (a) shall apply to dwelling ten reports to the Secretary (at such times and
ments 3.1, or
units acquired after December 31, 2021. in such manner as the Secretary may provide)
‘‘(II) in the case of a dwelling unit acquired
PART 4—CLEAN VEHICLES providing vehicle identification numbers and
after December 31, 2024, the Energy Star Single-
such other information related to each vehicle
Family New Homes National Program Require- SEC. 13401. CLEAN VEHICLE CREDIT.
manufactured by such manufacturer as the Sec-
ments 3.2, and (a) PER VEHICLE DOLLAR LIMITATION.—Sec- retary may require’’ before the period at the
‘‘(ii) the most recent Energy Star Single-Fam- tion 30D(b) is amended by striking paragraphs end, and
ily New Homes Program Requirements applica- (2) and (3) and inserting the following: (D) by adding at the end the following:
ble to the location of such dwelling unit (as in ‘‘(2) CRITICAL MINERALS.—In the case of a ve- ‘‘(6) NEW QUALIFIED FUEL CELL MOTOR VEHI-
effect on the latter of January 1, 2023, or Janu- hicle with respect to which the requirement de- CLE.—For purposes of this section, the term
ary 1 of two calendar years prior to the date the scribed in subsection (e)(1)(A) is satisfied, the ‘new clean vehicle’ shall include any new quali-
dwelling unit was acquired), or amount determined under this paragraph is fied fuel cell motor vehicle (as defined in section
‘‘(B) such dwelling unit meets the most recent $3,750. 30B(b)(3)) which meets the requirements under
Energy Star Manufactured Home National pro- ‘‘(3) BATTERY COMPONENTS.—In the case of a subparagraphs (G) and (H) of paragraph (1).’’.
gram requirements as in effect on the latter of vehicle with respect to which the requirement (2) CONFORMING AMENDMENTS.—Section 30D is
January 1, 2023, or January 1 of two calendar described in subsection (e)(2)(A) is satisfied, the amended—
years prior to the date such dwelling unit is ac- amount determined under this paragraph is (A) in subsection (a), by striking ‘‘new quali-
quired. $3,750.’’. fied plug-in electric drive motor vehicle’’ and in-
‘‘(3) MULTI-FAMILY HOME REQUIREMENTS.—A (b) FINAL ASSEMBLY.—Section 30D(d) is serting ‘‘new clean vehicle’’, and
dwelling unit meets the requirements of this amended— (B) in subsection (b)(1), by striking ‘‘new
paragraph if— (1) in paragraph (1)— qualified plug-in electric drive motor vehicle’’
‘‘(A) such dwelling unit meets the most recent (A) in subparagraph (E), by striking ‘‘and’’ at and inserting ‘‘new clean vehicle’’.
Energy Star Multifamily New Construction Na- the end, (d) ELIMINATION OF LIMITATION ON NUMBER
tional Program Requirements (as in effect on ei- (B) in subparagraph (F)(ii), by striking the OF VEHICLES ELIGIBLE FOR CREDIT.—Section
ther January 1, 2023, or January 1 of three cal- period at the end and inserting ‘‘, and’’, and 30D is amended by striking subsection (e).
endar years prior to the date the dwelling was (C) by adding at the end the following: (e) CRITICAL MINERAL AND BATTERY COMPO-
acquired, whichever is later), and ‘‘(G) the final assembly of which occurs with- NENT REQUIREMENTS.—
‘‘(B) such dwelling unit meets the most recent in North America.’’, (1) IN GENERAL.—Section 30D, as amended by
Energy Star Multifamily New Construction Re- (2) by adding at the end the following: the preceding provisions of this section, is
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gional Program Requirements applicable to the ‘‘(5) FINAL ASSEMBLY.—For purposes of para- amended by inserting after subsection (d) the
location of such dwelling unit (as in effect on ei- graph (1)(G), the term ‘final assembly’ means following:
ther January 1, 2023, or January 1 of three cal- the process by which a manufacturer produces a ‘‘(e) CRITICAL MINERAL AND BATTERY COMPO-
endar years prior to the date the dwelling was new clean vehicle at, or through the use of, a NENT REQUIREMENTS.—
acquired, whichever is later).’’. plant, factory, or other place from which the ve- ‘‘(1) CRITICAL MINERALS REQUIREMENT.—
(d) PREVAILING WAGE REQUIREMENT.—Section hicle is delivered to a dealer or importer with all ‘‘(A) IN GENERAL.—The requirement described
45L is amended by redesignating subsection (g) component parts necessary for the mechanical in this subparagraph with respect to a vehicle is
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H7612 CONGRESSIONAL RECORD — HOUSE August 12, 2022
that, with respect to the battery from which the ‘‘(B) any vehicle placed in service after De- ‘‘(B) prior to the election described in para-
electric motor of such vehicle draws electricity, cember 31, 2023, with respect to which any of the graph (1) and not later than at the time of such
the percentage of the value of the applicable components contained in the battery of such ve- sale, disclosed to the taxpayer purchasing such
critical minerals (as defined in section 45X(c)(6)) hicle (as described in subsection (e)(2)(A)) were vehicle—
contained in such battery that were— manufactured or assembled by a foreign entity ‘‘(i) the manufacturer’s suggested retail price,
‘‘(i) extracted or processed— of concern (as so defined).’’. ‘‘(ii) the value of the credit allowed and any
‘‘(I) in the United States, or (f) SPECIAL RULES.—Section 30D(f) is amended other incentive available for the purchase of
‘‘(II) in any country with which the United by adding at the end the following: such vehicle, and
States has a free trade agreement in effect, or ‘‘(8) ONE CREDIT PER VEHICLE.—In the case of ‘‘(iii) the amount provided by the dealer to
‘‘(ii) recycled in North America, any vehicle, the credit described in subsection such taxpayer as a condition of the election de-
is equal to or greater than the applicable per- (a) shall only be allowed once with respect to scribed in paragraph (1),
centage (as certified by the qualified manufac- such vehicle, as determined based upon the ve- ‘‘(C) not later than at the time of such sale,
turer, in such form or manner as prescribed by hicle identification number of such vehicle. made payment to such taxpayer (whether in
the Secretary). ‘‘(9) VIN REQUIREMENT.—No credit shall be al- cash or in the form of a partial payment or
‘‘(B) APPLICABLE PERCENTAGE.—For purposes lowed under this section with respect to any ve- down payment for the purchase of such vehicle)
of subparagraph (A), the applicable percentage hicle unless the taxpayer includes the vehicle in an amount equal to the credit otherwise al-
shall be— identification number of such vehicle on the re- lowable to such taxpayer, and
‘‘(i) in the case of a vehicle placed in service turn of tax for the taxable year. ‘‘(D) with respect to any incentive otherwise
after the date on which the proposed guidance ‘‘(10) LIMITATION BASED ON MODIFIED AD- available for the purchase of a vehicle for which
described in paragraph (3)(B) is issued by the JUSTED GROSS INCOME.— a credit is allowed under this section, including
Secretary and before January 1, 2024, 40 per- ‘‘(A) IN GENERAL.—No credit shall be allowed any incentive in the form of a rebate or discount
cent, under subsection (a) for any taxable year if— provided by the dealer or manufacturer, ensured
‘‘(ii) in the case of a vehicle placed in service ‘‘(i) the lesser of— that—
during calendar year 2024, 50 percent, ‘‘(I) the modified adjusted gross income of the ‘‘(i) the availability or use of such incentive
‘‘(iii) in the case of a vehicle placed in service taxpayer for such taxable year, or shall not limit the ability of a taxpayer to make
during calendar year 2025, 60 percent, ‘‘(II) the modified adjusted gross income of the an election described in paragraph (1), and
‘‘(iv) in the case of a vehicle placed in service taxpayer for the preceding taxable year, exceeds ‘‘(ii) such election shall not limit the value or
during calendar year 2026, 70 percent, and ‘‘(ii) the threshold amount. use of such incentive.
‘‘(v) in the case of a vehicle placed in service ‘‘(B) THRESHOLD AMOUNT.—For purposes of ‘‘(3) TIMING.—An election described in para-
after December 31, 2026, 80 percent. subparagraph (A)(ii), the threshold amount graph (1) shall be made by the taxpayer not
‘‘(2) BATTERY COMPONENTS.— shall be— later than the date on which the vehicle for
‘‘(A) IN GENERAL.—The requirement described ‘‘(i) in the case of a joint return or a surviving which the credit is allowed under subsection (a)
in this subparagraph with respect to a vehicle is spouse (as defined in section 2(a)), $300,000, is purchased.
that, with respect to the battery from which the ‘‘(ii) in the case of a head of household (as de- ‘‘(4) REVOCATION OF REGISTRATION.—Upon de-
electric motor of such vehicle draws electricity, fined in section 2(b)), $225,000, and termination by the Secretary that a dealer has
the percentage of the value of the components ‘‘(iii) in the case of a taxpayer not described failed to comply with the requirements described
contained in such battery that were manufac- in clause (i) or (ii), $150,000. in paragraph (2), the Secretary may revoke the
‘‘(C) MODIFIED ADJUSTED GROSS INCOME.—For registration (as described in subparagraph (A)
tured or assembled in North America is equal to
purposes of this paragraph, the term ‘modified of such paragraph) of such dealer.
or greater than the applicable percentage (as
adjusted gross income’ means adjusted gross in- ‘‘(5) TAX TREATMENT OF PAYMENTS.—With re-
certified by the qualified manufacturer, in such
come increased by any amount excluded from spect to any payment described in paragraph
form or manner as prescribed by the Secretary).
‘‘(B) APPLICABLE PERCENTAGE.—For purposes gross income under section 911, 931, or 933. (2)(C), such payment—
‘‘(11) MANUFACTURER’S SUGGESTED RETAIL ‘‘(A) shall not be includible in the gross in-
of subparagraph (A), the applicable percentage
PRICE LIMITATION.— come of the taxpayer, and
shall be— ‘‘(B) with respect to the dealer, shall not be
‘‘(A) IN GENERAL.—No credit shall be allowed
‘‘(i) in the case of a vehicle placed in service deductible under this title.
under subsection (a) for a vehicle with a manu-
after the date on which the proposed guidance ‘‘(6) APPLICATION OF CERTAIN OTHER REQUIRE-
facturer’s suggested retail price in excess of the
described in paragraph (3)(B) is issued by the MENTS.—In the case of any election under para-
applicable limitation.
Secretary and before January 1, 2024, 50 per- ‘‘(B) APPLICABLE LIMITATION.—For purposes graph (1) with respect to any vehicle—
cent, of subparagraph (A), the applicable limitation ‘‘(A) the requirements of paragraphs (1) and
‘‘(ii) in the case of a vehicle placed in service for each vehicle classification is as follows: (2) of subsection (f) shall apply to the taxpayer
during calendar year 2024 or 2025, 60 percent, ‘‘(i) VANS.—In the case of a van, $80,000. who acquired the vehicle in the same manner as
‘‘(iii) in the case of a vehicle placed in service ‘‘(ii) SPORT UTILITY VEHICLES.—In the case of if the credit determined under this section with
during calendar year 2026, 70 percent, a sport utility vehicle, $80,000. respect to such vehicle were allowed to such tax-
‘‘(iv) in the case of a vehicle placed in service ‘‘(iii) PICKUP TRUCKS.—In the case of a pickup payer,
during calendar year 2027, 80 percent, truck, $80,000. ‘‘(B) paragraph (6) of such subsection shall
‘‘(v) in the case of a vehicle placed in service ‘‘(iv) OTHER.—In the case of any other vehi- not apply, and
during calendar year 2028, 90 percent, cle, $55,000. ‘‘(C) the requirement of paragraph (9) of such
‘‘(vi) in the case of a vehicle placed in service ‘‘(C) REGULATIONS AND GUIDANCE.—For pur- subsection (f) shall be treated as satisfied if the
after December 31, 2028, 100 percent. poses of this paragraph, the Secretary shall pre- eligible entity provides the vehicle identification
‘‘(3) REGULATIONS AND GUIDANCE.— scribe such regulations or other guidance as the number of such vehicle to the Secretary in such
‘‘(A) IN GENERAL.—The Secretary shall issue Secretary determines necessary for determining manner as the Secretary may provide.
such regulations or other guidance as the Sec- vehicle classifications using criteria similar to ‘‘(7) ADVANCE PAYMENT TO REGISTERED DEAL-
retary determines necessary to carry out the that employed by the Environmental Protection ERS.—
purposes of this subsection, including regula- Agency and the Department of the Energy to ‘‘(A) IN GENERAL.—The Secretary shall estab-
tions or other guidance which provides for re- determine size and class of vehicles.’’. lish a program to make advance payments to
quirements for recordkeeping or information re- (g) TRANSFER OF CREDIT.— any eligible entity in an amount equal to the cu-
porting for purposes of administering the re- (1) IN GENERAL.—Section 30D is amended by mulative amount of the credits allowed under
quirements of this subsection. striking subsection (g) and inserting the fol- subsection (a) with respect to any vehicles sold
‘‘(B) DEADLINE FOR PROPOSED GUIDANCE.—Not lowing: by such entity for which an election described in
later than December 31, 2022, the Secretary shall ‘‘(g) TRANSFER OF CREDIT.— paragraph (1) has been made.
issue proposed guidance with respect to the re- ‘‘(1) IN GENERAL.—Subject to such regulations ‘‘(B) EXCESSIVE PAYMENTS.—Rules similar to
quirements under this subsection.’’. or other guidance as the Secretary determines the rules of section 6417(d)(6) shall apply for
(2) EXCLUDED ENTITIES.—Section 30D(d), as necessary, if the taxpayer who acquires a new purposes of this paragraph.
amended by the preceding provisions of this sec- clean vehicle elects the application of this sub- ‘‘(C) TREATMENT OF ADVANCE PAYMENTS.—For
tion, is amended by adding at the end the fol- section with respect to such vehicle, the credit purposes of section 1324 of title 31, United States
lowing: which would (but for this subsection) be allowed Code, the payments under subparagraph (A)
‘‘(7) EXCLUDED ENTITIES.—For purposes of to such taxpayer with respect to such vehicle shall be treated in the same manner as a refund
this section, the term ‘new clean vehicle’ shall shall be allowed to the eligible entity specified in due from a credit provision referred to in sub-
not include— such election (and not to such taxpayer). section (b)(2) of such section.
‘‘(A) any vehicle placed in service after De- ‘‘(2) ELIGIBLE ENTITY.—For purposes of this ‘‘(8) DEALER.—For purposes of this sub-
cember 31, 2024, with respect to which any of the subsection, the term ‘eligible entity’ means, with section, the term ‘dealer’ means a person li-
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applicable critical minerals contained in the respect to the vehicle for which the credit is al- censed by a State, the District of Columbia, the
battery of such vehicle (as described in sub- lowed under subsection (a), the dealer which Commonwealth of Puerto Rico, any other terri-
section (e)(1)(A)) were extracted, processed, or sold such vehicle to the taxpayer and has— tory or possession of the United States, an In-
recycled by a foreign entity of concern (as de- ‘‘(A) subject to paragraph (4), registered with dian tribal government, or any Alaska Native
fined in section 40207(a)(5) of the Infrastructure the Secretary for purposes of this paragraph, at Corporation (as defined in section 3 of the Alas-
Investment and Jobs Act (42 U.S.C. 18741(a)(5))), such time, and in such form and manner, as the ka Native Claims Settlement Act (43 U.S.C.
or Secretary may prescribe, 1602(m)) to engage in the sale of vehicles.
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7613
‘‘(9) INDIAN TRIBAL GOVERNMENT.—For pur- of the Internal Revenue Code of 1986) pursuant come increased by any amount excluded from
poses of this subsection, the term ‘Indian tribal to an election made under section 30D(g) of the gross income under section 911, 931, or 933.
government’ means the recognized governing Internal Revenue Code of 1986 that is direct ‘‘(c) DEFINITIONS.—For purposes of this sec-
body of any Indian or Alaska Native tribe, spending shall be increased by 6.0445 percent. tion—
band, nation, pueblo, village, community, com- (k) EFFECTIVE DATES.— ‘‘(1) PREVIOUSLY-OWNED CLEAN VEHICLE.—The
ponent band, or component reservation, individ- (1) IN GENERAL.—Except as provided in para- term ‘previously-owned clean vehicle’ means,
ually identified (including parenthetically) in graphs (2), (3), (4), and (5), the amendments with respect to a taxpayer, a motor vehicle—
the list published most recently as of the date of made by this section shall apply to vehicles ‘‘(A) the model year of which is at least 2
enactment of this subsection pursuant to section placed in service after December 31, 2022. years earlier than the calendar year in which
104 of the Federally Recognized Indian Tribe (2) FINAL ASSEMBLY.—The amendments made the taxpayer acquires such vehicle,
List Act of 1994 (25 U.S.C. 5131). by subsection (b) shall apply to vehicles sold ‘‘(B) the original use of which commences
‘‘(10) RECAPTURE.—In the case of any tax- after the date of enactment of this Act. with a person other than the taxpayer,
‘‘(C) which is acquired by the taxpayer in a
payer who has made an election described in (3) PER VEHICLE DOLLAR LIMITATION AND RE-
qualified sale, and
paragraph (1) with respect to a new clean vehi- LATED REQUIREMENTS.—The amendments made
‘‘(D) which—
cle and received a payment described in para- by subsections (a) and (e) shall apply to vehicles ‘‘(i) meets the requirements of subparagraphs
graph (2)(C) from an eligible entity, if the credit placed in service after the date on which the (C), (D), (E), (F), and (H) (except for clause (iv)
under subsection (a) would otherwise (but for proposed guidance described in paragraph thereof) of section 30D(d)(1), or
this subsection) not be allowable to such tax- (3)(B) of section 30D(e) of the Internal Revenue ‘‘(ii) is a motor vehicle which—
payer pursuant to the application of subsection Code of 1986 (as added by subsection (e)) is ‘‘(I) satisfies the requirements under subpara-
(f)(10), the tax imposed on such taxpayer under issued by the Secretary of the Treasury (or the graphs (A) and (B) of section 30B(b)(3), and
this chapter for the taxable year in which such Secretary’s delegate). ‘‘(II) has a gross vehicle weight rating of less
vehicle was placed in service shall be increased (4) TRANSFER OF CREDIT.—The amendments than 14,000 pounds.
by the amount of the payment received by such made by subsection (g) shall apply to vehicles ‘‘(2) QUALIFIED SALE.—The term ‘qualified
taxpayer.’’. placed in service after December 31, 2023. sale’ means a sale of a motor vehicle—
(2) CONFORMING AMENDMENTS.—Section 30D, (5) ELIMINATION OF MANUFACTURER LIMITA- ‘‘(A) by a dealer (as defined in section
as amended by the preceding provisions of this TION.—The amendment made by subsection (d) 30D(g)(8)),
section, is amended— shall apply to vehicles sold after December 31, ‘‘(B) for a sale price which does not exceed
(A) in subsection (d)(1)(H) of such section— 2022. $25,000, and
(i) in clause (iv), by striking ‘‘and’’ at the (l) TRANSITION RULE.—Solely for purposes of ‘‘(C) which is the first transfer since the date
end, the application of section 30D of the Internal of the enactment of this section to a qualified
(ii) in clause (v), by striking the period at the Revenue Code of 1986, in the case of a taxpayer buyer other than the person with whom the
end and inserting ‘‘, and’’, and that— original use of such vehicle commenced.
(iii) by adding at the end the following: (1) after December 31, 2021, and before the ‘‘(3) QUALIFIED BUYER.—The term ‘qualified
‘‘(vi) in the case of a taxpayer who makes an date of enactment of this Act, purchased, or en- buyer’ means, with respect to a sale of a motor
election under subsection (g)(1), any amount de- tered into a written binding contract to pur- vehicle, a taxpayer—
scribed in subsection (g)(2)(C) which has been chase, a new qualified plug-in electric drive ‘‘(A) who is an individual,
‘‘(B) who purchases such vehicle for use and
provided to such taxpayer.’’, and motor vehicle (as defined in section 30D(d)(1) of
not for resale,
(B) in subsection (f)— the Internal Revenue Code of 1986, as in effect ‘‘(C) with respect to whom no deduction is al-
(i) by striking paragraph (3), and on the day before the date of enactment of this lowable with respect to another taxpayer under
(ii) in paragraph (8), by inserting ‘‘, including Act), and section 151, and
any vehicle with respect to which the taxpayer (2) placed such vehicle in service on or after ‘‘(D) who has not been allowed a credit under
elects the application of subsection (g)’’ before the date of enactment of this Act, this section for any sale during the 3-year pe-
the period at the end. such taxpayer may elect (at such time, and in riod ending on the date of the sale of such vehi-
(h) TERMINATION.—Section 30D is amended by such form and manner, as the Secretary of the cle.
adding at the end the following: Treasury, or the Secretary’s delegate, may pre- ‘‘(4) MOTOR VEHICLE; CAPACITY.—The terms
‘‘(h) TERMINATION.—No credit shall be al- scribe) to treat such vehicle as having been ‘motor vehicle’ and ‘capacity’ have the meaning
lowed under this section with respect to any ve- placed in service on the day before the date of given such terms in paragraphs (2) and (4) of
hicle placed in service after December 31, 2032.’’. enactment of this Act. section 30D(d), respectively.
(i) ADDITIONAL CONFORMING AMENDMENTS.— SEC. 13402. CREDIT FOR PREVIOUSLY-OWNED ‘‘(d) VIN NUMBER REQUIREMENT.—No credit
(1) The heading of section 30D is amended by CLEAN VEHICLES. shall be allowed under subsection (a) with re-
striking ‘‘NEW QUALIFIED PLUG-IN ELECTRIC (a) IN GENERAL.—Subpart A of part IV of sub- spect to any vehicle unless the taxpayer in-
DRIVE MOTOR VEHICLES’’ and inserting ‘‘CLEAN chapter A of chapter 1 is amended by inserting cludes the vehicle identification number of such
VEHICLE CREDIT’’. after section 25D the following new section: vehicle on the return of tax for the taxable year.
(2) Section 30B is amended— ‘‘SEC. 25E. PREVIOUSLY-OWNED CLEAN VEHI- ‘‘(e) APPLICATION OF CERTAIN RULES.—For
(A) in subsection (h)(8), by striking ‘‘, except CLES. purposes of this section, rules similar to the
that no benefit shall be recaptured if such prop- ‘‘(a) ALLOWANCE OF CREDIT.—In the case of a rules of section 30D(f) (without regard to para-
erty ceases to be eligible for such credit by rea- qualified buyer who during a taxable year graph (10) or (11) thereof) shall apply for pur-
son of conversion to a qualified plug-in electric places in service a previously-owned clean vehi- poses of this section.
drive motor vehicle’’, and cle, there shall be allowed as a credit against ‘‘(f) TERMINATION.—No credit shall be allowed
(B) by striking subsection (i). the tax imposed by this chapter for the taxable under this section with respect to any vehicle
(3) Section 38(b)(30) is amended by striking year an amount equal to the lesser of— acquired after December 31, 2032.’’.
‘‘qualified plug-in electric drive motor’’ and in- ‘‘(1) $4,000, or (b) TRANSFER OF CREDIT.—Section 25E, as
serting ‘‘clean’’. ‘‘(2) the amount equal to 30 percent of the sale added by subsection (a), is amended—
(4) Section 6213(g)(2), as amended by the pre- (1) by redesignating subsection (f) as sub-
price with respect to such vehicle.
ceding provisions of this Act, is amended— section (g), and
‘‘(b) LIMITATION BASED ON MODIFIED AD-
(A) in subparagraph (R), by striking ‘‘and’’ at (2) by inserting after subsection (e) the fol-
JUSTED GROSS INCOME.—
the end, lowing:
‘‘(1) IN GENERAL.—No credit shall be allowed ‘‘(f) TRANSFER OF CREDIT.—Rules similar to
(B) in subparagraph (S), by striking the pe- under subsection (a) for any taxable year if—
riod at the end and inserting ‘‘, and’’, and the rules of section 30D(g) shall apply.’’.
‘‘(A) the lesser of— (c) CONFORMING AMENDMENTS.—Section
(C) by inserting after subparagraph (S) the ‘‘(i) the modified adjusted gross income of the 6213(g)(2), as amended by the preceding provi-
following: taxpayer for such taxable year, or sions of this Act, is amended—
‘‘(T) an omission of a correct vehicle identi- ‘‘(ii) the modified adjusted gross income of the (1) in subparagraph (S), by striking ‘‘and’’ at
fication number required under section 30D(f)(9) taxpayer for the preceding taxable year, exceeds the end,
(relating to credit for new clean vehicles) to be ‘‘(B) the threshold amount. (2) in subparagraph (T), by striking the period
included on a return.’’. ‘‘(2) THRESHOLD AMOUNT.—For purposes of at the end and inserting ‘‘, and’’, and
(5) Section 6501(m) is amended by striking paragraph (1)(B), the threshold amount shall (3) by inserting after subparagraph (T) the
‘‘30D(e)(4)’’ and inserting ‘‘30D(f)(6)’’. be— following:
(6) The table of sections for subpart B of part ‘‘(A) in the case of a joint return or a sur- ‘‘(U) an omission of a correct vehicle identi-
IV of subchapter A of chapter 1 is amended by viving spouse (as defined in section 2(a)), fication number required under section 25E(d)
striking the item relating to section 30D and in- $150,000, (relating to credit for previously-owned clean
serting after the item relating to section 30C the
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‘‘(B) in the case of a head of household (as vehicles) to be included on a return.’’.
following item: defined in section 2(b)), $112,500, and (d) CLERICAL AMENDMENT.—The table of sec-
‘‘Sec. 30D. Clean vehicle credit.’’. ‘‘(C) in the case of a taxpayer not described in tions for subpart A of part IV of subchapter A
(j) GROSS-UP OF DIRECT SPENDING.—Begin- subparagraph (A) or (B), $75,000. of chapter 1 is amended by inserting after the
ning in fiscal year 2023 and each fiscal year ‘‘(3) MODIFIED ADJUSTED GROSS INCOME.—For item relating to section 25D the following new
thereafter, the portion of any credit allowed to purposes of this subsection, the term ‘modified item:
an eligible entity (as defined in section 30D(g)(2) adjusted gross income’ means adjusted gross in- ‘‘Sec. 25E. Previously-owned clean vehicles.’’.
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H7614 CONGRESSIONAL RECORD — HOUSE August 12, 2022
(e) EFFECTIVE DATE.— gard to paragraph (10) or (11) thereof) shall same meaning as the term ‘qualified clean-fuel
(1) IN GENERAL.—Except as provided in para- apply for purposes of this section. vehicle refueling property’ would have under
graph (2), the amendments made by this section ‘‘(2) VEHICLES PLACED IN SERVICE BY TAX-EX- section 179A if—
shall apply to vehicles acquired after December EMPT ENTITIES.—Subsection (c)(4) shall not ‘‘(A) paragraph (1) of section 179A(d) did not
31, 2022. apply to any vehicle which is not subject to a apply to property installed on property which is
(2) TRANSFER OF CREDIT.—The amendments lease and which is placed in service by a tax-ex- used as the principal residence (within the
made by subsection (b) shall apply to vehicles empt entity described in clause (i), (ii), or (iv) of meaning of section 121) of the taxpayer, and
acquired after December 31, 2023. section 168(h)(2)(A). ‘‘(B) only the following were treated as clean-
SEC. 13403. QUALIFIED COMMERCIAL CLEAN VE- ‘‘(3) NO DOUBLE BENEFIT.—No credit shall be burning fuels for purposes of section 179A(d):
HICLES. allowed under this section with respect to any ‘‘(i) Any fuel at least 85 percent of the volume
(a) IN GENERAL.—Subpart D of part IV of sub- vehicle for which a credit was allowed under of which consists of one or more of the fol-
chapter A of chapter 1, as amended by the pre- section 30D. lowing: ethanol, natural gas, compressed nat-
ceding provisions of this Act, is amended by ‘‘(e) VIN NUMBER REQUIREMENT.—No credit ural gas, liquified natural gas, liquefied petro-
adding at the end the following new section: shall be determined under subsection (a) with leum gas, or hydrogen.
‘‘SEC. 45W. CREDIT FOR QUALIFIED COMMERCIAL respect to any vehicle unless the taxpayer in- ‘‘(ii) Any mixture—
CLEAN VEHICLES. cludes the vehicle identification number of such ‘‘(I) which consists of two or more of the fol-
‘‘(a) IN GENERAL.—For purposes of section 38, vehicle on the return of tax for the taxable year. lowing: biodiesel (as defined in section
the qualified commercial clean vehicle credit for ‘‘(f) REGULATIONS AND GUIDANCE.—The Sec- 40A(d)(1)), diesel fuel (as defined in section
any taxable year is an amount equal to the sum retary shall issue such regulations or other 4083(a)(3)), or kerosene, and
guidance as the Secretary determines necessary ‘‘(II) at least 20 percent of the volume of
of the credit amounts determined under sub-
to carry out the purposes of this section, includ- which consists of biodiesel (as so defined) deter-
section (b) with respect to each qualified com-
ing regulations or other guidance relating to de- mined without regard to any kerosene in such
mercial clean vehicle placed in service by the
termination of the incremental cost of any mixture.
taxpayer during the taxable year.
qualified commercial clean vehicle. ‘‘(iii) Electricity.
‘‘(b) PER VEHICLE AMOUNT.—
‘‘(g) TERMINATION.—No credit shall be deter- ‘‘(2) BIDIRECTIONAL CHARGING EQUIPMENT.—
‘‘(1) IN GENERAL.—Subject to paragraph (4),
mined under this section with respect to any ve- Property shall not fail to be treated as qualified
the amount determined under this subsection
hicle acquired after December 31, 2032.’’. alternative fuel vehicle refueling property solely
with respect to any qualified commercial clean
(b) CONFORMING AMENDMENTS.— because such property—
vehicle shall be equal to the lesser of— ‘‘(A) is capable of charging the battery of a
‘‘(A) 15 percent of the basis of such vehicle (30 (1) Section 38(b), as amended by the preceding
provisions of this Act, is amended— motor vehicle propelled by electricity, and
percent in the case of a vehicle not powered by ‘‘(B) allows discharging electricity from such
a gasoline or diesel internal combustion engine), (A) in paragraph (35), by striking ‘‘plus’’ at
battery to an electric load external to such
or the end,
(B) in paragraph (36), by striking the period motor vehicle.’’.
‘‘(B) the incremental cost of such vehicle. (c) CERTAIN ELECTRIC CHARGING STATIONS IN-
‘‘(2) INCREMENTAL COST.—For purposes of at the end and inserting ‘‘, plus’’, and
CLUDED AS QUALIFIED ALTERNATIVE FUEL VEHI-
paragraph (1)(B), the incremental cost of any (C) by adding at the end the following new
CLE REFUELING PROPERTY.—Section 30C is
qualified commercial clean vehicle is an amount paragraph:
‘‘(37) the qualified commercial clean vehicle amended by redesignating subsections (f) and
equal to the excess of the purchase price for (g) as subsections (g) and (h), respectively, and
such vehicle over such price of a comparable ve- credit determined under section 45W.’’.
(2) Section 6213(g)(2), as amended by the pre- by inserting after subsection (e) the following:
hicle. ‘‘(f) SPECIAL RULE FOR ELECTRIC CHARGING
‘‘(3) COMPARABLE VEHICLE.—For purposes of ceding provisions of this Act, is amended—
(A) in subparagraph (T), by striking ‘‘and’’ at STATIONS FOR CERTAIN VEHICLES WITH 2 OR 3
this subsection, the term ‘comparable vehicle’ WHEELS.—For purposes of this section—
means, with respect to any qualified commercial the end,
(B) in subparagraph (U), by striking the pe- ‘‘(1) IN GENERAL.—The term ‘qualified alter-
clean vehicle, any vehicle which is powered native fuel vehicle refueling property’ includes
solely by a gasoline or diesel internal combus- riod at the end and inserting ‘‘, and’’, and
(C) by inserting after subparagraph (U) the any property described in subsection (c) for the
tion engine and which is comparable in size and recharging of a motor vehicle described in para-
use to such vehicle. following:
‘‘(V) an omission of a correct vehicle identi- graph (2), but only if such property—
‘‘(4) LIMITATION.—The amount determined ‘‘(A) meets the requirements of subsection
under this subsection with respect to any quali- fication number required under section 45W(e)
(relating to commercial clean vehicle credit) to (a)(2), and
fied commercial clean vehicle shall not exceed— ‘‘(B) is of a character subject to depreciation.
‘‘(A) in the case of a vehicle which has a gross be included on a return.’’.
‘‘(2) MOTOR VEHICLE.—A motor vehicle is de-
vehicle weight rating of less than 14,000 pounds, (3) The table of sections for subpart D of part
scribed in this paragraph if the motor vehicle—
$7,500, and IV of subchapter A of chapter 1, as amended by
‘‘(A) is manufactured primarily for use on
‘‘(B) in the case of a vehicle not described in the preceding provisions of this Act, is amended
public streets, roads, or highways (not including
subparagraph (A), $40,000. by adding at the end the following new item:
a vehicle operated exclusively on a rail or rails),
‘‘(c) QUALIFIED COMMERCIAL CLEAN VEHI- ‘‘Sec. 45W. Qualified commercial clean vehicle ‘‘(B) has 2 or 3 wheels, and
CLE.—For purposes of this section, the term credit.’’. ‘‘(C) is propelled by electricity.’’.
‘qualified commercial clean vehicle’ means any (c) EFFECTIVE DATE.—The amendments made (d) WAGE AND APPRENTICESHIP REQUIRE-
vehicle which— by this section shall apply to vehicles acquired MENTS.—Section 30C, as amended by this sec-
‘‘(1) meets the requirements of section after December 31, 2022. tion, is further amended by redesignating sub-
30D(d)(1)(C) and is acquired for use or lease by SEC. 13404. ALTERNATIVE FUEL REFUELING sections (g) and (h) as subsections (h) and (i)
the taxpayer and not for resale, PROPERTY CREDIT. and by inserting after subsection (f) the fol-
‘‘(2) either— (a) IN GENERAL.—Section 30C(g) is amended lowing new subsection:
‘‘(A) meets the requirements of subparagraph by striking ‘‘December 31, 2021’’ and inserting ‘‘(g) WAGE AND APPRENTICESHIP REQUIRE-
(D) of section 30D(d)(1) and is manufactured ‘‘December 31, 2032’’. MENTS.—
primarily for use on public streets, roads, and (b) CREDIT FOR PROPERTY OF A CHARACTER ‘‘(1) INCREASED CREDIT AMOUNT.—
highways (not including a vehicle operated ex- SUBJECT TO DEPRECIATION.— ‘‘(A) IN GENERAL.—In the case of any quali-
clusively on a rail or rails), or (1) IN GENERAL.—Section 30C(a) is amended by fied alternative fuel vehicle refueling project
‘‘(B) is mobile machinery, as defined in sec- inserting ‘‘(6 percent in the case of property of which satisfies the requirements of subpara-
tion 4053(8) (including vehicles that are not de- a character subject to depreciation)’’ after ‘‘30 graph (C), the amount of the credit determined
signed to perform a function of transporting a percent’’. under subsection (a) for any qualified alter-
load over the public highways), (2) MODIFICATION OF CREDIT LIMITATION.— native fuel vehicle refueling property of a char-
‘‘(3) either— Subsection (b) of section 30C is amended— acter subject to an allowance for depreciation
‘‘(A) is propelled to a significant extent by an (A) in the matter preceding paragraph (1)— which is part of such project shall be equal to
electric motor which draws electricity from a (i) by striking ‘‘with respect to all’’ and in- such amount (determined without regard to this
battery which has a capacity of not less than 15 serting ‘‘with respect to any single item of’’, and sentence) multiplied by 5.
kilowatt hours (or, in the case of a vehicle (ii) by striking ‘‘at a location’’, and ‘‘(B) QUALIFIED ALTERNATIVE FUEL VEHICLE
which has a gross vehicle weight rating of less (B) in paragraph (1), by striking ‘‘$30,000 in REFUELING PROJECT.—For purposes of this sub-
than 14,000 pounds, 7 kilowatt hours) and is ca- the case of a property’’ and inserting ‘‘$100,000 section, the term ‘qualified alternative fuel vehi-
pable of being recharged from an external in the case of any such item of property’’. cle refueling project’ means a project consisting
source of electricity, or (3) BIDIRECTIONAL CHARGING EQUIPMENT IN- of one or more properties that are part of a sin-
‘‘(B) is a motor vehicle which satisfies the re- CLUDED AS QUALIFIED ALTERNATIVE FUEL VEHI- gle project.
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quirements under subparagraphs (A) and (B) of CLE REFUELING PROPERTY.—Section 30C(c) is ‘‘(C) PROJECT REQUIREMENTS.—A project
section 30B(b)(3), and amended to read as follows: meets the requirements of this subparagraph if it
‘‘(4) is of a character subject to the allowance ‘‘(c) QUALIFIED ALTERNATIVE FUEL VEHICLE is one of the following:
for depreciation. REFUELING PROPERTY.—For purposes of this ‘‘(i) A project the construction of which begins
‘‘(d) SPECIAL RULES.— section— prior to the date that is 60 days after the Sec-
‘‘(1) IN GENERAL.—Rules similar to the rules ‘‘(1) IN GENERAL.—The term ‘qualified alter- retary publishes guidance with respect to the re-
under subsection (f) of section 30D (without re- native fuel vehicle refueling property’ has the quirements of paragraphs (2)(A) and (3).
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7615
‘‘(ii) A project which satisfies the require- tification and allocation of credits under sub- (D) in clause (III), by striking ‘‘grids to sup-
ments of paragraphs (2)(A) and (3). section (d). port the transmission of intermittent sources of
‘‘(2) PREVAILING WAGE REQUIREMENTS.— ‘‘(3) CERTIFICATIONS.— renewable energy, including storage of such en-
‘‘(A) IN GENERAL.—The requirements described ‘‘(A) APPLICATION REQUIREMENT.—Each appli- ergy’’ and inserting ‘‘grid modernization equip-
in this subparagraph with respect to any quali- cant for certification under this subsection shall ment or components’’,
fied alternative fuel vehicle refueling project are submit an application at such time and con- (E) in subclause (IV), by striking ‘‘and seques-
that the taxpayer shall ensure that any laborers taining such information as the Secretary may ter carbon dioxide emissions’’ and inserting ‘‘,
and mechanics employed by the taxpayer or any require. remove, use, or sequester carbon oxide emis-
contractor or subcontractor in the construction ‘‘(B) TIME TO MEET CRITERIA FOR CERTIFI- sions’’,
of any qualified alternative fuel vehicle refuel- CATION.—Each applicant for certification shall (F) by striking subclause (V) and inserting the
ing property which is part of such project shall have 2 years from the date of acceptance by the following:
be paid wages at rates not less than the pre- Secretary of the application during which to ‘‘(V) equipment designed to refine, electrolyze,
vailing rates for construction, alteration, or re- provide to the Secretary evidence that the re- or blend any fuel, chemical, or product which
pair of a similar character in the locality in quirements of the certification have been met. is—
which such project is located as most recently ‘‘(C) PERIOD OF ISSUANCE.—An applicant ‘‘(aa) renewable, or
determined by the Secretary of Labor, in accord- which receives a certification shall have 2 years ‘‘(bb) low-carbon and low-emission,’’,
ance with subchapter IV of chapter 31 of title from the date of issuance of the certification in (G) by striking subclause (VI),
40, United States Code. order to place the project in service and to no- (H) by redesignating subclause (VII) as sub-
‘‘(B) CORRECTION AND PENALTY RELATED TO tify the Secretary that such project has been so clause (IX),
FAILURE TO SATISFY WAGE REQUIREMENTS.— placed in service, and if such project is not (I) by inserting after subclause (V) the fol-
Rules similar to the rules of section 45(b)(7)(B) placed in service by that time period, then the lowing new subclauses:
shall apply. certification shall no longer be valid. If any cer- ‘‘(VI) property designed to produce energy
‘‘(3) APPRENTICESHIP REQUIREMENTS.—Rules tification is revoked under this subparagraph, conservation technologies (including residential,
similar to the rules of section 45(b)(8) shall the amount of the limitation under paragraph commercial, and industrial applications),
apply. (2) shall be increased by the amount of the cred- ‘‘(VII) light-, medium-, or heavy-duty electric
‘‘(4) REGULATIONS AND GUIDANCE.—The Sec- or fuel cell vehicles, as well as—
it with respect to such revoked certification.
retary shall issue such regulations or other ‘‘(aa) technologies, components, or materials
‘‘(D) LOCATION OF PROJECT.—In the case of
guidance as the Secretary determines necessary for such vehicles, and
an applicant which receives a certification, if
‘‘(bb) associated charging or refueling infra-
to carry out the purposes of this subsection, in- the Secretary determines that the project has
structure,
cluding regulations or other guidance which been placed in service at a location which is ma- ‘‘(VIII) hybrid vehicles with a gross vehicle
provides for requirements for recordkeeping or terially different than the location specified in weight rating of not less than 14,000 pounds, as
information reporting for purposes of admin- the application for such project, the certifi- well as technologies, components, or materials
istering the requirements of this subsection.’’. cation shall no longer be valid. for such vehicles, or’’, and
(e) ELIGIBLE CENSUS TRACTS.—Subsection (c) ‘‘(4) CREDIT RATE CONDITIONED UPON WAGE (J) in subclause (IX), as so redesignated, by
of section 30C, as amended by subsection (b)(3), AND APPRENTICESHIP REQUIREMENTS.—
striking ‘‘and’’ at the end, and
is amended by adding at the end the following: ‘‘(A) BASE RATE.—For purposes of allocations (3) by striking clause (ii) and inserting the fol-
‘‘(3) PROPERTY REQUIRED TO BE LOCATED IN under this subsection, the amount of the credit lowing:
ELIGIBLE CENSUS TRACTS.— determined under subsection (a) shall be deter- ‘‘(ii) which re-equips an industrial or manu-
‘‘(A) IN GENERAL.—Property shall not be mined by substituting ‘6 percent’ for ‘30 per- facturing facility with equipment designed to re-
treated as qualified alternative fuel vehicle re- cent’. duce greenhouse gas emissions by at least 20
fueling property unless such property is placed ‘‘(B) ALTERNATIVE RATE.—In the case of any percent through the installation of—
in service in an eligible census tract. project which satisfies the requirements of para- ‘‘(I) low- or zero-carbon process heat systems,
‘‘(B) ELIGIBLE CENSUS TRACT.— graphs (5)(A) and (6), subparagraph (A) shall ‘‘(II) carbon capture, transport, utilization
‘‘(i) IN GENERAL.—For purposes of this para- not apply. and storage systems,
graph, the term ‘eligible census tract’ means any ‘‘(5) PREVAILING WAGE REQUIREMENTS.— ‘‘(III) energy efficiency and reduction in
population census tract which— ‘‘(A) IN GENERAL.—The requirements described waste from industrial processes, or
‘‘(I) is described in section 45D(e), or in this subparagraph with respect to a project ‘‘(IV) any other industrial technology de-
‘‘(II) is not an urban area. are that the taxpayer shall ensure that any la- signed to reduce greenhouse gas emissions, as
‘‘(ii) URBAN AREA.—For purposes of clause borers and mechanics employed by the taxpayer determined by the Secretary, or
(i)(II), the term ‘urban area’ means a census or any contractor or subcontractor in the re- ‘‘(iii) which re-equips, expands, or establishes
tract (as defined by the Bureau of the Census) equipping, expansion, or establishment of a an industrial facility for the processing, refin-
which, according to the most recent decennial manufacturing facility shall be paid wages at ing, or recycling of critical materials (as defined
census, has been designated as an urban area rates not less than the prevailing rates for con- in section 7002(a) of the Energy Act of 2020 (30
by the Secretary of Commerce.’’. struction, alteration, or repair of a similar char- U.S.C. 1606(a)).’’.
(f) EFFECTIVE DATE.— acter in the locality in which such project is lo- (c) CONFORMING AMENDMENT.—Subparagraph
(1) IN GENERAL.—Except as provided in para- cated as most recently determined by the Sec- (A) of section 48C(c)(2) is amended to read as
graph (2), the amendments made by this section retary of Labor, in accordance with subchapter follows:
shall apply to property placed in service after IV of chapter 31 of title 40, United States Code. ‘‘(A) which is necessary for—
December 31, 2022. ‘‘(B) CORRECTION AND PENALTY RELATED TO ‘‘(i) the production or recycling of property
(2) EXTENSION.—The amendments made by FAILURE TO SATISFY WAGE REQUIREMENTS.— described in clause (i) of paragraph (1)(A),
subsection (a) shall apply to property placed in Rules similar to the rules of section 45(b)(7)(B) ‘‘(ii) re-equipping an industrial or manufac-
service after December 31, 2021. shall apply. turing facility described in clause (ii) of such
PART 5—INVESTMENT IN CLEAN ENERGY ‘‘(6) APPRENTICESHIP REQUIREMENTS.—Rules paragraph, or
MANUFACTURING AND ENERGY SECURITY similar to the rules of section 45(b)(8) shall ‘‘(iii) re-equipping, expanding, or establishing
SEC. 13501. EXTENSION OF THE ADVANCED EN- apply. an industrial facility described in clause (iii) of
ERGY PROJECT CREDIT. ‘‘(7) DISCLOSURE OF ALLOCATIONS.—The Sec- such paragraph,’’.
(a) EXTENSION OF CREDIT.—Section 48C is retary shall, upon making a certification under (d) DENIAL OF DOUBLE BENEFIT.—48C(f), as
amended by redesignating subsection (e) as sub- this subsection, publicly disclose the identity of redesignated by this section, is amended by
section (f) and by inserting after subsection (d) the applicant and the amount of the credit with striking ‘‘or 48B’’ and inserting ‘‘48B, 48E, 45Q,
the following new subsection: respect to such applicant.’’. or 45V’’.
‘‘(e) ADDITIONAL ALLOCATIONS.— (b) MODIFICATION OF QUALIFYING ADVANCED (e) EFFECTIVE DATE.—The amendments made
‘‘(1) IN GENERAL.—Not later than 180 days ENERGY PROJECTS.—Section 48C(c)(1)(A) is by this section shall take effect on January 1,
after the date of enactment of this subsection, amended— 2023.
the Secretary shall establish a program to con- (1) by inserting ‘‘, any portion of the qualified SEC. 13502. ADVANCED MANUFACTURING PRO-
sider and award certifications for qualified in- investment of which is certified by the Secretary DUCTION CREDIT.
vestments eligible for credits under this section under subsection (e) as eligible for a credit (a) IN GENERAL.—Subpart D of part IV of sub-
to qualifying advanced energy project sponsors. under this section’’ after ‘‘means a project’’, chapter A of chapter 1, as amended by the pre-
‘‘(2) LIMITATION.—The total amount of credits (2) in clause (i)— ceding provisions of this Act, is amended by
which may be allocated under the program es- (A) by striking ‘‘a manufacturing facility for adding at the end the following new section:
tablished under paragraph (1) shall not exceed the production of’’ and inserting ‘‘an industrial ‘‘SEC. 45X. ADVANCED MANUFACTURING PRODUC-
$10,000,000,000, of which not greater than or manufacturing facility for the production or TION CREDIT.
ctelli on DSK11ZRN23PROD with HOUSE
$6,000,000,000 may be allocated to qualified in- recycling of’’, ‘‘(a) IN GENERAL.—
vestments which are not located within a census (B) in clause (I), by inserting ‘‘water,’’ after ‘‘(1) ALLOWANCE OF CREDIT.—For purposes of
tract which— ‘‘sun,’’, section 38, the advanced manufacturing produc-
‘‘(A) is described in clause (iii) of section (C) in clause (II), by striking ‘‘an energy stor- tion credit for any taxable year is an amount
45(b)(11)(B), and age system for use with electric or hybrid-elec- equal to the sum of the credit amounts deter-
‘‘(B) prior to the date of enactment of this tric motor vehicles’’ and inserting ‘‘energy stor- mined under subsection (b) with respect to each
subsection, had no project which received a cer- age systems and components’’, eligible component which is—
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H7616 CONGRESSIONAL RECORD — HOUSE August 12, 2022
‘‘(A) produced by the taxpayer, and ‘‘(i) $10 (or, in the case of a battery module property which is produced at a facility if the
‘‘(B) during the taxable year, sold by such which does not use battery cells, $45), multiplied basis of any property which is part of such fa-
taxpayer to an unrelated person. by cility is taken into account for purposes of the
‘‘(2) PRODUCTION AND SALE MUST BE IN TRADE ‘‘(ii) subject to paragraph (4), the capacity of credit allowed under section 48C after the date
OR BUSINESS.—Any eligible component produced such battery module (expressed on a kilowatt- of the enactment of this section.
and sold by the taxpayer shall be taken into ac- hour basis), and ‘‘(2) INVERTERS.—
count only if the production and sale described ‘‘(M) in the case of any applicable critical ‘‘(A) IN GENERAL.—The term ‘inverter’ means
in paragraph (1) is in a trade or business of the mineral, an amount equal to 10 percent of the an end product which is suitable to convert di-
taxpayer. costs incurred by the taxpayer with respect to rect current electricity from 1 or more solar mod-
‘‘(3) UNRELATED PERSON.— production of such mineral. ules or certified distributed wind energy systems
‘‘(A) IN GENERAL.—For purposes of this sub- ‘‘(2) APPLICABLE AMOUNTS.— into alternating current electricity.
section, a taxpayer shall be treated as selling ‘‘(A) WIND ENERGY COMPONENTS.—For pur- ‘‘(B) CENTRAL INVERTER.—The term ‘central
components to an unrelated person if such com- poses of paragraph (1)(F)(ii), the applicable inverter’ means an inverter which is suitable for
ponent is sold to such person by a person re- amount with respect to any wind energy compo- large utility-scale systems and has a capacity
lated to the taxpayer. nent shall be— which is greater than 1,000 kilowatts (expressed
‘‘(B) ELECTION.— ‘‘(i) in the case of a blade, 2 cents, on a per alternating current watt basis).
‘‘(i) IN GENERAL.—At the election of the tax- ‘‘(ii) in the case of a nacelle, 5 cents, ‘‘(C) COMMERCIAL INVERTER.—The term ‘com-
payer (in such form and manner as the Sec- ‘‘(iii) in the case of a tower, 3 cents, and mercial inverter’ means an inverter which—
retary may prescribe), a sale of components by ‘‘(iv) in the case of an offshore wind founda- ‘‘(i) is suitable for commercial or utility-scale
such taxpayer to a related person shall be tion— applications,
deemed to have been made to an unrelated per- ‘‘(I) which uses a fixed platform, 2 cents, or ‘‘(ii) has a rated output of 208, 480, 600, or 800
son. ‘‘(II) which uses a floating platform, 4 cents. volt three-phase power, and
‘‘(ii) REQUIREMENT.—As a condition of, and ‘‘(B) INVERTERS.—For purposes of paragraph ‘‘(iii) has a capacity which is not less than 20
prior to, any election described in clause (i), the (1)(I), the applicable amount with respect to any kilowatts and not greater than 125 kilowatts
Secretary may require such information or reg- inverter shall be— (expressed on a per alternating current watt
istration as the Secretary deems necessary for ‘‘(i) in the case of a central inverter, 0.25 basis).
purposes of preventing duplication, fraud, or cents, ‘‘(D) DISTRIBUTED WIND INVERTER.—
any improper or excessive amount determined ‘‘(ii) in the case of a utility inverter, 1.5 cents, ‘‘(i) IN GENERAL.—The term ‘distributed wind
under paragraph (1). ‘‘(iii) in the case of a commercial inverter, 2 inverter’ means an inverter which—
‘‘(b) CREDIT AMOUNT.— cents, ‘‘(I) is used in a residential or non-residential
‘‘(1) IN GENERAL.—Subject to paragraph (3), ‘‘(iv) in the case of a residential inverter, 6.5 system which utilizes 1 or more certified distrib-
the amount determined under this subsection cents, and uted wind energy systems, and
with respect to any eligible component, includ- ‘‘(v) in the case of a microinverter or a distrib- ‘‘(II) has a rated output of not greater than
ing any eligible component it incorporates, shall uted wind inverter, 11 cents. 150 kilowatts.
be equal to— ‘‘(3) PHASE OUT.— ‘‘(ii) CERTIFIED DISTRIBUTED WIND ENERGY
‘‘(A) in the case of a thin film photovoltaic ‘‘(A) IN GENERAL.—Subject to subparagraph SYSTEM.—The term ‘certified distributed wind
cell or a crystalline photovoltaic cell, an amount (C), in the case of any eligible component sold energy system’ means a wind energy system
equal to the product of— after December 31, 2029, the amount determined which is certified by an accredited certification
‘‘(i) 4 cents, multiplied by under this subsection with respect to such com- agency to meet Standard 9.1-2009 of the Amer-
‘‘(ii) the capacity of such cell (expressed on a ponent shall be equal to the product of— ican Wind Energy Association (including any
per direct current watt basis), ‘‘(i) the amount determined under paragraph subsequent revisions to or modifications of such
‘‘(B) in the case of a photovoltaic wafer, $12 (1) with respect to such component, as deter- Standard which have been approved by the
per square meter, mined without regard to this paragraph, multi- American National Standards Institute).
‘‘(C) in the case of solar grade polysilicon, $3 plied by ‘‘(E) MICROINVERTER.—The term ‘micro-
per kilogram, ‘‘(ii) the phase out percentage under subpara- inverter’ means an inverter which—
‘‘(D) in the case of a polymeric backsheet, 40 graph (B). ‘‘(i) is suitable to connect with one solar mod-
cents per square meter, ‘‘(B) PHASE OUT PERCENTAGE.—The phase out ule,
‘‘(E) in the case of a solar module, an amount percentage under this subparagraph is equal ‘‘(ii) has a rated output of—
equal to the product of— to— ‘‘(I) 120 or 240 volt single-phase power, or
‘‘(i) 7 cents, multiplied by ‘‘(i) in the case of an eligible component sold ‘‘(II) 208 or 480 volt three-phase power, and
during calendar year 2030, 75 percent, ‘‘(iii) has a capacity which is not greater than
‘‘(ii) the capacity of such module (expressed
‘‘(ii) in the case of an eligible component sold 650 watts (expressed on a per alternating cur-
on a per direct current watt basis),
‘‘(F) in the case of a wind energy compo- during calendar year 2031, 50 percent, rent watt basis).
‘‘(iii) in the case of an eligible component sold ‘‘(F) RESIDENTIAL INVERTER.—The term ‘resi-
nent—
during calendar year 2032, 25 percent, dential inverter’ means an inverter which—
‘‘(i) if such component is a related offshore
‘‘(iv) in the case of an eligible component sold ‘‘(i) is suitable for a residence,
wind vessel, an amount equal to 10 percent of
‘‘(ii) has a rated output of 120 or 240 volt sin-
the sales price of such vessel, and after December 31, 2032, 0 percent.
gle-phase power, and
‘‘(ii) if such component is not described in ‘‘(C) EXCEPTION.—For purposes of deter-
‘‘(iii) has a capacity which is not greater than
clause (i), an amount equal to the product of— mining the amount under this subsection with
20 kilowatts (expressed on a per alternating cur-
‘‘(I) the applicable amount with respect to respect to any applicable critical mineral, this
rent watt basis).
such component (as determined under para- paragraph shall not apply.
‘‘(G) UTILITY INVERTER.—The term ‘utility in-
graph (2)(A)), multiplied by ‘‘(4) LIMITATION ON CAPACITY OF BATTERY
verter’ means an inverter which—
‘‘(II) the total rated capacity (expressed on a CELLS AND BATTERY MODULES.—
‘‘(i) is suitable for commercial or utility-scale
per watt basis) of the completed wind turbine ‘‘(A) IN GENERAL.—For purposes of subpara- systems,
for which such component is designed, graph (K)(ii) or (L)(ii) of paragraph (1), the ca- ‘‘(ii) has a rated output of not less than 600
‘‘(G) in the case of a torque tube, 87 cents per pacity determined under either subparagraph volt three-phase power, and
kilogram, with respect to a battery cell or battery module ‘‘(iii) has a capacity which is greater than 125
‘‘(H) in the case of a structural fastener, $2.28 shall not exceed a capacity-to-power ratio of kilowatts and not greater than 1000 kilowatts
per kilogram, 100:1. (expressed on a per alternating current watt
‘‘(I) in the case of an inverter, an amount ‘‘(B) CAPACITY-TO-POWER RATIO.—For pur- basis)
equal to the product of— poses of this paragraph, the term ‘capacity-to- ‘‘(3) SOLAR ENERGY COMPONENT.—
‘‘(i) the applicable amount with respect to power ratio’ means, with respect to a battery ‘‘(A) IN GENERAL.—The term ‘solar energy
such inverter (as determined under paragraph cell or battery module, the ratio of the capacity component’ means any of the following:
(2)(B)), multiplied by of such cell or module to the maximum discharge ‘‘(i) Solar modules.
‘‘(ii) the capacity of such inverter (expressed amount of such cell or module. ‘‘(ii) Photovoltaic cells.
on a per alternating current watt basis), ‘‘(c) DEFINITIONS.—For purposes of this sec- ‘‘(iii) Photovoltaic wafers.
‘‘(J) in the case of electrode active materials, tion— ‘‘(iv) Solar grade polysilicon.
an amount equal to 10 percent of the costs in- ‘‘(1) ELIGIBLE COMPONENT.— ‘‘(v) Torque tubes or structural fasteners.
curred by the taxpayer with respect to produc- ‘‘(A) IN GENERAL.—The term ‘eligible compo- ‘‘(vi) Polymeric backsheets.
tion of such materials, nent’ means— ‘‘(B) ASSOCIATED DEFINITIONS.—
‘‘(K) in the case of a battery cell, an amount ‘‘(i) any solar energy component, ‘‘(i) PHOTOVOLTAIC CELL.—The term ‘photo-
ctelli on DSK11ZRN23PROD with HOUSE
equal to the product of— ‘‘(ii) any wind energy component, voltaic cell’ means the smallest semiconductor
‘‘(i) $35, multiplied by ‘‘(iii) any inverter described in subparagraphs element of a solar module which performs the
‘‘(ii) subject to paragraph (4), the capacity of (B) through (G) of paragraph (2), immediate conversion of light into electricity.
such battery cell (expressed on a kilowatt-hour ‘‘(iv) any qualifying battery component, and ‘‘(ii) PHOTOVOLTAIC WAFER.—The term ‘photo-
basis), ‘‘(v) any applicable critical mineral. voltaic wafer’ means a thin slice, sheet, or layer
‘‘(L) in the case of a battery module, an ‘‘(B) APPLICATION WITH OTHER CREDITS.—The of semiconductor material of at least 240 square
amount equal to the product of— term ‘eligible component’ shall not include any centimeters—
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7617
‘‘(I) produced by a single manufacturer ei- vessel which is purpose-built or retrofitted for ‘‘(J) EUROPIUM.—Europium which is—
ther— purposes of the development, transport, installa- ‘‘(i) converted to europium oxide which is pu-
‘‘(aa) directly from molten or evaporated solar tion, operation, or maintenance of offshore wind rified to a minimum purity of 99.9 percent euro-
grade polysilicon or deposition of solar grade energy components. pium oxide by mass, or
thin film semiconductor photon absorber layer, ‘‘(v) TOWER.—The term ‘tower’ means a tubu- ‘‘(ii) purified to a minimum purity of 99 per-
or lar or lattice structure which supports the na- cent by mass.
‘‘(bb) through formation of an ingot from mol- celle and rotor of a wind turbine. ‘‘(K) FLUORSPAR.—Fluorspar which is—
ten polysilicon and subsequent slicing, and ‘‘(5) QUALIFYING BATTERY COMPONENT.— ‘‘(i) converted to fluorspar which is purified to
‘‘(II) which comprises the substrate or ab- ‘‘(A) IN GENERAL.—The term ‘qualifying bat- a minimum purity of 97 percent calcium fluoride
sorber layer of one or more photovoltaic cells. tery component’ means any of the following: by mass, or
‘‘(iii) POLYMERIC BACKSHEET.—The term ‘poly- ‘‘(i) Electrode active materials. ‘‘(ii) purified to a minimum purity of 99 per-
meric backsheet’ means a sheet on the back of a ‘‘(ii) Battery cells. cent fluorspar by mass.
solar module which acts as an electric insulator ‘‘(iii) Battery modules. ‘‘(L) GADOLINIUM.—Gadolinium which is—
and protects the inner components of such mod- ‘‘(B) ASSOCIATED DEFINITIONS.— ‘‘(i) converted to gadolinium oxide which is
ule from the surrounding environment. ‘‘(i) ELECTRODE ACTIVE MATERIAL.—The term purified to a minimum purity of 99.9 percent
‘‘(iv) SOLAR GRADE POLYSILICON.—The term ‘electrode active material’ means cathode mate- gadolinium oxide by mass, or
‘solar grade polysilicon’ means silicon which rials, anode materials, anode foils, and electro- ‘‘(ii) purified to a minimum purity of 99 per-
is— chemically active materials, including solvents, cent gadolinium by mass.
‘‘(I) suitable for use in photovoltaic manufac- additives, and electrolyte salts that contribute to ‘‘(M) GERMANIUM.—Germanium which is—
turing, and the electrochemical processes necessary for en- ‘‘(i) converted to germanium tetrachloride, or
‘‘(II) purified to a minimum purity of 99.999999 ergy storage . ‘‘(ii) purified to a minimum purity of 99.99
percent silicon by mass. ‘‘(ii) BATTERY CELL.—The term ‘battery cell’ percent germanium by mass.
‘‘(v) SOLAR MODULE.—The term ‘solar module’ means an electrochemical cell— ‘‘(N) GRAPHITE.—Graphite which is purified
means the connection and lamination of photo- ‘‘(I) comprised of 1 or more positive electrodes to a minimum purity of 99.9 percent graphitic
voltaic cells into an environmentally protected and 1 or more negative electrodes, carbon by mass.
final assembly which is— ‘‘(II) with an energy density of not less than ‘‘(O) INDIUM.—Indium which is—
‘‘(I) suitable to generate electricity when ex- 100 watt-hours per liter, and ‘‘(i) converted to—
posed to sunlight, and ‘‘(III) capable of storing at least 12 watt-hours ‘‘(I) indium tin oxide, or
‘‘(II) ready for installation without an addi- of energy. ‘‘(II) indium oxide which is purified to a min-
tional manufacturing process. ‘‘(iii) BATTERY MODULE.—The term ‘battery imum purity of 99.9 percent indium oxide by
‘‘(vi) SOLAR TRACKER.—The term ‘solar track- module’ means a module— mass, or
er’ means a mechanical system that moves solar ‘‘(I)(aa) in the case of a module using battery ‘‘(ii) purified to a minimum purity of 99 per-
modules according to the position of the sun cells, with 2 or more battery cells which are con- cent indium by mass.
and to increase energy output. figured electrically, in series or parallel, to cre- ‘‘(P) LITHIUM.—Lithium which is—
‘‘(vii) SOLAR TRACKER COMPONENTS.— ate voltage or current, as appropriate, to a spec- ‘‘(i) converted to lithium carbonate or lithium
‘‘(I) TORQUE TUBE.—The term ‘torque tube’ ified end use, or hydroxide, or
means a structural steel support element (in- ‘‘(bb) with no battery cells, and ‘‘(ii) purified to a minimum purity of 99.9 per-
cluding longitudinal purlins) which— ‘‘(II) with an aggregate capacity of not less cent lithium by mass.
‘‘(aa) is part of a solar tracker, than 7 kilowatt-hours (or, in the case of a mod- ‘‘(Q) MANGANESE.—Manganese which is—
‘‘(bb) is of any cross-sectional shape, ule for a hydrogen fuel cell vehicle, not less ‘‘(i) converted to manganese sulphate, or
‘‘(cc) may be assembled from individually than 1 kilowatt-hour). ‘‘(ii) purified to a minimum purity of 99.7 per-
manufactured segments, ‘‘(6) APPLICABLE CRITICAL MINERALS.—The cent manganese by mass.
‘‘(dd) spans longitudinally between founda- term ‘applicable critical mineral’ means any of ‘‘(R) NEODYMIUM.—Neodymium which is—
tion posts, the following: ‘‘(i) converted to neodymium-praseodymium
‘‘(ee) supports solar panels and is connected ‘‘(A) ALUMINUM.—Aluminum which is— oxide which is purified to a minimum purity of
to a mounting attachment for solar panels (with ‘‘(i) converted from bauxite to a minimum pu- 99 percent neodymium-praseodymium oxide by
or without separate module interface rails), and rity of 99 percent alumina by mass, or mass,
‘‘(ff) is rotated by means of a drive system. ‘‘(ii) purified to a minimum purity of 99.9 per- ‘‘(ii) converted to neodymium oxide which is
‘‘(II) STRUCTURAL FASTENER.—The term cent aluminum by mass. purified to a minimum purity of 99.5 percent ne-
‘structural fastener’ means a component which ‘‘(B) ANTIMONY.—Antimony which is— odymium oxide by mass
is used— ‘‘(i) converted to antimony trisulfide con- ‘‘(iii) purified to a minimum purity of 99.9 per-
‘‘(aa) to connect the mechanical and drive centrate with a minimum purity of 90 percent cent neodymium by mass.
system components of a solar tracker to the antimony trisulfide by mass, or ‘‘(S) NICKEL.—Nickel which is—
foundation of such solar tracker, ‘‘(ii) purified to a minimum purity of 99.65 ‘‘(i) converted to nickel sulphate, or
‘‘(bb) to connect torque tubes to drive assem- percent antimony by mass. ‘‘(ii) purified to a minimum purity of 99 per-
blies, or ‘‘(C) BARITE.—Barite which is barium sulfate cent nickel by mass.
‘‘(cc) to connect segments of torque tubes to purified to a minimum purity of 80 percent bar- ‘‘(T) NIOBIUM.—Niobium which is—
one another. ite by mass. ‘‘(i) converted to ferronibium, or
‘‘(4) WIND ENERGY COMPONENT.— ‘‘(D) BERYLLIUM.—Beryllium which is— ‘‘(ii) purified to a minimum purity of 99 per-
‘‘(A) IN GENERAL.—The term ‘wind energy ‘‘(i) converted to copper-beryllium master cent niobium by mass.
component’ means any of the following: alloy, or ‘‘(U) TELLURIUM.—Tellurium which is—
‘‘(i) Blades. ‘‘(ii) purified to a minimum purity of 99 per- ‘‘(i) converted to cadmium telluride, or
‘‘(ii) Nacelles. cent beryllium by mass. ‘‘(ii) purified to a minimum purity of 99 per-
‘‘(iii) Towers. ‘‘(E) CERIUM.—Cerium which is— cent tellurium by mass.
‘‘(iv) Offshore wind foundations. ‘‘(i) converted to cerium oxide which is puri- ‘‘(V) TIN.—Tin which is purified to low alpha
‘‘(v) Related offshore wind vessels. fied to a minimum purity of 99.9 percent cerium emitting tin which—
‘‘(B) ASSOCIATED DEFINITIONS.— oxide by mass, or ‘‘(i) has a purity of greater than 99.99 percent
‘‘(i) BLADE.—The term ‘blade’ means an air- ‘‘(ii) purified to a minimum purity of 99 per- by mass, and
foil-shaped blade which is responsible for con- cent cerium by mass. ‘‘(ii) possesses an alpha emission rate of not
verting wind energy to low-speed rotational en- ‘‘(F) CESIUM.—Cesium which is— greater than 0.01 counts per hour per centimeter
ergy. ‘‘(i) converted to cesium formate or cesium square.
‘‘(ii) OFFSHORE WIND FOUNDATION.—The term carbonate, or ‘‘(W) TUNGSTEN.—Tungsten which is con-
‘offshore wind foundation’ means the compo- ‘‘(ii) purified to a minimum purity of 99 per- verted to ammonium paratungstate or
nent (including transition piece) which secures cent cesium by mass. ferrotungsten.
an offshore wind tower and any above-water ‘‘(G) CHROMIUM.—Chromium which is— ‘‘(X) VANADIUM.—Vanadium which is con-
turbine components to the seafloor using— ‘‘(i) converted to ferrochromium consisting of verted to ferrovanadium or vanadium pentoxide.
‘‘(I) fixed platforms, such as offshore wind not less than 60 percent chromium by mass, or ‘‘(Y) YTTRIUM.—Yttrium which is—
monopiles, jackets, or gravity-based founda- ‘‘(ii) purified to a minimum purity of 99 per- ‘‘(i) converted to yttrium oxide which is puri-
tions, or cent chromium by mass. fied to a minimum purity of 99.999 percent yt-
‘‘(II) floating platforms and associated moor- ‘‘(H) COBALT.—Cobalt which is— trium oxide by mass, or
ing systems. ‘‘(i) converted to cobalt sulfate, or ‘‘(ii) purified to a minimum purity of 99.9 per-
ctelli on DSK11ZRN23PROD with HOUSE
‘‘(iii) NACELLE.—The term ‘nacelle’ means the ‘‘(ii) purified to a minimum purity of 99.6 per- cent yttrium by mass.
assembly of the drivetrain and other tower-top cent cobalt by mass. ‘‘(Z) OTHER MINERALS.—Any of the following
components of a wind turbine (with the excep- ‘‘(I) DYSPROSIUM.—Dysprosium which is— minerals, provided that such mineral is purified
tion of the blades and the hub) within their ‘‘(i) converted to not less than 99 percent pure to a minimum purity of 99 percent by mass:
cover housing. dysprosium iron alloy by mass, or ‘‘(i) Arsenic.
‘‘(iv) RELATED OFFSHORE WIND VESSEL.—The ‘‘(ii) purified to a minimum purity of 99 per- ‘‘(ii) Bismuth.
term ‘related offshore wind vessel’ means any cent dysprosium by mass. ‘‘(iii) Erbium.
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H7618 CONGRESSIONAL RECORD — HOUSE August 12, 2022
‘‘(iv) Gallium. termined by substituting ‘calendar year 2022’ for ary 1, 2025, but only to the extent of the in-
‘‘(v) Hafnium. ‘calendar year 2016’ in subparagraph (A)(ii) creased amount of electricity produced at the fa-
‘‘(vi) Holmium. thereof. cility by reason of the following:
‘‘(vii) Iridium. ‘‘(B) ROUNDING.—If any amount as adjusted ‘‘(i) A new unit which is placed in service
‘‘(viii) Lanthanum. under subparagraph (A) is not a multiple of after December 31, 2024.
‘‘(ix) Lutetium. $0.01, such amount shall be rounded to the next ‘‘(ii) Any additions of capacity which are
‘‘(x) Magnesium. lowest multiple of $0.01.’’. placed in service after December 31, 2024.
‘‘(xi) Palladium. (b) AUTHORITY FOR ADVANCES.—Section ‘‘(D) COORDINATION WITH OTHER CREDITS.—
‘‘(xii) Platinum. 9507(d)(3)(B) is amended by striking ‘‘December The term ‘qualified facility’ shall not include
‘‘(xiii) Praseodymium. 31, 1995’’ and inserting ‘‘December 31, 2032’’. any facility for which a credit determined under
‘‘(xiv) Rhodium. (c) EFFECTIVE DATE.—The amendments made section 45, 45J, 45Q, 45U, 48, 48A, or 48E is al-
‘‘(xv) Rubidium. by this section shall take effect on January 1, lowed under section 38 for the taxable year or
‘‘(xvi) Ruthenium. 2023. any prior taxable year.
‘‘(xvii) Samarium. PART 7—INCENTIVES FOR CLEAN ELEC- ‘‘(2) GREENHOUSE GAS EMISSIONS RATE.—
‘‘(xviii) Scandium. ‘‘(A) IN GENERAL.—For purposes of this sec-
TRICITY AND CLEAN TRANSPORTATION
‘‘(xix) Tantalum. tion, the term ‘greenhouse gas emissions rate’
‘‘(xx) Terbium. SEC. 13701. CLEAN ELECTRICITY PRODUCTION means the amount of greenhouse gases emitted
CREDIT.
‘‘(xxi) Thulium. into the atmosphere by a facility in the produc-
‘‘(xxii) Titanium. (a) IN GENERAL.—Subpart D of part IV of sub- tion of electricity, expressed as grams of CO2e
‘‘(xxiii) Ytterbium. chapter A of chapter 1, as amended by the pre- per KWh.
‘‘(xxiv) Zinc. ceding provisions of this Act, is amended by ‘‘(B) FUEL COMBUSTION AND GASIFICATION.—
‘‘(xxv) Zirconium. adding at the end the following new section: In the case of a facility which produces elec-
‘‘(d) SPECIAL RULES.—In this section— ‘‘SEC. 45Y. CLEAN ELECTRICITY PRODUCTION tricity through combustion or gasification, the
‘‘(1) RELATED PERSONS.—Persons shall be CREDIT. greenhouse gas emissions rate for such facility
treated as related to each other if such persons ‘‘(a) AMOUNT OF CREDIT.— shall be equal to the net rate of greenhouse
would be treated as a single employer under the ‘‘(1) IN GENERAL.—For purposes of section 38, gases emitted into the atmosphere by such facil-
regulations prescribed under section 52(b). the clean electricity production credit for any ity (taking into account lifecycle greenhouse gas
‘‘(2) ONLY PRODUCTION IN THE UNITED STATES taxable year is an amount equal to the product emissions, as described in section 211(o)(1)(H) of
TAKEN INTO ACCOUNT.—Sales shall be taken into of— the Clean Air Act (42 U.S.C. 7545(o)(1)(H))) in
account under this section only with respect to ‘‘(A) the kilowatt hours of electricity— the production of electricity, expressed as grams
eligible components the production of which is ‘‘(i) produced by the taxpayer at a qualified of CO2e per KWh.
within— facility, and ‘‘(C) ESTABLISHMENT OF EMISSIONS RATES FOR
‘‘(A) the United States (within the meaning of ‘‘(ii)(I) sold by the taxpayer to an unrelated FACILITIES.—
section 638(1)), or person during the taxable year, or ‘‘(i) PUBLISHING EMISSIONS RATES.—The Sec-
‘‘(B) a possession of the United States (within ‘‘(II) in the case of a qualified facility which retary shall annually publish a table that sets
the meaning of section 638(2)). is equipped with a metering device which is forth the greenhouse gas emissions rates for
‘‘(3) PASS-THRU IN THE CASE OF ESTATES AND owned and operated by an unrelated person, types or categories of facilities, which a tax-
TRUSTS.—Under regulations prescribed by the sold, consumed, or stored by the taxpayer dur- payer shall use for purposes of this section.
Secretary, rules similar to the rules of subsection ing the taxable year, multiplied by ‘‘(ii) PROVISIONAL EMISSIONS RATE.—In the
(d) of section 52 shall apply. ‘‘(B) the applicable amount with respect to case of any facility for which an emissions rate
‘‘(4) SALE OF INTEGRATED COMPONENTS.—For such qualified facility. has not been established by the Secretary, a tax-
purposes of this section, a person shall be treat- ‘‘(2) APPLICABLE AMOUNT.— payer which owns such facility may file a peti-
ed as having sold an eligible component to an ‘‘(A) BASE AMOUNT.—Subject to subsection tion with the Secretary for determination of the
unrelated person if such component is inte- (g)(7), in the case of any qualified facility which emissions rate with respect to such facility.
grated, incorporated, or assembled into another is not described in clause (i) or (ii) of subpara- ‘‘(D) CARBON CAPTURE AND SEQUESTRATION
eligible component which is sold to an unrelated graph (B) and does not satisfy the requirements EQUIPMENT.—For purposes of this subsection,
person.’’. described in clause (iii) of such subparagraph, the amount of greenhouse gases emitted into the
(b) CONFORMING AMENDMENTS.— the applicable amount shall be 0.3 cents. atmosphere by a facility in the production of
(1) Section 38(b) of the Internal Revenue Code ‘‘(B) ALTERNATIVE AMOUNT.—Subject to sub- electricity shall not include any qualified car-
of 1986, as amended by the preceding provisions section (g)(7), in the case of any qualified facil- bon dioxide that is captured by the taxpayer
of this Act, is amended— ity— and—
(A) in paragraph (36), by striking ‘‘plus’’ at ‘‘(i) with a maximum net output of less than ‘‘(i) pursuant to any regulations established
the end, 1 megawatt (as measured in alternating cur- under paragraph (2) of section 45Q(f), disposed
(B) in paragraph (37), by striking the period rent), of by the taxpayer in secure geological storage,
at the end and inserting ‘‘, plus’’, and ‘‘(ii) the construction of which begins prior to or
(C) by adding at the end the following new the date that is 60 days after the Secretary pub- ‘‘(ii) utilized by the taxpayer in a manner de-
paragraph: lishes guidance with respect to the requirements scribed in paragraph (5) of such section.
‘‘(38) the advanced manufacturing production of paragraphs (9) and (10) of subsection (g), or ‘‘(c) INFLATION ADJUSTMENT.—
credit determined under section 45X(a).’’. ‘‘(iii) which— ‘‘(1) IN GENERAL.—In the case of a calendar
(2) The table of sections for subpart D of part ‘‘(I) satisfies the requirements under para- year beginning after 2024, the 0.3 cent amount
IV of subchapter A of chapter 1, as amended by graph (9) of subsection (g), and in paragraph (2)(A) of subsection (a) and the 1.5
the preceding provisions of this Act, is amended ‘‘(II) with respect to the construction of such cent amount in paragraph (2)(B) of such sub-
by adding at the end the following new item: facility, satisfies the requirements under para- section shall each be adjusted by multiplying
graph (10) of subsection (g), such amount by the inflation adjustment factor
‘‘Sec. 45X. Advanced manufacturing produc-
the applicable amount shall be 1.5 cents. for the calendar year in which the sale, con-
tion credit.’’.
‘‘(b) QUALIFIED FACILITY.— sumption, or storage of the electricity occurs. If
(c) EFFECTIVE DATE.—The amendments made
‘‘(1) IN GENERAL.— the 0.3 cent amount as increased under this
by this section shall apply to components pro-
‘‘(A) DEFINITION.—Subject to subparagraphs paragraph is not a multiple of 0.05 cent, such
duced and sold after December 31, 2022.
(B), (C), and (D), the term ‘qualified facility’ amount shall be rounded to the nearest multiple
PART 6—SUPERFUND means a facility owned by the taxpayer— of 0.05 cent. If the 1.5 cent amount as increased
SEC. 13601. REINSTATEMENT OF SUPERFUND. ‘‘(i) which is used for the generation of elec- under this paragraph is not a multiple of 0.1
(a) HAZARDOUS SUBSTANCE SUPERFUND FI- tricity, cent, such amount shall be rounded to the near-
NANCING RATE.— ‘‘(ii) which is placed in service after December est multiple of 0.1 cent.
(1) EXTENSION.—Section 4611 is amended by 31, 2024, and ‘‘(2) ANNUAL COMPUTATION.—The Secretary
striking subsection (e). ‘‘(iii) for which the greenhouse gas emissions shall, not later than April 1 of each calendar
(2) ADJUSTMENT FOR INFLATION.— rate (as determined under paragraph (2)) is not year, determine and publish in the Federal Reg-
(A) Section 4611(c)(2)(A) is amended by strik- greater than zero. ister the inflation adjustment factor for such
ing ‘‘9.7 cents’’ and inserting ‘‘16.4 cents’’. ‘‘(B) 10-YEAR PRODUCTION CREDIT.—For pur- calendar year in accordance with this sub-
(B) Section 4611(c) is amended by adding at poses of this section, a facility shall only be section.
the end the following: treated as a qualified facility during the 10-year ‘‘(3) INFLATION ADJUSTMENT FACTOR.—The
‘‘(3) ADJUSTMENT FOR INFLATION.— period beginning on the date the facility was term ‘inflation adjustment factor’ means, with
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‘‘(A) IN GENERAL.—In the case of a year be- originally placed in service. respect to a calendar year, a fraction the nu-
ginning after 2023, the amount in paragraph ‘‘(C) EXPANSION OF FACILITY; INCREMENTAL merator of which is the GDP implicit price
(2)(A) shall be increased by an amount equal PRODUCTION.—The term ‘qualified facility’ shall deflator for the preceding calendar year and the
to— include either of the following in connection denominator of which is the GDP implicit price
‘‘(i) such amount, multiplied by with a facility described in subparagraph (A) deflator for the calendar year 1992. The term
‘‘(ii) the cost-of-living adjustment determined (without regard to clause (ii) of such subpara- ‘GDP implicit price deflator’ means the most re-
under section 1(f)(3) for the calendar year, de- graph) which was placed in service before Janu- cent revision of the implicit price deflator for the
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7619
gross domestic product as computed and pub- clude any production in the form of useful ther- of a cooperative organization determined under
lished by the Department of Commerce before mal energy by any combined heat and power subsection (a) for a taxable year is less than the
March 15 of the calendar year. system property within such facility, and amount of such credit shown on the return of
‘‘(d) CREDIT PHASE-OUT.— ‘‘(ii) the amount of greenhouse gases emitted the cooperative organization for such year, an
‘‘(1) IN GENERAL.—The amount of the clean into the atmosphere by such facility in the pro- amount equal to the excess of—
electricity production credit under subsection duction of such useful thermal energy shall be ‘‘(i) such reduction, over
(a) for any qualified facility the construction of included for purposes of determining the green- ‘‘(ii) the amount not apportioned to such pa-
which begins during a calendar year described house gas emissions rate for such facility. trons under subparagraph (A) for the taxable
in paragraph (2) shall be equal to the product ‘‘(B) COMBINED HEAT AND POWER SYSTEM year,
of— PROPERTY.—For purposes of this paragraph, the shall be treated as an increase in tax imposed by
‘‘(A) the amount of the credit determined term ‘combined heat and power system property’ this chapter on the organization. Such increase
under subsection (a) without regard to this sub- has the same meaning given such term by sec- shall not be treated as tax imposed by this chap-
section, multiplied by tion 48(c)(3) (without regard to subparagraphs ter for purposes of determining the amount of
‘‘(B) the phase-out percentage under para- (A)(iv), (B), and (D) thereof). any credit under this chapter.
graph (2). ‘‘(C) CONVERSION FROM BTU TO KWH.— ‘‘(D) ELIGIBLE COOPERATIVE DEFINED.—For
‘‘(2) PHASE-OUT PERCENTAGE.—The phase-out ‘‘(i) IN GENERAL.—For purposes of subpara- purposes of this section, the term ‘eligible coop-
percentage under this paragraph is equal to— graph (A)(i), the amount of kilowatt hours of erative’ means a cooperative organization de-
‘‘(A) for a facility the construction of which electricity produced in the form of useful ther- scribed in section 1381(a) which is owned more
begins during the first calendar year following mal energy shall be equal to the quotient of— than 50 percent by agricultural producers or by
the applicable year, 100 percent, ‘‘(I) the total useful thermal energy produced entities owned by agricultural producers. For
‘‘(B) for a facility the construction of which by the combined heat and power system prop- this purpose an entity owned by an agricultural
begins during the second calendar year fol- erty within the qualified facility, divided by producer is one that is more than 50 percent
lowing the applicable year, 75 percent, ‘‘(II) the heat rate for such facility. owned by agricultural producers.
‘‘(C) for a facility the construction of which ‘‘(ii) HEAT RATE.—For purposes of this sub- ‘‘(7) INCREASE IN CREDIT IN ENERGY COMMU-
begins during the third calendar year following paragraph, the term ‘heat rate’ means the NITIES.—In the case of any qualified facility
the applicable year, 50 percent, and amount of energy used by the qualified facility which is located in an energy community (as de-
‘‘(D) for a facility the construction of which to generate 1 kilowatt hour of electricity, ex- fined in section 45(b)(11)(B)), for purposes of de-
begins during any calendar year subsequent to pressed as British thermal units per net kilowatt termining the amount of the credit under sub-
the calendar year described in subparagraph hour generated. section (a) with respect to any electricity pro-
(C), 0 percent. ‘‘(3) PRODUCTION ATTRIBUTABLE TO THE TAX- duced by the taxpayer at such facility during
‘‘(3) APPLICABLE YEAR.—For purposes of this PAYER.—In the case of a qualified facility in the taxable year, the applicable amount under
subsection, the term ‘applicable year’ means the which more than 1 person has an ownership in- paragraph (2) of such subsection shall be in-
later of— terest, except to the extent provided in regula- creased by an amount equal to 10 percent of the
‘‘(A) the calendar year in which the Secretary tions prescribed by the Secretary, production amount otherwise in effect under such para-
determines that the annual greenhouse gas from the facility shall be allocated among such graph.
emissions from the production of electricity in persons in proportion to their respective owner- ‘‘(8) CREDIT REDUCED FOR TAX-EXEMPT
the United States are equal to or less than 25 ship interests in the gross sales from such facil- BONDS.—Rules similar to the rules of section
percent of the annual greenhouse gas emissions ity. 45(b)(3) shall apply.
from the production of electricity in the United ‘‘(4) RELATED PERSONS.—Persons shall be ‘‘(9) WAGE REQUIREMENTS.—Rules similar to
States for calendar year 2022, or treated as related to each other if such persons the rules of section 45(b)(7) shall apply.
‘‘(B) 2032. would be treated as a single employer under the ‘‘(10) APPRENTICESHIP REQUIREMENTS.—Rules
‘‘(e) DEFINITIONS.—For purposes of this sec- regulations prescribed under section 52(b). In similar to the rules of section 45(b)(8) shall
tion: the case of a corporation which is a member of apply.
‘‘(1) CO2e PER KWh.—The term ‘CO2e per an affiliated group of corporations filing a con- ‘‘(11) DOMESTIC CONTENT BONUS CREDIT
KWh’ means, with respect to any greenhouse solidated return, such corporation shall be AMOUNT.—
gas, the equivalent carbon dioxide (as deter- treated as selling electricity to an unrelated per- ‘‘(A) IN GENERAL.—In the case of any quali-
mined based on global warming potential) per son if such electricity is sold to such a person by fied facility which satisfies the requirement
kilowatt hour of electricity produced. another member of such group. under subparagraph (B)(i), the amount of the
‘‘(2) GREENHOUSE GAS.—The term ‘greenhouse ‘‘(5) PASS-THRU IN THE CASE OF ESTATES AND credit determined under subsection (a) shall be
gas’ has the same meaning given such term TRUSTS.—Under regulations prescribed by the increased by an amount equal to 10 percent of
under section 211(o)(1)(G) of the Clean Air Act Secretary, rules similar to the rules of subsection the amount so determined (as determined with-
(42 U.S.C. 7545(o)(1)(G)), as in effect on the date (d) of section 52 shall apply. out application of paragraph (7)).
of the enactment of this section. ‘‘(6) ALLOCATION OF CREDIT TO PATRONS OF ‘‘(B) REQUIREMENT.—
‘‘(3) QUALIFIED CARBON DIOXIDE.—The term AGRICULTURAL COOPERATIVE.— ‘‘(i) IN GENERAL.—The requirement described
‘qualified carbon dioxide’ means carbon dioxide ‘‘(A) ELECTION TO ALLOCATE.— in this subclause is satisfied with respect to any
captured from an industrial source which— ‘‘(i) IN GENERAL.—In the case of an eligible co- qualified facility if the taxpayer certifies to the
‘‘(A) would otherwise be released into the at- operative organization, any portion of the credit Secretary (at such time, and in such form and
mosphere as industrial emission of greenhouse determined under subsection (a) for the taxable manner, as the Secretary may prescribe) that
gas, year may, at the election of the organization, be any steel, iron, or manufactured product which
‘‘(B) is measured at the source of capture and apportioned among patrons of the organization is a component of such facility (upon completion
verified at the point of disposal or utilization, on the basis of the amount of business done by of construction) was produced in the United
and the patrons during the taxable year. States (as determined under section 661 of title
‘‘(C) is captured and disposed or utilized with- ‘‘(ii) FORM AND EFFECT OF ELECTION.—An 49, Code of Federal Regulations).
in the United States (within the meaning of sec- election under clause (i) for any taxable year ‘‘(ii) STEEL AND IRON.—In the case of steel or
tion 638(1)) or a possession of the United States shall be made on a timely filed return for such iron, clause (i) shall be applied in a manner
(within the meaning of section 638(2)). year. Such election, once made, shall be irrev- consistent with section 661.5 of title 49, Code of
‘‘(f) GUIDANCE.—Not later than January 1, ocable for such taxable year. Such election shall Federal Regulations.
2025, the Secretary shall issue guidance regard- not take effect unless the organization des- ‘‘(iii) MANUFACTURED PRODUCT.—For pur-
ing implementation of this section, including ignates the apportionment as such in a written poses of clause (i), the manufactured products
calculation of greenhouse gas emission rates for notice mailed to its patrons during the payment which are components of a qualified facility
qualified facilities and determination of clean period described in section 1382(d). upon completion of construction shall be deemed
electricity production credits under this section. ‘‘(B) TREATMENT OF ORGANIZATIONS AND PA- to have been produced in the United States if
‘‘(g) SPECIAL RULES.— TRONS.—The amount of the credit apportioned not less than the adjusted percentage (as deter-
‘‘(1) ONLY PRODUCTION IN THE UNITED STATES to any patrons under subparagraph (A)— mined under subparagraph (C)) of the total
TAKEN INTO ACCOUNT.—Consumption, sales, or ‘‘(i) shall not be included in the amount deter- costs of all such manufactured products of such
storage shall be taken into account under this mined under subsection (a) with respect to the facility are attributable to manufactured prod-
section only with respect to electricity the pro- organization for the taxable year, and ucts (including components) which are mined,
duction of which is within— ‘‘(ii) shall be included in the amount deter- produced, or manufactured in the United States.
‘‘(A) the United States (within the meaning of mined under subsection (a) for the first taxable ‘‘(C) ADJUSTED PERCENTAGE.—
section 638(1)), or year of each patron ending on or after the last ‘‘(i) IN GENERAL.—Subject to subclause (ii), for
‘‘(B) a possession of the United States (within day of the payment period (as defined in section purposes of subparagraph (B)(iii), the adjusted
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the meaning of section 638(2)). 1382(d)) for the taxable year of the organization percentage shall be—
‘‘(2) COMBINED HEAT AND POWER SYSTEM or, if earlier, for the taxable year of each patron ‘‘(I) in the case of a facility the construction
PROPERTY.— ending on or after the date on which the patron of which begins before January 1, 2025, 40 per-
‘‘(A) IN GENERAL.—For purposes of subsection receives notice from the cooperative of the ap- cent,
(a)— portionment. ‘‘(II) in the case of a facility the construction
‘‘(i) the kilowatt hours of electricity produced ‘‘(C) SPECIAL RULES FOR DECREASE IN CREDITS of which begins after December 31, 2024, and be-
by a taxpayer at a qualified facility shall in- FOR TAXABLE YEAR.—If the amount of the credit fore January 1, 2026, 45 percent,
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H7620 CONGRESSIONAL RECORD — HOUSE August 12, 2022
‘‘(III) in the case of a facility the construction (c) EFFECTIVE DATE.—The amendments made ‘‘(II) in the case of any qualified investment
of which begins after December 31, 2025, and be- by this section shall apply to facilities placed in with respect to a qualified facility described in
fore January 1, 2027, 50 percent, and service after December 31, 2024. paragraph (2)(A)(ii) or with respect to energy
‘‘(IV) in the case of a facility the construction SEC. 13702. CLEAN ELECTRICITY INVESTMENT storage technology described in paragraph
of which begins after December 31, 2026, 55 per- CREDIT. (2)(B)(ii), 10 percentage points.
cent. (a) IN GENERAL.—Subpart E of part IV of sub- ‘‘(B) DOMESTIC CONTENT.—Rules similar to the
‘‘(ii) OFFSHORE WIND FACILITY.—For purposes chapter A of chapter 1, as amended by section rules of section 48(a)(12) shall apply.
of subparagraph (B)(iii), in the case of a quali- 107(a) of the CHIPS Act of 2022, is amended by ‘‘(b) QUALIFIED INVESTMENT WITH RESPECT TO
fied facility which is an offshore wind facility, inserting after section 48D the following new A QUALIFIED FACILITY.—
the adjusted percentage shall be— section: ‘‘(1) IN GENERAL.—For purposes of subsection
‘‘(I) in the case of a facility the construction ‘‘SEC. 48E.
CLEAN ELECTRICITY INVESTMENT (a), the qualified investment with respect to any
of which begins before January 1, 2025, 20 per- CREDIT. qualified facility for any taxable year is the sum
cent, ‘‘(a) INVESTMENT CREDIT FOR QUALIFIED of—
‘‘(II) in the case of a facility the construction PROPERTY.— ‘‘(A) the basis of any qualified property
of which begins after December 31, 2024, and be- ‘‘(1) IN GENERAL.—For purposes of section 46, placed in service by the taxpayer during such
fore January 1, 2026, 27.5 percent, the clean electricity investment credit for any taxable year which is part of a qualified facil-
‘‘(III) in the case of a facility the construction taxable year is an amount equal to the applica- ity, plus
of which begins after December 31, 2025, and be- ble percentage of the qualified investment for ‘‘(B) the amount of any expenditures which
fore January 1, 2027, 35 percent, such taxable year with respect to— are—
‘‘(IV) in the case of a facility the construction ‘‘(A) any qualified facility, and ‘‘(i) paid or incurred by the taxpayer for
of which begins after December 31, 2026, and be- ‘‘(B) any energy storage technology. qualified interconnection property—
fore January 1, 2028, 45 percent, and ‘‘(2) APPLICABLE PERCENTAGE.— ‘‘(I) in connection with a qualified facility
‘‘(V) in the case of a facility the construction ‘‘(A) QUALIFIED FACILITIES.—Subject to para- which has a maximum net output of not greater
of which begins after December 31, 2027, 55 per- graph (3)— than 5 megawatts (as measured in alternating
cent. ‘‘(i) BASE RATE.—In the case of any qualified current), and
‘‘(12) PHASEOUT FOR ELECTIVE PAYMENT.— facility which is not described in subclause (I) ‘‘(II) placed in service during the taxable year
‘‘(A) IN GENERAL.—In the case of a taxpayer or (II) of clause (ii) and does not satisfy the re- of the taxpayer, and
making an election under section 6417 with re- quirements described in subclause (III) of such ‘‘(ii) properly chargeable to capital account of
spect to a credit under this section, the amount clause, the applicable percentage shall be 6 per- the taxpayer.
of such credit shall be replaced with— cent. ‘‘(2) QUALIFIED PROPERTY.—For purposes of
‘‘(i) the value of such credit (determined with- ‘‘(ii) ALTERNATIVE RATE.—In the case of any this section, the term ‘qualified property’ means
out regard to this paragraph), multiplied by qualified facility— property—
‘‘(ii) the applicable percentage. ‘‘(I) with a maximum net output of less than ‘‘(A) which is—
‘‘(B) 100 PERCENT APPLICABLE PERCENTAGE 1 megawatt (as measured in alternating cur- ‘‘(i) tangible personal property, or
FOR CERTAIN QUALIFIED FACILITIES.—In the case rent), ‘‘(ii) other tangible property (not including a
of any qualified facility— ‘‘(II) the construction of which begins prior to building or its structural components), but only
‘‘(i) which satisfies the requirements under the date that is 60 days after the Secretary pub- if such property is used as an integral part of
paragraph (11)(B), or lishes guidance with respect to the requirements the qualified facility,
‘‘(ii) with a maximum net output of less than of paragraphs (3) and (4) of subsection (d), or ‘‘(B) with respect to which depreciation (or
1 megawatt (as measured in alternating cur- ‘‘(III) which— amortization in lieu of depreciation) is allow-
rent), ‘‘(aa) satisfies the requirements of subsection able, and
the applicable percentage shall be 100 percent. (d)(3), and ‘‘(C)(i) the construction, reconstruction, or
‘‘(C) PHASED DOMESTIC CONTENT REQUIRE- ‘‘(bb) with respect to the construction of such erection of which is completed by the taxpayer,
MENT.—Subject to subparagraph (D), in the case facility, satisfies the requirements of subsection or
of any qualified facility which is not described (d)(4), ‘‘(ii) which is acquired by the taxpayer if the
in subparagraph (B), the applicable percentage the applicable percentage shall be 30 percent. original use of such property commences with
shall be— ‘‘(B) ENERGY STORAGE TECHNOLOGY.—Subject the taxpayer.
‘‘(i) if construction of such facility began be- to paragraph (3)— ‘‘(3) QUALIFIED FACILITY.—
fore January 1, 2024, 100 percent, ‘‘(i) BASE RATE.—In the case of any energy ‘‘(A) IN GENERAL.—For purposes of this sec-
‘‘(ii) if construction of such facility began in storage technology which is not described in tion, the term ‘qualified facility’ means a facil-
calendar year 2024, 90 percent, subclause (I) or (II) of clause (ii) and does not ity—
‘‘(iii) if construction of such facility began in satisfy the requirements described in subclause ‘‘(i) which is used for the generation of elec-
calendar year 2025, 85 percent, and (III) of such clause, the applicable percentage tricity,
‘‘(iv) if construction of such facility began shall be 6 percent. ‘‘(ii) which is placed in service after December
after December 31, 2025, 0 percent. ‘‘(ii) ALTERNATIVE RATE.—In the case of any 31, 2024, and
‘‘(D) EXCEPTION.— energy storage technology— ‘‘(iii) for which the anticipated greenhouse
‘‘(i) IN GENERAL.—For purposes of this para- ‘‘(I) with a capacity of less than 1 megawatt, gas emissions rate (as determined under sub-
graph, the Secretary shall provide exceptions to ‘‘(II) the construction of which begins prior to paragraph (B)(ii)) is not greater than zero.
the requirements under this paragraph if— the date that is 60 days after the Secretary pub- ‘‘(B) ADDITIONAL RULES.—
‘‘(I) the inclusion of steel, iron, or manufac- lishes guidance with respect to the requirements ‘‘(i) EXPANSION OF FACILITY; INCREMENTAL
tured products which are produced in the of paragraphs (3) and (4) of subsection (d), or PRODUCTION.—Rules similar to the rules of sec-
United States increases the overall costs of con- ‘‘(III) which— tion 45Y(b)(1)(C) shall apply for purposes of this
struction of qualified facilities by more than 25 ‘‘(aa) satisfies the requirements of subsection paragraph.
percent, or (d)(3), and ‘‘(ii) GREENHOUSE GAS EMISSIONS RATE.—Rules
‘‘(II) relevant steel, iron, or manufactured ‘‘(bb) with respect to the construction of such similar to the rules of section 45Y(b)(2) shall
products are not produced in the United States property, satisfies the requirements of subsection apply for purposes of this paragraph.
in sufficient and reasonably available quantities (d)(4), ‘‘(C) EXCLUSION.—The term ‘qualified facility’
or of a satisfactory quality. the applicable percentage shall be 30 percent. shall not include any facility for which—
‘‘(ii) APPLICABLE PERCENTAGE.—In any case ‘‘(3) INCREASE IN CREDIT RATE IN CERTAIN ‘‘(i) a renewable electricity production credit
in which the Secretary provides an exception CASES.— determined under section 45,
pursuant to clause (i), the applicable percentage ‘‘(A) ENERGY COMMUNITIES.— ‘‘(ii) an advanced nuclear power facility pro-
shall be 100 percent.’’. ‘‘(i) IN GENERAL.—In the case of any qualified duction credit determined under section 45J,
(b) CONFORMING AMENDMENTS.— investment with respect to a qualified facility or ‘‘(iii) a carbon oxide sequestration credit de-
(1) Section 38(b), as amended by the preceding with respect to energy storage technology which termined under section 45Q,
provisions of this Act, is amended— is placed in service within an energy community ‘‘(iv) a zero-emission nuclear power produc-
(A) in paragraph (37), by striking ‘‘plus’’ at (as defined in section 45(b)(11)(B)), for purposes tion credit determined under section 45U,
the end, of applying paragraph (2) with respect to such ‘‘(v) a clean electricity production credit de-
(B) in paragraph (38), by striking the period property or investment, the applicable percent- termined under section 45Y,
at the end and inserting ‘‘, plus’’, and age shall be increased by the applicable credit ‘‘(vi) an energy credit determined under sec-
(C) by adding at the end the following new rate increase. tion 48, or
paragraph: ‘‘(ii) APPLICABLE CREDIT RATE INCREASE.—For ‘‘(vii) a qualifying advanced coal project cred-
‘‘(39) the clean electricity production credit
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purposes of clause (i), the applicable credit rate it under section 48A,
determined under section 45Y(a).’’. increase shall be an amount equal to— is allowed under section 38 for the taxable year
(2) The table of sections for subpart D of part ‘‘(I) in the case of any qualified investment or any prior taxable year.
IV of subchapter A of chapter 1, as amended by with respect to a qualified facility described in ‘‘(4) QUALIFIED INTERCONNECTION PROP-
the preceding provisions of this Act, is amended paragraph (2)(A)(i) or with respect to energy ERTY.—For purposes of this paragraph, the term
by adding at the end the following new item: storage technology described in paragraph ‘qualified interconnection property’ has the
‘‘Sec. 45Y. Clean electricity production credit.’’. (2)(B)(i), 2 percentage points, and meaning given such term in section 48(a)(8)(B).
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7621
‘‘(5) COORDINATION WITH REHABILITATION ‘‘(g) RECAPTURE OF CREDIT.—For purposes of ‘‘(D) FINANCIAL BENEFIT.—For purposes of
CREDIT.—The qualified investment with respect section 50, if the Secretary determines that the subparagraphs (B) and (C), electricity acquired
to any qualified facility for any taxable year greenhouse gas emissions rate for a qualified fa- at a below-market rate shall not fail to be taken
shall not include that portion of the basis of cility is greater than 10 grams of CO2e per KWh, into account as a financial benefit.
any property which is attributable to qualified any property for which a credit was allowed ‘‘(3) ELIGIBLE PROPERTY.—For purposes of
rehabilitation expenditures (as defined in sec- under this section with respect to such facility this subsection, the term ‘eligible property’
tion 47(c)(2)). shall cease to be investment credit property in means a qualified investment with respect to
‘‘(6) DEFINITIONS.—For purposes of this sub- the taxable year in which the determination is any applicable facility.
section, the terms ‘CO2e per KWh’ and ‘green- made. ‘‘(4) ALLOCATIONS.—
house gas emissions rate’ have the same mean- ‘‘(h) SPECIAL RULES FOR CERTAIN FACILITIES ‘‘(A) IN GENERAL.—Not later than January 1,
ing given such terms under section 45Y. PLACED IN SERVICE IN CONNECTION WITH LOW- 2025, the Secretary shall establish a program to
‘‘(c) QUALIFIED INVESTMENT WITH RESPECT TO INCOME COMMUNITIES.— allocate amounts of environmental justice ca-
ENERGY STORAGE TECHNOLOGY.— ‘‘(1) IN GENERAL.—In the case of any applica- pacity limitation to applicable facilities. In es-
‘‘(1) QUALIFIED INVESTMENT.—For purposes of ble facility with respect to which the Secretary tablishing such program and to carry out the
subsection (a), the qualified investment with re- makes an allocation of environmental justice ca- purposes of this subsection, the Secretary shall
spect to energy storage technology for any tax- pacity limitation under paragraph (4)— provide procedures to allow for an efficient allo-
able year is the basis of any energy storage ‘‘(A) the applicable percentage otherwise de- cation process, including, when determined ap-
technology placed in service by the taxpayer termined under subsection (a)(2) with respect to propriate, consideration of multiple projects in a
during such taxable year. any eligible property which is part of such facil- single application if such projects will be placed
‘‘(2) ENERGY STORAGE TECHNOLOGY.—For pur- ity shall be increased by— in service by a single taxpayer.
poses of this section, the term ‘energy storage ‘‘(i) in the case of a facility described in sub-
‘‘(B) LIMITATION.—The amount of environ-
technology’ has the meaning given such term in clause (I) of paragraph (2)(A)(iii) and not de-
mental justice capacity limitation allocated by
section 48(c)(6) (except that subparagraph (D) of scribed in subclause (II) of such paragraph, 10
the Secretary under subparagraph (A) during
such section shall not apply). percentage points, and
any calendar year shall not exceed the annual
‘‘(d) SPECIAL RULES.— ‘‘(ii) in the case of a facility described in sub-
capacity limitation with respect to such year.
‘‘(1) CERTAIN PROGRESS EXPENDITURE RULES clause (II) of paragraph (2)(A)(iii), 20 percent-
‘‘(C) ANNUAL CAPACITY LIMITATION.—For pur-
MADE APPLICABLE.—Rules similar to the rules of age points, and
‘‘(B) the increase in the credit determined poses of this paragraph, the term ‘annual ca-
subsections (c)(4) and (d) of section 46 (as in ef- pacity limitation’ means 1.8 gigawatts of direct
fect on the day before the date of the enactment under subsection (a) by reason of this subsection
for any taxable year with respect to all property current capacity for each calendar year during
of the Revenue Reconciliation Act of 1990) shall the period beginning on January 1, 2025, and
apply for purposes of subsection (a). which is part of such facility shall not exceed
the amount which bears the same ratio to the ending on December 31 of the applicable year
‘‘(2) SPECIAL RULE FOR PROPERTY FINANCED BY (as defined in section 45Y(d)(3)), and zero there-
SUBSIDIZED ENERGY FINANCING OR PRIVATE AC- amount of such increase (determined without re-
gard to this subparagraph) as— after.
TIVITY BONDS.—Rules similar to the rules of sec-
‘‘(i) the environmental justice capacity limita- ‘‘(D) CARRYOVER OF UNUSED LIMITATION.—
tion 45(b)(3) shall apply. ‘‘(i) IN GENERAL.—If the annual capacity limi-
‘‘(3) PREVAILING WAGE REQUIREMENTS.—Rules tion allocated to such facility, bears to
‘‘(ii) the total megawatt nameplate capacity of tation for any calendar year exceeds the aggre-
similar to the rules of section 48(a)(10) shall
such facility, as measured in direct current. gate amount allocated for such year under this
apply.
‘‘(2) APPLICABLE FACILITY.—For purposes of paragraph, such limitation for the succeeding
‘‘(4) APPRENTICESHIP REQUIREMENTS.—Rules
this subsection— calendar year shall be increased by the amount
similar to the rules of section 45(b)(8) shall
‘‘(A) IN GENERAL.—The term ‘applicable facil- of such excess. No amount may be carried under
apply.
ity’ means any qualified facility— the preceding sentence to any calendar year
‘‘(5) DOMESTIC CONTENT REQUIREMENT FOR ‘‘(i) which is not described in section after the third calendar year following the ap-
ELECTIVE PAYMENT.—In the case of a taxpayer
45Y(b)(2)(B), plicable year (as defined in section 45Y(d)(3)).
making an election under section 6417 with re- ‘‘(ii) which has a maximum net output of less
spect to a credit under this section, rules similar ‘‘(ii) CARRYOVER FROM SECTION 48 FOR CAL-
than 5 megawatts (as measured in alternating ENDAR YEAR 2025.—If the annual capacity limita-
to the rules of section 45Y(g)(12) shall apply. current), and
‘‘(e) CREDIT PHASE-OUT.— tion for calendar year 2024 under section
‘‘(iii) which— 48(e)(4)(D) exceeds the aggregate amount allo-
‘‘(1) IN GENERAL.—The amount of the clean ‘‘(I) is located in a low-income community (as
electricity investment credit under subsection (a) cated for such year under such section, such ex-
defined in section 45D(e)) or on Indian land (as cess amount may be carried over and applied to
for any qualified investment with respect to any defined in section 2601(2) of the Energy Policy
qualified facility or energy storage technology the annual capacity limitation under this sub-
Act of 1992 (25 U.S.C. 3501(2))), or section for calendar year 2025. The annual ca-
the construction of which begins during a cal- ‘‘(II) is part of a qualified low-income residen-
endar year described in paragraph (2) shall be pacity limitation for calendar year 2025 shall be
tial building project or a qualified low-income
equal to the product of— increased by the amount of such excess.
economic benefit project.
‘‘(A) the amount of the credit determined ‘‘(B) QUALIFIED LOW-INCOME RESIDENTIAL ‘‘(E) PLACED IN SERVICE DEADLINE.—
under subsection (a) without regard to this sub- BUILDING PROJECT.—A facility shall be treated
‘‘(i) IN GENERAL.—Paragraph (1) shall not
section, multiplied by as part of a qualified low-income residential apply with respect to any property which is
‘‘(B) the phase-out percentage under para- building project if— placed in service after the date that is 4 years
graph (2). ‘‘(i) such facility is installed on a residential after the date of the allocation with respect to
‘‘(2) PHASE-OUT PERCENTAGE.—The phase-out rental building which participates in a covered the facility of which such property is a part.
percentage under this paragraph is equal to— housing program (as defined in section 41411(a) ‘‘(ii) APPLICATION OF CARRYOVER.—Any
‘‘(A) for any qualified investment with respect of the Violence Against Women Act of 1994 (34 amount of environmental justice capacity limi-
to any qualified facility or energy storage tech- U.S.C. 12491(a)(3)), a housing assistance pro- tation which expires under clause (i) during any
nology the construction of which begins during gram administered by the Department of Agri- calendar year shall be taken into account as an
the first calendar year following the applicable culture under title V of the Housing Act of 1949, excess described in subparagraph (D)(i) (or as
year, 100 percent, a housing program administered by a tribally an increase in such excess) for such calendar
‘‘(B) for any qualified investment with respect designated housing entity (as defined in section year, subject to the limitation imposed by the
to any qualified facility or energy storage tech- 4(22) of the Native American Housing Assistance last sentence of such subparagraph.
nology the construction of which begins during and Self-Determination Act of 1996 (25 U.S.C. ‘‘(5) RECAPTURE.—The Secretary shall, by reg-
the second calendar year following the applica- 4103(22))) or such other affordable housing pro- ulations or other guidance, provide for recap-
ble year, 75 percent, grams as the Secretary may provide, and turing the benefit of any increase in the credit
‘‘(C) for any qualified investment with respect ‘‘(ii) the financial benefits of the electricity allowed under subsection (a) by reason of this
to any qualified facility or energy storage tech- produced by such facility are allocated equi- subsection with respect to any property which
nology the construction of which begins during tably among the occupants of the dwelling units ceases to be property eligible for such increase
the third calendar year following the applicable of such building. (but which does not cease to be investment cred-
year, 50 percent, and ‘‘(C) QUALIFIED LOW-INCOME ECONOMIC BEN- it property within the meaning of section 50(a)).
‘‘(D) for any qualified investment with respect EFIT PROJECT.—A facility shall be treated as The period and percentage of such recapture
to any qualified facility or energy storage tech- part of a qualified low-income economic benefit shall be determined under rules similar to the
nology the construction of which begins during project if at least 50 percent of the financial rules of section 50(a). To the extent provided by
any calendar year subsequent to the calendar benefits of the electricity produced by such fa- the Secretary, such recapture may not apply
year described in subparagraph (C), 0 percent. cility are provided to households with income with respect to any property if, within 12
ctelli on DSK11ZRN23PROD with HOUSE
‘‘(3) APPLICABLE YEAR.—For purposes of this of— months after the date the taxpayer becomes
subsection, the term ‘applicable year’ has the ‘‘(i) less than 200 percent of the poverty line aware (or reasonably should have become
same meaning given such term in section (as defined in section 36B(d)(3)(A)) applicable to aware) of such property ceasing to be property
45Y(d)(3). a family of the size involved, or eligible for such increase, the eligibility of such
‘‘(f) GREENHOUSE GAS.—In this section, the ‘‘(ii) less than 80 percent of area median gross property for such increase is restored. The pre-
term ‘greenhouse gas’ has the same meaning income (as determined under section ceding sentence shall not apply more than once
given such term under section 45Y(e)(2). 142(d)(2)(B)). with respect to any facility.
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H7622 CONGRESSIONAL RECORD — HOUSE August 12, 2022
‘‘(i) GUIDANCE.—Not later than January 1, ‘‘(B) ALTERNATIVE AMOUNT.—In the case of ‘‘(C) ROUNDING OF EMISSIONS RATE.—
2025, the Secretary shall issue guidance regard- any transportation fuel produced at a qualified ‘‘(i) IN GENERAL.—Subject to clause (ii), the
ing implementation of this section.’’. facility which satisfies the requirements under Secretary may round the emissions rates under
(b) CONFORMING AMENDMENTS.— paragraphs (6) and (7) of subsection (f), the ap- subparagraph (B) to the nearest multiple of 5
(1) Section 46, as amended by section 107(d) of plicable amount shall be $1.00. kilograms of CO2e per mmBTU.
the CHIPS Act of 2022, is amended— ‘‘(3) SPECIAL RATE FOR SUSTAINABLE AVIATION ‘‘(ii) EXCEPTION.—In the case of an emissions
(A) in paragraph (5), by striking ‘‘and’’ at the FUEL.— rate that is between 2.5 kilograms of CO2e per
end, ‘‘(A) IN GENERAL.—In the case of a transpor- mmBTU and -2.5 kilograms of CO2e per mmBTU,
(B) in paragraph (6), by striking the period at tation fuel which is sustainable aviation fuel, the Secretary may round such rate to zero.
the end and inserting ‘‘, and’’, and paragraph (2) shall be applied— ‘‘(D) PROVISIONAL EMISSIONS RATE.—In the
(C) by adding at the end the following: ‘‘(i) in the case of fuel produced at a qualified case of any transportation fuel for which an
‘‘(7) the clean electricity investment credit.’’. facility described in paragraph (2)(A), by sub- emissions rate has not been established under
(2) Section 49(a)(1)(C), as amended by section stituting ‘35 cents’ for ‘20 cents’, and subparagraph (B), a taxpayer producing such
107(d) of the CHIPS Act of 2022, is amended— ‘‘(ii) in the case of fuel produced at a quali- fuel may file a petition with the Secretary for
(A) by striking ‘‘and’’ at the end of clause (v), fied facility described in paragraph (2)(B), by determination of the emissions rate with respect
(B) by striking the period at the end of clause substituting ‘$1.75’ for ‘$1.00’. to such fuel.
(vi) and inserting a comma, and ‘‘(B) SUSTAINABLE AVIATION FUEL.—For pur- ‘‘(2) ROUNDING.—If any amount determined
(C) by adding at the end the following new poses of this subparagraph (A), the term ‘sus- under paragraph (1)(A) is not a multiple of 0.1,
clauses: tainable aviation fuel’ means liquid fuel, the such amount shall be rounded to the nearest
‘‘(vii) the basis of any qualified property portion of which is not kerosene, which is sold multiple of 0.1.
which is part of a qualified facility under sec- for use in an aircraft and which— ‘‘(c) INFLATION ADJUSTMENT.—
tion 48E, and ‘‘(i) meets the requirements of— ‘‘(1) IN GENERAL.—In the case of calendar
‘‘(viii) the basis of any energy storage tech- ‘‘(I) ASTM International Standard D7566, or years beginning after 2024, the 20 cent amount
nology under section 48E.’’. ‘‘(II) the Fischer Tropsch provisions of ASTM in subsection (a)(2)(A), the $1.00 amount in sub-
(3) Section 50(a)(2)(E), as amended by section International Standard D1655, Annex A1, and section (a)(2)(B), the 35 cent amount in sub-
107(d) of the CHIPS Act of 2022, is amended by ‘‘(ii) is not derived from palm fatty acid dis- section (a)(3)(A)(i), and the $1.75 amount in
striking ‘‘or 48D(b)(5)’’ and inserting ‘‘48D(b)(5), tillates or petroleum. subsection (a)(3)(A)(ii) shall each be adjusted by
or 48E(e)’’. ‘‘(4) SALE.—For purposes of paragraph (1), multiplying such amount by the inflation ad-
(4) Section 50(c)(3) is amended by inserting the transportation fuel is sold in a manner de- justment factor for the calendar year in which
‘‘or clean electricity investment credit’’ after scribed in this paragraph if such fuel is sold by the sale of the transportation fuel occurs. If any
‘‘In the case of any energy credit’’. the taxpayer to an unrelated person— amount as increased under the preceding sen-
(5) The table of sections for subpart E of part ‘‘(A) for use by such person in the production tence is not a multiple of 1 cent, such amount
IV of subchapter A of chapter 1, as amended by of a fuel mixture, shall be rounded to the nearest multiple of 1
section 107(d) of the CHIPS Act of 2022, is ‘‘(B) for use by such person in a trade or busi- cent.
amended by inserting after the item relating to ness, or ‘‘(2) INFLATION ADJUSTMENT FACTOR.—For
section 48D the following new item: ‘‘(C) who sells such fuel at retail to another purposes of paragraph (1), the inflation adjust-
‘‘48E. Clean electricity investment credit.’’. person and places such fuel in the fuel tank of ment factor shall be the inflation adjustment
(c) EFFECTIVE DATE.—The amendments made such other person. factor determined and published by the Sec-
by this section shall apply to property placed in ‘‘(5) ROUNDING.—If any amount determined retary pursuant to section 45Y(c), determined by
service after December 31, 2024. under paragraph (1) is not a multiple of 1 cent, substituting ‘calendar year 2022’ for ‘calendar
SEC. 13703. COST RECOVERY FOR QUALIFIED FA- such amount shall be rounded to the nearest year 1992’ in paragraph (3) thereof.
CILITIES, QUALIFIED PROPERTY, cent. ‘‘(d) DEFINITIONS.—In this section:
AND ENERGY STORAGE TECH- ‘‘(b) EMISSIONS FACTORS.— ‘‘(1) mmBTU.—The term ‘mmBTU’ means
NOLOGY. ‘‘(1) EMISSIONS FACTOR.— 1,000,000 British thermal units.
(a) IN GENERAL.—Section 168(e)(3)(B) is ‘‘(A) CALCULATION.— ‘‘(2) CO2e.—The term ‘CO2e’ means, with re-
amended— ‘‘(i) IN GENERAL.—The emissions factor of a spect to any greenhouse gas, the equivalent car-
(1) in clause (vi)(III), by striking ‘‘and’’ at the transportation fuel shall be an amount equal to bon dioxide (as determined based on relative
end, the quotient of— global warming potential).
(2) in clause (vii), by striking the period at the ‘‘(I) an amount equal to— ‘‘(3) GREENHOUSE GAS.—The term ‘greenhouse
end and inserting ‘‘, and’’, and ‘‘(aa) 50 kilograms of CO2e per mmBTU, minus gas’ has the same meaning given that term
(3) by inserting after clause (vii) the fol- ‘‘(bb) the emissions rate for such fuel, divided under section 211(o)(1)(G) of the Clean Air Act
lowing: by (42 U.S.C. 7545(o)(1)(G)), as in effect on the date
‘‘(viii) any qualified facility (as defined in ‘‘(II) 50 kilograms of CO2e per mmBTU. of the enactment of this section.
section 45Y(b)(1)(A)), any qualified property (as ‘‘(B) ESTABLISHMENT OF EMISSIONS RATE.— ‘‘(4) QUALIFIED FACILITY.—The term ‘qualified
defined in subsection (b)(2) of section 48E) ‘‘(i) IN GENERAL.—Subject to clauses (ii) and facility’—
which is a qualified investment (as defined in (iii), the Secretary shall annually publish a ‘‘(A) means a facility used for the production
subsection (b)(1) of such section), or any energy table which sets forth the emissions rate for of transportation fuels, and
storage technology (as defined in subsection similar types and categories of transportation ‘‘(B) does not include any facility for which
(c)(2) of such section).’’. fuels based on the amount of lifecycle green- one of the following credits is allowed under
(b) EFFECTIVE DATE.—The amendments made house gas emissions (as described in section section 38 for the taxable year:
by this section shall apply to facilities and prop- 211(o)(1)(H) of the Clean Air Act (42 U.S.C. ‘‘(i) The credit for production of clean hydro-
erty placed in service after December 31, 2024. 7545(o)(1)(H)), as in effect on the date of the en- gen under section 45V.
SEC. 13704. CLEAN FUEL PRODUCTION CREDIT. actment of this section) for such fuels, expressed ‘‘(ii) The credit determined under section 46 to
(a) IN GENERAL.—Subpart D of part IV of sub- as kilograms of CO2e per mmBTU, which a tax- the extent that such credit is attributable to the
chapter A of chapter 1, as amended by the pre- payer shall use for purposes of this section. energy credit determined under section 48 with
ceding provisions of this Act, is amended by ‘‘(ii) NON-AVIATION FUEL.—In the case of any respect to any specified clean hydrogen produc-
adding at the end the following new section: transportation fuel which is not a sustainable tion facility for which an election is made under
‘‘SEC. 45Z. CLEAN FUEL PRODUCTION CREDIT. aviation fuel, the lifecycle greenhouse gas emis- subsection (a)(15) of such section.
‘‘(a) AMOUNT OF CREDIT.— sions of such fuel shall be based on the most re- ‘‘(iii) The credit for carbon oxide sequestration
‘‘(1) IN GENERAL.—For purposes of section 38, cent determinations under the Greenhouse under section 45Q.
the clean fuel production credit for any taxable gases, Regulated Emissions, and Energy use in ‘‘(5) TRANSPORTATION FUEL.—
year is an amount equal to the product of— Transportation model developed by Argonne Na- ‘‘(A) IN GENERAL.—The term ‘transportation
‘‘(A) the applicable amount per gallon (or gal- tional Laboratory, or a successor model (as de- fuel’ means a fuel which—
lon equivalent) with respect to any transpor- termined by the Secretary). ‘‘(i) is suitable for use as a fuel in a highway
tation fuel which is— ‘‘(iii) AVIATION FUEL.—In the case of any vehicle or aircraft,
‘‘(i) produced by the taxpayer at a qualified transportation fuel which is a sustainable avia- ‘‘(ii) has an emissions rate which is not great-
facility, and tion fuel, the lifecycle greenhouse gas emissions er than 50 kilograms of CO2e per mmBTU, and
‘‘(ii) sold by the taxpayer in a manner de- of such fuel shall be determined in accordance ‘‘(iii) is not derived from coprocessing an ap-
scribed in paragraph (4) during the taxable with— plicable material (or materials derived from an
year, and ‘‘(I) the most recent Carbon Offsetting and applicable material) with a feedstock which is
‘‘(B) the emissions factor for such fuel (as de- Reduction Scheme for International Aviation not biomass.
ctelli on DSK11ZRN23PROD with HOUSE
termined under subsection (b)). which has been adopted by the International ‘‘(B) DEFINITIONS.—In this paragraph—
‘‘(2) APPLICABLE AMOUNT.— Civil Aviation Organization with the agreement ‘‘(i) APPLICABLE MATERIAL.—The term ‘appli-
‘‘(A) BASE AMOUNT.—In the case of any trans- of the United States, or cable material’ means—
portation fuel produced at a qualified facility ‘‘(II) any similar methodology which satisfies ‘‘(I) monoglycerides, diglycerides, and
which does not satisfy the requirements de- the criteria under section 211(o)(1)(H) of the triglycerides,
scribed in subparagraph (B), the applicable Clean Air Act (42 U.S.C. 7545(o)(1)(H)), as in ef- ‘‘(II) free fatty acids, and
amount shall be 20 cents. fect on the date of enactment of this section. ‘‘(III) fatty acid esters.
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7623
‘‘(ii) BIOMASS.—The term ‘biomass’ has the ‘‘(g) TERMINATION.—This section shall not ‘‘(6) In the case of a tax-exempt entity de-
same meaning given such term in section apply to transportation fuel sold after December scribed in clause (i), (ii), or (iv) of section
45K(c)(3). 31, 2027.’’. 168(h)(2)(A), the credit for qualified commercial
‘‘(e) GUIDANCE.—Not later than January 1, (b) CONFORMING AMENDMENTS.— vehicles determined under section 45W by reason
2025, the Secretary shall issue guidance regard- (1) Section 25C(d)(3), as amended by the pre- of subsection (d)(3) thereof.
ing implementation of this section, including ceding provisions of this Act, is amended— ‘‘(7) The credit for advanced manufacturing
calculation of emissions factors for transpor- (A) in subparagraph (A), by striking ‘‘and’’ at production under section 45X(a).
tation fuel, the table described in subsection the end, ‘‘(8) The clean electricity production credit de-
(b)(1)(B)(i), and the determination of clean fuel (B) in subparagraph (B), by striking the pe- termined under section 45Y(a).
production credits under this section. riod at the end and inserting ‘‘, and’’, and ‘‘(9) The clean fuel production credit deter-
‘‘(f) SPECIAL RULES.— (C) by adding at the end the following new mined under section 45Z(a).
‘‘(1) ONLY REGISTERED PRODUCTION IN THE subparagraph: ‘‘(10) The energy credit determined under sec-
UNITED STATES TAKEN INTO ACCOUNT.— ‘‘(C) transportation fuel (as defined in section tion 48.
‘‘(A) IN GENERAL.—No clean fuel production 45Z(d)(5)).’’. ‘‘(11) The qualifying advanced energy project
credit shall be determined under subsection (a) (2) Section 30C(c)(1)(B), as amended by the credit determined under section 48C.
with respect to any transportation fuel unless— preceding provisions of this Act, is amended by ‘‘(12) The clean electricity investment credit
‘‘(i) the taxpayer— adding at the end the following new clause: determined under section 48E.
‘‘(I) is registered as a producer of clean fuel ‘‘(iv) Any transportation fuel (as defined in ‘‘(c) APPLICATION TO PARTNERSHIPS AND S
under section 4101 at the time of production, section 45Z(d)(5)).’’. CORPORATIONS.—
and ‘‘(1) IN GENERAL.—In the case of any applica-
(3) Section 38(b), as amended by the preceding
‘‘(II) in the case of any transportation fuel ble credit determined with respect to any facility
provisions of this Act, is amended—
which is a sustainable aviation fuel, provides— or property held directly by a partnership or S
(A) in paragraph (38), by striking ‘‘plus’’ at
‘‘(aa) certification (in such form and manner corporation, any election under subsection (a)
the end,
as the Secretary shall prescribe) from an unre- shall be made by such partnership or S corpora-
(B) in paragraph (39), by striking the period
lated party demonstrating compliance with— tion. If such partnership or S corporation makes
at the end and inserting ‘‘, plus’’, and
‘‘(AA) any general requirements, supply chain an election under such subsection (in such man-
(C) by adding at the end the following new
traceability requirements, and information ner as the Secretary may provide) with respect
paragraph:
transmission requirements established under the to such credit—
‘‘(40) the clean fuel production credit deter-
Carbon Offsetting and Reduction Scheme for ‘‘(A) the Secretary shall make a payment to
mined under section 45Z(a).’’.
International Aviation described in subclause such partnership or S corporation equal to the
(4) The table of sections for subpart D of part
(I) of subsection (b)(1)(B)(iii), or amount of such credit,
‘‘(BB) in the case of any methodology de- IV of subchapter A of chapter 1, as amended by
‘‘(B) subsection (e) shall be applied with re-
scribed in subclause (II) of such subsection, re- the preceding provisions of this Act, is amended
spect to such credit before determining any part-
quirements similar to the requirements described by adding at the end the following new item:
ner’s distributive share, or shareholder’s pro
in subitem (AA), and ‘‘Sec. 45Z. Clean fuel production credit.’’. rata share, of such credit,
‘‘(bb) such other information with respect to (5) Section 4101(a)(1), as amended by the pre- ‘‘(C) any amount with respect to which the
such fuel as the Secretary may require for pur- ceding provisions of this Act, is amended by in- election in subsection (a) is made shall be treat-
poses of carrying out this section, and serting ‘‘every person producing a fuel eligible ed as tax exempt income for purposes of sections
‘‘(ii) such fuel is produced in the United for the clean fuel production credit (pursuant to 705 and 1366, and
States. section 45Z),’’ after ‘‘section 6426(k)(3)),’’. ‘‘(D) a partner’s distributive share of such tax
‘‘(B) UNITED STATES.—For purposes of this (c) EFFECTIVE DATE.—The amendments made exempt income shall be based on such partner’s
paragraph, the term ‘United States’ includes by this section shall apply to transportation fuel distributive share of the otherwise applicable
any possession of the United States. produced after December 31, 2024. credit for each taxable year.
‘‘(2) PRODUCTION ATTRIBUTABLE TO THE TAX- PART 8—CREDIT MONETIZATION AND ‘‘(2) COORDINATION WITH APPLICATION AT
PAYER.—In the case of a facility in which more APPROPRIATIONS PARTNER OR SHAREHOLDER LEVEL.—In the case
than 1 person has an ownership interest, except of any facility or property held directly by a
SEC. 13801. ELECTIVE PAYMENT FOR ENERGY
to the extent provided in regulations prescribed PROPERTY AND ELECTRICITY PRO- partnership or S corporation, no election by any
by the Secretary, production from the facility DUCED FROM CERTAIN RENEWABLE partner or shareholder shall be allowed under
shall be allocated among such persons in pro- RESOURCES, ETC. subsection (a) with respect to any applicable
portion to their respective ownership interests in (a) IN GENERAL.—Subchapter B of chapter 65 credit determined with respect to such facility or
the gross sales from such facility. is amended by inserting after section 6416 the property.
‘‘(3) RELATED PERSONS.—Persons shall be following new section: ‘‘(3) TREATMENT OF PAYMENTS TO PARTNER-
treated as related to each other if such persons SHIPS AND S CORPORATIONS.—For purposes of
‘‘SEC. 6417. ELECTIVE PAYMENT OF APPLICABLE
would be treated as a single employer under the CREDITS. section 1324 of title 31, United States Code, the
regulations prescribed under section 52(b). In payments under paragraph (1)(A) shall be treat-
‘‘(a) IN GENERAL.—In the case of an applica-
the case of a corporation which is a member of ed in the same manner as a refund due from a
ble entity making an election (at such time and
an affiliated group of corporations filing a con- credit provision referred to in subsection (b)(2)
in such manner as the Secretary may provide)
solidated return, such corporation shall be of such section.
under this section with respect to any applicable
treated as selling fuel to an unrelated person if ‘‘(d) SPECIAL RULES.—For purposes of this
credit determined with respect to such entity,
such fuel is sold to such a person by another section—
such entity shall be treated as making a pay-
member of such group. ‘‘(1) APPLICABLE ENTITY.—
ment against the tax imposed by subtitle A (for ‘‘(A) IN GENERAL.—The term ‘applicable enti-
‘‘(4) PASS-THRU IN THE CASE OF ESTATES AND
the taxable year with respect to which such ty’ means—
TRUSTS.—Under regulations prescribed by the
credit was determined) equal to the amount of ‘‘(i) any organization exempt from the tax im-
Secretary, rules similar to the rules of subsection
such credit. posed by subtitle A,
(d) of section 52 shall apply.
‘‘(5) ALLOCATION OF CREDIT TO PATRONS OF ‘‘(b) APPLICABLE CREDIT.—The term ‘applica- ‘‘(ii) any State or political subdivision thereof,
AGRICULTURAL COOPERATIVE.—Rules similar to
ble credit’ means each of the following: ‘‘(iii) the Tennessee Valley Authority,
the rules of section 45Y(g)(6) shall apply. ‘‘(1) So much of the credit for alternative fuel ‘‘(iv) an Indian tribal government (as defined
‘‘(6) PREVAILING WAGE REQUIREMENTS.— vehicle refueling property allowed under section in section 30D(g)(9)),
‘‘(A) IN GENERAL.—Subject to subparagraph 30C which, pursuant to subsection (d)(1) of such ‘‘(v) any Alaska Native Corporation (as de-
(B), rules similar to the rules of section 45(b)(7) section, is treated as a credit listed in section fined in section 3 of the Alaska Native Claims
shall apply. 38(b). Settlement Act (43 U.S.C. 1602(m)), or
‘‘(B) SPECIAL RULE FOR FACILITIES PLACED IN ‘‘(2) So much of the renewable electricity pro- ‘‘(vi) any corporation operating on a coopera-
SERVICE BEFORE JANUARY 1, 2025.—For purposes duction credit determined under section 45(a) as tive basis which is engaged in furnishing electric
of subparagraph (A), in the case of any quali- is attributable to qualified facilities which are energy to persons in rural areas.
fied facility placed in service before January 1, originally placed in service after December 31, ‘‘(B) ELECTION WITH RESPECT TO CREDIT FOR
2025— 2022. PRODUCTION OF CLEAN HYDROGEN.—If a tax-
‘‘(i) clause (i) of section 45(b)(7)(A) shall not ‘‘(3) So much of the credit for carbon oxide se- payer other than an entity described in sub-
apply, and questration determined under section 45Q(a) as paragraph (A) makes an election under this sub-
‘‘(ii) clause (ii) of such section shall be applied is attributable to carbon capture equipment paragraph with respect to any taxable year in
by substituting ‘with respect to any taxable year which is originally placed in service after De- which such taxpayer has placed in service a
beginning after December 31, 2024, for which the cember 31, 2022. qualified clean hydrogen production facility (as
ctelli on DSK11ZRN23PROD with HOUSE
credit is allowed under this section’ for ‘with re- ‘‘(4) The zero-emission nuclear power produc- defined in section 45V(c)(3)), such taxpayer
spect to any taxable year, for any portion of tion credit determined under section 45U(a). shall be treated as an applicable entity for pur-
such taxable year which is within the period de- ‘‘(5) So much of the credit for production of poses of this section for such taxable year, but
scribed in subsection (a)(2)(A)(ii)’. clean hydrogen determined under section 45V(a) only with respect to the credit described in sub-
‘‘(7) APPRENTICESHIP REQUIREMENTS.—Rules as is attributable to qualified clean hydrogen section (b)(5).
similar to the rules of section 45(b)(8) shall production facilities which are originally placed ‘‘(C) ELECTION WITH RESPECT TO CREDIT FOR
apply. in service after December 31, 2012. CARBON OXIDE SEQUESTRATION.—If a taxpayer
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H7624 CONGRESSIONAL RECORD — HOUSE August 12, 2022
other than an entity described in subparagraph ‘‘(ii) be made for the taxable year in which ‘‘(E) CLEAN ELECTRICITY PRODUCTION CRED-
(A) makes an election under this subparagraph such qualified facility is originally placed in IT.—In the case of the credit described in sub-
with respect to any taxable year in which such service, and section (b)(8), any election under subsection (a)
taxpayer has, after December 31, 2022, placed in ‘‘(iii) shall apply to such taxable year and to shall—
service carbon capture equipment at a qualified any subsequent taxable year which is within the ‘‘(i) apply separately with respect to each
facility (as defined in section 45Q(d)), such tax- period described in subsection (a)(2)(A)(ii) of qualified facility,
payer shall be treated as an applicable entity section 45 with respect to such qualified facility. ‘‘(ii) be made for the taxable year in which
for purposes of this section for such taxable ‘‘(C) CREDIT FOR CARBON OXIDE SEQUESTRA- such facility is placed in service, and
year, but only with respect to the credit de- TION.— ‘‘(iii) shall apply to such taxable year and to
scribed in subsection (b)(3). ‘‘(i) IN GENERAL.—In the case of the credit de- any subsequent taxable year which is within the
‘‘(D) ELECTION WITH RESPECT TO ADVANCED scribed in subsection (b)(3), any election under period described in subsection (b)(1)(B) of sec-
MANUFACTURING PRODUCTION CREDIT.— subsection (a) shall— tion 45Y with respect to such facility.
‘‘(i) IN GENERAL.—If a taxpayer other than an ‘‘(I) apply separately with respect to the car- ‘‘(4) TIMING.—The payment described in sub-
entity described in subparagraph (A) makes an bon capture equipment originally placed in serv- section (a) shall be treated as made on—
ice by the applicable entity during a taxable ‘‘(A) in the case of any government, or polit-
election under this subparagraph with respect to
year, and ical subdivision, described in paragraph (1) and
any taxable year in which such taxpayer has,
‘‘(II)(aa) in the case of a taxpayer who makes for which no return is required under section
after December 31, 2022, produced eligible com-
an election described in paragraph (1)(C), apply 6011 or 6033(a), the later of the date that a re-
ponents (as defined in section 45X(c)(1)), such
to the taxable year in which such equipment is turn would be due under section 6033(a) if such
taxpayer shall be treated as an applicable entity
placed in service and the 4 subsequent taxable government or subdivision were described in
for purposes of this section for such taxable
years with respect to such equipment which end that section or the date on which such govern-
year, but only with respect to the credit de-
before January 1, 2033, and ment or subdivision submits a claim for credit or
scribed in subsection (b)(7).
‘‘(ii) LIMITATION.— ‘‘(bb) in any other case, apply to such taxable refund (at such time and in such manner as the
‘‘(I) IN GENERAL.—Except as provided in sub- year and to any subsequent taxable year which Secretary shall provide), and
is within the period described in paragraph ‘‘(B) in any other case, the later of the due
clause (II), if a taxpayer makes an election
(3)(A) or (4)(A) of section 45Q(a) with respect to date (determined without regard to extensions)
under this subparagraph with respect to any
such equipment. of the return of tax for the taxable year or the
taxable year, such taxpayer shall be treated as
‘‘(ii) PROHIBITION ON TRANSFER.—For any tax- date on which such return is filed.
having made such election for each of the 4 suc- ‘‘(5) ADDITIONAL INFORMATION.—As a condi-
ceeding taxable years ending before January 1, able year described in clause (i)(II)(aa) with re-
spect to carbon capture equipment, no election tion of, and prior to, any amount being treated
2033. as a payment which is made by an applicable
‘‘(II) EXCEPTION.—A taxpayer may elect to re- may be made by the taxpayer under section
6418(a) for such taxable year with respect to entity under subsection (a), the Secretary may
voke the application of the election made under
such equipment for purposes of the credit de- require such information or registration as the
this subparagraph to any taxable year described
scribed in subsection (b)(3). Secretary deems necessary for purposes of pre-
in subclause (I). Any such election, if made,
‘‘(iii) REVOCATION OF ELECTION.—In the case venting duplication, fraud, improper payments,
shall apply to the applicable year specified in
of a taxpayer who makes an election described or excessive payments under this section.
such election and each subsequent taxable year ‘‘(6) EXCESSIVE PAYMENT.—
within the period described in subclause (I). in paragraph (1)(C) with respect to carbon cap-
‘‘(A) IN GENERAL.—In the case of any amount
Any election under this subclause may not be ture equipment, such taxpayer may, at any time
treated as a payment which is made by the ap-
subsequently revoked. during the period described in clause (i)(II)(aa),
plicable entity under subsection (a), or the
‘‘(iii) PROHIBITION ON TRANSFER.—For any revoke the application of such election with re-
amount of the payment made pursuant to sub-
taxable year described in clause (ii)(I), no elec- spect to such equipment for any subsequent tax-
section (c), which the Secretary determines con-
tion may be made by the taxpayer under section able years during such period. Any such elec-
stitutes an excessive payment, the tax imposed
6418(a) for such taxable year with respect to eli- tion, if made, shall apply to the applicable year
on such entity by chapter 1 (regardless of
gible components for purposes of the credit de- specified in such election and each subsequent
whether such entity would otherwise be subject
scribed in subsection (b)(7). taxable year within the period described in
to tax under such chapter) for the taxable year
‘‘(E) OTHER RULES.— clause (i)(II)(aa). Any election under this sub-
in which such determination is made shall be in-
‘‘(i) IN GENERAL.—An election made under clause may not be subsequently revoked.
creased by an amount equal to the sum of—
subparagraph (B), (C), or (D) shall be made at ‘‘(D) CREDIT FOR PRODUCTION OF CLEAN HY- ‘‘(i) the amount of such excessive payment,
such time and in such manner as the Secretary DROGEN.—
plus
may provide. ‘‘(i) IN GENERAL.—In the case of the credit de- ‘‘(ii) an amount equal to 20 percent of such
‘‘(ii) LIMITATION.—No election may be made scribed in subsection (b)(5), any election under excessive payment.
under subparagraph (B), (C), or (D) with re- subsection (a) shall— ‘‘(B) REASONABLE CAUSE.—Subparagraph
spect to any taxable year beginning after De- ‘‘(I) apply separately with respect to each (A)(ii) shall not apply if the applicable entity
cember 31, 2032. qualified clean hydrogen production facility, demonstrates to the satisfaction of the Secretary
‘‘(2) APPLICATION.—In the case of any appli- ‘‘(II) be made for the taxable year in which that the excessive payment resulted from reason-
cable entity which makes the election described such facility is placed in service (or within the able cause.
in subsection (a), any applicable credit shall be 1-year period subsequent to the date of enact- ‘‘(C) EXCESSIVE PAYMENT DEFINED.—For pur-
determined— ment of this section in the case of facilities poses of this paragraph, the term ‘excessive pay-
‘‘(A) without regard to paragraphs (3) and placed in service before December 31, 2022), and ment’ means, with respect to a facility or prop-
(4)(A)(i) of section 50(b), and ‘‘(III)(aa) in the case of a taxpayer who erty for which an election is made under this
‘‘(B) by treating any property with respect to makes an election described in paragraph (1)(B), section for any taxable year, an amount equal
which such credit is determined as used in a apply to such taxable year and the 4 subsequent to the excess of—
trade or business of the applicable entity. taxable years with respect to such facility which ‘‘(i) the amount treated as a payment which is
‘‘(3) ELECTIONS.— end before January 1, 2033, and made by the applicable entity under subsection
‘‘(A) IN GENERAL.— ‘‘(bb) in any other case, apply to such taxable (a), or the amount of the payment made pursu-
‘‘(i) DUE DATE.—Any election under sub- year and all subsequent taxable years with re- ant to subsection (c), with respect to such facil-
section (a) shall be made not later than— spect to such facility. ity or property for such taxable year, over
‘‘(I) in the case of any government, or polit- ‘‘(ii) PROHIBITION ON TRANSFER.—For any tax- ‘‘(ii) the amount of the credit which, without
ical subdivision, described in paragraph (1) and able year described in clause (i)(III)(aa) with re- application of this section, would be otherwise
for which no return is required under section spect to a qualified clean hydrogen production allowable (as determined pursuant to paragraph
6011 or 6033(a), such date as is determined ap- facility, no election may be made by the tax- (2) and without regard to section 38(c)) under
propriate by the Secretary, or payer under section 6418(a) for such taxable this title with respect to such facility or prop-
‘‘(II) in any other case, the due date (includ- year with respect to such facility for purposes of erty for such taxable year.
ing extensions of time) for the return of tax for the credit described in subsection (b)(5). ‘‘(e) DENIAL OF DOUBLE BENEFIT.—In the case
the taxable year for which the election is made, ‘‘(iii) REVOCATION OF ELECTION.—In the case of an applicable entity making an election
but in no event earlier than 180 days after the of a taxpayer who makes an election described under this section with respect to an applicable
date of the enactment of this section. in paragraph (1)(B) with respect to a qualified credit, such credit shall be reduced to zero and
‘‘(ii) ADDITIONAL RULES.—Any election under clean hydrogen production facility, such tax- shall, for any other purposes under this title, be
subsection (a), once made, shall be irrevocable payer may, at any time during the period de- deemed to have been allowed to such entity for
and shall apply (except as otherwise provided in scribed in clause (i)(III)(aa), revoke the applica- such taxable year.
this paragraph) with respect to any credit for tion of such election with respect to such facil- ‘‘(f) MIRROR CODE POSSESSIONS.—In the case
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the taxable year for which the election is made. ity for any subsequent taxable years during of any possession of the United States with a
‘‘(B) RENEWABLE ELECTRICITY PRODUCTION such period. Any such election, if made, shall mirror code tax system (as defined in section
CREDIT.—In the case of the credit described in apply to the applicable year specified in such 24(k)), this section shall not be treated as part
subsection (b)(2), any election under subsection election and each subsequent taxable year with- of the income tax laws of the United States for
(a) shall— in the period described in clause (i)(II)(aa). Any purposes of determining the income tax law of
‘‘(i) apply separately with respect to each election under this subclause may not be subse- such possession unless such possession elects to
qualified facility, quently revoked. have this section be so treated.
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August 12, 2022 CONGRESSIONAL RECORD — HOUSE H7625
‘‘(g) BASIS REDUCTION AND RECAPTURE.—Ex- eligible credit which has been previously trans- cility or property for which an election is made
cept as otherwise provided in subsection ferred to such taxpayer pursuant to this section. under subsection (a) for any taxable year, an
(c)(2)(A), rules similar to the rules of section 50 ‘‘(f) DEFINITIONS.—For purposes of this sec- amount equal to the excess of—
shall apply for purposes of this section. tion— ‘‘(i) the amount of the eligible credit claimed
‘‘(h) REGULATIONS.—The Secretary shall issue ‘‘(1) ELIGIBLE CREDIT.— by the transferee taxpayer with respect to such
such regulations or other guidance as may be ‘‘(A) IN GENERAL.—The term ‘eligible credit’ facility or property for such taxable year, over
necessary to carry out the purposes of this sec- means each of the following: ‘‘(ii) the amount of such credit which, without
tion, including guidance to ensure that the ‘‘(i) So much of the credit for alternative fuel application of this section, would be otherwise
amount of the payment or deemed payment vehicle refueling property allowed under section allowable under this title with respect to such
made under this section is commensurate with 30C which, pursuant to subsection (d)(1) of such facility or property for such taxable year.
the amount of the credit that would be other- section, is treated as a credit listed in section ‘‘(3) BASIS REDUCTION; NOTIFICATION OF RE-
wise allowable (determined without regard to 38(b). CAPTURE.—In the case of any election under
section 38(c)).’’. ‘‘(ii) The renewable electricity production subsection (a) with respect to any portion of an
(b) TRANSFER OF CERTAIN CREDITS.—Sub- credit determined under section 45(a). eligible credit described in clauses (ix) through
chapter B of chapter 65, as amended by sub- ‘‘(iii) The credit for carbon oxide sequestration (xi) of subsection (f)(1)(A)—
section (a), is amended by inserting after section determined under section 45Q(a). ‘‘(A) subsection (c) of section 50 shall apply to
6417 the following new section: ‘‘(iv) The zero-emission nuclear power produc- the applicable investment credit property (as de-
‘‘SEC. 6418. TRANSFER OF CERTAIN CREDITS. tion credit determined under section 45U(a). fined in subsection (a)(5) of such section) as if
‘‘(v) The clean hydrogen production credit de- such eligible credit was allowed to the eligible
‘‘(a) IN GENERAL.—In the case of an eligible
termined under section 45V(a). taxpayer, and
taxpayer which elects to transfer all (or any
‘‘(vi) The advanced manufacturing production ‘‘(B) if, during any taxable year, the applica-
portion specified in the election) of an eligible
credit determined under section 45X(a). ble investment credit property (as defined in
credit determined with respect to such taxpayer ‘‘(vii) The clean electricity production credit
for any taxable year to a taxpayer (referred to subsection (a)(5) of section 50) is disposed of, or
determined under section 45Y(a). otherwise ceases to be investment credit property
in this section as the ‘transferee taxpayer’) ‘‘(viii) The clean fuel production credit deter-
which is not related (within the meaning of sec- with respect to the eligible taxpayer, before the
mined under section 45Z(a). close of the recapture period (as described in
tion 267(b) or 707(b)(1)) to the eligible taxpayer, ‘‘(ix) The energy credit determined under sec-
the transferee taxpayer specified in such elec- subsection (a)(1) of such section)—
tion 48. ‘‘(i) such eligible taxpayer shall provide notice
tion (and not the eligible taxpayer) shall be ‘‘(x) The qualifying advanced energy project
treated as the taxpayer for purposes of this title of such occurrence to the transferee taxpayer
credit determined under section 48C. (in such form and manner as the Secretary shall
with respect to such credit (or such portion ‘‘(xi) The clean electricity investment credit
thereof). prescribe), and
determined under section 48E. ‘‘(ii) the transferee taxpayer shall provide no-
‘‘(b) TREATMENT OF PAYMENTS MADE IN CON- ‘‘(B) ELECTION FOR CERTAIN CREDITS.—In the
NECTION WITH TRANSFER.—With respect to any tice of the recapture amount (as defined in sub-
case of any eligible credit described in clause
amount paid by a transferee taxpayer to an eli- section (c)(2) of such section), if any, to the eli-
(ii), (iii), (v), or (vii) of subparagraph (A), an
gible taxpayer as consideration for a transfer gible taxpayer (in such form and manner as the
election under subsection (a) shall be made—
described in subsection (a), such consideration— Secretary shall prescribe).
‘‘(i) separately with respect to each facility for
‘‘(1) shall be required to be paid in cash, ‘‘(4) PROHIBITION ON ELECTION OR TRANSFER
which such credit is determined, and
‘‘(2) shall not be includible in gross income of WITH RESPECT TO PROGRESS EXPENDITURES.—
‘‘(ii) for each taxable year during the 10-year
the eligible taxpayer, and This section shall not apply with respect to any
period beginning on the date such facility was
‘‘(3) with respect to the transferee taxpayer, amount of an eligible credit which is allowed
originally placed in service (or, in the case of
shall not be deductible under this title. pursuant to rules similar to the rules of sub-
the credit described in clause (iii), for each year
‘‘(c) APPLICATION TO PARTNERSHIPS AND S sections (c)(4) and (d) of section 46 (as in effect
during the 12-year period beginning on the date
CORPORATIONS.— on the day before the date of the enactment of
the carbon capture equipment was originally
‘‘(1) IN GENERAL.—In the case of any eligible the Revenue Reconciliation Act of 1990).
placed in service at such facility).
credit determined with respect to any facility or ‘‘(h) REGULATIONS.—The Secretary shall issue
‘‘(C) EXCEPTION FOR BUSINESS CREDIT
property held directly by a partnership or S cor- such regulations or other guidance as may be
CARRYFORWARDS OR CARRYBACKS.—The term ‘el-
poration, if such partnership or S corporation necessary to carry out the purposes of this sec-
igible credit’ shall not include any business
makes an election under subsection (a) (in such tion, including regulations or other guidance
credit carryforward or business credit carryback
manner as the Secretary may provide) with re- providing rules for determining a partner’s dis-
determined under section 39.
spect to such credit— tributive share of the tax exempt income de-
‘‘(2) ELIGIBLE TAXPAYER.—The term ‘eligible
‘‘(A) any amount received as consideration for scribed in subsection (c)(1).’’.
taxpayer’ means any taxpayer which is not de-
a transfer described in such subsection shall be (c) REAL ESTATE INVESTMENT TRUSTS.—Sec-
scribed in section 6417(d)(1)(A).
treated as tax exempt income for purposes of ‘‘(g) SPECIAL RULES.—For purposes of this tion 50(d) is amended by adding at the end the
sections 705 and 1366, and section— following: ‘‘In the case of a real estate invest-
‘‘(B) a partner’s distributive share of such tax ‘‘(1) ADDITIONAL INFORMATION.—As a condi- ment trust making an election under section
exempt income shall be based on such partner’s tion of, and prior to, any transfer of any por- 6418, paragraphs (1)(B) and (2)(B) of the section
distributive share of the otherwise eligible credit tion of an eligible credit pursuant to subsection 46(e) referred to in paragraph (1) of this sub-
for each taxable year. (a), the Secretary may require such information section shall not apply to any investment credit
‘‘(2) COORDINATION WITH APPLICATION AT (including, in such form or manner as is deter- property of such real estate investment trust to
PARTNER OR SHAREHOLDER LEVEL.—In the case mined appropriate by the Secretary, such infor- which such election applies.’’.
of any facility or property held directly by a mation returns) or registration as the Secretary (d) 3-YEAR CARRYBACK FOR APPLICABLE CRED-
partnership or S corporation, no election by any ITS.—Section 39(a) is amended by adding at the
deems necessary for purposes of preventing du-
partner or shareholder shall be allowed under plication, fraud, improper payments, or exces- end the following:
subsection (a) with respect to any eligible credit sive payments under this section. ‘‘(4) 3-YEAR CARRYBACK FOR APPLICABLE CRED-
determined with respect to such facility or prop- ITS.—Notwithstanding subsection (d), in the
‘‘(2) EXCESSIVE CREDIT TRANSFER.—
erty. ‘‘(A) IN GENERAL.—In the case of any portion case of any applicable credit (as defined in sec-
‘‘(d) TAXABLE YEAR IN WHICH CREDIT TAKEN of an eligible credit which is transferred to a tion 6417(b))—
INTO ACCOUNT.—In the case of any credit (or transferee taxpayer pursuant to subsection (a) ‘‘(A) this section shall be applied separately
portion thereof) with respect to which an elec- which the Secretary determines constitutes an from the business credit (other than the applica-
tion is made under subsection (a), such credit excessive credit transfer, the tax imposed on the ble credit),
shall be taken into account in the first taxable transferee taxpayer by chapter 1 (regardless of ‘‘(B) paragraph (1) shall be applied by sub-
year of the transferee taxpayer ending with, or whether such entity would otherwise be subject stituting ‘each of the 3 taxable years’ for ‘the
after, the taxable year of the eligible taxpayer to tax under such chapter) for the taxable year taxable year’ in subparagraph (A) thereof, and
with respect to which the credit was determined. in which such determination is made shall be in- ‘‘(C) paragraph (2) shall be applied—
‘‘(e) LIMITATIONS ON ELECTION.— creased by an amount equal to the sum of— ‘‘(i) by substituting ‘23 taxable years’ for ‘21
‘‘(1) TIME FOR ELECTION.—An election under ‘‘(i) the amount of such excessive credit trans- taxable years’ in subparagraph (A) thereof, and
subsection (a) to transfer any portion of an eli- fer, plus ‘‘(ii) by substituting ‘22 taxable years’ for ‘20
gible credit shall be made not later than the due ‘‘(ii) an amount equal to 20 percent of such taxable years’ in subparagraph (B) thereof.’’.
date (including extensions of time) for the re- excessive credit transfer. (e) CLERICAL AMENDMENT.—The table of sec-
turn of tax for the taxable year for which the ‘‘(B) REASONABLE CAUSE.—Subparagraph tions for subchapter B of chapter 65 is amended
by inserting after the item relating to section
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credit is determined, but in no event earlier than (A)(ii) shall not apply if the transferee taxpayer
180 days after the date of the enactment of this demonstrates to the satisfaction of the Secretary 6416 the following new items:
section. Any such election, once made, shall be that the excessive credit transfer resulted from ‘‘Sec. 6417. Elective payment of applicable cred-
irrevocable. reasonable cause. its.
‘‘(2) NO ADDITIONAL TRANSFERS.—No election ‘‘(C) EXCESSIVE CREDIT TRANSFER DEFINED.— ‘‘Sec. 6418. Transfer of certain credits.’’.
may be made under subsection (a) by a trans- For purposes of this paragraph, the term ‘exces- (f) GROSS-UP OF DIRECT SPENDING.—Begin-
feree taxpayer with respect to any portion of an sive credit transfer’ means, with respect to a fa- ning in fiscal year 2023 and each fiscal year
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