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Dems Revised Ev Tax Credit
Dems Revised Ev Tax Credit
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14 STRUCTURE BONDS.
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1 ‘‘SEC. 6431A. CREDIT ALLOWED TO ISSUER FOR QUALIFIED
2 INFRASTRUCTURE BONDS.
21 ‘‘(3) LIMITATION.—
22 ‘‘(A) IN GENERAL.—The amount of any
23 interest payment taken into account under
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1 paragraph (1) with respect to a bond for any
2 payment date shall not exceed the amount of
3 interest which would have been payable under
4 such bond for such payment date if interest
5 were determined at the applicable credit rate
6 multiplied by the applicable amount for such
7 bond for such payment date.
8 ‘‘(B) APPLICABLE CREDIT RATE.—For
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1 the case of any bond that has more than
2 a de minimis amount of original issue dis-
3 count (determined under the rules of sec-
4 tion 1273(a)(3)), the applicable amount for
5 a payment date is the issue price of such
6 bond (within the meaning of section 148),
7 as adjusted for any principal payments
8 made prior to such date.
9 ‘‘(ii) OTHER BONDS.—In the case of
10 any other bond, the applicable amount for
11 a payment date is the outstanding prin-
12 cipal amount of such bond on such pay-
13 ment date (determined without taking into
14 account any principal payment on such
15 bond on such date).
16 ‘‘(c) QUALIFIED INFRASTRUCTURE BOND.—
17 ‘‘(1) IN GENERAL.—For purposes of this sec-
18 tion, the term ‘qualified infrastructure bond’ means
19 any bond (other than a private activity bond) issued
20 as part of an issue if—
21 ‘‘(A) 100 percent of the excess of available
22 project proceeds of such issue over the amounts
23 in a reasonably required reserve (within the
24 meaning of section 150(a)(3)) with respect to
25 such issue are to be used for—
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1 ‘‘(i) capital expenditures or operations
2 and maintenance expenditures in connec-
3 tion with property the acquisition, con-
4 struction, or improvement of which would
5 be a capital expenditure, or
6 ‘‘(ii) payments made by a State or po-
7 litical subdivision of a State to a custodian
8 of a rail corridor for purposes of the trans-
9 fer, lease, sale, or acquisition of an estab-
10 lished railroad right-of-way consistent with
11 section 8(d) of the National Trails Act of
12 1968, but only if the Surface Transpor-
13 tation Board has issued a certificate of in-
14 terim trail use or notice of interim trail use
15 for purposes of authorizing such transfer,
16 lease, sale, or acquisition,
17 ‘‘(B) the interest on such bond would (but
18 for this section) be excludable from gross in-
19 come under section 103,
20 ‘‘(C) the issue price has not more than a
21 de minimis amount (determined under rules
22 similar to the rules of section 1273(a)(3)) of
23 premium over the stated principal amount of
24 the bond, and
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1 ‘‘(D) prior to the issuance of such bond,
2 the issuer makes an irrevocable election to have
3 this section apply.
4 ‘‘(2) APPLICABLE RULES.—For purposes of ap-
5 plying paragraph (1)—
6 ‘‘(A) NOT TREATED AS FEDERALLY GUAR-
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1 ‘‘(2) AVAILABLE PROJECT PROCEEDS.—The
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1 ‘‘(iii) the refunded bond is redeemed
2 not later than 90 days after the date of the
3 issuance of the refunding bond, and
4 ‘‘(iv) the refunded bond was issued
5 more than 30 days after the date of the
6 enactment of this section.
7 ‘‘(B) APPLICABLE PERCENTAGE LIMITA-
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1 tion 6431A of the Internal Revenue Code of 1986 made
2 after the date of the enactment of this Act to which se-
3 questration applies, the amount of such payment shall be
4 increased to an amount equal to—
5 (1) such payment (determined before such se-
6 questration), multiplied by
7 (2) the quotient obtained by dividing 1 by the
8 amount by which 1 exceeds the percentage reduction
9 in such payment pursuant to such sequestration.
10 For purposes of this subsection, the term ‘‘sequestration’’
11 means any reduction in direct spending ordered in accord-
12 ance with a sequestration report prepared by the Director
13 of the Office and Management and Budget pursuant to
14 the Balanced Budget and Emergency Deficit Control Act
15 of 1985 or the Statutory Pay-As-You-Go Act of 2010.
16 (c) CONFORMING AMENDMENTS.—
17 (1) Section 1324(b)(2) of title 31, United
18 States Code, is amended by striking ‘‘or 6431’’ and
19 inserting ‘‘6431, or 6431A’’.
20 (2) The table of sections for subchapter B of
21 chapter 65 is amended by inserting before the item
22 relating to section 6432 the following new item:
‘‘Sec. 6431A. Credit allowed to issuer for qualified infrastructure bonds.’’.
10
1 SEC. 135102. ADVANCE REFUNDING BONDS.
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1 ‘‘(II) the first or second advance
2 refunding of the original bond if the
3 original bond was issued before 1986,
4 ‘‘(ii) in the case of refunded bonds
5 issued before 1986, the refunded bond is
6 redeemed not later than the earliest date
7 on which such bond may be redeemed at
8 par or at a premium of 3 percent or less,
9 ‘‘(iii) in the case of refunded bonds
10 issued after 1985, the refunded bond is re-
11 deemed not later than the earliest date on
12 which such bond may be redeemed,
13 ‘‘(iv) the initial temporary period
14 under section 148(c) ends—
15 ‘‘(I) with respect to the proceeds
16 of the refunding bond not later than
17 30 days after the date of issue of such
18 bond, and
19 ‘‘(II) with respect to the proceeds
20 of the refunded bond on the date of
21 issue of the refunding bond, and
22 ‘‘(v) in the case of refunded bonds to
23 which section 148(e) did not apply, on and
24 after the date of issue of the refunding
25 bond, the amount of proceeds of the re-
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1 funded bond invested in higher yielding in-
2 vestments (as defined in section 148(b))
3 which are nonpurpose investments (as de-
4 fined in section 148(f)(6)(A)) does not ex-
5 ceed—
6 ‘‘(I) the amount so invested as
7 part of a reasonably required reserve
8 or replacement fund or during an al-
9 lowable temporary period, and
10 ‘‘(II) the amount which is equal
11 to the lesser of 5 percent of the pro-
12 ceeds of the issue of which the re-
13 funded bond is a part or $100,000 (to
14 the extent such amount is allocable to
15 the refunded bond).
16 ‘‘(B) SPECIAL RULES FOR REDEMP-
17 TIONS.—
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1 ‘‘(ii) REDEMPTIONS NOT REQUIRED
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1 ‘‘(B) a bond issued before 1986, shall be
2 treated as advance refunded no more than once
3 before March 15, 1986.’’.
4 (b) CONFORMING AMENDMENT.—Section
5 148(f)(4)(C) is amended by redesignating clauses (xiv)
6 through (xvi) as clauses (xv) to (xvii), respectively, and
7 by inserting after clause (xiii) the following new clause:
8 ‘‘(xiv) DETERMINATION OF INITIAL
21 NANCIAL INSTITUTIONS.
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1 (b) PERMANENT MODIFICATION OF OTHER SPECIAL
2 RULES.—Section 265(b)(3) is amended—
3 (1) by redesignating clauses (iv), (v), and (vi)
4 of subparagraph (G) as clauses (ii), (iii), and (iv),
5 respectively, and moving such clauses to the end of
6 subparagraph (H) (as added by paragraph (2)), and
7 (2) by striking so much of subparagraph (G) as
8 precedes such clauses and inserting the following:
9 ‘‘(G) QUALIFIED 501(c)(3) BONDS TREATED
17 FINANCINGS.—
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1 are met with respect to each qualified
2 portion of the issue (determined by
3 treating each qualified portion as a
4 separate issue which is issued by the
5 qualified borrower with respect to
6 which such portion relates).’’.
7 (c) INFLATION ADJUSTMENT.—Section 265(b)(3), as
8 amended by subsection (b), is amended by adding at the
9 end the following new subparagraph:
10 ‘‘(I) INFLATION ADJUSTMENT.—In the
11 case of any calendar year after 2021, the
12 $30,000,000 amounts contained in subpara-
13 graphs (C)(i), (D)(i), and (D)(iii)(II) shall each
14 be increased by an amount equal to—
15 ‘‘(i) such dollar amount, multiplied by
16 ‘‘(ii) the cost-of-living adjustment de-
17 termined under section 1(f)(3) for such
18 calendar year, determined by substituting
19 ‘calendar year 2020’ for ‘calendar year
20 2016’ in subparagraph (A)(ii) thereof.
21 Any increase determined under the preceding
22 sentence shall be rounded to the nearest mul-
23 tiple of $100,000.’’.
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1 (d) EFFECTIVE DATE.—The amendments made by
2 this section shall apply to obligations issued after the date
3 of the enactment of this Act.
4 SEC. 135104. MODIFICATIONS TO QUALIFIED SMALL ISSUE
5 BONDS.
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1 subclause (I) or (II) if such facility is
2 located on the same site as the facility
3 described in subclause (I) or (II).
4 ‘‘(ii) CERTAIN FACILITIES IN-
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1 Con. Res. 14, or to any bond issued to re-
2 fund a bond issued on or before such date
3 (other than a bond to which clause (iii) of
4 this subparagraph (as in effect before the
5 date of the enactment of such Act) ap-
6 plies), either directly or in a series of
7 refundings.’’.
8 (b) INCREASE IN LIMITATIONS.—Section 144(a)(4) is
9 amended—
10 (1) in subparagraph (A)(i), by striking
11 ‘‘$10,000,000’’ and inserting ‘‘$30,000,000’’, and
12 (2) in the heading, by striking ‘‘$10,000,000’’ and
13 inserting ‘‘$30,000,000’’.
14 (c) ADJUSTMENT FOR INFLATION.—Section
15 144(a)(4) is amended by adding at the end the following
16 new subparagraph:
17 ‘‘(H) ADJUSTMENT FOR INFLATION.—In
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1 ‘calendar year 2020’ for ‘calendar year
2 2016’ in subparagraph (A)(ii) thereof.
3 If any amount as increased under the preceding
4 sentence is not a multiple of $100,000, such
5 amount shall be rounded to the nearest multiple
6 of $100,000.’’.
7 (d) EFFECTIVE DATE.—The amendments made by
8 this section shall apply to obligations issued after the date
9 of the enactment of this Act.
10 SEC. 135105. EXPANSION OF CERTAIN EXCEPTIONS TO THE
12 TIME FARMERS.
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1 (4) INFLATION ADJUSTMENT.—
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1 SEC. 135106. CERTAIN WATER AND SEWAGE FACILITY
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1 (b) EFFECTIVE DATE.—The amendments made by
2 this section shall apply to bonds issued after the date of
3 the enactment of this Act.
4 SEC. 135107. EXEMPT FACILITY BONDS FOR ZERO-EMISSION
5 VEHICLE INFRASTRUCTURE.
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1 ‘‘(B) is located where the vehicles are
2 charged or fueled,
3 ‘‘(C) is of a character subject to the allow-
4 ance for depreciation (or amortization in lieu of
5 depreciation),
6 ‘‘(D) is made available for use by members
7 of the general public,
8 ‘‘(E) accepts payment via a credit card
9 reader, including a credit card reader that uses
10 contactless technology, and
11 ‘‘(F) is capable of charging or fueling vehi-
12 cles produced by more than one manufacturer
13 (within the meaning of section 30D(d)(3)).
14 ‘‘(2) INCLUSION OF UTILITY SERVICE CONNEC-
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1 ‘‘(B) a vehicle that produces zero exhaust
2 emissions of any criteria pollutant (or precursor
3 pollutant) or greenhouse gas under any possible
4 operational modes and conditions.
5 ‘‘(4) ZERO-EMISSIONS VEHICLE INFRASTRUC-
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1 SEC. 135108. APPLICATION OF DAVIS-BACON ACT REQUIRE-
3 FACILITY BONDS.
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1 Subpart B—Other Provisions Related to
2 Infrastructure Financing
4 COSTS OF GOVERNMENT-OWNED
5 BROADBAND.
11 COSTS OF GOVERNMENT-OWNED
12 BROADBAND.
28
1 for any taxable year with respect to any qualified
2 broadband network shall not exceed the product of $400
3 multiplied by the number of qualified households sub-
4 scribed to the qualified broadband service provided by
5 such network (determined as of any time during such tax-
6 able year).
7 ‘‘(d) DEFINITIONS.—For purposes of this section—
8 ‘‘(1) APPLICABLE PERCENTAGE.—The term
9 ‘applicable percentage’ means—
10 ‘‘(A) in the case of any taxable year begin-
11 ning in 2021 through 2026, 30 percent,
12 ‘‘(B) in the case of any taxable year begin-
13 ning in 2027, 26 percent, and
14 ‘‘(C) in the case of any taxable year begin-
15 ning in 2028, 24 percent.
16 ‘‘(2) ELIGIBLE GOVERNMENTAL ENTITY.—The
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1 For purposes of this paragraph, the term ‘State’ in-
2 cludes any possession of the United States.
3 ‘‘(3) QUALIFIED BROADBAND EXPENSES.—The
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1 restrial broadband service providing downloads at a
2 speed of at least 25 megabits per second and
3 uploads at a speed of at least 3 megabits per second.
4 ‘‘(7) TAXABLE YEAR.—Except as otherwise pro-
5 vided by the Secretary, the term ‘taxable year’
6 means, with respect to any eligible governmental en-
7 tity, the fiscal year of such entity.
8 ‘‘(e) SPECIAL RULES.—
9 ‘‘(1) ALLOCATIONS.—For purposes of sub-
10 section (d)(3), amounts shall be treated as properly
11 allocated if allocated ratably among the subscribers
12 of the qualified broadband service.
13 ‘‘(2) DENIAL OF DOUBLE BENEFIT.—Qualified
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1 of 1985 (2 U.S.C. 905(h)) is amended by inserting: ‘‘Pay-
2 ments made under section 6431B(b) of the Internal Rev-
3 enue Code of 1986’’ after the item related to Payments
4 for Foster Care and Permanency.
5 (c) CONFORMING AMENDMENTS.—
6 (1) Section 1324(b)(2) of title 31, United
7 States Code, as amended by the preceding provisions
8 of this Act, is amended by striking ‘‘or 6431A’’ and
9 inserting ‘‘6431A, or 6431B’’.
10 (2) The table of sections for subchapter B of
11 chapter 65, as amended by the preceding provisions
12 of this Act, is amended by inserting before the item
13 relating to section 6432 the following new item:
‘‘Sec. 6431B. Credit for operations and maintenance costs of government-
owned broadband.’’.
19 TAX CREDIT.
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1 ‘‘(H) $5,000,000,000 for each of calendar
2 years 2020 and 2021,
3 ‘‘(I) $7,000,000,000 for calendar year
4 2022,
5 ‘‘(J) $6,000,000,000 for calendar year
6 2023, and
7 ‘‘(K) $5,000,000,000 for calendar year
8 2024 and each calendar year thereafter.’’.
9 (b) ALTERNATIVE MINIMUM TAX RELIEF.—Section
10 38(c)(4)(B) is amended—
11 (1) by redesignating clauses (v) through (xii) as
12 clauses (vi) through (xiii), respectively, and
13 (2) by inserting after clause (iv) the following
14 new clause:
15 ‘‘(v) the credit determined under sec-
16 tion 45D, but only with respect to credits
17 determined with respect to qualified equity
18 investments (as defined in section 45D(b))
19 initially made after December 31, 2021,’’.
20 (c) INFLATION ADJUSTMENT.—Section 45D(f) is
21 amended by adding at the end the following new para-
22 graph:
23 ‘‘(4) INFLATION ADJUSTMENT.—
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1 amount paragraph (1)(H) shall be increased by
2 an amount equal to—
3 ‘‘(i) such dollar amount, multiplied by
4 ‘‘(ii) the cost-of-living adjustment de-
5 termined under section 1(f)(3) for the cal-
6 endar year, determined by substituting
7 ‘calendar year 2023’ for ‘calendar year
8 2016’ in subparagraph (A)(ii) thereof.
9 ‘‘(B) ROUNDING RULE.—Any increase
10 under subparagraph (A) which is not a multiple
11 of $1,000,000 shall be rounded to the nearest
12 multiple of $1,000,000.’’.
13 (d) CONFORMING AMENDMENT.—Section 45D(f)(3)
14 is amended by striking the last sentence.
15 (e) EFFECTIVE DATES.—
16 (1) IN GENERAL.—Except as otherwise pro-
17 vided in this subsection, the amendments made by
18 this section shall apply to new markets tax credit
19 limitation determined for calendar years after 2021.
20 (2) ALTERNATIVE MINIMUM TAX RELIEF.—The
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1 PART 3—REHABILITATION TAX CREDIT
‘‘In the case of taxable years begin- The applicable percentage is:
ning:
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1 to the taxable year in which such expenditures were
2 paid or incurred.’’.
3 (d) EFFECTIVE DATE.—The amendments made by
4 this section shall apply to property placed in service after
5 March 31, 2021.
6 SEC. 135302. INCREASE IN THE REHABILITATION CREDIT
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1 which would be so taken into account but for
2 paragraph (1)(B)) with respect to such rehabili-
3 tation do not exceed $3,750,000,
4 ‘‘(B) no credit was allowed under this sec-
5 tion with respect to such building to any tax-
6 payer for either of the 2 taxable years imme-
7 diately preceding the first taxable year in which
8 expenditures described in subparagraph (A)
9 were paid or incurred, and
10 ‘‘(C) the taxpayer elects (at such time and
11 manner as the Secretary may provide) to have
12 this subsection apply with respect to such reha-
13 bilitation.’’.
14 (b) EFFECTIVE DATE.—The amendment made by
15 this section shall apply to taxable years beginning after
16 December 31, 2021.
17 SEC. 135303. MODIFICATION OF DEFINITION OF SUBSTAN-
18 TIALLY REHABILITATED.
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1 60-month periods (referred to in clause (ii) of such sec-
2 tion) which end after December 31, 2021.
3 SEC. 135304. ELIMINATION OF REHABILITATION CREDIT
4 BASIS ADJUSTMENT.
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1 a tax-exempt entity described in sec-
2 tion 168(h)(2)(A)(i) (determined with-
3 out regard to the last sentence of sec-
4 tion 168(h)(2)(A)), the determination
5 of whether property is tax-exempt use
6 property shall be made under section
7 168(h) without regard to whether the
8 property is leased in a disqualified
9 lease (as defined in section
10 168(h)(1)(B)(ii)).’’.
11 (b) EFFECTIVE DATE.—The amendments made by
12 this section shall apply to leases entered into after Decem-
13 ber 31, 2021.
14 SEC. 135306. QUALIFICATION OF REHABILITATION EXPEND-
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1 determined without regard to sub-
2 paragraph (B) thereof) at any time
3 during the 5-year period ending on
4 the date that such rehabilitation be-
5 gins and which is used as such a facil-
6 ity immediately after such rehabilita-
7 tion.’’.
8 (b) REPORT.—Not later than the date which is 5
9 years after the date of the enactment of this Act, the Sec-
10 retary of the Treasury, after consultation with the heads
11 of appropriate Federal agencies, shall report to Congress
12 on the effects resulting from the amendment made by sub-
13 section (a), including—
14 (1) the number of qualified public education fa-
15 cilities rehabilitated (stated separately with respect
16 to each State) and the number of students using
17 such facilities (stated separately with respect to each
18 such State),
19 (2) the number of qualified public education fa-
20 cilities rehabilitated in low income communities (as
21 section 45D(e)(1) of the Internal Revenue Code of
22 1986) and the number of students using such facili-
23 ties,
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1 (3) the amount of qualified rehabilitation ex-
2 penditures for each qualified public education facility
3 rehabilitated, and
4 (4) and any other data determined by the Sec-
5 retary to be useful in evaluating the impact of such
6 amendment.
7 (c) EFFECTIVE DATE.—The amendment made by
8 this section shall apply to property placed in service after
9 December 31, 2021.
10 PART 4—DISASTER AND RESILIENCY
13 TION PROGRAMS.
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1 ‘‘(2) QUALIFIED CATASTROPHE MITIGATION
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1 SEC. 135402. REPEAL OF TEMPORARY LIMITATION ON PER-
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1 guidance consistent with Revenue Procedure 2017–60 (as
2 so modified).
3 SEC. 135403. CREDIT FOR QUALIFIED WILDFIRE MITIGA-
4 TION EXPENDITURES.
9 TURES.
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1 item to the sum of the State’s and taxpayer’s ex-
2 penditures for such item is not less than 25 percent.
3 ‘‘(2) SPECIFIED WILDFIRE MITIGATION EX-
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1 taxable year (determined without regard to this sub-
2 section) that is attributable to expenditures made in
3 the ordinary course of the taxpayer’s trade or busi-
4 ness (or, in the case of expenditures made by a
5 State, would have been expenditures made in the or-
6 dinary course of the taxpayer’s trade or business if
7 made by the taxpayer) shall be treated as a credit
8 listed in section 38(b) for taxable year (and not al-
9 lowed under subsection (a)).
10 ‘‘(2) PERSONAL CREDIT.—For purposes of this
11 title, the credit allowed under subsection (a) for any
12 taxable year (determined after application of para-
13 graph (1)) shall be treated as a credit allowable
14 under subpart A for such taxable year.
15 ‘‘(d) REDUCTION OF CREDIT PERCENTAGE WHERE
16 TAXPAYER EXPENDITURES LESS THAN 30 PERCENT.—
17 ‘‘(1) IN GENERAL.—If the expenditure percent-
18 age with respect to any item of qualified wildfire
19 mitigation expenditure is less than 30 percent, sub-
20 section (a) shall be applied by substituting ‘the ex-
21 penditure percentage’ for ‘30 percent’ with respect
22 to such item of expenditure.
23 ‘‘(2) EXPENDITURE PERCENTAGE.—For pur-
24 poses of this section, the term ‘expenditure percent-
25 age’ means, with respect to any item of qualified
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1 wildfire mitigation expenditure any portion of which
2 is paid or incurred by a State, the ratio (expressed
3 as a percentage) of—
4 ‘‘(A) the taxpayer’s expenditure for such
5 item, divided by
6 ‘‘(B) the sum of the taxpayer’s and such
7 State’s expenditures for such item.
8 ‘‘(e) SPECIAL RULES.—
9 ‘‘(1) TREATMENT OF EXPENDITURES RELATED
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1 with respect to such expenditure (determined with-
2 out regard to subsection (c)).
3 ‘‘(3) DENIAL OF DOUBLE BENEFIT.—The
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1 (3) The table of sections for subpart B of part
2 IV of subchapter A of chapter 1 is amended by in-
3 serting after the item relating to section 27 the fol-
4 lowing new item:
‘‘Sec. 28. Qualified wildfire mitigation expenditures.’’.
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The sub- The sub-
clause (I) clause (II)
‘‘In the case of calendar year: amount amount
shall be: shall be:
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1 (b) EFFECTIVE DATE.—The amendments made by
2 this section shall apply to calendar years beginning after
3 December 31, 2021.
4 SEC. 135502. TAX-EXEMPT BOND FINANCING REQUIRE-
5 MENT.
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1 (B) by inserting after paragraph (5) the
2 following new paragraph:
3 ‘‘(6) PORTION OF STATE CEILING SET-ASIDE
5 LOW-INCOME HOUSEHOLDS.—
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1 ‘‘(ii) 100 percent of an amount equal
2 to the Federal poverty line (within the
3 meaning of section 36B(d)(3)).
4 ‘‘(C) STATE MAY NOT OVERRIDE SET-
20 COME HOUSEHOLDS.—
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1 ‘‘(II) which is designated by the
2 housing credit agency as requiring the
3 increase in credit under this subpara-
4 graph in order for such building to be
5 financially feasible as part of a quali-
6 fied low-income housing project,
7 subparagraph (B) shall not apply to the
8 portion of such building which is comprised
9 of such units, and the eligible basis of such
10 portion of the building shall be 150 per-
11 cent of such basis determined without re-
12 gard to this subparagraph.
13 ‘‘(ii) ALLOCATION RULES APPLICABLE
15 PLIES.—
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1 financed by tax-exempt bonds as de-
2 scribed in subsection (h)(4), for any
3 calendar year, the State shall not
4 issue more than 10 percent of the pri-
5 vate activity bond volume cap as de-
6 scribed in section 146(d)(1) to build-
7 ings to which clause (i) applies.
8 ‘‘(iii) TERMINATION.—This subpara-
9 graph shall not apply to allocations after
10 December 31, 2031.’’.
11 (c) EFFECTIVE DATE.—The amendments made by
12 this section shall apply to allocations, and determinations,
13 of housing credit dollar amount after December 31, 2021.
14 SEC. 135504. INCLUSION OF RURAL AREAS AS DIFFICULT
15 DEVELOPMENT AREAS.
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1 area, or any rural area as defined by
2 section 520 of the Housing Act of
3 1949, which is identified by the quali-
4 fied allocation plan under subsection
5 (m)(1)(B).’’.
6 (c) EFFECTIVE DATE.—The amendments made by
7 this section shall apply to buildings placed in service after
8 December 31, 2021.
9 SEC. 135505. REPEAL OF QUALIFIED CONTRACT OPTION.
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1 ‘‘(II) in the case of a building
2 any portion of which is financed as
3 described in paragraph (4), which re-
4 ceived before January 1, 2022, a de-
5 termination from the issuer of the
6 tax-exempt bonds or the housing cred-
7 it agency that the building is eligible
8 to receive an allocation of housing
9 credit dollar amount under the rules
10 of paragraphs (1) and (2) of sub-
11 section (m).’’.
12 (b) RULES RELATING TO EXISTING PROJECTS.—
13 Subparagraph (F) of section 42(h)(7), as redesignated by
14 section 135503, is amended by striking ‘‘the nonlow-in-
15 come portion’’ and all that follows and inserting ‘‘the
16 nonlow-income portion and the low-income portion of the
17 building for fair market value (determined by the housing
18 credit agency by taking into account the rent restrictions
19 required for the low-income portion of the building to con-
20 tinue to meet the standards of paragraphs (1) and (2) of
21 subsection (g)). The Secretary shall prescribe such regula-
22 tions as may be necessary or appropriate to carry out this
23 paragraph.’’.
24 (c) CONFORMING AMENDMENTS.—
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1 (1) Paragraph (7) of section 42(h), as redesig-
2 nated by section 135503, is amended by striking
3 subparagraph (G) and by redesignating subpara-
4 graphs (H), (I), (J), and (K) as subparagraphs (G),
5 (H), (I), and (J), respectively.
6 (2) Subclause (II) of section 42(h)(7)(E)(i), as
7 so redesignated and as amended by subsection (a),
8 is further amended by striking ‘‘subparagraph (I)’’
9 and inserting ‘‘subparagraph (H)’’.
10 (d) EFFECTIVE DATE.—
11 (1) IN GENERAL.—Except as provided in para-
12 graph (2), the amendments made by this section
13 shall take effect on the date of the enactment of this
14 Act.
15 (2) SUBSECTION (b).—The amendments made
16 by subsection (b) shall apply to buildings with re-
17 spect to which a written request described in section
18 42(h)(7)(H) of the Internal Revenue Code of 1986,
19 as redesignated by section 135503 and subsection
20 (c), is submitted after the date of the enactment of
21 this Act.
22 SEC. 135506. MODIFICATION AND CLARIFICATION OF
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1 (1) IN GENERAL.—Subparagraph (A) of section
2 42(i)(7) is amended by striking ‘‘a right of 1st re-
3 fusal’’ and inserting ‘‘an option’’.
4 (2) CONFORMING AMENDMENT.—The heading
5 of paragraph (7) of section 42(i) is amended by
6 striking ‘‘RIGHT OF 1ST REFUSAL’’ and inserting
7 ‘‘OPTION’’.
8 (b) CLARIFICATION WITH RESPECT TO RIGHT OF
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1 ment, operation, or maintenance of a build-
2 ing.’’.
3 (3) EXERCISE OF RIGHT OF FIRST REFUSAL
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1 ing on the date of the sale to the tenants). In the case
2 of a purchase of a partnership interest, the minimum pur-
3 chase price is an amount not less than such interest’s rat-
4 able share of the amount determined under the first sen-
5 tence of this subparagraph.’’.
6 (d) EFFECTIVE DATES.—
7 (1) MODIFICATION OF RIGHT OF FIRST RE-
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1 SEC. 135507. INCREASE IN CREDIT FOR BOND-FINANCED
3 AGENCY.
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1 ‘‘(A) the reasonable development costs paid
2 or incurred by the taxpayer with respect to such
3 qualified residence, over
4 ‘‘(B) the sale price of such qualified resi-
5 dence (reduced by any reasonable expenses paid
6 or incurred by the taxpayer in connection with
7 such sale), or
8 ‘‘(2) 35 percent of the lesser of—
9 ‘‘(A) the eligible development costs paid or
10 incurred by the taxpayer with respect to such
11 qualified residence, or
12 ‘‘(B) 80 percent of the national median
13 sale price for new homes (as determined pursu-
14 ant to the most recent census data available as
15 of the date on which the neighborhood homes
16 credit agency makes an allocation for the quali-
17 fied project).
18 ‘‘(b) DEVELOPMENT COSTS.—For purposes of this
19 section—
20 ‘‘(1) REASONABLE DEVELOPMENT COSTS.—
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1 ation, to the extent that the neighborhood
2 homes credit agency determines that such
3 amounts meet the standards specified pursuant
4 to subsection (f)(1)(C) (as of the date on which
5 construction or substantial rehabilitation is sub-
6 stantially complete, as determined by such
7 agency) and are necessary to ensure the finan-
8 cial feasibility of such qualified residence.
9 ‘‘(B) CONSIDERATIONS IN MAKING DETER-
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1 to any amount paid or incurred for the acquisition
2 of buildings and land.
3 ‘‘(3) SUBSTANTIAL REHABILITATION.—The
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1 under paragraph (A) only if paid or incurred
2 not more than 3 years before the date on which
3 the allocation referred to in subparagraph (A)
4 is made. If the taxpayer acquired any building
5 or land from an entity (or any related party to
6 such entity) that holds an ownership interest in
7 the taxpayer, then such entity must also have
8 acquired such property within such 3-year pe-
9 riod, and the acquisition cost included under
10 subparagraph (A) with respect to the taxpayer
11 shall not exceed the amount such entity paid or
12 incurred to acquire such property.
13 ‘‘(c) QUALIFIED RESIDENCE.—For purposes of this
14 section—
15 ‘‘(1) IN GENERAL.—The term ‘qualified resi-
16 dence’ means a residence that—
17 ‘‘(A) is real property affixed on a perma-
18 nent foundation,
19 ‘‘(B) is—
20 ‘‘(i) a house which is comprised of 4
21 or fewer residential units,
22 ‘‘(ii) a condominium unit, or
23 ‘‘(iii) a house or an apartment owned
24 by a cooperative housing corporation (as
25 defined in section 216(b)),
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1 ‘‘(C) is part of a qualified project with re-
2 spect to the neighborhood homes credit agency
3 has made an allocation under subsection (e),
4 and
5 ‘‘(D) is located in a qualified census tract
6 (determined as of the date of such allocation).
7 ‘‘(2) QUALIFIED CENSUS TRACT.—
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1 is not less than 150 percent of the
2 poverty rate of the applicable area,
3 ‘‘(II) has a median family income
4 which does not exceed the median
5 family income for the applicable area,
6 and
7 ‘‘(III) has a median value for
8 owner-occupied homes that does not
9 exceed 80 percent of the median value
10 for owner-occupied homes in the ap-
11 plicable area,
12 ‘‘(iii) which—
13 ‘‘(I) is located in a nonmetropoli-
14 tan county,
15 ‘‘(II) has a median family income
16 which does not exceed the median
17 family income for the applicable area,
18 and
19 ‘‘(III) has been designated by a
20 neighborhood homes credit agency
21 under this clause, or
22 ‘‘(iv) which is not otherwise a quali-
23 fied census tract and is located in a dis-
24 aster area (as defined in section
25 7508A(d)(3)), but only with respect to
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1 credits allocated in any period during
2 which the President of the United States
3 has determined that such area warrants in-
4 dividual or individual and public assistance
5 by the Federal Government under the Rob-
6 ert T. Stafford Disaster Relief and Emer-
7 gency Assistance Act.
8 ‘‘(B) APPLICABLE AREA.—The term ‘appli-
9 cable area’ means—
10 ‘‘(i) in the case of a metropolitan cen-
11 sus tract, the metropolitan area in which
12 such census tract is located, and
13 ‘‘(ii) in the case of a census tract
14 other than a census tract described in
15 clause (i), the State.
16 ‘‘(d) AFFORDABLE SALE.—For purposes of this sec-
17 tion—
18 ‘‘(1) IN GENERAL.—The term ‘affordable sale’
19 means a sale to a qualified homeowner of a qualified
20 residence that the neighborhood homes credit agency
21 certifies as meeting the standards promulgated
22 under subsection (f)(1)(D) for a price that does not
23 exceed—
24 ‘‘(A) in the case of any qualified residence
25 not described in subparagraph (B), (C), or (D),
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1 the amount equal to the product of 4 multiplied
2 by the median family income for the applicable
3 area (as determined pursuant to the most re-
4 cent census data available as of the date of the
5 contract for such sale),
6 ‘‘(B) in the case of a house comprised of
7 2 residential units, 125 percent of the amount
8 described in subparagraph (A),
9 ‘‘(C) in the case of a house comprised of
10 3 residential units, 150 percent of the amount
11 described in subparagraph (A), or
12 ‘‘(D) in the case of a house comprised of
13 4 residential units, 175 percent of the amount
14 described in subparagraph (A).
15 ‘‘(2) QUALIFIED HOMEOWNER.—The term
16 ‘qualified homeowner’ means, with respect to a
17 qualified residence, an individual—
18 ‘‘(A) who owns and uses such qualified res-
19 idence as the principal residence of such indi-
20 vidual, and
21 ‘‘(B) whose family income (determined as
22 of the date that a binding contract for the af-
23 fordable sale of such residence is entered into)
24 is 140 percent or less of the median family in-
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1 come for the applicable area in which the quali-
2 fied residence is located.
3 ‘‘(e) CREDIT CEILING AND ALLOCATIONS.—
4 ‘‘(1) CREDIT LIMITED BASED ON ALLOCATIONS
5 TO QUALIFIED PROJECTS.—
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1 allocation to the qualified project of which such
2 residence is a part (or, in the case of a qualified
3 residence to which subsection (i) applies, the re-
4 habilitation of such residence is completed dur-
5 ing such 5-year period).
6 ‘‘(2) LIMITATIONS ON ALLOCATIONS TO QUALI-
7 FIED PROJECTS.—
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1 ‘‘(i) the greater of—
2 ‘‘(I) the product of $6, multiplied
3 by the State population (determined
4 in accordance with section 146(j)), or
5 ‘‘(II) $8,000,000, and
6 ‘‘(ii) any amount previously allocated
7 to any taxpayer with respect to any quali-
8 fied project by the neighborhood homes
9 credit agency of such State which can no
10 longer be allocated to any qualified resi-
11 dence because the 5-year period described
12 in paragraph (1)(B) expires during cal-
13 endar year.
14 ‘‘(B) 3-YEAR CARRYFORWARD OF UNUSED
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1 amount originally arose, determined on a first-
2 in, first-out basis.
3 ‘‘(f) RESPONSIBILITIES OF NEIGHBORHOOD HOMES
4 CREDIT AGENCIES.—
5 ‘‘(1) IN GENERAL.—Notwithstanding subsection
6 (e), the State neighborhood homes credit dollar
7 amount shall be zero for a calendar year unless the
8 neighborhood homes credit agency of the State—
9 ‘‘(A) allocates such amount pursuant to a
10 qualified allocation plan of the neighborhood
11 homes credit agency,
12 ‘‘(B) allocates not more than 20 percent of
13 amounts allocated in the previous year (or for
14 allocations made in 2022, not more than 20
15 percent of the neighborhood homes credit ceil-
16 ing for such year) to projects with respect to
17 qualified residences which—
18 ‘‘(i) are located in census tracts de-
19 scribed in subsection (c)(2)(A)(iii),
20 (c)(2)(A)(iv), (i)(5), or
21 ‘‘(ii) are not located in a qualified
22 census tract but meet the requirements of
23 (i)(8),
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1 ‘‘(C) promulgates standards with respect
2 to reasonable qualified development costs and
3 fees,
4 ‘‘(D) promulgates standards with respect
5 to construction quality,
6 ‘‘(E) in the case of any neighborhood
7 homes credit agency which makes an allocation
8 to a qualified project which includes any quali-
9 fied residence to which subsection (i) applies,
10 promulgates standards with respect to pro-
11 tecting the owners of such residences, including
12 the capacity of such owners to pay rehabilita-
13 tion costs not covered by the credit provided by
14 this section and providing for the disclosure to
15 such owners of their rights and responsibilities
16 with respect to the rehabilitation of such resi-
17 dences, and
18 ‘‘(F) submits to the Secretary (at such
19 time and in such manner as the Secretary may
20 prescribe) an annual report specifying—
21 ‘‘(i) the amount of the neighborhood
22 homes credits allocated to each qualified
23 project for the previous year,
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1 ‘‘(ii) with respect to each qualified
2 residence completed in the preceding cal-
3 endar year—
4 ‘‘(I) the census tract in which
5 such qualified residence is located,
6 ‘‘(II) with respect to the qualified
7 project that includes such qualified
8 residence, the year in which such
9 project received an allocation under
10 this section,
11 ‘‘(III) whether such qualified res-
12 idence was new, substantially rehabili-
13 tated and sold to a qualified home-
14 owner, or substantially rehabilitated
15 pursuant to subsection (i),
16 ‘‘(IV) the eligible development
17 costs of such qualified residence,
18 ‘‘(V) the amount of the neighbor-
19 hood homes credit with respect to
20 such qualified residence,
21 ‘‘(VI) the sales price of such
22 qualified residence, if applicable, and
23 ‘‘(VII) the family income of the
24 qualified homeowner (expressed as a
25 percentage of the applicable area me-
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1 dian family income for the location of
2 the qualified residence), and
3 ‘‘(iii) such other information as the
4 Secretary may require.
5 ‘‘(2) QUALIFIED ALLOCATION PLAN.—For pur-
6 poses of this subsection, the term ‘qualified alloca-
7 tion plan’ means any plan which—
8 ‘‘(A) sets forth the selection criteria to be
9 used to prioritize qualified projects for alloca-
10 tions of State neighborhood homes credit dollar
11 amounts, including—
12 ‘‘(i) the need for new or substantially
13 rehabilitated owner-occupied homes in the
14 area addressed by the project,
15 ‘‘(ii) the expected contribution of the
16 project to neighborhood stability and revi-
17 talization, including the impact on neigh-
18 borhood residents,
19 ‘‘(iii) the capability and prior perform-
20 ance of the project sponsor, and
21 ‘‘(iv) the likelihood the project will re-
22 sult in long-term homeownership,
23 ‘‘(B) has been made available for public
24 comment, and
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1 ‘‘(C) provides a procedure that the neigh-
2 borhood homes credit agency (or any agent or
3 contractor of such agency) shall follow for pur-
4 poses of—
5 ‘‘(i) identifying noncompliance with
6 any provisions of this section, and
7 ‘‘(ii) notifying the Internal Revenue
8 Service of any such noncompliance of
9 which the agency becomes aware.
10 ‘‘(g) REPAYMENT.—
11 ‘‘(1) IN GENERAL.—
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1 amount equal to 50 percent of the gain from the
2 sale to which the repayment relates, reduced by 20
3 percent for each year of the 5-year period referred
4 to in paragraph (1)(A) which ends before the date
5 of such sale.
6 ‘‘(3) LIEN FOR REPAYMENT AMOUNT.—A
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1 ‘‘(h) OTHER DEFINITIONS AND SPECIAL RULES.—
2 For purposes of this section—
3 ‘‘(1) NEIGHBORHOOD HOMES CREDIT AGEN-
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1 respectively, of the entire condominium or coop-
2 erative housing property in which such qualified
3 residence is located, multiplied by a fraction—
4 ‘‘(i) the numerator of which is the
5 total floor space of such qualified resi-
6 dence, and
7 ‘‘(ii) the denominator of which is the
8 total floor space of all residences within
9 such property.
10 ‘‘(B) TENANT-STOCKHOLDERS OF COOPER-
18 AFFORDABLE SALES.—
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1 a relationship to such person specified in sec-
2 tion 267(b) or 707(b)(1), or the related person
3 and such person are engaged in trades or busi-
4 nesses under common control (within the mean-
5 ing of subsections (a) and (b) of section 52).
6 For purposes of the preceding sentence, in ap-
7 plying section 267(b) or 707(b)(1), ‘10 percent’
8 shall be substituted for ‘50 percent’.
9 ‘‘(7) INFLATION ADJUSTMENT.—
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1 a multiple of $1,000 shall be rounded to
2 the nearest multiple of $1,000.
3 ‘‘(ii) In the case of the dollar amount
4 in subsection (e)(3)(A)(i)(I), any increase
5 under paragraph (1) which is not a mul-
6 tiple of $0.01 shall be rounded to the near-
7 est multiple of $0.01.
8 ‘‘(iii) In the case of the dollar amount
9 in subsection (e)(3)(A)(i)(II), any increase
10 under paragraph (1) which is not a mul-
11 tiple of $100,000 shall be rounded to the
12 nearest multiple of $100,000.
13 ‘‘(8) REPORT.—
14 ‘‘(A) IN GENERAL.—The Secretary shall
15 annually issue a report, to be made available to
16 the public, which contains the information sub-
17 mitted pursuant to subsection (f)(1)(F).
18 ‘‘(B) DE-IDENTIFICATION.—The Secretary
19 shall ensure that any information made public
20 pursuant to paragraph (1) excludes any infor-
21 mation that would allow for the identification of
22 qualified homeowners.
23 ‘‘(9) LIST OF QUALIFIED CENSUS TRACTS.—
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1 shall, for each year, make publicly available a list of
2 qualified census tracts under—
3 ‘‘(A) on a combined basis, clauses (i) and
4 (ii) of subsection (c)(2)(A),
5 ‘‘(B) clause (iii) of such subsection, and
6 ‘‘(C) subsection (i)(5)(A).
7 ‘‘(i) APPLICATION OF CREDIT WITH RESPECT TO
8 OWNER-OCCUPIED REHABILITATIONS.—
9 ‘‘(1) IN GENERAL.—In the case of a qualified
10 rehabilitation by the taxpayer of any qualified resi-
11 dence which is owned (as of the date that the writ-
12 ten binding contract referred to in paragraph (3) is
13 entered into) by a specified homeowner, the rules of
14 paragraphs (2) through (7) shall apply.
15 ‘‘(2) ALTERNATIVE CREDIT DETERMINATION.—
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1 ‘‘(i) the amounts paid or incurred by
2 the taxpayer for the qualified rehabilitation
3 of the qualified residence to the extent that
4 such amounts are certified by the neigh-
5 borhood homes credit agency (at the time
6 of the completion of such rehabilitation) as
7 meeting the standards specified pursuant
8 to subsection (f)(1)(C), over
9 ‘‘(ii) any amounts paid to such tax-
10 payer for such rehabilitation,
11 ‘‘(B) 50 percent of the amounts described
12 in subparagraph (A)(i), or
13 ‘‘(C) $50,000.
14 ‘‘(3) QUALIFIED REHABILITATION.—
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1 TION.—A rule similar to the rule of section
2 (b)(4) shall apply for purposes of this sub-
3 section.
4 ‘‘(4) SPECIFIED HOMEOWNER.—For purposes
5 of this subsection, the term ‘qualified homeowner’
6 means, with respect to a qualified residence, an indi-
7 vidual—
8 ‘‘(A) who owns and uses such qualified res-
9 idence as the principal residence of such indi-
10 vidual as of the date that the written binding
11 contract referred to in paragraph (3) is entered
12 into, and
13 ‘‘(B) whose family income (determined as
14 of such date) does not exceed the median family
15 income for the applicable area (with respect to
16 the census tract in which the qualified residence
17 is located).
18 ‘‘(5) ADDITIONAL CENSUS TRACTS IN WHICH
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1 ‘‘(B) is designated by the neighborhood
2 homes credit agency for purposes of this para-
3 graph.
4 ‘‘(6) MODIFICATION OF REPAYMENT REQUIRE-
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1 tions that prevent avoidance of the rules, and abuse of
2 the purposes, of this section.’’.
3 (b) CREDIT ALLOWED AS PART OF GENERAL BUSI-
4 NESS CREDIT.—Section 38(b), as amended by the pre-
5 ceding provisions of this Act, is amended by striking
6 ‘‘plus’’ at the end of paragraph (34), by striking the period
7 at the end of paragraph (35) and inserting ‘‘, plus’’, and
8 by adding at the end the following new paragraph:
9 ‘‘(36) the neighborhood homes credit deter-
10 mined under section 42A(a),’’.
11 (c) CREDIT ALLOWED AGAINST ALTERNATIVE MIN-
12 IMUM TAX.—Section 38(c)(4)(B), as amended by the pre-
13 ceding provisions of this Act, is amended by redesginating
14 clauses (iv) through (xiii) as clauses (v) through (xiv), re-
15 spectively, and by inserting after clause (iii) the following
16 new clause:
17 ‘‘(iv) the credit determined under sec-
18 tion 42A,’’.
19 (d) CONFORMING AMENDMENTS.—
20 (1) Subsections (i)(3)(C), (i)(6)(B)(i), and
21 (k)(1) of section 469 are each amended by inserting
22 ‘‘or 42A’’ after ‘‘section 42’’.
23 (2) The table of sections for subpart D of part
24 IV of subchapter A of chapter 1 is amended by in-
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1 serting after the item relating to section 42 the fol-
2 lowing new item:
‘‘Sec. 42A. Neighborhood homes credit.’’.
7 INFRASTRUCTURE
89
1 justed in accordance with the cost of living
2 provision in section 146(d)(2)),
3 ‘‘(B) allocate such national bond volume
4 cap among all Indian Tribal Governments seek-
5 ing such an allocation in a particular year
6 under regulations prescribed by the Secretary.
7 ‘‘(2) APPLICATION OF GEOGRAPHIC RESTRIC-
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1 tion, or other organized group or community, or
2 of Alaska Natives, which is recognized as eligi-
3 ble for the special programs and services pro-
4 vided by the United States to Indians because
5 of their status as Indians, and also includes any
6 agencies, instrumentalities or political subdivi-
7 sions thereof.
8 ‘‘(B) INTERTRIBAL CONSORTIUMS, ETC.—
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1 jurisdictional area of an Oklahoma Indian Tribe
2 (as determined by the Secretary of the Interior)
3 and shall include lands outside a reservation
4 where the facility is to be placed in service in
5 connection with—
6 ‘‘(i) the active conduct of a trade or
7 business by an Indian Tribe on, contiguous
8 to, within reasonable proximity of, or with
9 a substantial connection to, an Indian res-
10 ervation or Alaska Native village, or
11 ‘‘(ii) infrastructure (including roads,
12 power lines, water systems, railroad spurs,
13 and communication facilities) serving an
14 Indian reservation or Alaska Native vil-
15 lage.’’.
16 (b) CONFORMING AMENDMENT.—Subparagraph (B)
17 of section 45(c)(9) is amended to read as follows:
18 ‘‘(B) INDIAN TRIBE.—For purposes of this
19 paragraph, the term ‘Indian tribe’ has the
20 meaning given the term ‘Indian Tribal Govern-
21 ment’ by section 7871(c)(3)(A).’’.
22 (c) EFFECTIVE DATE.—The amendments made by
23 this section shall apply to obligations issued in calendar
24 years beginning after the date of the enactment of this
25 Act.
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1 SEC. 135602. NEW MARKETS TAX CREDIT FOR TRIBAL STA-
2 TISTICAL AREAS.
8 STATISTICAL AREAS.—
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1 ‘‘(ii) LIMITATION ON CARRYOVER.—
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1 ‘‘(ii) any low-income community de-
2 scribed in subsection (e)(1)(B).’’.
3 (b) ELIGIBILITY OF CERTAIN PROJECTS SERVING
4 TRIBAL MEMBERS.—Section 45D(e)(1) is amended to
5 read as follows:
6 ‘‘(1) IN GENERAL.—The term ‘low-income com-
7 munity’ means any area—
8 ‘‘(A) comprising a population census tract
9 if—
10 ‘‘(i) the poverty rate for such tract is
11 at least 20 percent, or
12 ‘‘(ii)(I) in the case of a tract not lo-
13 cated within a metropolitan area, the me-
14 dian family income for such tract does not
15 exceed 80 percent of statewide median
16 family income, or
17 ‘‘(II) in the case of a tract located
18 within a metropolitan area, the median
19 family income for such tract does not ex-
20 ceed 80 percent of the greater of statewide
21 median family income or the metropolitan
22 area median family income,
23 ‘‘(B) which is used for a qualified active
24 low-income community business which—
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1 ‘‘(i) services a significant population
2 of Tribal or Alaska Native Village mem-
3 bers who are residents of a low-income
4 community described in subsection
5 (f)(5)(C)(i), and
6 ‘‘(ii) obtains a written statement from
7 the relevant Indian Tribal Government
8 (within the meaning of section 7871(c))
9 that documents the eligibility such project
10 with respect to the requirement of clause
11 (i).
12 Subparagraph (A)(ii) shall be applied using posses-
13 sion wide median family income in the case of cen-
14 sus tracts located within a possession of the United
15 States.’’.
16 (c) APPLICATION OF INFLATION ADJUSTMENT.—
17 Section 45D(f)(4), as added by the preceding provisions
18 of this Act, is amended by striking ‘‘the dollar amount
19 paragraph (1)(H) shall be increased’’ and inserting ‘‘the
20 dollar amounts in paragraphs (1)(H) and (5)(A) shall
21 each be increased’’.
22 (d) COORDINATION WITH EXISTING CARRYOVER.—
23 Section 45D(f)(3), as amended by the preceding provisions
24 of this Act, is amended to read as follows:
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1 ‘‘(3) CARRYOVER OF UNUSED LIMITATION.—If
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1 tion determined for calendar years after December 31,
2 2021.
3 SEC. 135603. INCLUSION OF INDIAN AREAS AS DIFFICULT
5 CERTAIN BUILDINGS.
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1 dian area, a building shall not be
2 treated as located in such area unless
3 such building is assisted or financed
4 under the Native American Housing
5 Assistance and Self Determination
6 Act of 1996 (25 U.S.C. 4101 et seq.)
7 or the project sponsor is an Indian
8 tribe (as defined in section
9 45A(c)(6)), a tribally designated hous-
10 ing entity (as defined in section 4(22)
11 of such Act (25 U.S.C. 4103(22))), or
12 wholly owned or controlled by such an
13 Indian tribe or tribally designated
14 housing entity.’’.
15 (c) EFFECTIVE DATE.—The amendments made by
16 this section shall apply to buildings placed in service after
17 December 31, 2021.
18 PART 7—INVESTMENTS IN THE TERRITORIES
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1 ‘‘SEC. 45V. POSSESSIONS ECONOMIC ACTIVITY CREDIT.
100
1 ‘‘(A) SOURCE QUALIFICATION.—80 percent
2 or more of the gross income of the corporation
3 for the 3-year period immediately preceding the
4 close of the taxable year (or for such part of
5 such period immediately preceding the close of
6 such taxable year as may be applicable) was de-
7 rived from sources within a possession of the
8 United States (determined without regard to
9 section 904(f)).
10 ‘‘(B) TRADE OR BUSINESS QUALIFICA-
18 TIONS.—
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101
1 ‘‘(ii) has an eligible foreign business
2 unit which, if such unit were a corporation,
3 would be a qualified corporation with re-
4 spect to which such ownership require-
5 ments would be met,
6 then, for purposes of this section, the United
7 States shareholder may elect to treat such unit
8 as a separate foreign corporation which meets
9 the requirements of paragraph (1)(B) and with
10 respect to which such shareholder is a United
11 States shareholder.
12 ‘‘(B) ELIGIBLE FOREIGN BUSINESS
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1 common parent of such group and shall apply
2 uniformly to all members of such group which
3 are United States shareholders with respect to
4 the foreign corporation which has such unit.
5 ‘‘(c) QUALIFIED POSSESSION WAGES.—For purposes
6 of this section—
7 ‘‘(1) IN GENERAL.—The term ‘qualified posses-
8 sion wages’ means wages paid or incurred by the
9 qualified corporation during the taxable year in con-
10 nection with the active conduct of a trade or busi-
11 ness within a possession of the United States to any
12 employee for services performed in such possession,
13 but only if such services are performed while the
14 principal place of employment of such employee is
15 within such possession.
16 ‘‘(2) LIMITATION ON AMOUNT OF WAGES
23 EES, ETC.—If—
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1 full-time basis at all times during the tax-
2 able year, or
3 ‘‘(ii) the principal place of employ-
4 ment of any employee with the qualified
5 corporation is not within a possession at
6 all times during the taxable year,
7 the limitation applicable under paragraph (1)
8 with respect to such employee shall be the ap-
9 propriate portion (as determined by the Sec-
10 retary) of the limitation which would otherwise
11 be in effect under paragraph (1).
12 ‘‘(C) WAGES.—
13 ‘‘(i) IN GENERAL.—Except as pro-
14 vided in clause (ii), the term ‘wages’ has
15 the meaning given to such term by sub-
16 section (b) of section 3306 (determined
17 without regard to any dollar limitation
18 contained in such section). For purposes of
19 the preceding sentence, such subsection (b)
20 shall be applied as if the term ‘United
21 States’ included all possessions of the
22 United States.
23 ‘‘(ii) SPECIAL RULE FOR AGRICUL-
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1 of paragraph (1) of section 51(h) applies,
2 the term ‘wages’ has the meaning given to
3 such term by section 51(h)(2).
4 ‘‘(3) ALLOCABLE EMPLOYEE FRINGE BENEFIT
5 EXPENSES.—
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1 would be allowable if such foreign corporation
2 were a domestic corporation) as a deduction
3 under this chapter to the qualified corporation
4 for such taxable year with respect to—
5 ‘‘(i) employer contributions under a
6 stock bonus, pension, profit-sharing, or an-
7 nuity plan,
8 ‘‘(ii) employer-provided coverage
9 under any accident or health plan for em-
10 ployees, and
11 ‘‘(iii) the cost of life or disability in-
12 surance provided to employees.
13 Any amount treated as wages under paragraph
14 (2)(C) shall not be taken into account under
15 this subparagraph.
16 ‘‘(d) POSSESSION.—
17 ‘‘(1) IN GENERAL.—The term ‘possession of the
18 United States’ means American Samoa, the Com-
19 monwealth of the Northern Mariana Islands, the
20 Commonwealth of Puerto Rico, Guam, and the Vir-
21 gin Islands.
22 ‘‘(2) MIRROR CODE POSSESSIONS.—In the case
23 of any possession of the United States with a mirror
24 code tax system (as defined in section 24(k)), this
25 section shall not be treated as part of the income tax
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1 laws of the United States for purposes of deter-
2 mining the income tax law of such possession unless
3 such possession elects to have this section be so
4 treated.
5 ‘‘(e) SEPARATE APPLICATION TO EACH POSSES-
6 SION.—For purposes of determining the amount of the
7 credit allowed under this section, this section shall be ap-
8 plied separately with respect to each possession of the
9 United States.
10 ‘‘(f) TERMINATION.—No credit shall be allowed
11 under this section for any taxable year beginning after De-
12 cember 31, 2031.’’.
13 (b) CREDIT MADE PART OF GENERAL BUSINESS
14 CREDIT.—Subsection (b) of section 38, as amended by the
15 preceding provisions of this Act, is amended by striking
16 ‘‘plus’’ at the end of paragraph (35), by striking the period
17 at the end of paragraph (36) and inserting ‘‘, plus’’, and
18 by adding at the end the following new paragraph:
19 ‘‘(37) the possessions economic activity credit
20 determined under section 45V.’’.
21 (c) CLERICAL AMENDMENT.—The table of sections
22 for subpart B of part IV of subchapter A of chapter 1
23 is amended by adding at the end the following:
‘‘Sec. 45V. Possessions Economic Activity Credit.’’.
107
1 the date of the enactment of this Act, and in the case
2 of a qualified corporation that is a foreign corporation,
3 to taxable years beginning after the date of enactment and
4 to taxable years of United States shareholders in which
5 or with which such taxable years of foreign corporations
6 end.
7 SEC. 135702. ADDITIONAL NEW MARKETS TAX CREDIT AL-
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108
1 cated by the Secretary as provided in para-
2 graph (2) except that such limitation may
3 only be allocated with respect to low-in-
4 come communities located in possessions of
5 the United States other than Puerto Rico.
6 ‘‘(B) CARRYOVER OF UNUSED LIMITA-
7 TION.—
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1 endar year following the calendar year in
2 which such amount of credit limitation
3 arose, the new market tax credit limitation
4 under paragraph (1) for such 6th calendar
5 year shall be increased by the amount of
6 such credit limitation.’’.
7 (b) APPLICATION OF INFLATION ADJUSTMENT.—
8 Section 45D(f)(4), as added and amended by the pre-
9 ceding provisions of this Act, is amended by striking
10 ‘‘paragraphs (1)(H) and (5)(A)’’ and inserting ‘‘para-
11 graphs (1)(H), (5)(A), (6)(A)(i), and (6)(A)(ii)’’.
12 (c) EFFECTIVE DATES.—The amendments made by
13 this subsection shall apply to new markets tax credit limi-
14 tation determined for calendar years after December 31,
15 2021.
16 Subtitle G—Green Energy
17 SEC. 136001. AMENDMENT OF 1986 CODE.
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110
1 PART 1—RENEWABLE ELECTRICITY AND
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1 (1) IN GENERAL.—Section 45(d)(1) is amended
2 by striking ‘‘January 1, 2022’’ and inserting ‘‘Janu-
3 ary 1, 2034’’.
4 (2) APPLICATION OF PHASEOUT PERCENT-
5 AGE.—
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1 ‘‘(A) in the case of any facility the con-
2 struction of which begins after December 31,
3 2031 and before January 1, 2033, 20 percent,
4 ‘‘(B) in the case of any facility the con-
5 struction of which begins after December 31,
6 2032 and before January 1, 2034, 40 percent,
7 and
8 ‘‘(C) in the case of any facility the con-
9 struction of which begins after December 31,
10 2033, 100 percent.’’.
11 (f) WAGE AND APPRENTICESHIP REQUIREMENTS.—
12 Section 45(b) is amended by adding at the end the fol-
13 lowing new paragraphs:
14 ‘‘(7) BASE CREDIT AMOUNT AND INCREASED
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1 ‘‘(i) IN GENERAL.—In the case of any
2 qualified facility which meets the project
3 requirements of this subparagraph, sub-
4 paragraph (A) shall not apply.
5 ‘‘(ii) PROJECT REQUIREMENTS.—A
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1 placed in service, the alteration or repair of
2 such facility,
3 shall be paid wages at rates not less than the
4 prevailing rates for construction, alteration, or
5 repair of a similar character in the locality as
6 most recently determined by the Secretary of
7 Labor, in accordance with subchapter IV of
8 chapter 31 of title 40, United States Code.
9 ‘‘(B) CORRECTION AND PENALTY RELATED
11 MENTS.—
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1 any period during such year, such tax-
2 payer—
3 ‘‘(I) makes payment to such la-
4 borer or mechanic in an amount equal
5 to the sum of—
6 ‘‘(aa) an amount equal to
7 the difference between the
8 amount of wages paid to such la-
9 borer or mechanic during such
10 period, and—
11 ‘‘(AA) the amount of
12 wages required to be paid to
13 such laborer or mechanic
14 pursuant to such subpara-
15 graph during such period,
16 plus
17 ‘‘(BB) interest on the
18 amount determined under
19 item (aa) at the under-
20 payment rate established
21 under section 6621 for the
22 period described in such
23 item, and
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1 ‘‘(II) makes payment to the Sec-
2 retary of a penalty in an amount
3 equal to the product of—
4 ‘‘(aa) $5,000, multiplied by
5 ‘‘(bb) the total number of la-
6 borers and mechanics who were
7 paid wages at a rate below the
8 rate described in subparagraph
9 (A) for any period during such
10 year.
11 ‘‘(ii) PENALTY ASSESSED AS TAX.—
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1 ensure that not less than the applicable
2 percentage of the total labor hours of such
3 work be performed by qualified appren-
4 tices.
5 ‘‘(ii) APPLICABLE PERCENTAGE.—For
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1 the Department of Labor or the applicable
2 State apprenticeship agency.
3 ‘‘(C) PARTICIPATION.—Each contractor
4 and subcontractor who employs 4 or more indi-
5 viduals to perform construction, alteration, or
6 repair work on an applicable project shall em-
7 ploy 1 or more qualified apprentices to perform
8 such work.
9 ‘‘(D) EXCEPTION.—
10 ‘‘(i) IN GENERAL.—Notwithstanding
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1 quested qualified apprentices from a reg-
2 istered apprenticeship program, as defined
3 in section 3131(e)(3)(B), and such request
4 has been denied, provided that such denial
5 is not the result of a refusal by the con-
6 tractors or subcontractors engaged in the
7 performance of construction, alteration, or
8 repair work on such applicable project to
9 comply with the established standards and
10 requirements of such apprenticeship pro-
11 gram.
12 ‘‘(E) DEFINITIONS.—For purposes of this
13 paragraph—
14 ‘‘(i) LABOR HOURS.—The term ‘labor
15 hours’—
16 ‘‘(I) means the total number of
17 hours devoted to the performance of
18 construction, alteration, or repair
19 work by employees of the contractor
20 or subcontractor, and
21 ‘‘(II) excludes any hours worked
22 by—
23 ‘‘(aa) foremen,
24 ‘‘(bb) superintendents,
25 ‘‘(cc) owners, or
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1 ‘‘(dd) persons employed in a
2 bona fide executive, administra-
3 tive, or professional capacity
4 (within the meaning of those
5 terms in part 541 of title 29,
6 Code of Federal Regulations).
7 ‘‘(ii) QUALIFIED APPRENTICE.—The
15 AMOUNT.—
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1 ‘‘(i) IN GENERAL.—Subject to clause
2 (iii), the requirement described in this sub-
3 clause with respect to any qualified facility
4 is that, prior to the end of the taxable year
5 in which such facility is placed in service,
6 the taxpayer shall certify to the Secretary
7 that, any steel, iron, or manufactured
8 product used in the construction of such
9 facility was produced in the United States.
10 ‘‘(ii) STEEL AND IRON.—In the case
11 of steel or iron, clause (i) shall be applied
12 in a manner consistent with section
13 661.5(b) of title 49, Code of Federal Regu-
14 lations.
15 ‘‘(iii) MANUFACTURED PRODUCT.—
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1 is consistent with the obligations of the United
2 States under international agreements.
3 ‘‘(11) PENALTY FOR DIRECT PAY.—
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1 ‘‘(i) if construction of such facility
2 began before January 1, 2024, 100 per-
3 cent,
4 ‘‘(ii) if construction of such facility
5 began in calendar year 2024, 90 percent,
6 ‘‘(iii) if construction of such facility
7 began in calendar year 2025, 85 percent,
8 and
9 ‘‘(iv) if construction of such facility
10 began after December 31, 2025, 0 percent.
11 ‘‘(D) EXCEPTIONS.—In order to facilitate
12 the use of amounts made available in this sec-
13 tion, increase the tax incentives for investment
14 in clean energy, and grow the domestic supply
15 chains, the Secretary shall provide appropriate
16 exceptions to the domestic content requirements
17 for products under subparagraph (C) for the
18 construction of qualified facilities if either the
19 inclusion of domestic products increases the
20 overall costs of projects by more than 25 per-
21 cent or relevant manufactured products are not
22 produced in the United States in sufficient and
23 reasonably available quantities or of a satisfac-
24 tory quality.
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1 ‘‘(12) REGULATIONS AND GUIDANCE.—The
10 CREDIT.
25 ERTY.—
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1 ‘‘(A) IN GENERAL.—Subject to subpara-
2 graph (B), in the case of any energy property
3 described in paragraph (3)(A)(i) the construc-
4 tion of which begins before January 1, 2034,
5 the energy percentage determined under para-
6 graph (2) shall be equal to—
7 ‘‘(i) in the case of any property the
8 construction of which begins after Decem-
9 ber 31, 2019, and which is placed in serv-
10 ice before January 1, 2022, 26 percent,
11 ‘‘(ii) in the case of any property the
12 construction of which begins before Janu-
13 ary 1, 2032, and which is placed in service
14 after December 31, 2021, 30 percent,
15 ‘‘(iii) in the case of any property the
16 construction of which begins after Decem-
17 ber 31, 2031 and before January 1, 2033,
18 26 percent, and
19 ‘‘(iv) in the case of any property the
20 construction of which begins after Decem-
21 ber 31, 2032 and before January 1, 2034,
22 22 percent.
23 ‘‘(B) PLACED IN SERVICE DEADLINE.—In
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1 begins before January 1, 2034, and which is
2 not placed in service before January 1, 2036,
3 the energy percentage determined under para-
4 graph (2) shall be equal to 10 percent.
5 ‘‘(7) PHASEOUT FOR CERTAIN OTHER ENERGY
6 PROPERTY.—
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1 ‘‘(iv) in the case of any property the
2 construction of which begins after Decem-
3 ber 31, 2032 and before January 1, 2034,
4 22 percent.
5 ‘‘(B) PLACED IN SERVICE DEADLINE.—In
17 (A) IN GENERAL.—Paragraphs
25 ERGY’’.
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1 (d) ENERGY STORAGE TECHNOLOGIES; QUALIFIED
2 BIOGAS PROPERTY; MICROGRID CONTROLLERS; EXTEN-
3 SION OF WASTE ENERGY RECOVERY PROPERTY.—
4 (1) IN GENERAL.—Section 48(a)(3)(A) is
5 amended by striking ‘‘or’’ at the end of clause (vii),
6 and by adding at the end the following new clauses:
7 ‘‘(viii) energy storage technology,
8 ‘‘(ix) qualified biogas property, or
9 ‘‘(x) microgrid controllers,’’.
10 (2) APPLICATION OF 30 PERCENT CREDIT.—
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1 ‘‘(A) IN GENERAL.—The term ‘energy
2 storage technology’ means equipment (other
3 than equipment primarily used in the transpor-
4 tation of goods or individuals and not for the
5 production of electricity) which uses batteries,
6 compressed air, pumped hydropower, hydrogen
7 storage, thermal energy storage, regenerative
8 fuel cells, flywheels, capacitors, superconducting
9 magnets, or other technologies identified by the
10 Secretary, after consultation with the Secretary
11 of Energy, to store energy for conversion to
12 electricity (or, in the case of hydrogen storage,
13 to store energy), and has a capacity of not less
14 than 5 kilowatt hours.
15 ‘‘(B) MODIFICATIONS OF CERTAIN PROP-
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1 5 kilowatt hours and is modified such that
2 such equipment (after such modification)
3 has an increased capacity,
4 such equipment shall be treated as described in
5 subparagraph (A) except that the basis of any
6 property which was part of such equipment be-
7 fore such modification shall not be taken into
8 account for purposes of this section. In the case
9 of any property to which this subparagraph ap-
10 plies, subparagraph (C) shall be applied by sub-
11 stituting ‘modification’ for ‘construction’.
12 ‘‘(C) TERMINATION.—The term ‘energy
13 storage technology’ shall not include any prop-
14 erty the construction of which does not begin
15 before January 1, 2034.
16 ‘‘(7) QUALIFIED BIOGAS PROPERTY.—
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1 ‘‘(II) is concentrated by such sys-
2 tem into a gas which consists of not
3 less than 52 percent methane, and
4 ‘‘(ii) captures such gas for productive
5 use.
6 ‘‘(B) INCLUSION OF CLEANING AND CON-
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1 ‘‘(i) includes equipment which is capa-
2 ble of generating not less than 4 kilowatts
3 and not greater than 20 megawatts of elec-
4 tricity,
5 ‘‘(ii) is capable of operating—
6 ‘‘(I) in connection with the elec-
7 trical grid and as a single controllable
8 entity with respect to such grid, and
9 ‘‘(II) independently (and discon-
10 nected) from such grid, and
11 ‘‘(iii) is not part of a bulk-power sys-
12 tem (as defined in section 215 of the Fed-
13 eral Power Act (16 U.S.C. 24o)).
14 ‘‘(C) TERMINATION.—The term ‘microgrid
15 controller’ shall not include any property the
16 construction of which does not begin before
17 January 1, 2034.’’.
18 (5) DENIAL OF DOUBLE BENEFIT FOR QUALI-
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1 credit is determined under section 48 with respect to
2 such property for the taxable year or any prior tax-
3 able year.’’.
4 (6) EXTENSION OF WASTE ENERGY RECOVERY
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1 (2) LINEAR GENERATOR ASSEMBLY LIMITA-
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1 (h) WAGE AND APPRENTICESHIP REQUIREMENTS.—
2 Section 48(a) is amended by adding at the end the fol-
3 lowing new paragraphs:
4 ‘‘(8) BASE CREDIT AMOUNT AND INCREASED
6 ‘‘(A) IN GENERAL.—
24 MENTS.—
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1 ‘‘(i) IN GENERAL.—In the case of any
2 energy project which meets the project re-
3 quirements of this subparagraph, subpara-
4 graph (A) shall not apply.
5 ‘‘(ii) PROJECT REQUIREMENTS.—A
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1 of such project is originally placed in serv-
2 ice, the alteration or repair of such prop-
3 erty,
4 shall be paid wages at rates not less than the
5 prevailing rates for construction, alteration, or
6 repair of a similar character in the locality as
7 most recently determined by the Secretary of
8 Labor, in accordance with subchapter IV of
9 chapter 31 of title 40, United States Code.
10 ‘‘(B) CORRECTION AND PENALTY RELATED
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1 applicable facility prior to such facility
2 being placed into service shall, subject to
3 subparagraph (B), ensure that not less
4 than the applicable percentage of the total
5 labor hours of such work be performed by
6 qualified apprentices.
7 ‘‘(ii) APPLICABLE PERCENTAGE.—For
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1 ments for apprentice-to-journeyworker ratios of
2 the Department of Labor or the applicable
3 State apprenticeship agency.
4 ‘‘(C) PARTICIPATION.—Each contractor
5 and subcontractor who employs 4 or more indi-
6 viduals to perform construction, alteration, or
7 repair work on an applicable project shall em-
8 ploy 1 or more qualified apprentices to perform
9 such work.
10 ‘‘(D) EXCEPTION.—
11 ‘‘(i) IN GENERAL.—Notwithstanding
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1 applicable project if such taxpayer has re-
2 quested qualified apprentices from a reg-
3 istered apprenticeship program, as defined
4 in section 3131(e)(3)(B), and such request
5 has been denied, provided that such denial
6 is not the result of a refusal by the con-
7 tractors or subcontractors engaged in the
8 performance of construction, alteration, or
9 repair work on such applicable project to
10 comply with the established standards and
11 requirements of such apprenticeship pro-
12 gram.
13 ‘‘(E) DEFINITIONS.—For purposes of this
14 paragraph—
15 ‘‘(i) LABOR HOURS.—The term ‘labor
16 hours’ has the meaning given such term in
17 section 45(b)(9)(E)(i).
18 ‘‘(ii) QUALIFIED APPRENTICE.—The
23 AMOUNT.—
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1 under subparagraph (B), the energy percentage
2 in subsection (a)(2) shall be increased by the
3 applicable rate in subparagraph (C).
4 ‘‘(B) REQUIREMENTS.—
5 ‘‘(i) IN GENERAL.—The requirement
6 described in this subclause with respect to
7 any energy project is satisfied if the tax-
8 payer certifies to the Secretary (at such
9 time, and in such form and manner, as the
10 Secretary may prescribe) that the facility
11 is composed of steel, iron, or manufactured
12 products which were produced in the
13 United States.
14 ‘‘(ii) STEEL AND IRON.—In the case
15 of steel or iron, clause (i) shall be applied
16 in a manner consistent with section
17 661.5(b) of title 49, Code of Federal Regu-
18 lations.
19 ‘‘(iii) MANUFACTURED PRODUCT.—
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1 to components which are mined, produced,
2 or manufactured in the United States.
3 ‘‘(C) APPLICABLE RATE INCREASE.—For
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1 ‘‘(i) the value of such credit (deter-
2 mined without regard to this paragraph),
3 multiplied by
4 ‘‘(ii) the applicable percentage.
5 ‘‘(B) 100 PERCENT APPLICABLE PERCENT-
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1 ‘‘(iii) if construction of such project
2 began in calendar year 2025, 85 percent,
3 and
4 ‘‘(iv) if construction of such project
5 began after December 31, 2025, 0 percent.
6 ‘‘(D) EXCEPTIONS.—In order to facilitate
7 the use of amounts made available in this sec-
8 tion, increase the tax incentives for investment
9 in clean energy, and grow the domestic supply
10 chains, the Secretary shall provide appropriate
11 exceptions to the domestic content requirements
12 for products under subparagraph (C) for the
13 construction of qualified facilities if either the
14 inclusion of domestic products increases the
15 overall costs of projects by more than 25 per-
16 cent or relevant manufactured products are not
17 produced in the United States in sufficient and
18 reasonably available quantities or of a satisfac-
19 tory quality.
20 ‘‘(13) REGULATIONS AND GUIDANCE.—The
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1 (1) The amendments made by subsections (a),
2 (b), (c), (e), (f), (g), and (h) of this section shall
3 apply to property placed in service after December
4 31, 2021.
5 (2) The amendment made by subsection (d)
6 shall apply to periods after December 31, 2021,
7 under rules similar to the rules of section 48(m) of
8 the Internal Revenue Code of 1986 (as in effect on
9 the day before the date of the enactment of the Rev-
10 enue Reconciliation Act of 1990).
11 SEC. 136103. INCREASE IN ENERGY CREDIT FOR SOLAR FA-
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1 ‘‘(A) equipment described in paragraph
2 (3)(B) shall be treated for purposes of this sec-
3 tion as energy property described in subsection
4 (a)(2)(A)(i),
5 ‘‘(B) the energy percentage otherwise de-
6 termined under subsection (a)(2) with respect
7 to any eligible property which is part of such
8 facility shall be increased by—
9 ‘‘(i) in the case of a facility described
10 in subclause (I) of paragraph (2)(A)(iii)
11 and not described in subclause (II) of such
12 paragraph, 10 percentage points, and
13 ‘‘(ii) in the case of a facility described
14 in subclause (II) of paragraph (2)(A)(iii),
15 20 percentage points, and
16 ‘‘(C) the increase in the credit determined
17 under subsection (a) by reason of this sub-
18 section for any taxable year with respect to all
19 property which is part of such facility shall not
20 exceed the amount which bears the same ratio
21 to the amount of such increase (determined
22 without regard to this subparagraph) as—
23 ‘‘(i) the environmental justice solar
24 capacity limitation allocated to such facil-
25 ity, bears to
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1 ‘‘(ii) the total megawatt nameplate ca-
2 pacity of such facility, as measured in di-
3 rect current.
4 ‘‘(2) QUALIFIED SOLAR FACILITY.—For pur-
5 poses of this subsection—
6 ‘‘(A) IN GENERAL.—The term ‘qualified
7 solar facility’ means any facility—
8 ‘‘(i) which generates electricity solely
9 from property described in subsection
10 (a)(3)(A)(i),
11 ‘‘(ii) which has a nameplate capacity
12 of 5 megawatts or less, and
13 ‘‘(iii) which—
14 ‘‘(I) is located in a low-income
15 community (as defined in section
16 45D(e)), or
17 ‘‘(II) is part of a qualified low-in-
18 come residential building project or a
19 qualified low-income economic benefit
20 project.
21 ‘‘(B) QUALIFIED LOW-INCOME RESIDEN-
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1 ‘‘(i) such facility is installed on a resi-
2 dential rental building which participates
3 in a covered housing program (as defined
4 in section 41411(a) of the Violence Against
5 Women Act of 1994 (34 U.S.C.
6 12491(a)(3)), a Housing Development
7 Fund Corporation cooperative under Arti-
8 cle XI of the New York State Private
9 Housing Finance Law, a housing assist-
10 ance program administered by the Depart-
11 ment of Agriculture under title V of the
12 Housing Act of 1949, or such other afford-
13 able housing programs as the Secretary
14 may provide, and
15 ‘‘(ii) the financial benefits of the elec-
16 tricity produced by such facility are allo-
17 cated equitably among the occupants of the
18 dwelling units of such building.
19 ‘‘(C) QUALIFIED LOW-INCOME ECONOMIC
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1 ‘‘(i) less than 200 percent of the pov-
2 erty line applicable to a family of the size
3 involved, or
4 ‘‘(ii) less than 80 percent of area me-
5 dian gross income (as determined under
6 section 142(d)(2)(B)).
7 ‘‘(D) FINANCIAL BENEFIT.—For purposes
8 of subparagraphs (B) and (C), electricity ac-
9 quired at a below-market rate shall not fail to
10 be taken into account as a financial benefit.
11 ‘‘(3) ELIGIBLE PROPERTY.—
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1 such property, and which are properly
2 chargeable to the capital account of the
3 taxpayer.
4 ‘‘(B) DEFINITIONS.—For purposes of sub-
5 paragraph (A)—
6 ‘‘(i) QUALIFIED INTERCONNECTION
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1 such property is paid or incurred
2 by such taxpayer, and
3 ‘‘(III) the original use of which,
4 pursuant to an interconnection agree-
5 ment, commences with the utility.
6 ‘‘(ii) INTERCONNECTION AGREE-
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1 erning or ratemaking body of an elec-
2 tric cooperative.
3 ‘‘(C) SPECIAL RULE FOR INTERCONNEC-
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1 rect current capacity for each of calendar years
2 2022 through 2031, and zero thereafter.
3 ‘‘(D) CARRYOVER OF UNUSED LIMITA-
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1 ject to the limitation imposed by the last
2 sentence of such subparagraph.
3 ‘‘(F) SELECTION CRITERIA.—In deter-
4 mining to which qualified solar facilities to allo-
5 cate environmental justice solar capacity limita-
6 tion under this paragraph, the Secretary shall
7 take into consideration which facilities will re-
8 sult in—
9 ‘‘(i) the greatest health and economic
10 benefits, including the ability to withstand
11 extreme weather events, for individuals de-
12 scribed in section 45D(e)(2),
13 ‘‘(ii) the greatest employment and
14 wages for such individuals, and
15 ‘‘(iii) the greatest engagement with,
16 outreach to, or ownership by, such individ-
17 uals, including through partnerships with
18 local governments and community-based
19 organizations.
20 ‘‘(G) DISCLOSURE OF ALLOCATIONS.—The
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1 to such applicant, and the location of the facil-
2 ity for which such allocation is made.
3 ‘‘(5) RECAPTURE.—The Secretary shall, by reg-
4 ulations or other guidance, provide for recapturing
5 the benefit of any increase in the credit allowed
6 under subsection (a) by reason of this subsection
7 with respect to any property which ceases to be
8 property eligible for such increase (but which does
9 not cease to be investment credit property within the
10 meaning of section 50(a)). The period and percent-
11 age of such recapture shall be determined under
12 rules similar to the rules of section 50(a). To the ex-
13 tent provided by the Secretary, such recapture may
14 not apply with respect to any property if, within 12
15 months after the date the taxpayer becomes aware
16 (or reasonably should have become aware) of such
17 property ceasing to be property eligible for such in-
18 crease, the eligibility of such property for such in-
19 crease is restored. The preceding sentence shall not
20 apply more than once with respect to any facility.’’.
21 (b) EFFECTIVE DATE.—The amendments made by
22 this section shall apply to periods after December 31,
23 2021, under rules similar to the rules of section 48(m)
24 of the Internal Revenue Code of 1986 (as in effect on the
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1 day before the date of the enactment of the Revenue Rec-
2 onciliation Act of 1990).
3 SEC. 136104. ELECTIVE PAYMENT FOR ENERGY PROPERTY
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1 ‘‘(4) The credit for alternative fuel vehicle re-
2 fueling property allowed under section 30C.
3 ‘‘(5) The qualifying advanced energy project
4 credit determined under section 48C.
5 ‘‘(c) SPECIAL RULES.—For purposes of this sec-
6 tion—
7 ‘‘(1) APPLICATION TO TAX-EXEMPT AND GOV-
21 CORPORATIONS.—
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1 corporation, if such partnership or S corpora-
2 tion makes an election under this subsection (in
3 such manner as the Secretary may provide)
4 with respect to such credit—
5 ‘‘(i) the Secretary shall make a pay-
6 ment to such partnership or S corporation
7 equal to the amount of such credit,
8 ‘‘(ii) subsection (d) shall be applied
9 with respect to such credit before deter-
10 mining any partner’s distributive share, or
11 shareholder’s pro rata share, of such cred-
12 it,
13 ‘‘(iii) any amount with respect to
14 which the election in subsection (a) is
15 made excluded from gross income by rea-
16 son of paragraph (4) shall be treated as
17 tax exempt income for purposes of sections
18 705 and 1366, and
19 ‘‘(iv) a partner’s distributive share of
20 such tax exempt income shall be based on
21 such partner’s distributive share of the
22 otherwise applicable credit for each taxable
23 year.
24 ‘‘(B) COORDINATION WITH APPLICATION
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1 case of any partnership or S corporation, sub-
2 section (a) shall be applied at the partner or
3 shareholder level after application of paragraph
4 (2)(A)(ii).
5 ‘‘(3) IRREVOCABLE ELECTION.—Any election
6 under this subsection shall be made not later than
7 the due date (including extensions of time) for the
8 return of tax for the taxable year for which the ap-
9 plicable credit is determined, but in no event earlier
10 than 180 days after the date of the enactment of
11 this section. Any such election, once made, shall be
12 irrevocable.
13 ‘‘(4) TIMING.—The payment described in sub-
14 section (a) shall be treated as made on—
15 ‘‘(A) in the case of any government, or po-
16 litical subdivision, described in paragraph (1)
17 and for which no return is required under sec-
18 tion 6011 or 6033(a), the later of the date that
19 a return would be due under section 6033(a) if
20 such government or subdivision were described
21 in that section or the date on which such gov-
22 ernment or subdivision submits a claim for
23 credit or refund (at such time and in such man-
24 ner as the Secretary shall provide), and
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1 ‘‘(B) in any other case, the later of the due
2 date of the return of tax for the taxable year
3 or the date on which such return is filed.
4 ‘‘(5) TREATMENT OF PAYMENTS TO PARTNER-
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1 which such determination is made shall be in-
2 creased by an amount equal to the sum of—
3 ‘‘(i) the amount of such excessive pay-
4 ment, plus
5 ‘‘(ii) an amount equal to 20 percent of
6 such excessive payment.
7 ‘‘(B) REASONABLE CAUSE.—Subparagraph
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1 section with respect to such facility for
2 such taxable year.
3 ‘‘(d) DENIAL OF DOUBLE BENEFIT.—In the case of
4 a taxpayer making an election under this section with re-
5 spect to an applicable credit, such credit shall be reduced
6 to zero and such taxpayer shall be deemed to have taken
7 such credit.
8 ‘‘(e) MIRROR CODE POSSESSIONS.—In the case of
9 any possession of the United States with a mirror code
10 tax system (as defined in section 24(k)), this section shall
11 not be treated as part of the income tax laws of the United
12 States for purposes of determining the income tax law of
13 such possession unless such possession elects to have this
14 section be so treated.
15 ‘‘(f) BASIS REDUCTION AND RECAPTURE.—Rules
16 similar to the rules of subsections (a) and (c) of section
17 50 shall apply for purposes of this section.
18 ‘‘(g) REGULATIONS.—The Secretary shall issue such
19 regulations or other guidance as may be necessary or ap-
20 propriate to carry out the purposes of this section, includ-
21 ing—
22 ‘‘(1) regulations or other guidance providing
23 rules for determining a partner’s distributive share
24 of the tax exempt income described in subsection
25 (c)(2)(A)(iii), and
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1 ‘‘(2) guidance to ensure that the amount of the
2 payment or deemed payment made under this sec-
3 tion is commensurate with the amount of the credit
4 that would be otherwise allowable.’’.
5 (b) CLERICAL AMENDMENT.—The table of sections
6 for subchapter B of chapter 65 is amended by inserting
7 after the item relating to section 6416 the following new
8 item:
‘‘Sec. 6417. Elective payment of applicable credits.’’.
13 MISSION PROPERTY.
18 ERTY.
164
1 ‘‘(1) IN GENERAL.—The term ‘qualifying elec-
2 tric transmission property’ means tangible prop-
3 erty—
4 ‘‘(A) which is a qualifying electric trans-
5 mission line or related transmission property,
6 ‘‘(B)(i) the construction, reconstruction, or
7 erection of which is completed by the taxpayer,
8 or
9 ‘‘(ii) which is acquired by the taxpayer if
10 the original use of such property commences
11 with the taxpayer, and
12 ‘‘(C) with respect to which depreciation (or
13 amortization in lieu of depreciation) is allow-
14 able.
15 ‘‘(2) QUALIFYING ELECTRIC TRANSMISSION
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1 any electric transmission line, any property
2 which—
3 ‘‘(i) is listed as ‘transmission plant’ in
4 the Uniform System of Accounts for the
5 Federal Energy Regulatory Commission
6 under part 101 of subchapter C of chapter
7 I of title 18, Code of Federal Regulations,
8 and
9 ‘‘(ii) is necessary for the operation of
10 such electric transmission line.
11 ‘‘(B) CREDIT NOT ALLOWED SEPARATELY
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1 ‘‘(A) the 500 megawatts referred to in sub-
2 section (b)(2)(B) shall be increased by the
3 transmission capacity of such existing electric
4 transmission line, and
5 ‘‘(B) in no event shall the basis of such ex-
6 isting electric transmission line (or related
7 transmission property with respect to such ex-
8 isting electric transmission line) be taken into
9 account in determining the credit allowed under
10 this section.
11 ‘‘(2) UPGRADES TREATED AS REPLACE-
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1 ‘‘(2) any property if—
2 ‘‘(A) construction of such property begins
3 before January 1, 2022, or
4 ‘‘(B) construction of any portion of the
5 qualifying electric transmission line to which
6 such property relates begins before such date.
7 ‘‘(e) CERTAIN QUALIFIED PROGRESS EXPENDITURES
8 RULES MADE APPLICABLE.—Rules similar to the rules of
9 subsections (c)(4) and (d) of section 46 (as in effect on
10 the day before the enactment of the Revenue Reconcili-
11 ation Act of 1990) shall apply for purposes of this section.
12 ‘‘(f) CREDIT ADJUSTMENTS; WAGE AND APPREN-
13 TICESHIP REQUIREMENTS.—
14 ‘‘(1) BASE CREDIT AMOUNT AND INCREASED
16 ‘‘(A) IN GENERAL.—
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1 the term ‘applicable facility’ means a quali-
2 fying electric transmission line and related
3 transmission property to which such quali-
4 fying electric transmission line relates.
5 ‘‘(B) INCREASED CREDIT FOR APPLICABLE
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1 shall ensure that any laborers and mechanics
2 employed by contractors and subcontractors
3 in—
4 ‘‘(i) the construction of such facility,
5 and
6 ‘‘(ii) for any year during the 5-year
7 period beginning on the date the facility or
8 property is originally placed in service, the
9 alteration or repair of such facility or prop-
10 erty,
11 shall be paid wages at rates not less than the
12 prevailing rates for construction, alteration, or
13 repair of a similar character in the locality as
14 most recently determined by the Secretary of
15 Labor, in accordance with subchapter IV of
16 chapter 31 of title 40, United States Code.
17 ‘‘(B) CORRECTION AND PENALTY RELATED
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1 spect to the construction of any applicable facility
2 are as follows:
3 ‘‘(A) LABOR HOURS.—
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1 ‘‘(III) in the case of any applica-
2 ble project the construction of which
3 begins after December 31, 2023, 15
4 percent.
5 ‘‘(B) APPRENTICE TO JOURNEYWORKER
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1 ‘‘(II) makes a good faith effort to
2 comply with the requirements of this
3 paragraph.
4 ‘‘(ii) GOOD FAITH EFFORT.—For pur-
5 poses of clause (i), a taxpayer shall be
6 deemed to have satisfied the requirements
7 under such paragraph with respect to an
8 applicable project if such taxpayer has re-
9 quested qualified apprentices from a reg-
10 istered apprenticeship program, as defined
11 in section 3131(e)(3)(B), and such request
12 has been denied, provided that such denial
13 is not the result of a refusal by the con-
14 tractors or subcontractors engaged in the
15 performance of construction, alteration, or
16 repair work on such applicable project to
17 comply with the established standards and
18 requirements of such apprenticeship pro-
19 gram.
20 ‘‘(E) DEFINITIONS.—For purposes of this
21 paragraph—
22 ‘‘(i) LABOR HOURS.—The term ‘labor
23 hours’ has the meaning given such term in
24 section 45(b)(9)(E)(i).
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1 ‘‘(ii) QUALIFIED APPRENTICE.—The
6 AMOUNT.—
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1 661.5(b) of title 49, Code of Federal Regu-
2 lations.
3 ‘‘(iii) MANUFACTURED PRODUCT.—
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1 which is consistent with the obligations of the
2 United States under international agreements.
3 ‘‘(5) PENALTY FOR DIRECT PAY.—
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1 ‘‘(i) if construction of such facility
2 began before January 1, 2024, 100 per-
3 cent,
4 ‘‘(ii) if construction of such facility
5 began in calendar year 2024, 90 percent,
6 ‘‘(iii) if construction of such facility
7 began in calendar year 2025, 85 percent,
8 and
9 ‘‘(iv) if construction of such facility
10 began after December 31, 2025, 0 percent.
11 ‘‘(D) EXCEPTIONS.—In order to facilitate
12 the use of amounts made available in this sec-
13 tion, increase the tax incentives for investment
14 in clean energy, and grow the domestic supply
15 chains, the Secretary shall provide appropriate
16 exceptions to the domestic content requirements
17 for products under subparagraph (C) for the
18 construction of qualified facilities if either the
19 inclusion of domestic products increases the
20 overall costs of projects by more than 25 per-
21 cent or relevant manufactured products are not
22 produced in the United States in sufficient and
23 reasonably available quantities or of a satisfac-
24 tory quality.
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1 ‘‘(g) TERMINATION.—This section shall not apply to
2 any property unless—
3 ‘‘(1) such property is placed in service before
4 January 1, 2032, and
5 ‘‘(2) the qualifying electric transmission line
6 with respect to which such property relates is placed
7 in service before such date.
8 ‘‘(h) REGULATIONS AND GUIDANCE.—The Secretary,
9 after consultation with the Chairman of the Federal En-
10 ergy Regulatory Commission, shall issue such regulations
11 or other guidance as the Secretary determines necessary
12 or appropriate to carry out the purposes of this section.’’.
13 (b) ELECTIVE PAYMENT OF CREDIT.—Section
14 6417(b), as added by the preceding provisions of this Act,
15 is amended by adding at the end the following new para-
16 graph:
17 ‘‘(6) The qualifying electric transmission prop-
18 erty credit determined under section 48D.’’.
19 (c) CONFORMING AMENDMENTS.—
20 (1) Section 46 is amended—
21 (A) by striking ‘‘and’’ at the end of para-
22 graph (5),
23 (B) by striking the period at the end of
24 paragraph (6) and inserting ‘‘, and’’, and
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1 (C) by adding at the end the following new
2 paragraph:
3 ‘‘(7) the qualifying electric transmission prop-
4 erty credit.’’.
5 (2) Section 49(a)(1)(C) is amended—
6 (A) by striking ‘‘and’’ at the end of clause
7 (iv),
8 (B) by striking the period at the end of
9 clause (v) and inserting ‘‘, and’’, and
10 (C) by adding at the end the following new
11 clause:
12 ‘‘(vi) the basis of any qualifying elec-
13 tric transmission property under section
14 48D.’’.
15 (3) Section 50(a)(2)(E) is amended by striking
16 ‘‘or 48C(b)(2)’’ and inserting ‘‘48C(b)(2), or 48D’’.
17 (4) The table of sections for subpart E of part
18 IV of subchapter A of chapter 1 of such Code is
19 amended by inserting after the item relating to sec-
20 tion 48C the following new item:
‘‘Sec. 48D. Qualifying electric transmission property.’’.
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1 (2) EXCEPTION FOR CERTAIN PROPERTY AND
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1 Revenue Reconciliation Act of 1990) shall apply for
2 purposes of this section.
3 ‘‘(3) LIMITATION.—The amount which is treat-
4 ed as the qualified investment for all taxable years
5 with respect to any zero emissions facility shall not
6 exceed the amount designated by the Secretary as el-
7 igible for the credit under this section.
8 ‘‘(c) ZERO EMISSIONS FACILITY.—
9 ‘‘(1) IN GENERAL.—For purposes of this sec-
10 tion, the term ‘zero emissions facility’ means any fa-
11 cility—
12 ‘‘(A) which generates electricity,
13 ‘‘(B) which does not generate any green-
14 house gases (within the meaning of section
15 211(o)(1)(G) of the Clean Air Act (42 U.S.C.
16 7545(o)(1)(G)), as in effect on the date of the
17 enactment of this section),
18 ‘‘(C) which uses a technology or process
19 which, in the calendar year in which an amount
20 of credit is designated with respect to such fa-
21 cility, achieved a market penetration level of
22 less than 3 percent,
23 ‘‘(D) no portion of which is—
24 ‘‘(i) a qualified facility (as defined in
25 section 45(d)),
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1 ‘‘(ii) an advanced nuclear power facil-
2 ity (as defined in section 45J(d)),
3 ‘‘(iii) a qualified facility (as defined in
4 section 45Q), or
5 ‘‘(iv) energy property (as defined in
6 section 48(a)(3)).
7 ‘‘(2) MARKET PENETRATION LEVEL.—For pur-
8 poses of this subsection, the term ‘market penetra-
9 tion level’ means, with respect to any calendar year,
10 the amount equal to the greater of—
11 ‘‘(A) the amount (expressed as a percent-
12 age) equal to the quotient of—
13 ‘‘(i) the sum of all electricity produced
14 (expressed in terawatt hours) from the
15 technology or method used for the produc-
16 tion of electricity by all electricity gener-
17 ating facilities in the United States during
18 such calendar year (as determined by the
19 Secretary on the basis of data reported by
20 the Energy Information Administration),
21 divided by the total domestic power sector
22 electricity production (expressed in
23 terawatt hours) for such calendar year, or
24 ‘‘(ii) the amount determined under
25 this subparagraph for the preceding cal-
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1 endar year with respect to such technology
2 or method.
3 ‘‘(d) ELIGIBLE PROPERTY.—For purposes of this
4 section, the term ‘eligible property’ means any property—
5 ‘‘(1) which is necessary for the generation of
6 electricity,
7 ‘‘(2) which is—
8 ‘‘(A) tangible personal property, or
9 ‘‘(B) other tangible property (not including
10 a building or its structural components), but
11 only if such property is used as an integral part
12 of the zero emissions facility, and
13 ‘‘(3) with respect to which depreciation (or am-
14 ortization in lieu of depreciation) is allowable.
15 ‘‘(e) ALLOCATIONS.—
16 ‘‘(1) IN GENERAL.—Not later than 180 days
17 after the date of enactment of this section, the Sec-
18 retary, after consultation with the Secretary of En-
19 ergy and the Administrator of the Environmental
20 Protection Agency, shall establish a program to con-
21 sider and award certification amounts of zero emis-
22 sions facility credit limitation to zero emissions fa-
23 cilities.
24 ‘‘(2) ANNUAL LIMITATION.—
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1 ‘‘(A) IN GENERAL.—The amount of zero
2 emissions facility credit limitation that may be
3 designated under this subsection during any
4 calendar year shall not exceed the annual credit
5 limitation with respect to such year.
6 ‘‘(B) ANNUAL CREDIT LIMITATION.—For
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1 ‘‘(B) APPLICATION OF CARRYOVER.—Any
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1 subcontractors in the performance of construc-
2 tion, alteration or repair work on a zero emis-
3 sions facility shall be paid wages at rates not
4 less than those prevailing on projects of a simi-
5 lar character in the locality as determined by
6 the Secretary of Labor in accordance with sub-
7 chapter IV of chapter 31 of title 40, United
8 States Code.
9 ‘‘(5) DISCLOSURE OF CERTIFICATIONS.—The
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1 sure that any laborers and mechanics employed
2 by contractors and subcontractors in—
3 ‘‘(i) the construction of such zero
4 emissions facility, and
5 ‘‘(ii) for any year during the 5-year
6 period beginning on the date the facility is
7 originally placed in service, the alteration
8 or repair of such zero emissions facility,
9 shall be paid wages at rates not less than the
10 prevailing rates for construction, alteration, or
11 repair of a similar character in the locality as
12 most recently determined by the Secretary of
13 Labor, in accordance with subchapter IV of
14 chapter 31 of title 40, United States Code.
15 ‘‘(B) CORRECTION AND PENALTY RELATED
17 MENTS.—
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1 such requirement under such subparagraph
2 with respect to such zero emissions facility
3 for any year if, with respect to any laborer
4 or mechanic who was paid wages at a rate
5 below the rate described in such subpara-
6 graph for any period during such year,
7 such taxpayer—
8 ‘‘(I) makes payment to such la-
9 borer or mechanic in an amount equal
10 to the sum of—
11 ‘‘(aa) an amount equal to
12 the difference between the
13 amount of wages paid to such la-
14 borer or mechanic during such
15 period, and—
16 ‘‘(bb) the amount of wages
17 required to be paid to such la-
18 borer or mechanic pursuant to
19 such subparagraph during such
20 period, plus
21 ‘‘(AA) interest on the
22 amount determined under
23 item (aa) at the under-
24 payment rate established
25 under section 6621 for the
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188
1 period described in such
2 item, and
3 ‘‘(II) makes payment to the Sec-
4 retary of a penalty in an amount
5 equal to the product of—
6 ‘‘(aa) $5,000, multiplied by
7 ‘‘(bb) the total number of la-
8 borers and mechanics who were
9 paid wages at a rate below the
10 rate described in subparagraph
11 (A) for any period during such
12 year.
13 ‘‘(ii) PENALTY ASSESSED AS TAX.—
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1 facility prior to such facility being placed
2 into service shall, subject to subparagraph
3 (B), ensure that not less than the applica-
4 ble percentage of the total labor hours of
5 such work be performed by qualified ap-
6 prentices.
7 ‘‘(ii) APPLICABLE PERCENTAGE.—For
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190
1 ments for apprentice-to-journeyworker ratios of
2 the Department of Labor or the applicable
3 State apprenticeship agency.
4 ‘‘(C) PARTICIPATION.—Each contractor
5 and subcontractor who employs 4 or more indi-
6 viduals to perform construction, alteration, or
7 repair work on an applicable zero emissions fa-
8 cility shall employ 1 or more qualified appren-
9 tices to perform such work.
10 ‘‘(D) EXCEPTION.—
11 ‘‘(i) IN GENERAL.—Notwithstanding
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1 applicable project if such taxpayer has re-
2 quested qualified apprentices from a reg-
3 istered apprenticeship program, as defined
4 in section 3131(e)(3)(B), and such request
5 has been denied, provided that such denial
6 is not the result of a refusal by the con-
7 tractors or subcontractors engaged in the
8 performance of construction, alteration, or
9 repair work on such applicable project to
10 comply with the established standards and
11 requirements of such apprenticeship pro-
12 gram.
13 ‘‘(E) DEFINITIONS.—For purposes of this
14 paragraph—
15 ‘‘(i) LABOR HOURS.—The term ‘labor
16 hours’—
17 ‘‘(I) means the total number of
18 hours devoted to the performance of
19 construction, alteration, or repair
20 work by employees of the contractor
21 or subcontractor prior to a facility
22 being placed into service, and
23 ‘‘(II) excludes any hours worked
24 by—
25 ‘‘(aa) foremen,
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1 ‘‘(bb) superintendents,
2 ‘‘(cc) owners, or
3 ‘‘(dd) persons employed in a
4 bona fide executive, administra-
5 tive, or professional capacity
6 (within the meaning of those
7 terms in part 541 of title 29,
8 Code of Federal Regulations).
9 ‘‘(ii QUALIFIED APPRENTICE.—The
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1 ‘‘(B) 100 PERCENT APPLICABLE PERCENT-
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1 ‘‘(D) EXCEPTION.—If the Secretary, after
2 consultation with the Secretary of Commerce
3 and the United States Trade Representative,
4 determines that, for purposes of application of
5 the requirements under paragraph (5) with re-
6 spect to the construction of the qualified facil-
7 ity—
8 ‘‘(i) their application would be incon-
9 sistent with the public interest,
10 ‘‘(ii) such materials and products are
11 not produced in the United States in suffi-
12 cient and reasonably available quantities
13 and of a satisfactory quality, or
14 ‘‘(iii) inclusion of domestic material
15 will increase the cost of the construction of
16 the qualified facility by more than 25 per-
17 cent,
18 the applicable percentage shall be 100 per-
19 cent.’’.
20 (b) ELECTIVE PAYMENT OF CREDIT.—Section
21 6417(b), as added and amended by the preceding provi-
22 sions of this Act, is amended by adding at the end the
23 following new paragraph:
24 ‘‘(7) The zero emissions facility credit deter-
25 mined under section 48E.’’.
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1 (c) CONFORMING AMENDMENTS.—
2 (1) Section 46 is amended by striking ‘‘and’’ at
3 the end of paragraph (6), by striking the period at
4 the end of paragraph (7) and inserting ‘‘, and’’, and
5 by adding at the end the following new paragraph:
6 ‘‘(8) the zero emissions facility credit.’’.
7 (2) Section 49(a)(1)(C) is amended by striking
8 ‘‘and’’ at the end of clause (v), by striking the pe-
9 riod at the end of clause (vi) and inserting a comma,
10 and by adding at the end the following new clause:
11 ‘‘(vii) the basis of any eligible prop-
12 erty which is part of a zero emissions facil-
13 ity under section 48D.’’.
14 (3) Section 50(a)(2)(E) is amended by striking
15 ‘‘ or 48D’’ and inserting ‘‘48D, or 48E(b)(2)’’.
16 (4) The table of sections for subpart E of part
17 IV of subchapter A of chapter 1 is amended by in-
18 serting after the item relating to section 48D the
19 following new item:
Sec. 48E. Zero emissions facility credit.
196
1 SEC. 136107. EXTENSION AND MODIFICATION OF CREDIT
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1 (c) DETERMINATION OF APPLICABLE DOLLAR
2 AMOUNT.—
3 (1) IN GENERAL.—Section 45Q(b)(1) is amend-
4 ed by redesignating subparagraph (B) as subpara-
5 graph (C) and by inserting after subparagraph (A)
6 the following new subparagraph:
7 ‘‘(B) SPECIAL RULE FOR DIRECT AIR CAP-
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1 calendar year, determined by substituting
2 ‘2020’ for ‘1990’.’’.
3 (2) CONFORMING AMENDMENTS.—
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1 ‘‘(2) INCREASED CREDIT FOR CERTAIN FACILI-
3 PROJECT REQUIREMENTS.—
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1 that the taxpayer shall ensure that any laborers
2 and mechanics employed by contractors and
3 subcontractors in—
4 ‘‘(i) the construction of such facility
5 and carbon capture equipment,
6 ‘‘(ii) the alteration or repair of such
7 facility and carbon capture equipment dur-
8 ing the 12 year-period after being placed
9 into service, or for carbon capture equip-
10 ment placed in service prior to 2018, until
11 the date determined by the Secretary
12 under subsection (g),
13 shall be paid wages at rates not less than the
14 prevailing rates for construction, alteration, or
15 repair of a similar character in the locality as
16 most recently determined by the Secretary of
17 Labor, in accordance with subchapter IV of
18 chapter 31 of title 40, United States Code.
19 ‘‘(B) CORRECTION AND PENALTY RELATED
21 MENTS.—
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1 or with respect to the alteration or repair
2 of a facility in any year during the period
3 described in subparagraph (A)(ii), such
4 taxpayer shall be deemed to have satisfied
5 such requirement under such subparagraph
6 with respect to such facility and carbon
7 capture equipment for any year if, with re-
8 spect to any laborer or mechanic who was
9 paid wages at a rate below the rate de-
10 scribed in such subparagraph for any pe-
11 riod during such year, such taxpayer—
12 ‘‘(I) makes payment to such la-
13 borer or mechanic in an amount equal
14 to the sum of an amount equal to the
15 difference between the amount of
16 wages paid to such laborer or me-
17 chanic during such period, and—
18 ‘‘(aa) the amount of wages
19 required to be paid to such la-
20 borer or mechanic pursuant to
21 such subparagraph during such
22 period, plus
23 ‘‘(bb) interest on the
24 amount determined under item
25 (aa) at the underpayment rate
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1 established under section 6621
2 for the period described in such
3 item, and
4 ‘‘(II) makes payment to the Sec-
5 retary of a penalty in an amount
6 equal to the product of—
7 ‘‘(aa) $5,000, multiplied by
8 ‘‘(bb) the total number of la-
9 borers and mechanics who were
10 paid wages at a rate below the
11 rate described in subparagraph
12 (A) for any period during such
13 year.
14 ‘‘(ii) PENALTY ASSESSED AS TAX.—
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1 tors engaged in the performance of con-
2 struction, alteration, or repair work on any
3 facility and carbon capture equipment
4 prior to such facility being placed into
5 service shall, subject to subparagraph (B),
6 ensure that not less than the applicable
7 percentage of the total labor hours of such
8 work be performed by qualified appren-
9 tices.
10 ‘‘(ii) APPLICABLE PERCENTAGE.—For
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1 ‘‘(B) APPRENTICE TO JOURNEYWORKER
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1 ‘‘(ii) GOOD FAITH EFFORT.—For pur-
2 poses of clause (i), a taxpayer shall be
3 deemed to have satisfied the requirements
4 under such paragraph with respect to an
5 applicable project if such taxpayer has re-
6 quested qualified apprentices from a reg-
7 istered apprenticeship program, as defined
8 in section 3131(e)(3)(B), and such request
9 has been denied, provided that such denial
10 is not the result of a refusal by the con-
11 tractors or subcontractors engaged in the
12 performance of construction, alteration, or
13 repair work on such applicable project to
14 comply with the established standards and
15 requirements of such apprenticeship pro-
16 gram.
17 ‘‘(E) DEFINITIONS.—For purposes of this
18 paragraph—
19 ‘‘(i) LABOR HOURS.—The term ‘labor
20 hours’ has the meaning given such term in
21 section 45(b)(9)(E)(i).
22 ‘‘(ii) QUALIFIED APPRENTICE.—The
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206
1 ‘‘(5) REGULATIONS AND GUIDANCE.—The Sec-
2 retary shall issue such regulations or other guidance
3 as the Secretary determines necessary or appropriate
4 to carry out the purposes of this subsection.’’.
5 (e) INCREASED APPLICABLE DOLLAR AMOUNT.—
6 (1) IN GENERAL.—Section 45Q(b)(1) is amend-
7 ed—
8 (A) by amending clause (i) of subpara-
9 graph (A) to read as follows:
10 ‘‘(i) for any taxable year beginning in
11 a calendar year after 2016 and before
12 2027—
13 ‘‘(I) for purposes of paragraph
14 (3) of subsection (a), $50 for each
15 calendar year during such period, and
16 ‘‘(II) for purposes of paragraph
17 (4) of such subsection, $35 for each
18 calendar year during such period,
19 and’’,
20 (B) by redesignating subparagraphs (B)
21 and (C) as subparagraphs (C) and (D), and
22 (C) by inserting after subparagraph (A)
23 the following new subparagraph:
24 ‘‘(B) INFLATION ADJUSTMENT.—In the
25 case of any taxable year beginning in a calendar
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207
1 year after 2025, each of the dollar amounts in
2 subparagraph (A)(i) shall be increased by an
3 amount equal to—
4 ‘‘(i) such dollar amount, multiplied by
5 ‘‘(ii) the cost-of-living adjustment de-
6 termined under section 1(f)(3) for the cal-
7 endar year in which the taxable year be-
8 gins, determined by substituting ‘calendar
9 year 2024’ for ‘calendar year 2016’ in sub-
10 paragraph (A)(ii) thereof.
11 Any increase determined under the preceding
12 sentence shall be rounded to the nearest cent.’’.
13 (f) EFFECTIVE DATES.—
14 (1) EXTENSION.—The amendment made by
15 subsection (a) shall apply to facilities the construc-
16 tion of which begins after December 31, 2025.
17 (2) OTHER AMENDMENTS.—The amendments
18 made by subsections (b), (c), (d), and (e) shall apply
19 to taxable years beginning after December 31, 2021.
20 SEC. 136108. GREEN ENERGY PUBLICLY TRADED PARTNER-
21 SHIPS.
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1 (1) by striking ‘‘income and gains derived from
2 the exploration’’ and inserting ‘‘income and gains
3 derived from—
4 ‘‘(i) the exploration’’,
5 (2) by inserting ‘‘or’’ before ‘‘industrial
6 source’’, and
7 (3) by striking ‘‘, or the transportation or stor-
8 age’’ and all that follows and inserting the following:
9 ‘‘(ii) the generation of electric power
10 or thermal energy exclusively using any
11 qualified energy resource (as defined in
12 section 45(c)(1)),
13 ‘‘(iii) the operation of energy property
14 (as defined in section 48(a)(3), determined
15 without regard to any date by which the
16 construction of the facility is required to
17 begin),
18 ‘‘(iv) in the case of a facility described
19 in paragraph (3) or (7) of section 45(d)
20 (determined without regard to any placed
21 in service date or date by which construc-
22 tion of the facility is required to begin),
23 the accepting or processing of open-loop
24 biomass or municipal solid waste,
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209
1 ‘‘(v) the transportation or storage of
2 any fuel described in subsection (b), (c),
3 (d), or (e) of section 6426,
4 ‘‘(vi) the conversion of renewable bio-
5 mass (as defined in subparagraph (I) of
6 section 211(o)(1) of the Clean Air Act (as
7 in effect on the date of the enactment of
8 this clause)) into renewable fuel (as de-
9 fined in subparagraph (J) of such section
10 as so in effect), or the storage or transpor-
11 tation of such fuel,
12 ‘‘(vii) the production, storage, or
13 transportation of any fuel which—
14 ‘‘(I) uses as its primary feedstock
15 carbon oxides captured from an an-
16 thropogenic source or the atmosphere,
17 ‘‘(II) does not use as its primary
18 feedstock carbon oxide which is delib-
19 erately released from naturally occur-
20 ring subsurface springs, and
21 ‘‘(III) is determined by the Sec-
22 retary, after consultation with the
23 Secretary of Energy and the Adminis-
24 trator of the Environmental Protec-
25 tion Agency, to achieve a reduction of
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1 not less than a 60 percent in lifecycle
2 greenhouse gas emissions (as defined
3 in section 211(o)(1)(H) of the Clean
4 Air Act, as in effect on the date of the
5 enactment of this clause) compared to
6 baseline lifecycle greenhouse gas emis-
7 sions (as defined in section
8 211(o)(1)(C) of such Act, as so in ef-
9 fect), or
10 ‘‘(viii) a qualified facility (as defined
11 in section 45Q(d), without regard to any
12 date by which construction of the facility is
13 required to begin).’’.
14 (b) EFFECTIVE DATE.—The amendments made by
15 this section apply to taxable years beginning after Decem-
16 ber 31, 2021.
17 SEC. 136109. ZERO-EMISSION NUCLEAR POWER PRODUC-
18 TION CREDIT.
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1 ‘‘SEC. 45W. ZERO-EMISSION NUCLEAR POWER PRODUCTION
2 CREDIT.
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1 ‘‘(C) which is placed in service before the
2 date of the enactment of this section.
3 ‘‘(2) REDUCTION AMOUNT.—
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1 ‘‘(bb) the amount deter-
2 mined under subsection
3 (a)(1)(B).
4 ‘‘(B) TREATMENT OF CERTAIN RE-
5 CEIPTS.—
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1 Federal, State or local government pro-
2 gram for, in whole or in part, the zero-
3 emission, zero-carbon, or air quality at-
4 tributes of any portion of the electricity
5 produced by such facility.
6 ‘‘(3) ELECTRICITY.—For purposes of this sec-
7 tion, the term ‘electricity’ means the energy pro-
8 duced by a qualified nuclear power facility from the
9 conversion of nuclear fuel into electric power.
10 ‘‘(c) OTHER RULES.—
11 ‘‘(1) INFLATION ADJUSTMENT.—The 1.5 cent
12 amount in subsection (a)(1)(A) and the 2.5 cent
13 amount in subsection (b)(2)(A)(ii)(II)(aa) shall each
14 be adjusted by multiplying such amount by the infla-
15 tion adjustment factor (as determined under section
16 45(e)(2), as applied by substituting ‘calendar year
17 2022’ for ‘calendar year 1992’ in subparagraph (B)
18 thereof) for the calendar year in which the sale oc-
19 curs. If any amount as increased under the pre-
20 ceding sentence is not a multiple of 0.1 cent, such
21 amount shall be rounded to the nearest multiple of
22 0.1 cent.
23 ‘‘(2) SPECIAL RULES.—Rules similar to the
24 rules of paragraphs (1), (3), (4), and (5) of section
25 45(e) shall apply for purposes of this section.
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1 ‘‘(3) DENIAL OF DOUBLE BENEFIT.—No credit
2 shall be allowed under section 48E for any power
3 production for which a credit is taken under this
4 section.
5 ‘‘(d) WAGE AND APPRENTICESHIP REQUIRE-
6 MENTS.—
9 FACILITIES.—
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1 ‘‘(ii) PROJECT REQUIREMENTS.—A
22 MENTS.—
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1 payer shall be deemed to have satisfied
2 such requirement under such subparagraph
3 with respect to such facility for any year if,
4 with respect to any laborer or mechanic
5 who was paid wages at a rate below the
6 rate described in such subparagraph for
7 any period during such year, such tax-
8 payer—
9 ‘‘(I) makes payment to such la-
10 borer or mechanic in an amount equal
11 to the sum of—
12 ‘‘(aa) an amount equal to
13 the difference between the
14 amount of wages paid to such la-
15 borer or mechanic during such
16 period, and—
17 ‘‘(AA) the amount of
18 wages required to be paid to
19 such laborer or mechanic
20 pursuant to such subpara-
21 graph during such period,
22 plus
23 ‘‘(BB) interest on the
24 amount determined under
25 item (aa) at the under-
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1 payment rate established
2 under section 6621 for the
3 period described in such
4 item, and
5 ‘‘(II) makes payment to the Sec-
6 retary of a penalty in an amount
7 equal to the product of—
8 ‘‘(aa) $5,000, multiplied by
9 ‘‘(bb) the total number of la-
10 borers and mechanics who were
11 paid wages at a rate below the
12 rate described in subparagraph
13 (A) for any period during such
14 year.
15 ‘‘(ii) PENALTY ASSESSED AS TAX.—
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1 ‘‘(i) PERCENTAGE OF TOTAL LABOR
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1 ‘‘(B) APPRENTICE TO JOURNEYWORKER
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1 ‘‘(ii) GOOD FAITH EFFORT.—For pur-
2 poses of clause (i), a taxpayer shall be
3 deemed to have satisfied the requirements
4 under such paragraph with respect to an
5 applicable project if such taxpayer has re-
6 quested qualified apprentices from a reg-
7 istered apprenticeship program, as defined
8 in section 3131(e)(3)(B), and such request
9 has been denied, provided that such denial
10 is not the result of a refusal by the con-
11 tractors or subcontractors engaged in the
12 performance of construction, alteration, or
13 repair work on such applicable project to
14 comply with the established standards and
15 requirements of such apprenticeship pro-
16 gram.
17 ‘‘(E) DEFINITIONS.—For purposes of this
18 paragraph—
19 ‘‘(i) LABOR HOURS.—The term ‘labor
20 hours’ has the meaning given such term in
21 section 45(b)(9)(E)(i).
22 ‘‘(ii) QUALIFIED APPRENTICE.—The
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1 ‘‘(4) REGULATIONS AND GUIDANCE.—The Sec-
2 retary shall issue such regulations or other guidance
3 as the Secretary determines necessary or appropriate
4 to carry out the purposes of this subsection.
5 ‘‘(e) TERMINATION.—This section shall not apply to
6 taxable years beginning after December 31, 2026.’’.
7 (b) CONFORMING AMENDMENTS.—
8 (1) Section 38(b) of the Internal Revenue Code
9 of 1986 is amended—
10 (A) in paragraph (36), by striking ‘‘plus’’
11 at the end,
12 (B) in paragraph (37), by striking the pe-
13 riod at the end and inserting ‘‘, plus’’, and
14 (C) by adding at the end the following new
15 paragraph:
16 ‘‘(38) the zero-emission nuclear power produc-
17 tion credit determined under section 45W(a).’’.
18 (2) The table of sections for subpart D of part
19 IV of subchapter A of chapter 1 of such Code is
20 amended by adding at the end the following new
21 item:
‘‘Sec. 45W. Zero-emission nuclear power production credit.’’.
223
1 ‘‘(8) The zero-emission nuclear power produc-
2 tion credit determined under section 45W.’’.
3 (d) EFFECTIVE DATE.—This section shall apply to
4 electricity produced and sold after December 31, 2021, in
5 taxable years beginning after such date.
6 PART 2—RENEWABLE FUELS
9 FUELS.
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1 (d) ALTERNATIVE FUEL MIXTURE CREDIT.—Section
2 6426(e)(3) is amended by striking ‘‘December 31, 2021’’
3 and inserting ‘‘December 31, 2031’’.
4 (e) PAYMENTS FOR ALTERNATIVE FUELS.—Section
5 6427(e)(6)(C) is amended by striking ‘‘December 31,
6 2021’’ and inserting ‘‘December 31, 2031’’.
7 (f) EFFECTIVE DATE.—The amendments made by
8 this section shall apply to fuel sold or used after December
9 31, 2021.
10 SEC. 136202. EXTENSION OF SECOND GENERATION
11 BIOFUEL INCENTIVES.
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1 occurs during such taxable year, an amount equal to the
2 product of—
3 ‘‘(1) the number of gallons of sustainable avia-
4 tion fuel in such mixture, multiplied by
5 ‘‘(2) the sum of—
6 ‘‘(A) $1.25, plus
7 ‘‘(B) the applicable supplementary amount
8 with respect to such sustainable aviation fuel.
9 ‘‘(b) APPLICABLE SUPPLEMENTARY AMOUNT.—For
10 purposes of this section, the term ‘applicable supple-
11 mentary amount’ means, with respect to any sustainable
12 aviation fuel, an amount equal to $0.01 for each percent-
13 age point by which the lifecycle greehouse gas emissions
14 reduction percentage with respect to such fuel exceeds 50
15 percent. In no event shall the applicable supplementary
16 amount determined under this subsection exceed $0.50.
17 ‘‘(c) QUALIFIED MIXTURE.—For purposes of this
18 section, the term ‘qualified mixture’ means a mixture of
19 sustainable aviation fuel and kerosene if—
20 ‘‘(1) such mixture is produced by the taxpayer
21 in the United States,
22 ‘‘(2) such mixture is used by the taxpayer (or
23 sold by the taxpayer for use) in an aircraft,
24 ‘‘(3) such sale or use is in the ordinary course
25 of a trade or business of the taxpayer, and
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1 ‘‘(4) the transfer of such mixture to the fuel
2 tank of such aircraft occurs in the United States.
3 ‘‘(d) SUSTAINABLE AVIATION FUEL.—For purposes
4 of this section, the term ‘sustainable aviation fuel’ means
5 liquid fuel which—
6 ‘‘(1) meets the requirements of—
7 ‘‘(A) ASTM International Standard
8 D7566, or
9 ‘‘(B) the Fischer Tropsch provisions of
10 ASTM International Standard D1655, Annex
11 A1,
12 ‘‘(2) is not derived from palm fatty distillates or
13 petroleum, and
14 ‘‘(3) has been certified in accordance with sub-
15 section (e) as having a lifecycle greenhouse gas emis-
16 sions reduction percentage of at least 50 percent.
17 ‘‘(e) LIFECYCLE GREENHOUSE GAS EMISSIONS RE-
18 DUCTION PERCENTAGE.—For purposes of this section—
19 ‘‘(1) IN GENERAL.—The term ‘lifecycle green-
20 house gas emissions reduction percentage’ means,
21 with respect to any sustainable aviation fuel, the
22 percentage reduction in lifecycle greenhouse gas
23 emissions achieved by such fuel in comparison with
24 petroleum-based jet fuel as stated in a certification
25 which meets the requirements of paragraphs (2).
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1 ‘‘(2) CERTIFICATION METHODOLOGY.—A cer-
2 tification meets the requirements of this paragraph
3 if such certification (including the methodology and
4 process of such certification) conforms with all re-
5 quirements (including requirements related to
6 traceability and information transmission) of the
7 most recent Carbon Offsetting and Reduction
8 Scheme for International Aviation which has been
9 adopted by the International Civil Aviation Organi-
10 zation with the agreement of the United States.
11 ‘‘(3) OPTION TO OBTAIN CERTIFICATION FROM
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1 ‘‘(g) COORDINATION WITH CREDIT AGAINST EXCISE
2 TAX.—The amount of the credit determined under this
3 section with respect to any sustainable aviation fuel shall,
4 under rules prescribed by the Secretary, be properly re-
5 duced to take into account any benefit provided with re-
6 spect to such sustainable aviation fuel solely by reason of
7 the application of section 6426 or 6427(e).
8 ‘‘(h) TERMINATION.—This section shall not apply to
9 any sale or use after December 31, 2031.’’.
10 (b) CREDIT MADE PART OF GENERAL BUSINESS
11 CREDIT.— Section 38(b) is amended by striking ‘‘plus’’
12 at the end of paragraph (37), by striking the period at
13 the end of paragraph (38) and inserting ‘‘, plus’’, and by
14 inserting after paragraph (38) the following new para-
15 graph:
16 ‘‘(39) the sustainable aviation fuel credit deter-
17 mined under section 40B.’’.
18 (c) COORDINATION WITH BIODIESEL INCENTIVES.—
19 (1) IN GENERAL.—Section 40A(d)(1) is amend-
20 ed by inserting ‘‘or 40B’’ after ‘‘determined under
21 section 40’’.
22 (2) CONFORMING AMENDMENT.—Section
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1 (d) SUSTAINABLE AVIATION FUEL ADDED TO CRED-
2 IT FOR ALCOHOL FUEL, BIODIESEL, AND ALTERNATIVE
3 FUEL MIXTURES.—
4 (1) IN GENERAL.—Section 6426 is amended by
5 adding at the end the following new subsection:
6 ‘‘(k) SUSTAINABLE AVIATION FUEL CREDIT.—
7 ‘‘(1) IN GENERAL.—For purposes of this sec-
8 tion, the sustainable aviation fuel credit for the tax-
9 able year is, with respect to any sale or use of a
10 qualified mixture, an amount equal to the product
11 of—
12 ‘‘(A) the number of gallons of sustainable
13 aviation fuel in such mixture, multiplied by
14 ‘‘(B) the sum of—
15 ‘‘(i) $1.25, plus
16 ‘‘(ii) the applicable supplementary
17 amount with respect to such sustainable
18 aviation fuel.
19 ‘‘(2) APPLICABLE SUPPLEMENTARY AMOUNT.—
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1 shall have the meaning given such term by section
2 40B.
3 ‘‘(4) REGISTRATION REQUIREMENT.—For pur-
4 poses of this subsection, rules similar to the rules of
5 section 40B(f) shall apply.’’.
6 (2) CONFORMING AMENDMENTS.—
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1 ternal Revenue Code of 1986 (as added by this subsection)
2 shall be properly reduced to take into account any benefit
3 provided with respect to sustainable aviation fuel (as de-
4 fined in such section 40B) by reason of the application
5 of section 6426 or section 6427(e).
6 (f) AMOUNT OF CREDIT INCLUDED IN GROSS IN-
7 COME.—Section 87 is amended by striking ‘‘and’’ in para-
8 graph (1), by striking the period at the end of paragraph
9 (2) and inserting ‘‘, and’’, and by adding at the end the
10 following new paragraph:
11 ‘‘(3) the sustainable aviation fuel credit deter-
12 mined with respect to the taxpayer for the taxable
13 year under section 40B(a).’’.
14 (g) EFFECTIVE DATE.—The amendments made by
15 this section shall apply to fuel sold or used after December
16 31, 2022.
17 SEC. 136204. CLEAN HYDROGEN.
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1 ‘‘SEC. 45X. CREDIT FOR PRODUCTION OF CLEAN HYDRO-
2 GEN.
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1 age reduction in lifecycle greenhouse gas emis-
2 sions which is less than 75 percent, 20 percent,
3 ‘‘(B) in the case of any qualified clean hy-
4 drogen which is produced through a process
5 that, as compared to hydrogen produced by
6 steam-methane reforming, achieves a percent-
7 age reduction in lifecycle greenhouse gas emis-
8 sions which is not less than 75 percent and less
9 than 85 percent, 25 percent,
10 ‘‘(C) in the case of any qualified clean hy-
11 drogen which is produced through a process
12 that, as compared to hydrogen produced by
13 steam-methane reforming, achieves a percent-
14 age reduction in lifecycle greenhouse gas emis-
15 sions which is not less than 85 percent and less
16 than 95 percent, 34 percent, and
17 ‘‘(D) in the case of any qualified clean hy-
18 drogen which is produced through a process
19 that, as compared to hydrogen produced by
20 steam-methane reforming, achieves a percent-
21 age reduction in lifecycle greenhouse gas emis-
22 sions which is not less than 95 percent, 100
23 percent.
24 ‘‘(3) INFLATION ADJUSTMENT.—The $3.00
25 amount in paragraph (1) shall be adjusted by multi-
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1 plying such amount by the inflation adjustment fac-
2 tor (as determined under section 45(e)(2), deter-
3 mined by substituting ‘2020’ for ‘1992’ in subpara-
4 graph (B) thereof) for the calendar year in which
5 the qualified clean hydrogen is produced. If any
6 amount as increased under the preceding sentence is
7 not a multiple of 0.1 cent, such amount shall be
8 rounded to the nearest multiple of 0.1 cent.
9 ‘‘(c) DEFINITIONS.—For purposes of this section—
10 ‘‘(1) LIFECYCLE GREENHOUSE GAS EMIS-
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1 ‘‘(B) ADDITIONAL REQUIREMENTS.—Such
12 TION FACILITY.—
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1 than natural gas derived from biomass (as defined
2 in section 45K(c)(3) as in effect on the date of the
3 enactment of this section), without carbon capture
4 and sequestration.
5 ‘‘(d) SPECIAL RULES.—
6 ‘‘(1) TREATMENT OF FACILITIES OWNED BY
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1 ‘‘(A) IN GENERAL.—In the case of any
2 qualified facility which meets the project re-
3 quirements of this paragraph, paragraph (1)
4 shall not apply.
5 ‘‘(B) PROJECT REQUIREMENTS.—A project
6 meets the requirements of this subparagraph if
7 it is one of the following:
8 ‘‘(i) A project with a maximum net
9 output of less than 1 megawatt.
10 ‘‘(ii) A project which commences con-
11 struction prior to the date of the enact-
12 ment of this paragraph.
13 ‘‘(iii) A project which satisfies the re-
14 quirements of paragraphs (3) and (4).
15 ‘‘(3) PREVAILING WAGE REQUIREMENTS.—
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1 placed in service, the alteration or repair of
2 such facility,
3 shall be paid wages at rates not less than the
4 prevailing rates for construction, alteration, or
5 repair of a similar character in the locality as
6 most recently determined by the Secretary of
7 Labor, in accordance with subchapter IV of
8 chapter 31 of title 40, United States Code.
9 ‘‘(B) CORRECTION AND PENALTY RELATED
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1 regulations or other guidance to carry out the purposes
2 of this section, including regulations or other guidance—
3 ‘‘(1) for determining lifecycle greenhouse gas
4 emissions, and
5 ‘‘(2) which require verification by unrelated
6 third parties of the production and sale or use of
7 qualified clean hydrogen with respect to which credit
8 is otherwise allowed under this section.’’.
9 (2) ELECTIVE PAYMENT OF CREDIT.—Section
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1 (B) The table of sections for subpart D of
2 part IV of subchapter A of chapter 1 amended
3 by adding at the end the following new item:
‘‘Sec. 45X. Credit for production of clean hydrogen.’’.
241
1 regulations or other guidance to require verification
2 by unrelated third parties of the production and use
3 of electricity to which this paragraph applies.’’.
4 (2) EFFECTIVE DATE.—The amendment made
5 by this subsection shall apply to electricity produced
6 after December 31, 2021.
7 (c) ELECTION TO TREAT CLEAN HYDROGEN PRO-
8 DUCTION FACILITIES AS ENERGY PROPERTY.—
9 (1) IN GENERAL.—Section 48(a) is amended by
10 adding at the end the following new paragraph:
11 ‘‘(8) ELECTION TO TREAT CLEAN HYDROGEN
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1 paragraph (A) of section 45X(b)(2), 6
2 percent,
3 ‘‘(II) in the case of a facility
4 which is designed and reasonably ex-
5 pected to produce qualified clean hy-
6 drogen which is described in a sub-
7 paragraph (B) of such section, 7.5
8 percent,
9 ‘‘(III) in the case of a facility
10 which is designed and reasonably ex-
11 pected to produce qualified clean hy-
12 drogen which is described in a sub-
13 paragraph (C) of such section, 10.2
14 percent, and
15 ‘‘(IV) in the case of a facility
16 which is designed and reasonably ex-
17 pected to produce qualified clean hy-
18 drogen which is described in a sub-
19 paragraph (D) of such section, 30
20 percent.
21 ‘‘(B) DENIAL OF PRODUCTION CREDIT.—
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1 ‘‘(C) SPECIFIED CLEAN HYDROGEN PRO-
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1 of this section, including regulations or other
2 guidance which—
3 ‘‘(i) requires verification by one or
4 more unrelated third parties that the facil-
5 ity produces hydrogen which is consistent
6 with the hydrogen that such facility was
7 designed and expected to produce under
8 subparagraph (A)(ii), and
9 ‘‘(ii) recaptures so much of any credit
10 allowed under this section as exceeds the
11 amount of the credit which would have
12 been allowed if the expected production
13 were consistent with the actual verified
14 production (or all of the credit so allowed
15 in the absence of such verification).’’.
16 (2) EFFECTIVE DATE.—The amendments made
17 by this section shall apply to periods after December
18 31, 2021, under rules similar to the rules of section
19 48(m) of the Internal Revenue Code of 1986 (as in
20 effect on the day before the date of the enactment
21 of the Revenue Reconciliation Act of 1990).
22 (d) TERMINATION OF EXCISE TAX CREDIT FOR HY-
23 DROGEN.—
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1 designating subparagraphs (E), (F), and (G) as sub-
2 paragraphs (D), (E), and (F), respectively.
3 (2) CONFORMING AMENDMENT.—Section
13 IT.
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1 ‘‘(1) IN GENERAL.—The credit allowed under
2 this section with respect to any taxpayer for any tax-
3 able year shall not exceed $1,200.
4 ‘‘(2) WINDOWS.—The credit allowed under this
5 section by reason of subsection (a)(1) with respect to
6 any taxpayer for any taxable year shall not exceed—
7 ‘‘(A) in the aggregate with respect to all
8 exterior windows and skylights which are not
9 described in subparagraph (B), $200,
10 ‘‘(B) in the aggregate with respect to all
11 exterior windows and skylights which meet the
12 standard for the most efficient certification
13 under applicable Energy Star program require-
14 ments, the excess (if any) of $600 over the
15 credit so allowed with respect to all windows
16 and skylights taken into account under sub-
17 paragraph (A).
18 ‘‘(3) DOORS.—The credit allowed under this
19 section by reason of subsection (a)(1) with respect to
20 any taxpayer for any taxable year shall not exceed—
21 ‘‘(A) $250 in the case of any exterior door,
22 and
23 ‘‘(B) $500 in the aggregate with respect to
24 all exterior doors.’’.
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1 (d) MODIFICATIONS RELATED TO QUALIFIED EN-
2 ERGY EFFICIENCY IMPROVEMENTS.—
3 (1) STANDARDS FOR ENERGY EFFICIENT
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1 tion 25C(c)(3)(A) is amended by striking ‘‘material
2 or system’’ and inserting ‘‘material or system, in-
3 cluding air sealing material or system,’’.
4 (e) MODIFICATION OF RESIDENTIAL ENERGY PROP-
5 ERTY EXPENDITURES.—Section 25C(d) is amended to
6 read as follows:
7 ‘‘(d) RESIDENTIAL ENERGY PROPERTY EXPENDI-
8 TURES.—For purposes of this section—
9 ‘‘(1) IN GENERAL.—The term ‘residential en-
10 ergy property expenditures’ means expenditures
11 made by the taxpayer for qualified energy property
12 which is—
13 ‘‘(A) installed on or in connection with a
14 dwelling unit located in the United States and
15 used as a residence by the taxpayer, and
16 ‘‘(B) originally placed in service by the tax-
17 payer.
18 Such term includes expenditures for labor costs
19 properly allocable to the onsite preparation, assem-
20 bly, or original installation of the property.
21 ‘‘(2) QUALIFIED ENERGY PROPERTY.—The
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1 fect as of the beginning of the calendar year in
2 which the property is placed in service:
3 ‘‘(A) An electric heat pump water heater.
4 ‘‘(B) An electric heat pump.
5 ‘‘(C) A central air conditioner.
6 ‘‘(D) A natural gas, propane, or oil water
7 heater.
8 ‘‘(E) A natural gas, propane, or oil furnace
9 or hot water boiler.’’.
10 (f) HOME ENERGY AUDITS.—
11 (1) IN GENERAL.—Section 25C(a) is amended
12 by striking ‘‘and’’ at the end of paragraph (1), by
13 striking the period at the end of paragraph (2) and
14 inserting ‘‘, and’’, and by adding at the end the fol-
15 lowing new paragraph:
16 ‘‘(3) 30 percent of the amount paid or incurred
17 by the taxpayer during the taxable year for home en-
18 ergy audits.’’.
19 (2) LIMITATION.—Section 25C(b), as amended
20 by subsection (c), is amended adding at the end the
21 following new paragraph:
22 ‘‘(5) HOME ENERGY AUDITS.—
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1 ‘‘(B) SUBSTANTIATION REQUIREMENT.—
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1 ‘‘(2) is conducted and prepared by a home en-
2 ergy auditor that meets the certification or other re-
3 quirements specified by the Secretary (after con-
4 sultation with the Secretary of Energy and the Ad-
5 ministrator of the Environmental Protection Agency
6 and not later than 180 days after the date of the en-
7 actment of this subsection) in regulations or other
8 guidance.’’.
9 (B) CONFORMING AMENDMENT.—Section
14 6213(g)(2) is amended—
15 (A) in subparagraph (P), by striking
16 ‘‘and’’ at the end,
17 (B) in subparagraph (Q), by striking the
18 period at the end and inserting ‘‘, and’’, and
19 (C) by adding at the end the following:
20 ‘‘(R) an omission of correct information or
21 documentation required under section
22 25C(b)(5)(B) (relating to home energy audits)
23 to be included on a return.’’.
24 (g) IDENTIFICATION NUMBER REQUIREMENT.—
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1 (1) IN GENERAL.—Section 25C, as amended by
2 subsections (a) and (f), is amended by redesignating
3 subsection (h) as subsection (i) and by inserting
4 after subsection (g) the following new subsection:
5 ‘‘(h) PRODUCT IDENTIFICATION NUMBER REQUIRE-
6 MENT.—
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1 means any manufacturer of specified property
2 which enters into an agreement with the Sec-
3 retary which provides that such manufacturer
4 will—
5 ‘‘(i) assign a product identification
6 number to each item of specified property
7 produced by such manufacturer utilizing a
8 methodology that will ensure that such
9 number (including any alphanumeric) is
10 unique to each such item (by utilizing
11 numbers or letters which are unique to
12 such manufacturer or by such other meth-
13 od as the Secretary may provide),
14 ‘‘(ii) label such item with such num-
15 ber in such manner as the Secretary may
16 provide, and
17 ‘‘(iii) make periodic written reports to
18 the Secretary (at such times and in such
19 manner as the Secretary may provide) of
20 the product identification numbers so as-
21 signed and including such information as
22 the Secretary may require with respect to
23 the item of specified property to which
24 such number was so assigned.
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1 ‘‘(B) CONSULTATION WITH DOE AND
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1 (relating to credit for nonbusiness energy prop-
2 erty) to be included on a return.’’.
3 (h) EFFECTIVE DATES.—
4 (1) IN GENERAL.—Except as otherwise pro-
5 vided by this subsection, the amendments made by
6 this section shall apply to property placed in service
7 after December 31, 2021.
8 (2) HOME ENERGY AUDITS.—The amendments
9 made by subsection (f) shall apply to amounts paid
10 or incurred after December 31, 2021.
11 (3) IDENTIFICATION NUMBER REQUIREMENT.—
20 25D(g) is amended—
21 (A) by striking ‘‘before January 1, 2023’’
22 in paragraph (2) and inserting ‘‘before January
23 1, 2022’’,
24 (B) by striking ‘‘and’’ at the end of para-
25 graph (2),
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1 (C) by redesignating paragraph (3) as
2 paragraph (5) and by inserting after paragraph
3 (2) the following new paragraphs:
4 ‘‘(3) in the case of property placed in service
5 after December 31, 2021, and before January 1,
6 2032, 30 percent,
7 ‘‘(4) in the case of property placed in service
8 after December 31, 2031, and before January 1,
9 2033, 26 percent, and’’, and
10 (D) by striking ‘‘December 31, 2022, and
11 before January 1, 2024’’ in paragraph (5) (as
12 so redesignated) and inserting ‘‘December 31,
13 2032, and before January 1, 2034’’.
14 (b) RESIDENTIAL ENERGY EFFICIENT PROPERTY
15 CREDIT FOR BATTERY STORAGE TECHNOLOGY.—
16 (1) IN GENERAL.—Section 25D(a) is amended
17 by striking ‘‘and’’ at the end of paragraph (5) and
18 by inserting after paragraph (6) the following new
19 paragraph:
20 ‘‘(7) the qualified battery storage technology ex-
21 penditures,’’.
22 (2) QUALIFIED BATTERY STORAGE TECH-
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1 ‘‘(7) QUALIFIED BATTERY STORAGE TECH-
14 DEDUCTION.
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1 beginning after December 31, 2021, and before Jan-
2 uary 1, 2032.
3 ‘‘(2) MODIFICATION OF EFFICIENCY STAND-
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1 ‘‘(B) APPLICABLE DOLLAR VALUE.—For
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1 shall be applied by substituting ‘$0.50’ for
2 ‘$2.50’, ‘$.02’ for ‘$.10’, and ‘$1.00’ for
3 ‘$5.00’.
4 ‘‘(B) INCREASED CREDIT FOR CERTAIN
6 MENTS.—
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1 ‘‘(A) IN GENERAL.—The requirements de-
2 scribed in this subparagraph with respect to
3 any project are that the taxpayer shall ensure
4 that any laborers and mechanics employed by
5 contractors and subcontractors in the construc-
6 tion of any property or with respect to building
7 modifications made as part of a qualified ret-
8 rofit plan shall be paid wages at rates not less
9 than the prevailing rates for construction, alter-
10 ation, or repair of a similar character in the lo-
11 cality as most recently determined by the Sec-
12 retary of Labor, in accordance with subchapter
13 IV of chapter 31 of title 40, United States
14 Code.
15 ‘‘(B) CORRECTION AND PENALTY RELATED
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1 ‘‘(6) APPRENTICESHIP REQUIREMENTS.—The
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1 before January 1, 2024, 10 percent,
2 and
3 ‘‘(III) in the case of any applica-
4 ble project the construction of which
5 begins after December 31, 2023, 15
6 percent.
7 ‘‘(B) APPRENTICE TO JOURNEYWORKER
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1 geographic area of the construction,
2 alteration, or repair work, and
3 ‘‘(II) makes a good faith effort to
4 comply with the requirements of this
5 paragraph.
6 ‘‘(ii) GOOD FAITH EFFORT.—For pur-
7 poses of clause (i), a taxpayer shall be
8 deemed to have satisfied the requirements
9 under such paragraph with respect to an
10 applicable project if such taxpayer has re-
11 quested qualified apprentices from a reg-
12 istered apprenticeship program, as defined
13 in section 3131(e)(3)(B), and such request
14 has been denied, provided that such denial
15 is not the result of a refusal by the con-
16 tractors or subcontractors engaged in the
17 performance of construction, alteration, or
18 repair work on such applicable project to
19 comply with the established standards and
20 requirements of such apprenticeship pro-
21 gram.
22 ‘‘(E) DEFINITIONS.—For purposes of this
23 paragraph—
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1 ‘‘(i) LABOR HOURS.—The term ‘labor
2 hours’ has the meaning given such term in
3 section 45(b)(9)(E)(i).
4 ‘‘(ii) QUALIFIED APPRENTICE.—The
9 TAX-EXEMPT ENTITIES.—
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1 ‘‘(8) ALTERNATIVE DEDUCTION FOR ENERGY
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1 ‘‘(B) QUALIFIED RETROFIT PLAN.—For
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1 paragraph, the term ‘energy efficient retrofit
2 building property’ means property—
3 ‘‘(i) with respect to which depreciation
4 (or amortization in lieu of depreciation) is
5 allowable,
6 ‘‘(ii) which is installed on or in any
7 qualified building,
8 ‘‘(iii) which is installed as part of—
9 ‘‘(I) the interior lighting systems,
10 ‘‘(II) the heating, cooling, ven-
11 tilation, and hot water systems, or
12 ‘‘(III) the building envelope, and
13 ‘‘(iv) which is certified in accordance
14 with subparagraph (B)(ii) as meeting the
15 requirements of clauses (ii) and (iii).
16 ‘‘(D) QUALIFIED BUILDING.—For pur-
17 poses of this paragraph, the term ‘qualified
18 building’ means any building which—
19 ‘‘(i) is located in the United States,
20 and
21 ‘‘(ii) was originally placed in service
22 not less than 5 years before the establish-
23 ment of the qualified retrofit plan with re-
24 spect to such building.
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1 ‘‘(E) QUALIFYING FINAL CERTIFI-
10 SITY.—
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1 ‘‘(G) OTHER DEFINITIONS.—For purposes
2 of this paragraph—
3 ‘‘(i) ENERGY USAGE INTENSITY.—The
18 (a).—
19 ‘‘(i) IN GENERAL.—In the case of any
20 building with respect to which an election
21 is made under subparagraph (A), the term
22 ‘energy efficient commercial building prop-
23 erty’ shall not include any energy efficient
24 retrofit building property with respect to
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271
1 which a deduction is allowable under this
2 paragraph.
3 ‘‘(ii) CERTAIN RULES NOT APPLICA-
4 BLE.—
5 ‘‘(I) IN GENERAL.—Except as
6 provided in subclause (II), subsection
7 (d) shall not apply for purposes of
8 this paragraph.
9 ‘‘(II) ALLOCATION OF DEDUC-
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1 placed in service after December 31, 2021 (in tax-
2 able years ending after such date) if such property
3 is placed in service pursuant to qualified retrofit
4 plan (within the meaning of such section) estab-
5 lished after such date.
6 SEC. 136304. EXTENSION, INCREASE, AND MODIFICATIONS
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1 ‘‘(B) in the case of a dwelling which are
2 part of a building eligible to participate in the
3 Energy Star Multifamily New Construction
4 Program—
5 ‘‘(i) that is described in subsection
6 (c)(1)(A) (and not described in subsection
7 (c)(1)(B)), $500, and
8 ‘‘(ii) that is described in subsection
9 (c)(1)(B), $1000.’’.
10 (c) MODIFICATION OF ENERGY SAVING REQUIRE-
11 MENTS.—Section 45L(c) is amended to read as follows:
12 ‘‘(c) ENERGY SAVING REQUIREMENTS.—
13 ‘‘(1) IN GENERAL.—A dwelling unit meets the
14 energy saving requirements of this subsection if—
15 ‘‘(A) such dwelling unit meets the require-
16 ments of paragraph (2) or (3) (whichever is ap-
17 plicable), or
18 ‘‘(B) such dwelling unit is certified as a
19 zero energy ready home under the zero energy
20 ready home program of the Department of En-
21 ergy (or any successor program determined by
22 the Secretary, after consultation with the Sec-
23 retary of Energy) as in effect on January 1,
24 2022.
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1 ‘‘(2) SINGLE-FAMILY HOME REQUIREMENTS.—
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1 ‘‘(3) MULTI-FAMILY HOME REQUIREMENTS.—A
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1 the credit amount allowed with respect to such resi-
2 dence shall be—
3 ‘‘(A) $2,500 in the case of a residence de-
4 scribed in subparagraph (A) of subsection
5 (c)(1) (and not described in subparagraph (B)
6 of such subsection), and
7 ‘‘(B) $5,000 in the case of a residence de-
8 scribed in (c)(1)(B).
9 ‘‘(2) PREVAILING WAGE REQUIREMENTS.—
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1 graph (A) with respect to any qualified resi-
2 dence, rules similar to the rules of section
3 45(b)(8)(B) shall apply for purposes of this
4 paragraph.
5 ‘‘(3) REGULATIONS AND GUIDANCE.—The Sec-
6 retary shall issue such regulations or other guidance
7 as the Secretary determines necessary or appropriate
8 to carry out the purposes of this subsection.’’.
9 (e) EFFECTIVE DATES.—The amendments made by
10 this section shall apply to dwelling units acquired after
11 December 31, 2021.
12 SEC. 136305. MODIFICATIONS TO INCOME EXCLUSION FOR
13 CONSERVATION SUBSIDIES.
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1 purchase or installation of any water conservation or
2 efficiency measure,
3 ‘‘(3) provided (directly or indirectly) by a storm
4 water management provider to a customer, or by a
5 State or local government to a resident of such State
6 or locality, for the purchase or installation of any
7 storm water management measure, or
8 ‘‘(4) provided (directly or indirectly) by a State
9 or local government to a resident of such State or
10 locality for the purchase or installation of any waste-
11 water management measure, but only if such meas-
12 ure is with respect to the taxpayer’s principal resi-
13 dence.’’.
14 (b) CONFORMING AMENDMENTS.—
15 (1) DEFINITION OF WATER CONSERVATION OR
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1 (C) by redesignating paragraph (2) as
2 paragraph (5) and by inserting after paragraph
3 (1) the following:
4 ‘‘(2) WATER CONSERVATION OR EFFICIENCY
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1 amended by striking subparagraph (B) and inserting
2 the following:
3 ‘‘(B) PUBLIC UTILITY.—The term ‘public
4 utility’ means a person engaged in the sale of
5 electricity, natural gas, or water to residential,
6 commercial, or industrial customers for use by
7 such customers.
8 ‘‘(C) STORM WATER MANAGEMENT PRO-
24 LIC UTILITIES’’.
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1 (B) The item relating to section 136 in the
2 table of sections of part III of subchapter B of
3 chapter 1 is amended—
4 (i) by inserting ‘‘and water’’ after
5 ‘‘energy’’, and
6 (ii) by striking ‘‘provided by public
7 utilities’’.
8 (c) EFFECTIVE DATE.—The amendments made by
9 this section shall apply to amounts received after Decem-
10 ber 31, 2018.
11 (d) NO INFERENCE.—Nothing in this Act or the
12 amendments made by this Act shall be construed to create
13 any inference with respect to the proper tax treatment of
14 any subsidy received directly or indirectly from a public
15 utility, a storm water management provider, or a State
16 or local government for any water conservation measure
17 or storm water management measure before January 1,
18 2019.
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1 PART 4—GREENING THE FLEET AND
2 ALTERNATIVE VEHICLES
5 DIVIDUALS.
10 MOTOR VEHICLES.
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1 ‘‘(2) BASE AMOUNT.—The amount determined
2 under this paragraph is $4,000.
3 ‘‘(3) BATTERY CAPACITY.—In the case of a new
4 qualified plug-in electric drive motor vehicle, the
5 amount determined under this paragraph is $3,500
6 if—
7 ‘‘(A) in the case of a vehicle placed in serv-
8 ice before January 1, 2027, such vehicle draws
9 propulsion energy from a battery with not less
10 than 40 kilowatt hours of capacity, and
11 ‘‘(B) in the case of a vehicle placed in serv-
12 ice after December 31, 2026, such vehicle
13 draws propulsion energy from a battery with
14 not less than 50 kilowatt hours of capacity.
15 ‘‘(4) DOMESTIC ASSEMBLY.—In the case of a
16 new qualified plug-in vehicle which satisfies the do-
17 mestic assembly qualifications, the amount deter-
18 mined under this paragraph is $4,500.
19 ‘‘(5) DOMESTIC CONTENT.—In the case of a
20 new qualified plug-in vehicle which satisfies domestic
21 content qualifications, the amount determined under
22 this paragraph is $500.
23 ‘‘(c) LIMITATION BASED ON MODIFIED ADJUSTED
24 GROSS INCOME.—
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1 ‘‘(1) IN GENERAL.—The amount of the credit
2 allowable under subsection (a) shall be reduced (but
3 not below zero) by $200 for each $1,000 (or fraction
4 thereof) by which the taxpayer’s modified adjusted
5 gross income exceeds the threshold amount. For
6 purposes of the preceding sentence, the term ‘modi-
7 fied adjusted gross income’ means adjusted gross in-
8 come increased by any amount excluded from gross
9 income under section 911, 931, or 933.
10 ‘‘(2) SPECIAL RULE FOR DETERMINATION OF
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1 ‘‘(B) $600,000 in the case of a head of
2 household, and
3 ‘‘(C) $400,000 in any other case.
4 ‘‘(d) MANUFACTURER’S SUGGESTED RETAIL PRICE
5 LIMITATION.—
6 ‘‘(1) IN GENERAL.—No credit shall be allowed
7 under subsection (a) for a vehicle with a manufac-
8 turer’s suggested retail price in excess of the appli-
9 cable limitation.
10 ‘‘(2) APPLICABLE LIMITATION.—For purposes
11 of paragraph (1), the applicable limitation for each
12 vehicle classification is as follows:
13 ‘‘(A) SEDANS.—In the case of a sedan,
14 $55,000.
15 ‘‘(B) VANS.—In the case of a van,
16 $64,000.
17 ‘‘(C) SPORT UTILITY VEHICLES.—In the
18 case of a sport utility vehicle, $69,000.
19 ‘‘(D) PICKUP TRUCKS.—In the case of a
20 pickup truck, $74,000.
21 ‘‘(3) REGULATIONS.—For purposes of this sub-
22 section, the Secretary shall prescribe regulations for
23 determining vehicle classifications using criteria
24 similar to that employed by the Environmental Pro-
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1 tection Agency and the Department of Energy to de-
2 termine size and class of vehicles.
3 ‘‘(e) NEW QUALIFIED PLUG-IN ELECTRIC DRIVE
4 MOTOR VEHICLE.—For purposes of this section—
5 ‘‘(1) IN GENERAL.—The term ‘new qualified
6 plug-in electric drive motor vehicle’ means a motor
7 vehicle—
8 ‘‘(A) the original use of which commences
9 with the taxpayer,
10 ‘‘(B) which is acquired for use by the tax-
11 payer and not for resale,
12 ‘‘(C) which is made by a qualified manu-
13 facturer,
14 ‘‘(D) which is treated as a motor vehicle
15 for purposes of title II of the Clean Air Act,
16 ‘‘(E) which has a gross vehicle weight rat-
17 ing of less than 14,000 pounds,
18 ‘‘(F) which is propelled to a significant ex-
19 tent by an electric motor which draws electricity
20 from a battery which—
21 ‘‘(i) has a capacity of—
22 ‘‘(I) in the case of a vehicle
23 placed in service in 2022 or 2023, not
24 less than 7 kilowatt hours, and
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1 ‘‘(II) in the case of a vehicle
2 placed in service after 2023, not less
3 than 10 kilowatt hours, and
4 ‘‘(ii) is capable of being recharged
5 from an external source of electricity,
6 ‘‘(G) for which, in the case of a vehicle
7 placed into service after December 31, 2026,
8 final assembly is within the United States, and
9 ‘‘(H) is not of a character subject to an al-
10 lowance for depreciation.
11 ‘‘(2) MOTOR VEHICLE.—The term ‘motor vehi-
12 cle’ means any vehicle which is manufactured pri-
13 marily for use on public streets, roads, and highways
14 (not including a vehicle operated exclusively on a rail
15 or rails) and which has at least 4 wheels.
16 ‘‘(3) QUALIFIED MANUFACTURER.—The term
17 ‘qualified manufacturer’ means any manufacturer
18 (within the meaning of the regulations prescribed by
19 the Administrator of the Environmental Protection
20 Agency for purposes of the administration of title II
21 of the Clean Air Act (42 U.S.C. 7521 et seq.) which
22 enters into a written agreement with the Secretary
23 under which such manufacturer agrees—
24 ‘‘(A) to ensure that each vehicle manufac-
25 tured by such manufacturer after the later of
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1 the date on which such agreement takes effect
2 or December 31, 2021, and that meets the re-
3 quirements of subparagraphs (D), (E), and (F)
4 of paragraph (1) and paragraph (6) of sub-
5 section (e) is labeled with a unique vehicle iden-
6 tification number, and
7 ‘‘(B) to make periodic written reports to
8 the Secretary (at such times and in such man-
9 ner as the Secretary may provide) providing
10 such vehicle identification numbers and such
11 other information related to such vehicle as the
12 Secretary may require.
13 ‘‘(4) BATTERY CAPACITY.—The term ‘capacity’
14 means, with respect to any battery, the quantity of
15 electricity which the battery is capable of storing, ex-
16 pressed in kilowatt hours, as measured from a 100
17 percent state of charge to a 0 percent state of
18 charge.
19 ‘‘(f) SPECIAL RULES.—
20 ‘‘(1) BASIS REDUCTION.—For purposes of this
21 subtitle, the basis of any property for which a credit
22 is allowable under subsection (a) shall be reduced by
23 the amount of such credit so allowed.
24 ‘‘(2) NO DOUBLE BENEFIT.—The amount of
25 any deduction or other credit allowable under this
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1 chapter for a vehicle for which a credit is allowable
2 under subsection (a) shall be reduced by the amount
3 of credit allowed under such subsection for such ve-
4 hicle.
5 ‘‘(3) PROPERTY USED OUTSIDE UNITED STATES
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1 sions of State law in the case of a State which
2 has adopted such provision under a waiver
3 under section 209(b) of the Clean Air Act), and
4 ‘‘(B) the motor vehicle safety provisions of
5 sections 30101 through 30169 of title 49,
6 United States Code.
7 ‘‘(g) CREDIT ALLOWED FOR 2 AND 3-WHEELED
8 PLUG-IN ELECTRIC VEHICLES.—
9 ‘‘(1) IN GENERAL.—In the case of a qualified
10 2- or 3-wheeled plug-in electric vehicle—
11 ‘‘(A) there shall be allowed as a credit
12 against the tax imposed by this subtitle for the
13 taxable year an amount equal to the sum of the
14 applicable amount with respect to each such
15 qualified 2- or 3-wheeled plug-in electric vehicle
16 placed in service by the taxpayer during the
17 taxable year, and
18 ‘‘(B) the amount of the credit allowed
19 under subparagraph (A) shall be treated as a
20 credit allowed under subsection (a).
21 ‘‘(2) APPLICABLE AMOUNT.—For purposes of
22 paragraph (1), the applicable amount is an amount
23 equal to the lesser of—
24 ‘‘(A) 10 percent of the cost of the qualified
25 2- or 3-wheeled plug-in electric vehicle, or
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1 ‘‘(B) $2,500.
2 ‘‘(3) QUALIFIED 2- OR 3-WHEELED PLUG-IN
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1 each possession of the United States which has a
2 mirror code tax system amounts equal to the loss (if
3 any) to that possession by reason of the application
4 of the provisions of this section (determined without
5 regard to this subsection). Such amounts shall be
6 determined by the Secretary based on information
7 provided by the government of the respective posses-
8 sion.
9 ‘‘(2) PAYMENTS TO OTHER POSSESSIONS.—The
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1 ‘‘(j) ASSEMBLY AND CONTENT QUALIFICATIONS.—
2 For purposes of this section—
3 ‘‘(1) DOMESTIC ASSEMBLY QUALIFICATIONS.—
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1 time, and in such form and manner, as the Sec-
2 retary may prescribe.
3 ‘‘(3) FINAL ASSEMBLY.—The term ‘final assem-
4 bly’ means the process by which a manufacturer pro-
5 duces a new qualified plug-in electric vehicle at, or
6 through the use of, a plant, factory, or other place
7 from which the vehicle is delivered to a dealer or im-
8 porter with all component parts necessary for the
9 mechanical operation of the vehicle included with the
10 vehicle, whether or not the component parts are per-
11 manently installed in or on the vehicle.
12 ‘‘(k) TERMINATION.—No credit shall be allowed
13 under this section with respect to any vehicle acquired
14 after December 31, 2031.’’.
15 (b) TRANSFER OF CREDIT.—Subsection (f) of section
16 36C is amended by adding at the end the following new
17 paragraphs:
18 ‘‘(7) IN GENERAL.—Subject to such regulations
19 or other guidance as the Secretary determines nec-
20 essary or appropriate, if, with respect to the credit
21 allowed under subsection (a) for any taxable year,
22 the taxpayer elects the application of this subpara-
23 graph for such taxable year with respect to such
24 credit, the eligible entity specified in such election,
25 and not the taxpayer who has purchased or leased
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1 the vehicle, shall be treated as the taxpayer for pur-
2 poses of this title with respect to such credit.
3 ‘‘(8) ELIGIBLE ENTITY.—For purposes of this
4 paragraph, the term ‘eligible entity’ means, with re-
5 spect to the vehicle for which the credit is allowed
6 under subsection (a), the dealer which sold such ve-
7 hicle to the taxpayer and has—
8 ‘‘(A) subject to paragraph (10), registered
9 with the Secretary for purposes of this para-
10 graph, at such time, and in such form and
11 manner, as the Secretary may prescribe,
12 ‘‘(B) prior to the election described in
13 paragraph (7), disclosed to the taxpayer pur-
14 chasing such vehicle—
15 ‘‘(i) the manufacturer’s suggested re-
16 tail price,
17 ‘‘(ii) the value of the credit allowed or
18 other incentive available for the purchase
19 or lease of such vehicle,
20 ‘‘(iii) all fees associated with the pur-
21 chase or lease of such vehicle, and
22 ‘‘(iv) the amount provided by the deal-
23 er to such taxpayer as a condition of the
24 election described in paragraph (7),
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1 ‘‘(C) made payment to such taxpayer
2 (whether in cash or in the form of a partial
3 payment or down payment for the purchase of
4 such vehicle) in an amount equal to the credit
5 otherwise allowable to such taxpayer, and
6 ‘‘(D) with respect to any incentive other-
7 wise available for the purchase of a vehicle for
8 which a credit is allowed under this section, in-
9 cluding any incentive in the form of a rebate or
10 discount provided by the dealer or manufac-
11 turer, ensured that—
12 ‘‘(i) the availability or use of such in-
13 centive shall not limit the ability of a tax-
14 payer to make an election described in
15 paragraph (7), and
16 ‘‘(ii) such election shall not limit the
17 value or use of such incentive.
18 ‘‘(9) TIMING.—An election described in para-
19 graph (7) shall be made by the taxpayer not later
20 than the date on which the vehicle for which the
21 credit is allowed under subsection (a) is purchased.
22 ‘‘(10) REVOCATION OF REGISTRATION.—Upon
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1 istration (as described in subparagraph (A) of such
2 subparagraph) of such dealer.
3 ‘‘(11) TAX TREATMENT OF PAYMENTS.—With
11 DEALERS.—
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1 sion of the United States, or an Indian Tribe (as de-
2 fined in section 4 of the Indian Self-Determination
3 and Education Assistance Act (25 U.S.C. 5304)) to
4 engage in the sale of vehicles.’’.
5 (c) REPEAL OF NONREFUNDABLE NEW QUALIFIED
6 PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE CREDIT.—
7 Subpart B of part IV of subchapter A of chapter 1 is
8 amended by striking section 30D (and by striking the item
9 relating to such section in the table of sections of such
10 subpart).
11 (d) CONFORMING AMENDMENTS.—
12 (1) Section 1016(a)(37) is amended by striking
13 ‘‘section 30D(f)(1)’’ and inserting ‘‘section
14 36C(f)(1)’’.
15 (2) Section 6211(b)(4)(A) is amended by insert-
16 ing ‘‘36C,’’ after ‘‘36B,’’.
17 (3) Section 6213(g)(2), as amended by the pre-
18 ceding provisions of this Act, is amended—
19 (A) in subparagraph (R), by striking
20 ‘‘and’’ at the end,
21 (B) in subparagraph (S), by striking the
22 period at the end and inserting ‘‘, and’’, and
23 (C) by adding at the end the following:
24 ‘‘(T) an omission of a correct vehicle iden-
25 tification number required under section 36C(f)
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1 (relating to credit for new qualified plug-in elec-
2 tric drive motor vehicles) to be included on a re-
3 turn.’’.
4 (4) Section 6501(m) is amended by striking
5 ‘‘30D(e)(4)’’ and inserting ‘‘36C(f)(5)’’.
6 (5) Section 166(b)(5)(A)(ii) of title 23, United
7 States Code, is amended by striking ‘‘section
8 30D(d)(1)’’ and inserting ‘‘section 36C(e)(1)’’.
9 (6) Section 1324(b)(2) of title 31, United
10 States Code, is amended by inserting ‘‘36C,’’ after
11 ‘‘36B,’’.
12 (7) The table of sections for subpart C of part
13 IV of subchapter A of chapter 1 is amended by in-
14 serting after the item relating to section 36B the fol-
15 lowing new item:
‘‘Sec. 36C. New qualified plug-in electric drive motor vehicles.’’.
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1 SEC. 136402. CREDIT FOR PREVIOUSLY-OWNED QUALIFIED
301
1 ‘‘(2) ADJUSTED GROSS INCOME.—The amount
2 which would (but for this paragraph) be allowed as
3 a credit under subsection (a) shall be reduced (but
4 not below zero) by $200 for each $1,000 (or fraction
5 thereof) by which the taxpayer’s adjusted gross in-
6 come exceeds—
7 ‘‘(A) $150,000 in the case of a joint return
8 or a surviving spouse (as defined in section
9 2(a)),
10 ‘‘(B) $112,500 in the case of a head of
11 household (as defined in section 2(b)), and
12 ‘‘(C) $75,000 in the case of a taxpayer not
13 described in paragraph (1) or (2).
14 ‘‘(c) DEFINITIONS.—For purposes of this section—
15 ‘‘(1) PREVIOUSLY-OWNED QUALIFIED PLUG-IN
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1 ‘‘(C) which is acquired by the taxpayer in
2 a qualified sale,
3 ‘‘(D) registered by the taxpayer for oper-
4 ation in a State or possession of the United
5 States, and
6 ‘‘(E) which meets the requirements of sub-
7 paragraphs (C), (D), (E), (F), and (G) of sec-
8 tion 36C(e)(1).
9 ‘‘(2) QUALIFIED SALE.—The term ‘qualified
10 sale’ means a sale of a motor vehicle—
11 ‘‘(A) by a seller who holds such vehicle in
12 inventory (within the meaning of section 471)
13 for sale or lease,
14 ‘‘(B) for a sale price not to exceed
15 $25,000, and
16 ‘‘(C) which is the first transfer since the
17 date of the enactment of this section to a per-
18 son other than the person with whom the origi-
19 nal use of such vehicle commenced.
20 ‘‘(3) QUALIFIED BUYER.—The term ‘qualified
21 buyer’ means, with respect to a sale of a motor vehi-
22 cle, a taxpayer—
23 ‘‘(A) who is an individual,
24 ‘‘(B) who purchases such vehicle for use
25 and not for resale,
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1 ‘‘(C) with respect to whom no deduction is
2 allowable with respect to another taxpayer
3 under section 151,
4 ‘‘(D) who has not been allowed a credit
5 under this section for any sale during the 3-
6 year period ending on the date of the sale of
7 such vehicle, and
8 ‘‘(E) who possesses a certificate issued by
9 the seller that certifies—
10 ‘‘(i) that the vehicle is a previously-
11 owned qualified plug-in electric drive motor
12 vehicle,
13 ‘‘(ii) the vehicle identification number
14 of such vehicle,
15 ‘‘(iii) the capacity of the battery at
16 time of sale, and
17 ‘‘(iv) such other information as the
18 Secretary may require.
19 ‘‘(4) MOTOR VEHICLE; CAPACITY.—The terms
20 ‘motor vehicle’ and ‘capacity’ have the meaning
21 given such terms in paragraphs (2) and (4) of sec-
22 tion 36C(e), respectively.
23 ‘‘(d) VIN NUMBER REQUIREMENT.—No credit shall
24 be allowed under subsection (a) with respect to any vehicle
25 unless the taxpayer includes the vehicle identification
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304
1 number of such vehicle on the return of tax for the taxable
2 year.
3 ‘‘(e) APPLICATION OF CERTAIN RULES.—For pur-
4 poses of this section, rules similar to the rules of para-
5 graphs (1), (2), (4), (5), (6) and (7) of section 36C(f)
6 shall apply for purposes of this section.
7 ‘‘(f) CERTIFICATE SUBMISSION REQUIREMENT.—
8 The Secretary may require that the issuer of the certifi-
9 cate described in subsection (c)(3)(E) submit such certifi-
10 cate to the Secretary at the time and in the manner re-
11 quired by the Secretary.
12 ‘‘(g) TREATMENT OF CERTAIN POSSESSIONS.—
13 ‘‘(1) PAYMENTS TO POSSESSIONS WITH MIRROR
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1 to the aggregate benefits (if any) that would have
2 been provided to residents of such possession by rea-
3 son of the provisions of this section if a mirror code
4 tax system had been in effect in such possession.
5 The preceding sentence shall not apply unless the re-
6 spective possession has a plan which has been ap-
7 proved by the Secretary under which such possession
8 will promptly distribute such payments to its resi-
9 dents.
10 ‘‘(3) MIRROR CODE TAX SYSTEM; TREATMENT
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1 (B) in subparagraph (T), by striking the
2 period at the end and inserting ‘‘, and’’, and
3 (C) by adding at the end the following:
4 ‘‘(U) an omission of a correct vehicle iden-
5 tification number required under section
6 36D(d) (relating to credit for previously-owned
7 qualified plug-in electric drive motor vehicles) to
8 be included on a return.’’.
9 (3) Paragraph (2) of section 1324(b) of title
10 31, United States Code, as amended by the pre-
11 ceding provisions of this Act, is amended by insert-
12 ing ‘‘36D,’’ after ‘‘36C,’’.
13 (c) CLERICAL AMENDMENT.—The table of sections
14 for subpart C of part IV of subchapter A of chapter 1,
15 as amended by the preceding provisions of this Act, is
16 amended by inserting after the item relating to section
17 36C the following new item:
‘‘Sec. 36D. Previously-owned qualified plug-in electric drive motor vehicles.’’.
22 CLES.
307
1 ‘‘SEC. 45Y. CREDIT FOR QUALIFIED COMMERCIAL ELEC-
2 TRIC VEHICLES.
308
1 ‘‘(A) has a capacity of not less than 30 kil-
2 owatt hours,
3 ‘‘(B) is capable of being recharged from an
4 external source of electricity,
5 ‘‘(C) is not powered or charged by an in-
6 ternal combustion engine, or
7 ‘‘(D) is a new qualified fuel cell motor ve-
8 hicle described in subparagraphs (A) and (B) of
9 section 30B(b)(3), and
10 ‘‘(4) is of a character subject to the allowance
11 for depreciation.
12 ‘‘(d) SPECIAL RULES.—
13 ‘‘(1) IN GENERAL.—Rules similar to the rules
14 under subsection (f) of section 36C shall apply for
15 purposes of this section.
16 ‘‘(2) PROPERTY USED BY TAX-EXEMPT ENTI-
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1 ‘‘(e) VIN NUMBER REQUIREMENT.—No credit shall
2 be determined under subsection (a) with respect to any
3 vehicle unless the taxpayer includes the vehicle identifica-
4 tion number of such vehicle on the return of tax for the
5 taxable year.
6 ‘‘(f) TERMINATION.—No credit shall be determined
7 under this section with respect to any vehicle acquired
8 after December 31, 2031.’’.
9 (b) CONFORMING AMENDMENTS.—
10 (1) Section 38(b) is amended by striking para-
11 graph (30) and inserting the following:
12 ‘‘(30) the qualified commercial electric vehicle
13 credit determined under section 45Y,’’.
14 (2) Section 6213(g)(2), as amended by the pre-
15 ceding provisions of this Act, is amended—
16 (A) in subparagraph (T), by striking
17 ‘‘and’’ at the end,
18 (B) in subparagraph (U), by striking the
19 period at the end and inserting ‘‘, and’’, and
20 (C) by adding at the end the following:
21 ‘‘(V) an omission of a correct vehicle iden-
22 tification number required under section 45Y(e)
23 (relating to commercial electric vehicle credit)
24 to be included on a return.’’.
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1 (3) The table of sections for subpart D of part
2 IV of subchapter A of chapter 1 is amended by add-
3 ing at the end the following new item:
‘‘Sec. 45Y. Qualified commercial electric vehicle credit.’’.
22 CREDIT.
311
1 (b) ADDITIONAL CREDIT FOR CERTAIN ELECTRIC
2 CHARGING PROPERTY.—
3 (1) IN GENERAL.—Section 30C(a) is amend-
4 ed—
5 (A) by striking ‘‘equal to 30 percent’’ and
6 inserting the following: ‘‘equal to the sum of—
7 ‘‘(1) 30 percent’’,
8 (B) by striking the period at the end and
9 inserting ‘‘, plus’’, and
10 (C) by adding at the end the following new
11 paragraph:
12 ‘‘(2) 20 percent of so much of such cost as ex-
13 ceeds the limitation under subsection (b)(1) that
14 does not exceed the amount of cost attributable to
15 qualified alternative vehicle refueling property (de-
16 termined without regard to subsection (c)(1) and as
17 if only electricity, and fuel at least 85 percent of the
18 volume of which consists of hydrogen, were treated
19 as clean-burning fuels for purposes of section
20 179A(d)) which—
21 ‘‘(A) is intended for general public use
22 with no associated fee or payment arrangement,
23 ‘‘(B) is intended for general public use and
24 accepts payment via a credit card reader, in-
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1 cluding a credit card reader that uses
2 contactless technology, or
3 ‘‘(C) is intended for use exclusively by
4 fleets of commercial or governmental vehicles.’’.
5 (2) CONFORMING AMENDMENT.—Section
6 30C(b) is amended—
7 (A) by striking ‘‘The credit allowed under
8 subsection (a)’’ and inserting ‘‘The amount of
9 cost taken into account under subsection
10 (a)(1)’’,
11 (B) by striking ‘‘$30,000’’ and inserting
12 ‘‘$100,000’’, and
13 (C) by striking ‘‘$1,000’’ and inserting
14 ‘‘$3,333.33’’.
15 (3) BIDIRECTIONAL CHARGING EQUIPMENT IN-
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1 ‘‘(2) BIDIRECTIONAL CHARGING EQUIPMENT.—
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1 ‘‘(A) meets the requirements of subsection
2 (a)(2), and
3 ‘‘(B) is of a character subject to deprecia-
4 tion.
5 ‘‘(2) MOTOR VEHICLE.—A motor vehicle is de-
6 scribed in this paragraph if the motor vehicle—
7 ‘‘(A) is manufactured primarily for use on
8 public streets, roads, or highways (not including
9 a vehicle operated exclusively on a rail or rails),
10 and
11 ‘‘(B) has at least 2, but not more than 3,
12 wheels.’’.
13 (d) WAGE AND APPRENTICESHIP REQUIREMENTS.—
14 Section 30C, as amended by this section, is further
15 amended by redesignating subsections (g) and (h) as sub-
16 sections (h) and (i) and by inserting after subsection (f)
17 the following new subsection:
18 ‘‘(g) WAGE AND APPRENTICESHIP REQUIRE-
19 MENTS.—
21 CREDIT AMOUNT.—
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1 termined under subsection (a) shall be 20 per-
2 cent of such amount (determined without re-
3 gard to this sentence).
4 ‘‘(B) INCREASED CREDIT FOR CERTAIN
7 QUIREMENTS.—
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1 property are that the taxpayer shall ensure that
2 any laborers and mechanics employed by con-
3 tractors and subcontractors in the construction
4 of such property shall be paid wages at rates
5 not less than the prevailing rates for construc-
6 tion, alteration, or repair of a similar character
7 in the locality as most recently determined by
8 the Secretary of Labor, in accordance with sub-
9 chapter IV of chapter 31 of title 40, United
10 States Code.
11 ‘‘(B) CORRECTION AND PENALTY RELATED
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1 tors engaged in the performance of con-
2 struction on any project shall, subject to
3 subparagraph (B), ensure that not less
4 than the applicable percentage of the total
5 labor hours of such work be performed by
6 qualified apprentices.
7 ‘‘(ii) APPLICABLE PERCENTAGE.—For
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1 ments for apprentice-to-journeyworker ratios of
2 the Department of Labor or the applicable
3 State apprenticeship agency.
4 ‘‘(C) PARTICIPATION.—Each contractor
5 and subcontractor who employs 4 or more indi-
6 viduals to perform construction, alteration, or
7 repair work on an applicable project shall em-
8 ploy 1 or more qualified apprentices to perform
9 such work.
10 ‘‘(D) EXCEPTION.—
11 ‘‘(i) IN GENERAL.—Notwithstanding
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1 applicable project if such taxpayer has re-
2 quested qualified apprentices from a reg-
3 istered apprenticeship program, as defined
4 in section 3131(e)(3)(B), and such request
5 has been denied, provided that such denial
6 is not the result of a refusal by the con-
7 tractors or subcontractors engaged in the
8 performance of construction, alteration, or
9 repair work on such applicable project to
10 comply with the established standards and
11 requirements of such apprenticeship pro-
12 gram.
13 ‘‘(E) DEFINITIONS.—For purposes of this
14 paragraph—
15 ‘‘(i) LABOR HOURS.—The term ‘labor
16 hours’ has the meaning given such term in
17 section 45(b)(9)(E)(i).
18 ‘‘(ii) QUALIFIED APPRENTICE.—The
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1 (e) EFFECTIVE DATE.—The amendment made by
2 this section shall apply to property placed in service after
3 December 31, 2021.
4 SEC. 136406. REINSTATEMENT AND EXPANSION OF EM-
6 BICYCLE COMMUTING.
14 COMMUTING BENEFITS.—
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1 (including a bikeshare), improvement,
2 repair, or storage of qualified com-
3 muting property, or
4 ‘‘(II) the provision by the em-
5 ployer to the employee during such
6 calendar year of the use (including a
7 bikeshare), improvement, repair, or
8 storage of qualified commuting prop-
9 erty,
10 if the employee regularly uses such quali-
11 fied commuting property for travel between
12 the employee’s residence, place of employ-
13 ment, or a mass transit facility that con-
14 nects the employee to their residence or
15 place of employment.
16 ‘‘(ii) QUALIFIED COMMUTING PROP-
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1 ‘‘(III) any 2- or 3-wheel scooter
2 (other than a scooter equipped with
3 any motor), and
4 ‘‘(IV) any 2- or 3-wheel scooter
5 propelled by an electric motor if such
6 motor does not provide assistance if
7 the speed of such scooter exceeds 20
8 miler per hour (or if the speed of such
9 scooter is not capable of exceeding 20
10 miles per hour) and the weight of
11 such scooter does not exceed 100
12 pounds.
13 ‘‘(iii) BIKESHARE.—The term
14 ‘bikeshare’ means a rental operation at
15 which qualified commuting property is
16 made available to customers to pick up and
17 drop off for point-to-point use within a de-
18 fined geographic area.’’.
19 (c) LIMITATION ON EXCLUSION.—Section
20 132(f)(2)(C) is amended to read as follows:
21 ‘‘(C) 30 percent of the dollar amount in ef-
22 fect under subparagraph (B) per month in the
23 case of any qualified bicycle commuting ben-
24 efit.’’.
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1 (d) NO CONSTRUCTIVE RECEIPT.—Section 132(f)(4)
2 is amended by striking ‘‘(other than a qualified bicycle
3 commuting reimbursement)’’.
4 (e) CONFORMING AMENDMENT.—Section
5 132(f)(1)(D) is amended by striking ‘‘reimbursement’’
6 and inserting ‘‘benefit’’.
7 (f) EFFECTIVE DATE.—The amendments made by
8 this section shall apply to taxable years beginning after
9 December 31, 2021.
10 SEC. 136407. CREDIT FOR CERTAIN NEW ELECTRIC BICY-
11 CLES.
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1 into account under subsection (a) as the cost of any
2 qualified electric bicycle shall not exceed $5,000.
3 ‘‘(2) BICYCLE LIMITATION WITH RESPECT TO
4 CREDIT.—
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1 ‘‘(i) $150,000 in the case of a joint
2 return or a surviving spouse (as defined in
3 section 2(a)),
4 ‘‘(ii) $112,500 in the case of a head
5 of household (as defined in section 2(b)),
6 and
7 ‘‘(iii) $75,000 in the case of a tax-
8 payer not described in clause (i) or (ii).
9 ‘‘(C) MODIFIED ADJUSTED GROSS IN-
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1 ‘‘(c) QUALIFIED ELECTRIC BICYCLE.—For purposes
2 of this section, the term ‘qualified electric bicycle’ means
3 a bicycle—
4 ‘‘(1) the original use of which commences with
5 the taxpayer,
6 ‘‘(2) which is acquired for use by the taxpayer
7 and not for resale,
8 ‘‘(3) which is made by a qualified manufacturer
9 and is labeled with the qualified vehicle identification
10 number assigned to such bicycle by such manufac-
11 turer,
12 ‘‘(4) with respect to which the aggregate
13 amount paid for such acquisition does not exceed
14 $8,000, and
15 ‘‘(5) which is equipped with—
16 ‘‘(A) fully operable pedals,
17 ‘‘(B) a saddle or seat for the rider, and
18 ‘‘(C) an electric motor of less than 750
19 watts which is designed to provided assistance
20 in propelling the bicycle and—
21 ‘‘(i) does not provide such assistance
22 if the bicycle is moving in excess of 20
23 miler per hour, or
24 ‘‘(ii) if such motor only provides such
25 assistance when the rider is pedaling, does
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1 not provide such assistance if the bicycle is
2 moving in excess of 28 miles per hour.
3 ‘‘(d) VIN NUMBER REQUIREMENT.—
4 ‘‘(1) IN GENERAL.—No credit shall be allowed
5 under subsection (a) with respect to any qualified
6 electric bicycle unless the taxpayer includes the
7 qualified vehicle identification number of such bicy-
8 cle on the return of tax for the taxable year.
9 ‘‘(2) QUALIFIED VEHICLE IDENTIFICATION
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1 phanumeric) is unique to such bicycle (by uti-
2 lizing numbers or letters which are unique to
3 such manufacturer or by such other method as
4 the Secretary may provide),
5 ‘‘(B) label such bicycle with such number
6 in such manner as the Secretary may provide,
7 and
8 ‘‘(C) make periodic written reports to the
9 Secretary (at such times and in such manner as
10 the Secretary may provide) of the vehicle identi-
11 fication numbers so assigned and including
12 such information as the Secretary may require
13 with respect to the qualified electric bicycle to
14 which such number was so assigned.
15 ‘‘(e) SPECIAL RULES.—
16 ‘‘(1) BASIS REDUCTION.—For purposes of this
17 subtitle, the basis of any property for which a credit
18 is allowable under subsection (a) shall be reduced by
19 the amount of such credit so allowed (determined
20 without regard to subsection (c)).
21 ‘‘(2) NO DOUBLE BENEFIT.—The amount of
22 any deduction or other credit allowable under this
23 chapter for a qualified electric bicycle for which a
24 credit is allowable under subsection (a) shall be re-
25 duced by the amount of credit allowed under such
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1 subsection for such vehicle (determined without re-
2 gard to subsection (c)).
3 ‘‘(3) PROPERTY USED OUTSIDE UNITED STATES
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1 provided by the government of the respective posses-
2 sion.
3 ‘‘(2) PAYMENTS TO OTHER POSSESSIONS.—The
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1 and by adding at the end the following new para-
2 graph:
3 ‘‘(41) the portion of the electric bicycles credit
4 to which section 36E(c)(1) applies.’’.
5 (2) Section 1016(a) is amended by striking
6 ‘‘and’’ at the end of paragraph (37), by striking the
7 period at the end of paragraph (38) and inserting ‘‘,
8 and’’, and by adding at the end the following new
9 paragraph:
10 ‘‘(39) to the extent provided in section
11 36E(f)(1).’’.
12 (3) Section 6211(b)(4)(A) of such Code is
13 amended by inserting ‘‘36E by reason of subsection
14 (c)(2) thereof,’’ before ‘‘32,’’.
15 (4) Section 6213(g)(2), as amended by the pre-
16 ceding provisions of this Act, is amended—
17 (A) in subparagraph (U), by striking
18 ‘‘and’’ at the end,
19 (B) in subparagraph (V), by striking the
20 period at the end and inserting ‘‘, and’’, and
21 (C) by adding at the end the following:
22 ‘‘(W) an omission of a correct vehicle iden-
23 tification number required under section 36E(e)
24 (relating to electric bicycles credit) to be in-
25 cluded on a return.’’.
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1 (5) Section 6501(m) is amended by inserting
2 ‘‘36E(f)(4),’’ after ‘‘35(g)(11),’’.
3 (6) Section 1324(b)(2) of title 31, United
4 States Code, is amended by inserting ‘‘36E,’’ after
5 ‘‘36B,’’.
6 (c) CLERICAL AMENDMENT.—The table of sections
7 for subpart B of part IV of subchapter A of chapter 1
8 is amended by adding at the end the following new item:
‘‘Sec. 36E. Electric bicycles.’’.
14 WORKFORCE
16 PROJECT CREDIT.
333
1 award certifications for qualified investments eligible
2 for credits under this section to qualifying advanced
3 energy project sponsors.
4 ‘‘(2) ANNUAL LIMITATION.—
17 MOTIVE COMMUNITIES.—
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1 ‘‘(II) AUTOMOTIVE COMMU-
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1 containing such information as the Secretary
2 may require.
3 ‘‘(B) TIME TO MEET CRITERIA FOR CER-
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1 ‘‘(4) SELECTION CRITERIA.—Selection criteria
2 similar to those in subsection (d)(3) shall apply, ex-
3 cept that in determining designations under this
4 subsection, the Secretary, after consultation with the
5 Secretary of Energy, shall—
6 ‘‘(A) in addition to the factors described in
7 subsection (d)(3)(B), take into consideration
8 which projects—
9 ‘‘(i) will provide the greatest net im-
10 pact in avoiding or reducing anthropogenic
11 emissions of greenhouse gases, as deter-
12 mined by the Secretary after consultation
13 with the Administrator of the Environ-
14 mental Protection Agency,
15 ‘‘(ii) will provide the greatest domestic
16 job creation (both direct and indirect) dur-
17 ing the credit period,
18 ‘‘(iii) will provide the greatest job cre-
19 ation within the vicinity of the project, par-
20 ticularly with respect to—
21 ‘‘(I) low-income communities (as
22 described in section 45D(e)), and
23 ‘‘(II) dislocated workers who
24 were previously employed in manufac-
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1 turing, coal power plants, or coal min-
2 ing, and
3 ‘‘(iv) will provide the greatest job cre-
4 ation in areas with a population that is at
5 risk of experiencing higher or more adverse
6 human health or environmental effects and
7 a significant portion of such population is
8 comprised of communities of color, low-in-
9 come communities, Tribal and Indigenous
10 communities, or individuals formerly em-
11 ployed in the fossil fuel industry, and
12 ‘‘(B) give the highest priority to projects
13 which—
14 ‘‘(i) manufacture (other than pri-
15 marily assembly of components) property
16 described in a subclause of subsection
17 (c)(1)(A)(i) (or components thereof), and
18 ‘‘(ii) have the greatest potential for
19 commercial deployment of new applica-
20 tions.
21 ‘‘(5) DISCLOSURE OF ALLOCATIONS.—The Sec-
22 retary shall, upon allocating a credit under this sub-
23 section, publicly disclose the identity of the appli-
24 cant, the amount of the credit with respect to such
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1 applicant, and the project location for which such
2 credit was allocated.
3 ‘‘(6) CREDIT CONDITIONED UPON WAGE AND
25 MENTS.—
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1 ‘‘(i) IN GENERAL.—In the case of any
2 taxpayer which fails to satisfy the require-
3 ment under subparagraph (A) with respect
4 to any project—
5 ‘‘(I) rules similar to the rules of
6 section 45(b)(8)(B) shall apply for
7 purposes of this paragraph, and
8 ‘‘(II) if the failure to satisfy the
9 requirement under subparagraph (A)
10 is not corrected pursuant to the rules
11 described in subclause (I), the certifi-
12 cation with respect to the re-equip-
13 ping, expansion, or establishment of
14 an industrial or manufacturing facility
15 shall no longer be valid.
16 ‘‘(8) APPRENTICESHIP REQUIREMENTS.—The
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1 percentage of the total labor hours of such
2 work be performed by qualified appren-
3 tices.
4 ‘‘(ii) APPLICABLE PERCENTAGE.—For
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1 ‘‘(C) PARTICIPATION.—Each contractor
2 and subcontractor who employs 4 or more indi-
3 viduals to perform construction, alteration, or
4 repair work on an applicable project shall em-
5 ploy 1 or more qualified apprentices to perform
6 such work.
7 ‘‘(D) EXCEPTION.—
8 ‘‘(i) IN GENERAL.—Notwithstanding
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1 in section 3131(e)(3)(B), and such request
2 has been denied, provided that such denial
3 is not the result of a refusal by the con-
4 tractors or subcontractors engaged in the
5 performance of construction, alteration, or
6 repair work on such applicable project to
7 comply with the established standards and
8 requirements of such apprenticeship pro-
9 gram.
10 ‘‘(E) DEFINITIONS.—For purposes of this
11 paragraph—
12 ‘‘(i) LABOR HOURS.—The term ‘labor
13 hours’ has the meaning given such term in
14 section 45(b)(9)(E)(i).
15 ‘‘(ii) QUALIFIED APPRENTICE.—The
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1 ergy storage system for use with electric or hybrid-
2 electric motor vehicles’’ and inserting ‘‘energy stor-
3 age systems and components’’.
4 (3) MODIFICATION OF QUALIFYING ELECTRIC
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1 serting after subclause (VI) the following new sub-
2 clause:
3 ‘‘(VII) property designed to be
4 used to produce qualified clean hydro-
5 gen (as defined in section 45X), or’’.
6 (7) RECYCLING OF ADVANCED ENERGY PROP-
19 INSULATION PROPERTY.
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1 ‘‘SEC. 45Z. LABOR COSTS OF INSTALLING MECHANICAL IN-
2 SULATION PROPERTY.
346
1 ‘‘(iii) meets the requirements of sec-
2 tion 434.403 of title 10, Code of Federal
3 Regulations (as in effect on the date of en-
4 actment of this section), and
5 ‘‘(B) which result in a reduction in energy
6 loss from the mechanical system which is great-
7 er than the expected reduction from the instal-
8 lation of insulation materials which meet the
9 minimum requirements of Reference Standard
10 90.1 (as defined in section 179D(c)(2)).
11 ‘‘(c) TERMINATION.—This section shall not apply to
12 mechanical insulation labor costs paid or incurred after
13 December 31, 2031.’’.
14 (b) CREDIT ALLOWED AS PART OF GENERAL BUSI-
15 NESS CREDIT.—Section 38(b), as amended by the pre-
16 ceding provisions of this Act, is further amended by strik-
17 ing ‘‘plus’’ at the end of paragraph (40), by striking the
18 period at the end of paragraph (41) and inserting ‘‘, plus’’,
19 and by adding at the end the following new paragraph:
20 ‘‘(42) the mechanical insulation labor costs
21 credit determined under section 45Z(a).’’.
22 (c) CONFORMING AMENDMENTS.—
23 (1) Section 280C is amended by adding at the
24 end the following new subsection:
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1 ‘‘(i) MECHANICAL INSULATION LABOR COSTS CRED-
2 IT.—
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1 (d) EFFECTIVE DATE.—The amendments made by
2 this section shall apply to amounts paid or incurred after
3 December 31, 2021, in taxable years ending after such
4 date.
5 PART 6—ENVIRONMENTAL JUSTICE
7 GRAM CREDIT.
13 GRAMS.
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1 tions that is designed to address, or improve data
2 about, qualified environmental stressors for the pri-
3 mary purpose of improving, or facilitating the im-
4 provement of, health and economic outcomes of indi-
5 viduals residing in low-income areas or areas that
6 experience, or are at risk of experiencing, multiple
7 exposures to qualified environmental stressors.
8 ‘‘(2) QUALIFIED ENVIRONMENTAL STRESSOR.—
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1 er Education Act of 1965) that is eligible to participate
2 in a program under title IV of such Act.
3 ‘‘(d) APPLICABLE PERCENTAGE.—For purposes of
4 this section, the term ‘applicable percentage’ means—
5 ‘‘(1) in the case of a program involving material
6 participation of faculty and students of an institu-
7 tion described in section 371(a) of the Higher Edu-
8 cation Act of 1965, 30 percent, and
9 ‘‘(2) in all other cases, 20 percent.
10 ‘‘(e) CREDIT ALLOCATION.—
11 ‘‘(1) ALLOCATION.—
12 ‘‘(A) IN GENERAL.—The Secretary shall
13 allocate credit dollar amounts under this section
14 to eligible educational institutions, for qualified
15 environmental justice programs, that—
16 ‘‘(i) submit applications at such time
17 and in such manner as the Secretary may
18 provide, and
19 ‘‘(ii) are selected by the Secretary
20 under subparagraph (B).
21 ‘‘(B) SELECTION CRITERIA.—The Sec-
22 retary, after consultation with the Secretary of
23 Energy, the Secretary of Education, the Sec-
24 retary of Health and Human Services, and the
25 Administrator of the Environmental Protection
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1 Agency, shall select applications on the basis of
2 the following criteria:
3 ‘‘(i) The extent of participation of fac-
4 ulty and students of an institution de-
5 scribed in section 371(a) of the Higher
6 Education Act of 1965.
7 ‘‘(ii) The extent of the expected effect
8 on the health or economic outcomes of in-
9 dividuals residing in areas within the
10 United States that are low-income areas or
11 areas that experience, or are at risk of ex-
12 periencing, multiple exposures to qualified
13 environmental stressors.
14 ‘‘(iii) The creation or significant ex-
15 pansion of qualified environmental justice
16 programs.
17 ‘‘(2) LIMITATIONS.—
18 ‘‘(A) IN GENERAL.—The amount of the
19 credit determined under this section for any
20 taxable year to any eligible educational institu-
21 tion for any qualified environmental justice pro-
22 gram shall not exceed the excess of—
23 ‘‘(i) the credit dollar amount allocated
24 to such institution for such program under
25 this subsection, over
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1 ‘‘(ii) the credits previously claimed by
2 such institution for such program under
3 this section.
4 ‘‘(B) FIVE-YEAR LIMITATION.—No
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1 ‘‘(f) REQUIREMENTS.—
2 ‘‘(1) IN GENERAL.—An eligible educational in-
3 stitution that has been allocated credit dollar
4 amounts under this section for a qualified environ-
5 mental justice project for a taxable year shall—
6 ‘‘(A) make publicly available the applica-
7 tion submitted to the Secretary under sub-
8 section (e) with respect to such project, and
9 ‘‘(B) submit an annual report to the Sec-
10 retary that describes the amounts paid or in-
11 curred for, and expected impact of, such
12 project.
13 ‘‘(2) FAILURE TO COMPLY.—In the case of an
14 eligible educations institution that has failed to com-
15 ply with the requirements of this subsection, the
16 credit dollar amount allocated to such institution
17 under this section is deemed to be $0.
18 ‘‘(g) PUBLIC DISCLOSURE.—The Secretary, upon
19 making an allocation of credit dollar amounts under this
20 section, shall publicly disclose—
21 ‘‘(1) the identity of the eligible educational in-
22 stitution receiving the allocation, and
23 ‘‘(2) the amount of such allocation.’’.
24 (b) CONFORMING AMENDMENTS.—
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1 (1) Section 6211(b)(4)(A), as amended by the
2 preceding provisions of this Act, is amended by in-
3 serting ‘‘36F,’’ after ‘‘36D,’’.
4 (2) Paragraph (2) of section 1324(b) of title
5 31, United States Code, as amended by the pre-
6 ceding provisions of this Act, is amended by insert-
7 ing ‘‘36F,’’ after ‘‘36D,’’.
8 (c) CLERICAL AMENDMENT.—The table of sections
9 for subpart C of part IV of subchapter A of chapter 1,
10 as amended by the preceding provisions of this Act, is
11 amended by inserting after the item relating to section
12 36E the following new item:
‘‘Sec. 36F. Qualified environmental justice programs.’’.
355
1 (2) ADJUSTMENT FOR INFLATION.—
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1 PART 8—APPROPRIATIONS
22 2021.
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1 (1) by striking ‘‘qualified’’ each place it appears
2 in clause (iv)(II) and inserting ‘‘qualifying’’, and
3 (2) by adding at the end the following new
4 clause:
5 ‘‘(v) EXCEPTION FOR FRAUD AND IN-
7 REGULATIONS.—
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1 respect to any individual taken into
2 account in determining the annual ad-
3 vance amount of such taxpayer if such
4 taxpayer entered into a plan or other
5 arrangement with, or expected, an-
6 other taxpayer to take such individual
7 into account in determining the credit
8 allowed under this section for the tax-
9 able year.’’.
10 (b) TREATMENT OF JOINT RETURNS.—Section 24(j)
11 is amended by adding at the end the following new para-
12 graph:
13 ‘‘(3) JOINT RETURNS.—Except as otherwise
14 provided by the Secretary, in the case of an advance
15 payment made under section 7527A with respect to
16 a joint return, half of such payment shall be treated
17 as having been made to each individual filing such
18 return.’’.
19 (c) ANNUAL ADVANCE AMOUNT.—Section 7527A(b)
20 is amended—
21 (1) in paragraph (1)—
22 (A) in subparagraph (A), by inserting ‘‘or
23 based on any other information known to the
24 Secretary’’ after ‘‘reference taxable year’’,
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1 (B) in subparagraph (C), by inserting ‘‘un-
2 less determined by the Secretary based on any
3 information known to the Secretary,’’ before
4 ‘‘the only children’’, and
5 (C) in subparagraph (D), by inserting ‘‘un-
6 less determined by the Secretary based on any
7 information known to the Secretary,’’ before
8 ‘‘the ages of’’, and
9 (2) in paragraph (3)(A)(ii), by striking ‘‘ pro-
10 vided by the taxpayer’’ and inserting ‘‘provided, or
11 known,’’.
12 (d) EFFECTIVE DATE.—The amendments made by
13 this section shall apply to taxable years beginning, and
14 payments made, after December 31, 2020.
15 SEC. 137102. EXTENSION AND MODIFICATION OF CHILD TAX
17 (a) EXTENSIONS.—
18 (1) EXTENSION OF CHILD TAX CREDIT.—Sec-
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1 (2) EXTENSION OF PROVISIONS RELATED TO
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1 (C) in subsection (f), by striking ‘‘Decem-
2 ber 31, 2021’’ and inserting ‘‘December 31,
3 2022’’.
4 (b) REPEAL OF SOCIAL SECURITY NUMBER RE-
5 QUIREMENT.—Section 24(h) is amended by striking para-
6 graph (7).
7 (c) APPLICATION OF INCOME PHASEOUT ON BASIS
8 OF INCOME FOR PRECEDING TAXABLE YEAR.—Section
9 24(i) is amended by adding at the end the following new
10 paragraph:
11 ‘‘(5) APPLICATION OF INCOME PHASEOUT ON
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1 ‘‘(A) IN GENERAL.—In the case of any
2 taxable year beginning after December 31,
3 2021, the $500 amount in subsection (h)(4)(A),
4 the $3,000 and $3,600 amounts in paragraph
5 (3) and subsection (j)(2)(B)(iv), and the dollar
6 amounts in paragraph (4)(B), shall each be in-
7 creased by an amount equal to—
8 ‘‘(i) such dollar amount, multiplied by
9 ‘‘(ii) the percentage (if any) by
10 which—
11 ‘‘(I) the CPI (as defined in sec-
12 tion 1(f)(4)) for the calendar year
13 preceding the calendar year in which
14 such taxable year begins, exceeds
15 ‘‘(II) the CPI (as so defined) for
16 calendar year 2020.
17 ‘‘(B) ROUNDING.—
18 ‘‘(i) $500 AMOUNT.—In the case of
19 the $500 amount in subsection (h)(4)(A),
20 any increase under subparagraph (A)
21 which is not a multiple of $10 shall be
22 rounded to the nearest multiple of $10.
23 ‘‘(ii) $3,000 AND $3,600 AMOUNTS.—
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1 (j)(2)(B)(iv), any increase under subpara-
2 graph (A) which is not a multiple of $100
3 shall be rounded to the nearest multiple of
4 $100.
5 ‘‘(iii) APPLICABLE THRESHOLD
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1 ‘‘(I) taken into account in deter-
2 mining the annual advance amount
3 with respect to such taxpayer under
4 section 7527A with respect to months
5 beginning in such taxable year, and
6 ‘‘(II) not taken into account in
7 determining the credit allowed to such
8 taxpayer under this section for such
9 taxable year.’’.
10 (f) EFFECTIVE DATE.—The amendments made by
11 this section shall apply to taxable years beginning, and
12 payments made, after December 31, 2021.
13 SEC. 137103. ESTABLISHMENT OF MONTHLY CHILD TAX
15 2025.
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365
1 ‘‘(b) MONTHLY SPECIFIED CHILD ALLOWANCE.—
2 ‘‘(1) IN GENERAL.—For purposes of this sec-
3 tion, the term ‘monthly specified child allowance’
4 means, with respect to any taxpayer for any cal-
5 endar month, the sum of—
6 ‘‘(A) $300 with respect to each specified
7 child of such taxpayer who will not, as of the
8 close of the taxable year which includes such
9 month, have attained age 6, plus
10 ‘‘(B) $250 with respect to each specified
11 child of such taxpayer who will, as of the close
12 of the taxable year which includes such month,
13 have attained age 6.
14 ‘‘(2) LIMITATIONS BASED ON MODIFIED AD-
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1 ‘‘(B) LIMITATION ON INITIAL REDUC-
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1 come for the applicable taxable year over the
2 secondary threshold amount.
3 ‘‘(D) DEFINITIONS RELATED TO LIMITA-
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1 ‘‘(II) $300,000, in the case of a
2 head of household (as defined in sec-
3 tion 2(b)), and
4 ‘‘(III) $200,000, in any other
5 case.
6 ‘‘(iv) APPLICABLE TAXABLE YEAR.—
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1 ‘‘(1) IN GENERAL.—The term ‘specified child’
2 means, with respect to any taxpayer for any cal-
3 endar month, an individual—
4 ‘‘(A) who has the same principal place of
5 abode as the taxpayer for more than one-half of
6 such month,
7 ‘‘(B) who is younger than the taxpayer and
8 will not, as of the close of the calendar year
9 which includes such month, have attained age
10 18,
11 ‘‘(C) who receives care from the taxpayer
12 during such month that is not compensated,
13 ‘‘(D) who is not the spouse of the taxpayer
14 at any time during such month,
15 ‘‘(E) who is not a taxpayer with respect to
16 whom any individual is a specified child for
17 such month, and
18 ‘‘(F) who either—
19 ‘‘(i) is a citizen, national, or resident
20 of the United States, or
21 ‘‘(ii) if the taxpayer is a citizen or na-
22 tional of the United States, such individual
23 is described in section 152(f)(1)(B) with
24 respect to such taxpayer.
25 ‘‘(2) CARE FROM THE TAXPAYER.—
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1 ‘‘(A) IN GENERAL.—Except as otherwise
2 provided by the Secretary, whether any indi-
3 vidual receives care from the taxpayer (within
4 the meaning of paragraph (1)(C)) shall be de-
5 termined on the basis of facts and cir-
6 cumstances with respect to the following fac-
7 tors:
8 ‘‘(i) The supervision provided by the
9 taxpayer regarding the daily activities and
10 needs of the individual.
11 ‘‘(ii) The maintenance by the taxpayer
12 of a secure environment at which the indi-
13 vidual resides.
14 ‘‘(iii) The provision or arrangement by
15 the taxpayer of, and transportation by the
16 taxpayer to, medical care at regular inter-
17 vals and as required for the individual.
18 ‘‘(iv) The involvement by the taxpayer
19 in, and financial and other support by the
20 taxpayer for, educational or similar activi-
21 ties of the individual.
22 ‘‘(v) Any other factor that the Sec-
23 retary determines to be appropriate to de-
24 termine whether the individual receives
25 care from the taxpayer.
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1 ‘‘(B) DETERMINATION OF WHETHER CARE
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1 the highest adjusted gross income for the
2 taxable year which includes such month, or
3 ‘‘(iii) if the individual is neither a
4 specified child of any parent of the indi-
5 vidual nor a specified child of any specified
6 relative of the individual (in both cases de-
7 termined without regard to this para-
8 graph), the taxpayer with the highest ad-
9 justed gross income for the taxable year
10 which includes such month.
11 ‘‘(B) TIE-BREAKER AMONG PARENTS.—If
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1 ‘‘(C) SPECIFIED RELATIVE.—For purposes
2 of this paragraph, the term ‘specified relative’
3 means an individual who is—
4 ‘‘(i) an ancestor of a parent of the
5 specified child,
6 ‘‘(ii) a brother or sister of a parent of
7 the specified child, or
8 ‘‘(iii) a brother, sister, stepbrother, or
9 stepsister of the specified child.
10 ‘‘(D) CERTAIN PARENTS OR SPECIFIED
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1 justed gross income of any parent of the
2 individual for any taxable year which in-
3 cludes such month (determined without re-
4 gard to any parent with respect to whom
5 such individual is not a specified child, de-
6 termined without regard to subparagraphs
7 (A) and (B) and after application of this
8 subparagraph), and
9 ‘‘(iii) in the case of a specified relative
10 of such individual, the adjusted gross in-
11 come of the taxpayer (with respect to
12 whom such individual would be treated as
13 a specified child after application of this
14 subparagraph) for the taxable year which
15 includes such month is higher than the
16 highest adjusted gross income of any par-
17 ent and any specified relative of the indi-
18 vidual for any taxable year which includes
19 such month (determined without regard to
20 any parent and any specified relative with
21 respect to whom such individual is not a
22 specified child, determined without regard
23 to subparagraphs (A) and (B) and after
24 application of this subparagraph).
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1 ‘‘(E) TREATMENT OF JOINT RETURNS.—
11 AND DEATH.—
12 ‘‘(A) BIRTH.—
13 ‘‘(i) IN GENERAL.—In the case of the
14 birth of an individual during any calendar
15 year, such individual shall be treated as a
16 specified child of the relevant taxpayer for
17 each calendar month in such calendar year
18 which precedes the calendar month re-
19 ferred to in clause (ii).
20 ‘‘(ii) RELEVANT TAXPAYER.—For
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1 fied child with respect to any taxpayer (de-
2 termined without regard to this subpara-
3 graph).
4 ‘‘(B) DEATH.—
5 ‘‘(i) IN GENERAL.—In the case of the
6 death of an individual during any calendar
7 year, such individual shall be treated as a
8 specified child of the relevant taxpayer for
9 each calendar month in such calendar year
10 which follows the calendar month referred
11 to in clause (ii).
12 ‘‘(ii) RELEVANT TAXPAYER.—For
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1 ‘‘(ii) not be treated as a day at any
2 other location.
3 ‘‘(B) TEMPORARY ABSENCE.—For pur-
4 poses of subparagraph (A), an absence shall be
5 treated as temporary if—
6 ‘‘(i) the individual would have resided
7 at the place of abode but for the absence,
8 and
9 ‘‘(ii) under the facts and cir-
10 cumstances, it is reasonable to assume that
11 the individual will return to reside at the
12 place of abode.
13 ‘‘(6) SPECIAL RULE FOR DIVORCED PARENTS,
17 PRESUMPTIVE ELIGIBILITY.—
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1 ‘‘(ii) such individual shall not be
2 treated as the specified child of any other
3 taxpayer with respect to whom a period of
4 presumptive eligibility has not been estab-
5 lished for any such month.
6 ‘‘(B) ABILITY OF CREDIT CLAIMANTS TO
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1 ‘‘(e) IDENTIFICATION REQUIREMENTS.—Rules simi-
2 lar to the rules of section 24(e) shall apply for purposes
3 of this section.
4 ‘‘(f) RESTRICTIONS ON TAXPAYERS WHO IMPROP-
5 ERLY CLAIMED CREDIT OR IMPROPERLY RECEIVED
6 MONTHLY ADVANCE CHILD PAYMENT.—
7 ‘‘(1) TAXPAYERS MAKING PRIOR FRAUDULENT
8 OR RECKLESS CLAIMS.—
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1 which there was a final determination that
2 the taxpayer’s claim of credit under this
3 section or section 24 (or payment under
4 section 7527A or 7527B) was due to reck-
5 less or intentional disregard of rules and
6 regulations (but not due to fraud), and
7 ‘‘(iii) in addition to any period deter-
8 mined under clause (i) or (ii) (as the case
9 may be), the period beginning on the date
10 of the final determination described in
11 such clause and ending with the beginning
12 of the period described in such clause.
13 ‘‘(2) TAXPAYERS MAKING IMPROPER PRIOR
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1 the Secretary shall coordinate with each possession
2 of the United States to prevent the avoidance of the
3 application of this subsection.
4 ‘‘(g) RECONCILIATION OF CREDIT AND MONTHLY
5 ADVANCE CHILD PAYMENTS.—
6 ‘‘(1) IN GENERAL.—The amount otherwise de-
7 termined under subsection (a) with respect to any
8 taxpayer for any taxable year shall be reduced (but
9 not below zero) by the aggregate amount of pay-
10 ments made under section 7527B to such taxpayer
11 for one or more calendar months in such taxable
12 year. Any failure to so reduce the credit shall be
13 treated as arising out of a mathematical or clerical
14 error and assessed according to section 6213(b)(1).
15 ‘‘(2) RECAPTURE OF EXCESS ADVANCE PAY-
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1 ‘‘(B) the amount determined under sub-
2 section (a) with respect to the taxpayer for such
3 taxable year (without regard to paragraph (1)
4 of this subsection).
5 ‘‘(3) TAXPAYERS SUBJECT TO RECAPTURE.—
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1 ‘‘(ii) the increase determined under
2 paragraph (2) by reason of this subpara-
3 graph shall not exceed the excess of—
4 ‘‘(I) the amount described in
5 paragraph (2)(A), over
6 ‘‘(II) the amount which would be
7 so described if the payments described
8 therein had been determined on the
9 basis of the taxpayer’s modified ad-
10 justed gross income for the applicable
11 taxable year (as defined in subsection
12 (b)).
13 A rule similar to the rule of the preceding
14 sentence shall apply if the amount de-
15 scribed in paragraph (2)(A) with respect to
16 the taxpayer for the taxable year was de-
17 termined on the basis of a filing status of
18 the taxpayer which differs from the tax-
19 payer’s filing status for the applicable tax-
20 able year (as so defined).
21 ‘‘(C) PAYMENTS MADE OUTSIDE OF PE-
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1 was not part of a period of presumptive eligi-
2 bility established under section 7527B(c) for
3 such child with respect to such taxpayer—
4 ‘‘(i) such taxpayer shall be treated as
5 described in this paragraph, and
6 ‘‘(ii) the increase determined under
7 paragraph (2) by reason of this subpara-
8 graph shall not exceed the portion of such
9 payment so made.
10 ‘‘(D) CERTAIN PAYMENTS MADE AFTER
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1 this paragraph which apply with respect to tax-
2 payers who are described in section
3 7527B(b)(4) with respect to the reference
4 month but are not so described with respect to
5 one or more months during the taxable year for
6 which advance payments under section 7527B
7 are made.
8 ‘‘(F) OTHER CIRCUMSTANCES TO PREVENT
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1 ‘‘(1) MONTHLY SPECIFIED CHILD ALLOW-
2 ANCE.—
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1 ‘‘(i) such dollar amount, multiplied by
2 ‘‘(ii) the percentage (if any) by
3 which—
4 ‘‘(I) the CPI (as defined in sec-
5 tion 1(f)(4)) for the calendar year
6 preceding the calendar year in which
7 such taxable year begins, exceeds
8 ‘‘(II) the CPI (as so defined) for
9 calendar year 2020.
10 ‘‘(B) ROUNDING.—Any increase under
11 subparagraph (A) which is not a multiple of
12 $5,000 shall be rounded to the nearest multiple
13 of $5,000.
14 ‘‘(i) APPLICATION OF CREDIT IN POSSESSIONS.—
15 ‘‘(1) MIRROR CODE POSSESSIONS.—
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1 ‘‘(B) COORDINATION WITH CREDIT AL-
21 RICO.—
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1 ‘‘(B) For application of advance payment
2 to residents of Puerto Rico, see section
3 7527B(b)(4).
4 ‘‘(3) AMERICAN SAMOA.—
25 TAXES.—
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1 ‘‘(i) IN GENERAL.—In the case of a
2 taxable year with respect to which a plan
3 is approved under subparagraph (B), this
4 section (other than this subsection) shall
5 not apply to any individual eligible for a
6 distribution under such plan.
7 ‘‘(ii) APPLICATION OF SECTION IN
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1 ‘‘(1) for determining whether an individual re-
2 ceives care from a taxpayer for purposes of sub-
3 section (c)(1), and
4 ‘‘(2) to coordinate or modify the application of
5 this section and section 24, 7527A, and 7527B in
6 the case of any taxpayer—
7 ‘‘(A) whose taxable year is other than a
8 calendar year,
9 ‘‘(B) whose filing status for a taxable year
10 is different from the status used for deter-
11 mining one or more monthly payments under
12 section 7527B during such taxable year, or
13 ‘‘(C) whose principal place of abode for
14 any month is different from the principal place
15 of abode used for determining the monthly pay-
16 ment under section 7527B for such month.
17 ‘‘(k) TERMINATION.—This section shall not apply to
18 taxable years beginning after December 31, 2025.
19 ‘‘SEC. 24B. CREDIT FOR CERTAIN OTHER DEPENDENTS.
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1 ‘‘(1) IN GENERAL.—The amount of the credit
2 allowable under subsection (a) shall be reduced (but
3 not below zero) by $50 for each $1,000 (or fraction
4 thereof) by which the taxpayer’s modified adjusted
5 gross income exceeds the threshold amount.
6 ‘‘(2) THRESHOLD AMOUNT.—For purposes of
7 this subsection, the term ‘threshold amount’
8 means—
9 ‘‘(A) $400,000, in the case of a joint re-
10 turn or surviving spouse (as defined in section
11 2(a)),
12 ‘‘(B) $300,000, in the case of a head of
13 household (as defined in section 2(b)), and
14 ‘‘(C) $200,000, in any other case.
15 ‘‘(3) MODIFIED ADJUSTED GROSS INCOME.—
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1 ‘‘(1) is a specified child of the taxpayer, or any
2 other taxpayer, for any month during such taxable
3 year, or
4 ‘‘(2) would not be a dependent if subparagraph
5 (A) of section 152(b)(3) were applied without regard
6 to all that follows ‘resident of the United States’.
7 ‘‘(d) IDENTIFICATION REQUIREMENTS.—Rules simi-
8 lar to the rules of section 24(e) shall apply for purposes
9 of this section.
10 ‘‘(e) TAXABLE YEAR MUST BE FULL TAXABLE
11 YEAR.—Except in the case of a taxable year closed by rea-
12 son of the death of the taxpayer, no credit shall be allow-
13 able under this section in the case of a taxable year cov-
14 ering a period of less than 12 months.
15 ‘‘(f) INFLATION ADJUSTMENT.—
16 ‘‘(1) IN GENERAL.—In the case of any taxable
17 year beginning after December 31, 2022, the $500
18 amount in subsection (a) shall be increased by an
19 amount equal to—
20 ‘‘(A) such dollar amount, multiplied by
21 ‘‘(B) the percentage (if any) by which—
22 ‘‘(i) the CPI (as defined in section
23 1(f)(4)) for the calendar year preceding
24 the calendar year in which such taxable
25 year begins, exceeds
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1 ‘‘(ii) the CPI (as so defined) for cal-
2 endar year 2020.
3 ‘‘(2) ROUNDING.—If the increase determined
4 under paragraph (1) is not a multiple of $10, such
5 increase shall be rounded to the nearest multiple of
6 $10.
7 ‘‘(g) REGULATIONS.—The Secretary shall issue such
8 regulations or other guidance as the Secretary determines
9 necessary or appropriate to carry out the purposes of this
10 section.
11 ‘‘(h) TERMINATION.—This section shall not apply to
12 taxable years beginning after December 31, 2025.’’.
13 (b) MONTHLY PAYMENT OF CHILD TAX CREDIT.—
14 Chapter 77 is amended by inserting after section 7527A
15 the following new section:
16 ‘‘SEC. 7527B. MONTHLY PAYMENTS OF CHILD TAX CREDIT.
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1 month, the amount (if any) which is estimated by the Sec-
2 retary as being equal to the monthly specified child allow-
3 ance which would be determined under section 24A(b)
4 with respect to such taxpayer for such calendar month if—
5 ‘‘(1) unless determined by the Secretary based
6 on any information known to the Secretary, the only
7 specified children of such taxpayer for such calendar
8 month are the specified children of such taxpayer for
9 the reference month,
10 ‘‘(2) unless determined by the Secretary based
11 on any information known to the Secretary, the ages
12 of such children (and the status of such children as
13 specified children) are determined for such calendar
14 month by taking into account the passage of time
15 since such reference month,
16 ‘‘(3) the limitations of section 24A(b)(2) were
17 applied with respect to the reference taxable year
18 rather than with respect to the applicable taxable
19 year, and
20 ‘‘(4) unless determined by the Secretary based
21 on any information known to the Secretary, no
22 monthly specified child allowance were determined
23 with respect to such taxpayer for such calendar
24 month unless the taxpayer (in the case of a joint re-
25 turn, either spouse) has a principal place of abode
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1 (determined as provided in section 32) in the United
2 States or Puerto Rico for more than one-half of the
3 reference month.
4 ‘‘(c) PRESUMPTIVE ELIGIBILITY.—
5 ‘‘(1) IN GENERAL.—An individual shall be
6 treated as a specified child of a taxpayer for pur-
7 poses of determining any monthly advance child pay-
8 ment under this section only if such month is part
9 of the period of presumptive eligibility determined by
10 the Secretary under this subsection with respect to
11 such specified child and such taxpayer (determined
12 by treating the month described in subclause (I) of
13 paragraph (2)(A)(ii) as being the first month begin-
14 ning after the determination described in such sub-
15 clause).
16 ‘‘(2) PERIOD OF PRESUMPTIVE ELIGIBILITY.—
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1 ‘‘(I) the beginning of the month
2 described in clause (i) if the Secretary
3 determines that the taxpayer com-
4 mitted fraud or intentionally dis-
5 regarded rules or regulations in estab-
6 lishing or maintaining presumptive
7 eligibility,
8 ‘‘(II) in the case of any notifica-
9 tion from the Secretary that the pe-
10 riod of presumptive eligibility has
11 been terminated or suspended by rea-
12 son of any question regarding eligi-
13 bility of the taxpayer for monthly ad-
14 vance child payments with respect to
15 such child, the month specified in
16 such notice as the month on which
17 such termination or suspension be-
18 gins, and
19 ‘‘(III) the month following any
20 failure of the taxpayer to make the re-
21 quired annual renewal of presumptive
22 eligibility by such date as the Sec-
23 retary may provide.
24 ‘‘(B) ESTABLISHING PRESUMPTIVE ELIGI-
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1 eligibility with respect to any specified child for
2 any month at such time and in such manner as
3 the Secretary may provide. Except as otherwise
4 provided by the Secretary, in order to establish
5 a period of presumptive eligibility the taxpayer
6 must express a reasonable expectation and in-
7 tent that the taxpayer will continue to be eligi-
8 ble with respect to such specified child for at
9 least the two months following the month for
10 which presumptive eligibility is to be estab-
11 lished.
12 ‘‘(C) METHOD OF ESTABLISHING PRE-
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1 period to which paragraph (1) or (2) of sub-
2 section (g) applies.
3 ‘‘(E) AUTOMATIC ELIGIBILITY FOR BIRTH
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1 child is treated as automatically estab-
2 lishing presumptive eligibility with respect
3 to such child, and
4 ‘‘(ii) the period for which such auto-
5 matic presumptive eligibility is determined
6 (including any additional circumstances
7 under which such period will terminate).
8 ‘‘(G) COORDINATION WITH PRESUMP-
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1 ‘‘(1) REFERENCE MONTH.—The term ‘reference
2 month’ means, with respect to any taxpayer for any
3 calendar month, the most recent of—
4 ‘‘(A) in the case of a taxpayer who filed a
5 return of tax for the last taxable year ending
6 before such calendar month, the last month of
7 such taxable year,
8 ‘‘(B) in the case of a taxpayer who filed a
9 return of tax for the taxable year preceding the
10 taxable year described in subparagraph (A), the
11 last month of such preceding taxable year, and
12 ‘‘(C) in the case of a taxpayer who pro-
13 vides, through a specified alternative mecha-
14 nism, information which is sufficient to esti-
15 mate the taxpayer’s monthly advance child pay-
16 ment for such month, such month.
17 ‘‘(2) REFERENCE TAXABLE YEAR.—The term
18 ‘reference taxable year’ means, with respect to any
19 taxpayer for any calendar month, the most recent
20 of—
21 ‘‘(A) the taxable year described in subpara-
22 graph (A) or (B) of paragraph (1), or
23 ‘‘(B) in the case of a taxpayer who pro-
24 vides, through a specified alternative mecha-
25 nism, information which is sufficient to esti-
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1 mate the taxpayer’s modified adjusted gross in-
2 come for the taxable year which includes such
3 month, such taxable year.
4 ‘‘(3) AVAILABILITY OF INFORMATION.—Any
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1 mation known to the Secretary which the Sec-
2 retary determines is reasonably reliable, and
3 ‘‘(B) if the taxpayer is not described in
4 paragraph (1)(C) and the information on the
5 return of tax referred to in subparagraph (A)
6 or (B) of paragraph (1) does not establish the
7 status of the taxpayer (in the case of a joint re-
8 turn, either spouse) as having a principal place
9 of abode (determined as provided in section 32)
10 in the United States or Puerto Rico for more
11 than one-half of the reference month, the Sec-
12 retary shall determine such status based on in-
13 formation known to the Secretary.
14 ‘‘(5) TRANSITION RULE.—In any case with re-
15 spect to which section 24A was not in effect for the
16 taxable year described in subparagraph (A), (B), or
17 (C) of paragraph (1) (whichever is applicable), sub-
18 section (b)(1) shall be applied by substituting ‘the
19 qualifying children of such taxpayer for the taxable
20 year which includes the reference month’ for ‘the
21 specified children of such taxpayer for the reference
22 month’.
23 ‘‘(e) ON-LINE INFORMATION PORTAL; SPECIFIED AL-
24 TERNATIVE MECHANISMS.—
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1 ‘‘(1) ON-LINE INFORMATION PORTAL.—The
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405
1 lished under section 7527A, and any other mecha-
2 nism or method established by the Secretary to allow
3 taxpayer’s to provide the information described in
4 paragraph (1) (including in connection with the fil-
5 ing of any return of tax).
6 ‘‘(f) SPECIFIED CHILD OF MORE THAN 1 TAX-
7 PAYER.—
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1 ‘‘(2) PROVISIONS RELATED TO ADJUDICA-
2 TION.—
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1 ‘‘(C) ADJUDICATION NOT TREATED AS AS-
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408
1 vance child payments to such taxpayer would have
2 increased during such period if such determination
3 had been made immediately.
4 ‘‘(4) RECAPTURE OF PAYMENTS.—If, pursuant
5 to the procedures established under paragraph
6 (1)(B), the Secretary makes payments with respect
7 to the child during the period during which the de-
8 termination is made—
9 ‘‘(A) the Secretary shall provide each tax-
10 payer which receives such payments notice that
11 such payments may be subject to recapture,
12 and
13 ‘‘(B) upon making such determination, the
14 Secretary shall determine on the basis of the
15 facts and circumstances of each such taxpayer
16 whether any such payments should be subject
17 to recapture and shall so notify each such tax-
18 payer.
19 ‘‘(g) RULES RELATED TO GRACE PERIODS AND
20 HARDSHIPS.—
21 ‘‘(1) AUTOMATIC GRACE PERIOD.—
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409
1 the application of this subparagraph, credit
2 under section 24A or retroactive payment under
3 this section (similar to the payment described in
4 subsection (f)(3)) shall be allowed or made with
5 respect to so much of the period of such failure
6 or delay as does not exceed 3 months. The pre-
7 ceding sentence shall not apply if the Secretary
8 determines that such failure or delay was due
9 to fraud or reckless or intentional disregard of
10 rules and regulations.
11 ‘‘(B) LIMITATION.—Subparagraph (A)
12 shall not apply with respect to any taxpayer
13 more than once during any 36-month period.
14 ‘‘(2) HARDSHIP.—Notwithstanding subsection
15 (f), if the Secretary determines that a failure or
16 delay in establishing a period of presumptive eligi-
17 bility with respect to any specified child was due to
18 domestic violence, serious illness, natural disaster, or
19 any other hardship, credit under section 24A or ret-
20 roactive payment under this section (similar to the
21 payment described in subsection (f)(3)) shall be al-
22 lowed or made with respect to so much of the period
23 of such failure or delay as does not exceed 6 months.
24 ‘‘(h) PROVISIONS RELATED TO FORM, MANNER, AND
25 TREATMENT OF PAYMENTS.—
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1 ‘‘(1) APPLICATION OF ELECTRONIC FUNDS PAY-
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411
1 ‘‘(i) For application of child tax credit
2 to residents of Puerto Rico, see section
3 24A(d).
4 ‘‘(ii) For application of monthly ad-
5 vance child payments to residents of Puer-
6 to Rico, see subsection (b)(4).
7 ‘‘(B) MIRROR CODE POSSESSIONS.—In the
8 case of any possession of the United States with
9 a mirror code tax system (as defined in section
10 24A(i)(1)(C)), this section shall not be treated
11 as part of the income tax laws of the United
12 States for purposes of determining the income
13 tax law of such possession unless such posses-
14 sion elects to have this section be so treated.
15 ‘‘(C) ADMINISTRATIVE EXPENSES OF AD-
16 VANCE PAYMENTS.—
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412
1 a plan, which has been approved by the
2 Secretary, for making monthly advance
3 child payments consistent with such elec-
4 tion.
5 ‘‘(ii) AMERICAN SAMOA.— The
6 amount otherwise paid by the Secretary to
7 American Samoa under subparagraph (A)
8 of section 24A(i)(3) with respect to taxable
9 years beginning in 2023, 2024, and 2025
10 shall each be increased by $300,000 if the
11 plan described in subparagraph (B) of
12 such section includes a program, which has
13 been approved by the Secretary, for mak-
14 ing monthly advance child payments under
15 rules similar to the rules of this section.
16 ‘‘(iii) TIMING OF PAYMENT.—The
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413
1 ‘‘(1) DEFINITIONS.—Except as otherwise pro-
2 vided in this section, terms used in this section
3 which are also used in section 24A shall have the
4 same respective meanings as when used in section
5 24A.
6 ‘‘(2) TREATMENT OF CERTAIN DEATHS.—A
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414
1 ‘‘(j) NOTICE OF PAYMENTS.—
2 ‘‘(1) IN GENERAL.—Not later than January 31
3 of the calendar year following any calendar year dur-
4 ing which the Secretary makes one or more pay-
5 ments to any taxpayer under this section, the Sec-
6 retary shall provide such taxpayer with a written no-
7 tice which includes—
8 ‘‘(A) the taxpayer’s taxpayer identity (as
9 defined in section 6103(b)(6)),
10 ‘‘(B) the aggregate amount of such pay-
11 ments made to such taxpayer during such cal-
12 endar year, and
13 ‘‘(C) such other information as the Sec-
14 retary determines appropriate.
15 ‘‘(2) CERTAIN PAYMENTS SUBJECT TO RECAP-
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415
1 ‘‘(l) TERMINATION.—No payments shall be made
2 under the program established under subsection (a) with
3 respect to any month beginning after December 31,
4 2025.’’.
5 (c) SUSPENSION OF CHILD TAX CREDIT DURING PE-
6 RIOD THAT MONTHLY CHILD TAX CREDIT IS IN EF-
7 FECT.—Section 24 is amended by adding at the end the
8 following new subsection:
9 ‘‘(l) COORDINATION WITH MONTHLY CHILD TAX
10 CREDIT.—This section shall not apply to (and no payment
11 shall be made under subsection (k) with respect to) any
12 taxable year beginning after December 31, 2022, and be-
13 fore January 1, 2026.’’.
14 (d) CONFORMING AMENDMENTS.—
15 (1) Section 26(b)(2) is amended by striking
16 ‘‘and’’ at the end of subparagraph (Y), by striking
17 the period at the end of subparagraph (Z) and in-
18 serting ‘‘, and’’, and by adding at the end the fol-
19 lowing new subparagraph:
20 ‘‘(AA) section 24A(g)(2) (relating to recap-
21 ture of certain monthly advance child pay-
22 ments).’’.
23 (2) Section 152(f)(6)(B)(ii) is amended to read
24 as follows:
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416
1 ‘‘(ii) the credits under sections 24,
2 24A, and 24B and the payments under
3 sections 7527A and 7527B,’’.
4 (3) Section 3402(f)(1)(C) is amended by insert-
5 ing ‘‘or section 24A (determined after application of
6 subsection (g) thereof)’’ after ‘‘section 24 (deter-
7 mined after application of subsection (j) thereof)’’.
8 (4) Section 6103(l)(13)(A)(v) is amended by in-
9 sert ‘‘or section 24A, as the case may be’’ after
10 ‘‘section 24’’.
11 (5) Section 6211(b)(4)(A) is amended by insert-
12 ing ‘‘24A by reason of subsection (d) thereof,’’ after
13 ‘‘24 by reason of subsections (d) and (i)(1) there-
14 of,’’.
15 (6) Section 6213(g)(2)(I) is amended by insert-
16 ing ‘‘or section 24A(e) (relating to monthly child tax
17 credit)’’ after ‘‘section 24(e) (relating to child tax
18 credit)’’.
19 (7) Section 6213(g)(2)(L) is amended by insert-
20 ing ‘‘24A,’’ after ‘‘24,’’.
21 (8) Section 6213(g)(2)(P) is amended—
22 (A) by inserting ‘‘or 24A(f)(2)’’ after ‘‘sec-
23 tion 24(g)(2)’’,
24 (B) by inserting ‘‘or 24A’’ after ‘‘under
25 section 24’’, and
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1 (C) by striking ‘‘subsection (g)(1) thereof’’
2 and inserting ‘‘section 24(g)(1) or section
3 24A(f)(1), respectively’’.
4 (9) Section 6695(g)(2) is amended by inserting
5 ‘‘24A,’’ after ‘‘24,’’.
6 (10) Paragraph (2) of section 1324(b) of title
7 31, United States Code, as amended by the pre-
8 ceding provisions of this Act, is amended—
9 (A) by inserting ‘‘24A,’’ after ‘‘24,’’, and
10 (B) by inserting ‘‘7527B,’’ after ‘‘7527A,’’.
11 (11) The table of sections for subpart A of part
12 IV of subchapter A of chapter 1 is amended by in-
13 serting after the item relating to section 24 the fol-
14 lowing new items:
‘‘Sec. 24A. Monthly child tax credit.
‘‘Sec. 24B. Credit for certain other dependents.’’.
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1 (2) MONTHLY ADVANCE CHILD PAYMENTS.—
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1 (A) in subparagraph (B) (as amended by
2 the preceding provisions of this Act)—
3 (i) by inserting ‘‘and before January
4 1, 2026,’’ after ‘‘December 31, 2022,’’,
5 and
6 (ii) by inserting ‘‘AND BEFORE 2026’’
7 after ‘‘AFTER 2022’’, and
8 (B) by adding at the end the following new
9 subparagraph:
10 ‘‘(C) APPLICATION TO TAXABLE YEARS
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1 (C) by adding at the end the following new
2 subclause:
3 ‘‘(III) if such taxable year begins
4 after December 31, 2025, subsection
5 (m) shall be applied by substituting
6 ‘Puerto Rico or American Samoa’ for
7 ‘Puerto Rico’.’’.
8 (c) EFFECTIVE DATE.—The amendments made by
9 this section shall apply to taxable years beginning after
10 December 31, 2025.
11 SEC. 137105. APPROPRIATIONS.
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1 September 30, 2026, to support efforts to increase
2 enrollment of eligible families in the Child Tax Cred-
3 it, for advance payments of the Child Tax Credit,
4 and for other tax benefits, including but not limited
5 to program outreach, costs of data sharing arrange-
6 ments, systems changes, forms changes, and related
7 efforts, and efforts by federal agencies to facilitate
8 the cross-enrollment of beneficiaries of other pro-
9 grams in the Child Tax Credit, and for advance pay-
10 ments of the Child Tax Credit, including by estab-
11 lishing intergovernmental cooperative agreements
12 with states and local governments, tribal govern-
13 ments, and possessions of the United States: Pro-
14 vided, that such amount shall be available in addi-
15 tion to any amounts otherwise available: Provided
16 further, that these funds may be awarded by federal
17 agencies to state and local governments, tribal gov-
18 ernments, and possessions of the United States, and
19 private entities, including organizations dedicated to
20 free tax return preparation.
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1 PART 2—CHILD AND DEPENDENT CARE TAX
2 CREDIT
5 NENT.
423
1 (2) by striking ‘‘$15,000’’ and inserting
2 ‘‘$125,000’’.
3 (d) APPLICATION OF INCREASED DOLLAR LIMITA-
4 TION TO SPOUSES WHO ARE STUDENTS OR INCAPABLE
5 OF CARING FOR THEMSELVES.—Section 21(d)(2) is
6 amended by striking ‘‘of not less than—’’ and all that fol-
7 lows through ‘‘In the case of’’ and inserting ‘‘of not less
8 than 1⁄12 of the dollar amount in effect under paragraph
9 (1) or (2) of subsection (c) (whichever is applicable to the
10 taxpayer for the taxable year). In the case of’’.
11 (e) INFLATION ADJUSTMENT.—Section 21(e) is
12 amended by adding at the end the following new para-
13 graph:
14 ‘‘(11) INFLATION ADJUSTMENT.—
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1 gins, determined by substituting ‘calendar
2 year 2020’ for ‘calendar year 2016’ in sub-
3 paragraph (A)(ii) thereof.
4 ‘‘(B) ROUNDING.—
5 ‘‘(i) LIMITATION BASED ON ADJUSTED
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1 ‘‘(3) PHASEOUT PERCENTAGE.—For purposes
2 of paragraph (2), the term ‘phaseout percentage’
3 means 20 percent reduced (but not below zero) by
4 1 percentage point for each $2,000 (or fraction
5 thereof) by which the taxpayer’s adjusted gross in-
6 come for the taxable year exceeds $400,000.’’.
7 (g) APPLICATION OF CREDIT IN POSSESSIONS.—Sec-
8 tion 21(h) is amended—
9 (1) in paragraph (1)—
10 (A) by striking ‘‘The Secretary’’ and in-
11 serting ‘‘With respect to taxable years begin-
12 ning in or with calendar years after 2020, the
13 Secretary’’, and
14 (B) by striking ‘‘with respect to taxable
15 years beginning in or with 2021’’,
16 (2) in paragraph (2)—
17 (A) by striking ‘‘The Secretary’’ and in-
18 serting ‘‘With respect to taxable years begin-
19 ning in or with calendar years after 2020, the
20 Secretary’’, and
21 (B) by striking ‘‘with respect to taxable
22 years beginning in or with 2021’’, and
23 (3) in paragraph (3), by striking ‘‘in or with
24 2021’’ and inserting ‘‘after December 31, 2020’’.
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1 (h) EFFECTIVE DATE.—The amendments made by
2 this section shall apply to taxable years beginning after
3 December 31, 2021.
4 SEC. 137202. INCREASE IN EXCLUSION FOR EMPLOYER-
6 MADE PERMANENT.
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1 ‘‘(B) ROUNDING.—If any increase deter-
2 mined under subparagraph (A) is not a multiple
3 of $100, such amount shall be rounded to the
4 nearest multiple of $100.’’.
5 (c) CONFORMING AMENDMENT.—Section 129(a)(2)
6 is amended by striking subparagraph (D).
7 (d) EFFECTIVE DATE.—The amendments made by
8 this section shall apply to taxable years beginning after
9 December 31, 2021.
10 (e) RETROACTIVE PLAN AMENDMENTS.—A plan that
11 otherwise satisfies all applicable requirements of sections
12 125 and 129 of the Internal Revenue Code of 1986 (in-
13 cluding any rules or regulations thereunder) shall not fail
14 to be treated as a cafeteria plan or dependent care assist-
15 ance program merely because such plan is amended pursu-
16 ant to a provision under this subsection and such amend-
17 ment is retroactive, if—
18 (1) such amendment is adopted no later than
19 the last day of the plan year in which the amend-
20 ment is effective, and
21 (2) the plan is operated consistent with the
22 terms of such amendment during the period begin-
23 ning on the effective date of the amendment and
24 ending on the date the amendment is adopted.
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1 PART 3—SUPPORTING CAREGIVERS
3 WORKERS.
429
1 ployment of all the employees of the eligible child
2 care employer for such calendar quarter.
3 ‘‘(3) REFUNDABILITY OF EXCESS CREDIT.—
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1 pating Child Care Provider by the Secretary of Health and
2 Human Services under section 418A(c) of the Social Secu-
3 rity Act.
4 ‘‘(e) ELIGIBLE EMPLOYEE.—For purposes of this
5 section, the term ‘eligible employee’ means, with respect
6 to any eligible child care employer for any calendar quar-
7 ter, any employee of such employer if—
8 ‘‘(1) the aggregate wages paid to such employee
9 for such quarter do not exceed 25 percent of the dol-
10 lar amount in effect for such quarter under section
11 414(q)(1)(B)(i) (relating to highly compensated em-
12 ployees), and
13 ‘‘(2) the aggregate wages paid to such employee
14 for the 1-year period ending with the close of such
15 quarter do not exceed 100 percent of such dollar
16 amount.
17 ‘‘(f) QUALIFIED CHILD CARE WAGES.—For purposes
18 of this section—
19 ‘‘(1) IN GENERAL.—The term ‘qualified child
20 care wages’ means, with respect to any eligible em-
21 ployee for any calendar quarter, so much of the child
22 care wages paid by the eligible child care employer
23 to such employee during such quarter as are paid at
24 a rate in excess of the applicable minimum rate.
25 Such term shall not include any wages paid by an
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1 eligible child care employer during any period during
2 which the certification described in subsection (d) is
3 not in effect.
4 ‘‘(2) APPLICABLE MINIMUM RATE.—The term
5 ‘applicable minimum rate’ means, with respect to
6 wages paid to any eligible employee, the rate of basic
7 pay which is payable for GS-3, step 1 of the General
8 Schedule under subchapter III of chapter 53 of title
9 5, United States Code (including any applicable lo-
10 cality-based comparability payment under section
11 5304 of such title, or similar authority) at the time
12 such wages are paid and determined with respect to
13 the locality in which the services are provided.
14 ‘‘(3) CHILD CARE WAGES.—The term ‘child
15 care wages’ means wages paid for the services of the
16 employee to provide child care at a qualified child
17 care facility or to provide support services for such
18 a facility.
19 ‘‘(4) EXCEPTION.—The term ‘child care wages’
20 shall not include any wages taken into account
21 under section 41, 45A, 45P, 45R, 51, 1396, 3131,
22 3132, 3134, or 6432.
23 ‘‘(g) OTHER DEFINITIONS AND SPECIAL RULES.—
24 For purposes of this section—
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1 ‘‘(1) APPLICABLE EMPLOYMENT TAXES.—The
19 PLAN EXPENSES.—
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1 income of employees by reason of section
2 106(a).
3 ‘‘(ii) ALLOCATION RULES.—For pur-
4 poses of this section, amounts treated as
5 wages under clause (i) shall be treated as
6 paid with respect to any eligible employee
7 (and with respect to any period) to the ex-
8 tent that such amounts are properly allo-
9 cable to such employee (and to such pe-
10 riod) in such manner as the Secretary may
11 prescribe. Except as otherwise provided by
12 the Secretary, such allocation shall be
13 treated as properly made if made on the
14 basis of being pro rata among periods of
15 coverage.
16 ‘‘(3) OTHER TERMS.—Any term used in this
17 section which is also used in this chapter or chapter
18 22 shall have the same meaning as when used in
19 such chapter.
20 ‘‘(4) DENIAL OF DOUBLE BENEFIT.—For pur-
21 poses of chapter 1, the gross income of the em-
22 ployer, for the taxable year which includes the last
23 day of any calendar quarter with respect to which a
24 credit is allowed under this section, shall be in-
25 creased by the amount of such credit.
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1 ‘‘(5) ELECTION TO NOT TAKE CERTAIN WAGES
16 GRAMS.—
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1 ‘‘(ii) a grant under section 324 of the
2 Economic Aid to Hard-Hit Small Busi-
3 nesses, Non-Profits, and Venues Act, or
4 ‘‘(iii) a restaurant revitalization grant
5 under section 5003 of the American Res-
6 cue Plan Act of 2021.
7 ‘‘(B) APPLICATION WHERE PPP LOANS
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1 nection with either such section, have the same
2 meaning as when used in such section, respec-
3 tively.
4 ‘‘(8) AGGREGATION RULE.—All persons treated
5 as a single employer under subsection (a) or (b) of
6 section 52, or subsection (m) or (o) of section 414,
7 shall be treated as one employer for purposes of this
8 section.
9 ‘‘(9) THIRD PARTY PAYORS.—Any credit al-
10 lowed under this section shall be treated as a credit
11 described in section 3511(d)(2).
12 ‘‘(10) INFLATION ADJUSTMENT.—In the case of
13 any taxable year beginning after December 31,
14 2022, the $2,500 amount in subsection (b)(1) shall
15 be increased by an amount equal to—
16 ‘‘(A) such dollar amount, multiplied by
17 ‘‘(B) the cost-of-living adjustment deter-
18 mined under section 1(f)(3) for the calendar
19 year in which the taxable year begins, deter-
20 mined by substituting ‘calendar year 2021’ for
21 ‘calendar year 2016’ in subparagraph (A)(ii)
22 thereof.
23 If any amount as adjusted under the preceding sen-
24 tence is not a multiple of $100, such amount shall
25 be rounded to the nearest multiple of $100.
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1 ‘‘(h) REGULATIONS.—The Secretary shall prescribe
2 such regulations or other guidance as may be necessary
3 to carry out the purposes of this section, including—
4 ‘‘(1) regulations or other guidance to prevent
5 the avoidance of the purposes of the limitations
6 under this section,
7 ‘‘(2) regulations or other guidance to minimize
8 compliance and record-keeping burdens under this
9 section,
10 ‘‘(3) regulations or other guidance providing for
11 waiver of penalties for failure to deposit amounts in
12 anticipation of the allowance of the credit allowed
13 under this section,
14 ‘‘(4) regulations or other guidance for recap-
15 turing the benefit of credits determined under this
16 section in cases where there is a subsequent adjust-
17 ment to the credit determined under subsection (a),
18 ‘‘(5) regulations or other guidance to permit the
19 advancement of the credit determined under sub-
20 section (a), and
21 ‘‘(6) regulations or other guidance for applying
22 subsection (f) with respect to eligible employees not
23 paid at a single rate of pay.’’.
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1 (b) REFUNDS.—Paragraph (2) of section 1324(b) of
2 title 31, United States Code, is amended by inserting
3 ‘‘3135,’’ after ‘‘3134,’’.
4 (c) CLERICAL AMENDMENT.—The table of sections
5 for subchapter D of chapter 21 is amended by adding at
6 the end the following:
‘‘Sec. 3135. Payroll credit for certain wages paid to child care workers.’’.
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1 ‘‘(1) IN GENERAL.—The term ‘qualified care re-
2 cipient’ means, with respect to any taxable year, any
3 individual who—
4 ‘‘(A) is the spouse of the taxpayer, or any
5 other person who bears a relationship to the
6 taxpayer described in any of subparagraphs (A)
7 through (H) of section 152(d)(2),
8 ‘‘(B) has been certified, before the due
9 date for filing the return of tax for the taxable
10 year, by a licensed health care practitioner (as
11 defined in section 7702B(c)(4)) as being an in-
12 dividual with long-term care needs (as defined
13 in paragraph (3)) for a period—
14 ‘‘(i) which is expected to be at least
15 180 consecutive days, and
16 ‘‘(ii) a portion of which occurs within
17 the taxable year, and
18 ‘‘(C) resides in a personal residence and
19 not an institutional care facility.
20 ‘‘(2) PERIOD FOR MAKING CERTIFICATION.—
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1 ‘‘(3) INDIVIDUALS WITH LONG-TERM CARE
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1 functional capacity, to perform (without sub-
2 stantial assistance from another individual) at
3 least 2 of the following activities:
4 ‘‘(i) Eating.
5 ‘‘(ii) Transferring.
6 ‘‘(iii) Mobility.
7 ‘‘(C) The individual is under 2 years of age
8 and requires specific durable medical equipment
9 by reason of a severe health condition or re-
10 quires a skilled practitioner trained to address
11 the individual’s condition to be available if the
12 individual’s parents or guardians are absent.
13 ‘‘(4) INSTITUTIONAL CARE FACILITY.—For pur-
14 poses of paragraph (1)(C), an institutional care fa-
15 cility (including two or more places, establishments,
16 or institutions owned by the same legal entity) in-
17 cludes any congregate, protected living residential
18 arrangement that provides or coordinates personal
19 or health care services, including assistance with the
20 activities of daily living and social care, for two or
21 more adults who are aged, infirm, or disabled
22 ‘‘(c) QUALIFIED EXPENSES.—For purposes of this
23 section—
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1 ‘‘(1) IN GENERAL.—The term ‘qualified ex-
2 penses’ means expenses for goods, services, and sup-
3 ports described in paragraph (2) which—
4 ‘‘(A) assist a qualified care recipient with
5 accomplishing activities of daily living (as de-
6 fined in section 7702B(c)(2)(B)) and instru-
7 mental activities of daily living (as defined in
8 section 1915(k)(6)(F) of the Social Security
9 Act), and
10 ‘‘(B) are provided solely for use by such
11 qualified care recipient.
12 ‘‘(2) ITEMS DESCRIBED.—The goods, services,
13 and supports described in this paragraph are—
14 ‘‘(A) human assistance, supervision, cuing,
15 and standby assistance,
16 ‘‘(B) health maintenance tasks (such as
17 medication management),
18 ‘‘(C) respite care,
19 ‘‘(D) assistive technologies and devices (in-
20 cluding remote health monitoring),
21 ‘‘(E) accessibility modifications of the
22 qualified care recipient’s residence,
23 ‘‘(F) counseling, support groups, or train-
24 ing relating to caring for a qualified care recipi-
25 ent, and
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1 ‘‘(G) any other items which directly relate
2 to the health and safety of a qualified care re-
3 cipient, as determined by the Secretary after
4 consultation with the Secretary of Health and
5 Human Services.
6 ‘‘(3) DOLLAR LIMITATION.—The amount taken
7 into account as qualified expenses for any taxable
8 year shall not exceed $4,000.
9 ‘‘(4) DENIAL OF DOUBLE BENEFIT.—Amounts
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1 ‘‘(1) PAYMENTS TO RELATED INDIVIDUALS.—
5 TIONER.—
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1 ‘‘(B) IDENTIFICATION REQUIREMENT.—
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1 ‘‘(f) TERMINATION.—No credit shall be allowed
2 under this section for any taxable year beginning after De-
3 cember 31, 2025.’’.
4 (b) MATH ERROR AUTHORITY.—Section 6213(g)(2),
5 as amended by the preceding provisions of this Act, is
6 amended by striking ‘‘and’’ at the end of subparagraph
7 (T), by striking the period at the end of subparagraph
8 (U) and inserting ‘‘, and’’, and by inserting after subpara-
9 graph (U) the following new subparagraph:
10 ‘‘(V) an omission of a correct TIN re-
11 quired under section 25E(e)(4) or a correct
12 specified provider identification number re-
13 quired under section 25E(e)(2)(B).’’.
14 (c) CLERICAL AMENDMENT.—The table of sections
15 for subpart A of part IV of subchapter A of chapter 1
16 is amended by inserting after the item relating to section
17 25D the following new item:
‘‘Sec. 25E. Credit for caregiver expenses.’’.
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1 (1) IN GENERAL.—Section 32(c)(1)(A)(ii)(II) is
2 amended by striking ‘‘age 25’’ and inserting ‘‘the
3 applicable minimum age’’.
4 (2) APPLICABLE MINIMUM AGE.—Section 32(c)
5 is amended by adding at the end the following new
6 paragraph:
7 ‘‘(5) APPLICABLE MINIMUM AGE.—
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1 term ‘qualified former foster youth’ means an
2 individual who—
3 ‘‘(i) on or after the date that such in-
4 dividual attained age 14, was in foster care
5 provided under the supervision or adminis-
6 tration of an entity administering (or eligi-
7 ble to administer) a plan under part B or
8 part E of title IV of the Social Security
9 Act (without regard to whether Federal as-
10 sistance was provided with respect to such
11 child under such part E), and
12 ‘‘(ii) provides (in such manner as the
13 Secretary may provide) consent for entities
14 which administer a plan under part B or
15 part E of title IV of the Social Security
16 Act to disclose to the Secretary informa-
17 tion related to the status of such individual
18 as a qualified former foster youth.
19 ‘‘(D) QUALIFIED HOMELESS YOUTH.—For
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1 panied, at risk of homelessness, and self-sup-
2 porting.’’.
3 (b) ELIMINATION OF MAXIMUM AGE FOR CREDIT.—
4 Section 32(c)(1)(A)(ii)(II) is amended by striking ‘‘but
5 not attained age 65’’.
6 (c) INCREASE IN CREDIT AND PHASEOUT PERCENT-
7 AGES.—The table contained in section 32(b)(1) is amend-
8 ed by striking ‘‘7.65’’ each place it appears therein and
9 inserting ‘‘15.3’’.
10 (d) INCREASE IN EARNED INCOME AND PHASEOUT
11 AMOUNTS.—
12 (1) IN GENERAL.—The table contained in sec-
13 tion 32(b)(2)(A) is amended—
14 (A) by striking ‘‘$4,220’’ and inserting
15 ‘‘$9,820’’, and
16 (B) by striking ‘‘$5,280’’ and inserting
17 ‘‘$11,610’’.
18 (2) APPLICATION OF INFLATION ADJUST-
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1 (B) in subparagraph (B)(i), by inserting
2 ‘‘(other than the $9,820 and $11,610
3 amounts)’’ after ‘‘subsection (b)(2)(A)’’, and
4 (C) in subparagraph (B)(iii), by inserting
5 ‘‘the $9,820 and $11,610 amounts in sub-
6 section (b)(2)(A) and’’ before ‘‘the $10,000
7 amount in subsection (i)(1)’’.
8 (e) Section 32, as amended by subsection (f), is
9 amended by adding at the end the following new sub-
10 section:
11 ‘‘(n) ELECTION TO DETERMINE EARNED INCOME
12 BASED ON PRIOR TAXABLE YEAR.—
13 ‘‘(1) IN GENERAL.—In the case of a taxpayer
14 whose earned income for any taxable year is less
15 than the earned income of such taxpayer for the pre-
16 ceding taxable year, if such taxpayer elects (at such
17 time and in such manner as the Secretary may pro-
18 vide) the application of this subsection for such tax-
19 able year, the earned income of such taxpayer for
20 such taxable year shall be treated for purposes of
21 this section as being equal to the earned income of
22 such taxpayer for such preceding taxable year.
23 ‘‘(2) JOINT RETURNS.—For purposes of this
24 subsection, in the case of a joint return, the earned
25 income of the taxpayer for the preceding taxable
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1 year shall be the sum of the earned income of each
2 spouse for the preceding taxable year.
3 ‘‘(3) TREATMENT AS MATHEMATICAL OR CLER-
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1 SEC. 137402. FUNDS FOR ADMINISTRATION OF EARNED IN-
453
1 (d) EFFECTIVE DATE.—The amendments made by
2 this section shall apply to payments made for calendar
3 years beginning after December 31, 2021.
4 PART 5—EXPANDING ACCESS TO HEALTH
8 CONSUMERS.
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1 (b) CREDIT ALLOWED TO TAXPAYERS WHOSE
2 HOUSEHOLD INCOME EXCEEDS 400 PERCENT OF THE
3 POVERTY LINE.—
4 (1) IN GENERAL.—Section 36B(c)(1)(A) is
5 amended by striking ‘‘but does not exceed 400 per-
6 cent’’.
7 (2) CONFORMING AMENDMENT.—Section
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1 (c) EFFECTIVE DATE.—The amendments made by
2 this section shall apply to taxable years beginning after
3 December 31, 2021.
4 SEC. 137503. TREATMENT OF LUMP-SUM SOCIAL SECURITY
6 COME.
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1 taxable year beginning on or after the ter-
2 mination date (as defined in subsection
3 (h)(2)), a taxpayer may elect (at such time
4 and in such manner as the Secretary may
5 provide) to have this subparagraph not
6 apply for such taxable year.’’.
7 (b) EFFECTIVE DATE.—The amendment made by
8 this section shall apply to taxable years beginning after
9 December 31, 2021.
10 SEC. 137504. TEMPORARY EXPANSION OF HEALTH INSUR-
12 LOW-INCOME POPULATIONS.
17 2022.—
18 ‘‘(1) IN GENERAL.—With respect to any taxable
19 year beginning after December 31, 2021, and before
20 the termination date—
21 ‘‘(A) ELIGIBILITY FOR CREDIT NOT LIM-
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1 ‘‘(B) CREDIT ALLOWED TO CERTAIN LOW-
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1 ‘‘(i) IN GENERAL.—In the case of a
2 taxpayer whose household income is less
3 than 200 percent of the poverty line for
4 the size of the family involved for the tax-
5 able year, the amount of the increase
6 under subsection (f)(2)(A) shall in no
7 event exceed $300 (one-half of such
8 amount in the case of a taxpayer whose
9 tax is determined under section 1(c) for
10 the taxable year).
11 ‘‘(ii) LIMITATION ON INCREASE FOR
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459
1 jected to not exceed 138 percent of
2 the poverty line for a family of the
3 size involved,
4 subsection (f)(2)(A) shall not apply to such
5 taxpayer for such taxable year and such
6 taxpayer shall not be required to file such
7 return of tax.
8 ‘‘(iii) INFORMATION PROVIDED BY EX-
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460
1 of the Social Security Act (relating to Federal
2 Medicaid program to close coverage gap in non-
3 expansion States).’’.
4 (b) EMPLOYER SHARED RESPONSIBILITY PROVISION
5 NOT APPLICABLE WITH RESPECT TO CERTAIN LOW-IN-
6 COME TAXPAYERS RECEIVING PREMIUM ASSISTANCE.—
7 Section 4980H(c)(3) is amended to read as follows:
8 ‘‘(3) APPLICABLE PREMIUM TAX CREDIT AND
9 COST-SHARING REDUCTION.—
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1 credit, reduction, or payment is allowed or paid
2 for a taxable year of an employee (beginning
3 after December 31, 2021, and before the termi-
4 nation date, as defined in section 36B(h)(2))
5 with respect to which—
6 ‘‘(i) an Exchange established under
7 title I of the Patient Protection and Af-
8 fordable Care Act has determined that
9 such employee’s household income for such
10 taxable year is projected to not exceed 138
11 percent of the poverty line for a family of
12 the size involved, or
13 ‘‘(ii) such employee’s household in-
14 come for such taxable year does not exceed
15 138 percent of the poverty line for a family
16 of the size involved.’’.
17 (c) EFFECTIVE DATE.—The amendments made by
18 this section shall apply to taxable years beginning after
19 December 31, 2021.
20 SEC. 137505. ENSURING AFFORDABILITY OF COVERAGE
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1 (A) in paragraph (2), by inserting ‘‘(or,
2 with respect to plan years 2023 and 2024,
3 whose household income does not exceed 400
4 percent of the poverty line for a family of the
5 size involved)’’ before the period; and
6 (B) in the matter following paragraph (2),
7 by adding at the end the following new sen-
8 tence: ‘‘In the case of an individual with a
9 household income of less than 138 percent of
10 the poverty line for a family of the size involved
11 for any month occurring during the period be-
12 ginning on January 1, 2022, and ending on De-
13 cember 31, 2022, such individual shall, for such
14 month and for each succeeding month during
15 such period, be treated as having household in-
16 come equal to 100 percent for purposes of ap-
17 plying this section.’’; and
18 (2) in subsection (c)—
19 (A) in paragraph (1)(A), in the matter
20 preceding clause (i), by inserting ‘‘, with respect
21 to eligible insureds (other than, with respect to
22 plan years 2023 and 2024, specified enrollees
23 (as defined in paragraph (6)(C))),’’ after ‘‘first
24 be achieved’’;
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1 (B) in paragraph (2), in the matter pre-
2 ceding subparagraph (A), by inserting ‘‘with re-
3 spect to eligible insureds (other than, with re-
4 spect to plan years 2023 and 2024, specified
5 enrollees)’’ after ‘‘under the plan’’;
6 (C) in paragraph (3)—
7 (i) in subparagraph (A), by striking
8 ‘‘this subsection’’ and inserting ‘‘paragraph
9 (1) or (2)’’; and
10 (ii) in subparagraph (B), by striking
11 ‘‘this section’’ and inserting ‘‘paragraphs
12 (1) and (2)’’; and
13 (D) by adding at the end the following new
14 paragraph:
15 ‘‘(6) SPECIAL RULE FOR SPECIFIED ENROLL-
16 EES.—
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1 fits provided under the plan to 99 percent of
2 such costs.
3 ‘‘(B) METHODS FOR REDUCING COST
4 SHARING.—
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1 the poverty line for a family of the size involved
2 during such month. Such insured shall be
3 deemed to be a specified enrollee for each suc-
4 ceeding month in such plan year.’’.
5 (b) OPEN ENROLLMENTS APPLICABLE TO CERTAIN
6 LOWER-INCOME POPULATIONS.—Section 1311(c) of the
7 Patient Protection and Affordable Care Act (42 U.S.C.
8 18031(c)) is amended—
9 (1) in paragraph (6)—
10 (A) in subparagraph (C), by striking at the
11 end ‘‘and’’;
12 (B) in subparagraph (D), by striking the
13 period at the end and inserting ‘‘; and’’; and
14 (C) by adding at the end the following new
15 subparagraph:
16 ‘‘(E) with respect to a qualified health plan
17 with respect to which section 1402 applies, for
18 months occurring during the period beginning
19 on January 1, 2022, and ending on December
20 31, 2024, enrollment periods described in sub-
21 paragraph (A) of paragraph (8) for individuals
22 described in subparagraph (B) of such para-
23 graph.’’; and
24 (2) by adding at the end the following new
25 paragraph:
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1 ‘‘(8) SPECIAL ENROLLMENT PERIOD FOR CER-
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1 (A) in subparagraph (B), by striking
2 ‘‘and’’ at the end;
3 (B) in subparagraph (C)(iv), by striking
4 the period and inserting ‘‘; and’’; and
5 (C) by adding at the end the following new
6 subparagraph:
7 ‘‘(D) provides, with respect to a plan of-
8 fered in the silver level of coverage to which sec-
9 tion 1402 applies during plan year 2024, for
10 benefits described in paragraph (5) in the case
11 of an individual who, for a month during such
12 plan year, has a household income of less than
13 138 percent of the poverty line for a family of
14 the size involved, and who is eligible to receive
15 cost-sharing reductions under section 1402.’’;
16 and
17 (2) by adding at the end the following new
18 paragraph:
19 ‘‘(5) ADDITIONAL BENEFITS FOR CERTAIN
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1 scribed in subsection (a)(4)(C) of section 1905
2 of the Social Security Act, without any restric-
3 tion on the choice of a qualified provider from
4 whom such an individual so enrolled in such
5 plan may receive such services described in such
6 subsection, and without any imposition of cost
7 sharing, which are not otherwise provided under
8 such plan as part of the essential health bene-
9 fits package described in section 1302(a).
10 ‘‘(B) PAYMENTS FOR ADDITIONAL BENE-
11 FITS.—
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1 purposes of making payments under clause
2 (i).’’.
3 (d) EDUCATION AND OUTREACH ACTIVITIES.——
4 (1) IN GENERAL.—Section 1321(c) of the Pa-
5 tient Protection and Affordable Care Act (42 U.S.C.
6 18041(c)) is amended by adding at the end the fol-
7 lowing new paragraph:
8 ‘‘(3) OUTREACH AND EDUCATIONAL ACTIVI-
9 TIES.—
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1 vided in a manner that is culturally and linguis-
2 tically appropriate to the needs of the popu-
3 lations being served by the Exchange (including
4 hard-to-reach populations, such as racial and
5 sexual minorities, limited English proficient
6 populations, individuals residing in areas where
7 the unemployment rates exceeds the national
8 average unemployment rate, individuals in rural
9 areas, veterans, and young adults).
10 ‘‘(B) LIMITATION ON USE OF FUNDS.—No
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1 ‘‘(D) FUNDING.—There are appropriated,
2 out of any monies in the Treasury not other-
3 wise appropriated, $15,000,000 for fiscal year
4 2022, and $30,000,000 for each of fiscal years
5 2023 and 2024, to carry out this paragraph.
6 Funds appropriated under this subparagraph
7 shall remain available until expended.’’.
8 (2) NAVIGATOR PROGRAM.—Section 1311(i)(6)
9 of the Patient Protection and Affordable Care Act
10 (42 U.S.C. 18031(i)(6)) is amended—
11 (A) by striking ‘‘FUNDING.—Grants
12 under’’ and inserting ‘‘FUNDING.—
13 ‘‘(A) STATE EXCHANGES.—Grants under’’;
14 and
15 (B) by adding at the end the following new
16 subparagraph:
17 ‘‘(B) FEDERAL EXCHANGES.—For pur-
18 poses of carrying out this subsection, with re-
19 spect to an Exchange established and operated
20 by the Secretary within a State pursuant to sec-
21 tion 1321(c), the Secretary shall obligate
22 $10,000,000 out of amounts collected through
23 the user fees on participating health insurance
24 issuers pursuant to section 156.50 of title 45,
25 Code of Federal Regulations (or any successor
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1 regulations) for fiscal year 2022, and
2 $20,000,000 for each of fiscal years 2023 and
3 2024. Such amount so obligated for a fiscal
4 year shall remain available until expended.’’.
5 SEC. 137506. ESTABLISHING A HEALTH INSURANCE AF-
6 FORDABILITY FUND.
12 AFFORDABILITY FUND
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1 ‘‘SEC. 1352. USE OF FUNDS.
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1 ‘‘(2) A plan (commonly referred to as a ‘transi-
2 tional plan’) continued under the letter issued by the
3 Centers for Medicare & Medicaid Services on No-
4 vember 14, 2013, to the State Insurance Commis-
5 sioners outlining a transitional policy for coverage in
6 the individual and small group markets to which sec-
7 tion 1251 does not apply, and under the extension
8 of the transitional policy for such coverage set forth
9 in the Insurance Standards Bulletin Series guidance
10 issued by the Centers for Medicare & Medicaid Serv-
11 ices on March 5, 2014, February 29, 2016, Feb-
12 ruary 13, 2017, April 9, 2018, March 25, 2019,
13 January 31, 2020, and January 19, 2021, or under
14 any subsequent extensions thereof.
15 ‘‘(3) Student health insurance coverage (as de-
16 fined in section 147.145 of title 45, Code of Federal
17 Regulations, or any successor regulation).
18 ‘‘(4) Excepted benefits (as defined in section
19 2791(c) of the Public Health Service Act).
20 ‘‘SEC. 1353. STATE ELIGIBILITY AND APPROVAL; DEFAULT
21 SAFEGUARD.
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1 part for a year (beginning with 2023), a State shall
2 submit to the Administrator an application at such
3 time (but, in the case of allocations for 2023, not
4 later than 120 days after the date of the enactment
5 of this part and, in the case of allocations for a sub-
6 sequent year, not later than January 1 of the pre-
7 vious year) and in such form and manner as speci-
8 fied by the Administrator containing—
9 ‘‘(A) a description of how the funds will be
10 used; and
11 ‘‘(B) such other information as the Admin-
12 istrator may require.
13 ‘‘(2) AUTOMATIC APPROVAL.—An application so
14 submitted is approved (as outlined in the terms of
15 the plan) unless the Administrator notifies the State
16 submitting the application, not later than 90 days
17 after the date of the submission of such application,
18 that the application has been denied for not being in
19 compliance with any requirement of this part and of
20 the reason for such denial.
21 ‘‘(3) 5-YEAR APPLICATION APPROVAL.—If an
22 application of a State is approved for a purpose de-
23 scribed in section 1352 for a year, such application
24 shall be treated as approved for such purpose for
25 each of the subsequent 4 years.
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1 ‘‘(4) OVERSIGHT AUTHORITY AND AUTHORITY
2 TO REVOKE APPROVAL.—
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1 purpose described in paragraph (2) in such State for
2 such year.
3 ‘‘(2) SPECIFIED USE.—The amount described
4 in paragraph (3), with respect to a State described
5 in paragraph (5) for 2023 or 2024, shall be used to
6 carry out the purpose described in section
7 1352(a)(1) in such State for such year, as applica-
8 ble, by providing reinsurance payments to health in-
9 surance issuers with respect to attachment range
10 claims (as defined in section 1354(b)(2), using the
11 dollar amounts specified in subparagraph (B) of
12 such section for such year) in an amount equal to,
13 subject to paragraph (4), the percentage (specified
14 for such year by the Secretary under such subpara-
15 graph) of the amount of such claims.
16 ‘‘(3) AMOUNT DESCRIBED.—The amount de-
17 scribed in this paragraph, with respect to 2023 or
18 2024, is the amount equal to the total sum of
19 amounts that the Secretary would otherwise esti-
20 mate under section 1354(b)(2)(A)(i) for such year
21 for each State described in paragraph (5) for such
22 year, as applicable, if each such State were not so
23 described for such year.
24 ‘‘(4) ADJUSTMENT.—For purposes of this sub-
25 section, the Secretary may apply a percentage under
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1 paragraph (3) with respect to a year that is less
2 than the percentage otherwise specified in section
3 1354(b)(2)(B) for such year, if the cost of paying
4 the total eligible attachment range claims for States
5 described in paragraph (5) for such year at such
6 percentage otherwise specified would exceed the
7 amount calculated under paragraph (3) for such
8 year.
9 ‘‘(5) STATE DESCRIBED.—A State described in
10 this paragraph, with respect to years 2023 and
11 2024, is a State that, as of January 1 of 2022 or
12 2023, respectively, was not expending amounts
13 under the State plan (or waiver of such plan) for all
14 individuals described in section
15 1902(a)(10)(A)(i)(VIII) during such year.
16 ‘‘SEC. 1354. ALLOCATIONS.
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1 Secretary shall, with respect to a State not de-
2 scribed in section 1353(b) for such year and
3 not later than the date specified under subpara-
4 graph (B) for such year, allocate for such State
5 the amount determined for such State and year
6 under paragraph (2).
7 ‘‘(B) SPECIFIED DATE.—For purposes of
8 subparagraph (A), the date specified in this
9 subparagraph is—
10 ‘‘(i) for 2023, the date that is 90 days
11 after the date of the enactment of this
12 part; and
13 ‘‘(ii) for 2024 or a subsequent year,
14 January 1 of the previous year.
15 ‘‘(C) NOTIFICATIONS OF ALLOCATION
22 TIONS.—
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1 paragraph (1)(A) for such year is the amount
2 equal to—
3 ‘‘(i) the amount that the Secretary es-
4 timates would be expended under this part
5 for such year on attachment range claims
6 of individuals residing in such State if such
7 State used such funds only for the purpose
8 described in paragraph (1) of section
9 1352(a) at the dollar amounts and per-
10 centage specified under subparagraph (B)
11 for such year; minus
12 ‘‘(ii) the amount, if any, by which the
13 Secretary determines—
14 ‘‘(I) the estimated amount of
15 premium tax credits under section
16 36B of the Internal Revenue Code of
17 1986 that would be attributable to in-
18 dividuals residing in such State for
19 such year without application of this
20 part; exceeds
21 ‘‘(II) the estimated amount of
22 premium tax credits under section
23 36B of the Internal Revenue Code of
24 1986 that would be attributable to in-
25 dividuals residing in such State for
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1 such year if section 1353(b) applied
2 for such year and applied with respect
3 to such State for such year.
4 For purposes of the previous sentence and sec-
5 tion 1353(b)(3), the term ‘attachment range
6 claims’ means, with respect to an individual, the
7 claims for such individual that exceed a dollar
8 amount specified by the Secretary for a year,
9 but do not exceed a ceiling dollar amount speci-
10 fied by the Secretary for such year, under sub-
11 paragraph (B).
12 ‘‘(B) SPECIFICATIONS.—For purposes of
13 subparagraph (A) and section 1353(b)(3), the
14 Secretary shall determine the dollar amounts
15 and the percentage to be specified under this
16 subparagraph for a year in a manner to ensure
17 that the total amount of expenditures under
18 this part for such year is estimated to equal the
19 total amount appropriated for such year under
20 subsection (a) if such expenditures were used
21 solely for the purpose described in paragraph
22 (1) of section 1352(a) for attachment range
23 claims at the dollar amounts and percentage so
24 specified for such year.
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1 ‘‘(3) AVAILABILITY.—Funds allocated to a
2 State under this subsection for a year shall remain
3 available through the end of the subsequent year.’’.
4 (b) BASIC HEALTH PROGRAM FUNDING ADJUST-
5 MENTS.—Section 1331 of the Patient Protection and Af-
6 fordable Care Act (42 U.S.C. 18051) is amended—
7 (1) in subsection (a), by adding at the end the
8 following new paragraph:
9 ‘‘(3) PROVISION OF INFORMATION ON QUALI-
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483
1 the monthly premium for such plan and year
2 that would have applied had such plan not re-
3 ceived any payments described in subparagraph
4 (A) for such year.’’; and
5 (2) in subsection (d)(3)(A)(ii), by adding at the
6 end the following new sentence: ‘‘In making such de-
7 termination, the Secretary shall calculate the value
8 of such premium tax credits that would have been
9 provided to such individuals enrolled through a basic
10 health program established by a State during a year
11 using the adjusted premium amounts (as defined in
12 subsection (a)(3)(B)) for qualified health plans of-
13 fered in such State during such year.’’.
14 SEC. 137507. SPECIAL RULE FOR INDIVIDUALS RECEIVING
15 UNEMPLOYMENT COMPENSATION.
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484
1 (d) EFFECTIVE DATE.—The amendments made by
2 this section shall apply to taxable years beginning after
3 December 31, 2021.
4 SEC. 137508. PERMANENT CREDIT FOR HEALTH INSURANCE
5 COSTS.
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1 PART 6—PATHWAY TO PRACTICE TRAINING
2 PROGRAMS
7 (a) PROGRAM.—
8 (1) IN GENERAL.—Title XVIII of the Social Se-
9 curity Act (42 U.S.C. 1395 et seq.) is amended by
10 adding at the end the following new section:
11 ‘‘SEC. 1899C. RURAL AND UNDERSERVED PATHWAY TO
486
1 ‘‘(1) attests he or she—
2 ‘‘(A) is or will be a first-generation student
3 of a 4-year college, graduate school, or profes-
4 sional school;
5 ‘‘(B) was a Pell Grant recipient; or
6 ‘‘(C) lived in a medically underserved area,
7 rural area, or health professional shortage area
8 for a period of 4 or more years prior to attend-
9 ing an undergraduate program;
10 ‘‘(2) has accepted enrollment in—
11 ‘‘(A) a post-baccalaureate program that is
12 not more than 2 years and intends to enroll in
13 a qualifying medical school within 2 years after
14 completion of such program; or
15 ‘‘(B) a qualifying medical school;
16 ‘‘(3) will practice medicine in a health profes-
17 sional shortage area, medically underserved area,
18 public hospital, rural area, or as required under sub-
19 section (d)(5); and
20 ‘‘(4) submits an application and a signed copy
21 of the agreement described under subsection (c).
22 ‘‘(c) APPLICATIONS.—
23 ‘‘(1) IN GENERAL.—To be eligible to receive a
24 Pathway to Practice medical scholarship voucher
25 under this section, a qualifying student described in
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487
1 subsection (b) shall submit to the Secretary an ap-
2 plication at such time, in such manner, and con-
3 taining such information as the Secretary may re-
4 quire.
5 ‘‘(2) INFORMATION TO BE INCLUDED.—As a
6 part of the application described in paragraph (1),
7 the Secretary shall include a notice of the items
8 which are required to be agreed to under subsection
9 (d)(4) for the purpose of notifying the qualifying
10 student of the terms of the Rural and Underserved
11 Pathway to Practice Training Program.
12 ‘‘(d) PATHWAY TO PRACTICE MEDICAL SCHOLAR-
13 SHIP VOUCHER DETAILS.—
14 ‘‘(1) NUMBER.—On an annual basis, the Sec-
15 retary may award a Pathway to Practice medical
16 scholarship voucher under the Program to not more
17 than 1,000 qualifying students described in sub-
18 section (b).
19 ‘‘(2) PRIORITIZATION CRITERIA.—In deter-
20 mining whether to award a Pathway to Practice
21 medical scholarship voucher under the Program to
22 qualifying students described in subsection (b), the
23 Secretary shall prioritize applications from any such
24 student who attests that he or she—
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488
1 ‘‘(A) was a participant in the Health Re-
2 sources and Services Administration Health Ca-
3 reers Opportunity Program or an Area Health
4 Education Center scholar;
5 ‘‘(B) is a disadvantaged student (as de-
6 fined by the National Health Service Corps of
7 the Health Resources & Services Administration
8 of the Department of Health and Human Serv-
9 ices); or
10 ‘‘(C) attended a historically black college
11 or other minority serving institution (as defined
12 in section 1067q of title 20, United States
13 Code).
14 ‘‘(3) DURATION.—Each Pathway to Practice
15 medical scholarship voucher awarded to a qualifying
16 student pursuant to paragraph (1) shall be so
17 awarded to such a student on an annual basis for
18 each year of enrollment in a post-baccalaureate pro-
19 gram and a qualifying medical school (as appro-
20 priate).
21 ‘‘(4) AMOUNT.—Subject to paragraph (5), each
22 Pathway to Practice medical scholarship voucher
23 awarded under the Program shall include amounts
24 for—
25 ‘‘(A) tuition;
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489
1 ‘‘(B) academic fees (as determined by the
2 qualifying medical school);
3 ‘‘(C) required textbooks and equipment;
4 ‘‘(D) a monthly stipend equal to the
5 amount provided for individuals under the
6 health professions scholarship and financial as-
7 sistance program described in section 2121(c)
8 of title 10, United States Code; and
9 ‘‘(E) any other educational expenses nor-
10 mally incurred by students at the post-bacca-
11 laureate program or qualifying medical school
12 (as appropriate).
13 ‘‘(5) REQUIRED AGREEMENT.—No amounts
14 under paragraph (4) may be provided a qualifying
15 student awarded a Pathway to Practice medical
16 scholarship voucher under the Program, unless the
17 qualifying student submits to the Secretary an
18 agreement to—
19 ‘‘(A) complete a post-baccalaureate pro-
20 gram that is not more than 2 years (if applica-
21 ble pursuant to the option under subsection
22 (b)(2)(A));
23 ‘‘(B) graduate from a qualifying medical
24 school;
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490
1 ‘‘(C) complete a residency program in an
2 approved residency training program (as de-
3 fined in section 1886(h)(5)(A));
4 ‘‘(D) complete an initial residency period
5 or the period of board eligibility;
6 ‘‘(E) practice medicine for at least the
7 number of years of the Pathway to Practice
8 medical scholarship voucher awarded under
9 paragraph (2) after a residency program in a
10 health professional shortage area, a medically
11 underserved area, a public hospital, or a rural
12 area, and during such period annually submit
13 documentation with respect to whether the
14 qualifying student practices medicine in such an
15 area and where;
16 ‘‘(F) for the purpose of determining com-
17 pliance with subparagraph (E), not later than
18 180 days after the date on which qualifying stu-
19 dent completes a residency program, provide to
20 the Secretary information with respect to where
21 the qualifying student is practicing medicine
22 following the period described in such subpara-
23 graph;
24 ‘‘(G) except in the case of a waiver for
25 hardship pursuant to section 1892(f)(3), be lia-
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1 ble to the United States pursuant to section
2 1892 for any amounts received under this Pro-
3 gram that is determined a past-due obligation
4 under subsection (b)(3) of such section in the
5 case qualifying student fails to complete all of
6 the requirements of this agreement under this
7 subsection; and
8 ‘‘(H) for the purpose of determining the
9 amount of Pathway to Practice medical scholar-
10 ship vouchers paid or incurred by a qualifying
11 medical school or any provider of a post-bacca-
12 laureate program referred to in subsection
13 (b)(2)(A) for the costs of tuition under para-
14 graph (4)(A), consent to any personally identi-
15 fying information being shared with the Sec-
16 retary of the Treasury.
17 ‘‘(6) RESPONSIBILITIES OF PARTICIPATING
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492
1 ‘‘(A) submit to the Secretary such infor-
2 mation as the Secretary may require to deter-
3 mine the amount of such award on the basis of
4 the costs of the costs of the items specified
5 under paragraph (4) (except for subparagraph
6 (D)) with respect to such school or program,
7 and
8 ‘‘(B) enter into an agreement with the Sec-
9 retary under which such school or provider will
10 verify (in such manner as the Secretary may
11 provide) that amounts paid by such school or
12 provider to the qualifying student are used for
13 such costs.
14 ‘‘(e) DEFINITIONS.—In this section:
15 ‘‘(1) HEALTH PROFESSIONAL SHORTAGE
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493
1 designated pursuant to section 330(b)(3)(A) of the
2 Public Health Service Act.
3 ‘‘(4) PELL GRANT RECIPIENT.—The term ‘Pell
4 Grant recipient’ has the meaning given such term in
5 section 322(3) of the Higher Education Act of 1965.
6 ‘‘(5) PERIOD OF BOARD ELIGIBILITY.—The
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494
1 fessional shortage areas, medically underserved
2 areas, or rural areas, including—
3 ‘‘(i) clinical rotations in such areas in
4 applicable specialties (as applicable and as
5 available);
6 ‘‘(ii) coursework or training experi-
7 ences focused on medical issues prevalent
8 in such areas and cultural and structural
9 competency; and
10 ‘‘(C) is located in a State (as defined in
11 section 210(h)).
12 ‘‘(7) RURAL AREA.—The term ‘rural area’ has
13 the meaning given such term in section
14 1886(d)(2)(D).
15 ‘‘(f) PENALTY FOR FALSE INFORMATION.—Any per-
16 son who knowingly and willfully obtains by fraud, false
17 statement, or forgery, or fails to refund any funds, assets,
18 or property provided under this section or attempts to so
19 obtain by fraud, false statement or forgery, or fail to re-
20 fund any funds, assets, or property, received pursuant to
21 this section shall be fined not more than $20,000 or im-
22 prisoned for not more than 5 years, or both.’’.
23 (2) AGREEMENTS.—Section 1892 of the Social
24 Security Act (42 U.S.C. 1395ccc) is amended—
25 (A) in subsection (a)(1)(A)—
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495
1 (i) by striking ‘‘, or the’’ and inserting
2 ‘‘, the’’; and
3 (ii) by inserting ‘‘or the Rural and
4 Underserved Pathway to Practice Training
5 Program for Post- Baccalaureate and Med-
6 ical Students under section 1899C’’ before
7 ‘‘, owes a past-due obligation’’;
8 (B) in subsection (b)—
9 (i) in paragraph (1), by striking at
10 the end ‘‘or’’;
11 (ii) in paragraph (2), by striking the
12 period at the end and inserting ‘‘; or’’; and
13 (iii) by adding the end the following
14 new paragraph:
15 ‘‘(3) subject to subsection (f), owed by an indi-
16 vidual to the United States by breach of an agree-
17 ment under section 1899C(c) and which payment
18 has not been paid by the individual for any amounts
19 received under the Rural and Underserved Pathway
20 to Practice Training Program for Post-Bacca-
21 laureate and Medical Students (and accrued interest
22 determined in accordance with subsection (f)(4)) in
23 the case such individual fails to complete the re-
24 quirements of such agreement.’’; and
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496
1 (C) by adding at the end the following new
2 subsection:
3 ‘‘(f) AUTHORITIES WITH RESPECT TO THE COLLEC-
4 TION UNDER THE PATHWAY TO PRACTICE TRAINING
5 PROGRAM.—The Secretary—
6 ‘‘(1) shall require payment to the United States
7 for any amount of damages that the United States
8 is entitled to recover under subsection (b)(3), within
9 the 5-year period beginning on the date an eligible
10 individual fails to complete the requirements of such
11 agreement under section 1899C(d)(5) (or such
12 longer period beginning on such date as specified by
13 the Secretary), and any such amounts not paid with-
14 in such period shall be subject to collection through
15 deductions in Medicare payments pursuant to sub-
16 section (e);
17 ‘‘(2) may allow payments described in para-
18 graph (1) to be paid in installments over such 5-year
19 period, which shall accrue interest in an amount de-
20 termined pursuant to paragraph (5);
21 ‘‘(3) may waive the requirement for an indi-
22 vidual to pay a past-due obligation under subsection
23 (b)(3) in the case of hardship (as determined by the
24 Secretary);
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497
1 ‘‘(4) may not disclose any past-due obligation
2 under subsection (b)(3) that is owed to the United
3 States to any credit reporting agency that the
4 United States entitled to be recovered the United
5 States under this section; and
6 ‘‘(5) shall make a final determination of wheth-
7 er the amount of payment under section 1899C
8 made to a qualifying student (as described in sub-
9 section (b) of such section) was in excess of or less
10 than the amount of payment that is due, and pay-
11 ment of such excess or deficit is not made (or ef-
12 fected by offset) within 90 days of the date of the
13 determination, and interest shall accrue on the bal-
14 ance of such excess or deficit not paid or offset (to
15 the extent that the balance is owed by or owing to
16 the provider) at a rate determined in accordance
17 with the regulations of the Secretary of the Treasury
18 applicable to charges for late payments.’’.
19 SEC. 137602. FUNDING FOR THE RURAL AND UNDERSERVED
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498
1 is amended by inserting after section 36F the following
2 new section:
3 ‘‘SEC. 36G. PATHWAY TO PRACTICE MEDICAL SCHOLAR-
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1 ‘‘(2) in the case of any amount credited by a
2 qualified educational institution against a liability
3 owed by the qualifying student to such institution,
4 such amount shall be treated as paid by such insti-
5 tution to such student as of the date that such liabil-
6 ity would otherwise be due.
7 ‘‘(c) DEFINITIONS.—For purposes of this section—
8 ‘‘(1) QUALIFIED EDUCATIONAL INSTITUTION.—
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1 ‘‘(3) ANNUAL AWARD OF A PATHWAY TO PRAC-
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501
1 ceding provisions of this Act, is amended by insert-
2 ing ‘‘36G,’’ after ‘‘36F,’’.
3 (3) The table of sections for subpart C of part
4 IV of subchapter A of chapter 1 of the Internal Rev-
5 enue Code of 1986, and amended by the preceding
6 provisions of this Act, is amended by inserting after
7 the item relating to section 36F the following new
8 item:
‘‘Sec. 36G. Pathway to Practice medical scholarship voucher credit.’’.
502
1 SEC. 137603. ESTABLISHING RURAL AND UNDERSERVED
14 GRAMS.—
503
1 subparagraph (F) for such cost re-
2 porting period by the number of full-
3 time equivalent residents so trained
4 under such program during such pe-
5 riod (in this clause, referred to as the
6 ‘Rural and Underserved Pathway to
7 Practice Training Programs for Med-
8 ical Residents’ or ‘Program’).
9 ‘‘(II) APPLICABLE HOSPITAL OR
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504
1 ‘‘(cc) The programs have a
2 demonstrated record of training
3 medical residents in medically
4 underserved areas, rural areas, or
5 health professional shortage
6 areas.
7 ‘‘(dd) The hospital agrees to
8 promote community-based train-
9 ing of residents under their pro-
10 grams, as appropriate.
11 ‘‘(III) ANNUAL LIMITATION FOR
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505
1 or (B) of section 332(a)(1) of the
2 Public Health Service Act.
3 ‘‘(bb) MEDICAL UNDER-
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506
1 SEC. 137604. ADMINISTRATIVE FUNDING OF THE RURAL
22 INFRASTRUCTURE.
507
1 ‘‘SEC. 45AA. PUBLIC UNIVERSITY RESEARCH INFRASTRUC-
2 TURE CREDIT.
508
1 to the extent that it is designated as such by a cer-
2 tified educational institution under subsection (d).
3 ‘‘(c) DEFINITIONS.—For purposes of this section—
4 ‘‘(1) QUALIFYING PROJECT.—The term ‘quali-
5 fying project’ means a project to purchase, con-
6 struct, or improve research infrastructure property.
7 ‘‘(2) RESEARCH INFRASTRUCTURE PROP-
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1 ‘‘(4) CERTIFIED EDUCATIONAL INSTITUTION.—
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1 ‘‘(B) LIMITATIONS.—
2 ‘‘(i) ALLOCATION LIMITATION PER IN-
8 TION.—
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1 subclause for such succeeding cal-
2 endar year.
3 ‘‘(iii) DESIGNATION LIMITATION.—
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1 ‘‘(B) in a manner that ensures consider-
2 ation is given to eligible educational institutions
3 with full-time student populations of less than
4 12,000.
5 ‘‘(4) DESIGNATION OF QUALIFIED CASH CON-
12 IGNATIONS.—
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1 ‘‘(e) REGULATIONS AND GUIDANCE.—The Secretary,
2 after consultation with the Secretary of Education when
3 applicable, shall prescribe such regulations and guidance
4 as may be necessary or appropriate to carry out the pur-
5 poses of this section, including regulations for—
6 ‘‘(1) prevention of abuse,
7 ‘‘(2) establishment of reporting requirements,
8 ‘‘(3) establishment of selection criteria for ap-
9 plications, and
10 ‘‘(4) disclosure of allocations.
11 ‘‘(f) PENALTY FOR NONCOMPLIANCE.—
12 ‘‘(1) IN GENERAL.—If at any time during the
13 5-year period beginning on the date of the allocation
14 of credit amounts to a certified educational institu-
15 tion under subsection (d)(1)(A)(i) there is a non-
16 compliance event with respect to such credit
17 amounts, then the following rules shall apply:
18 ‘‘(A) GENERAL RULE.—Any cash contribu-
19 tion designated as a qualifying cash contribu-
20 tion with respect to a qualifying project for
21 which such credit amounts were allocated under
22 subsection (d)(1)(A)(ii) shall be treated as un-
23 related business taxable income (as defined in
24 section 512) of such certified educational insti-
25 tution.
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1 ‘‘(B) RULE FOR UNUSED CREDIT
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1 ‘‘(C) the research infrastructure property
2 placed in service as part of a qualifying project
3 with respect to which such credit amount was
4 allocated ceases to be used for research within
5 five years after such property is placed in serv-
6 ice.
7 ‘‘(g) REVIEW AND REALLOCATION OF CREDIT
8 AMOUNTS.—
9 ‘‘(1) REVIEW.—Not later than 5 years after the
10 date of enactment of this section, the Secretary shall
11 review the credit amounts allocated under this sec-
12 tion as of such date.
13 ‘‘(2) REALLOCATION.—
14 ‘‘(A) IN GENERAL.—The Secretary may re-
15 allocate credit amounts allocated under this sec-
16 tion if the Secretary determines, as of the date
17 of the review in paragraph (1), that such credit
18 amounts are subject to a noncompliance event.
19 ‘‘(B) ADDITIONAL PROGRAM.—If the Sec-
20 retary determines that credits under this sec-
21 tion are available for reallocation pursuant to
22 the requirements set forth in subparagraph (A),
23 the Secretary is authorized to conduct an addi-
24 tional program for applications for certification.
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1 ‘‘(C) DEADLINE FOR REALLOCATION.—
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1 as amended by the preceding provisions of this Act, is
2 amended by adding at the end the following new item:
‘‘Sec. 45AA. Public university research infrastructure credit.’’.
8 UNIVERSITIES.
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1 dents for academic periods beginning dur-
2 ing the taxable year, over
3 ‘‘(ii) an amount equal to 20 percent of
4 the aggregate undergraduate tuition and
5 fees received by the institution from first-
6 time, full-time undergraduate students for
7 such academic periods, bears to
8 ‘‘(B) an amount equal to 13 percent of
9 such aggregate undergraduate tuition and fees
10 so received.
11 ‘‘(2) INSTITUTION MUST MEET REPORTING RE-
12 QUIREMENT.—
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1 ‘‘(ii) The students who have been
2 awarded a Federal Pell Grant under sub-
3 part 1 of part A of title IV of the Higher
4 Education Act of 1965 for attendance at
5 the institution.
6 ‘‘(iii) The students who received work-
7 study assistance under part C of title IV of
8 such Act for attendance at such institu-
9 tion.
10 ‘‘(iv) The students who were provided
11 such Federal student loans.
12 ‘‘(B) FORM AND MANNER FOR REPORT.—
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1 ‘‘(A) FIRST-TIME, FULL-TIME UNDER-
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1 ‘‘(B) the cost-of-living adjustment deter-
2 mined under section 1(f)(3) for the calendar
3 year in which the taxable year begins, deter-
4 mined by substituting ‘calendar year 2021’ for
5 ‘calendar year 2016’ in subparagraph (A)(ii)
6 thereof.
7 If any increase determined under this paragraph is
8 not a multiple of $1,000, such increase shall be
9 rounded to the nearest multiple of $1,000.’’.
10 (c) CLARIFICATION OF 500 STUDENT THRESH-
11 OLD.—Section 4968(b)(1)(A) is amended by inserting
12 ‘‘below the graduate level’’ after ‘‘500 tuition-paying stu-
13 dents’’.
14 (d) EFFECTIVE DATE.—The amendment made by
15 this section shall apply to taxable years beginning after
16 December 31, 2021.
17 SEC. 137703. TREATMENT OF FEDERAL PELL GRANTS FOR
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522
1 such amount was used for qualified tuition and
2 related expenses, or
3 ‘‘(B) as a Federal Pell Grant under section
4 401 of the Higher Education Act of 1965.’’.
5 (b) TREATMENT FOR PURPOSES OF AMERICAN OP-
6 PORTUNITY TAX CREDIT AND LIFETIME LEARNING
7 CREDIT.—Section 25A(g)(2) is amended—
8 (1) in subparagraph (A), by inserting ‘‘de-
9 scribed in section 117(b)(1)(A)’’ after ‘‘a qualified
10 scholarship’’, and
11 (2) in subparagraph (C), by inserting ‘‘or Fed-
12 eral Pell Grant under section 401 of the Higher
13 Education Act of 1965’’ after ‘‘within the meaning
14 of section 102(a)’’.
15 (c) EFFECTIVE DATE.—The amendment made by
16 this section shall apply to taxable years beginning after
17 December 31, 2021.
18 SEC. 137704. REPEAL OF DENIAL OF AMERICAN OPPOR-
20 DRUG CONVICTION.
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1 Subtitle J—Drug Pricing
2 PART 1—LOWERING PRICES THROUGH FAIR
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1 ‘‘(4) carry out the administrative duties de-
2 scribed in section 1196.
3 ‘‘(b) DEFINITIONS RELATING TO TIMING.—For pur-
4 poses of this part:
5 ‘‘(1) INITIAL PRICE APPLICABILITY YEAR.—The
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1 spect to an initial price applicability year with re-
2 spect to a selected drug, the period—
3 ‘‘(A) beginning on the sooner of—
4 ‘‘(i) the date on which the manufac-
5 turer of the drug and the Secretary enter
6 into an agreement under section 1193 with
7 respect to such drug; or
8 ‘‘(ii) June 15 following the selected
9 drug publication date with respect to such
10 selected drug; and
11 ‘‘(B) ending on March 31 of the year that
12 begins one year prior to the initial price appli-
13 cability year.
14 ‘‘(c) OTHER DEFINITIONS.—For purposes of this
15 part:
16 ‘‘(1) FAIR PRICE ELIGIBLE INDIVIDUAL.—The
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1 under such plan for such selected drug;
2 and
3 ‘‘(ii) an individual who is enrolled
4 under a group health plan or health insur-
5 ance coverage offered in the group or indi-
6 vidual market (as such terms are defined
7 in section 2791 of the Public Health Serv-
8 ice Act) with respect to which there is in
9 effect an agreement with the Secretary
10 under section 1197 with respect to such se-
11 lected drug as so furnished or dispensed;
12 and
13 ‘‘(B) in the case such drug is furnished or
14 administered to the individual by a hospital,
15 physician, or other provider of services or sup-
16 plier—
17 ‘‘(i) an individual who is entitled to
18 benefits under part A of title XVIII or en-
19 rolled under part B of such title if such se-
20 lected drug is covered under the respective
21 part; and
22 ‘‘(ii) an individual who is enrolled
23 under a group health plan or health insur-
24 ance coverage offered in the group or indi-
25 vidual market (as such terms are defined
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1 in section 2791 of the Public Health Serv-
2 ice Act) with respect to which there is in
3 effect an agreement with the Secretary
4 under section 1197 with respect to such se-
5 lected drug as so furnished or adminis-
6 tered.
7 ‘‘(2) MAXIMUM FAIR PRICE.—The term ‘max-
8 imum fair price’ means, with respect to a plan year
9 during a price applicability period and with respect
10 to a selected drug (as defined in section 1192(c))
11 with respect to such period, the price published pur-
12 suant to section 1195 in the Federal Register for
13 such drug and year.
14 ‘‘(3) AVERAGE INTERNATIONAL MARKET PRICE
15 DEFINED.—
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1 of the date of publication of such drug as a se-
2 lected drug under section 1192(a)) in all coun-
3 tries described in clause (ii) of subparagraph
4 (B) that are applicable countries (as described
5 in clause (i) of such subparagraph) with respect
6 to such drug.
7 ‘‘(B) APPLICABLE COUNTRIES.—
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1 (such as a capsule or tablet, milligram of molecules,
2 or grams) of the drug that is dispensed.
3 ‘‘SEC. 1192. SELECTION OF NEGOTIATION-ELIGIBLE DRUGS
4 AS SELECTED DRUGS.
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1 such negotiation-eligible drugs for the year) with re-
2 spect to such year;
3 ‘‘(2) all negotiation-eligible drugs described in
4 subparagraph (C) of such subsection with respect to
5 such year; and
6 ‘‘(3) all new-entrant negotiation-eligible drugs
7 (as defined in subsection (g)(1)) with respect to such
8 year.
9 Each drug published on the list pursuant to the previous
10 sentence shall be subject to the negotiation process under
11 section 1194 for the voluntary negotiation period with re-
12 spect to such initial price applicability year (and the re-
13 negotiation process under such section as applicable for
14 any subsequent year during the applicable price applica-
15 bility period). In applying this subsection, any negotiation-
16 eligible drug that is selected under this subsection for an
17 initial price applicability year shall not count toward the
18 required minimum amount of drugs to be selected under
19 paragraph (1) for any subsequent year, including such a
20 drug so selected that is subject to renegotiation under sec-
21 tion 1194.
22 ‘‘(b) SELECTION OF DRUGS.—In carrying out sub-
23 section (a)(1) the Secretary shall select for inclusion on
24 the published list described in subsection (a) with respect
25 to a price applicability period, the negotiation-eligible
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1 drugs that the Secretary projects will result in the greatest
2 savings to the Federal Government or fair price eligible
3 individuals during the price applicability period. In making
4 this projection of savings for drugs for which there is an
5 AIM price for a price applicability period, the savings shall
6 be projected across different dosage forms and strengths
7 of the drugs and not based on the specific formulation or
8 package size or package type of the drugs, taking into con-
9 sideration both the volume of drugs for which payment
10 is made, to the extent such data is available, and the
11 amount by which the net price for the drugs exceeds the
12 AIM price for the drugs.
13 ‘‘(c) SELECTED DRUG.—For purposes of this part,
14 each drug included on the list published under subsection
15 (a) with respect to an initial price applicability year shall
16 be referred to as a ‘selected drug’ with respect to such
17 year and each subsequent plan year beginning before the
18 first plan year beginning after the date on which the Sec-
19 retary determines two or more drug products—
20 ‘‘(1) are approved or licensed (as applicable)—
21 ‘‘(A) under section 505(j) of the Federal
22 Food, Drug, and Cosmetic Act using such drug
23 as the listed drug; or
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532
1 ‘‘(B) under section 351(k) of the Public
2 Health Service Act using such drug as the ref-
3 erence product; and
4 ‘‘(2) continue to be marketed.
5 ‘‘(d) NEGOTIATION-ELIGIBLE DRUG.—
6 ‘‘(1) IN GENERAL.—For purposes of this part,
7 the term ‘negotiation-eligible drug’ means, with re-
8 spect to the selected drug publication date with re-
9 spect to an initial price applicability year, a quali-
10 fying single source drug, as defined in subsection
11 (e), that meets any of the following criteria:
12 ‘‘(A) COVERED PART D DRUGS.—The drug
13 is among the 125 covered part D drugs (as de-
14 fined in section 1860D–2(e)) for which there
15 was an estimated greatest net spending under
16 parts C and D of title XVIII, as determined by
17 the Secretary, during the most recent plan year
18 prior to such drug publication date for which
19 data are available.
20 ‘‘(B) OTHER DRUGS.—The drug is among
21 the 125 drugs for which there was an estimated
22 greatest net spending in the United States (in-
23 cluding the 50 States, the District of Columbia,
24 and the territories of the United States), as de-
25 termined by the Secretary, during the most re-
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533
1 cent plan year prior to such drug publication
2 date for which data are available.
3 ‘‘(C) INSULIN.—The drug is a qualifying
4 single source drug described in subsection
5 (e)(3).
6 ‘‘(2) CLARIFICATION.—In determining whether
7 a qualifying single source drug satisfies any of the
8 criteria described in paragraph (1), the Secretary
9 shall, to the extent practicable, use data that is ag-
10 gregated across dosage forms and strengths of the
11 drug and not based on the specific formulation or
12 package size or package type of the drug.
13 ‘‘(3) PUBLICATION.—Not later than the se-
14 lected drug publication date with respect to an ini-
15 tial price applicability year, the Secretary shall pub-
16 lish in the Federal Register a list of negotiation-eli-
17 gible drugs with respect to such selected drug publi-
18 cation date.
19 ‘‘(e) QUALIFYING SINGLE SOURCE DRUG.—For pur-
20 poses of this part, the term ‘qualifying single source drug’
21 means any of the following:
22 ‘‘(1) DRUG PRODUCTS.—A drug that—
23 ‘‘(A) is approved under section 505(c) of
24 the Federal Food, Drug, and Cosmetic Act and
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1 continues to be marketed pursuant to such ap-
2 proval; and
3 ‘‘(B) is not the listed drug for any drug
4 that is approved and continues to be marketed
5 under section 505(j) of such Act.
6 ‘‘(2) BIOLOGICAL PRODUCTS.—A biological
7 product that—
8 ‘‘(A) is licensed under section 351(a) of
9 the Public Health Service Act, including any
10 product that has been deemed to be licensed
11 under section 351 of such Act pursuant to sec-
12 tion 7002(e)(4) of the Biologics Price Competi-
13 tion and Innovation Act of 2009, and continues
14 to be marketed under section 351 of such Act;
15 and
16 ‘‘(B) is not the reference product for any
17 biological product that is licensed and continues
18 to be marketed under section 351(k) of such
19 Act.
20 ‘‘(3) INSULIN PRODUCT.—Notwithstanding
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1 marketed under such section 505 or 351, including
2 any insulin product that has been deemed to be li-
3 censed under section 351(a) of the Public Health
4 Service Act pursuant to section 7002(e)(4) of the
5 Biologics Price Competition and Innovation Act of
6 2009 and continues to be marketed pursuant to such
7 licensure.
8 For purposes of applying paragraphs (1) and (2), a drug
9 or biological product that is marketed by the same sponsor
10 or manufacturer (or an affiliate thereof or a cross-licensed
11 producer or distributor) as the listed drug or reference
12 product described in such respective paragraph shall not
13 be taken into consideration.
14 ‘‘(f) INFORMATION ON INTERNATIONAL DRUG
15 PRICES.—For purposes of determining which negotiation-
16 eligible drugs to select under subsection (a) and, in the
17 case of such drugs that are selected drugs, to determine
18 the maximum fair price for such a drug and whether such
19 maximum fair price should be renegotiated under section
20 1194, the Secretary shall use data relating to the AIM
21 price with respect to such drug as available or provided
22 to the Secretary and shall on an ongoing basis request
23 from manufacturers of selected drugs information on the
24 AIM price of such a drug.
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1 ‘‘(g) NEW-ENTRANT NEGOTIATION-ELIGIBLE
2 DRUGS.—
3 ‘‘(1) IN GENERAL.—For purposes of this part,
4 the term ‘new-entrant negotiation-eligible drug’
5 means, with respect to the selected drug publication
6 date with respect to an initial price applicability
7 year, a qualifying single source drug—
8 ‘‘(A) that is first approved or licensed, as
9 described in paragraph (1), (2), or (3) of sub-
10 section (e), as applicable, during the year pre-
11 ceding such selected drug publication date; and
12 ‘‘(B) that the Secretary determines under
13 paragraph (2) is likely to be included as a nego-
14 tiation-eligible drug with respect to the subse-
15 quent selected drug publication date.
16 ‘‘(2) DETERMINATION.—In the case of a quali-
17 fying single source drug that meets the criteria de-
18 scribed in subparagraph (A) of paragraph (1), with
19 respect to an initial price applicability year, if the
20 wholesale acquisition cost at which such drug is first
21 marketed in the United States is equal to or greater
22 than the median household income (as determined
23 according to the most recent data collected by the
24 United States Census Bureau), the Secretary shall
25 determine before the selected drug publication date
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1 with respect to the initial price applicability year, if
2 the drug is likely to be included as a negotiation-eli-
3 gible drug with respect to the subsequent selected
4 drug publication date, based on the projected spend-
5 ing under title XVIII or in the United States on
6 such drug. For purposes of this paragraph the term
7 ‘United States’ includes the 50 States, the District
8 of Columbia, and the territories of the United
9 States.
10 ‘‘(h) CONFLICT OF INTEREST.—
11 ‘‘(1) IN GENERAL.—In the case the Inspector
12 General of the Department of Health and Human
13 Services determines the Secretary has a conflict,
14 with respect to a matter described in paragraph (2),
15 the individual described in paragraph (3) shall carry
16 out the duties of the Secretary under this part, with
17 respect to a negotiation-eligible drug, that would
18 otherwise be such a conflict.
19 ‘‘(2) MATTER DESCRIBED.—A matter described
20 in this paragraph is—
21 ‘‘(A) a financial interest (as described in
22 section 2635.402 of title 5, Code of Federal
23 Regulations, as in effect on the date of the en-
24 actment of this section, (except for an interest
25 described in subsection (b)(2)(iv) of such sec-
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538
1 tion)) on the date of the selected drug publica-
2 tion date, with respect the price applicability
3 year (as applicable);
4 ‘‘(B) a personal or business relationship
5 (as described in section 2635.502 of such title)
6 on the date of the selected drug publication
7 date, with respect the price applicability year;
8 ‘‘(C) employment by a manufacturer of a
9 negotiation-eligible drug during the preceding
10 10-year period beginning on the date of the se-
11 lected drug publication date, with respect to
12 each price applicability year; and
13 ‘‘(D) any other matter the General Counsel
14 determines appropriate.
15 ‘‘(3) INDIVIDUAL DESCRIBED.—An individual
16 described in this paragraph is—
17 ‘‘(A) the highest-ranking officer or em-
18 ployee of the Department of Health and
19 Human Services (as determined by the organi-
20 zational chart of the Department) that does not
21 have a conflict under this subsection; and
22 ‘‘(B) is nominated by the President and
23 confirmed by the Senate with respect to the po-
24 sition.
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539
1 ‘‘SEC. 1193. MANUFACTURER AGREEMENTS.
540
1 administered such drug during, subject to sub-
2 paragraph (2), the price applicability period;
3 ‘‘(2) the Secretary and the manufacturer shall,
4 in accordance with a process and during a period
5 specified by the Secretary pursuant to rulemaking,
6 renegotiate (and, by not later than the last date of
7 such period and in accordance with subsection (c),
8 agree to) the maximum fair price for such drug if
9 the Secretary determines that there is a material
10 change in any of the factors described in section
11 1194(d) relating to the drug, including changes in
12 the AIM price for such drug, in order to provide ac-
13 cess to such maximum fair price (as so renegoti-
14 ated)—
15 ‘‘(A) to fair price eligible individuals who
16 with respect to such drug are described in sub-
17 paragraph (A) of section 1191(c)(1) and are
18 furnished or dispensed such drug during any
19 year during the price applicability period (be-
20 ginning after such renegotiation) with respect
21 to such selected drug; and
22 ‘‘(B) to hospitals, physicians, and other
23 providers of services and suppliers with respect
24 to fair price eligible individuals who with re-
25 spect to such drug are described in subpara-
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541
1 graph (B) of such section and are furnished or
2 administered such drug during any year de-
3 scribed in subparagraph (A);
4 ‘‘(3) the maximum fair price (including as re-
5 negotiated pursuant to paragraph (2)), with respect
6 to such a selected drug, shall be provided to fair
7 price eligible individuals, who with respect to such
8 drug are described in subparagraph (A) of section
9 1191(c)(1), at the pharmacy or by a mail order serv-
10 ice at the point-of-sale of such drug;
11 ‘‘(4) the manufacturer, subject to subsection
12 (d), submits to the Secretary, in a form and manner
13 specified by the Secretary—
14 ‘‘(A) for the voluntary negotiation period
15 for the price applicability period (and, if appli-
16 cable, before any period of renegotiation speci-
17 fied pursuant to paragraph (2)) with respect to
18 such drug all information that the Secretary re-
19 quires to carry out the negotiation (or renegoti-
20 ation process) under this part, including infor-
21 mation described in section 1192(f) and section
22 1194(d)(1); and
23 ‘‘(B) on an ongoing basis, information on
24 changes in prices for such drug that would af-
25 fect the AIM price for such drug or otherwise
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542
1 provide a basis for renegotiation of the max-
2 imum fair price for such drug pursuant to
3 paragraph (2);
4 ‘‘(5) the manufacturer agrees that in the case
5 the selected drug of a manufacturer is a drug de-
6 scribed in subsection (c), the manufacturer will, in
7 accordance with such subsection, make any payment
8 required under such subsection with respect to such
9 drug; and
10 ‘‘(6) the manufacturer complies with require-
11 ments imposed by the Secretary for purposes of ad-
12 ministering the program, including with respect to
13 the duties described in section 1196.
14 ‘‘(b) AGREEMENT IN EFFECT UNTIL DRUG IS NO
15 LONGER A SELECTED DRUG.—An agreement entered into
16 under this section shall be effective, with respect to a drug,
17 until such drug is no longer considered a selected drug
18 under section 1192(c).
19 ‘‘(c) SPECIAL RULE FOR CERTAIN SELECTED DRUGS
20 WITHOUT AIM PRICE.—
21 ‘‘(1) IN GENERAL.—In the case of a selected
22 drug for which there is no AIM price available with
23 respect to the initial price applicability year for such
24 drug and for which an AIM price becomes available
25 beginning with respect to a subsequent plan year
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1 during the price applicability period for such drug,
2 if the Secretary determines that the amount de-
3 scribed in paragraph (2)(A) for a unit of such drug
4 is greater than the amount described in paragraph
5 (2)(B) for a unit of such drug, then by not later
6 than one year after the date of such determination,
7 the manufacturer of such selected drug shall pay to
8 the Treasury an amount equal to the product of—
9 ‘‘(A) the difference between such amount
10 described in paragraph (2)(A) for a unit of
11 such drug and such amount described in para-
12 graph (2)(B) for a unit of such drug; and
13 ‘‘(B) the number of units of such drug sold
14 in the United States, including the 50 States,
15 the District of Columbia, and the territories of
16 the United States, during the period described
17 in paragraph (2)(B).
18 ‘‘(2) AMOUNTS DESCRIBED.—
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1 form for the drug during the period beginning
2 with the first plan year for which the drug is
3 included on the list of negotiation-eligible drugs
4 published under section 1192(d) and ending
5 with the last plan year during the price applica-
6 bility period for such drug with respect to which
7 there is no AIM price available for such drug.
8 ‘‘(B) AMOUNT MULTIPLIER AFTER AIM
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545
1 ‘‘(1) IN GENERAL.—The Secretary shall, pursu-
2 ant to rulemaking, specify, in accordance with para-
3 graph (2), the information that must be submitted
4 under subsection (a)(4).
5 ‘‘(2) INFORMATION SPECIFIED.—Information
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1 the period for which such agreement is in effect and in
2 accordance with subsections (b) and (c), the Secretary and
3 the manufacturer—
4 ‘‘(1) shall during the voluntary negotiation pe-
5 riod with respect to the initial price applicability
6 year for such drug, in accordance with this section,
7 negotiate a maximum fair price for such drug for
8 the purpose described in section 1193(a)(1); and
9 ‘‘(2) as applicable pursuant to section
10 1193(a)(2) and in accordance with the process speci-
11 fied pursuant to such section, renegotiate such max-
12 imum fair price for such drug for the purpose de-
13 scribed in such section.
14 ‘‘(b) NEGOTIATING METHODOLOGY AND OBJEC-
15 TIVE.—
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1 extent practicable, consider all of the available fac-
2 tors listed but shall prioritize the following factors:
3 ‘‘(A) RESEARCH AND DEVELOPMENT
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1 paragraph (B) for such drug for the respective
2 year, the Secretary shall agree under such ne-
3 gotiation or renegotiation, respectively, to such
4 offered price as the maximum fair price.
5 ‘‘(B) TARGET PRICE.—
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1 ‘‘(ii) SELECTED DRUGS WITHOUT AIM
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1 ‘‘(2) SELECTED DRUGS WITHOUT AIM PRICE.—
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1 which the manufacturer has recouped research
2 and development costs.
3 ‘‘(B) Market data for the drug, including
4 the distribution of sales across different pro-
5 grams and purchasers and projected future rev-
6 enues for the drug.
7 ‘‘(C) Unit costs of production and distribu-
8 tion of the drug.
9 ‘‘(D) Prior Federal financial support for
10 novel therapeutic discovery and development
11 with respect to the drug.
12 ‘‘(E) Data on patents and on existing and
13 pending exclusivity for the drug.
14 ‘‘(F) National sales data for the drug.
15 ‘‘(G) Information on clinical trials for the
16 drug in the United States or in applicable coun-
17 tries described in section 1191(c)(3)(B).
18 ‘‘(2) INFORMATION ON ALTERNATIVE PROD-
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1 ‘‘(B) Information on approval by the Food
2 and Drug Administration of alternative drug
3 products.
4 ‘‘(C) Information on comparative effective-
5 ness analysis for such products, taking into
6 consideration the effects of such products on
7 specific populations, such as individuals with
8 disabilities, the elderly, terminally ill, children,
9 and other patient populations.
10 In considering information described in subpara-
11 graph (C), the Secretary shall not use evidence or
12 findings from comparative clinical effectiveness re-
13 search in a manner that treats extending the life of
14 an elderly, disabled, or terminally ill individual as of
15 lower value than extending the life of an individual
16 who is younger, nondisabled, or not terminally ill.
17 Nothing in the previous sentence shall affect the ap-
18 plication or consideration of an AIM price for a se-
19 lected drug.
20 ‘‘(3) FOREIGN SALES INFORMATION.—To the
21 extent available on a timely basis, including as pro-
22 vided by a manufacturer of the selected drug or oth-
23 erwise, information on sales of the selected drug in
24 each of the countries described in section
25 1191(c)(3)(B).
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1 ‘‘(4) VA DRUG PRICING INFORMATION.—Infor-
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1 such requested information in such form and man-
2 ner as the Secretary may require.
3 The Secretary shall request, from the manufacturer or
4 others, such additional information as may be needed to
5 carry out the negotiation and renegotiation process under
6 this section.
7 ‘‘(f) DISCLOSURE OF INFORMATION.—For purposes
8 of this part, the Secretary of Veterans Affairs may disclose
9 to the Secretary of Health and Human Services the price
10 of any negotiation-eligible drug that is purchased pursuant
11 to section 8126 of title 38, United States Code.
12 ‘‘SEC. 1195. PUBLICATION OF MAXIMUM FAIR PRICES.
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1 such drug is in effect under section 1193, the Sec-
2 retary shall publish in the Federal Register—
3 ‘‘(A) subject to subparagraph (B), the
4 amount equal to the maximum fair price pub-
5 lished for such drug for the previous year, in-
6 creased by the annual percentage increase in
7 the consumer price index for all urban con-
8 sumers (all items; U.S. city average) as of Sep-
9 tember of such previous year; or
10 ‘‘(B) in the case the maximum fair price
11 for such drug was renegotiated, for the first
12 year for which such price as so renegotiated ap-
13 plies, such renegotiated maximum fair price.
14 ‘‘(2) PRICES NEGOTIATED AFTER DEADLINE.—
23 VISIONS.
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1 ‘‘(1) IN GENERAL.—For purposes of section
2 1191, the administrative duties described in this sec-
3 tion are the following:
4 ‘‘(A) The establishment of procedures (in-
5 cluding through agreements with manufacturers
6 under this part, contracts with prescription
7 drug plans under part D of title XVIII and
8 MA–PD plans under part C of such title, and
9 agreements under section 1197 with group
10 health plans and health insurance issuers of
11 health insurance coverage offered in the indi-
12 vidual or group market) under which the max-
13 imum fair price for a selected drug is provided
14 to fair price eligible individuals, who with re-
15 spect to such drug are described in subpara-
16 graph (A) of section 1191(c)(1), at pharmacies
17 or by mail order service at the point-of-sale of
18 the drug for the applicable price period for such
19 drug and providing that such maximum fair
20 price is used for determining cost-sharing under
21 such plans or coverage for the selected drug.
22 ‘‘(B) The establishment of procedures (in-
23 cluding through agreements with manufacturers
24 under this part and contracts with hospitals,
25 physicians, and other providers of services and
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1 suppliers and agreements under section 1197
2 with group health plans and health insurance
3 issuers of health insurance coverage offered in
4 the individual or group market) under which, in
5 the case of a selected drug furnished or admin-
6 istered by such a hospital, physician, or other
7 provider of services or supplier to fair price eli-
8 gible individuals (who with respect to such drug
9 are described in subparagraph (B) of section
10 1191(c)(1)), the maximum fair price for the se-
11 lected drug is provided to such hospitals, physi-
12 cians, and other providers of services and sup-
13 pliers (as applicable) with respect to such indi-
14 viduals and providing that such maximum fair
15 price is used for determining cost-sharing under
16 the respective part, plan, or coverage for the se-
17 lected drug.
18 ‘‘(C) The establishment of procedures (in-
19 cluding through agreements and contracts de-
20 scribed in subparagraphs (A) and (B)) to en-
21 sure that, not later than 90 days after the dis-
22 pensing of a selected drug to a fair price eligi-
23 ble individual by a pharmacy or mail order serv-
24 ice, the pharmacy or mail order service is reim-
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1 bursed for an amount equal to the difference
2 between—
3 ‘‘(i) the lesser of—
4 ‘‘(I) the wholesale acquisition
5 cost of the drug;
6 ‘‘(II) the national average drug
7 acquisition cost of the drug; and
8 ‘‘(III) any other similar deter-
9 mination of pharmacy acquisition
10 costs of the drug, as determined by
11 the Secretary; and
12 ‘‘(ii) the maximum fair price for the
13 drug.
14 ‘‘(D) The establishment of procedures to
15 ensure that the maximum fair price for a se-
16 lected drug is applied before—
17 ‘‘(i) any coverage or financial assist-
18 ance under other health benefit plans or
19 programs that provide coverage or finan-
20 cial assistance for the purchase or provi-
21 sion of prescription drug coverage on be-
22 half of fair price eligible individuals as the
23 Secretary may specify; and
24 ‘‘(ii) any other discounts.
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1 ‘‘(E) The establishment of procedures to
2 enter into appropriate agreements and protocols
3 for the ongoing computation of AIM prices for
4 selected drugs, including, to the extent possible,
5 to compute the AIM price for selected drugs
6 and including by providing that the manufac-
7 turer of such a selected drug should provide in-
8 formation for such computation not later than
9 3 months after the first date of the voluntary
10 negotiation period for such selected drug.
11 ‘‘(F) The establishment of procedures to
12 compute and apply the maximum fair price
13 across different strengths and dosage forms of
14 a selected drug and not based on the specific
15 formulation or package size or package type of
16 the drug.
17 ‘‘(G) The establishment of procedures to
18 negotiate and apply the maximum fair price in
19 a manner that does not include any dispensing
20 or similar fee.
21 ‘‘(H) The establishment of procedures to
22 carry out the provisions of this part, as applica-
23 ble, with respect to—
24 ‘‘(i) fair price eligible individuals who
25 are enrolled under a prescription drug plan
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560
1 under part D of title XVIII or an MA–PD
2 plan under part C of such title;
3 ‘‘(ii) fair price eligible individuals who
4 are enrolled under a group health plan or
5 health insurance coverage offered by a
6 health insurance issuer in the individual or
7 group market with respect to which there
8 is an agreement in effect under section
9 1197; and
10 ‘‘(iii) fair price eligible individuals who
11 are entitled to benefits under part A of
12 title XVIII or enrolled under part B of
13 such title.
14 ‘‘(I) The establishment of a negotiation
15 process and renegotiation process in accordance
16 with section 1194, including a process for ac-
17 quiring information described in subsection (d)
18 of such section and determining amounts de-
19 scribed in subsection (b) of such section.
20 ‘‘(J) The provision of a reasonable dispute
21 resolution mechanism to resolve disagreements
22 between manufacturers, fair price eligible indi-
23 viduals, and the third party with a contract
24 under subsection (c)(1).
25 ‘‘(2) MONITORING COMPLIANCE.—
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1 ‘‘(A) IN GENERAL.—The Secretary shall
2 monitor compliance by a manufacturer with the
3 terms of an agreement under section 1193, in-
4 cluding by establishing a mechanism through
5 which violations of such terms may be reported.
6 ‘‘(B) NOTIFICATION.—If a third party
7 with a contract under subsection (c)(1) deter-
8 mines that the manufacturer is not in compli-
9 ance with such agreement, the third party shall
10 notify the Secretary of such noncompliance for
11 appropriate enforcement under section 4192 of
12 the Internal Revenue Code of 1986 or section
13 1198, as applicable.
14 ‘‘(b) COLLECTION OF DATA.—
15 ‘‘(1) FROM PRESCRIPTION DRUG PLANS AND
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562
1 that allows for maximum fair prices to be provided
2 under this part for selected drugs.
3 ‘‘(3) COORDINATION OF DATA COLLECTION.—
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1 ‘‘(C) provide adequate and timely informa-
2 tion to manufacturers, consistent with the
3 agreement with the manufacturer under this
4 part, as necessary for the manufacturer to ful-
5 fill its obligations under this part; and
6 ‘‘(D) permit manufacturers to conduct
7 periodic audits, directly or through contracts, of
8 the data and information used by the third
9 party to determine discounts for applicable
10 drugs of the manufacturer under the program.
11 ‘‘(2) PERFORMANCE REQUIREMENTS.—The
18 HEALTH PLANS.
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1 erage (as such terms are defined in section 2791 of
2 the Public Health Service Act), with respect to a
3 price applicability period and a selected drug with
4 respect to such period—
5 ‘‘(A) with respect to such selected drug
6 furnished or dispensed at a pharmacy or by
7 mail order service if coverage is provided under
8 such plan or coverage during such period for
9 such selected drug as so furnished or dispensed;
10 and
11 ‘‘(B) with respect to such selected drug
12 furnished or administered by a hospital, physi-
13 cian, or other provider of services or supplier if
14 coverage is provided under such plan or cov-
15 erage during such period for such selected drug
16 as so furnished or administered.
17 ‘‘(2) OPTING OUT OF AGREEMENT.—The Sec-
18 retary shall not be treated as having in effect an
19 agreement under the program under this part with
20 a group health plan or health insurance issuer offer-
21 ing group or individual health insurance coverage
22 with respect to a price applicability period and a se-
23 lected drug with respect to such period if such a
24 plan or issuer affirmatively elects, through a process
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565
1 specified by the Secretary, not to participate under
2 the program with respect to such period and drug.
3 ‘‘(b) PUBLICATION OF ELECTION.—With respect to
4 each price applicability period and each selected drug with
5 respect to such period, the Secretary and the Secretary
6 of Labor and the Secretary of the Treasury, as applicable,
7 shall make public a list of each group health plan and each
8 health insurance issuer offering group or individual health
9 insurance coverage, with respect to which coverage is pro-
10 vided under such plan or coverage for such drug, that has
11 elected under subsection (a) not to participate under the
12 program with respect to such period and drug.
13 ‘‘SEC. 1198. CIVIL MONETARY PENALTY.
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1 ‘‘(2) to a hospital, physician, or other provider
2 of services or supplier with respect to fair price eligi-
3 ble individuals who with respect to such drug is de-
4 scribed in subparagraph (B) of such section and is
5 furnished or administered such drug by such hos-
6 pital, physician, or provider or supplier during such
7 year;
8 shall be subject to a civil monetary penalty equal to ten
9 times the amount equal to the difference between the price
10 for such drug made available for such year by such manu-
11 facturer with respect to such individual or hospital, physi-
12 cian, provider, or supplier and the maximum fair price for
13 such drug for such year.
14 ‘‘(b) VIOLATIONS OF CERTAIN TERMS OF AGREE-
15 MENT.—Any manufacturer of a selected drug that has en-
16 tered into an agreement under section 1193, with respect
17 to a plan year during the price applicability period for
18 such drug, that is in violation of a requirement imposed
19 pursuant to section 1193(a)(6) shall be subject to a civil
20 monetary penalty of not more than $1,000,000 for each
21 such violation.
22 ‘‘(c) APPLICATION.—The provisions of section 1128A
23 (other than subsections (a) and (b)) shall apply to a civil
24 monetary penalty under this section in the same manner
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1 as such provisions apply to a penalty or proceeding under
2 section 1128A(a).
3 ‘‘SEC. 1199. MISCELLANEOUS PROVISIONS.
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568
1 is necessary to determine the tax imposed by section 4192
2 of the Internal Revenue Code of 1986.’’.
3 (b) APPLICATION OF MAXIMUM FAIR PRICES AND
4 CONFORMING AMENDMENTS.—
5 (1) UNDER MEDICARE.—
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1 (i) in subparagraph (B), by inserting
2 ‘‘, subject to subparagraph (D),’’ after
3 ‘‘negotiated prices’’; and
4 (ii) by adding at the end the following
5 new subparagraph:
6 ‘‘(D) APPLICATION OF MAXIMUM FAIR
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570
1 with a PDP sponsor under this part with respect to
2 a prescription drug plan offered by such sponsor
3 shall require the sponsor to provide information to
4 the Secretary as requested by the Secretary in ac-
5 cordance with section 1196(b).’’.
6 (ii) MA–PD PLANS.—Section
13 1860D–12(b)(8).’’.
14 (2) UNDER GROUP HEALTH PLANS AND
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1 an agreement with the Secretary under the Fair Price Ne-
2 gotiation Program under part E of title XI of such Act,
3 with respect to a price applicability period (as defined in
4 section 1191(b) of such Act) and a selected drug (as de-
5 fined in section 1192(c) of such Act) with respect to such
6 period with respect to which coverage is provided under
7 such plan or coverage—
8 ‘‘(1) the provisions of such part shall apply—
9 ‘‘(A) if coverage of such selected drug is
10 provided under such plan or coverage if the
11 drug is furnished or dispensed at a pharmacy
12 or by a mail order service, to the plans or cov-
13 erage offered by such plan or issuer, and to the
14 individuals enrolled under such plans or cov-
15 erage, during such period, with respect to such
16 selected drug, in the same manner as such pro-
17 visions apply to prescription drug plans and
18 MA–PD plans, and to individuals enrolled
19 under such prescription drug plans and MA–
20 PD plans during such period; and
21 ‘‘(B) if coverage of such selected drug is
22 provided under such plan or coverage if the
23 drug is furnished or administered by a hospital,
24 physician, or other provider of services or sup-
25 plier, to the plans or coverage offered by such
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1 plan or issuers, to the individuals enrolled
2 under such plans or coverage, and to hospitals,
3 physicians, and other providers of services and
4 suppliers during such period, with respect to
5 such drug in the same manner as such provi-
6 sions apply to the Secretary, to individuals enti-
7 tled to benefits under part A of title XVIII or
8 enrolled under part B of such title, and to hos-
9 pitals, physicians, and other providers and sup-
10 pliers participating under title XVIII during
11 such period;
12 ‘‘(2) the plan or issuer shall apply any cost-
13 sharing responsibilities under such plan or coverage,
14 with respect to such selected drug, by substituting
15 an amount not more than the maximum fair price
16 negotiated under such part E of title XI for such
17 drug in lieu of the drug price upon which the cost-
18 sharing would have otherwise applied, and such cost-
19 sharing responsibilities with respect to such selected
20 drug may not exceed such maximum fair price; and
21 ‘‘(3) the Secretary shall apply the provisions of
22 such part E to such plan, issuer, and coverage, such
23 individuals so enrolled in such plans and coverage,
24 and such hospitals, physicians, and other providers
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573
1 and suppliers participating in such plans and cov-
2 erage.
3 ‘‘(b) NOTIFICATION REGARDING NONPARTICIPATION
4 IN FAIR PRICE NEGOTIATION PROGRAM.—A group health
5 plan or a health insurance issuer offering group or indi-
6 vidual health insurance coverage shall publicly disclose in
7 a manner and in accordance with a process specified by
8 the Secretary any election made under section 1197 of the
9 Social Security Act by the plan or issuer to not participate
10 in the Fair Price Negotiation Program under part E of
11 title XI of such Act with respect to a selected drug (as
12 defined in section 1192(c) of such Act) for which coverage
13 is provided under such plan or coverage before the begin-
14 ning of the plan year for which such election was made.’’.
15 (B) ERISA.—
16 (i) IN GENERAL.—Subpart B of part
17 7 of subtitle B of title I of the Employee
18 Retirement Income Security Act of 1974
19 (29 U.S.C. 1181 et seq.) is amended by
20 adding at the end the following new sec-
21 tion:
22 ‘‘SEC. 726. FAIR PRICE NEGOTIATION PROGRAM AND APPLI-
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574
1 surance coverage that is treated under section 1197 of the
2 Social Security Act as having in effect an agreement with
3 the Secretary under the Fair Price Negotiation Program
4 under part E of title XI of such Act, with respect to a
5 price applicability period (as defined in section 1191(b)
6 of such Act) and a selected drug (as defined in section
7 1192(c) of such Act) with respect to such period with re-
8 spect to which coverage is provided under such plan or
9 coverage—
10 ‘‘(1) the provisions of such part shall apply, as
11 applicable—
12 ‘‘(A) if coverage of such selected drug is
13 provided under such plan or coverage if the
14 drug is furnished or dispensed at a pharmacy
15 or by a mail order service, to the plans or cov-
16 erage offered by such plan or issuer, and to the
17 individuals enrolled under such plans or cov-
18 erage, during such period, with respect to such
19 selected drug, in the same manner as such pro-
20 visions apply to prescription drug plans and
21 MA–PD plans, and to individuals enrolled
22 under such prescription drug plans and MA–
23 PD plans during such period; and
24 ‘‘(B) if coverage of such selected drug is
25 provided under such plan or coverage if the
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1 drug is furnished or administered by a hospital,
2 physician, or other provider of services or sup-
3 plier, to the plans or coverage offered by such
4 plan or issuers, to the individuals enrolled
5 under such plans or coverage, and to hospitals,
6 physicians, and other providers of services and
7 suppliers during such period, with respect to
8 such drug in the same manner as such provi-
9 sions apply to the Secretary, to individuals enti-
10 tled to benefits under part A of title XVIII or
11 enrolled under part B of such title, and to hos-
12 pitals, physicians, and other providers and sup-
13 pliers participating under title XVIII during
14 such period;
15 ‘‘(2) the plan or issuer shall apply any cost-
16 sharing responsibilities under such plan or coverage,
17 with respect to such selected drug, by substituting
18 an amount not more than the maximum fair price
19 negotiated under such part E of title XI for such
20 drug in lieu of the drug price upon which the cost-
21 sharing would have otherwise applied, and such cost-
22 sharing responsibilities with respect to such selected
23 drug may not exceed such maximum fair price; and
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576
1 ‘‘(3) the Secretary shall apply the provisions of
2 such part E to such plan, issuer, and coverage, and
3 such individuals so enrolled in such plans.
4 ‘‘(b) NOTIFICATION REGARDING NONPARTICIPATION
5 IN FAIR PRICE NEGOTIATION PROGRAM.—A group health
6 plan or a health insurance issuer offering group health in-
7 surance coverage shall publicly disclose in a manner and
8 in accordance with a process specified by the Secretary
9 any election made under section 1197 of the Social Secu-
10 rity Act by the plan or issuer to not participate in the
11 Fair Price Negotiation Program under part E of title XI
12 of such Act with respect to a selected drug (as defined
13 in section 1192(c) of such Act) for which coverage is pro-
14 vided under such plan or coverage before the beginning
15 of the plan year for which such election was made.’’.
16 (ii) APPLICATION TO RETIREE AND
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1 tirement Income Security Act of 1974 is
2 amended by adding at the end the fol-
3 lowing:
‘‘Sec. 726. Fair Price Negotiation Program and application of maximum fair
prices.’’.
4 (C) IRC.—
5 (i) IN GENERAL.—Subchapter B of
6 chapter 100 of the Internal Revenue Code
7 of 1986 is amended by adding at the end
8 the following new section:
9 ‘‘SEC. 9826. FAIR PRICE NEGOTIATION PROGRAM AND AP-
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1 order service, to the plan, and to the individuals
2 enrolled under such plan during such period,
3 with respect to such selected drug, in the same
4 manner as such provisions apply to prescription
5 drug plans and MA–PD plans, and to individ-
6 uals enrolled under such prescription drug
7 plans and MA–PD plans during such period;
8 and
9 ‘‘(B) if coverage of such selected drug is
10 provided under such plan if the drug is fur-
11 nished or administered by a hospital, physician,
12 or other provider of services or supplier, to the
13 plan, to the individuals enrolled under such
14 plan, and to hospitals, physicians, and other
15 providers of services and suppliers during such
16 period, with respect to such drug in the same
17 manner as such provisions apply to the Sec-
18 retary, to individuals entitled to benefits under
19 part A of title XVIII or enrolled under part B
20 of such title, and to hospitals, physicians, and
21 other providers and suppliers participating
22 under title XVIII during such period;
23 ‘‘(2) the plan shall apply any cost-sharing re-
24 sponsibilities under such plan, with respect to such
25 selected drug, by substituting an amount not more
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579
1 than the maximum fair price negotiated under such
2 part E of title XI for such drug in lieu of the drug
3 price upon which the cost-sharing would have other-
4 wise applied, and such cost-sharing responsibilities
5 with respect to such selected drug may not exceed
6 such maximum fair price; and
7 ‘‘(3) the Secretary shall apply the provisions of
8 such part E to such plan and such individuals so en-
9 rolled in such plan.
10 ‘‘(b) NOTIFICATION REGARDING NONPARTICIPATION
11 IN FAIR PRICE NEGOTIATION PROGRAM.—A group health
12 plan shall publicly disclose in a manner and in accordance
13 with a process specified by the Secretary any election
14 made under section 1197 of the Social Security Act by
15 the plan to not participate in the Fair Price Negotiation
16 Program under part E of title XI of such Act with respect
17 to a selected drug (as defined in section 1192(c) of such
18 Act) for which coverage is provided under such plan before
19 the beginning of the plan year for which such election was
20 made.’’.
21 (ii) APPLICATION TO RETIREE AND
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1 ‘‘other than with respect to section 9826,’’
2 before ‘‘any group health plan’’.
3 (iii) CLERICAL AMENDMENT.—The
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1 manufacturer during the rebate period
2 by reason of application of part E of
3 title XI to any wholesaler, retailer,
4 provider, health maintenance organi-
5 zation, nonprofit entity, or govern-
6 mental entity within the United
7 States.’’; and
8 (B) in subsection (k)(1)(B), by adding at
9 the end the following new clause:
10 ‘‘(iii) CLARIFICATION.—Notwith-
11 standing clause (i), in the case of a rebate
12 period and a covered outpatient drug that
13 is a selected drug (as defined in section
14 1192(c)) during such rebate period, any
15 reduction in price paid during the rebate
16 period to the manufacturer for the drug by
17 a wholesaler or retail community pharmacy
18 described in subparagraph (A) by reason of
19 application of part E of title XI shall be
20 included in the average manufacturer price
21 for the covered outpatient drug.’’.
22 (4) FEHBP.—Section 8902 of title 5, United
23 States Code, is amended by adding at the end the
24 following:
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1 ‘‘(p) A contract may not be made or a plan approved
2 under this chapter with any carrier that has affirmatively
3 elected, pursuant to section 1197 of the Social Security
4 Act, not to participate in the Fair Price Negotiation Pro-
5 gram established under section 1191 of such Act for any
6 selected drug (as that term is defined in section 1192(c)
7 of such Act).’’.
8 (5) OPTION OF SECRETARY OF VETERANS AF-
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583
1 (including after application of any reduction under sub-
2 section (a)(2) and any discount under subsection (c)), at
3 the option of the Secretary, in lieu of the maximum price
4 (determined after application of the reduction under sub-
5 section (a)(2) and any discount under subsection (c), as
6 applicable) that would be permitted to be charged during
7 such year for such drug pursuant to this section without
8 application of this subsection, the maximum price per-
9 mitted to be charged during such year for such drug pur-
10 suant to this section shall be such maximum fair price for
11 such drug and year.
12 ‘‘(2) For purposes of this subsection:
13 ‘‘(A) The term ‘maximum fair price’ means,
14 with respect to a selected drug and year during the
15 price applicability period for such drug, the max-
16 imum fair price (as defined in section 1191(c)(2) of
17 the Social Security Act) for such drug and year.
18 ‘‘(B) The term ‘negotiation eligible drug’ has
19 the meaning given such term in section 1192(d)(1)
20 of the Social Security Act.
21 ‘‘(C) The term ‘price applicability period’ has,
22 with respect to a selected drug, the meaning given
23 such term in section 1191(b)(2) of such Act.
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1 ‘‘(D) The term ‘selected drug’ means, with re-
2 spect to a year, a drug that is a selected drug under
3 section 1192(c) of such Act for such year.’’.
4 SEC. 139002. SELECTED DRUG MANUFACTURER EXCISE TAX
6 ODS.
11 PERIODS.
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1 manufacturer of the drug has in place an agreement
2 described in subsection (a) of section 1193 of the
3 Social Security Act with respect to such drug.
4 ‘‘(2) The period beginning on the April 1st im-
5 mediately following the June 16th described in para-
6 graph (1) and ending on the first date during which
7 the manufacturer of the drug has agreed to a max-
8 imum fair price under such agreement.
9 ‘‘(3) In the case of a selected drug with respect
10 to which the Secretary of Health and Human Serv-
11 ices has specified a renegotiation period under such
12 agreement, the period beginning on the first date
13 after the last date of such renegotiation period and
14 ending on the first date during which the manufac-
15 turer of the drug has agreed to a renegotiated max-
16 imum fair price under such agreement.
17 ‘‘(4) With respect to information that is re-
18 quired to be submitted to the Secretary of Health
19 and Human Services under such agreement, the pe-
20 riod beginning on the date on which such Secretary
21 certifies that such information is overdue and ending
22 on the date that such information is so submitted.
23 ‘‘(5) In the case of a selected drug with respect
24 to which a payment is due under subsection (c) of
25 such section 1193, the period beginning on the date
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586
1 on which the Secretary of Health and Human Serv-
2 ices certifies that such payment is overdue and end-
3 ing on the date that such payment is made in full.
4 ‘‘(c) APPLICABLE PERCENTAGE.—For purposes of
5 this section, the term ‘applicable percentage’ means—
6 ‘‘(1) in the case of sales of a selected drug dur-
7 ing the first 90 days described in subsection (b) with
8 respect to such drug, 65 percent,
9 ‘‘(2) in the case of sales of such drug during
10 the 91st day through the 180th day described in
11 subsection (b) with respect to such drug, 75 percent,
12 ‘‘(3) in the case of sales of such drug during
13 the 181st day through the 270th day described in
14 subsection (b) with respect to such drug, 85 percent,
15 and
16 ‘‘(4) in the case of sales of such drug during
17 any subsequent day, 95 percent.
18 ‘‘(d) SELECTED DRUG.—For purposes of this sec-
19 tion—
20 ‘‘(1) IN GENERAL.—The term ‘selected drug’
21 means any selected drug (within the meaning of sec-
22 tion 1192 of the Social Security Act) which is manu-
23 factured or produced in the United States or entered
24 into the United States for consumption, use, or
25 warehousing.
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1 ‘‘(2) UNITED STATES.—The term ‘United
2 States’ has the meaning given such term by section
3 4612(a)(4).
4 ‘‘(3) COORDINATION WITH RULES FOR POSSES-
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588
1 (d) CLERICAL AMENDMENTS.—
2 (1) The heading of subchapter E of chapter 32
3 of the Internal Revenue Code of 1986 is amended by
4 striking ‘‘Medical Devices’’ and inserting
5 ‘‘Other Medical Products’’.
6 (2) The table of subchapters for chapter 32 of
7 such Code is amended by striking the item relating
8 to subchapter E and inserting the following new
9 item:
‘‘SUBCHAPTER E. OTHER MEDICAL PRODUCTS’’.
17 FUND.
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589
1 (b) FUNDING.—There is authorized to be appro-
2 priated, and there is hereby appropriated, out of any mon-
3 ies in the Treasury not otherwise appropriated, to the
4 Fund $3,000,000,000, to remain available until expended,
5 of which—
6 (1) $600,000,000 shall become available on the
7 date of the enactment of this Act;
8 (2) $600,000,000 shall become available on Oc-
9 tober 1, 2023;
10 (3) $600,000,000 shall become available on Oc-
11 tober 1, 2024;
12 (4) $600,000,000 shall become available on Oc-
13 tober 1, 2025; and
14 (5) $600,000,000 shall become available on Oc-
15 tober 1, 2026.
16 (c) SUPPLEMENT NOT SUPPLANT.—Any amounts
17 appropriated pursuant to this section shall be in addition
18 to any other amounts otherwise appropriated pursuant to
19 any other provision of law.
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590
1 PART 2—PRESCRIPTION DRUG INFLATION
2 REBATES
4 ERS.
591
1 such paragraph for such drug and calendar
2 quarter.
3 ‘‘(iii) The rebate amount specified
4 under such paragraph for such part B
5 rebatable drug and calendar quarter.
6 ‘‘(B) MANUFACTURER REQUIREMENT.—
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1 such term shall not include such a drug or bio-
2 logical—
3 ‘‘(i) if the average total allowed
4 charges under this part as determined by
5 the Secretary for a year per individual that
6 uses such a drug or biological, as deter-
7 mined by the Secretary, are less than, sub-
8 ject to subparagraph (B), $100; or
9 ‘‘(ii) that is a vaccine described in
10 subparagraph (A) or (B) of section
11 1861(s)(10).
12 ‘‘(B) INCREASE.—The dollar amount ap-
13 plied under subparagraph (A)(i)—
14 ‘‘(i) for 2024, shall be the dollar
15 amount specified under such subparagraph
16 for 2023, increased by the percentage in-
17 crease in the consumer price index for all
18 urban consumers (United States city aver-
19 age) for the 12-month period ending with
20 June of the previous year; and
21 ‘‘(ii) for a subsequent year, shall be
22 the dollar amount specified in this clause
23 (or clause (i)) for the previous year, in-
24 creased by the percentage increase in the
25 consumer price index for all urban con-
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1 sumers (United States city average) for
2 the 12-month period ending with June of
3 the previous year.
4 Any dollar amount specified under this sub-
5 paragraph that is not a multiple of $10 shall be
6 rounded to the nearest multiple of $10.
7 ‘‘(3) REBATE AMOUNT.—
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1 ‘‘(II) the inflation-adjusted pay-
2 ment amount determined under sub-
3 paragraph (C) for such part B
4 rebatable drug during the calendar
5 quarter.
6 ‘‘(B) EXCLUDED UNITS.—For purposes of
7 subparagraph (A)(i), the Secretary shall exclude
8 from the total number of units with respect to
9 a part B rebatable drug and calendar quarter
10 units of such part B rebatable drug for which
11 payment was made under a State plan under
12 title XIX (or waiver of such plan), as reported
13 by States under section 1927(b)(2)(A) for the
14 most recent rebate period.
15 ‘‘(C) DETERMINATION OF INFLATION-AD-
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595
1 graph (F)) for the calendar quarter ex-
2 ceeds the benchmark period CPI–U (as de-
3 fined in subparagraph (E)).
4 ‘‘(D) PAYMENT AMOUNT BENCHMARK
22 AND EXEMPTION.—
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1 by the Food and Drug Administration after
2 July 1, 2015, clause (i) of paragraph (3)(C)
3 shall be applied as if the term ‘payment amount
4 benchmark quarter’ were defined under para-
5 graph (3)(D) as the third full calendar quarter
6 after the day on which the drug was first mar-
7 keted and clause (ii) of paragraph (3)(C) shall
8 be applied as if the term ‘benchmark period
9 CPI–U’ were defined under paragraph (3)(E)
10 as if the reference to ‘July 2015’ under such
11 paragraph were a reference to ‘the first month
12 of the first full calendar quarter after the day
13 on which the drug was first marketed’.
14 ‘‘(B) TIMELINE FOR PROVISION OF RE-
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1 amount under paragraph (1)(B) with respect to
2 a part B rebatable drug that is described as
3 currently in shortage on the shortage list in ef-
4 fect under section 506E of the Federal Food,
5 Drug, and Cosmetic Act or in the case of other
6 exigent circumstances, as determined by the
7 Secretary.
8 ‘‘(D) SELECTED DRUGS.—In the case of a
9 part B rebatable drug that is a selected drug
10 (as defined in section 1192(c)) for a price appli-
11 cability period (as defined in section
12 1191(b)(2))—
13 ‘‘(i) for calendar quarters during such
14 period for which a maximum fair price (as
15 defined in section 1191(c)(2)) for such
16 drug has been determined and is applied
17 under part E of title XI, the rebate
18 amount under paragraph (1)(B) shall be
19 waived; and
20 ‘‘(ii) in the case such drug is deter-
21 mined (pursuant to such section 1192(c))
22 to no longer be a selected drug, for each
23 applicable year beginning after the price
24 applicability period with respect to such
25 drug, clause (i) of paragraph (3)(C) shall
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598
1 be applied as if the term ‘payment amount
2 benchmark quarter’ were defined under
3 paragraph (3)(D) as the calendar quarter
4 beginning January 1 of the last year be-
5 ginning during such price applicability pe-
6 riod with respect to such selected drug and
7 clause (ii) of paragraph (3)(C) shall be ap-
8 plied as if the term ‘benchmark period
9 CPI–U’ were defined under paragraph
10 (3)(E) as if the reference to ‘July 2015’
11 under such paragraph were a reference to
12 the July of the year preceding such last
13 year.
14 ‘‘(5) APPLICATION TO BENEFICIARY COINSUR-
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1 ‘‘(B) the amount of such coinsurance is
2 equal to 20 percent of such inflation-adjusted
3 payment amount so determined.
4 ‘‘(6) REBATE DEPOSITS.—Amounts paid as re-
5 bates under paragraph (1)(B) shall be deposited into
6 the Federal Supplementary Medical Insurance Trust
7 Fund established under section 1841.
8 ‘‘(7) CIVIL MONEY PENALTY.—If a manufac-
9 turer of a part B rebatable drug has failed to com-
10 ply with the requirements under paragraph (1)(B)
11 for such drug for a calendar quarter, the manufac-
12 turer shall be subject to, in accordance with a proc-
13 ess established by the Secretary pursuant to regula-
14 tions, a civil money penalty in an amount equal to
15 at least 125 percent of the amount specified in para-
16 graph (3) for such drug for such calendar quarter.
17 The provisions of section 1128A (other than sub-
18 sections (a) (with respect to amounts of penalties or
19 additional assessments) and (b)) shall apply to a
20 civil money penalty under this paragraph in the
21 same manner as such provisions apply to a penalty
22 or proceeding under section 1128A(a).
23 ‘‘(8) APPLICATION TO MULTIPLE SOURCE
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1 multiple source drugs (as defined in section
2 1847A(c)(6)(C)), including, for purposes of deter-
3 mining the rebate amount under paragraph (3), by
4 calculating manufacturer-specific average sales
5 prices for the benchmark period and the rebate pe-
6 riod.’’.
7 (b) AMOUNTS PAYABLE; COST-SHARING.—Section
8 1833 of the Social Security Act (42 U.S.C. 1395l) is
9 amended—
10 (1) in subsection (a)—
11 (A) in paragraph (1)—
12 (i) in subparagraph (G), by inserting
13 ‘‘, subject to subsection (i)(9),’’ after ‘‘the
14 amounts paid’’;
15 (ii) in subparagraph (S), by striking
16 ‘‘with respect to’’ and inserting ‘‘subject to
17 subparagraph (DD), with respect to’’;
18 (iii) by striking ‘‘and (DD)’’ and in-
19 serting ‘‘(EE)’’; and
20 (iv) by inserting before the semicolon
21 at the end the following: ‘‘, and (EE) with
22 respect to a part B rebatable drug (as de-
23 fined in paragraph (2) of section 1834(z))
24 for which the payment amount for a cal-
25 endar quarter under paragraph
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601
1 (3)(A)(ii)(I) of such section for such quar-
2 ter exceeds the inflation-adjusted payment
3 under paragraph (3)(A)(ii)(II) of such sec-
4 tion for such quarter, the amounts paid
5 shall be the difference between (i) the pay-
6 ment amount under paragraph
7 (3)(A)(ii)(I) of such section for such drug,
8 and (ii) 20 percent of the inflation-ad-
9 justed payment amount under paragraph
10 (3)(A)(ii)(II) of such section for such
11 drug’’; and
12 (B) by adding at the end of the flush left
13 matter following paragraph (9), the following:
14 ‘‘For purposes of applying paragraph (1)(EE), sub-
15 sections (i)(9) and (t)(8)(F), and section 1834(z)(5), the
16 Secretary shall make such estimates and use such data
17 as the Secretary determines appropriate, and may do so
18 by program instruction or otherwise.’’;
19 (2) in subsection (i), by adding at the end the
20 following new paragraph:
21 ‘‘(9) In the case of a part B rebatable drug (as de-
22 fined in paragraph (2) of section 1834(z)) for which pay-
23 ment under this subsection is not packaged into a payment
24 for a covered OPD service (as defined in subsection
25 (t)(1)(B)) (or group of services) furnished on or after July
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602
1 1, 2023, under the system under this subsection, in lieu
2 of calculation of coinsurance and the amount of payment
3 otherwise applicable under this subsection, the provisions
4 of section 1834(z)(5), paragraph (1)(EE) of subsection
5 (a), and the flush left matter following paragraph (9) of
6 subsection (a), shall, as determined appropriate by the
7 Secretary, apply under this subsection in the same manner
8 as such provisions of section 1834(z)(5) and subsection
9 (a) apply under such section and subsection.’’; and
10 (3) in subsection (t)(8), by adding at the end
11 the following new subparagraph:
12 ‘‘(F) PART B REBATABLE DRUGS.—In the
13 case of a part B rebatable drug (as defined in
14 paragraph (2) of section 1834(z)) for which
15 payment under this part is not packaged into a
16 payment for a service furnished on or after July
17 1, 2023, under the system under this sub-
18 section, in lieu of calculation of coinsurance and
19 the amount of payment otherwise applicable
20 under this subsection, the provisions of section
21 1834(z)(5), paragraph (1)(EE) of subsection
22 (a), and the flush left matter following para-
23 graph (9) of subsection (a), shall, as determined
24 appropriate by the Secretary, apply under this
25 subsection in the same manner as such provi-
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603
1 sions of section 1834(z)(5) and subsection (a)
2 apply under such section and subsection.’’.
3 (c) CONFORMING AMENDMENTS.—
4 (1) TO PART B ASP CALCULATION.—Section
20 ERS.
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1 ‘‘SEC. 1860D–14B. MANUFACTURER REBATE FOR CERTAIN
3 THAN INFLATION.
4 ‘‘(a) REQUIREMENTS.—
5 ‘‘(1) SECRETARIAL PROVISION OF INFORMA-
605
1 such dosage form and strength with respect to such
2 drug for such year.
3 ‘‘(b) REBATE AMOUNT.—
4 ‘‘(1) IN GENERAL.—
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1 strength with respect to such part D
2 rebatable drug for the year; exceeds
3 ‘‘(II) the inflation-adjusted pay-
4 ment amount determined under para-
5 graph (3) for such dosage form and
6 strength with respect to such part D
7 rebatable drug for the year.
8 ‘‘(B) EXCLUDED UNITS.—For purposes of
9 subparagraph (A)(i), the Secretary shall exclude
10 from the total number of units for a dosage
11 form and strength with respect to a part D
12 rebatable drug and the most recent rebate pe-
13 riod under section 1927, with respect to an ap-
14 plicable year, for which such information is
15 available, units of each dosage form and
16 strength of such part D rebatable drug, for
17 which payment was made under a State plan
18 under title XIX (or waiver of such plan), as re-
19 ported by States under section 1927(b)(2)(A)
20 for such rebate period.
21 ‘‘(2) DETERMINATION OF ANNUAL MANUFAC-
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1 drug and an applicable year, is the sum of the prod-
2 ucts of—
3 ‘‘(A) the average manufacturer price (as
4 defined in subsection (g)(6)) of such dosage
5 form and strength, as calculated for a unit of
6 such drug, with respect to each of the calendar
7 quarters of such year; and
8 ‘‘(B) the ratio of—
9 ‘‘(i) the total number of units of such
10 dosage form and strength reported for the
11 purpose of calculating average manufac-
12 turer price under section 1927 during each
13 such calendar quarter of such year; to
14 ‘‘(ii) the total number of units of such
15 dosage form and strength reported for the
16 purpose of calculating average manufac-
17 turer price under section 1927 during such
18 year, as determined by the Secretary.
19 ‘‘(3) DETERMINATION OF INFLATION-ADJUSTED
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1 ‘‘(A) the benchmark year manufacturer
2 price determined under paragraph (4) for such
3 dosage form and strength with respect to such
4 drug and year; increased by
5 ‘‘(B) the percentage by which the applica-
6 ble year CPI–U (as defined in subsection
7 (g)(5)) for the year exceeds the benchmark pe-
8 riod CPI–U (as defined in subsection (g)(4)).
9 ‘‘(4) DETERMINATION OF BENCHMARK YEAR
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1 ‘‘(ii) the total number of units of such
2 dosage form and strength dispensed during
3 such payment amount benchmark year.
4 ‘‘(5) SPECIAL TREATMENT OF CERTAIN DRUGS
5 AND EXEMPTION.—
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1 rebatable drug that is described as currently in
2 shortage on the shortage list in effect under
3 section 506E of the Federal Food, Drug, and
4 Cosmetic Act or in the case of other exigent cir-
5 cumstances, as determined by the Secretary.
6 ‘‘(C) TREATMENT OF NEW FORMULA-
7 TIONS.—
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1 whether such abuse-deterrent formulation
2 is an extended release formulation.
3 ‘‘(D) SELECTED DRUGS.—In the case of a
4 part D rebatable drug that is a selected drug
5 (as defined in section 1192(c)) for a price appli-
6 cability period (as defined in section
7 1191(b)(2))—
8 ‘‘(i) for plan years during such period
9 for which a maximum fair price (as defined
10 in section 1191(c)(2)) for such drug has
11 been determined and is applied under part
12 E of title XI, the rebate under subsection
13 (a)(1)(B) shall be waived; and
14 ‘‘(ii) in the case such drug is deter-
15 mined (pursuant to such section 1192(c))
16 to no longer be a selected drug, for each
17 applicable year beginning after the price
18 applicability period with respect to such
19 drug, subparagraphs (A) and (B) of para-
20 graph (4) shall be applied as if the term
21 ‘payment amount benchmark year’ were
22 defined under subsection (g)(3) as the last
23 year beginning during such price applica-
24 bility period with respect to such selected
25 drug and subparagraph (B) of paragraph
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1 (3) shall be applied as if the term ‘bench-
2 mark period CPI–U’ were defined under
3 subsection (g)(4) as if the reference to
4 ‘January 2016’ under such subsection were
5 a reference to January of the last year be-
6 ginning during such price applicability pe-
7 riod with respect to such drug.
8 ‘‘(c) REBATE DEPOSITS.—Amounts paid as rebates
9 under subsection (b) shall be deposited into the Medicare
10 Prescription Drug Account in the Federal Supplementary
11 Medical Insurance Trust Fund established under section
12 1841.
13 ‘‘(d) INFORMATION.—For purposes of carrying out
14 this section, the Secretary shall use information submitted
15 by manufacturers under section 1927(b)(3) and informa-
16 tion submitted by States under section 1927(b)(2)(A).
17 ‘‘(e) CIVIL MONEY PENALTY.—If a manufacturer of
18 a part D rebatable drug has failed to comply with the re-
19 quirement under subsection (a)(1)(B) with respect to such
20 drug for an applicable year, the manufacturer shall be
21 subject to, in accordance with a process established by the
22 Secretary pursuant to regulations, a civil money penalty
23 in an amount equal to 125 percent of the amount specified
24 in subsection (b) for such drug for such year. The provi-
25 sions of section 1128A (other than subsections (a) (with
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1 respect to amounts of penalties or additional assessments)
2 and (b)) shall apply to a civil money penalty under this
3 subsection in the same manner as such provisions apply
4 to a penalty or proceeding under section 1128A(a).
5 ‘‘(f) JUDICIAL REVIEW.—There shall be no judicial
6 review of the following:
7 ‘‘(1) The determination of units under this sec-
8 tion.
9 ‘‘(2) The determination of whether a drug is a
10 part D rebatable drug under this section.
11 ‘‘(3) The calculation of the rebate amount
12 under this section.
13 ‘‘(g) DEFINITIONS.—In this section:
14 ‘‘(1) PART D REBATABLE DRUG DEFINED.—
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1 available or, if data is not available, as esti-
2 mated by the Secretary.
3 ‘‘(B) INCREASE.—The dollar amount ap-
4 plied under subparagraph (A)—
5 ‘‘(i) for 2024, shall be the dollar
6 amount specified under such subparagraph
7 for 2023, increased by the percentage in-
8 crease in the consumer price index for all
9 urban consumers (United States city aver-
10 age) for the 12-month period beginning
11 with January of 2023; and
12 ‘‘(ii) for a subsequent year, shall be
13 the dollar amount specified in this sub-
14 paragraph for the previous year, increased
15 by the percentage increase in the consumer
16 price index for all urban consumers
17 (United States city average) for the 12-
18 month period beginning with January of
19 the previous year.
20 Any dollar amount specified under this sub-
21 paragraph that is not a multiple of $10 shall be
22 rounded to the nearest multiple of $10.
23 ‘‘(2) UNIT DEFINED.—The term ‘unit’ means,
24 with respect to a part D rebatable drug, the lowest
25 identifiable quantity (such as a capsule or tablet,
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1 milligram of molecules, or grams) of the part D
2 rebatable drug, including data reported under sec-
3 tion 1927.
4 ‘‘(3) PAYMENT AMOUNT BENCHMARK YEAR.—
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1 (1) TO PART B ASP CALCULATION.—Section
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1 PART 3—PART D IMPROVEMENTS AND MAXIMUM
2 OUT-OF-POCKET CAP FOR MEDICARE BENE-
3 FICIARIES
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1 (I) in the matter preceding sub-
2 clause (I), by inserting ‘‘for a year
3 preceding 2024,’’ after ‘‘paragraph
4 (4),’’; and
5 (II) in subclause (I)(bb), by
6 striking ‘‘a year after 2018’’ and in-
7 serting ‘‘each of years 2018 through
8 2023’’; and
9 (ii) in clause (ii)(V), by striking
10 ‘‘2019 and each subsequent year’’ and in-
11 serting ‘‘each of years 2019 through
12 2023’’;
13 (2) in paragraph (3)(A)—
14 (A) in the matter preceding clause (i), by
15 inserting ‘‘for a year preceding 2024,’’ after
16 ‘‘and (4),’’; and
17 (B) in clause (ii), by striking ‘‘for a subse-
18 quent year’’ and inserting ‘‘for each of years
19 2007 through 2023’’; and
20 (3) in paragraph (4)—
21 (A) in subparagraph (A)—
22 (i) in clause (i)—
23 (I) by redesignating subclauses
24 (I) and (II) as items (aa) and (bb),
25 respectively, and moving the margin
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619
1 of each such redesignated item 2 ems
2 to the right;
3 (II) in the matter preceding item
4 (aa), as redesignated by subclause (I),
5 by striking ‘‘is equal to the greater
6 of—’’ and inserting ‘‘is equal to—
7 ‘‘(I) for a year preceding 2024,
8 the greater of—’’;
9 (III) by striking the period at the
10 end of item (bb), as redesignated by
11 subclause (I), and inserting ‘‘; and’’;
12 and
13 (IV) by adding at the end the fol-
14 lowing:
15 ‘‘(II) for 2024 and each suc-
16 ceeding year, $0.’’; and
17 (ii) in clause (ii), by striking ‘‘clause
18 (i)(I)’’ and inserting ‘‘clause (i)(I)(aa)’’;
19 (B) in subparagraph (B)—
20 (i) in clause (i)—
21 (I) in subclause (V), by striking
22 ‘‘or’’ at the end;
23 (II) in subclause (VI)—
24 (aa) by striking ‘‘for a sub-
25 sequent year’’ and inserting ‘‘for
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1 each of years 2021 through
2 2023’’; and
3 (bb) by striking the period
4 at the end and inserting a semi-
5 colon; and
6 (III) by adding at the end the
7 following new subclauses:
8 ‘‘(VII) for 2024, is equal to
9 $2,000; or
10 ‘‘(VIII) for a subsequent year, is
11 equal to the amount specified in this
12 subparagraph for the previous year,
13 increased by the annual percentage in-
14 crease described in paragraph (6) for
15 the year involved.’’; and
16 (ii) in clause (ii), by striking ‘‘clause
17 (i)(II)’’ and inserting ‘‘clause (i)’’;
18 (C) in subparagraph (C)(i), by striking
19 ‘‘and for amounts’’ and inserting ‘‘and, for a
20 year preceding 2024, for amounts’’; and
21 (D) in subparagraph (E), by striking ‘‘In
22 applying’’ and inserting ‘‘For each of years
23 2011 through 2023, in applying’’.
24 (b) DECREASING REINSURANCE PAYMENT
25 AMOUNT.—Section 1860D–15(b)(1) of the Social Security
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621
1 Act (42 U.S.C. 1395w–115(b)(1)) is amended by inserting
2 after ‘‘80 percent’’ the following: ‘‘(or, with respect to a
3 coverage year after 2023, 20 percent)’’.
4 (c) MANUFACTURER DISCOUNT PROGRAM.—
5 (1) IN GENERAL.—Part D of title XVIII of the
6 Social Security Act (42 U.S.C. 1395w–101 et seq.),
7 as amended by section 139102, is further amended
8 by inserting after section 1860D–14B the following
9 new section:
10 ‘‘SEC. 1860D–14C. MANUFACTURER DISCOUNT PROGRAM.
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1 counted prices for applicable drugs of the man-
2 ufacturer that are dispensed on or after Janu-
3 ary 1, 2024.
4 ‘‘(B) PROVISION OF DISCOUNTED PRICES
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623
1 agreement shall be renewed under para-
2 graph (4)(A)) not later than January 30 of
3 the preceding year.
4 ‘‘(2) PROVISION OF APPROPRIATE DATA.—Each
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1 ‘‘(B) TERMINATION.—
2 ‘‘(i) BY THE SECRETARY.—The Sec-
3 retary may provide for termination of an
4 agreement under this section for a knowing
5 and willful violation of the requirements of
6 the agreement or other good cause shown.
7 Such termination shall not be effective ear-
8 lier than 30 days after the date of notice
9 to the manufacturer of such termination.
10 The Secretary shall provide, upon request,
11 a manufacturer with a hearing concerning
12 such a termination, and such hearing shall
13 take place prior to the effective date of the
14 termination with sufficient time for such
15 effective date to be repealed if the Sec-
16 retary determines appropriate.
17 ‘‘(ii) BY A MANUFACTURER.—A man-
18 ufacturer may terminate an agreement
19 under this section for any reason. Any
20 such termination shall be effective, with re-
21 spect to a plan year—
22 ‘‘(I) if the termination occurs be-
23 fore January 30 of a plan year, as of
24 the day after the end of the plan year;
25 and
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1 ‘‘(II) if the termination occurs on
2 or after January 30 of a plan year, as
3 of the day after the end of the suc-
4 ceeding plan year.
5 ‘‘(iii) EFFECTIVENESS OF TERMI-
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1 applicable beneficiaries at pharmacies or by
2 mail order service at the point-of-sale of an ap-
3 plicable drug;
4 ‘‘(C) the establishment of procedures to
5 ensure that, not later than the applicable num-
6 ber of calendar days after the dispensing of an
7 applicable drug by a pharmacy or mail order
8 service, the pharmacy or mail order service is
9 reimbursed for an amount equal to the dif-
10 ference between—
11 ‘‘(i) the negotiated price of the appli-
12 cable drug; and
13 ‘‘(ii) the discounted price of the appli-
14 cable drug;
15 ‘‘(D) the establishment of procedures to
16 ensure that the discounted price for an applica-
17 ble drug under this section is applied before any
18 coverage or financial assistance under other
19 health benefit plans or programs that provide
20 coverage or financial assistance for the pur-
21 chase or provision of prescription drug coverage
22 on behalf of applicable beneficiaries as the Sec-
23 retary may specify; and
24 ‘‘(E) providing a reasonable dispute resolu-
25 tion mechanism to resolve disagreements be-
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1 tween manufacturers, applicable beneficiaries,
2 and the third party with a contract under sub-
3 section (d)(3).
4 ‘‘(2) MONITORING COMPLIANCE.—
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1 ‘‘(2) LIMITATION.—In providing for the imple-
2 mentation of this section, the Secretary shall not re-
3 ceive or distribute any funds of a manufacturer
4 under the program.
5 ‘‘(3) CONTRACT WITH THIRD PARTIES.—The
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629
1 ‘‘(D) permit manufacturers to conduct
2 periodic audits, directly or through contracts, of
3 the data and information used by the third
4 party to determine discounts for applicable
5 drugs of the manufacturer under the program.
6 ‘‘(4) PERFORMANCE REQUIREMENTS.—The
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1 counts for applicable drugs of the manufacturer
2 in accordance with such agreement for each
3 such failure in an amount the Secretary deter-
4 mines is equal to the sum of—
5 ‘‘(i) the amount that the manufac-
6 turer would have paid with respect to such
7 discounts under the agreement, which will
8 then be used to pay the discounts which
9 the manufacturer had failed to provide;
10 and
11 ‘‘(ii) 25 percent of such amount.
12 ‘‘(B) APPLICATION.—The provisions of
13 section 1128A (other than subsections (a) and
14 (b)) shall apply to a civil money penalty under
15 this paragraph in the same manner as such
16 provisions apply to a penalty or proceeding
17 under section 1128A(a).
18 ‘‘(f) CLARIFICATION REGARDING AVAILABILITY OF
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1 ‘‘(1) APPLICABLE BENEFICIARY.—The term
2 ‘applicable beneficiary’ means an individual who, on
3 the date of dispensing a covered part D drug—
4 ‘‘(A) is enrolled in a prescription drug plan
5 or an MA–PD plan;
6 ‘‘(B) is not enrolled in a qualified retiree
7 prescription drug plan; and
8 ‘‘(C) has incurred costs, as determined in
9 accordance with section 1860D–2(b)(4)(C), for
10 covered part D drugs in the year that exceed
11 the annual deductible with respect to such indi-
12 vidual for such year, as specified in section
13 1860D–2(b)(1), section 1860D–14(a)(1)(B), or
14 section 1860D–14(a)(2)(B), as applicable.
15 ‘‘(2) APPLICABLE DRUG.—The term ‘applicable
16 drug’, with respect to an applicable beneficiary—
17 ‘‘(A) means a covered part D drug—
18 ‘‘(i) approved under a new drug appli-
19 cation under section 505(c) of the Federal
20 Food, Drug, and Cosmetic Act or, in the
21 case of a biologic product, licensed under
22 section 351 of the Public Health Service
23 Act; and
24 ‘‘(ii)(I) if the PDP sponsor of the pre-
25 scription drug plan or the MA organization
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1 offering the MA–PD plan uses a for-
2 mulary, which is on the formulary of the
3 prescription drug plan or MA–PD plan
4 that the applicable beneficiary is enrolled
5 in;
6 ‘‘(II) if the PDP sponsor of the pre-
7 scription drug plan or the MA organization
8 offering the MA–PD plan does not use a
9 formulary, for which benefits are available
10 under the prescription drug plan or MA–
11 PD plan that the applicable beneficiary is
12 enrolled in; or
13 ‘‘(III) is provided through an excep-
14 tion or appeal; and
15 ‘‘(B) does not include a selected drug (as
16 defined in section 1192(c)) during a price appli-
17 cability period (as defined in section
18 1191(b)(2)) with respect to such drug.
19 ‘‘(3) APPLICABLE NUMBER OF CALENDAR
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1 ‘‘(4) DISCOUNTED PRICE.—
24 CLAIMS.—
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1 ‘‘(i) CLAIMS SPANNING DEDUCT-
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1 gotiated price of the applicable drug
2 that falls below such threshold; and
3 ‘‘(II) in accordance with subpara-
4 graph (A)(ii) on the portion of such
5 price of such drug that falls at or
6 above such threshold.
7 ‘‘(5) MANUFACTURER.—The term ‘manufac-
8 turer’ means any entity which is engaged in the pro-
9 duction, preparation, propagation, compounding,
10 conversion, or processing of prescription drug prod-
11 ucts, either directly or indirectly by extraction from
12 substances of natural origin, or independently by
13 means of chemical synthesis, or by a combination of
14 extraction and chemical synthesis. Such term does
15 not include a wholesale distributor of drugs or a re-
16 tail pharmacy licensed under State law.
17 ‘‘(6) NEGOTIATED PRICE.—The term ‘nego-
18 tiated price’ has the meaning given such term in sec-
19 tion 423.100 of title 42, Code of Federal Regula-
20 tions (or any successor regulation), except that, with
21 respect to an applicable drug, such negotiated price
22 shall not include any dispensing fee for the applica-
23 ble drug.
24 ‘‘(7) QUALIFIED RETIREE PRESCRIPTION DRUG
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1 plan’ has the meaning given such term in section
2 1860D–22(a)(2).’’.
3 (2) SUNSET OF MEDICARE COVERAGE GAP DIS-
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1 of the Social Security Act (42 U.S.C. 1395w–111)
2 is amended—
3 (A) in subsection (b)(2)(C)(iii)—
4 (i) by striking ‘‘assumptions regarding
5 the reinsurance’’ and inserting ‘‘assump-
6 tions regarding—
7 ‘‘(I) the reinsurance’’; and
8 (ii) by adding at the end the fol-
9 lowing:
10 ‘‘(II) for 2024 and each subse-
11 quent year, the manufacturer dis-
12 counts provided under section 1860D–
13 14C subtracted from the actuarial
14 value to produce such bid; and’’; and
15 (B) in subsection (c)(1)(C)—
16 (i) by striking ‘‘an actuarial valuation
17 of the reinsurance’’ and inserting ‘‘an ac-
18 tuarial valuation of—
19 ‘‘(i) the reinsurance’’;
20 (ii) in clause (i), as inserted by clause
21 (i) of this subparagraph, by adding ‘‘and’’
22 at the end; and
23 (iii) by adding at the end the fol-
24 lowing:
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1 ‘‘(ii) for 2024 and each subsequent
2 year, the manufacturer discounts provided
3 under section 1860D–14C;’’.
4 (d) CONFORMING AMENDMENTS.—
5 (1) Section 1860D–2 of the Social Security Act
6 (42 U.S.C. 1395w–102) is amended—
7 (A) in subsection (a)(2)(A)(i)(I), by strik-
8 ing ‘‘, or an increase in the initial’’ and insert-
9 ing ‘‘or, for a year preceding 2024, an increase
10 in the initial’’;
11 (B) in subsection (c)(1)(C)—
12 (i) in the subparagraph heading, by
13 striking ‘‘AT INITIAL COVERAGE LIMIT’’;
14 and
15 (ii) by inserting ‘‘for a year preceding
16 2024 or the annual out-of-pocket threshold
17 specified in subsection (b)(4)(B) for the
18 year for 2024 and each subsequent year’’
19 after ‘‘subsection (b)(3) for the year’’ each
20 place it appears; and
21 (C) in subsection (d)(1)(A), by striking ‘‘or
22 an initial’’ and inserting ‘‘or, for a year pre-
23 ceding 2024, an initial’’.
24 (2) Section 1860D–4(a)(4)(B)(i) of the Social
25 Security Act (42 U.S.C. 1395w–104(a)(4)(B)(i)) is
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1 amended by striking ‘‘the initial’’ and inserting ‘‘for
2 a year preceding 2024, the initial’’.
3 (3) Section 1860D–14(a) of the Social Security
4 Act (42 U.S.C. 1395w–114(a)) is amended—
5 (A) in paragraph (1)—
6 (i) in subparagraph (C), by striking
7 ‘‘The continuation’’ and inserting ‘‘For a
8 year preceding 2024, the continuation’’;
9 (ii) in subparagraph (D)(iii), by strik-
10 ing ‘‘1860D–2(b)(4)(A)(i)(I)’’ and insert-
11 ing ‘‘1860D–2(b)(4)(A)(i)(I)(aa)’’; and
12 (iii) in subparagraph (E), by striking
13 ‘‘The elimination’’ and inserting ‘‘For a
14 year preceding 2024, the elimination’’; and
15 (B) in paragraph (2)—
16 (i) in subparagraph (C), by striking
17 ‘‘The continuation’’ and inserting ‘‘For a
18 year preceding 2024, the continuation’’;
19 and
20 (ii) in subparagraph (E), by striking
21 ‘‘1860D–2(b)(4)(A)(i)(I)’’ and inserting
22 ‘‘1860D–2(b)(4)(A)(i)(I)(aa)’’.
23 (4) Section 1860D–21(d)(7) of the Social Secu-
24 rity Act (42 U.S.C. 1395w–131(d)(7)) is amended
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640
1 by striking ‘‘section 1860D–2(b)(4)(B)(i)’’ and in-
2 serting ‘‘section 1860D–2(b)(4)(C)(i)’’.
3 (5) Section 1860D–22(a)(2)(A) of the Social
4 Security Act (42 U.S.C. 1395w–132(a)(2)(A)) is
5 amended—
6 (A) by striking ‘‘the value of any discount’’
7 and inserting the following: ‘‘the value of—
8 ‘‘(i) for years prior to 2024, any dis-
9 count’’;
10 (B) in clause (i), as inserted by subpara-
11 graph (A) of this paragraph, by striking the pe-
12 riod at the end and inserting ‘‘; and’’; and
13 (C) by adding at the end the following new
14 clause:
15 ‘‘(ii) for 2024 and each subsequent
16 year, any discount provided pursuant to
17 section 1860D–14C.’’.
18 (6) Section 1860D–41(a)(6) of the Social Secu-
19 rity Act (42 U.S.C. 1395w–151(a)(6)) is amended—
20 (A) by inserting ‘‘for a year before 2024’’
21 after ‘‘1860D–2(b)(3)’’; and
22 (B) by inserting ‘‘for such year’’ before the
23 period.
24 (7) Section 1860D–43 of the Social Security
25 Act (42 U.S.C. 1395w–153) is amended—
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641
1 (A) in subsection (a)—
2 (i) by striking paragraph (1) and in-
3 serting the following:
4 ‘‘(1) participate in—
5 ‘‘(A) for 2011 through 2023, the Medicare
6 coverage gap discount program under section
7 1860D–14A; and
8 ‘‘(B) for 2024 and each subsequent year,
9 the manufacturer discount program under sec-
10 tion 1860D–14C;’’;
11 (ii) by striking paragraph (2) and in-
12 serting the following:
13 ‘‘(2) have entered into and have in effect—
14 ‘‘(A) for 2011 through 2023, an agreement
15 described in subsection (b) of section 1860D–
16 14A with the Secretary; and
17 ‘‘(B) for 2024 and each subsequent year,
18 an agreement described in subsection (b) of sec-
19 tion 1860D–14C with the Secretary; and’’; and
20 (iii) by striking paragraph (3) and in-
21 serting the following:
22 ‘‘(3) have entered into and have in effect, under
23 terms and conditions specified by the Secretary—
24 ‘‘(A) for 2011 through 2023, a contract
25 with a third party that the Secretary has en-
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642
1 tered into a contract with under subsection
2 (d)(3) of section 1860D–14A; and
3 ‘‘(B) for 2024 and each subsequent year,
4 a contract with a third party that the Secretary
5 has entered into a contract with under sub-
6 section (d)(3) of section 1860D–14C.’’; and
7 (B) by striking subsection (b) and insert-
8 ing the following:
9 ‘‘(b) EFFECTIVE DATE.—Paragraphs (1)(A), (2)(A),
10 and (3)(A) of subsection (a) shall apply to covered part
11 D drugs dispensed under this part on or after January
12 1, 2011, and before January 1, 2024, and paragraphs
13 (1)(B), (2)(B), and (3)(B) of such subsection shall apply
14 to covered part D drugs dispensed under this part on or
15 after January 1, 2024.’’.
16 (8) Section 1927 of the Social Security Act (42
17 U.S.C. 1396r–8) is amended—
18 (A) in subsection (c)(1)(C)(i)(VI), by in-
19 serting before the period at the end the fol-
20 lowing: ‘‘or under the manufacturer discount
21 program under section 1860D–14C’’; and
22 (B) in subsection (k)(1)(B)(i)(V), by in-
23 serting before the period at the end the fol-
24 lowing: ‘‘or under section 1860D–14C’’.
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643
1 (e) EFFECTIVE DATE.—The amendments made by
2 this section shall apply with respect to plan year 2024 and
3 subsequent plan years.
4 SEC. 139202. ALLOWING CERTAIN ENROLLEES OF PRE-
8 CUMSTANCES.
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1 and with respect to whom the plan projects that
2 the dispensing of the first fill of a covered part
3 D drug to such individual will result in the indi-
4 vidual incurring costs that are equal to or above
5 the annual out-of-pocket threshold specified in
6 paragraph (4)(B) for such plan year, provide
7 such individual with the option to make the co-
8 insurance payment required under subpara-
9 graph (A) (for the portion of such costs that
10 are not above such annual out-of-pocket thresh-
11 old) in the form of periodic installments over
12 the remainder of such plan year.’’.
13 PART 4—REPEAL OF CERTAIN PRESCRIPTION
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1 and Creation of New Safe Harbor Protection for Certain
2 Point-of-Sale Reductions in Price on Prescription Phar-
3 maceuticals and Certain Pharmacy Benefit Manager Serv-
4 ice Fees’’ (85 Fed. Reg. 76666).
◊
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