1.1.SEC10101. CORPORATE ALTERNATIVE MINIMUM TAX.

    (a) Imposition of Tax.—

            (1) In general.—Paragraph (2) of section 55(b) <<NOTE: 26

        USC 55.>> is amended to read as follows:

            ✂️✂️(2) Corporations.—

                    ✂️✂️(A) Applicable corporations.—In the case of an

                applicable corporation, the tentative minimum tax for

                the taxable year shall be the excess of—

                          ✂️✂️(i) 15 percent of the adjusted financial

                      statement income for the taxable year (as

                      determined under section 56A), over

                          ✂️✂️(ii) the corporate AMT foreign tax credit

                      for the taxable year.

                    ✂️✂️(B) Other corporations.—In the case of any

                corporation which is not an applicable corporation, the

                tentative minimum tax for the taxable year shall be

                zero.’'.

            (2) Applicable corporation.—Section 59 is amended by adding

        at the end the following new subsection:

    ✂️✂️(k) <<NOTE: Determinations.>> Applicable Corporation.—For

purposes of this part—

            ✂️✂️(1) Applicable corporation defined.—

                    ✂️✂️(A) In general.—The term ✂️applicable corporation’

                means, with respect to any taxable year, any corporation

                (other than an S corporation, a regulated investment

                company, or a real estate investment trust) which meets

                the

[[Page 136 STAT. 1819]]

                average annual adjusted financial statement income test

                of subparagraph (B) for one or more taxable years

                which—

                          ✂️✂️(i) are prior to such taxable year, and

                          ✂️✂️(ii) <<NOTE: Effective date.>> end after

                      December 31, 2021.

                    ✂️✂️(B) <<NOTE: Time period.>> Average annual

                adjusted financial statement income test.—For purposes

                of this subsection—

                          ✂️✂️(i) a corporation meets the average annual

                      adjusted financial statement income test for a

                      taxable year if the average annual adjusted

                      financial statement income of such corporation

                      (determined without regard to section 56A(d)) for

                      the 3-taxable-year period ending with such taxable

                      year exceeds $1,000,000,000, and

                          ✂️✂️(ii) in the case of a corporation described

                      in paragraph (2), such corporation meets the

                      average annual adjusted financial statement income

                      test for a taxable year if—

                                    ✂️✂️(I) the corporation meets the

                                requirements of clause (i) for such

                                taxable year (determined after the

                                application of paragraph (2)), and

                                    ✂️✂️(II) the average annual adjusted

                                financial statement income of such

                                corporation (determined without regard

                                to the application of paragraph (2) and

                                without regard to section 56A(d)) for

                                the 3-taxable-year-period ending with

                                such taxable year is $100,000,000 or

                                more.

                    ✂️✂️(C) Exception.—Notwithstanding subparagraph (A),

                the term ✂️applicable corporation’ shall not include any

                corporation which otherwise meets the requirements of

                subparagraph (A) if—

                          ✂️✂️(i) such corporation—

                                    ✂️✂️(I) has a change in ownership, or

                                    ✂️✂️(II) has a specified number (to be

                                determined by the Secretary and which

                                shall, as appropriate, take into account

                                the facts and circumstances of the

                                taxpayer) of consecutive taxable years,

                                including the most recent taxable year,

                                in which the corporation does not meet

                                the average annual adjusted financial

                                statement income test of subparagraph

                                (B), and

                          ✂️✂️(ii) the Secretary determines that it would

                      not be appropriate to continue to treat such

                      corporation as an applicable corporation.

                The preceding sentence shall not apply to any

                corporation if, after the Secretary makes the

                determination described in clause (ii), such corporation

                meets the average annual adjusted financial statement

                income test of subparagraph (B) for any taxable year

                beginning after the first taxable year for which such

                determination applies.

                    ✂️✂️(D) <<NOTE: Definition.>> Special rules for

                determining applicable corporation status.—

                          ✂️✂️(i) In general.—Solely for purposes of

                      determining whether a corporation is an applicable

                      corporation under this paragraph, all adjusted

                      financial statement income of persons treated as a

                      single employer with such corporation under

                      subsection (a) or (b) of section 52 (determined

                      with the modifications described in clause (ii))

                      shall be treated as adjusted financial

[[Page 136 STAT. 1820]]

                      statement income of such corporation, and adjusted

                      financial statement income of such corporation

                      shall be determined without regard to paragraphs

                      (2)(D)(i) and (11) of section 56A(c).

                          ✂️✂️(ii) Modifications.—For purposes of this

                      subparagraph—

                                    ✂️✂️(I) <<NOTE: Applicability.>>

                                section 52(a) shall be applied by

                                substituting ✂️component members’ for

                                ✂️members’, and

                                    ✂️✂️(II) for purposes of applying

                                section 52(b), the term ✂️trade or

                                business’ shall include any activity

                                treated as a trade or business under

                                paragraph (5) or (6) of section 469(c)

                                (determined without regard to the phrase

                                ✂️To the extent provided in regulations’

                                in such paragraph (6)).

                          ✂️✂️(iii) Component member.—For purposes of

                      this subparagraph, the term ✂️component member’ has

                      the meaning given such term by section 1563(b),

                      except that the determination shall be made

                      without regard to section 1563(b)(2).

                    ✂️✂️(E) Other special rules.—

                          ✂️✂️(i) <<NOTE: Applicability.>> Corporations

                      in existence for less than 3 years.—If the

                      corporation was in existence for less than 3-

                      taxable years, subparagraph (B) shall be applied

                      on the basis of the period during which such

                      corporation was in existence.

                          ✂️✂️(ii) <<NOTE: Time period.>> Short taxable

                      years.—Adjusted financial statement income for

                      any taxable year of less than 12 months shall be

                      annualized by multiplying the adjusted financial

                      statement income for the short period by 12 and

                      dividing the result by the number of months in the

                      short period.

                          ✂️✂️(iii) Treatment of predecessors.—Any

                      reference in this subparagraph to a corporation

                      shall include a reference to any predecessor of

                      such corporation.

            ✂️✂️(2) Special rule for foreign-parented multinational

        groups.—

                    ✂️✂️(A) In general.—If a corporation is a member of a

                foreign-parented multinational group for any taxable

                year, then, solely for purposes of determining whether

                such corporation meets the average annual adjusted

                financial statement income test under paragraph

                (1)(B)(ii)(I) for such taxable year, the adjusted

                financial statement income of such corporation for such

                taxable year shall include the adjusted financial

                statement income of all members of such group. Solely

                for purposes of this subparagraph, adjusted financial

                statement income shall be determined without regard to

                paragraphs (2)(D)(i), (3), (4), and (11) of section

                56A(c).

                    ✂️✂️(B) <<NOTE: Definition.>> Foreign-parented

                multinational group.—For purposes of subparagraph (A),

                the term ✂️foreign-parented multinational group’ means,

                with respect to any taxable year, two or more entities

                if—

                          ✂️✂️(i) at least one entity is a domestic

                      corporation and another entity is a foreign

                      corporation,

[[Page 136 STAT. 1821]]

                          ✂️✂️(ii) such entities are included in the same

                      applicable financial statement with respect to

                      such year, and

                          ✂️✂️(iii) either—

                                    ✂️✂️(I) the common parent of such

                                entities is a foreign corporation, or

                                    ✂️✂️(II) if there is no common parent,

                                the entities are treated as having a

                                common parent which is a foreign

                                corporation under subparagraph (D).

                    ✂️✂️(C) Foreign corporations engaged in a trade or

                business within the united states.—For purposes of this

                paragraph, if a foreign corporation is engaged in a

                trade or business within the United States, such trade

                or business shall be treated as a separate domestic

                corporation that is wholly owned by the foreign

                corporation.

                    ✂️✂️(D) <<NOTE: Applicability.>> Other rules.—The

                Secretary shall, applying the principles of this

                section, prescribe rules for the application of this

                paragraph, including rules for the determination of—

                          ✂️✂️(i) the entities (if any) which are to be to

                      be treated under subparagraph (B)(iii)(II) as

                      having a common parent which is a foreign

                      corporation,

                          ✂️✂️(ii) the entities to be included in a

                      foreign-parented multinational group, and

                          ✂️✂️(iii) the common parent of a foreign-

                      parented multinational group.

            ✂️✂️(3) Regulations or other guidance.—The Secretary shall

        provide regulations or other guidance for the purposes of

        carrying out this subsection, including regulations or other

        guidance—

                    ✂️✂️(A) providing a simplified method for determining

                whether a corporation meets the requirements of

                paragraph (1), and

                    ✂️✂️’(B) addressing the application of this subsection

                to a corporation that experiences a change in

                ownership.’'.

            (3) Reduction for base erosion and anti-abuse tax.—Section

        55(a)(2) <<NOTE: 26 USC 55.>> is amended by inserting ✂️✂️plus,

        in the case of an applicable corporation, the tax imposed by

        section 59A’' before the period at the end.

            (4) Conforming amendments.—

                    (A) Section 55(a) is amended by striking ✂️✂️In the

                case of a taxpayer other than a corporation, there’' and

                inserting ✂️✂️There’'.

                    (B)(i) Section 55(b)(1) is amended—

                          (I) by striking so much as precedes

                      subparagraph (A) and inserting the following:

            ✂️✂️(1) Noncorporate taxpayers.—In the case of a taxpayer

        other than a corporation—’', and

                          (II) by adding at the end the following new

                      subparagraph:

                    ✂️✂️(D) <<NOTE: Definition.>> Alternative minimum

                taxable income.—The term ✂️alternative minimum taxable

                income’ means the taxable income of the taxpayer for the

                taxable year—

                          ✂️✂️(i) determined with the adjustments provided

                      in section 56 and section 58, and

                          ✂️✂️(ii) increased by the amount of the items of

                      tax preference described in section 57.

[[Page 136 STAT. 1822]]

                If a taxpayer is subject to the regular tax, such

                taxpayer shall be subject to the tax imposed by this

                section (and, if the regular tax is determined by

                reference to an amount other than taxable income, such

                amount shall be treated as the taxable income of such

                taxpayer for purposes of the preceding sentence).’'.

                    (ii) <<NOTE: 26 USC 860E.>> Section 860E(a)(4) is

                amended by striking ✂️✂️55(b)(2)’' and inserting

                ✂️✂️55(b)(1)(D)’'.

                    (iii) Section 897(a)(2)(A)(i) is amended by striking

                ✂️✂️55(b)(2)’' and inserting ✂️✂️55(b)(1)(D)’'.

                    (C) Section 11(d) is amended by striking ✂️✂️the tax

                imposed by subsection (a)’' and inserting ✂️✂️the taxes

                imposed by subsection (a) and section 55’'.

                    (D) Section 12 is amended by adding at the end the

                following new paragraph:

            ✂️✂️(5) For alternative minimum tax, see section 55.’'.

                    (E) Section 882(a)(1) is amended by inserting ✂️✂️,

                55,’' after ✂️✂️section 11’'.

                    (F) Section 6425(c)(1)(A) is amended to read as

                follows:

                    ✂️✂️(A) the sum of—

                          ✂️✂️(i) the tax imposed by section 11 or

                      subchapter L of chapter 1, whichever is

                      applicable, plus

                          ✂️✂️(ii) the tax imposed by section 55, plus

                          ✂️✂️(iii) the tax imposed by section 59A,

                      over’'.

                    (G) Section 6655(e)(2) is amended by inserting ✂️✂️,

                adjusted financial statement income (as defined in

                section 56A),’' before ✂️✂️and modified taxable income’'

                each place it appears in subparagraphs (A)(i) and

                (B)(i).

                    (H) Section 6655(g)(1)(A) is amended by

                redesignating clauses (ii) and (iii) as clauses (iii)

                and (iv), respectively, and by inserting after clause

                (i) the following new clause:

                          ✂️✂️(ii) the tax imposed by section 55,’'.

    (b) Adjusted Financial Statement Income.—

            (1) In general.—Part VI of subchapter A of chapter 1 is

        amended by inserting after section 56 the following new section:

✂️✂️SEC. 56A. <<NOTE: 26 USC 56A.>> ADJUSTED FINANCIAL STATEMENT

                        INCOME.

    ✂️✂️(a) <<NOTE: Definition.>> In General.—For purposes of this part,

the term ✂️adjusted financial statement income’ means, with respect to

any corporation for any taxable year, the net income or loss of the

taxpayer set forth on the taxpayer’s applicable financial statement for

such taxable year, adjusted as provided in this section.

    ✂️✂️(b) <<NOTE: Definition.>> Applicable Financial Statement.—For

purposes of this section, the term ✂️applicable financial statement’

means, with respect to any taxable year, an applicable financial

statement (as defined in section 451(b)(3) or as specified by the

Secretary in regulations or other guidance) which covers such taxable

year.

    ✂️✂️(c) General Adjustments.—

            ✂️✂️(1) Statements covering different taxable years.—

        Appropriate adjustments shall be made in adjusted financial

        statement income in any case in which an applicable financial

        statement covers a period other than the taxable year.

            ✂️✂️(2) Special rules for related entities.—

                    ✂️✂️(A) <<NOTE: Applicability.>> Consolidated

                financial statements.—If the financial results of a

                taxpayer are reported on the

[[Page 136 STAT. 1823]]

                applicable financial statement for a group of entities,

                rules similar to the rules of section 451(b)(5) shall

                apply.

                    ✂️✂️(B) Consolidated returns.—Except as provided in

                regulations prescribed by the Secretary, if the taxpayer

                is part of an affiliated group of corporations filing a

                consolidated return for any taxable year, adjusted

                financial statement income for such group for such

                taxable year shall take into account items on the

                group’s applicable financial statement which are

                properly allocable to members of such group.

                    ✂️✂️(C) Treatment of dividends and other amounts.—In

                the case <<NOTE: Determination.>> of any corporation

                which is not included on a consolidated return with the

                taxpayer, adjusted financial statement income of the

                taxpayer with respect to such other corporation shall be

                determined by only taking into account the dividends

                received from such other corporation (reduced to the

                extent provided by the Secretary in regulations or other

                guidance) and other amounts which are includible in

                gross income or deductible as a loss under this chapter

                (other than amounts required to be included under

                sections 951 and 951A or such other amounts as provided

                by the Secretary) with respect to such other

                corporation.

                    ✂️✂️(D) Treatment of partnerships.—

                          ✂️✂️(i) In general.—Except as provided by the

                      Secretary, if the taxpayer is a partner in a

                      partnership, adjusted financial statement income

                      of the taxpayer with respect to such partnership

                      shall be adjusted to only take into account the

                      taxpayer’s distributive share of adjusted

                      financial statement income of such partnership.

                          ✂️✂️(ii) Adjusted financial statement income of

                      partnerships.—For the purposes of this part, the

                      adjusted financial statement income of a

                      partnership shall be the partnership’s net income

                      or loss set forth on such partnership’s applicable

                      financial statement (adjusted under rules similar

                      to the rules of this section).

            ✂️✂️(3) Adjustments to take into account certain items of

        foreign income.—

                    ✂️✂️(A) In general.—If, for any taxable year, a

                taxpayer is a United States shareholder of one or more

                controlled foreign corporations, the adjusted financial

                statement income of such taxpayer with respect to such

                controlled foreign corporation (as determined under

                paragraph (2)(C)) shall be adjusted to also take into

                account such taxpayer’s pro rata share (determined under

                rules similar to the rules under section 951(a)(2)) of

                items taken into account in computing the net income or

                loss set forth on the applicable financial statement (as

                adjusted under rules similar to those that apply in

                determining adjusted financial statement income) of each

                such controlled foreign corporation with respect to

                which such taxpayer is a United States shareholder.

                    ✂️✂️(B) Negative adjustments.—In any case in which

                the adjustment determined under subparagraph (A) would

                result in a negative adjustment for such taxable year—

[[Page 136 STAT. 1824]]

                          ✂️✂️(i) no adjustment shall be made under this

                      paragraph for such taxable year, and

                          ✂️✂️(ii) the amount of the adjustment determined

                      under this paragraph for the succeeding taxable

                      year (determined without regard to this paragraph)

                      shall be reduced by an amount equal to the

                      negative adjustment for such taxable year.

            ✂️✂️(4) <<NOTE: Determination. Applicability.>> Effectively

        connected income.—In the case of a foreign corporation, to

        determine adjusted financial statement income, the principles of

        section 882 shall apply.

            ✂️✂️(5) Adjustments for certain taxes.—Adjusted financial

        statement income shall be appropriately adjusted to disregard

        any Federal income taxes, or income, war profits, or excess

        profits taxes (within the meaning of section 901) with respect

        to a foreign country or possession of the United States, which

        are taken into account on the taxpayer’s applicable financial

        statement. To the extent provided by the Secretary, the

        preceding sentence shall not apply to income, war profits, or

        excess profits taxes (within the meaning of section 901) that

        are imposed by a foreign country or possession of the United

        States and taken into account on the taxpayer’s applicable

        financial statement if the taxpayer does not choose to have the

        benefits of subpart A of part III of subchapter N for the

        taxable year. The Secretary shall

        prescribe <<NOTE: Regulations. Guidelines.>> such regulations

        or other guidance as may be necessary and appropriate to provide

        for the proper treatment of current and deferred taxes for

        purposes of this paragraph, including the time at which such

        taxes are properly taken into account.

            ✂️✂️(6) Adjustment with respect to disregarded entities.—

        Adjusted financial statement income shall be adjusted to take

        into account any adjusted financial statement income of a

        disregarded entity owned by the taxpayer.

            ✂️✂️(7) <<NOTE: Applicability.>> Special rule for

        cooperatives.—In the case of a cooperative to which section

        1381 applies, the adjusted financial statement income

        (determined without regard to this paragraph) shall be reduced

        by the amounts referred to in section 1382(b) (relating to

        patronage dividends and per-unit retain allocations) to the

        extent such amounts were not otherwise taken into account in

        determining adjusted financial statement income.

            ✂️✂️(8) Rules for alaska native corporations.—Adjusted

        financial statement income shall be appropriately adjusted to

        allow—

                    ✂️✂️(A) cost recovery and depletion attributable to

                property the basis of which is determined under section

                21(c) of the Alaska Native Claims Settlement Act (43

                U.S.C. 1620(c)), and

                    ✂️✂️(B) deductions for amounts payable made pursuant

                to section 7(i) or section 7(j) of such Act (43 U.S.C.

                1606(i) and 1606(j)) only at such time as the deductions

                are allowed for tax purposes.

            ✂️✂️(9) Amounts attributable to elections for direct payment

        of certain credits.—Adjusted financial statement income shall

        be appropriately adjusted to disregard any amount treated as a

        payment against the tax imposed by subtitle A pursuant to an

        election under section 48D(d) or 6417, to the

[[Page 136 STAT. 1825]]

        extent such amount was not otherwise taken into account under

        paragraph (5).

            ✂️✂️(10) Consistent treatment of mortgage servicing income of

        taxpayer other than a regulated investment company.—

                    ✂️✂️(A) In general.—Adjusted financial statement

                income shall be adjusted so as not to include any item

                of income in connection with a mortgage servicing

                contract any earlier than when such income is included

                in gross income under any other provision of this

                chapter.

                    ✂️✂️(B) Rules for amounts not representing reasonable

                compensation.— <<NOTE: Determination.>> The Secretary

                shall provide regulations to prevent the avoidance of

                taxes imposed by this chapter with respect to amounts

                not representing reasonable compensation (as determined

                by the Secretary) with respect to a mortgage servicing

                contract.

            ✂️✂️(11) Adjustment with respect to defined benefit

        pensions.—

                    ✂️✂️(A) <<NOTE: Regulations. Guidelines.>> In

                general.—Except as otherwise provided in rules

                prescribed by the Secretary in regulations or other

                guidance, adjusted financial statement income shall be—

                          ✂️✂️(i) adjusted to disregard any amount of

                      income, cost, or expense that would otherwise be

                      included on the applicable financial statement in

                      connection with any covered benefit plan,

                          ✂️✂️(ii) increased by any amount of income in

                      connection with any such covered benefit plan that

                      is included in the gross income of the corporation

                      under any other provision of this chapter, and

                          ✂️✂️(iii) reduced by deductions allowed under

                      any other provision of this chapter with respect

                      to any such covered benefit plan.

                    ✂️✂️(B) <<NOTE: Definition.>> Covered benefit plan.—

                For purposes of this paragraph, the term ✂️covered

                benefit plan’ means—

                          ✂️✂️(i) a defined benefit plan (other than a

                      multiemployer plan described in section 414(f)) if

                      the trust which is part of such plan is an

                      employees’ trust described in section 401(a) which

                      is exempt from tax under section 501(a),

                          ✂️✂️(ii) any qualified foreign plan (as defined

                      in section 404A(e)), or

                          ✂️✂️(iii) any other defined benefit plan which

                      provides post-employment benefits other than

                      pension benefits.

            ✂️✂️(12) Tax-exempt entities.—In the case of an organization

        subject to tax under section 511, adjusted financial statement

        income shall be appropriately adjusted to only take into account

        any adjusted financial statement income—

                    ✂️✂️(A) of an unrelated trade or business (as defined

                in section 513) of such organization, or

                    ✂️✂️(B) derived from debt-financed property (as

                defined in section 514) to the extent that income from

                such property is treated as unrelated business taxable

                income.

            ✂️✂️(13) Depreciation.—Adjusted financial statement income

        shall be—

                    ✂️✂️(A) <<NOTE: Applicability.>> reduced by

                depreciation deductions allowed under section 167 with

                respect to property to which section 168

[[Page 136 STAT. 1826]]

                applies to the extent of the amount allowed as

                deductions in computing taxable income for the taxable

                year, and

                    ✂️✂️(B) appropriately adjusted—

                          ✂️✂️(i) to disregard any amount of depreciation

                      expense that is taken into account on the

                      taxpayer’s applicable financial statement with

                      respect to such property, and

                          ✂️✂️(ii) to take into account any other item

                      specified by the Secretary in order to provide

                      that such property is accounted for in the same

                      manner as it is accounted for under this chapter.

            ✂️✂️(14) Qualified wireless spectrum.—

                    ✂️✂️(A) In general.—Adjusted financial statement

                income shall be—

                          ✂️✂️(i) reduced by amortization deductions

                      allowed under section 197 with respect to

                      qualified wireless spectrum to the extent of the

                      amount allowed as deductions in computing taxable

                      income for the taxable year, and

                          ✂️✂️(ii) appropriately adjusted—

                                    ✂️✂️(I) to disregard any amount of

                                amortization expense that is taken into

                                account on the taxpayer’s applicable

                                financial statement with respect to such

                                qualified wireless spectrum, and

                                    ✂️✂️(II) to take into account any

                                other item specified by the Secretary in

                                order to provide that such qualified

                                wireless spectrum is accounted for in

                                the same manner as it is accounted for

                                under this chapter.

                    ✂️✂️(B) <<NOTE: Definition.>> Qualified wireless

                spectrum.—For purposes of this paragraph, the term

                ✂️qualified wireless spectrum’ means wireless spectrum

                which—

                          ✂️✂️(i) is used in the trade or business of a

                      wireless telecommunications carrier, and

                          ✂️✂️(ii) <<NOTE: Effective date.>> was acquired

                      after December 31, 2007, and before the date of

                      enactment of this section.

            ✂️✂️(15) <<NOTE: Regulations. Guidelines. Determination.>>

        Secretarial authority to adjust items.—The Secretary shall

        issue regulations or other guidance to provide for such

        adjustments to adjusted financial statement income as the

        Secretary determines necessary to carry out the purposes of this

        section, including adjustments—

                    ✂️✂️(A) to prevent the omission or duplication of any

                item, and

                    ✂️✂️(B) to carry out the principles of part II of

                subchapter C of this chapter (relating to corporate

                liquidations), part III of subchapter C of this chapter

                (relating to corporate organizations and

                reorganizations), and part II of subchapter K of this

                chapter (relating to partnership contributions and

                distributions).

    ✂️✂️(d) <<NOTE: Determinations.>> Deduction for Financial Statement

Net Operating Loss.—

            ✂️✂️(1) In general.—Adjusted financial statement income

        (determined after application of subsection (c) and without

        regard to this subsection) shall be reduced by an amount equal

        to the lesser of—

                    ✂️✂️(A) the aggregate amount of financial statement

                net operating loss carryovers to the taxable year, or

[[Page 136 STAT. 1827]]

                    ✂️✂️(B) 80 percent of adjusted financial statement

                income computed without regard to the deduction

                allowable under this subsection.

            ✂️✂️(2) Financial statement net operating loss carryover.—A

        financial statement net operating loss for any taxable year

        shall be a financial statement net operating loss carryover to

        each taxable year following the taxable year of the loss. The

        portion of such loss which shall be carried to subsequent

        taxable years shall be the amount of such loss remaining (if

        any) after the application of paragraph (1).

            ✂️✂️(3) <<NOTE: Effective date.>> Financial statement net

        operating loss defined.—For purposes of this subsection, the

        term ✂️financial statement net operating loss’ means the amount

        of the net loss (if any) set forth on the corporation’s

        applicable financial statement (determined after application of

        subsection (c) and without regard to this subsection) for

        taxable years ending after December 31, 2019.

    ✂️✂️(e) Regulations and Other Guidance.—The Secretary shall provide

for such regulations and other guidance as necessary to carry out the

purposes of this section, including regulations and other guidance

relating to the effect of the rules of this section on partnerships with

income taken into account by an applicable corporation.’'.

            (2) Clerical amendment.—The table of sections for part VI

        of subchapter A of chapter 1 <<NOTE: 26 USC 55 prec.>> is

        amended by inserting after the item relating to section 56 the

        following new item:

✂️✂️Sec. 56A. Adjusted financial statement income.’'.

    (c) Corporate AMT Foreign Tax Credit.—Section 59, as amended by

this section, <<NOTE: 26 USC 59.>> is amended by adding at the end the

following new subsection:

    ✂️✂️(l) Corporate AMT Foreign Tax Credit.—

            ✂️✂️(1) In general.—For purposes of this part, if an

        applicable corporation chooses to have the benefits of subpart A

        of part III of subchapter N for any taxable year, the corporate

        AMT foreign tax credit for the taxable year of the applicable

        corporation is an amount equal to sum of—

                    ✂️✂️(A) the lesser of—

                          ✂️✂️(i) <<NOTE: Determination.>> the aggregate

                      of the applicable corporation’s pro rata share (as

                      determined under section 56A(c)(3)) of the amount

                      of income, war profits, and excess profits taxes

                      (within the meaning of section 901) imposed by any

                      foreign country or possession of the United States

                      which are—

                                    ✂️✂️(I) taken into account on the

                                applicable financial statement of each

                                controlled foreign corporation with

                                respect to which the applicable

                                corporation is a United States

                                shareholder, and

                                    ✂️✂️(II) paid or accrued (for Federal

                                income tax purposes) by each such

                                controlled foreign corporation, or

                          ✂️✂️(ii) the product of the amount of the

                      adjustment under section 56A(c)(3) and the

                      percentage specified in section 55(b)(2)(A)(i),

                      and

                    ✂️✂️(B) in the case of an applicable corporation that

                is a domestic corporation, the amount of income, war

                profits, and excess profits taxes (within the meaning of

                section

[[Page 136 STAT. 1828]]

                901) imposed by any foreign country or possession of the

                United States to the extent such taxes are—

                          ✂️✂️(i) taken into account on the applicable

                      corporation’s applicable financial statement, and

                          ✂️✂️(ii) paid or accrued (for Federal income tax

                      purposes) by the applicable corporation.

            ✂️✂️(2) <<NOTE: Time period.>> Carryover of excess tax

        paid.—For any taxable year for which an applicable corporation

        chooses to have the benefits of subpart A of part III of

        subchapter N, the excess of the amount described in paragraph

        (1)(A)(i) over the amount described in paragraph (1)(A)(ii)

        shall increase the amount described in paragraph (1)(A)(i) in

        any of the first 5 succeeding taxable years to the extent not

        taken into account in a prior taxable year.

            ✂️✂️(3) Regulations or other guidance.—The Secretary shall

        provide for such regulations or other guidance as is necessary

        to carry out the purposes of this subsection.’'.

    (d) Treatment of General Business Credit.—Section

38(c)(6)(E) <<NOTE: 26 USC 38.>> is amended to read as follows:

                    ✂️✂️(E) <<NOTE: Applicability.>> Corporations.—In

                the case of a corporation—

                          ✂️✂️(i) the first sentence of paragraph (1)

                      shall be applied by substituting ✂️25 percent of

                      the taxpayer’s net income tax as exceeds $25,000’

                      for ✂️the greater of’ and all that follows,

                          ✂️✂️(ii) paragraph (2)(A) shall be applied

                      without regard to clause (ii)(I) thereof, and

                          ✂️✂️(iii) paragraph (4)(A) shall be applied

                      without regard to clause (ii)(I) thereof.’'.

    (e) Credit for Prior Year Minimum Tax Liability.—

            (1) In general.—Section 53(e) is amended to read as

        follows:

    ✂️✂️(e) Application to Applicable Corporations.—In the case of a

corporation—

            ✂️✂️(1) subsection (b)(1) shall be applied by substituting

        ✂️the net minimum tax for all prior taxable years beginning after

        2022’ for ✂️the adjusted net minimum tax imposed for all prior

        taxable years beginning after 1986’, and

            ✂️✂️(2) the amount determined under subsection (c)(1) shall be

        increased by the amount of tax imposed under section 59A for the

        taxable year.’'.

            (2) Conforming amendments.—Section 53(d) is amended—

                    (A) in paragraph (2), by striking ✂️✂️, except that in

                the case’' and all that follows through ✂️✂️treated as

                zero’', and

                    (B) by striking paragraph (3).

    (f) <<NOTE: 26 USC 11 note.>> Effective Date.—The amendments made

by this section shall apply to taxable years beginning after December

31, 2022.

1.2.SEC10201. EXCISE TAX ON REPURCHASE OF CORPORATE STOCK.

    (a) In General.—Subtitle D is amended by inserting after chapter 36

the following new chapter:

[[Page 136 STAT. 1829]]

✂️✂️CHAPTER 37 <<NOTE: 26 USC 4501 prec.>> —REPURCHASE OF CORPORATE STOCK

✂️✂️Sec. 4501. Repurchase of corporate stock.

✂️✂️SEC. 4501. <<NOTE: 26 USC 4501.>> REPURCHASE OF CORPORATE

                          STOCK.

    ✂️✂️(a) General Rule.—There is hereby imposed on each covered

corporation a tax equal to 1 percent of the fair market value of any

stock of the corporation which is repurchased by such corporation during

the taxable year.

    ✂️✂️(b) <<NOTE: Definition.>> Covered Corporation.—For purposes of

this section, the term ✂️covered corporation’ means any domestic

corporation the stock of which is traded on an established securities

market (within the meaning of section 7704(b)(1)).

    ✂️✂️(c) <<NOTE: Definitions.>> Repurchase.—For purposes of this

section—

            ✂️✂️(1) In general.—The term ✂️repurchase’ means—

                    ✂️✂️(A) a redemption within the meaning of section

                317(b) with regard to the stock of a covered

                corporation, and

                    ✂️✂️(B) <<NOTE: Determination.>> any transaction

                determined by the Secretary to be economically similar

                to a transaction described in subparagraph (A).

            ✂️✂️(2) Treatment of purchases by specified affiliates.—

                    ✂️✂️(A) In general.—The acquisition of stock of a

                covered corporation by a specified affiliate of such

                covered corporation, from a person who is not the

                covered corporation or a specified affiliate of such

                covered corporation, shall be treated as a repurchase of

                the stock of the covered corporation by such covered

                corporation.

                    ✂️✂️(B) Specified affiliate.—For purposes of this

                section, the term ✂️specified affiliate’ means, with

                respect to any corporation—

                          ✂️✂️(i) any corporation more than 50 percent of

                      the stock of which is owned (by vote or by value),

                      directly or indirectly, by such corporation, and

                          ✂️✂️(ii) any partnership more than 50 percent of

                      the capital interests or profits interests of

                      which is held, directly or indirectly, by such

                      corporation.

            ✂️✂️(3) Adjustment.—The amount taken into account under

        subsection (a) with respect to any stock repurchased by a

        covered corporation shall be reduced by the fair market value of

        any stock issued by the covered corporation during the taxable

        year, including the fair market value of any stock issued or

        provided to employees of such covered corporation or employees

        of a specified affiliate of such covered corporation during the

        taxable year, whether or not such stock is issued or provided in

        response to the exercise of an option to purchase such stock.

    ✂️✂️(d) <<NOTE: Determinations.>> Special Rules for Acquisition of

Stock of Certain Foreign Corporations.—

            ✂️✂️(1) In general.—In the case of an acquisition of stock of

        an applicable foreign corporation by a specified affiliate of

        such corporation (other than a foreign corporation or a foreign

        partnership (unless such partnership has a domestic entity as a

        direct or indirect partner)) from a person who is not the

        applicable foreign corporation or a specified affiliate of such

        applicable foreign corporation, for purposes of this section—

[[Page 136 STAT. 1830]]

                    ✂️✂️(A) such specified affiliate shall be treated as a

                covered corporation with respect to such acquisition,

                    ✂️✂️(B) such acquisition shall be treated as a

                repurchase of stock of a covered corporation by such

                covered corporation, and

                    ✂️✂️(C) the adjustment under subsection (c)(3) shall

                be determined only with respect to stock issued or

                provided by such specified affiliate to employees of the

                specified affiliate.

            ✂️✂️(2) Surrogate foreign corporations.—In the case of a

        repurchase of stock of a covered surrogate foreign corporation

        by such covered surrogate foreign corporation, or an acquisition

        of stock of a covered surrogate foreign corporation by a

        specified affiliate of such corporation, for purposes of this

        section—

                    ✂️✂️(A) the expatriated entity with respect to such

                covered surrogate foreign corporation shall be treated

                as a covered corporation with respect to such repurchase

                or acquisition,

                    ✂️✂️(B) such repurchase or acquisition shall be

                treated as a repurchase of stock of a covered

                corporation by such covered corporation, and

                    ✂️✂️(C) the adjustment under subsection (c)(3) shall

                be determined only with respect to stock issued or

                provided by such expatriated entity to employees of the

                expatriated entity.

            ✂️✂️(3) Definitions.—For purposes of this subsection—

                    ✂️✂️(A) Applicable foreign corporation.—The term

                ✂️applicable foreign corporation’ means any foreign

                corporation the stock of which is traded on an

                established securities market (within the meaning of

                section 7704(b)(1)).

                    ✂️✂️(B) Covered surrogate foreign corporation.—The

                term ✂️covered surrogate foreign corporation’ means any

                surrogate foreign corporation (as determined under

                section 7874(a)(2)(B) by substituting ✂️September 20,

                2021’ for ✂️March 4, 2003’ each place it appears) the

                stock of which is traded on an established securities

                market (within the meaning of section 7704(b)(1)), but

                only with respect to taxable years which include any

                portion of the applicable period with respect to such

                corporation under section 7874(d)(1).

                    ✂️✂️(C) Expatriated entity.—The term ✂️expatriated

                entity’ has the meaning given such term by section

                7874(a)(2)(A).

    ✂️✂️(e) Exceptions.—Subsection (a) shall not apply—

            ✂️✂️(1) to the extent that the repurchase is part of a

        reorganization (within the meaning of section 368(a)) and no

        gain or loss is recognized on such repurchase by the shareholder

        under chapter 1 by reason of such reorganization,

            ✂️✂️(2) in any case in which the stock repurchased is, or an

        amount of stock equal to the value of the stock repurchased is,

        contributed to an employer-sponsored retirement plan, employee

        stock ownership plan, or similar plan,

            ✂️✂️(3) in any case in which the total value of the stock

        repurchased during the taxable year does not exceed $1,000,000,

            ✂️✂️(4) under regulations prescribed by the Secretary, in

        cases in which the repurchase is by a dealer in securities in

        the ordinary course of business,

[[Page 136 STAT. 1831]]

            ✂️✂️(5) to repurchases by a regulated investment company (as

        defined in section 851) or a real estate investment trust, or

            ✂️✂️(6) to the extent that the repurchase is treated as a

        dividend for purposes of this title.

    ✂️✂️(f) Regulations and Guidance.—The Secretary shall prescribe such

regulations and other guidance as are necessary or appropriate to carry

out, and to prevent the avoidance of, the purposes of this section,

including regulations and other guidance—

            ✂️✂️(1) to prevent the abuse of the exceptions provided by

        subsection (e),

            ✂️✂️(2) to address special classes of stock and preferred

        stock, and

            ✂️✂️(3) for the application of the rules under subsection

        (d).’'.

    (b) Tax Not Deductible.—Paragraph (6) of section 275(a) <<NOTE: 26

USC 275.>> is amended by inserting ✂️✂️37,’' before ✂️✂️41’'.

    (c) Clerical Amendment.—The table of chapters for subtitle D

is <<NOTE: 26 USC 4001 prec.>> amended by inserting after the item

relating to chapter 36 the following new item:

             ✂️✂️Chapter 37—Repurchase of Corporate Stock’'.

    (d) <<NOTE: 26 USC 4501 note.>> Effective Date.—The amendments

made by this section shall apply to repurchases (within the meaning of

section 4501(c) of the Internal Revenue Code of 1986, as added by this

section) of stock after December 31, 2022.

1.3.SEC10301. ENHANCEMENT OF INTERNAL REVENUE SERVICE RESOURCES.

    In General.—The following sums are appropriated, out of any money

in the Treasury not otherwise appropriated, for the fiscal year ending

September 30, 2022:

            (1) Internal revenue service.—

                    (A) In general.—

                          (i) Taxpayer services.—For necessary expenses

                      of the Internal Revenue Service to provide

                      taxpayer services, including pre-filing assistance

                      and education, filing and account services,

                      taxpayer advocacy services, and other services as

                      authorized by 5 U.S.C. 3109, at such rates as may

                      be determined by the Commissioner, $3,181,500,000,

                      to remain available until September 30, 2031:

                      Provided, That these amounts shall be in addition

                      to amounts otherwise available for such purposes.

                          (ii) Enforcement.—For necessary expenses for

                      tax enforcement activities of the Internal Revenue

                      Service to determine and collect owed taxes, to

                      provide legal and litigation support, to conduct

                      criminal investigations (including investigative

                      technology), to provide digital asset monitoring

                      and compliance activities, to enforce criminal

                      statutes related to violations of internal revenue

                      laws and other financial crimes, to purchase and

                      hire passenger motor vehicles (31 U.S.C.

[[Page 136 STAT. 1832]]

                      1343(b)), and to provide other services as

                      authorized by 5 U.S.C. 3109, at such rates as may

                      be determined by the Commissioner,

                      $45,637,400,000, to remain available until

                      September 30, 2031: Provided, That these amounts

                      shall be in addition to amounts otherwise

                      available for such purposes.

                          (iii) Operations support.—For necessary

                      expenses of the Internal Revenue Service to

                      support taxpayer services and enforcement

                      programs, including rent payments; facilities

                      services; printing; postage; physical security;

                      headquarters and other IRS-wide administration

                      activities; research and statistics of income;

                      telecommunications; information technology

                      development, enhancement, operations, maintenance,

                      and security; the hire of passenger motor vehicles

                      (31 U.S.C. 1343(b)); the operations of the

                      Internal Revenue Service Oversight Board; and

                      other services as authorized by 5 U.S.C. 3109, at

                      such rates as may be determined by the

                      Commissioner, $25,326,400,000, to remain available

                      until September 30, 2031: Provided, That these

                      amounts shall be in addition to amounts otherwise

                      available for such purposes.

                          (iv) Business systems modernization.—For

                      necessary expenses of the Internal Revenue

                      Service’s business systems modernization program,

                      including development of callback technology and

                      other technology to provide a more personalized

                      customer service but not including the operation

                      and maintenance of legacy systems, $4,750,700,000,

                      to remain available until September 30, 2031:

                      Provided, That these amounts shall be in addition

                      to amounts otherwise available for such purposes.

                    (B) Task force to design an irs-run free ✂️✂️direct

                efile’' tax return system.—For necessary expenses of

                the Internal Revenue Service to deliver to Congress,

                within nine months following the date of the enactment

                of this Act, a report on (I) the cost (including options

                for differential coverage based on taxpayer adjusted

                gross income and return complexity) of developing and

                running a free direct efile tax return system, including

                costs to build and administer each release, with a focus

                on multi-lingual and mobile-friendly features and

                safeguards for taxpayer data; (II) taxpayer opinions,

                expectations, and level of trust, based on surveys, for

                such a free direct efile system; and (III) the opinions

                of an independent third-party on the overall

                feasibility, approach, schedule, cost, organizational

                design, and Internal Revenue Service capacity to deliver

                such a direct efile tax return system, $15,000,000, to

                remain available until September 30, 2023: Provided,

                That these amounts shall be in addition to amounts

                otherwise available for such purposes.

            (2) Treasury inspector general for tax administration.—For

        necessary expenses of the Treasury Inspector General for Tax

        Administration in carrying out the Inspector General Act of

        1978, as amended, including purchase and hire of passenger motor

        vehicles (31 U.S.C. 1343(b)); and services

[[Page 136 STAT. 1833]]

        authorized by 5 U.S.C. 3109, at such rates as may be determined

        by the Inspector General for Tax Administration, $403,000,000,

        to remain available until September 30, 2031: Provided, That

        these amounts shall be in addition to amounts otherwise

        available for such purposes.

            (3) Office of tax policy.—For necessary expenses of the

        Office of Tax Policy of the Department of the Treasury to carry

        out functions related to promulgating regulations under the

        Internal Revenue Code of 1986, $104,533,803, to remain available

        until September 30, 2031: Provided, That these amounts shall be

        in addition to amounts otherwise available for such purposes.

            (4) United states tax court.—For necessary expenses of the

        United States Tax Court, including contract reporting and other

        services as authorized by 5 U.S.C. 3109; $153,000,000, to remain

        available until September 30, 2031: Provided, That these amounts

        shall be in addition to amounts otherwise available for such

        purposes.

            (5) Treasury departmental offices.—For necessary expenses

        of the Departmental Offices of the Department of the Treasury to

        provide for oversight and implementation support for actions by

        the Internal Revenue Service to implement this Act and the

        amendments made by this Act, $50,000,000, to remain available

        until September 30, 2031: Provided, That these amounts shall be

        in addition to amounts otherwise available for such purposes.

              Subtitle B—Prescription Drug Pricing Reform

1.4.SEC11001. PROVIDING FOR LOWER PRICES FOR CERTAIN HIGH-PRICED SINGLE SOURCE DRUGS.

    (a) Program To Lower Prices for Certain High-Priced Single Source

Drugs.—Title XI of the Social Security Act is amended by adding after

section 1184 (42 U.S.C. 1320e-3) the following new part:

1.5.SEC11002. SPECIAL RULE TO DELAY SELECTION AND NEGOTIATION OF BIOLOGICS FOR BIOSIMILAR MARKET ENTRY.

    (a) In General.—Part E of title XI of the Social Security Act, as

added by section 11001, is amended—

            (1) <<NOTE: 42 USC 1320f-1.>> in section 1192—

                    (A) in subsection (a), in the flush matter following

                paragraph (4), by inserting ✂️✂️and subsection (b)(3)’'

                after ✂️✂️the previous sentence’';

                    (B) in subsection (b)—

                          (i) in paragraph (1), by adding at the end the

                      following new subparagraph:

                    ✂️✂️(C) In the case of a biological product for which

                the inclusion of the biological product as a selected

                drug on a list published under subsection (a) has been

                delayed under subsection (f)(2), remove such biological

                product from the rankings under subparagraph (A) before

                making the selections under subparagraph (B).’'; and

                          (ii) by adding at the end the following new

                      paragraph:

            ✂️✂️(3) Inclusion of delayed biological products.—Pursuant to

        subparagraphs (B)(ii)(I) and (C)(i) of subsection (f)(2), the

        Secretary shall select and include on the list published under

        subsection (a) the biological products described in such

        subparagraphs. Such biological products shall count towards the

        required number of drugs to be selected under subsection

        (a)(1).’'; and

                    (C) by adding at the end the following new

                subsection:

    ✂️✂️(f) Special Rule To Delay Selection and Negotiation of Biologics

for Biosimilar Market Entry.—

            ✂️✂️(1) Application.—

[[Page 136 STAT. 1855]]

                    ✂️✂️(A) <<NOTE: Determination. Time period.>> In

                general.—Subject to subparagraph (B), in the case of a

                biological product that would (but for this subsection)

                be an extended-monopoly drug (as defined in section

                1194(c)(4)) included as a selected drug on the list

                published under subsection (a) with respect to an

                initial price applicability year, the rules described in

                paragraph (2) shall apply if the Secretary determines

                that there is a high likelihood (as described in

                paragraph (3)) that a biosimilar biological product (for

                which such biological product will be the reference

                product) will be licensed and marketed under section

                351(k) of the Public Health Service Act before the date

                that is 2 years after the selected drug publication date

                with respect to such initial price applicability year.

                    ✂️✂️(B) Request required.—

                          ✂️✂️(i) In general.—The Secretary shall not

                      provide for a delay under—

                                    ✂️✂️(I) paragraph (2)(A) unless a

                                request is made for such a delay by a

                                manufacturer of a biosimilar biological

                                product prior to the selected drug

                                publication date for the list published

                                under subsection (a) with respect to the

                                initial price applicability year for

                                which the biological product may have

                                been included as a selected drug on such

                                list but for subparagraph (2)(A); or

                                    ✂️✂️(II) <<NOTE: Time period.>>

                                paragraph (2)(B)(iii) unless a request

                                is made for such a delay by such a

                                manufacturer prior to the selected drug

                                publication date for the list published

                                under subsection (a) with respect to the

                                initial price applicability year that is

                                1 year after the initial price

                                applicability year for which the

                                biological product described in

                                subsection (a) would have been included

                                as a selected drug on such list but for

                                paragraph (2)(A).

                          ✂️✂️(ii) Information and documents.—

                                    ✂️✂️(I) In general.—A request made

                                under clause (i) shall be submitted to

                                the Secretary by such manufacturer at a

                                time and in a form and manner specified

                                by the Secretary, and contain—

                                            ✂️✂️(aa) information and

                                        documents necessary for the

                                        Secretary to make determinations

                                        under this subsection, as

                                        specified by the Secretary and

                                        including, to the extent

                                        available, items described in

                                        subclause (III); and

                                            ✂️✂️(bb) all agreements

                                        related to the biosimilar

                                        biological product filed with

                                        the Federal Trade Commission or

                                        the Assistant Attorney General

                                        pursuant to subsections (a) and

                                        (c) of section 1112 of the

                                        Medicare Prescription Drug,

                                        Improvement, and Modernization

                                        Act of 2003.

                                    ✂️✂️(II) Additional information and

                                documents.—After the Secretary has

                                reviewed the request and materials

                                submitted under subclause (I), the

                                manufacturer shall submit any additional

[[Page 136 STAT. 1856]]

                                information and documents requested by

                                the Secretary necessary to make

                                determinations under this subsection.

                                    ✂️✂️(III) Items described.—The items

                                described in this clause are the

                                following:

                                            ✂️✂️(aa) The manufacturing

                                        schedule for such biosimilar

                                        biological product submitted to

                                        the Food and Drug Administration

                                        during its review of the

                                        application under such section

                                        351(k).

                                            ✂️✂️(bb) <<NOTE: Time

                                        period.>> Disclosures (in

                                        filings by the manufacturer of

                                        such biosimilar biological

                                        product with the Securities and

                                        Exchange Commission required

                                        under section 12(b), 12(g),

                                        13(a), or 15(d) of the

                                        Securities Exchange Act of 1934

                                        about capital investment,

                                        revenue expectations, and

                                        actions taken by the

                                        manufacturer that are typical of

                                        the normal course of business in

                                        the year (or the 2 years, as

                                        applicable) before marketing of

                                        a biosimilar biological product)

                                        that pertain to the marketing of

                                        such biosimilar biological

                                        product, or comparable

                                        documentation that is

                                        distributed to the shareholders

                                        of privately held companies.

                    ✂️✂️(C) Aggregation rule.—

                          ✂️✂️(i) In general.—All persons treated as a

                      single employer under subsection (a) or (b) of

                      section 52 of the Internal Revenue Code of 1986,

                      or in a partnership, shall be treated as one

                      manufacturer for purposes of paragraph (2)(D)(iv).

                          ✂️✂️(ii) Partnership defined.—In clause (i),

                      the term ✂️partnership’ means a syndicate, group,

                      pool, joint venture, or other organization through

                      or by means of which any business, financial

                      operation, or venture is carried on by the

                      manufacturer of the biological product and the

                      manufacturer of the biosimilar biological product.

            ✂️✂️(2) <<NOTE: Time periods. Determination.>> Rules

        described.—The rules described in this paragraph are the

        following:

                    ✂️✂️(A) Delayed selection and negotiation for 1

                year.—If a determination of high likelihood is made

                under paragraph (3), the Secretary shall delay the

                inclusion of the biological product as a selected drug

                on the list published under subsection (a) until such

                list is published with respect to the initial price

                applicability year that is 1 year after the initial

                price applicability year for which the biological

                product would have been included as a selected drug on

                such list.

                    ✂️✂️(B) If not licensed and marketed during the

                initial delay.—

                          ✂️✂️(i) In general.—If, during the time period

                      between the selected drug publication date on

                      which the biological product would have been

                      included on the list as a selected drug pursuant

                      to subsection (a) but for subparagraph (A) and the

                      selected drug publication date with respect to the

                      initial price applicability year that is 1 year

                      after the initial price applicability

[[Page 136 STAT. 1857]]

                      year for which such biological product would have

                      been included as a selected drug on such list, the

                      Secretary determines that the biosimilar

                      biological product for which the manufacturer

                      submitted the request under paragraph

                      (1)(B)(i)(II) (and for which the Secretary

                      previously made a high likelihood determination

                      under paragraph (3)) has not been licensed and

                      marketed under section 351(k) of the Public Health

                      Service Act, the Secretary shall, at the request

                      of such manufacturer—

                                    ✂️✂️(I) reevaluate whether there is a

                                high likelihood (as described in

                                paragraph (3)) that such biosimilar

                                biological product will be licensed and

                                marketed under such section 351(k)

                                before the date that is 2 years after

                                the selected drug publication date for

                                which such biological product would have

                                been included as a selected drug on such

                                list published but for subparagraph (A);

                                and

                                    ✂️✂️(II) <<NOTE: Evaluation.>>

                                evaluate whether, on the basis of clear

                                and convincing evidence, the

                                manufacturer of such biosimilar

                                biological product has made a

                                significant amount of progress (as

                                determined by the Secretary) towards

                                both such licensure and the marketing of

                                such biosimilar biological product

                                (based on information from items

                                described in subclauses (I)(bb) and (II)

                                of paragraph (1)(B)(ii)) since the

                                receipt by the Secretary of the request

                                made by such manufacturer under

                                paragraph (1)(B)(i)(I).

                          ✂️✂️(ii) Selection and negotiation.—If the

                      Secretary determines that there is not a high

                      likelihood that such biosimilar biological product

                      will be licensed and marketed as described in

                      clause (i)(I) or there has not been a significant

                      amount of progress as described in clause

                      (i)(II)—

                                    ✂️✂️(I) the Secretary shall include

                                the biological product as a selected

                                drug on the list published under

                                subsection (a) with respect to the

                                initial price applicability year that is

                                1 year after the initial price

                                applicability year for which such

                                biological product would have been

                                included as a selected drug on such list

                                but for subparagraph (A); and

                                    ✂️✂️(II) the manufacturer of such

                                biological product shall pay a rebate

                                under paragraph (4) with respect to the

                                year for which such manufacturer would

                                have provided access to a maximum fair

                                price for such biological product but

                                for subparagraph (A).

                          ✂️✂️(iii) Second 1-year delay.—If the Secretary

                      determines that there is a high likelihood that

                      such biosimilar biological product will be

                      licensed and marketed (as described in clause

                      (i)(I)) and a significant amount of progress has

                      been made by the manufacturer of such biosimilar

                      biological product towards such licensure and

                      marketing (as described in clause (i)(II)), the

                      Secretary shall delay the inclusion of the

                      biological product as a selected drug on the list

                      published under

[[Page 136 STAT. 1858]]

                      subsection (a) until the selected drug publication

                      date of such list with respect to the initial

                      price applicability year that is 2 years after the

                      initial price applicability year for which such

                      biological product would have been included as a

                      selected drug on such list but for this

                      subsection.

                    ✂️✂️(C) If not licensed and marketed during the year

                two delay.—If, during the time period between the

                selected drug publication date of the list for which the

                biological product would have been included as a

                selected drug but for subparagraph (B)(iii) and the

                selected drug publication date with respect to the

                initial price applicability year that is 2 years after

                the initial price applicability year for which such

                biological product would have been included as a

                selected drug on such list but for this subsection, the

                Secretary determines that such biosimilar biological

                product has not been licensed and marketed—

                          ✂️✂️(i) the Secretary shall include such

                      biological product as a selected drug on such list

                      with respect to the initial price applicability

                      year that is 2 years after the initial price

                      applicability year for which such biological

                      product would have been included as a selected

                      drug on such list; and

                          ✂️✂️(ii) the manufacturer of such biological

                      product shall pay a rebate under paragraph (4)

                      with respect to the years for which such

                      manufacturer would have provided access to a

                      maximum fair price for such biological product but

                      for this subsection.

                    ✂️✂️(D) Limitations on delays.—

                          ✂️✂️(i) Limited to 2 years.—In no case shall

                      the Secretary delay the inclusion of a biological

                      product on the list published under subsection (a)

                      for more than 2 years.

                          ✂️✂️(ii) Exclusion of biological products that

                      transitioned to a long-monopoly drug during the

                      delay.—In the case of a biological product for

                      which the inclusion on the list published pursuant

                      to subsection (a) was delayed by 1 year under

                      subparagraph (A) and for which there would have

                      been a change in status to a long-monopoly drug

                      (as defined in section 1194(c)(5)) if such

                      biological product had been a selected drug, in no

                      case may the Secretary provide for a second 1-year

                      delay under subparagraph (B)(iii).

                          ✂️✂️(iii) Exclusion of biological products if

                      more than 1 year since licensure.—In no case

                      shall the Secretary delay the inclusion of a

                      biological product on the list published under

                      subsection (a) if more than 1 year has elapsed

                      since the biosimilar biological product has been

                      licensed under section 351(k) of the Public Health

                      Service Act and marketing has not commenced for

                      such biosimilar biological product.

                          ✂️✂️(iv) Certain manufacturers of biosimilar

                      biological products excluded.—In no case shall

                      the Secretary delay the inclusion of a biological

                      product

[[Page 136 STAT. 1859]]

                      as a selected drug on the list published under

                      subsection (a) if Secretary determined that the

                      manufacturer of the biosimilar biological product

                      described in paragraph (1)(A)—

                                    ✂️✂️(I) is the same as the

                                manufacturer of the reference product

                                described in such paragraph or is

                                treated as being the same pursuant to

                                paragraph (1)(C); or

                                    ✂️✂️(II) has, based on information

                                from items described in paragraph

                                (1)(B)(ii)(I)(bb), entered into any

                                agreement described in such paragraph

                                with the manufacturer of the reference

                                product described in paragraph (1)(A)

                                that—

                                            ✂️✂️(aa) requires or

                                        incentivizes the manufacturer of

                                        the biosimilar biological

                                        product to submit a request

                                        described in paragraph (1)(B);

                                        or

                                            ✂️✂️(bb) restricts the

                                        quantity (either directly or

                                        indirectly) of the biosimilar

                                        biological product that may be

                                        sold in the United States over a

                                        specified period of time.

            ✂️✂️(3) High likelihood.—For purposes of this subsection,

        there is a high likelihood described in paragraph (1) or

        paragraph (2), as applicable, if the Secretary finds that—

                    ✂️✂️(A) an application for licensure under section

                351(k) of the Public Health Service Act for the

                biosimilar biological product has been accepted for

                review or approved by the Food and Drug Administration;

                and

                    ✂️✂️(B) information from items described in sub

                clauses (I)(bb) and (III) of paragraph (1)(B)(ii)

                submitted to the Secretary by the manufacturer

                requesting a delay under such paragraph provides clear

                and convincing evidence that such biosimilar biological

                product will, within the time period specified under

                paragraph (1)(A) or (2)(B)(i)(I), be marketed.

            ✂️✂️(4) Rebate.—

                    ✂️✂️(A) In general.—For purposes of subparagraphs

                (B)(ii)(II) and (C)(ii) of paragraph (2), in the case of

                a biological product for which the inclusion on the list

                under subsection (a) was delayed under this subsection

                and for which the Secretary has negotiated and entered

                into an agreement under section 1193 with respect to

                such biological product, the manufacturer shall be

                required to pay a rebate to the Secretary at such time

                and in such manner as determined by the Secretary.

                    ✂️✂️(B) <<NOTE: Estimate.>> Amount.—Subject to

                subparagraph (C), the amount of the rebate under

                subparagraph (A) with respect to a biological product

                shall be equal to the estimated amount—

                          ✂️✂️(i) in the case of a biological product that

                      is a covered part D drug (as defined in section

                      1860D-2(e)), that is the sum of the products of—

                                    ✂️✂️(I) 75 percent of the amount by

                                which—

                                            ✂️✂️(aa) the average

                                        manufacturer price, as reported

                                        by the manufacturer of such

                                        covered part D drug under

                                        section 1927 (or, if not

                                        reported by such manufacturer

                                        under section

[[Page 136 STAT. 1860]]

                                        1927, as reported by such

                                        manufacturer to the Secretary

                                        pursuant to the agreement under

                                        section 1193(a)) for such

                                        biological product, with respect

                                        to each of the calendar quarters

                                        of the price applicability

                                        period that would have applied

                                        but for this subsection; exceeds

                                            ✂️✂️(bb) in the initial price

                                        applicability year that would

                                        have applied but for a delay

                                        under—

                                                ✂️✂️(AA) paragraph (2)(A),

                                            the maximum fair price

                                            negotiated under section

                                            1194 for such biological

                                            product under such

                                            agreement; or

                                                ✂️✂️(BB) paragraph

                                            (2)(B)(iii), such maximum

                                            fair price, increased as

                                            described in section

                                            1195(b)(1)(A); and

                                    ✂️✂️(II) the number of units dispensed

                                under part D of title XVIII for such

                                covered part D drug during each such

                                calendar quarter of such price

                                applicability period; and

                          ✂️✂️(ii) in the case of a biological product for

                      which payment may be made under part B of title

                      XVIII, that is the sum of the products of—

                                    ✂️✂️(I) 80 percent of the amount by

                                which—

                                            ✂️✂️(aa) the payment amount

                                        for such biological product

                                        under section 1847A(b), with

                                        respect to each of the calendar

                                        quarters of the price

                                        applicability period that would

                                        have applied but for this

                                        subsection; exceeds

                                            ✂️✂️(bb) in the initial price

                                        applicability year that would

                                        have applied but for a delay

                                        under—

                                                ✂️✂️(AA) paragraph (2)(A),

                                            the maximum fair price

                                            negotiated under section

                                            1194 for such biological

                                            product under such

                                            agreement; or

                                                ✂️✂️(BB) paragraph

                                            (2)(B)(iii), such maximum

                                            fair price, increased as

                                            described in section

                                            1195(b)(1)(A); and

                                    ✂️✂️(II) the number of units

                                (excluding units that are packaged into

                                the payment amount for an item or

                                service and are not separately payable

                                under such part B) of the billing and

                                payment code of such biological product

                                administered or furnished under such

                                part B during each such calendar quarter

                                of such price applicability period.

                    ✂️✂️(C) Special rule for delayed biological products

                that are long-monopoly drugs.—

                          ✂️✂️(i) <<NOTE: Determination.>> In general.—

                      In the case of a biological product with respect

                      to which a rebate is required to be paid under

                      this paragraph, if such biological product

                      qualifies as a long-monopoly drug (as defined in

                      section 1194(c)(5)) at the time of its inclusion

                      on the list published under subsection (a), in

                      determining the amount of the rebate for such

                      biological product under subparagraph (B), the

                      amount described in clause (ii) shall

[[Page 136 STAT. 1861]]

                      be substituted for the maximum fair price

                      described in clause (i)(I) or (ii)(I) of such

                      subparagraph (B), as applicable.

                          ✂️✂️(ii) <<NOTE: Time periods.>> Amount

                      described.—The amount described in this clause is

                      an amount equal to 65 percent of the average non-

                      Federal average manufacturer price for the

                      biological product for 2021 (or, in the case that

                      there is not an average non-Federal average

                      manufacturer price available for such biological

                      product for 2021, for the first full year

                      following the market entry for such biological

                      product), increased by the percentage increase in

                      the consumer price index for all urban consumers

                      (all items; United States city average) from

                      September 2021 (or December of such first full

                      year following the market entry), as applicable,

                      to September of the year prior to the selected

                      drug publication date with respect to the initial

                      price applicability year that would have applied

                      but for this subsection.

                    ✂️✂️(D) Rebate deposits.—Amounts paid as rebates

                under this paragraph shall be deposited into—

                          ✂️✂️(i) in the case payment is made for such

                      biological product under part B of title XVIII,

                      the Federal Supplementary Medical Insurance Trust

                      Fund established under section 1841; and

                          ✂️✂️(ii) in the case such biological product is

                      a covered part D drug (as defined in section

                      1860D-2(e)), the Medicare Prescription Drug

                      Account under section 1860D-16 in such Trust Fund.

            ✂️✂️(5) Definitions of biosimilar biological product.—In this

        subsection, the term ✂️biosimilar biological product’ has the

        meaning given such term in section 1847A(c)(6).’';

            (2) in section 1193(a)(4) <<NOTE: 42 USC 1320f-2.>> —

                    (A) in the matter preceding subparagraph (A), by

                inserting ✂️✂️, and for section 1192(f),’' after ✂️✂️section

                1194(f))’';

                    (B) in subparagraph (A), by striking ✂️✂️and’' at the

                end;

                    (C) by adding at the end the following new

                subparagraph:

                    ✂️✂️(C) information that the Secretary requires to

                carry out section 1192(f), including rebates under

                paragraph (4) of such section; and’';

            (3) in section 1196(a)(7) <<NOTE: 42 USC 1320f-5.>> , by

        striking ✂️✂️section 1192(d)(2)(B)’' and inserting ✂️✂️subsections

        (d)(2)(B) and (f)(1)(C) of section 1192’';

            (4) in section 1197 <<NOTE: 42 USC 1320f-6.>> —

                    (A) by redesignating subsections (b), (c), and (d)

                as subsections (c), (d), and (e), respectively; and

                    (B) by inserting after subsection (a) the following

                new subsection:

    ✂️✂️(b) <<NOTE: Penalties.>> Violations Relating to Providing

Rebates.—Any manufacturer that fails to comply with the rebate

requirements under section 1192(f)(4) shall be subject to a civil

monetary penalty equal to 10 times the amount of the rebate the

manufacturer failed to pay under such section.’'; and

            (5) in section 1198(b)(2) <<NOTE: 42 USC 1320f-7.>> , by

        inserting ✂️✂️the application of section 1192(f),’' after

        ✂️✂️section 1192(e)’'.

[[Page 136 STAT. 1862]]

    (b) Conforming Amendments for Disclosure of Certain Information.—

Section 1927(b)(3)(D)(i) of the Social Security Act (42 U.S.C. 1396r-

8(b)(3)(D)(i)) is amended by striking ✂️✂️or to carry out section 1847B’'

and inserting ✂️✂️or to carry out section 1847B or section 1192(f),

including rebates under paragraph (4) of such section’'.

    (c) <<NOTE: 42 USC 1320f-1 note.>> Implementation for 2026 Through

2028.—The Secretary of Health and Human Services shall implement this

section, including the amendments made by this section, for 2026, 2027,

and 2028 by program instruction or other forms of program guidance.

1.5.SEC11003. EXCISE TAX IMPOSED ON DRUG MANUFACTURERS DURING NONCOMPLIANCE PERIODS.

    (a) In General.—Subtitle D of the Internal Revenue Code of 1986 is

amended by adding at the end the following new chapter:

✂️✂️CHAPTER 50A <<NOTE: 26 USC 5000D prec.>> —DESIGNATED DRUGS

✂️✂️Sec. 5000D. Designated drugs during noncompliance periods.

✂️✂️SEC. 5000D <<NOTE: 26 USC 5000D.>> . DESIGNATED DRUGS DURING

                            NONCOMPLIANCE PERIODS.

    ✂️✂️(a) In General.—There is hereby imposed on the sale by the

manufacturer, producer, or importer of any designated drug during a day

described in subsection (b) a tax in an amount such that the applicable

percentage is equal to the ratio of—

            ✂️✂️(1) such tax, divided by

            ✂️✂️(2) the sum of such tax and the price for which so sold.

    ✂️✂️(b) Noncompliance Periods.—A day is described in this subsection

with respect to a designated drug if it is a day during one of the

following periods:

            ✂️✂️(1) The period beginning on the March 1st (or, in the case

        of initial price applicability year 2026, the October 2nd)

        immediately following the date on which such drug is included on

        the list published under section 1192(a) of the Social Security

        Act and ending on the earlier of—

                    ✂️✂️(A) the first date on which the manufacturer of

                such designated drug has in place an agreement described

                in section 1193(a) of such Act with respect to such

                drug, or

                    ✂️✂️(B) the date that the Secretary of Health and

                Human Services has made a determination described in

                section 1192(c)(1) of such Act with respect to such

                designated drug.

            ✂️✂️(2) The period beginning on the November 2nd immediately

        following the March 1st described in paragraph (1) (or, in the

        case of initial price applicability year 2026, the August 2nd

        immediately following the October 2nd described in such

        paragraph) and ending on the earlier of—

                    ✂️✂️(A) the first date on which the manufacturer of

                such designated drug and the Secretary of Health and

                Human Services have agreed to a maximum fair price under

                an agreement described in section 1193(a) of the Social

                Security Act, or

                    ✂️✂️(B) the date that the Secretary of Health and

                Human Services has made a determination described in

                section 1192(c)(1) of such Act with respect to such

                designated drug.

            ✂️✂️(3) In the case of any designated drug which is a selected

        drug (as defined in section 1192(c) of the Social Security Act)

[[Page 136 STAT. 1863]]

        that the Secretary of Health and Human Services has selected for

        renegotiation under section 1194(f) of such Act, the period

        beginning on the November 2nd of the year that begins 2 years

        prior to the first initial price applicability year of the price

        applicability period for which the maximum fair price

        established pursuant to such renegotiation applies and ending on

        the earlier of—

                    ✂️✂️(A) the first date on which the manufacturer of

                such designated drug has agreed to a renegotiated

                maximum fair price under such agreement, or

                    ✂️✂️(B) the date that the Secretary of Health and

                Human Services has made a determination described in

                section 1192(c)(1) of such Act with respect to such

                designated drug.

            ✂️✂️(4) With respect to information that is required to be

        submitted to the Secretary of Health and Human Services under an

        agreement described in section 1193(a) of the Social Security

        Act, the period beginning on the date on which such Secretary

        certifies that such information is overdue and ending on the

        date that such information is so submitted.

    ✂️✂️(c) Suspension of Tax.— <<NOTE: Contracts.>>

            ✂️✂️(1) In general.—A day shall not be taken into account as

        a day during a period described in subsection (b) if such day is

        also a day during the period—

                    ✂️✂️(A) beginning on the first date on which—

                          ✂️✂️(i) <<NOTE: Notice.>> the notice of

                      terminations of all applicable agreements of the

                      manufacturer have been received by the Secretary

                      of Health and Human Services, and

                          ✂️✂️(ii) none of the drugs of the manufacturer

                      of the designated drug are covered by an agreement

                      under section 1860D-14A or 1860D-14C of the Social

                      Security Act, and

                    ✂️✂️(B) ending on the last day of February following

                the earlier of—

                          ✂️✂️(i) the first day after the date described

                      in subparagraph (A) on which the manufacturer

                      enters into any subsequent applicable agreement,

                      or

                          ✂️✂️(ii) the first date any drug of the

                      manufacturer of the designated drug is covered by

                      an agreement under section 1860D-14A or 1860D-14C

                      of the Social Security Act.

            ✂️✂️(2) <<NOTE: Definition.>> Applicable agreement.—For

        purposes of this subsection, the term ✂️applicable agreement’

        means the following:

                    ✂️✂️(A) An agreement under—

                          ✂️✂️(i) the Medicare coverage gap discount

                      program under section 1860D-14A of the Social

                      Security Act, or

                          ✂️✂️(ii) the manufacturer discount program under

                      section 1860D-14C of such Act.

                    ✂️✂️(B) A rebate agreement described in section

                1927(b) of such Act.

    ✂️✂️(d) <<NOTE: Definition.>> Applicable Percentage.—For purposes of

this section, the term ✂️applicable percentage’ means—

            ✂️✂️(1) in the case of sales of a designated drug during the

        first 90 days described in subsection (b) with respect to such

        drug, 65 percent,

[[Page 136 STAT. 1864]]

            ✂️✂️(2) in the case of sales of such drug during the 91st day

        through the 180th day described in subsection (b) with respect

        to such drug, 75 percent,

            ✂️✂️(3) in the case of sales of such drug during the 181st day

        through the 270th day described in subsection (b) with respect

        to such drug, 85 percent, and

            ✂️✂️(4) in the case of sales of such drug during any

        subsequent day, 95 percent.

    ✂️✂️(e) Definitions.—For purposes of this section—

            ✂️✂️(1) Designated drug.—The term ✂️designated drug’ means any

        negotiation-eligible drug (as defined in section 1192(d) of the

        Social Security Act) included on the list published under

        section 1192(a) of such Act which is manufactured or produced in

        the United States or entered into the United States for

        consumption, use, or warehousing.

            ✂️✂️(2) United states.—The term ✂️United States’ has the

        meaning given such term by section 4612(a)(4).

            ✂️✂️(3) Other terms.—The terms ✂️initial price applicability

        year’, ✂️price applicability period’, and ✂️maximum fair price’

        have the meaning given such terms in section 1191 of the Social

        Security Act.

    ✂️✂️(f) Special Rules.—

            ✂️✂️(1) <<NOTE: Applicability.>> Coordination with rules for

        possessions of the united states.—Rules similar to the rules of

        paragraphs (2) and (4) of section 4132(c) shall apply for

        purposes of this section.

            ✂️✂️(2) Anti-abuse rule.—In the case of a sale which was

        timed for the purpose of avoiding the tax imposed by this

        section, the Secretary may treat such sale as occurring during a

        day described in subsection (b).

    ✂️✂️(g) <<NOTE: Applicability.>> Exports.—Rules similar to the rules

of section 4662(e) (other than section 4662(e)(2)(A)(ii)(II)) shall

apply for purposes of this chapter.

    ✂️✂️(h) <<NOTE: Guidelines.>> Regulations.—The Secretary shall

prescribe such regulations and other guidance as may be necessary to

carry out this section.’'.

    (b) No Deduction for Excise Tax Payments.—Section 275(a)(6) of the

Internal Revenue Code of 1986 <<NOTE: 26 USC 275.>> is amended by

inserting ✂️✂️50A,’' after ✂️✂️46,’'.

    (c) Clerical Amendment.—The table of chapters for subtitle D of the

Internal Revenue Code of 1986 <<NOTE: 26 USC 4001 prec.>> is amended by

adding at the end the following new item:

                   ✂️✂️Chapter 50A—Designated Drugs’'.

    (d) <<NOTE: 26 USC 5000D note.>> Effective Date.—The amendments

made by this section shall apply to sales after the date of the

enactment of this Act.

1.5.SEC11004. FUNDING.

    In addition to amounts otherwise available, there is appropriated to

the Centers for Medicare & Medicaid Services, out of any money in the

Treasury not otherwise appropriated, $3,000,000,000 for fiscal year

2022, to remain available until expended, to carry out the provisions

of, including the amendments made by, this part.

[[Page 136 STAT. 1865]]

1.6.SEC11101. MEDICARE PART B REBATE BY MANUFACTURERS.

    (a) In General.—Section 1847A of the Social Security Act (42 U.S.C.

1395w-3a) is amended by redesignating subsection (i) as subsection (j)

and by inserting after subsection (h) the following subsection:

    ✂️✂️(i) Rebate by Manufacturers for Single Source Drugs and

Biologicals With Prices Increasing Faster Than Inflation.—

            ✂️✂️(1) <<NOTE: Deadlines. Effective dates. Time periods.>>

        Requirements.—

                    ✂️✂️(A) <<NOTE: Reports.>> Secretarial provision of

                information.—Not later than 6 months after the end of

                each calendar quarter beginning on or after January 1,

                2023, the Secretary shall, for each part B rebatable

                drug, report to each manufacturer of such part B

                rebatable drug the following for such calendar quarter:

                          ✂️✂️(i) Information on the total number of units

                      of the billing and payment code described in

                      subparagraph (A)(i) of paragraph (3) with respect

                      to such drug and calendar quarter.

                          ✂️✂️(ii) Information on the amount (if any) of

                      the excess average sales price increase described

                      in subparagraph (A)(ii) of such paragraph for such

                      drug and calendar quarter.

                          ✂️✂️(iii) The rebate amount specified under such

                      paragraph for such part B rebatable drug and

                      calendar quarter.

                    ✂️✂️(B) Manufacturer requirement.—For each calendar

                quarter beginning on or after January 1, 2023, the

                manufacturer of a part B rebatable drug shall, for such

                drug, not later than 30 days after the date of receipt

                from the Secretary of the information described in

                subparagraph (A) for such calendar quarter, provide to

                the Secretary a rebate that is equal to the amount

                specified in paragraph (3) for such drug for such

                calendar quarter.

                    ✂️✂️(C) Transition rule for reporting.—The Secretary

                may, for each part B rebatable drug, delay the timeframe

                for reporting the information described in subparagraph

                (A) for calendar quarters beginning in 2023 and 2024

                until not later than September 30, 2025.

            ✂️✂️(2) Part b rebatable drug defined.—

                    ✂️✂️(A) In general.—In this subsection, the term

                ✂️part B rebatable drug’ means a single source drug or

                biological (as defined in subparagraph (D) of subsection

                (c)(6)), including a biosimilar biological product (as

                defined in subparagraph (H) of such subsection) but

                excluding a qualifying biosimilar biological product (as

                defined in subsection (b)(8)(B)(iii)), for which payment

                is made under this part, except such term shall not

                include such a drug or biological—

                          ✂️✂️(i) <<NOTE: Determination.>> if, as

                      determined by the Secretary, the average total

                      allowed charges for such drug or biological under

                      this part for a year per individual that uses such

[[Page 136 STAT. 1866]]

                      a drug or biological are less than, subject to

                      subparagraph (B), $100; or

                          ✂️✂️(ii) that is a vaccine described in

                      subparagraph (A) or (B) of section 1861(s)(10).

                    ✂️✂️(B) <<NOTE: Time periods.>> Increase.—The dollar

                amount applied under subparagraph (A)(i)—

                          ✂️✂️(i) for 2024, shall be the dollar amount

                      specified under such subparagraph for 2023,

                      increased by the percentage increase in the

                      consumer price index for all urban consumers

                      (United States city average) for the 12-month

                      period ending with June of the previous year; and

                          ✂️✂️(ii) for a subsequent year, shall be the

                      dollar amount specified in this clause (or clause

                      (i)) for the previous year (without application of

                      subparagraph (C)), increased by the percentage

                      increase in the consumer price index for all urban

                      consumers (United States city average) for the 12-

                      month period ending with June of the previous

                      year.

                    ✂️✂️(C) Rounding.—Any dollar amount determined under

                subparagraph (B) that is not a multiple of $10 shall be

                rounded to the nearest multiple of $10.

            ✂️✂️(3) <<NOTE: Time periods.>> Rebate amount.—

                    ✂️✂️(A) <<NOTE: Estimate.>> In general.—For purposes

                of paragraph (1), the amount specified in this paragraph

                for a part B rebatable drug assigned to a billing and

                payment code for a calendar quarter is, subject to

                subparagraphs (B) and (G) and paragraph (4), the

                estimated amount equal to the product of—

                          ✂️✂️(i) the total number of units determined

                      under subparagraph (B) for the billing and payment

                      code of such drug; and

                          ✂️✂️(ii) the amount (if any) by which—

                                    ✂️✂️(I) the amount equal to—

                                            ✂️✂️(aa) in the case of a part

                                        B rebatable drug described in

                                        paragraph (1)(B) of subsection

                                        (b), 106 percent of the amount

                                        determined under paragraph (4)

                                        of such section for such drug

                                        during the calendar quarter; or

                                            ✂️✂️(bb) in the case of a part

                                        B rebatable drug described in

                                        paragraph (1)(C) of such

                                        subsection, the payment amount

                                        under such paragraph for such

                                        drug during the calendar

                                        quarter; exceeds

                                    ✂️✂️(II) the inflation-adjusted

                                payment amount determined under

                                subparagraph (C) for such part B

                                rebatable drug during the calendar

                                quarter.

                    ✂️✂️(B) Total number of units.—For purposes of

                subparagraph (A)(i), the total number of units for the

                billing and payment code with respect to a part B

                rebatable drug furnished during a calendar quarter

                described in subparagraph (A) is equal to—

                          ✂️✂️(i) the number of units for the billing and

                      payment code of such drug furnished during such

                      calendar quarter, minus

[[Page 136 STAT. 1867]]

                          ✂️✂️(ii) the number of units for such billing

                      and payment code of such drug furnished during

                      such calendar quarter—

                                    ✂️✂️(I) with respect to which the

                                manufacturer provides a discount under

                                the program under section 340B of the

                                Public Health Service Act or a rebate

                                under section 1927; or

                                    ✂️✂️(II) that are packaged into the

                                payment amount for an item or service

                                and are not separately payable.

                    ✂️✂️(C) Determination of inflation-adjusted payment

                amount.—The inflation-adjusted payment amount

                determined under this subparagraph for a part B

                rebatable drug for a calendar quarter is—

                          ✂️✂️(i) the payment amount for the billing and

                      payment code for such drug in the payment amount

                      benchmark quarter (as defined in subparagraph

                      (D)); increased by

                          ✂️✂️(ii) the percentage by which the rebate

                      period CPI-U (as defined in subparagraph (F)) for

                      the calendar quarter exceeds the benchmark period

                      CPI-U (as defined in subparagraph (E)).

                    ✂️✂️(D) <<NOTE: Definition.>> Payment amount

                benchmark quarter.—The term ✂️payment amount benchmark

                quarter’ means the calendar quarter beginning July 1,

                2021.

                    ✂️✂️(E) <<NOTE: Definition.>> Benchmark period cpi-

                u.—The term ✂️benchmark period CPI-U’ means the consumer

                price index for all urban consumers (United States city

                average) for January 2021.

                    ✂️✂️(F) Rebate period cpi-u.—The term ✂️rebate period

                CPI-U’ means, with respect to a calendar quarter

                described in subparagraph (C), the greater of the

                benchmark period CPI-U and the consumer price index for

                all urban consumers (United States city average) for the

                first month of the calendar quarter that is two calendar

                quarters prior to such described calendar quarter.

                    ✂️✂️(G) Reduction or waiver for shortages and severe

                supply chain disruptions.—The Secretary shall reduce or

                waive the amount under subparagraph (A) with respect to

                a part B rebatable drug and a calendar quarter—

                          ✂️✂️(i) in the case of a part B rebatable drug

                      that is described as currently in shortage on the

                      shortage list in effect under section 506E of the

                      Federal Food, Drug, and Cosmetic Act at any point

                      during the calendar quarter; or

                          ✂️✂️(ii) <<NOTE: Determination.>> in the case

                      of a biosimilar biological product, when the

                      Secretary determines there is a severe supply

                      chain disruption during the calendar quarter, such

                      as that caused by a natural disaster or other

                      unique or unexpected event.

            ✂️✂️(4) <<NOTE: Effective dates. Applicability. Time

        periods.>> Special treatment of certain drugs and exemption.—

                    ✂️✂️(A) Subsequently approved drugs.—In the case of a

                part B rebatable drug first approved or licensed by the

                Food and Drug Administration after December 1, 2020,

                clause (i) of paragraph (3)(C) shall be applied as if

                the term ✂️payment amount benchmark quarter’ were defined

[[Page 136 STAT. 1868]]

                under paragraph (3)(D) as the third full calendar

                quarter after the day on which the drug was first

                marketed and clause (ii) of paragraph (3)(C) shall be

                applied as if the term ✂️benchmark period CPI-U’ were

                defined under paragraph (3)(E) as if the reference to

                ✂️January 2021’ under such paragraph were a reference to

                ✂️the first month of the first full calendar quarter

                after the day on which the drug was first marketed’.

                    ✂️✂️(B) Timeline for provision of rebates for

                subsequently approved drugs.—In the case of a part B

                rebatable drug first approved or licensed by the Food

                and Drug Administration after December 1, 2020,

                paragraph (1)(B) shall be applied as if the reference to

                ✂️January 1, 2023’ under such paragraph were a reference

                to ✂️the later of the 6th full calendar quarter after the

                day on which the drug was first marketed or January 1,

                2023’.

                    ✂️✂️(C) Selected drugs.—In the case of a part B

                rebatable drug that is a selected drug (as defined in

                section 1192(c)) with respect to a price applicability

                period (as defined in section 1191(b)(2)), in the case

                such drug is no longer considered to be a selected drug

                under section 1192(c), for each applicable period (as

                defined under subsection (g)(7)) beginning after the

                price applicability period with respect to such drug,

                clause (i) of paragraph (3)(C) shall be applied as if

                the term ✂️payment amount benchmark quarter’ were defined

                under paragraph (3)(D) as the calendar quarter beginning

                January 1 of the last year during such price

                applicability period with respect to such selected drug

                and clause (ii) of paragraph (3)(C) shall be applied as

                if the term ✂️benchmark period CPI-U’ were defined under

                paragraph (3)(E) as if the reference to ✂️January 2021’

                under such paragraph were a reference to ✂️the July of

                the year preceding such last year’.

            ✂️✂️(5) <<NOTE: Effective date. Time period.>> Application to

        beneficiary coinsurance.—In the case of a part B rebatable drug

        furnished on or after April 1, 2023, if the payment amount

        described in paragraph (3)(A)(ii)(I) (or, in the case of a part

        B rebatable drug that is a selected drug (as defined in section

        1192(c)), the payment amount described in subsection (b)(1)(B)

        for such drug) for a calendar quarter exceeds the inflation

        adjusted payment for such quarter—

                    ✂️✂️(A) in computing the amount of any coinsurance

                applicable under this part to an individual to whom such

                drug is furnished, the computation of such coinsurance

                shall be equal to 20 percent of the inflation-adjusted

                payment amount determined under paragraph (3)(C) for

                such part B rebatable drug; and

                    ✂️✂️(B) <<NOTE: Applicability. Determination.>> the

                amount of such coinsurance for such calendar quarter, as

                computed under subparagraph (A), shall be applied as a

                percent, as determined by the Secretary, to the payment

                amount that would otherwise apply under subparagraphs

                (B) or (C) of subsection (b)(1).

            ✂️✂️(6) Rebate deposits.—Amounts paid as rebates under

        paragraph (1)(B) shall be deposited into the Federal

        Supplementary Medical Insurance Trust Fund established under

        section 1841.

[[Page 136 STAT. 1869]]

            ✂️✂️(7) <<NOTE: Time period.>> Civil money penalty.—If a

        manufacturer of a part B rebatable drug has failed to comply

        with the requirements under paragraph (1)(B) for such drug for a

        calendar quarter, the manufacturer shall be subject to, in

        accordance with a process established by the Secretary pursuant

        to regulations, a civil money penalty in an amount equal to at

        least 125 percent of the amount specified in paragraph (3) for

        such drug for such calendar quarter.

        The <<NOTE: Applicability.>> provisions of section 1128A (other

        than subsections (a) (with respect to amounts of penalties or

        additional assessments) and (b)) shall apply to a civil money

        penalty under this paragraph in the same manner as such

        provisions apply to a penalty or proceeding under section

        1128A(a).

            ✂️✂️(8) Limitation on administrative or judicial review.—

        There shall be no administrative or judicial review of any of

        the following:

                    ✂️✂️(A) The determination of units under this

                subsection.

                    ✂️✂️(B) The determination of whether a drug is a part

                B rebatable drug under this subsection.

                    ✂️✂️(C) The calculation of the rebate amount under

                this subsection.

                    ✂️✂️(D) The computation of coinsurance under paragraph

                (5) of this subsection.

                    ✂️✂️(E) The computation of amounts paid under section

                1833(a)(1)(EE).’'.

    (b) Amounts Payable; Cost-Sharing.—Section 1833 of the Social

Security Act (42 U.S.C. 1395l) is amended—

            (1) in subsection (a)(1)—

                    (A) in subparagraph (G), by inserting ✂️✂️, subject to

                subsection (i)(9),’' after ✂️✂️the amounts paid’';

                    (B) in subparagraph (S), by striking ✂️✂️with respect

                to’' and inserting ✂️✂️subject to subparagraph (EE), with

                respect to’';

                    (C) by striking ✂️✂️and (DD)’' and inserting ✂️✂️(DD)’';

                and

                    (D) <<NOTE: Effective date. Time

                period. Applicability.>> by inserting before the

                semicolon at the end the following: ✂️✂️, and (EE) with

                respect to a part B rebatable drug (as defined in

                paragraph (2) of section 1847A(i)) furnished on or after

                April 1, 2023, for which the payment amount for a

                calendar quarter under paragraph (3)(A)(ii)(I) of such

                section (or, in the case of a part B rebatable drug that

                is a selected drug (as defined in section 1192(c) for

                which, the payment amount described in section

                1847A(b)(1)(B)) for such drug for such quarter exceeds

                the inflation-adjusted payment under paragraph

                (3)(A)(ii)(II) of such section for such quarter, the

                amounts paid shall be equal to the percent of the

                payment amount under paragraph (3)(A)(ii)(I) of such

                section or section 1847A(b)(1)(B), as applicable, that

                equals the difference between (i) 100 percent, and (ii)

                the percent applied under section 1847A(i)(5)(B)’';

            (2) in subsection (i), by adding at the end the following

        new paragraph:

    ✂️✂️(9) <<NOTE: Effective date. Determination. Applicability.>> In

the case of a part B rebatable drug (as defined in paragraph (2) of

section 1847A(i)) for which payment under this subsection is not

packaged into a payment for a service furnished on or after April 1,

2023, under the revised payment system under this subsection, in lieu of

calculation of coinsurance and the amount

[[Page 136 STAT. 1870]]

of payment otherwise applicable under this subsection, the provisions of

section 1847A(i)(5) and paragraph (1)(EE) of subsection (a), shall, as

determined appropriate by the Secretary, apply under this subsection in

the same manner as such provisions of section 1847A(i)(5) and subsection

(a) apply under such section and subsection.’'; and

            (3) in subsection (t)(8), by adding at the end the following

        new subparagraph:

                    ✂️✂️(F) <<NOTE: Effective date. Time

                period. Determination. Applicability.>> Part b

                rebatable drugs.—In the case of a part B rebatable drug

                (as defined in paragraph (2) of section 1847A(i), except

                if such drug does not have a copayment amount as a

                result of application of subparagraph (E)) for which

                payment under this part is not packaged into a payment

                for a covered OPD service (or group of services)

                furnished on or after April 1, 2023, and the payment for

                such drug under this subsection is the same as the

                amount for a calendar quarter under paragraph

                (3)(A)(ii)(I) of section 1847A(i), under the system

                under this subsection, in lieu of calculation of the

                copayment amount and the amount of payment otherwise

                applicable under this subsection (other than the

                application of the limitation described in subparagraph

                (C)), the provisions of section 1847A(i)(5) and

                paragraph (1)(EE) of subsection (a), shall, as

                determined appropriate by the Secretary, apply under

                this subsection in the same manner as such provisions of

                section 1847A(i)(5) and subsection (a) apply under such

                section and subsection.’'.

    (c) Conforming Amendments.—

            (1) To part b asp calculation.—Section 1847A(c)(3) of the

        Social Security Act (42 U.S.C. 1395w-3a(c)(3)) is amended by

        inserting ✂️✂️subsection (i) or’' before ✂️✂️section 1927’'.

            (2) Excluding part b drug inflation rebate from best

        price.—Section 1927(c)(1)(C)(ii)(I) of the Social Security Act

        (42 U.S.C. 1396r-8(c)(1)(C)(ii)(I)) is amended by inserting ✂️✂️or

        section 1847A(i)’' after ✂️✂️this section’'.

            (3) Coordination with medicaid rebate information

        disclosure.—Section 1927(b)(3)(D)(i) of the Social Security Act

        (42 U.S.C. 1396r-8(b)(3)(D)(i)) is amended by inserting ✂️✂️and

        the rebate’' after ✂️✂️the payment amount’'.

            (4) Excluding part b drug inflation rebates from average

        manufacturer price.—Section 1927(k)(1)(B)(i) of the Social

        Security Act (42 U.S.C. 1396r-8(k)(1)(B)(i)), as amended by

        section 11001(b)(3), is amended—

                    (A) in subclause (V), by striking ✂️✂️and’' at the

                end;

                    (B) in subclause (VI), by striking the period at the

                end and inserting a semicolon; and

                    (C) by adding at the end the following new

                subclause:

                                    ✂️✂️(VII) rebates paid by

                                manufacturers under section 1847A(i);

                                and’'.

    (d) <<NOTE: Time period.>> Funding.—In addition to amounts

otherwise available, there are appropriated to the Centers for Medicare

& Medicaid Services, out of any money in the Treasury not otherwise

appropriated, $80,000,000 for fiscal year 2022, including $12,500,000 to

carry out the provisions of, including the amendments made by, this

section in fiscal year 2022, and $7,500,000 to carry out the provisions

of, including the amendments made by, this section

[[Page 136 STAT. 1871]]

in each of fiscal years 2023 through 2031, to remain available until

expended.

1.6.SEC11102. MEDICARE PART D REBATE BY MANUFACTURERS.

    (a) In General.—Part D of title XVIII of the Social Security Act is

amended by inserting after section 1860D-14A (42 U.S.C. 1395w-114a) the

following new section:

✂️✂️SEC. 1860D-14B. <<NOTE: 42 USC 1395w-114b.>> MANUFACTURER

                              REBATE FOR CERTAIN DRUGS WITH PRICES

                              INCREASING FASTER THAN INFLATION.

    ✂️✂️(a) Requirements.—

            ✂️✂️(1) <<NOTE: Reports.>> Secretarial provision of

        information.—Not later than 9 months after the end of each

        applicable period (as defined in subsection (g)(7)), subject to

        paragraph (3), the Secretary shall, for each part D rebatable

        drug, report to each manufacturer of such part D rebatable drug

        the following for such period:

                    ✂️✂️(A) The amount (if any) of the excess annual

                manufacturer price increase described in subsection

                (b)(1)(A)(ii) for each dosage form and strength with

                respect to such drug and period.

                    ✂️✂️(B) The rebate amount specified under subsection

                (b) for each dosage form and strength with respect to

                such drug and period.

            ✂️✂️(2) <<NOTE: Deadline.>> Manufacturer requirements.—For

        each applicable period, the manufacturer of a part D rebatable

        drug, for each dosage form and strength with respect to such

        drug, not later than 30 days after the date of receipt from the

        Secretary of the information described in paragraph (1) for such

        period, shall provide to the Secretary a rebate that is equal to

        the amount specified in subsection (b) for such dosage form and

        strength with respect to such drug for such period.

            ✂️✂️(3) <<NOTE: Time period. Effective date.>> Transition

        rule for reporting.—The Secretary may, for each rebatable

        covered part D drug, delay the timeframe for reporting the

        information and rebate amount described in subparagraphs (A) and

        (B) of such paragraph for the applicable periods beginning

        October 1, 2022, and October 1, 2023, until not later than

        December 31, 2025.

    ✂️✂️(b) <<NOTE: Determinations.>> Rebate Amount.—

            ✂️✂️(1) In general.—

                    ✂️✂️(A) Calculation.—For purposes of this section,

                the amount specified in this subsection for a dosage

                form and strength with respect to a part D rebatable

                drug and applicable period is, subject to subparagraph

                (C), paragraph (5)(B), and paragraph (6), the estimated

                amount equal to the product of—

                          ✂️✂️(i) subject to subparagraph (B) of this

                      paragraph, the total number of units of such

                      dosage form and strength for each rebatable

                      covered part D drug dispensed under this part

                      during the applicable period; and

                          ✂️✂️(ii) the amount (if any) by which—

                                    ✂️✂️(I) the annual manufacturer price

                                (as determined in paragraph (2)) paid

                                for such dosage form and strength with

                                respect to such part D rebatable drug

                                for the period; exceeds

                                    ✂️✂️(II) the inflation-adjusted

                                payment amount determined under

                                paragraph (3) for such dosage

[[Page 136 STAT. 1872]]

                                form and strength with respect to such

                                part D rebatable drug for the period.

                    ✂️✂️(B) <<NOTE: Effective date.>> Excluded units.—

                For purposes of subparagraph (A)(i), beginning with plan

                year 2026, the Secretary shall exclude from the total

                number of units for a dosage form and strength with

                respect to a part D rebatable drug, with respect to an

                applicable period, units of each dosage form and

                strength of such part D rebatable drug for which the

                manufacturer provides a discount under the program under

                section 340B of the Public Health Service Act.

                    ✂️✂️(C) Reduction or waiver for shortages and severe

                supply chain disruptions.—The Secretary shall reduce or

                waive the amount under subparagraph (A) with respect to

                a part D rebatable drug and an applicable period—

                          ✂️✂️(i) in the case of a part D rebatable drug

                      that is described as currently in shortage on the

                      shortage list in effect under section 506E of the

                      Federal Food, Drug, and Cosmetic Act at any point

                      during the applicable period;

                          ✂️✂️(ii) in the case of a generic part D

                      rebatable drug (described in subsection

                      (g)(1)(C)(ii)) or a biosimilar (defined as a

                      biological product licensed under section 351(k)

                      of the Public Health Service Act), when the

                      Secretary determines there is a severe supply

                      chain disruption during the applicable period,

                      such as that caused by a natural disaster or other

                      unique or unexpected event; and

                          ✂️✂️(iii) in the case of a generic Part D

                      rebatable drug (as so described), if the Secretary

                      determines that without such reduction or waiver,

                      the drug is likely to be described as in shortage

                      on such shortage list during a subsequent

                      applicable period.

            ✂️✂️(2) Determination of annual manufacturer price.—The

        annual manufacturer price determined under this paragraph for a

        dosage form and strength, with respect to a part D rebatable

        drug and an applicable period, is the sum of the products of—

                    ✂️✂️(A) the average manufacturer price (as defined in

                subsection (g)(6)) of such dosage form and strength, as

                calculated for a unit of such drug, with respect to each

                of the calendar quarters of such period; and

                    ✂️✂️(B) the ratio of—

                          ✂️✂️(i) the total number of units of such dosage

                      form and strength reported under section 1927 with

                      respect to each such calendar quarter of such

                      period; to

                          ✂️✂️(ii) the total number of units of such

                      dosage form and strength reported under section

                      1927 with respect to such period, as determined by

                      the Secretary.

            ✂️✂️(3) Determination of inflation-adjusted payment amount.—

        The inflation-adjusted payment amount determined under this

        paragraph for a dosage form and strength with respect to a part

        D rebatable drug for an applicable period, subject to paragraph

        (5), is—

                    ✂️✂️(A) the benchmark period manufacturer price

                determined under paragraph (4) for such dosage form and

                strength with respect to such drug and period; increased

                by

[[Page 136 STAT. 1873]]

                    ✂️✂️(B) the percentage by which the applicable period

                CPI-U (as defined in subsection (g)(5)) for the period

                exceeds the benchmark period CPI-U (as defined in

                subsection (g)(4)).

            ✂️✂️(4) Determination of benchmark period manufacturer

        price.—The benchmark period manufacturer price determined under

        this paragraph for a dosage form and strength, with respect to a

        part D rebatable drug and an applicable period, is the sum of

        the products of—

                    ✂️✂️(A) the average manufacturer price (as defined in

                subsection (g)(6)) of such dosage form and strength, as

                calculated for a unit of such drug, with respect to each

                of the calendar quarters of the payment amount benchmark

                period (as defined in subsection (g)(3)); and

                    ✂️✂️(B) the ratio of—

                          ✂️✂️(i) the total number of units reported under

                      section 1927 of such dosage form and strength with

                      respect to each such calendar quarter of such

                      payment amount benchmark period; to

                          ✂️✂️(ii) the total number of units reported

                      under section 1927 of such dosage form and

                      strength with respect to such payment amount

                      benchmark period.

            ✂️✂️(5) Special treatment of certain drugs and exemption.—

                    ✂️✂️(A) <<NOTE: Effective dates. Applicability. Time

                period.>> Subsequently approved drugs.—In the case of

                a part D rebatable drug first approved or licensed by

                the Food and Drug Administration after October 1, 2021,

                subparagraphs (A) and (B) of paragraph (4) shall be

                applied as if the term ✂️payment amount benchmark period’

                were defined under subsection (g)(3) as the first

                calendar year beginning after the day on which the drug

                was first marketed and subparagraph (B) of paragraph (3)

                shall be applied as if the term ✂️benchmark period CPI-U’

                were defined under subsection (g)(4) as if the reference

                to ✂️January 2021’ under such subsection were a reference

                to ✂️January of the first year beginning after the date

                on which the drug was first marketed’.

                    ✂️✂️(B) Treatment of new formulations.—

                          ✂️✂️(i) In general.—In the case of a part D

                      rebatable drug that is a line extension of a part

                      D rebatable drug that is an oral solid dosage

                      form, the Secretary shall establish a formula for

                      determining the rebate amount under paragraph (1)

                      and the inflation adjusted payment amount under

                      paragraph (3) with respect to such part D

                      rebatable drug and an applicable period,

                      consistent with the formula applied under

                      subsection (c)(2)(C) of section 1927 for

                      determining a rebate obligation for a rebate

                      period under such section.

                          ✂️✂️(ii) Line extension defined.—In this

                      subparagraph, the term ✂️line extension’ means,

                      with respect to a part D rebatable drug, a new

                      formulation of the drug, such as an extended

                      release formulation, but does not include an

                      abuse-deterrent formulation of the drug (as

                      determined by the Secretary), regardless of

                      whether such abuse-deterrent formulation is an

                      extended release formulation.

[[Page 136 STAT. 1874]]

                    ✂️✂️(C) <<NOTE: Effective date. Applicability.>>

                Selected drugs.—In the case of a part D rebatable drug

                that is a selected drug (as defined in section 1192(c))

                with respect to a price applicability period (as defined

                in section 1191(b)(2)), in the case such drug is no

                longer considered to be a selected drug under section

                1192(c), for each applicable period (as defined under

                subsection (g)(7)) beginning after the price

                applicability period with respect to such drug,

                subparagraphs (A) and (B) of paragraph (4) shall be

                applied as if the term ✂️payment amount benchmark period’

                were defined under subsection (g)(3) as the last year

                beginning during such price applicability period with

                respect to such selected drug and subparagraph (B) of

                paragraph (3) shall be applied as if the term ✂️benchmark

                period CPI-U’ were defined under subsection (g)(4) as if

                the reference to ✂️January 2021’ under such subsection

                were a reference to ✂️January of the last year beginning

                during such price applicability period with respect to

                such drug’.

            ✂️✂️(6) Reconciliation in case of revised information.—The

        Secretary shall provide for a method and process under which, in

        the case where a PDP sponsor of a prescription drug plan or an

        MA organization offering an MA-PD plan submits revisions to the

        number of units of a rebatable covered part D drug dispensed,

        the Secretary determines, pursuant to such revisions,

        adjustments, if any, to the calculation of the amount specified

        in this subsection for a dosage form and strength with respect

        to such part D rebatable drug and an applicable period and

        reconciles any overpayments or underpayments in amounts paid as

        rebates under this subsection. <<NOTE: Deadline.>> Any

        identified underpayment shall be rectified by the manufacturer

        not later than 30 days after the date of receipt from the

        Secretary of information on such underpayment.

    ✂️✂️(c) Rebate Deposits.—Amounts paid as rebates under subsection (b)

shall be deposited into the Medicare Prescription Drug Account in the

Federal Supplementary Medical Insurance Trust Fund established under

section 1841.

    ✂️✂️(d) Information.—For purposes of carrying out this section, the

Secretary shall use information submitted by—

            ✂️✂️(1) manufacturers under section 1927(b)(3);

            ✂️✂️(2) States under section 1927(b)(2)(A); and

            ✂️✂️(3) PDP sponsors of prescription drug plans and MA

        organization offering MA-PD plans under this part.

    ✂️✂️(e) Civil Money Penalty.—If a manufacturer of a part D rebatable

drug has failed to comply with the requirement under subsection (a)(2)

with respect to such drug for an applicable period, the manufacturer

shall be subject to a civil money penalty in an amount equal to 125

percent of the amount specified in subsection (b) for such drug for such

period. The <<NOTE: Applicability.>> provisions of section 1128A (other

than subsections (a) (with respect to amounts of penalties or additional

assessments) and (b)) shall apply to a civil money penalty under this

subsection in the same manner as such provisions apply to a penalty or

proceeding under section 1128A(a).

    ✂️✂️(f) Limitation on Administrative or Judicial Review.—There shall

be no administrative or judicial review of any of the following:

            ✂️✂️(1) The determination of units under this section.

[[Page 136 STAT. 1875]]

            ✂️✂️(2) The determination of whether a drug is a part D

        rebatable drug under this section.

            ✂️✂️(3) The calculation of the rebate amount under this

        section.

    ✂️✂️(g) Definitions.—In this section:

            ✂️✂️(1) Part d rebatable drug.—

                    ✂️✂️(A) In general.—Except as provided in

                subparagraph (B), the term ✂️part D rebatable drug’

                means, with respect to an applicable period, a drug or

                biological described in subparagraph (C) that is a

                covered part D drug (as such term is defined under

                section 1860D-2(e)).

                    ✂️✂️(B) Exclusion.—

                          ✂️✂️(i) <<NOTE: Determinations. Estimate.>> In

                      general.—Such term shall, with respect to an

                      applicable period, not include a drug or

                      biological if the average annual total cost under

                      this part for such period per individual who uses

                      such a drug or biological, as determined by the

                      Secretary, is less than, subject to clause (ii),

                      $100, as determined by the Secretary using the

                      most recent data available or, if data is not

                      available, as estimated by the Secretary.

                          ✂️✂️(ii) <<NOTE: Time periods. Effective

                      dates.>> Increase.—The dollar amount applied

                      under clause (i)—

                                    ✂️✂️(I) for the applicable period

                                beginning October 1, 2023, shall be the

                                dollar amount specified under such

                                clause for the applicable period

                                beginning October 1, 2022, increased by

                                the percentage increase in the consumer

                                price index for all urban consumers

                                (United States city average) for the 12-

                                month period beginning with October of

                                2023; and

                                    ✂️✂️(II) for a subsequent applicable

                                period, shall be the dollar amount

                                specified in this clause for the

                                previous applicable period, increased by

                                the percentage increase in the consumer

                                price index for all urban consumers

                                (United States city average) for the 12-

                                month period beginning with October of

                                the previous period.

                      Any dollar amount specified under this clause that

                      is not a multiple of $10 shall be rounded to the

                      nearest multiple of $10.

                    ✂️✂️(C) Drug or biological described.—A drug or

                biological described in this subparagraph is a drug or

                biological that, as of the first day of the applicable

                period involved, is—

                          ✂️✂️(i) a drug approved under a new drug

                      application under section 505(c) of the Federal

                      Food, Drug, and Cosmetic Act;

                          ✂️✂️(ii) a drug approved under an abbreviated

                      new drug application under section 505(j) of the

                      Federal Food, Drug, and Cosmetic Act, in the case

                      where—

                                    ✂️✂️(I) the reference listed drug

                                approved under section 505(c) of the

                                Federal Food, Drug, and Cosmetic Act,

                                including any ✂️authorized generic drug’

                                (as that term is defined in section

                                505(t)(3) of the Federal Food, Drug, and

                                Cosmetic Act), is not being marketed, as

                                identified in the Food and Drug

                                Administration’s National Drug Code

                                Directory;

[[Page 136 STAT. 1876]]

                                    ✂️✂️(II) there is no other drug

                                approved under section 505(j) of the

                                Federal Food, Drug, and Cosmetic Act

                                that is rated as therapeutically

                                equivalent (under the Food and Drug

                                Administration’s most recent publication

                                of ✂️Approved Drug Products with

                                Therapeutic Equivalence Evaluations’)

                                and that is being marketed, as

                                identified in the Food and Drug

                                Administration’s National Drug Code

                                Directory;

                                    ✂️✂️(III) <<NOTE: Time period.>> the

                                manufacturer is not a ✂️first applicant’

                                during the ✂️180-day exclusivity period’,

                                as those terms are defined in section

                                505(j)(5)(B)(iv) of the Federal Food,

                                Drug, and Cosmetic Act; and

                                    ✂️✂️(IV) the manufacturer is not a

                                ✂️first approved applicant’ for a

                                competitive generic therapy, as that

                                term is defined in section

                                505(j)(5)(B)(v) of the Federal Food,

                                Drug, and Cosmetic Act; or

                          ✂️✂️(iii) a biological licensed under section

                      351 of the Public Health Service Act.

            ✂️✂️(2) Unit.—The term ✂️unit’ means, with respect to a part D

        rebatable drug, the lowest dispensable amount (such as a capsule

        or tablet, milligram of molecules, or grams) of the part D

        rebatable drug, as reported under section 1927.

            ✂️✂️(3) Payment amount benchmark period.—The term ✂️payment

        amount benchmark period’ means the period beginning January 1,

        2021, and ending in the month immediately prior to October 1,

        2021.

            ✂️✂️(4) Benchmark period cpi-u.—The term ✂️benchmark period

        CPI-U’ means the consumer price index for all urban consumers

        (United States city average) for January 2021.

            ✂️✂️(5) Applicable period cpi-u.—The term ✂️applicable period

        CPI-U’ means, with respect to an applicable period, the consumer

        price index for all urban consumers (United States city average)

        for the first month of such applicable period.

            ✂️✂️(6) Average manufacturer price.—The term ✂️average

        manufacturer price’ has the meaning, with respect to a part D

        rebatable drug of a manufacturer, given such term in section

        1927(k)(1), with respect to a covered outpatient drug of a

        manufacturer for a rebate period under section 1927.

            ✂️✂️(7) Applicable period.—The term ✂️applicable period’ means

        a 12-month period beginning with October 1 of a year (beginning

        with October 1, 2022).

    ✂️✂️(h) Implementation for 2022, 2023, and 2024.—The Secretary shall

implement this section for 2022, 2023, and 2024 by program instruction

or other forms of program guidance.’'.

    (b) Conforming Amendments.—

            (1) To part b asp calculation.—Section 1847A(c)(3) of the

        Social Security Act (42 U.S.C. 1395w-3a(c)(3)), as amended by

        section 11101(c)(1), is amended by striking ✂️✂️subsection (i) or

        section 1927’' and inserting ✂️✂️subsection (i), section 1927, or

        section 1860D-14B’'.

            (2) Excluding part d drug inflation rebate from best

        price.—Section 1927(c)(1)(C)(ii)(I) of the Social Security Act

        (42 U.S.C. 1396r-8(c)(1)(C)(ii)(I)), as amended by section

        11101(c)(2), is amended by striking ✂️✂️or section 1847A(i)’' and

        inserting ✂️✂️, section 1847A(i), or section 1860D-14B’'.

[[Page 136 STAT. 1877]]

            (3) Coordination with medicaid rebate information

        disclosure.—Section 1927(b)(3)(D)(i) of the Social Security Act

        (42 U.S.C. 1396r-8(b)(3)(D)(i)), as amended by sections 11002(b)

        and 11101(c)(3), is amended by striking ✂️✂️or section 1192(f),

        including rebates under paragraph (4) of such section’' and

        inserting ✂️✂️, section 1192(f), including rebates under paragraph

        (4) of such section, or section 1860D-14B’'.

            (4) Excluding part d drug inflation rebates from average

        manufacturer price.—Section 1927(k)(1)(B)(i) of the Social

        Security Act (42 U.S.C. 1396r-8(k)(1)(B)(i)), as amended by

        section 11001(b)(3) and section 11101(c)(4), is amended by

        adding at the end the following new subclause:

                    (A) in subclause (VI), by striking ✂️✂️and’' at the

                end;

                    (B) in subclause (VII), by striking the period at

                the end and inserting a semicolon; and

                    (C) by adding at the end the following new

                subclause:

                                    ✂️✂️(VIII) rebates paid by

                                manufacturers under section 1860D-

                                14B.’'.

    (c) <<NOTE: Time periods.>> Funding.—In addition to amounts

otherwise available, there are appropriated to the Centers for Medicare

& Medicaid Services, out of any money in the Treasury not otherwise

appropriated, $80,000,000 for fiscal year 2022, including $12,500,000 to

carry out the provisions of, including the amendments made by, this

section in fiscal year 2022, and $7,500,000 to carry out the provisions

of, including the amendments made by, this section in each of fiscal

years 2023 through 2031, to remain available until expended.

1.7.SEC11201. <<NOTE: Time periods.>> MEDICARE PART D BENEFIT REDESIGN.

    (a) Benefit Structure Redesign.—Section 1860D-2(b) of the Social

Security Act (42 U.S.C. 1395w-102(b)) is amended—

            (1) in paragraph (2)—

                    (A) in subparagraph (A), in the matter preceding

                clause (i), by inserting ✂️✂️for a year preceding 2025 and

                for costs above the annual deductible specified in

                paragraph (1) and up to the annual out-of-pocket

                threshold specified in paragraph (4)(B) for 2025 and

                each subsequent year’' after ✂️✂️paragraph (3)’';

                    (B) in subparagraph (C)—

                          (i) in clause (i), in the matter preceding

                      subclause (I), by inserting ✂️✂️for a year preceding

                      2025,’' after ✂️✂️paragraph (4),’'; and

                          (ii) in clause (ii)(III), by striking ✂️✂️and

                      each subsequent year’' and inserting ✂️✂️through

                      2024’'; and

                    (C) in subparagraph (D)—

                          (i) in clause (i)—

                                    (I) in the matter preceding

                                subclause (I), by inserting ✂️✂️for a year

                                preceding 2025,’' after ✂️✂️paragraph

                                (4),’'; and

                                    (II) in subclause (I)(bb), by

                                striking ✂️✂️a year after 2018’' and

                                inserting ✂️✂️each of years 2019 through

                                2024’'; and

[[Page 136 STAT. 1878]]

                          (ii) in clause (ii)(V), by striking ✂️✂️2019 and

                      each subsequent year’' and inserting ✂️✂️each of

                      years 2019 through 2024’';

            (2) in paragraph (3)(A)—

                    (A) in the matter preceding clause (i), by inserting

                ✂️✂️for a year preceding 2025,’' after ✂️✂️and (4),’'; and

                    (B) in clause (ii), by striking ✂️✂️for a subsequent

                year’' and inserting ✂️✂️for each of years 2007 through

                2024’'; and

            (3) in paragraph (4)—

                    (A) in subparagraph (A)—

                          (i) in clause (i)—

                                    (I) by redesignating subclauses (I)

                                and (II) as items (aa) and (bb),

                                respectively, and moving the margin of

                                each such redesignated item 2 ems to the

                                right;

                                    (II) in the matter preceding item

                                (aa), as redesignated by subclause (I),

                                by striking ✂️✂️is equal to the greater

                                of—’' and inserting ✂️✂️is equal to—

                                    ✂️✂️(I) for a year preceding 2024, the

                                greater of—’';

                                    (III) by striking the period at the

                                end of item (bb), as redesignated by

                                subclause (I), and inserting ✂️✂️; and’';

                                and

                                    (IV) by adding at the end the

                                following:

                                    ✂️✂️(II) for 2024 and each succeeding

                                year, $0.’'; and

                          (ii) in clause (ii)—

                                    (I) by striking ✂️✂️clause (i)(I)’'

                                and inserting ✂️✂️clause (i)(I)(aa)’'; and

                                    (II) by adding at the end the

                                following new sentence: ✂️✂️The Secretary

                                shall continue to calculate the dollar

                                amounts specified in clause (i)(I)(aa),

                                including with the adjustment under this

                                clause, after 2023 for purposes of

                                section 1860D-14(a)(1)(D)(iii).’';

                    (B) in subparagraph (B)—

                          (i) in clause (i)—

                                    (I) in subclause (V), by striking

                                ✂️✂️or’' at the end;

                                    (II) in subclause (VI)—

                                            (aa) by striking ✂️✂️for a

                                        subsequent year’' and inserting

                                        ✂️✂️for each of years 2021 through

                                        2024’'; and

                                            (bb) by striking the period

                                        at the end and inserting a

                                        semicolon; and

                                    (III) by adding at the end the

                                following new subclauses:

                                    ✂️✂️(VII) for 2025, is equal to

                                $2,000; or

                                    ✂️✂️(VIII) for a subsequent year, is

                                equal to the amount specified in this

                                subparagraph for the previous year,

                                increased by the annual percentage

                                increase described in paragraph (6) for

                                the year involved.’'; and

                          (ii) in clause (ii), by striking ✂️✂️clause

                      (i)(II)’' and inserting ✂️✂️clause (i)’';

                    (C) in subparagraph (C)—

[[Page 136 STAT. 1879]]

                          (i) in clause (i), by striking ✂️✂️and for

                      amounts’' and inserting ✂️✂️and, for a year

                      preceding 2025, for amounts’'; and

                          (ii) in clause (iii)—

                                    (I) by redesignating subclauses (I)

                                through (IV) as items (aa) through (dd)

                                and indenting appropriately;

                                    (II) by striking ✂️✂️if such costs are

                                borne or paid’' and inserting ✂️✂️if such

                                costs—

                                    ✂️✂️(I) are borne or paid—’'; and

                                    (III) in item (dd), by striking the

                                period at the end and inserting ✂️✂️;

                                or’'; and

                                    (IV) by adding at the end the

                                following new subclause:

                                    ✂️✂️(II) for 2025 and subsequent

                                years, are reimbursed through insurance,

                                a group health plan, or certain other

                                third party payment arrangements, but

                                not including the coverage provided by a

                                prescription drug plan or an MA-PD plan

                                that is basic prescription drug coverage

                                (as defined in subsection (a)(3)) or any

                                payments by a manufacturer under the

                                manufacturer discount program under

                                section 1860D-14C.’'; and

                    (D) in subparagraph (E), by striking ✂️✂️In applying’'

                and inserting ✂️✂️For each of years 2011 through 2024, in

                applying’'.

    (b) Reinsurance Payment Amount.—Section 1860D-15(b) of the Social

Security Act (42 U.S.C. 1395w-115(b)) is amended—

            (1) in paragraph (1)—

                    (A) by striking ✂️✂️equal to 80 percent’' and

                inserting ✂️✂️equal to—

                    ✂️✂️(A) for a year preceding 2025, 80 percent’';

                    (B) in subparagraph (A), as added by subparagraph

                (A), by striking the period at the end and inserting ✂️✂️;

                and’'; and

                    (C) by adding at the end the following new

                subparagraph:

                    ✂️✂️(B) for 2025 and each subsequent year, the sum

                of—

                          ✂️✂️(i) with respect to applicable drugs (as

                      defined in section 1860D-14C(g)(2)), an amount

                      equal to 20 percent of such allowable reinsurance

                      costs attributable to that portion of gross

                      covered prescription drug costs as specified in

                      paragraph (3) incurred in the coverage year after

                      such individual has incurred costs that exceed the

                      annual out-of-pocket threshold specified in

                      section 1860D-2(b)(4)(B); and

                          ✂️✂️(ii) with respect to covered part D drugs

                      that are not applicable drugs (as so defined), an

                      amount equal to 40 percent of such allowable

                      reinsurance costs attributable to that portion of

                      gross covered prescription drug costs as specified

                      in paragraph (3) incurred in the coverage year

                      after such individual has incurred costs that

                      exceed the annual out-of-pocket threshold

                      specified in section 1860D-2(b)(4)(B).’';

            (2) in paragraph (2)—

                    (A) by striking ✂️✂️COSTS.—For purposes’' and

                inserting ✂️✂️Costs.—

[[Page 136 STAT. 1880]]

                    ✂️✂️(A) In general.—Subject to subparagraph (B), for

                purposes’'; and

                    (B) by adding at the end the following new

                subparagraph:

                    ✂️✂️(B) Inclusion of manufacturer discounts on

                applicable drugs. <<NOTE: Definition.>> —For purposes

                of applying subparagraph (A), the term ✂️allowable

                reinsurance costs’ shall include the portion of the

                negotiated price (as defined in section 1860D-14C(g)(6))

                of an applicable drug (as defined in section 1860D-

                14C(g)(2)) that was paid by a manufacturer under the

                manufacturer discount program under section 1860D-

                14C.’'; and

            (3) in paragraph (3)—

                    (A) in the first sentence, by striking ✂️✂️For

                purposes’' and inserting ✂️✂️Subject to paragraph (2)(B),

                for purposes’'; and

                    (B) in the second sentence, by inserting ✂️✂️(or, with

                respect to 2025 and subsequent years, in the case of an

                applicable drug, as defined in section 1860D-14C(g)(2),

                by a manufacturer)’' after ✂️✂️by the individual or under

                the plan’'.

    (c) Manufacturer Discount Program.—

            (1) In general.—Part D of title XVIII of the Social

        Security Act (42 U.S.C. 1395w-101 through 42 U.S.C. 1395w-153),

        as amended by section 11102, is amended by inserting after

        section 1860D-14B the following new sections:

✂️✂️SEC. 1860D-14C. <<NOTE: 42 USC 1395w-114c.>> MANUFACTURER

                              DISCOUNT PROGRAM.

    ✂️✂️(a) Establishment.—The Secretary shall establish a manufacturer

discount program (in this section referred to as the ✂️program’). Under

the program, the Secretary shall enter into agreements described in

subsection (b) with manufacturers and provide for the performance of the

duties described in subsection (c).

    ✂️✂️(b) Terms of Agreement.—

            ✂️✂️(1) In general.—

                    ✂️✂️(A) <<NOTE: Effective date.>> Agreement.—An

                agreement under this section shall require the

                manufacturer to provide, in accordance with this

                section, discounted prices for applicable drugs of the

                manufacturer that are dispensed to applicable

                beneficiaries on or after January 1, 2025.

                    ✂️✂️(B) Clarification.—Nothing in this section shall

                be construed as affecting—

                          ✂️✂️(i) the application of a coinsurance of 25

                      percent of the negotiated price, as applied under

                      paragraph (2)(A) of section 1860D-2(b), for costs

                      described in such paragraph; or

                          ✂️✂️(ii) the application of the copayment amount

                      described in paragraph (4)(A) of such section,

                      with respect to costs described in such paragraph.

                    ✂️✂️(C) <<NOTE: Deadlines.>> Timing of agreement.—

                          ✂️✂️(i) Special rule for 2025.—In order for an

                      agreement with a manufacturer to be in effect

                      under this section with respect to the period

                      beginning on January 1, 2025, and ending on

                      December 31, 2025, the manufacturer shall enter

                      into such agreement not later than March 1, 2024.

[[Page 136 STAT. 1881]]

                          ✂️✂️(ii) 2026 and subsequent years.—In order

                      for an agreement with a manufacturer to be in

                      effect under this section with respect to plan

                      year 2026 or a subsequent plan year, the

                      manufacturer shall enter into such agreement not

                      later than a calendar quarter or semi-annual

                      deadline established by the Secretary.

            ✂️✂️(2) <<NOTE: Determination.>> Provision of appropriate

        data.—Each manufacturer with an agreement in effect under this

        section shall collect and have available appropriate data, as

        determined by the Secretary, to ensure that it can demonstrate

        to the Secretary compliance with the requirements under the

        program.

            ✂️✂️(3) Compliance with requirements for administration of

        program.—Each manufacturer with an agreement in effect under

        this section shall comply with requirements imposed by the

        Secretary, as applicable, for purposes of administering the

        program, including any determination under subparagraph (A) of

        subsection (c)(1) or procedures established under such

        subsection (c)(1).

            ✂️✂️(4) Length of agreement.—

                    ✂️✂️(A) In general.—An agreement under this section

                shall be effective for an initial period of not less

                than 12 months and shall be automatically renewed for a

                period of not less than 1 year unless terminated under

                subparagraph (B).

                    ✂️✂️(B) Termination.—

                          ✂️✂️(i) By the secretary.—The Secretary shall

                      provide for termination of an agreement under this

                      section for a knowing and willful violation of the

                      requirements of the agreement or other good cause

                      shown. <<NOTE: Time period.>> Such termination

                      shall not be effective earlier than 30 days after

                      the date of notice to the manufacturer of such

                      termination. <<NOTE: Hearings.>> The Secretary

                      shall provide, upon request, a manufacturer with a

                      hearing concerning such a termination, and such

                      hearing shall take place prior to the effective

                      date of the termination with sufficient time for

                      such effective date to be repealed if the

                      Secretary determines appropriate.

                          ✂️✂️(ii) By a manufacturer.—A manufacturer may

                      terminate an agreement under this section for any

                      reason. <<NOTE: Effective dates.>> Any such

                      termination shall be effective, with respect to a

                      plan year—

                                    ✂️✂️(I) if the termination occurs

                                before January 31 of a plan year, as of

                                the day after the end of the plan year;

                                and

                                    ✂️✂️(II) if the termination occurs on

                                or after January 31 of a plan year, as

                                of the day after the end of the

                                succeeding plan year.

                          ✂️✂️(iii) Effectiveness of termination.—Any

                      termination under this subparagraph shall not

                      affect discounts for applicable drugs of the

                      manufacturer that are due under the agreement

                      before the effective date of its termination.

            ✂️✂️(5) Effective date of agreement.—An agreement under this

        section shall take effect at the start of a calendar quarter or

        another date specified by the Secretary.

    ✂️✂️(c) Duties Described.—The duties described in this subsection are

the following:

[[Page 136 STAT. 1882]]

            ✂️✂️(1) Administration of program.—Administering the program,

        including—

                    ✂️✂️(A) the determination of the amount of the

                discounted price of an applicable drug of a

                manufacturer;

                    ✂️✂️(B) the establishment of procedures to ensure

                that, not later than the applicable number of calendar

                days after the dispensing of an applicable drug by a

                pharmacy or mail order service, the pharmacy or mail

                order service is reimbursed for an amount equal to the

                difference between—

                          ✂️✂️(i) the negotiated price of the applicable

                      drug; and

                          ✂️✂️(ii) the discounted price of the applicable

                      drug;

                    ✂️✂️(C) the establishment of procedures to ensure that

                the discounted price for an applicable drug under this

                section is applied before any coverage or financial

                assistance under other health benefit plans or programs

                that provide coverage or financial assistance for the

                purchase or provision of prescription drug coverage on

                behalf of applicable beneficiaries as specified by the

                Secretary; and

                    ✂️✂️(D) providing a reasonable dispute resolution

                mechanism to resolve disagreements between

                manufacturers, prescription drug plans and MA-PD plans,

                and the Secretary.

            ✂️✂️(2) Monitoring compliance.—The Secretary shall monitor

        compliance by a manufacturer with the terms of an agreement

        under this section.

            ✂️✂️(3) Collection of data from prescription drug plans and

        ma-pd plans.—The Secretary may collect appropriate data from

        prescription drug plans and MA-PD plans in a timeframe that

        allows for discounted prices to be provided for applicable drugs

        under this section.

    ✂️✂️(d) Administration.—

            ✂️✂️(1) In general.—Subject to paragraph (2), the Secretary

        shall provide for the implementation of this section, including

        the performance of the duties described in subsection (c).

            ✂️✂️(2) Limitation.—In providing for the implementation of

        this section, the Secretary shall not receive or distribute any

        funds of a manufacturer under the program.

    ✂️✂️(e) Civil Money Penalty.—

            ✂️✂️(1) <<NOTE: Determination.>> In general.—A manufacturer

        that fails to provide discounted prices for applicable drugs of

        the manufacturer dispensed to applicable beneficiaries in

        accordance with an agreement in effect under this section shall

        be subject to a civil money penalty for each such failure in an

        amount the Secretary determines is equal to the sum of—

                    ✂️✂️(A) the amount that the manufacturer would have

                paid with respect to such discounts under the agreement,

                which will then be used to pay the discounts which the

                manufacturer had failed to provide; and

                    ✂️✂️(B) 25 percent of such amount.

            ✂️✂️(2) Application.—The provisions of section 1128A (other

        than subsections (a) and (b)) shall apply to a civil money

        penalty under this subsection in the same manner as such

        provisions apply to a penalty or proceeding under section

        1128A(a).

[[Page 136 STAT. 1883]]

    ✂️✂️(f) Clarification Regarding Availability of Other Covered Part D

Drugs.—Nothing in this section shall prevent an applicable beneficiary

from purchasing a covered part D drug that is not an applicable drug

(including a generic drug or a drug that is not on the formulary of the

prescription drug plan or MA-PD plan that the applicable beneficiary is

enrolled in).

    ✂️✂️(g) Definitions.—In this section:

            ✂️✂️(1) Applicable beneficiary.—The term ✂️applicable

        beneficiary’ means an individual who, on the date of dispensing

        a covered part D drug—

                    ✂️✂️(A) is enrolled in a prescription drug plan or an

                MA-PD plan;

                    ✂️✂️(B) is not enrolled in a qualified retiree

                prescription drug plan; and

                    ✂️✂️(C) has incurred costs, as determined in

                accordance with section 1860D-2(b)(4)(C), for covered

                part D drugs in the year that exceed the annual

                deductible specified in section 1860D-2(b)(1).

            ✂️✂️(2) Applicable drug.—The term ✂️applicable drug’, with

        respect to an applicable beneficiary—

                    ✂️✂️(A) means a covered part D drug—

                          ✂️✂️(i) approved under a new drug application

                      under section 505(c) of the Federal Food, Drug,

                      and Cosmetic Act or, in the case of a biologic

                      product, licensed under section 351 of the Public

                      Health Service Act; and

                          ✂️✂️(ii)(I) if the PDP sponsor of the

                      prescription drug plan or the MA organization

                      offering the MA-PD plan uses a formulary, which is

                      on the formulary of the prescription drug plan or

                      MA-PD plan that the applicable beneficiary is

                      enrolled in;

                          ✂️✂️(II) if the PDP sponsor of the prescription

                      drug plan or the MA organization offering the MA-

                      PD plan does not use a formulary, for which

                      benefits are available under the prescription drug

                      plan or MA-PD plan that the applicable beneficiary

                      is enrolled in; or

                          ✂️✂️(III) is provided through an exception or

                      appeal; and

                    ✂️✂️(B) does not include a selected drug (as referred

                to under section 1192(c)) during a price applicability

                period (as defined in section 1191(b)(2)) with respect

                to such drug.

            ✂️✂️(3) Applicable number of calendar days.—The term

        ✂️applicable number of calendar days’ means—

                    ✂️✂️(A) with respect to claims for reimbursement

                submitted electronically, 14 days; and

                    ✂️✂️(B) with respect to claims for reimbursement

                submitted otherwise, 30 days.

            ✂️✂️(4) Discounted price.—

                    ✂️✂️(A) In general.—The term ✂️discounted price’

                means, subject to subparagraphs (B) and (C), with

                respect to an applicable drug of a manufacturer

                dispensed during a year to an applicable beneficiary—

                          ✂️✂️(i) who has not incurred costs, as

                      determined in accordance with section 1860D-

                      2(b)(4)(C), for covered part D drugs in the year

                      that are equal to or exceed the annual out-of-

                      pocket threshold specified in section 1860D-

                      2(b)(4)(B)(i) for the year, 90 percent of the

                      negotiated price of such drug; and

[[Page 136 STAT. 1884]]

                          ✂️✂️(ii) who has incurred such costs, as so

                      determined, in the year that are equal to or

                      exceed such threshold for the year, 80 percent of

                      the negotiated price of such drug.

                    ✂️✂️(B) Phase-in for certain drugs dispensed to lis

                beneficiaries.—

                          ✂️✂️(i) In general.—In the case of an

                      applicable drug of a specified manufacturer (as

                      defined in clause (ii)) that is marketed as of the

                      date of enactment of this subparagraph and

                      dispensed for an applicable beneficiary who is a

                      subsidy eligible individual (as defined in section

                      1860D-14(a)(3)), the term ✂️discounted price’ means

                      the specified LIS percent (as defined in clause

                      (iii)) of the negotiated price of the applicable

                      drug of the manufacturer.

                          ✂️✂️(ii) Specified manufacturer.—

                                    ✂️✂️(I) In general.—In this

                                subparagraph, subject to subclause (II),

                                the term ✂️specified manufacturer’ means

                                a manufacturer of an applicable drug for

                                which, in 2021—

                                            ✂️✂️(aa) the manufacturer had

                                        a coverage gap discount

                                        agreement under section 1860D-

                                        14A;

                                            ✂️✂️(bb) the total

                                        expenditures for all of the

                                        specified drugs of the

                                        manufacturer covered by such

                                        agreement or agreements for such

                                        year and covered under this part

                                        during such year represented

                                        less than 1.0 percent of the

                                        total expenditures under this

                                        part for all covered Part D

                                        drugs during such year; and

                                            ✂️✂️(cc) the total

                                        expenditures for all of the

                                        specified drugs of the

                                        manufacturer that are single

                                        source drugs and biological

                                        products for which payment may

                                        be made under part B during such

                                        year represented less than 1.0

                                        percent of the total

                                        expenditures under part B for

                                        all drugs or biological products

                                        for which payment may be made

                                        under such part during such

                                        year.

                                    ✂️✂️(II) Specified drugs.—

                                            ✂️✂️(aa) In general.—For

                                        purposes of this clause, the

                                        term ✂️specified drug’ means,

                                        with respect to a specified

                                        manufacturer, for 2021, an

                                        applicable drug that is

                                        produced, prepared, propagated,

                                        compounded, converted, or

                                        processed by the manufacturer.

                                            ✂️✂️(bb) Aggregation rule.—

                                        All persons treated as a single

                                        employer under subsection (a) or

                                        (b) of section 52 of the

                                        Internal Revenue Code of 1986

                                        shall be treated as one

                                        manufacturer for purposes of

                                        this

                                        subparagraph. <<NOTE: Determinati

                                        on. Requirement. Attestation.>>

                                        For purposes of making a

                                        determination pursuant to the

                                        previous sentence, an agreement

                                        under this section shall require

                                        that a manufacturer provide and

                                        attest to such information as

                                        specified by the Secretary as

                                        necessary.

                                    ✂️✂️(III) <<NOTE: Time

                                periods. Effective dates.>>

                                Limitation.—The term ✂️specified

                                manufacturer’ shall not include a

                                manufacturer

[[Page 136 STAT. 1885]]

                                described in subclause (I) if such

                                manufacturer is acquired after 2021 by

                                another manufacturer that is not a

                                specified manufacturer, effective at the

                                beginning of the plan year immediately

                                following such acquisition or, in the

                                case of an acquisition before 2025,

                                effective January 1, 2025.

                          ✂️✂️(iii) Specified lis percent.—In this

                      subparagraph, the ✂️specified LIS percent’ means,

                      with respect to a year—

                                    ✂️✂️(I) for an applicable drug

                                dispensed for an applicable beneficiary

                                described in clause (i) who has not

                                incurred costs, as determined in

                                accordance with section 1860D-

                                2(b)(4)(C), for covered part D drugs in

                                the year that are equal to or exceed the

                                annual out-of-pocket threshold specified

                                in section 1860D-2(b)(4)(B)(i) for the

                                year—

                                            ✂️✂️(aa) for 2025, 99 percent;

                                            ✂️✂️(bb) for 2026, 98 percent;

                                            ✂️✂️(cc) for 2027, 95 percent;

                                            ✂️✂️(dd) for 2028, 92 percent;

                                        and

                                            ✂️✂️(ee) for 2029 and each

                                        subsequent year, 90 percent; and

                                    ✂️✂️(II) for an applicable drug

                                dispensed for an applicable beneficiary

                                described in clause (i) who has incurred

                                costs, as determined in accordance with

                                section 1860D-2(b)(4)(C), for covered

                                part D drugs in the year that are equal

                                to or exceed the annual out-of-pocket

                                threshold specified in section 1860D-

                                2(b)(4)(B)(i) for the year—

                                            ✂️✂️(aa) for 2025, 99 percent;

                                            ✂️✂️(bb) for 2026, 98 percent;

                                            ✂️✂️(cc) for 2027, 95 percent;

                                            ✂️✂️(dd) for 2028, 92 percent;

                                            ✂️✂️(ee) for 2029, 90 percent;

                                            ✂️✂️(ff) for 2030, 85 percent;

                                        and

                                            ✂️✂️(gg) for 2031 and each

                                        subsequent year, 80 percent.

                    ✂️✂️(C) Phase-in for specified small manufacturers.—

                          ✂️✂️(i) In general.—In the case of an

                      applicable drug of a specified small manufacturer

                      (as defined in clause (ii)) that is marketed as of

                      the date of enactment of this subparagraph and

                      dispensed for an applicable beneficiary, the term

                      ✂️discounted price’ means the specified small

                      manufacturer percent (as defined in clause (iii))

                      of the negotiated price of the applicable drug of

                      the manufacturer.

                          ✂️✂️(ii) Specified small manufacturer.—

                                    ✂️✂️(I) In general.—In this

                                subparagraph, subject to subclause

                                (III), the term ✂️specified small

                                manufacturer’ means a manufacturer of an

                                applicable drug for which, in 2021—

                                            ✂️✂️(aa) the manufacturer is a

                                        specified manufacturer (as

                                        defined in subparagraph

                                        (B)(ii)); and

[[Page 136 STAT. 1886]]

                                            ✂️✂️(bb) the total

                                        expenditures under part D for

                                        any one of the specified small

                                        manufacturer drugs of the

                                        manufacturer that are covered by

                                        the agreement or agreements

                                        under section 1860D-14A of such

                                        manufacturer for such year and

                                        covered under this part during

                                        such year are equal to or more

                                        than 80 percent of the total

                                        expenditures under this part for

                                        all specified small manufacturer

                                        drugs of the manufacturer that

                                        are covered by such agreement or

                                        agreements for such year and

                                        covered under this part during

                                        such year.

                                    ✂️✂️(II) Specified small manufacturer

                                drugs.—

                                            ✂️✂️(aa) In general.—For

                                        purposes of this clause, the

                                        term ✂️specified small

                                        manufacturer drugs’ means, with

                                        respect to a specified small

                                        manufacturer, for 2021, an

                                        applicable drug that is

                                        produced, prepared, propagated,

                                        compounded, converted, or

                                        processed by the manufacturer.

                                            ✂️✂️(bb) Aggregation rule.—

                                        All persons treated as a single

                                        employer under subsection (a) or

                                        (b) of section 52 of the

                                        Internal Revenue Code of 1986

                                        shall be treated as one

                                        manufacturer for purposes of

                                        this subparagraph. For purposes

                                        of making a determination

                                        pursuant to the previous

                                        sentence, an agreement under

                                        this section shall require that

                                        a manufacturer provide and

                                        attest to such information as

                                        specified by the Secretary as

                                        necessary.

                                    ✂️✂️(III) Limitation.—The term

                                ✂️specified small manufacturer’ shall not

                                include a manufacturer described in

                                subclause (I) if such manufacturer is

                                acquired after 2021 by another

                                manufacturer that is not a specified

                                small manufacturer, effective at the

                                beginning of the plan year immediately

                                following such acquisition or, in the

                                case of an acquisition before 2025,

                                effective January 1, 2025.

                          ✂️✂️(iii) Specified small manufacturer

                      percent.—In this subparagraph, the term

                      ✂️specified small manufacturer percent’ means, with

                      respect to a year—

                                    ✂️✂️(I) for an applicable drug

                                dispensed for an applicable beneficiary

                                who has not incurred costs, as

                                determined in accordance with section

                                1860D-2(b)(4)(C), for covered part D

                                drugs in the year that are equal to or

                                exceed the annual out-of-pocket

                                threshold specified in section 1860D-

                                2(b)(4)(B)(i) for the year—

                                            ✂️✂️(aa) for 2025, 99 percent;

                                            ✂️✂️(bb) for 2026, 98 percent;

                                            ✂️✂️(cc) for 2027, 95 percent;

                                            ✂️✂️(dd) for 2028, 92 percent;

                                        and

                                            ✂️✂️(ee) for 2029 and each

                                        subsequent year, 90 percent; and

                                    ✂️✂️(II) for an applicable drug

                                dispensed for an applicable beneficiary

                                who has incurred costs, as

[[Page 136 STAT. 1887]]

                                determined in accordance with section

                                1860D-2(b)(4)(C), for covered part D

                                drugs in the year that are equal to or

                                exceed the annual out-of-pocket

                                threshold specified in section 1860D-

                                2(b)(4)(B)(i) for the year—

                                            ✂️✂️(aa) for 2025, 99 percent;

                                            ✂️✂️(bb) for 2026, 98 percent;

                                            ✂️✂️(cc) for 2027, 95 percent;

                                            ✂️✂️(dd) for 2028, 92 percent;

                                            ✂️✂️(ee) for 2029, 90 percent;

                                            ✂️✂️(ff) for 2030, 85 percent;

                                        and

                                            ✂️✂️(gg) for 2031 and each

                                        subsequent year, 80 percent.

                    ✂️✂️(D) Total expenditures.—For purposes of this

                paragraph, the term ✂️total expenditures’ includes, in

                the case of expenditures with respect to part D, the

                total gross covered prescription drug costs as defined

                in section 1860D-15(b)(3). The term ✂️total expenditures’

                excludes, in the case of expenditures with respect to

                part B, expenditures for a drug or biological that are

                bundled or packaged into the payment for another

                service.

                    ✂️✂️(E) Special case for certain claims.—

                          ✂️✂️(i) Claims spanning deductible.—In the case

                      where the entire amount of the negotiated price of

                      an individual claim for an applicable drug with

                      respect to an applicable beneficiary does not fall

                      above the annual deductible specified in section

                      1860D-2(b)(1) for the year, the manufacturer of

                      the applicable drug shall provide the discounted

                      price under this section on only the portion of

                      the negotiated price of the applicable drug that

                      falls above such annual deductible.

                          ✂️✂️(ii) Claims spanning out-of-pocket

                      threshold.—In the case where the entire amount of

                      the negotiated price of an individual claim for an

                      applicable drug with respect to an applicable

                      beneficiary does not fall entirely below or

                      entirely above the annual out-of-pocket threshold

                      specified in section 1860D-2(b)(4)(B)(i) for the

                      year, the manufacturer of the applicable drug

                      shall provide the discounted price—

                                    ✂️✂️(I) in accordance with

                                subparagraph (A)(i) on the portion of

                                the negotiated price of the applicable

                                drug that falls below such threshold;

                                and

                                    ✂️✂️(II) in accordance with

                                subparagraph (A)(ii) on the portion of

                                such price of such drug that falls at or

                                above such threshold.

            ✂️✂️(5) Manufacturer.—The term ✂️manufacturer’ means any

        entity which is engaged in the production, preparation,

        propagation, compounding, conversion, or processing of

        prescription drug products, either directly or indirectly by

        extraction from substances of natural origin, or independently

        by means of chemical synthesis, or by a combination of

        extraction and chemical synthesis. Such term does not include a

        wholesale distributor of drugs or a retail pharmacy licensed

        under State law.

            ✂️✂️(6) Negotiated price.—The term ✂️negotiated price’ has the

        meaning given such term for purposes of section 1860D-

[[Page 136 STAT. 1888]]

        2(d)(1)(B), and, with respect to an applicable drug, such

        negotiated price shall include any dispensing fee and, if

        applicable, any vaccine administration fee for the applicable

        drug.

            ✂️✂️(7) Qualified retiree prescription drug plan.—The term

        ✂️qualified retiree prescription drug plan’ has the meaning given

        such term in section 1860D-22(a)(2).

✂️✂️SEC. 1860D-14D. <<NOTE: 42 USC 1395w-114d.>> SELECTED DRUG

                              SUBSIDY PROGRAM.

    ✂️✂️With respect to covered part D drugs that would be applicable

drugs (as defined in section 1860D-14C(g)(2)) but for the application of

subparagraph (B) of such section, the Secretary shall provide a process

whereby, in the case of an applicable beneficiary (as defined in section

1860D-14C(g)(1)) who, with respect to a year, is enrolled in a

prescription drug plan or is enrolled in an MA-PD plan, has not incurred

costs that are equal to or exceed the annual out-of-pocket threshold

specified in section 1860D-2(b)(4)(B)(i), and is dispensed such a drug,

the Secretary (periodically and on a timely basis) provides the PDP

sponsor or the MA organization offering the plan, a subsidy with respect

to such drug that is equal to 10 percent of the negotiated price (as

defined in section 1860D-14C(g)(6)) of such drug.’'.

            (2) Sunset of medicare coverage gap discount program.—

        Section 1860D-14A of the Social Security Act (42 U.S.C. 1395w-

        114a) is amended—

                    (A) in subsection (a), in the first sentence, by

                striking ✂️✂️The Secretary’' and inserting ✂️✂️Subject to

                subsection (h), the Secretary’'; and

                    (B) by adding at the end the following new

                subsection:

    ✂️✂️(h) Sunset of Program.—

            ✂️✂️(1) In general.—The program shall not apply with respect

        to applicable drugs dispensed on or after January 1, 2025, and,

        subject to paragraph (2), agreements under this section shall be

        terminated as of such date.

            ✂️✂️(2) Continued application for applicable drugs dispensed

        prior to sunset.—The provisions of this section (including all

        responsibilities and duties) shall continue to apply on and

        after January 1, 2025, with respect to applicable drugs

        dispensed prior to such date.’'.

            (3) Selected drug subsidy payments from medicare

        prescription drug account.—Section 1860D-16(b)(1) of the Social

        Security Act (42 U.S.C. 1395w-116(b)(1)) is amended—

                    (A) in subparagraph (C), by striking ✂️✂️and’' at the

                end;

                    (B) in subparagraph (D), by striking the period at

                the end and inserting ✂️✂️; and’'; and

                    (C) by adding at the end the following new

                subparagraph:

                    ✂️✂️(E) payments under section 1860D-14D (relating to

                selected drug subsidy payments).’'.

    (d) Medicare Part D Premium Stabilization.—

            (1) 2024 through 2029.—Section 1860D-13 of the Social

        Security Act (42 U.S.C. 1395w-113) is amended—

                    (A) in subsection (a)—

                          (i) in paragraph (1)(A), by inserting ✂️✂️or (8)

                      (as applicable)’' after ✂️✂️paragraph (2)’';

                          (ii) in paragraph (2), in the matter preceding

                      subparagraph (A), by striking ✂️✂️The base’' and

                      inserting ✂️✂️Subject to paragraph (8), the base’';

[[Page 136 STAT. 1889]]

                          (iii) in paragraph (7)—

                                    (I) in subparagraph (B)(ii), by

                                inserting ✂️✂️or (8) (as applicable)’'

                                after ✂️✂️paragraph (2)’'; and

                                    (II) in subparagraph (E)(i), by

                                inserting ✂️✂️or (8) (as applicable)’'

                                after ✂️✂️paragraph (2)’'; and

                          (iv) by adding at the end the following new

                      paragraph:

            ✂️✂️(8) <<NOTE: Time period.>> Premium stabilization.—

                    ✂️✂️(A) In general.—The base beneficiary premium

                under this paragraph for a prescription drug plan for a

                month in 2024 through 2029 shall be computed as follows:

                          ✂️✂️(i) 2024.—The base beneficiary premium for

                      a month in 2024 shall be equal to the lesser of—

                                    ✂️✂️(I) the base beneficiary premium

                                computed under paragraph (2) for a month

                                in 2023 increased by 6 percent; or

                                    ✂️✂️(II) the base beneficiary premium

                                computed under paragraph (2) for a month

                                in 2024 that would have applied if this

                                paragraph had not been enacted.

                          ✂️✂️(ii) 2025.—The base beneficiary premium for

                      a month in 2025 shall be equal to the lesser of—

                                    ✂️✂️(I) the base beneficiary premium

                                computed under clause (i) for a month in

                                2024 increased by 6 percent; or

                                    ✂️✂️(II) the base beneficiary premium

                                computed under paragraph (2) for a month

                                in 2025 that would have applied if this

                                paragraph had not been enacted.

                          ✂️✂️(iii) 2026.—The base beneficiary premium

                      for a month in 2026 shall be equal to the lesser

                      of—

                                    ✂️✂️(I) the base beneficiary premium

                                computed under clause (ii) for a month

                                in 2025 increased by 6 percent; or

                                    ✂️✂️(II) the base beneficiary premium

                                computed under paragraph (2) for a month

                                in 2026 that would have applied if this

                                paragraph had not been enacted.

                          ✂️✂️(iv) 2027.—The base beneficiary premium for

                      a month in 2027 shall be equal to the lesser of—

                                    ✂️✂️(I) the base beneficiary premium

                                computed under clause (iii) for a month

                                in 2026 increased by 6 percent; or

                                    ✂️✂️(II) the base beneficiary premium

                                computed under paragraph (2) for a month

                                in 2027 that would have applied if this

                                paragraph had not been enacted.

                          ✂️✂️(v) 2028.—The base beneficiary premium for

                      a month in 2028 shall be equal to the lesser of—

                                    ✂️✂️(I) the base beneficiary premium

                                computed under clause (iv) for a month

                                in 2027 increased by 6 percent; or

                                    ✂️✂️(II) the base beneficiary premium

                                computed under paragraph (2) for a month

                                in 2028 that would have applied if this

                                paragraph had not been enacted.

[[Page 136 STAT. 1890]]

                          ✂️✂️(vi) 2029.—The base beneficiary premium for

                      a month in 2029 shall be equal to the lesser of—

                                    ✂️✂️(I) the base beneficiary premium

                                computed under clause (v) for a month in

                                2028 increased by 6 percent; or

                                    ✂️✂️(II) the base beneficiary premium

                                computed under paragraph (2) for a month

                                in 2029 that would have applied if this

                                paragraph had not been enacted.

                    ✂️✂️(B) Clarification regarding 2030 and subsequent

                years.—The base beneficiary premium for a month in 2030

                or a subsequent year shall be computed under paragraph

                (2) without regard to this paragraph.’'; and

                    (B) in subsection (b)(3)(A)(ii), by striking

                ✂️✂️subsection (a)(2)’' and inserting ✂️✂️paragraph (2) or

                (8) of subsection (a) (as applicable)’'.

            (2) Adjustment to beneficiary premium percentage for 2030

        and subsequent years.—Section 1860D-13(a) of the Social

        Security Act (42 U.S.C. 1395w-113(a)), as amended by paragraph

        (1), is amended—

                    (A) in paragraph (3)(A), by inserting ✂️✂️(or, for

                2030 and each subsequent year, the percent specified

                under paragraph (9))’' after ✂️✂️25.5 percent’'; and

                    (B) by adding at the end the following new

                paragraph:

            ✂️✂️(9) <<NOTE: Time periods.>> Percent specified.—

                    ✂️✂️(A) <<NOTE: Determination.>> In general.—Subject

                to subparagraph (B), for purposes of paragraph (3)(A),

                the percent specified under this paragraph for 2030 and

                each subsequent year is the percent that the Secretary

                determines is necessary to ensure that the base

                beneficiary premium computed under paragraph (2) for a

                month in 2030 is equal to the lesser of—

                          ✂️✂️(i) the base beneficiary premium computed

                      under paragraph (8)(A)(vi) for a month in 2029

                      increased by 6 percent; or

                          ✂️✂️(ii) the base beneficiary premium computed

                      under paragraph (2) for a month in 2030 that would

                      have applied if this paragraph had not been

                      enacted.

                    ✂️✂️(B) Floor.—The percent specified under

                subparagraph (A) may not be less than 20 percent.’'.

            (3) Conforming amendments.—

                    (A) Section 1854(b)(2)(B) of the Social Security Act

                42 U.S.C. 1395w-24(b)(2)(B)) is amended by striking

                ✂️✂️section 1860D-13(a)(2)’' and inserting ✂️✂️paragraph (2)

                or (8) (as applicable) of section 1860D-13(a)’'.

                    (B) Section 1860D-11(g)(6) of the Social Security

                Act (42 U.S.C. 1395w-111(g)(6)) is amended by inserting

                ✂️✂️(or, for 2030 and each subsequent year, the percent

                specified under section 1860D-13(a)(9))’' after ✂️✂️25.5

                percent’'.

                    (C) Section 1860D-13(a)(7)(B)(i) of the Social

                Security Act (42 U.S.C. 1395w-113(a)(7)(B)(i)) is

                amended—

                          (i) in subclause (I), by inserting ✂️✂️(or, for

                      2030 and each subsequent year, the percent

                      specified under paragraph (9))’' after ✂️✂️25.5

                      percent’'; and

                          (ii) in subclause (II), by inserting ✂️✂️(or,

                      for 2030 and each subsequent year, the percent

                      specified under paragraph (9))’' after ✂️✂️25.5

                      percent’'.

[[Page 136 STAT. 1891]]

                    (D) Section 1860D-15(a) of the Social Security Act

                (42 U.S.C. 1395w-115(a)) is amended—

                          (i) in the matter preceding paragraph (1), by

                      inserting ✂️✂️(or, for each of 2024 through 2029,

                      the percent applicable as a result of the

                      application of section 1860D-13(a)(8), or, for

                      2030 and each subsequent year, 100 percent minus

                      the percent specified under section 1860D-

                      13(a)(9))’' after ✂️✂️74.5 percent’'; and

                          (ii) in paragraph (1)(B), by striking

                      ✂️✂️paragraph (2) of section 1860D-13(a)’' and

                      inserting ✂️✂️paragraph (2) or (8) of section 1860D-

                      13(a) (as applicable)’'.

    (e) <<NOTE: Time periods.>> Conforming Amendments.—

            (1) Section 1860D-2 of the Social Security Act (42 U.S.C.

        1395w-102) is amended—

                    (A) in subsection (a)(2)(A)(i)(I), by striking ✂️✂️,

                or an increase in the initial’' and inserting ✂️✂️or, for

                a year preceding 2025, an increase in the initial’';

                    (B) in subsection (c)(1)(C)—

                          (i) in the subparagraph heading, by striking

                      ✂️✂️at initial coverage limit’'; and

                          (ii) by inserting ✂️✂️for a year preceding 2025

                      or the annual out-of-pocket threshold specified in

                      subsection (b)(4)(B) for the year for 2025 and

                      each subsequent year’' after ✂️✂️subsection (b)(3)

                      for the year’' each place it appears; and

                    (C) in subsection (d)(1)(A), by striking ✂️✂️or an

                initial’' and inserting ✂️✂️or, for a year preceding 2025,

                an initial’'.

            (2) Section 1860D-4(a)(4)(B)(i) of the Social Security Act

        (42 U.S.C. 1395w-104(a)(4)(B)(i)) is amended by striking ✂️✂️the

        initial’' and inserting ✂️✂️for a year preceding 2025, the

        initial’'.

            (3) Section 1860D-14(a) of the Social Security Act (42

        U.S.C. 1395w-114(a)) is amended—

                    (A) in paragraph (1)—

                          (i) in subparagraph (C), by striking ✂️✂️The

                      continuation’' and inserting ✂️✂️For a year

                      preceding 2025, the continuation’';

                          (ii) in subparagraph (D)(iii), by striking

                      ✂️✂️1860D-2(b)(4)(A)(i)(I)’' and inserting ✂️✂️1860D-

                      2(b)(4)(A)(i)(I)(aa)’'; and

                          (iii) in subparagraph (E), by striking ✂️✂️The

                      elimination’' and inserting ✂️✂️For a year preceding

                      2024, the elimination’'; and

                    (B) in paragraph (2)(E), by striking ✂️✂️1860D-

                2(b)(4)(A)(i)(I)’' and inserting ✂️✂️1860D-

                2(b)(4)(A)(i)(I)(aa)’'.

            (4) Section 1860D-21(d)(7) of the Social Security Act (42

        U.S.C. 1395w-131(d)(7)) is amended by striking ✂️✂️section 1860D-

        2(b)(4)(B)(i)’' and inserting ✂️✂️section 1860D-2(b)(4)(C)(i)’'.

            (5) Section 1860D-22(a)(2)(A) of the Social Security Act (42

        U.S.C. 1395w-132(a)(2)(A)) is amended—

                    (A) by striking ✂️✂️the value of any discount’' and

                inserting the following: ✂️✂️the value of—

                          ✂️✂️(i) for years prior to 2025, any discount’';

                    (B) in clause (i), as inserted by subparagraph (A)

                of this paragraph, by striking the period at the end and

                inserting ✂️✂️; and’'; and

                    (C) by adding at the end the following new clause:

[[Page 136 STAT. 1892]]

                          ✂️✂️(ii) for 2025 and each subsequent year, any

                      discount provided pursuant to section 1860D-

                      14C.’'.

            (6) Section 1860D-41(a)(6) of the Social Security Act (42

        U.S.C. 1395w-151(a)(6)) is amended—

                    (A) by inserting ✂️✂️for a year before 2025’' after

                ✂️✂️1860D-2(b)(3)’'; and

                    (B) by inserting ✂️✂️for such year’' before the

                period.

            (7) Section 1860D-43 of the Social Security Act (42 U.S.C.

        1395w-153) is amended—

                    (A) in subsection (a)—

                          (i) by striking paragraph (1) and inserting

                      the following:

            ✂️✂️(1) participate in—

                    ✂️✂️(A) for 2011 through 2024, the Medicare coverage

                gap discount program under section 1860D-14A; and

                    ✂️✂️(B) for 2025 and each subsequent year, the

                manufacturer discount program under section 1860D-

                14C;’';

                          (ii) by striking paragraph (2) and inserting

                      the following:

            ✂️✂️(2) have entered into and have in effect—

                    ✂️✂️(A) for 2011 through 2024, an agreement described

                in subsection (b) of section 1860D-14A with the

                Secretary; and

                    ✂️✂️(B) for 2025 and each subsequent year, an

                agreement described in subsection (b) of section 1860D-

                14C with the Secretary; and’'; and

                          (iii) in paragraph (3), by striking ✂️✂️such

                      section’' and inserting ✂️✂️section 1860D-14A’'; and

                    (B) by striking subsection (b) and inserting the

                following:

    ✂️✂️(b) <<NOTE: Applicability.>> Effective Date.—Paragraphs (1)(A),

(2)(A), and (3) of subsection (a) shall apply to covered part D drugs

dispensed under this part on or after January 1, 2011, and before

January 1, 2025, and paragraphs (1)(B) and (2)(B) of such subsection

shall apply to covered part D drugs dispensed under this part on or

after January 1, 2025.’'.

            (8) Section 1927 of the Social Security Act (42 U.S.C.

        1396r-8) is amended—

                    (A) in subsection (c)(1)(C)(i)(VI), by inserting

                before the period at the end the following: ✂️✂️or under

                the manufacturer discount program under section 1860D-

                14C’'; and

                    (B) in subsection (k)(1)(B)(i)(V), by inserting

                before the period at the end the following: ✂️✂️or under

                section 1860D-14C’'.

    (f) <<NOTE: 42 USC 1395w-102 note.>> Implementation for 2024

Through 2026.—The Secretary shall implement this section, including the

amendments made by this section, for 2024, 2025, and 2026 by program

instruction or other forms of program guidance.

    (g) <<NOTE: Time periods.>> Funding.—In addition to amounts

otherwise available, there are appropriated to the Centers for Medicare

& Medicaid Services, out of any money in the Treasury not otherwise

appropriated, $341,000,000 for fiscal year 2022, including $20,000,000

and $65,000,000 to carry out the provisions of, including the amendments

made by, this section in fiscal years 2022 and 2023, respectively, and

$32,000,000 to carry out the provisions of, including the amendments

made by, this section in each of fiscal years 2024 through 2031, to

remain available until expended.

[[Page 136 STAT. 1893]]

1.7.SEC11202. MAXIMUM MONTHLY CAP ON COST-SHARING PAYMENTS UNDER PRESCRIPTION DRUG PLANS AND MA-PD PLANS.

    (a) In General.—Section 1860D-2(b) of the Social Security Act (42

U.S.C. 1395w-102(b)) is amended—

            (1) in paragraph (2)—

                    (A) in subparagraph (A), by striking ✂️✂️and (D)’' and

                inserting ✂️✂️, (D), and (E)’'; and

                    (B) by adding at the end the following new

                subparagraph:

                    ✂️✂️(E) Maximum monthly cap on cost-sharing

                payments.—

                          ✂️✂️(i) <<NOTE: Effective date.>> In general.—

                      For plan years beginning on or after January 1,

                      2025, each PDP sponsor offering a prescription

                      drug plan and each MA organization offering an MA-

                      PD plan shall provide to any enrollee of such

                      plan, including an enrollee who is a subsidy

                      eligible individual (as defined in paragraph (3)

                      of section 1860D-14(a)), the option to elect with

                      respect to a plan year to pay cost-sharing under

                      the plan in monthly amounts that are capped in

                      accordance with this subparagraph.

                          ✂️✂️(ii) Determination of maximum monthly cap.—

                      For each month in the plan year for which an

                      enrollee in a prescription drug plan or an MA-PD

                      plan has made an election pursuant to clause (i),

                      the PDP sponsor or MA organization shall determine

                      a maximum monthly cap (as defined in clause (iv))

                      for such enrollee.

                          ✂️✂️(iii) Beneficiary monthly payments.—With

                      respect to an enrollee who has made an election

                      pursuant to clause (i), for each month described

                      in clause (ii), the PDP sponsor or MA organization

                      shall bill such enrollee an amount (not to exceed

                      the maximum monthly cap) for the out-of-pocket

                      costs of such enrollee in such month.

                          ✂️✂️(iv) Maximum monthly cap defined.—In this

                      subparagraph, the term ✂️maximum monthly cap’

                      means, with respect to an enrollee—

                                    ✂️✂️(I) for the first month for which

                                the enrollee has made an election

                                pursuant to clause (i), an amount

                                determined by calculating—

                                            ✂️✂️(aa) the annual out-of-

                                        pocket threshold specified in

                                        paragraph (4)(B) minus the

                                        incurred costs of the enrollee

                                        as described in paragraph

                                        (4)(C); divided by

                                            ✂️✂️(bb) the number of months

                                        remaining in the plan year; and

                                    ✂️✂️(II) for a subsequent month, an

                                amount determined by calculating—

                                            ✂️✂️(aa) the sum of any

                                        remaining out-of-pocket costs

                                        owed by the enrollee from a

                                        previous month that have not yet

                                        been billed to the enrollee and

                                        any additional out-of-pocket

                                        costs incurred by the enrollee;

                                        divided by

                                            ✂️✂️(bb) the number of months

                                        remaining in the plan year.

[[Page 136 STAT. 1894]]

                          ✂️✂️(v) <<NOTE: Applicability.>> Additional

                      requirements.—The following requirements shall

                      apply with respect to the option to make an

                      election pursuant to clause (i) under this

                      subparagraph:

                                    ✂️✂️(I) Secretarial

                                responsibilities.—The Secretary shall

                                provide information to part D eligible

                                individuals on the option to make such

                                election through educational materials,

                                including through the notices provided

                                under section 1804(a).

                                    ✂️✂️(II) Timing of election.—An

                                enrollee in a prescription drug plan or

                                an MA-PD plan may make such an

                                election—

                                            ✂️✂️(aa) prior to the

                                        beginning of the plan year; or

                                            ✂️✂️(bb) in any month during

                                        the plan year.

                                    ✂️✂️(III) Pdp sponsor and ma

                                organization responsibilities.—Each PDP

                                sponsor offering a prescription drug

                                plan or MA organization offering an MA-

                                PD plan—

                                            ✂️✂️(aa) may not limit the

                                        option for an enrollee to make

                                        such an election to certain

                                        covered part D drugs;

                                        ✂️✂️(bb) <<NOTE: Notification.>>

                                        shall, prior to the plan year,

                                        notify prospective enrollees of

                                        the option to make such an

                                        election in promotional

                                        materials;

                                            ✂️✂️(cc) shall include

                                        information on such option in

                                        enrollee educational materials;

                                        ✂️✂️(dd) <<NOTE: Notification.>>

                                        shall have in place a mechanism

                                        to notify a pharmacy during the

                                        plan year when an enrollee

                                        incurs out-of-pocket costs with

                                        respect to covered part D drugs

                                        that make it likely the enrollee

                                        may benefit from making such an

                                        election;

                                            ✂️✂️(ee) shall provide that a

                                        pharmacy, after receiving a

                                        notification described in item

                                        (dd) with respect to an

                                        enrollee, informs the enrollee

                                        of such notification;

                                            ✂️✂️(ff) shall ensure that

                                        such an election by an enrollee

                                        has no effect on the amount paid

                                        to pharmacies (or the timing of

                                        such payments) with respect to

                                        covered part D drugs dispensed

                                        to the enrollee; and

                                            ✂️✂️(gg) shall have in place a

                                        financial reconciliation process

                                        to correct inaccuracies in

                                        payments made by an enrollee

                                        under this subparagraph with

                                        respect to covered part D drugs

                                        during the plan year.

                                    ✂️✂️(IV) Failure to pay amount

                                billed.—If an enrollee fails to pay the

                                amount billed for a month as required

                                under this subparagraph—

                                            ✂️✂️(aa) the election of the

                                        enrollee pursuant to clause (i)

                                        shall be terminated and the

                                        enrollee shall pay the cost-

                                        sharing otherwise applicable for

                                        any covered part D drugs

                                        subsequently dispensed to the

                                        enrollee up to the annual out-

                                        of-pocket threshold specified in

                                        paragraph (4)(B); and

[[Page 136 STAT. 1895]]

                                            ✂️✂️(bb) the PDP sponsor or MA

                                        organization may preclude the

                                        enrollee from making an election

                                        pursuant to clause (i) in a

                                        subsequent plan year.

                                    ✂️✂️(V) Clarification regarding past

                                due amounts.—Nothing in this

                                subparagraph shall be construed as

                                prohibiting a PDP sponsor or an MA

                                organization from billing an enrollee

                                for an amount owed under this

                                subparagraph.

                                    ✂️✂️(VI) Treatment of unsettled

                                balances.—Any unsettled balances with

                                respect to amounts owed under this

                                subparagraph shall be treated as plan

                                losses and the Secretary shall not be

                                liable for any such balances outside of

                                those assumed as losses estimated in

                                plan bids.’'; and

            (2) in paragraph (4)—

                    (A) in subparagraph (C), by striking ✂️✂️subparagraph

                (E)’' and inserting ✂️✂️subparagraph (E) or subparagraph

                (F)’'; and

                    (B) by adding at the end the following new

                subparagraph:

                    ✂️✂️(F) Inclusion of costs paid under maximum monthly

                cap option.—In applying subparagraph (A), with respect

                to an enrollee who has made an election pursuant to

                clause (i) of paragraph (2)(E), costs shall be treated

                as incurred if such costs are paid by a PDP sponsor or

                an MA organization under the option provided under such

                paragraph.’'.

    (b) Application to Alternative Prescription Drug Coverage.—Section

1860D-2(c) of the Social Security Act (42 U.S.C. 1395w-102(c)) is

amended by adding at the end the following new paragraph:

            ✂️✂️(4) Same maximum monthly cap on cost-sharing.—The maximum

        monthly cap on cost-sharing payments shall apply to coverage

        with respect to an enrollee who has made an election pursuant to

        clause (i) of subsection (b)(2)(E) under the option provided

        under such subsection.’'.

    (c) <<NOTE: 42 USC 1395w-102 note.>> Implementation for 2025.—The

Secretary shall implement this section, including the amendments made by

this section, for 2025 by program instruction or other forms of program

guidance.

    (d) <<NOTE: Time period.>> Funding.—In addition to amounts

otherwise available, there are appropriated to the Centers for Medicare

& Medicaid Services, out of any money in the Treasury not otherwise

appropriated, $10,000,000 for fiscal year 2023, to remain available

until expended, to carry out the provisions of, including the amendments

made by, this section.

[[Page 136 STAT. 1896]]

1.8.SEC11301. <<NOTE: [42 USC 1320](https://www.law.cornell.edu/uscode/text/42/1320)a-7b note.>> EXTENSION OF MORATORIUM ON IMPLEMENTATION OF RULE RELATING TO ELIMINATING THE ANTI- KICKBACK STATUTE SAFE HARBOR PROTECTION FOR PRESCRIPTION DRUG REBATES.

    The <<NOTE: Effective date.>> Secretary of Health and Human

Services shall not, prior to January 1, 2032, implement, administer, or

enforce the provisions of the final rule published by the Office of the

Inspector General of the Department of Health and Human Services on

November 30, 2020, and titled ✂️✂️Fraud and Abuse; Removal of Safe Harbor

Protection for Rebates Involving Prescription Pharmaceuticals and

Creation of New Safe Harbor Protection for Certain Point-of-Sale

Reductions in Price on Prescription Pharmaceuticals and Certain Pharmacy

Benefit Manager Service Fees’' (85 Fed. Reg. 76666).

1.9.SEC11401. COVERAGE OF ADULT VACCINES RECOMMENDED BY THE ADVISORY COMMITTEE ON IMMUNIZATION PRACTICES UNDER MEDICARE PART D.

    (a) Ensuring Treatment of Cost-sharing and Deductible Is Consistent

With Treatment of Vaccines Under Medicare Part B.—Section 1860D-2 of

the Social Security Act (42 U.S.C. 1395w-102), as amended by sections

11201 and 11202, is amended—

            (1) in subsection (b)—

                    (A) in paragraph (1)(A), by striking ✂️✂️The

                coverage’' and inserting ✂️✂️Subject to paragraph (8), the

                coverage’';

                    (B) in paragraph (2)—

                          (i) in subparagraph (A), by inserting ✂️✂️and

                      paragraph (8)’' after ✂️✂️and (E)’';

                          (ii) in subparagraph (C)(i), in the matter

                      preceding subclause (I), by striking ✂️✂️paragraph

                      (4)’' and inserting ✂️✂️paragraphs (4) and (8)’';

                      and

                          (iii) in subparagraph (D)(i), in the matter

                      preceding subclause (I), by striking ✂️✂️paragraph

                      (4)’' and inserting ✂️✂️paragraphs (4) and (8)’';

                    (C) in paragraph (3)(A), in the matter preceding

                clause (i), by striking ✂️✂️and (4)’' and inserting ✂️✂️(4),

                and (8)’';

                    (D) in paragraph (4)(A)(i), by striking ✂️✂️The

                coverage’' and inserting ✂️✂️Subject to paragraph (8), the

                coverage’'; and

                    (E) by adding at the end the following new

                paragraph:

            ✂️✂️(8) Treatment of cost-sharing for adult vaccines

        recommended by the advisory committee on immunization practices

        consistent with treatment of vaccines under part b.—

                    ✂️✂️(A) <<NOTE: Effective date.>> In general.—For

                plan years beginning on or after January 1, 2023, with

                respect to an adult vaccine recommended by the Advisory

                Committee on Immunization Practices (as defined in

                subparagraph (B))—

                          ✂️✂️(i) the deductible under paragraph (1) shall

                      not apply; and

[[Page 136 STAT. 1897]]

                          ✂️✂️(ii) there shall be no coinsurance or other

                      cost-sharing under this part with respect to such

                      vaccine.

                    ✂️✂️(B) Adult vaccines recommended by the advisory

                committee on immunization

                practices. <<NOTE: Definition.>> —For purposes of this

                paragraph, the term ✂️adult vaccine recommended by the

                Advisory Committee on Immunization Practices’ means a

                covered part D drug that is a vaccine licensed under

                section 351 of the Public Health Service Act for use by

                adult populations and administered in accordance with

                recommendations of the Advisory Committee on

                Immunization Practices of the Centers for Disease

                Control and Prevention.’'; and

            (2) in subsection (c), by adding at the end the following

        new paragraph:

            ✂️✂️(5) Treatment of cost-sharing for adult vaccines

        recommended by the advisory committee on immunization

        practices.—The coverage is in accordance with subsection

        (b)(8).’'.

    (b) Conforming Amendments to Cost-sharing for Low-income

Individuals.—Section 1860D-14(a) of the Social Security Act (42 U.S.C.

1395w-114(a)), as amended by section 11201, is amended—

            (1) in paragraph (1)(D), in each of clauses (ii) and (iii),

        by striking ✂️✂️In the case’' and inserting ✂️✂️Subject to paragraph

        (6), in the case’';

            (2) in paragraph (2)—

                    (A) in subparagraph (B), by striking ✂️✂️A reduction’'

                and inserting ✂️✂️Subject to section 1860D-2(b)(8), a

                reduction’';

                    (B) in subparagraph (D), by striking ✂️✂️The

                substitution’' and inserting ✂️✂️Subject to paragraph (6),

                the substitution’'; and

                    (C) in subparagraph (E), by striking ✂️✂️subsection

                (c)’' and inserting ✂️✂️paragraph (6) of this subsection

                and subsection (c)’'; and

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

            ✂️✂️(6) No application of cost-sharing or deductible for adult

        vaccines recommended by the advisory committee on immunization

        practices. <<NOTE: Effective date.>> —For plan years beginning

        on or after January 1, 2023, with respect to an adult vaccine

        recommended by the Advisory Committee on Immunization Practices

        (as defined in section 1860D-2(b)(8)(B))—

                    ✂️✂️(A) the deductible under section 1860D-2(b)(1)

                shall not apply; and

                    ✂️✂️(B) there shall be no cost-sharing under this

                section with respect to such vaccine.’'.

    (c) Temporary Retrospective Subsidy.—

            (1) In general.—Section 1860D-15 of the Social Security Act

        (42 U.S.C. 1395w-115) is amended by adding at the end the

        following new subsection:

    ✂️✂️(h) Temporary Retrospective Subsidy for Reduction in Cost-sharing

and Deductible for Adult Vaccines Recommended by the Advisory Committee

on Immunization Practices During 2023.—

            ✂️✂️(1) In general.—In addition to amounts otherwise payable

        under this section to a PDP sponsor of a prescription drug plan

        or an MA organization offering an MA-PD plan, for plan year

        2023, the Secretary shall provide the PDP sponsor

[[Page 136 STAT. 1898]]

        or MA organization offering the plan subsidies in an amount

        equal to the aggregate reduction in cost-sharing and deductible

        by reason of the application of section 1860D-2(b)(8) for

        individuals under the plan during the year.

            ✂️✂️(2) <<NOTE: Deadline.>> Timing.—The Secretary shall

        provide a subsidy under paragraph (1), as applicable, not later

        than 18 months following the end of the applicable plan year.’'.

            (2) Treatment as incurred costs.—Section 1860D-

        2(b)(4)(C)(iii)(I) of the Social Security Act (42 U.S.C. 1395w-

        102(b)(4)(C)(iii)(I)), as amended by section 11201(a)(3)(C), is

        amended—

                    (A) in item (cc), by striking ✂️✂️or’' at the end; and

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

                                            ✂️✂️(dd) under section 1860D-

                                        15(h); or’'.

    (d) <<NOTE: 42 USC 1395w-102 note.>> Rule of Construction.—Nothing

in this section shall be construed as limiting coverage under part D of

title XVIII of the Social Security Act for vaccines that are not

recommended by the Advisory Committee on Immunization Practices.

    (e) <<NOTE: 42 USC 1395w-102 note.>> Implementation for 2023

Through 2025.—The Secretary shall implement this section, including the

amendments made by this section, for 2023, 2024, and 2025, by program

instruction or other forms of program guidance.

1.9.SEC11402. PAYMENT FOR BIOSIMILAR BIOLOGICAL PRODUCTS DURING INITIAL PERIOD.

    Section 1847A(c)(4) of the Social Security Act (42 U.S.C. 1395w-

3a(c)(4)) is amended—

            (1) in each of subparagraphs (A) and (B), by redesignating

        clauses (i) and (ii) as subclauses (I) and (II), respectively,

        and moving such subclauses 2 ems to the right;

            (2) by redesignating subparagraphs (A) and (B) as clauses

        (i) and (ii) and moving such clauses 2 ems to the right;

            (3) by striking ✂️✂️unavailable.—In the case’' and inserting

        ✂️✂️unavailable.—

                    ✂️✂️(A) In general.—Subject to subparagraph (B), in

                the case’'; and

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

                    ✂️✂️(B) Limitation on payment amount for biosimilar

                biological products during initial

                period. <<NOTE: Effective date.>> —In the case of a

                biosimilar biological product furnished on or after July

                1, 2024, during the initial period described in

                subparagraph (A) with respect to the biosimilar

                biological product, the amount payable under this

                section for the biosimilar biological product is the

                lesser of the following:

                          ✂️✂️(i) The amount determined under clause (ii)

                      of such subparagraph for the biosimilar biological

                      product.

                          ✂️✂️(ii) The amount determined under subsection

                      (b)(1)(B) for the reference biological product.’'.

1.9.SEC11403. TEMPORARY INCREASE IN MEDICARE PART B PAYMENT FOR CERTAIN BIOSIMILAR BIOLOGICAL PRODUCTS.

    Section 1847A(b)(8) of the Social Security Act (42 U.S.C. 1395w-

3a(b)(8)) is amended—

            (1) by redesignating subparagraphs (A) and (B) as clauses

        (i) and (ii), respectively, and moving the margin of each such

        redesignated clause 2 ems to the right;

[[Page 136 STAT. 1899]]

            (2) by striking ✂️✂️product.—The amount’' and inserting the

        following: ✂️✂️product.—

                    ✂️✂️(A) In general.—Subject to subparagraph (B), the

                amount’'; and

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

                    ✂️✂️(B) <<NOTE: Time periods.>> Temporary payment

                increase.—

                          ✂️✂️(i) In general.—In the case of a qualifying

                      biosimilar biological product that is furnished

                      during the applicable 5-year period for such

                      product, the amount specified in this paragraph

                      for such product with respect to such period is

                      the sum determined under subparagraph (A), except

                      that clause (ii) of such subparagraph shall be

                      applied by substituting ✂️8 percent’ for ✂️6

                      percent’.

                          ✂️✂️(ii) Applicable 5-year period.—For purposes

                      of clause (i), the applicable 5-year period for a

                      qualifying biosimilar biological product is—

                                    ✂️✂️(I) <<NOTE: Effective date.>> in

                                the case of such a product for which

                                payment was made under this paragraph as

                                of September 30, 2022, the 5-year period

                                beginning on October 1, 2022; and

                                    ✂️✂️(II) in the case of such a product

                                for which payment is first made under

                                this paragraph during a calendar quarter

                                during the period beginning October 1,

                                2022, and ending December 31, 2027, the

                                5-year period beginning on the first day

                                of such calendar quarter during which

                                such payment is first made.

                          ✂️✂️(iii) Qualifying biosimilar biological

                      product defined.—For purposes of this

                      subparagraph, the term ✂️qualifying biosimilar

                      biological product’ means a biosimilar biological

                      product described in paragraph (1)(C) with respect

                      to which—

                                    ✂️✂️(I) in the case of a product

                                described in clause (ii)(I), the average

                                sales price under paragraph (8)(A)(i)

                                for a calendar quarter during the 5-year

                                period described in such clause is not

                                more than the average sales price under

                                paragraph (4)(A) for such quarter for

                                the reference biological product; and

                                    ✂️✂️(II) in the case of a product

                                described in clause (ii)(II), the

                                average sales price under paragraph

                                (8)(A)(i) for a calendar quarter during

                                the 5-year period described in such

                                clause is not more than the average

                                sales price under paragraph (4)(A) for

                                such quarter for the reference

                                biological product.’'.

1.9.SEC11404. <<NOTE: Effective date.>> EXPANDING ELIGIBILITY FOR LOW-INCOME SUBSIDIES UNDER PART D OF THE MEDICARE PROGRAM.

    Section 1860D-14(a) of the Social Security Act (42 U.S.C. 1395w-

114(a)), as amended by sections 11201 and 11401, is amended—

            (1) in the subsection heading, by striking ✂️✂️Individuals’'

        and all that follows through ✂️✂️Line’' and inserting ✂️✂️Certain

        Individuals’';

            (2) in paragraph (1)—

[[Page 136 STAT. 1900]]

                    (A) by striking the paragraph heading and inserting

                ✂️✂️Individuals with certain low incomes’'; and

                    (B) in the matter preceding subparagraph (A)—

                          (i) by inserting ✂️✂️(or, with respect to a plan

                      year beginning on or after January 1, 2024, 150

                      percent)’' after ✂️✂️135 percent’'; and

                          (ii) by inserting ✂️✂️(or, with respect to a

                      plan year beginning on or after January 1, 2024,

                      paragraph (3)(E))’' after ✂️✂️the resources

                      requirement described in paragraph (3)(D)’'; and

            (3) in paragraph (2)—

                    (A) by striking the paragraph heading and inserting

                ✂️✂️Other low-income individuals’'; and

                    (B) in the matter preceding subparagraph (A), by

                striking ✂️✂️In the case of a subsidy’' and inserting

                ✂️✂️With respect to a plan year beginning before January

                1, 2024, in the case of a subsidy’'.

1.9.SEC11405. IMPROVING ACCESS TO ADULT VACCINES UNDER MEDICAID AND CHIP.

    (a) Medicaid.—

            (1) Requiring coverage of adult vaccinations.—

                    (A) In general.—Section 1902(a)(10)(A) of the

                Social Security Act (42 U.S.C. 1396a(a)(10)(A)) is

                amended in the matter preceding clause (i) by inserting

                ✂️✂️(13)(B),’' after ✂️✂️(5),’'.

                    (B) Medically needy.—Section 1902(a)(10)(C)(iv) of

                such Act (42 U.S.C. 1396a(a)(10)(C)(iv)) is amended by

                inserting ✂️✂️, (13)(B),’' after ✂️✂️(5)’'.

            (2) No cost sharing for vaccinations.—

                    (A) General cost-sharing limitations.—Section 1916

                of the Social Security Act (42 U.S.C. 1396o) is

                amended—

                          (i) in subsection (a)(2)—

                                    (I) in subparagraph (G), by

                                inserting a comma after ✂️✂️State plan’';

                                    (II) in subparagraph (H), by

                                striking ✂️✂️; or’' and inserting a comma;

                                    (III) in subparagraph (I), by

                                striking ✂️✂️; and’' and inserting ✂️✂️,

                                or’'; and

                                    (IV) by adding at the end the

                                following new subparagraph:

                    ✂️✂️(J) vaccines described in section 1905(a)(13)(B)

                and the administration of such vaccines; and’'; and

                          (ii) in subsection (b)(2)—

                                    (I) in subparagraph (G), by

                                inserting a comma after ✂️✂️State plan’';

                                    (II) in subparagraph (H), by

                                striking ✂️✂️; or’' and inserting a comma;

                                    (III) in subparagraph (I), by

                                striking ✂️✂️; and’' and inserting ✂️✂️,

                                or’'; and

                                    (IV) by adding at the end the

                                following new subparagraph:

                    ✂️✂️(J) vaccines described in section 1905(a)(13)(B)

                and the administration of such vaccines; and’'.

                    (B) Application to alternative cost sharing.—

                Section 1916A(b)(3)(B) of the Social Security Act (42

                U.S.C.

[[Page 136 STAT. 1901]]

                1396o-1(b)(3)(B)) is amended by adding at the end the

                following new clause:

                          ✂️✂️(xiv) Vaccines described in section

                      1905(a)(13)(B) and the administration of such

                      vaccines.’'.

            (3) Increased fmap for adult vaccines and their

        administration.—Section 1905(b) of the Social Security Act (42

        U.S.C. 1396d(b)) is amended—

                    (A) by striking ✂️✂️and (5)’' and inserting ✂️✂️(5)’';

                    (B) by striking ✂️✂️services and vaccines described in

                subparagraphs (A) and (B) of subsection (a)(13), and

                prohibits cost-sharing for such services and vaccines’'

                and inserting ✂️✂️services described in subsection

                (a)(13)(A), and prohibits cost-sharing for such

                services’';

                    (C) by striking ✂️✂️medical assistance for such

                services and vaccines’' and inserting ✂️✂️medical

                assistance for such services’'; and

                    (D) <<NOTE: Time periods.>> by inserting ✂️✂️, and

                (6) during the first 8 fiscal quarters beginning on or

                after the effective date of this clause, in the case of

                a State which, as of the date of enactment of the Act

                titled ✂️An Act to provide for reconciliation pursuant to

                title II of S. Con. Res. 14’, provides medical

                assistance for vaccines described in subsection

                (a)(13)(B) and their administration and prohibits cost-

                sharing for such vaccines, the Federal medical

                assistance percentage, as determined under this

                subsection and subsection (y), shall be increased by 1

                percentage point with respect to medical assistance for

                such vaccines and their administration’' before the

                first period.

    (b) CHIP.—

            (1) Requiring coverage of adult vaccinations.—Section

        2103(c) of the Social Security Act (42 U.S.C. 1397cc(c)) is

        amended by adding at the end the following paragraph:

            ✂️✂️(12) Required coverage of approved, recommended adult

        vaccines and their administration.—Regardless of the type of

        coverage elected by a State under subsection (a), if the State

        child health plan or a waiver of such plan provides child health

        assistance or pregnancy-related assistance (as defined in

        section 2112) to an individual who is 19 years of age or older,

        such assistance shall include coverage of vaccines described in

        section 1905(a)(13)(B) and their administration.’'.

            (2) No cost-sharing for vaccinations.—Section 2103(e)(2) of

        such Act (42 U.S.C. 1397cc(e)(2)) is amended by inserting

        ✂️✂️vaccines described in subsection (c)(12) (and the

        administration of such vaccines),’' after ✂️✂️in vitro diagnostic

        products described in subsection (c)(10) (and administration of

        such products),’'.

    (c) <<NOTE: Applicability. 42 USC 1396a note.>> Effective Date.—

The amendments made by this section take effect on the 1st day of the

1st fiscal quarter that begins on or after the date that is 1 year after

the date of enactment of this Act and shall apply to expenditures made

under a State plan or waiver of such plan under title XIX of the Social

Security Act (42 U.S.C. 1396 through 1396w-6) or under a State child

health plan or waiver of such plan under title XXI of such Act (42

U.S.C. 1397aa through 1397mm) on or after such effective date.

[[Page 136 STAT. 1902]]

1.9.SEC11406. APPROPRIATE COST-SHARING FOR COVERED INSULIN PRODUCTS UNDER MEDICARE PART D.

    (a) In General.—Section 1860D-2 of the Social Security Act (42

U.S.C. 1395w-102), as amended by sections 11201, 11202, and 11401, is

amended—

            (1) in subsection (b)—

                    (A) in paragraph (1)(A), by striking ✂️✂️paragraph

                (8)’' and inserting ✂️✂️paragraphs (8) and (9)’';

                    (B) in paragraph (2)—

                          (i) in subparagraph (A), by striking

                      ✂️✂️paragraph (8)’' and inserting ✂️✂️paragraphs (8)

                      and (9)’';

                          (ii) in subparagraph (C)(i), in the matter

                      preceding subclause (I), by striking ✂️✂️and (8)’'

                      and inserting ✂️✂️, (8), and (9)’'; and

                          (iii) in subparagraph (D)(i), in the matter

                      preceding subclause (I), by striking ✂️✂️and (8)’'

                      and inserting ✂️✂️, (8), and (9)’';

                    (C) in paragraph (3)(A), in the matter preceding

                clause (i), by striking ✂️✂️and (8)’' and inserting ✂️✂️(8),

                and (9)’';

                    (D) in paragraph (4)(A)(i), by striking ✂️✂️paragraph

                (8)’' and inserting ✂️✂️paragraphs (8) and (9)’'; and

                    (E) by adding at the end the following new

                paragraph:

            ✂️✂️(9) Treatment of cost-sharing for covered insulin

        products.—

                    ✂️✂️(A) <<NOTE: Time periods.>> No application of

                deductible.—For plan year 2023 and subsequent plan

                years, the deductible under paragraph (1) shall not

                apply with respect to any covered insulin product.

                    ✂️✂️(B) Application of cost-sharing.—

                          ✂️✂️(i) Plan years 2023 and 2024.—For plan

                      years 2023 and 2024, the coverage provides

                      benefits for any covered insulin product,

                      regardless of whether an individual has reached

                      the initial coverage limit under paragraph (3) or

                      the out-of-pocket threshold under paragraph (4),

                      with cost-sharing for a month’s supply that does

                      not exceed the applicable copayment amount.

                          ✂️✂️(ii) Plan year 2025 and subsequent plan

                      years.—For a plan year beginning on or after

                      January 1, 2025, the coverage provides benefits

                      for any covered insulin product, prior to an

                      individual reaching the out-of-pocket threshold

                      under paragraph (4), with cost-sharing for a

                      month’s supply that does not exceed the applicable

                      copayment amount.

                    ✂️✂️(C) <<NOTE: Definition.>> Covered insulin

                product.—In this paragraph, the term ✂️covered insulin

                product’ means an insulin product that is a covered part

                D drug covered under the prescription drug plan or MA-PD

                plan that is approved under section 505 of the Federal

                Food, Drug, and Cosmetic Act or licensed under section

                351 of the Public Health Service Act and marketed

                pursuant to such approval or licensure, including any

                covered insulin product that has been deemed to be

                licensed under section 351 of the Public Health Service

                Act pursuant to section 7002(e)(4) of the Biologics

                Price Competition and Innovation Act of 2009 and

                marketed pursuant to such section.

                    ✂️✂️(D) <<NOTE: Definition.>> Applicable copayment

                amount.—In this paragraph, the term ✂️applicable

                copayment amount’ means, with

[[Page 136 STAT. 1903]]

                respect to a covered insulin product under a

                prescription drug plan or an MA-PD plan dispensed—

                          ✂️✂️(i) during plan years 2023, 2024, and 2025,

                      $35; and

                          ✂️✂️(ii) during plan year 2026 and each

                      subsequent plan year, the lesser of—

                                    ✂️✂️(I) $35;

                                    ✂️✂️(II) an amount equal to 25 percent

                                of the maximum fair price established

                                for the covered insulin product in

                                accordance with part E of title XI; or

                                    ✂️✂️(III) an amount equal to 25

                                percent of the negotiated price of the

                                covered insulin product under the

                                prescription drug plan or MA-PD plan.

                    ✂️✂️(E) <<NOTE: Reimbursement. Deadline.>> Special

                rule for first 3 months of 2023.—With respect to a

                month’s supply of a covered insulin product dispensed

                during the period beginning on January 1, 2023, and

                ending on March 31, 2023, a PDP sponsor offering a

                prescription drug plan or an MA organization offering an

                MA-PD plan shall reimburse an enrollee within 30 days

                for any cost-sharing paid by such enrollee that exceeds

                the cost-sharing applied by the prescription drug plan

                or MA-PD plan under subparagraph (B)(i) at the point-of-

                sale for such month’s supply.’'; and

            (2) in subsection (c), by adding at the end the following

        new paragraph:

            ✂️✂️(6) Treatment of cost-sharing for covered insulin

        products.—The coverage is provided in accordance with

        subsection (b)(9).’'.

    (b) Conforming Amendments to Cost-sharing for Low-income

Individuals.—Section 1860D-14(a) of the Social Security Act (42 U.S.C.

1395w-114(a)), as amended by sections 11201, 11401, and 11404, is

amended—

            (1) <<NOTE: Time periods.>> in paragraph (1)—

                    (A) in subparagraph (D)(iii), by adding at the end

                the following new sentence: ✂️✂️For plan year 2023 and

                subsequent plan years, the copayment amount applicable

                under the preceding sentence to a month’s supply of a

                covered insulin product (as defined in section 1860D-

                2(b)(9)(C)) dispensed to the individual may not exceed

                the applicable copayment amount for the product under

                the prescription drug plan or MA-PD plan in which the

                individual is enrolled.’'; and

                    (B) in subparagraph (E), by inserting the following

                before the period at the end: ✂️✂️or under section 1860D-

                2(b)(9) in the case of a covered insulin product (as

                defined in subparagraph (C) of such section)’'; and

            (2) in paragraph (2)—

                    (A) in subparagraph (B), by striking ✂️✂️section

                1860D-2(b)(8)’' and inserting ✂️✂️paragraphs (8) and (9)

                of section 1860D-2(b)’';

                    (B) in subparagraph (D), by adding at the end the

                following new sentence: ✂️✂️For plan year 2023, the amount

                of the coinsurance applicable under the preceding

                sentence to a month’s supply of a covered insulin

                product (as defined in section 1860D-2(b)(9)(C))

                dispensed to the individual may not exceed the

                applicable copayment amount for the

[[Page 136 STAT. 1904]]

                product under the prescription drug plan or MA-PD plan

                in which the individual is enrolled.’'; and

                    (C) in subparagraph (E), by adding at the end the

                following new sentence: ✂️✂️For plan year 2023, the amount

                of the copayment or coinsurance applicable under the

                preceding sentence to a month’s supply of a covered

                insulin product (as defined in section 1860D-2(b)(9)(C))

                dispensed to the individual may not exceed the

                applicable copayment amount for the product under the

                prescription drug plan or MA-PD plan in which the

                individual is enrolled.’'.

    (c) Temporary Retrospective Subsidy.—Section 1860D-15(h) of the

Social Security Act (42 U.S.C. 1395w-115(h)), as added by section

11401(c), is amended—

            (1) in the subsection heading, by inserting ✂️✂️and Insulin’'

        after ✂️✂️Practices’'; and

            (2) in paragraph (1), by striking ✂️✂️section 1860D-2(b)(8)’'

        and inserting ✂️✂️paragraph (8) or (9) of section 1860D-2(b)’'.

    (d) <<NOTE: 42 USC 1395w-102 note.>> Implementation for 2023

Through 2025.—The Secretary shall implement this section for plan years

2023, 2024, and 2025 by program instruction or other forms of program

guidance.

    (e) Funding.—In addition to amounts otherwise available, there is

appropriated to the Centers for Medicare & Medicaid Services, out of any

money in the Treasury not otherwise appropriated, $1,500,000 for fiscal

year 2022, to remain available until expended, to carry out the

provisions of, including the amendments made by, this section.

1.9.SEC11407. <<NOTE: Effective dates.>> LIMITATION ON MONTHLY COINSURANCE AND ADJUSTMENTS TO SUPPLIER PAYMENT UNDER MEDICARE PART B FOR INSULIN FURNISHED THROUGH DURABLE MEDICAL EQUIPMENT.

    (a) Waiver of Deductible.—The first sentence of section 1833(b) of

the Social Security Act (42 U.S.C. 1395l(b)) is amended—

            (1) by striking ✂️✂️and (12)’' and inserting ✂️✂️(12)’'; and

            (2) by inserting before the period the following: ✂️✂️, and

        (13) such deductible shall not apply with respect to insulin

        furnished on or after July 1, 2023, through an item of durable

        medical equipment covered under section 1861(n).’'.

    (b) Coinsurance.—

            (1) In general.—Section 1833(a)(1)(S) of the Social

        Security Act (42 U.S.C. 1395l(a)(1)(S)) is amended—

                    (A) by inserting ✂️✂️(i) except as provided in clause

                (ii),’' after ✂️✂️(S)’'; and

                    (B) by inserting after ✂️✂️or 1847B),’' the following:

                ✂️✂️and (ii) with respect to insulin furnished on or after

                July 1, 2023, through an item of durable medical

                equipment covered under section 1861(n), the amounts

                paid shall be, subject to the fourth sentence of this

                subsection, 80 percent of the payment amount established

                under section 1847A (or section 1847B, if applicable)

                for such insulin,’'.

            (2) Adjustment to supplier payments; limitation on monthly

        coinsurance.—Section 1833(a) of the Social Security Act (42

        U.S.C. 1395l(a)) is amended, in the flush matter at the end, by

        adding at the end the following new sentence: ✂️✂️The Secretary

        shall make such adjustments as may be necessary to the amounts

        paid as specified under paragraph (1)(S)(ii) for insulin

        furnished on or after July 1, 2023, through

[[Page 136 STAT. 1905]]

        an item of durable medical equipment covered under section

        1861(n), such that the amount of coinsurance payable by an

        individual enrolled under this part for a month’s supply of such

        insulin does not exceed $35.’'.

    (c) <<NOTE: 42 USC 1395l note.>> Implementation.—The Secretary of

Health and Human Services shall implement this section for 2023 by

program instruction or other forms of program guidance.

1.9.SEC11408. SAFE HARBOR FOR ABSENCE OF DEDUCTIBLE FOR INSULIN.

    (a) In General.—Paragraph (2) of section 223(c) of the Internal

Revenue Code of 1986 <<NOTE: 26 USC 223.>> is amended by adding at the

end the following new subparagraph:

                    ✂️✂️(G) Safe harbor for absence of deductible for

                certain insulin products.—

                          ✂️✂️(i) In general.—A plan shall not fail to be

                      treated as a high deductible health plan by reason

                      of failing to have a deductible for selected

                      insulin products.

                          ✂️✂️(ii) <<NOTE: Definitions.>> Selected

                      insulin products.—For purposes of this

                      subparagraph—

                                    ✂️✂️(I) In general.—The term

                                ✂️selected insulin products’ means any

                                dosage form (such as vial, pump, or

                                inhaler dosage forms) of any different

                                type (such as rapid-acting, short-

                                acting, intermediate-acting, long-

                                acting, ultra long-acting, and premixed)

                                of insulin.

                                    ✂️✂️(II) Insulin.—The term ✂️insulin’

                                means insulin that is licensed under

                                subsection (a) or (k) of section 351 of

                                the Public Health Service Act (42 U.S.C.

                                262) and continues to be marketed under

                                such section, including any insulin

                                product that has been deemed to be

                                licensed under section 351(a) of such

                                Act pursuant to section 7002(e)(4) of

                                the Biologics Price Competition and

                                Innovation Act of 2009 (Public Law 111-

                                148) and continues to be marketed

                                pursuant to such licensure.’'.

    (b) <<NOTE: 26 USC 223 note.>> Effective Date.—The amendment made

by this section shall apply to plan years beginning after December 31,

2022.

                Subtitle C—Affordable Care Act Subsidies

1.9.SEC12001. IMPROVE AFFORDABILITY AND REDUCE PREMIUM COSTS OF HEALTH INSURANCE FOR CONSUMERS.

    (a) In General.—Clause (iii) of section 36B(b)(3)(A) of the

Internal Revenue Code of 1986 is amended—

            (1) by striking ✂️✂️in 2021 or 2022’' and inserting ✂️✂️after

        December 31, 2020, and before January 1, 2026’', and

            (2) by striking ✂️✂️2021 and 2022’' in the heading and

        inserting ✂️✂️2021 through 2025’'.

    (b) Extension Through 2025 of Rule to Allow Credit to Taxpayers

Whose Household Income Exceeds 400 Percent of the Poverty Line.—Section

36B(c)(1)(E) of the Internal Revenue Code of 1986 is amended—

            (1) by striking ✂️✂️in 2021 or 2022’' and inserting ✂️✂️after

        December 31, 2020, and before January 1, 2026’', and

[[Page 136 STAT. 1906]]

            (2) by striking ✂️✂️2021 and 2022’' in the heading and

        inserting ✂️✂️2021 through 2025’'.

    (c) <<NOTE: 26 USC 36B note.>> Effective Date.—The amendments made

by this section shall apply to taxable years beginning after December

31, 2022.

                       Subtitle D—Energy Security

1.9.SEC13001. AMENDMENT OF 1986 CODE.

    Except as otherwise expressly provided, whenever in this subtitle an

amendment or repeal is expressed in terms of an amendment to, or repeal

of, a section or other provision, the reference shall be considered to

be made to a section or other provision of the Internal Revenue Code of

1986.

1.10.SEC13101. EXTENSION AND MODIFICATION OF CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE RESOURCES.

    (a) In General.—The following provisions of section

45(d) <<NOTE: 26 USC 45.>> are each amended by striking ✂️✂️January 1,

2022’' each place it appears and inserting ✂️✂️January 1, 2025’':

            (1) Paragraph (2)(A).

            (2) Paragraph (3)(A).

            (3) Paragraph (6).

            (4) Paragraph (7).

            (5) Paragraph (9).

            (6) Paragraph (11)(B).

    (b) Base Credit Amount.—Section 45 is amended—

            (1) in subsection (a)(1), by striking ✂️✂️1.5 cents’' and

        inserting ✂️✂️0.3 cents’', and

            (2) in subsection (b)(2), by striking ✂️✂️1.5 cent’' and

        inserting ✂️✂️0.3 cent’'.

    (c) Application of Extension to Geothermal and Solar.—Section

45(d)(4) is amended by striking ✂️✂️and which’' and all that follows

through ✂️✂️January 1, 2022’' and inserting ✂️✂️and the construction of

which begins before January 1, 2025’'.

    (d) Extension of Election to Treat Qualified Facilities as Energy

Property.—Section 48(a)(5)(C)(ii) is amended by striking ✂️✂️January 1,

2022’' and inserting ✂️✂️January 1, 2025’'.

    (e) Application of Extension to Wind Facilities.—

            (1) In general.—Section 45(d)(1) is amended by striking

        ✂️✂️January 1, 2022’' and inserting ✂️✂️January 1, 2025’'.

            (2) Application of phaseout percentage.—

                    (A) Renewable electricity production credit.—

                Section 45(b)(5) is amended by inserting ✂️✂️which is

                placed in service before January 1, 2022’' after ✂️✂️using

                wind to produce electricity’'.

                    (B) Energy credit.—Section 48(a)(5)(E) is amended

                by inserting ✂️✂️placed in service before January 1, 2022,

                and’' before ✂️✂️treated as energy property’'.

            (3) Qualified offshore wind facilities under energy

        credit.—Section 48(a)(5)(F)(i) is amended by striking

        ✂️✂️offshore wind facility’' and all that follows and inserting

        the following: ✂️✂️offshore wind facility, subparagraph (E) shall

        not apply.’'.

[[Page 136 STAT. 1907]]

    (f) Wage and Apprenticeship Requirements.—Section 45(b) <<NOTE: 26

USC 45.>> is amended by adding at the end the following new paragraphs:

            ✂️✂️(6) Increased credit amount for qualified facilities.—

                    ✂️✂️(A) In general.—In the case of any qualified

                facility which satisfies the requirements of

                subparagraph (B), the amount of the credit determined

                under subsection (a) (determined after the application

                of paragraphs (1) through (5) and without regard to this

                paragraph) shall be equal to such amount multiplied by

                5.

                    ✂️✂️(B) Qualified facility requirements.—A qualified

                facility meets the requirements of this subparagraph if

                it is one of the following:

                          ✂️✂️(i) A facility with a maximum net output of

                      less than 1 megawatt (as measured in alternating

                      current).

                          ✂️✂️(ii) <<NOTE: Time

                      period. Publication. Guidelines.>> A facility the

                      construction of which begins prior to the date

                      that is 60 days after the Secretary publishes

                      guidance with respect to the requirements of

                      paragraphs (7)(A) and (8).

                          ✂️✂️(iii) A facility which satisfies the

                      requirements of paragraphs (7)(A) and (8).

            ✂️✂️(7) Prevailing wage requirements.—

                    ✂️✂️(A) In general.—The requirements described in

                this subparagraph with respect to any qualified facility

                are that the taxpayer shall ensure that any laborers and

                mechanics employed by the taxpayer or any contractor or

                subcontractor in—

                          ✂️✂️(i) the construction of such facility, and

                          ✂️✂️(ii) <<NOTE: Determination.>> with respect

                      to any taxable year, for any portion of such

                      taxable year which is within the period described

                      in subsection (a)(2)(A)(ii), the alteration or

                      repair of such facility,

                shall be paid wages at rates not less than the

                prevailing rates for construction, alteration, or repair

                of a similar character in the locality in which such

                facility is located as most recently determined by the

                Secretary of Labor, in accordance with subchapter IV of

                chapter 31 of title 40, United States

                Code. <<NOTE: Applicability.>> For purposes of

                determining an increased credit amount under paragraph

                (6)(A) for a taxable year, the requirement under clause

                (ii) is applied to such taxable year in which the

                alteration or repair of the qualified facility occurs.’'

                    ✂️✂️(B) Correction and penalty related to failure to

                satisfy wage requirements.—

                          ✂️✂️(i) In general.—In the case of any taxpayer

                      which fails to satisfy the requirement under

                      subparagraph (A) with respect to the construction

                      of any qualified facility or with respect to the

                      alteration or repair of a facility in any year

                      during the period described in subparagraph

                      (A)(ii), such taxpayer shall be deemed to have

                      satisfied such requirement under such subparagraph

                      with respect to such facility for any year if,

                      with respect to any laborer or mechanic who was

                      paid wages at a rate below the rate described in

                      such subparagraph for any period during such year,

                      such taxpayer—

[[Page 136 STAT. 1908]]

                                    ✂️✂️(I) makes payment to such laborer

                                or mechanic in an amount equal to the

                                sum of—

                                            ✂️✂️(aa) an amount equal to

                                        the difference between—

                                                ✂️✂️(AA) the amount of

                                            wages paid to such laborer

                                            or mechanic during such

                                            period, and

                                                ✂️✂️(BB) the amount of

                                            wages required to be paid to

                                            such laborer or mechanic

                                            pursuant to such

                                            subparagraph during such

                                            period, plus

                                            ✂️✂️(bb) interest on the

                                        amount determined under item

                                        (aa) at the underpayment rate

                                        established under section 6621

                                        (determined by substituting ✂️6

                                        percentage points’ for ✂️3

                                        percentage points’ in subsection

                                        (a)(2) of such section) for the

                                        period described in such item,

                                        and

                                    ✂️✂️(II) makes payment to the

                                Secretary of a penalty in an amount

                                equal to the product of—

                                            ✂️✂️(aa) $5,000, multiplied by

                                            ✂️✂️(bb) the total number of

                                        laborers and mechanics who were

                                        paid wages at a rate below the

                                        rate described in subparagraph

                                        (A) for any period during such

                                        year.

                          ✂️✂️(ii) Deficiency procedures not to apply.—

                      Subchapter B of chapter 63 (relating to deficiency

                      procedures for income, estate, gift, and certain

                      excise taxes) shall not apply with respect to the

                      assessment or collection of any penalty imposed by

                      this paragraph.

                      ✂️✂️(iii) <<NOTE: Determination. Applicability.>>

                      Intentional disregard.—If the Secretary

                      determines that any failure described in clause

                      (i) is due to intentional disregard of the

                      requirements under subparagraph (A), such clause

                      shall be applied—

                                    ✂️✂️(I) in subclause (I), by

                                substituting ✂️three times the sum’ for

                                ✂️the sum’, and

                                    ✂️✂️(II) in subclause (II), by

                                substituting ✂️$10,000’ for ✂️5,000’ in

                                item (aa) thereof.

                          ✂️✂️(iv) <<NOTE: Regulations. Deadline.>>

                      Limitation on period for payment.—Pursuant to

                      rules issued by the Secretary, in the case of a

                      final determination by the Secretary with respect

                      to any failure by the taxpayer to satisfy the

                      requirement under subparagraph (A), subparagraph

                      (B)(i) shall not apply unless the payments

                      described in subclauses (I) and (II) of such

                      subparagraph are made by the taxpayer on or before

                      the date which is 180 days after the date of such

                      determination.

            ✂️✂️(8) Apprenticeship requirements.—The requirements

        described in this paragraph with respect to the construction of

        any qualified facility are as follows:

                    ✂️✂️(A) Labor hours.—

                          ✂️✂️(i) Percentage of total labor hours.—

                      Taxpayers shall ensure that, with respect to the

                      construction of any qualified facility, not less

                      than the applicable percentage of the total labor

                      hours of the construction, alteration, or repair

                      work (including such work performed by any

                      contractor or subcontractor)

[[Page 136 STAT. 1909]]

                      with respect to such facility shall, subject to

                      subparagraph (B), be performed by qualified

                      apprentices.

                          ✂️✂️(ii) <<NOTE: Effective dates.>> Applicable

                      percentage.—For purposes of clause (i), the

                      applicable percentage shall be—

                                    ✂️✂️(I) in the case of a qualified

                                facility the construction of which

                                begins before January 1, 2023, 10

                                percent,

                                    ✂️✂️(II) in the case of a qualified

                                facility the construction of which

                                begins after December 31, 2022, and

                                before January 1, 2024, 12.5 percent,

                                and

                                    ✂️✂️(III) in the case of a qualified

                                facility the construction of which

                                begins after December 31, 2023, 15

                                percent.

                    ✂️✂️(B) Apprentice to journeyworker ratio.—The

                requirement under subparagraph (A)(i) shall be subject

                to any applicable requirements for apprentice-to-

                journeyworker ratios of the Department of Labor or the

                applicable State apprenticeship agency.

                    ✂️✂️(C) Participation.—Each taxpayer, contractor, or

                subcontractor who employs 4 or more individuals to

                perform construction, alteration, or repair work with

                respect to the construction of a qualified facility

                shall employ 1 or more qualified apprentices to perform

                such work.

                    ✂️✂️(D) Exception.—

                          ✂️✂️(i) In general.—A taxpayer shall not be

                      treated as failing to satisfy the requirements of

                      this paragraph if such taxpayer—

                                    ✂️✂️(I) satisfies the requirements

                                described in clause (ii), or

                                    ✂️✂️(II) subject to clause (iii), in

                                the case of any failure by the taxpayer

                                to satisfy the requirement under

                                subparagraphs (A) and (C) with respect

                                to the construction, alteration, or

                                repair work on any qualified facility to

                                which subclause (I) does not apply,

                                makes payment to the Secretary of a

                                penalty in an amount equal to the

                                product of—

                                            ✂️✂️(aa) $50, multiplied by

                                            ✂️✂️(bb) the total labor hours

                                        for which the requirement

                                        described in such subparagraph

                                        was not satisfied with respect

                                        to the construction, alteration,

                                        or repair work on such qualified

                                        facility.

                          ✂️✂️(ii) Good faith effort.—For purposes of

                      clause (i), a taxpayer shall be deemed to have

                      satisfied the requirements under this paragraph

                      with respect to a qualified facility if such

                      taxpayer has requested qualified apprentices from

                      a registered apprenticeship program, as defined in

                      section 3131(e)(3)(B), and—

                                    ✂️✂️(I) such request has been denied,

                                provided that such denial is not the

                                result of a refusal by the taxpayer or

                                any contractors or subcontractors

                                engaged in the performance of

                                construction, alteration, or repair work

                                with respect to such qualified facility

                                to comply with the established standards

                                and requirements of the registered

                                apprenticeship program, or

[[Page 136 STAT. 1910]]

                                    ✂️✂️(II) <<NOTE: Deadline.>> the

                                registered apprenticeship program fails

                                to respond to such request within 5

                                business days after the date on which

                                such registered apprenticeship program

                                received such request.

                          ✂️✂️(iii) <<NOTE: Determination.>> Intentional

                      disregard.—If the Secretary determines that any

                      failure described in subclause (i)(II) is due to

                      intentional disregard of the requirements under

                      subparagraphs (A) and (C), subclause (i)(II) shall

                      be applied by substituting ✂️$500’ for ✂️$50’ in

                      item (aa) thereof.

                    ✂️✂️(E) Definitions.—For purposes of this paragraph—

                          ✂️✂️(i) Labor hours.—The term ✂️labor hours’—

                                    ✂️✂️(I) means the total number of

                                hours devoted to the performance of

                                construction, alteration, or repair work

                                by any individual employed by the

                                taxpayer or by any contractor or

                                subcontractor, and

                                    ✂️✂️(II) excludes any hours worked

                                by—

                                            ✂️✂️(aa) foremen,

                                            ✂️✂️(bb) superintendents,

                                            ✂️✂️(cc) owners, or

                                            ✂️✂️(dd) persons employed in a

                                        bona fide executive,

                                        administrative, or professional

                                        capacity (within the meaning of

                                        those terms in part 541 of title

                                        29, Code of Federal

                                        Regulations).

                          ✂️✂️(ii) Qualified apprentice.—The term

                      ✂️qualified apprentice’ means an individual who is

                      employed by the taxpayer or by any contractor or

                      subcontractor and who is participating in a

                      registered apprenticeship program, as defined in

                      section 3131(e)(3)(B).

            ✂️✂️(9) <<NOTE: Determination.>> Regulations and guidance.—

        The Secretary shall issue such regulations or other guidance as

        the Secretary determines necessary to carry out the purposes of

        this subsection, including regulations or other guidance which

        provides for requirements for recordkeeping or information

        reporting for purposes of administering the requirements of this

        subsection.’'.

    (g) Domestic Content, Phaseout, and Energy Communities.—Section

45(b), as amended by subsection (f), <<NOTE: 26 USC 45.>> is amended—

            (1) by redesignating paragraph (9) as paragraph (12), and

            (2) by inserting after paragraph (8) the following:

            ✂️✂️(9) Domestic content bonus credit amount.—

                    ✂️✂️(A) In general.—In the case of any qualified

                facility which satisfies the requirement under

                subparagraph (B)(i), the amount of the credit determined

                under subsection (a) (determined after the application

                of paragraphs (1) through (8)) shall be increased by an

                amount equal to 10 percent of the amount so determined.

                    ✂️✂️(B) Requirement.—

                          ✂️✂️(i) <<NOTE: Certification.>> In general.—

                      The requirement described in this clause is

                      satisfied with respect to any qualified facility

                      if the taxpayer certifies to the Secretary (at

                      such time, and in such form and manner, as the

                      Secretary may prescribe) that any steel, iron, or

                      manufactured product which is a component of such

                      facility (upon completion of construction) was

                      produced in the

[[Page 136 STAT. 1911]]

                      United States (as determined under section 661 of

                      title 49, Code of Federal Regulations).

                          ✂️✂️(ii) <<NOTE: Applicability.>> Steel and

                      iron.—In the case of steel or iron, clause (i)

                      shall be applied in a manner consistent with

                      section 661.5 of title 49, Code of Federal

                      Regulations.

                          ✂️✂️(iii) Manufactured product.—For purposes of

                      clause (i), the manufactured products which are

                      components of a qualified facility upon completion

                      of construction shall be deemed to have been

                      produced in the United States if not less than the

                      adjusted percentage (as determined under

                      subparagraph (C)) of the total costs of all such

                      manufactured products of such facility are

                      attributable to manufactured products (including

                      components) which are mined, produced, or

                      manufactured in the United States.

                    ✂️✂️(C) Adjusted percentage.—

                          ✂️✂️(i) In general.—Subject to subclause (ii),

                      for purposes of subparagraph (B)(iii), the

                      adjusted percentage shall be 40 percent.

                          ✂️✂️(ii) Offshore wind facility.—For purposes

                      of subparagraph (B)(iii), in the case of a

                      qualified facility which is an offshore wind

                      facility, the adjusted percentage shall be 20

                      percent.

            ✂️✂️(10) Phaseout for elective payment.—

                    ✂️✂️(A) In general.—In the case of a taxpayer making

                an election under section 6417 with respect to a credit

                under this section, the amount of such credit shall be

                replaced with—

                          ✂️✂️(i) the value of such credit (determined

                      without regard to this paragraph), multiplied by

                          ✂️✂️(ii) the applicable percentage.

                    ✂️✂️(B) 100 percent applicable percentage for certain

                qualified facilities.—In the case of any qualified

                facility—

                          ✂️✂️(i) which satisfies the requirements under

                      paragraph (9)(B), or

                          ✂️✂️(ii) with a maximum net output of less than

                      1 megawatt (as measured in alternating current),

                the applicable percentage shall be 100 percent.

                    ✂️✂️(C) <<NOTE: Effective dates.>> Phased domestic

                content requirement.—Subject to subparagraph (D), in

                the case of any qualified facility which is not

                described in subparagraph (B), the applicable percentage

                shall be—

                          ✂️✂️(i) if construction of such facility began

                      before January 1, 2024, 100 percent, and

                          ✂️✂️(ii) if construction of such facility began

                      in calendar year 2024, 90 percent.

                    ✂️✂️(D) Exception.—

                          ✂️✂️(i) In general.—For purposes of this

                      paragraph, the Secretary shall provide exceptions

                      to the requirements under this paragraph if—

                                    ✂️✂️(I) the inclusion of steel, iron,

                                or manufactured products which are

                                produced in the United States increases

                                the overall costs of construction of

                                qualified facilities by more than 25

                                percent, or

[[Page 136 STAT. 1912]]

                                    ✂️✂️(II) relevant steel, iron, or

                                manufactured products are not produced

                                in the United States in sufficient and

                                reasonably available quantities or of a

                                satisfactory quality.

                          ✂️✂️(ii) Applicable percentage.—In any case in

                      which the Secretary provides an exception pursuant

                      to clause (i), the applicable percentage shall be

                      100 percent.

            ✂️✂️(11) Special rule for qualified facility located in energy

        community.—

                    ✂️✂️(A) In general.—In the case of a qualified

                facility which is located in an energy community, the

                credit determined under subsection (a) (determined after

                the application of paragraphs (1) through (10), without

                the application of paragraph (9)) shall be increased by

                an amount equal to 10 percent of the amount so

                determined.

                    ✂️✂️(B) <<NOTE: Definition.>> Energy community.—For

                purposes of this paragraph, the term ✂️energy community’

                means—

                          ✂️✂️(i) a brownfield site (as defined in

                      subparagraphs (A), (B), and (D)(ii)(III) of

                      section 101(39) of the Comprehensive Environmental

                      Response, Compensation, and Liability Act of 1980

                      (42 U.S.C. 9601(39))),

                          ✂️✂️(ii) <<NOTE: Determinations.>> a

                      metropolitan statistical area or non-metropolitan

                      statistical area which—

                                    ✂️✂️(I) has (or, at any time during

                                the period beginning after December 31,

                                2009, had) 0.17 percent or greater

                                direct employment or 25 percent or

                                greater local tax revenues related to

                                the extraction, processing, transport,

                                or storage of coal, oil, or natural gas

                                (as determined by the Secretary), and

                                    ✂️✂️(II) has an unemployment rate at

                                or above the national average

                                unemployment rate for the previous year

                                (as determined by the Secretary), or

                          ✂️✂️(iii) a census tract—

                                    ✂️✂️(I) <<NOTE: Effective dates.>> in

                                which—

                                            ✂️✂️(aa) after December 31,

                                        1999, a coal mine has closed, or

                                            ✂️✂️(bb) after December 31,

                                        2009, a coal-fired electric

                                        generating unit has been

                                        retired, or

                                    ✂️✂️(II) which is directly adjoining

                                to any census tract described in

                                subclause (I).’'.

    (h) Credit Reduced for Tax-exempt Bonds.—Section <<NOTE: 26 USC

45.>> 45(b)(3) is amended to read as follows:

            ✂️✂️(3) Credit reduced for tax-exempt bonds.—The amount of

        the credit determined under subsection (a) with respect to any

        facility for any taxable year (determined after the application

        of paragraphs (1) and (2)) shall be reduced by the amount which

        is the product of the amount so determined for such year and the

        lesser of 15 percent or a fraction—

                    ✂️✂️(A) the numerator of which is the sum, for the

                taxable year and all prior taxable years, of proceeds of

                an issue of any obligations the interest on which is

                exempt from tax under section 103 and which is used to

                provide financing for the qualified facility, and

[[Page 136 STAT. 1913]]

                    ✂️✂️(B) the denominator of which is the aggregate

                amount of additions to the capital account for the

                qualified facility for the taxable year and all prior

                taxable years.

        The <<NOTE: Determination.>> amounts under the preceding

        sentence for any taxable year shall be determined as of the

        close of the taxable year.’'.

    (i) Rounding Adjustment.—

            (1) In general.—Section 45(b)(2) <<NOTE: 26 USC 45.>> is

        amended by striking the second sentence and inserting the

        following: ✂️✂️If the 0.3 cent amount as increased under the

        preceding sentence is not a multiple of 0.05 cent, such amount

        shall be rounded to the nearest multiple of 0.05 cent. In any

        other case, if an amount as increased under this paragraph is

        not a multiple of 0.1 cent, such amount shall be rounded to the

        nearest multiple of 0.1 cent.’'.

            (2) Conforming amendment.—Section 45(b)(4)(A) is amended by

        striking ✂️✂️last sentence’' and inserting ✂️✂️last two sentences’'.

    (j) Hydropower.—

            (1) Elimination of credit rate reduction for qualified

        hydroelectric production and marine and hydrokinetic renewable

        energy.—Section 45(b)(4)(A), as amended by the preceding

        provisions of this section, is amended by striking ✂️✂️(7), (9),

        or (11)’' and inserting ✂️✂️or (7)’'.

            (2) Marine and hydrokinetic renewable energy.—Section 45 is

        amended—

                    (A) in subsection (c)(10)(A)—

                          (i) in clause (iii), by striking ✂️✂️or’',

                          (ii) in clause (iv), by striking the period at

                      the end and inserting ✂️✂️, or’' and

                          (iii) by adding at the end the following:

                          ✂️✂️(v) pressurized water used in a pipeline (or

                      similar man-made water conveyance) which is

                      operated—

                                    ✂️✂️(I) for the distribution of water

                                for agricultural, municipal, or

                                industrial consumption, and

                                    ✂️✂️(II) not primarily for the

                                generation of electricity.’', and

                    (B) in subsection (d)(11)(A), by striking ✂️✂️150’'

                and inserting ✂️✂️25’'.

    (k) <<NOTE: Applicability. 26 USC 45 note.>> Effective Dates.—

            (1) In general.—Except as provided in paragraphs (2) and

        (3), the amendments made by this section shall apply to

        facilities placed in service after December 31, 2021.

            (2) Credit reduced for tax-exempt bonds.—The amendment made

        by subsection (h) shall apply to facilities the construction of

        which begins after the date of enactment of this Act.

            (3) Domestic content, phaseout, energy communities, and

        hydropower.—The amendments made by subsections (g) and (j)

        shall apply to facilities placed in service after December 31,

        2022.

1.10.SEC13102. EXTENSION AND MODIFICATION OF ENERGY CREDIT.

    (a) Extension of Credit.—The following provisions of section 48 are

each amended by striking ✂️✂️January 1, 2024’' each place it appears and

inserting ✂️✂️January 1, 2025’':

            (1) Subsection (a)(2)(A)(i)(II).

            (2) Subsection (a)(3)(A)(ii).

[[Page 136 STAT. 1914]]

            (3) Subsection (c)(1)(D).

            (4) Subsection (c)(2)(D).

            (5) Subsection (c)(3)(A)(iv).

            (6) Subsection (c)(4)(C).

            (7) Subsection (c)(5)(D).

    (b) Further Extension for Certain Energy Property.—Section

48(a)(3)(A)(vii) <<NOTE: 26 USC 48.>> is amended by striking ✂️✂️January

1, 2024’' and inserting ✂️✂️January 1, 2035’'.

    (c) Phaseout of Credit.—Section 48(a) is amended by striking

paragraphs (6) and (7) and inserting the following new paragraph:

            ✂️✂️(6) <<NOTE: Effective dates.>> Phaseout for certain

        energy property.—In the case of any qualified fuel cell

        property, qualified small wind property, or energy property

        described in clause (i) or clause (ii) of paragraph (3)(A) the

        construction of which begins after December 31, 2019, and which

        is placed in service before January 1, 2022, the energy

        percentage determined under paragraph (2) shall be equal to 26

        percent.’'.

    (d) Base Energy Percentage Amount; Phaseout of Certain Energy

Property.—

            (1) Base energy percentage amount.—Section 48(a) is

        amended—

                    (A) in paragraph (2)(A)—

                          (i) in clause (i), by striking ✂️✂️30 percent’'

                      and inserting ✂️✂️6 percent’', and

                          (ii) in clause (ii), by striking ✂️✂️10

                      percent’' and inserting ✂️✂️2 percent’', and

                    (B) in paragraph (5)(A)(ii), by striking ✂️✂️30

                percent’' and inserting ✂️✂️6 percent’'.

            (2) Phaseout of certain energy property.—Section 48(a), as

        amended by the preceding provisions of this Act, is amended by

        adding at the end the following new paragraph:

            ✂️✂️(7) <<NOTE: Effective dates. Time periods.>> Phaseout for

        certain energy property.—In the case of any energy property

        described in clause (vii) of paragraph (3)(A), the energy

        percentage determined under paragraph (2) shall be equal to—

                    ✂️✂️(A) in the case of any property the construction

                of which begins before January 1, 2033, and which is

                placed in service after December 31, 2021, 6 percent,

                    ✂️✂️(B) in the case of any property the construction

                of which begins after December 31, 2032, and before

                January 1, 2034, 5.2 percent, and

                    ✂️✂️(C) in the case of any property the construction

                of which begins after December 31, 2033, and before

                January 1, 2035, 4.4 percent.’'.

    (e) 6 Percent Credit for Geothermal.—Section 48(a)(2)(A)(i)(II) is

amended by striking ✂️✂️paragraph (3)(A)(i)’' and inserting ✂️✂️clause (i)

or (iii) of paragraph (3)(A)’'.

    (f) Energy Storage Technologies; Qualified Biogas Property;

Microgrid Controllers; Extension of Other Property.—

            (1) In general.—Section 48(a)(3)(A) is amended by striking

        ✂️✂️or’' at the end of clause (vii), and by adding at the end the

        following new clauses:

                          ✂️✂️(ix) energy storage technology,

                          ✂️✂️(x) qualified biogas property, or

                          ✂️✂️(xi) microgrid controllers,’'.

[[Page 136 STAT. 1915]]

            (2) Application of 6 percent credit.—Section

        48(a)(2)(A)(i) <<NOTE: 26 USC 48.>> is amended by striking

        ✂️✂️and’' at the end of subclauses (IV) and (V) and adding at the

        end the following new subclauses:

                                    ✂️✂️(VI) energy storage technology,

                                    ✂️✂️(VII) qualified biogas property,

                                    ✂️✂️(VIII) microgrid controllers, and

                                    ✂️✂️(IX) energy property described in

                                clauses (v) and (vii) of paragraph

                                (3)(A), and’'.

            (3) Definitions.—Section 48(c) is amended by adding at the

        end the following new paragraphs:

            ✂️✂️(6) Energy storage technology.—

                    ✂️✂️(A) In general.—The term ✂️energy storage

                technology’ means—

                          ✂️✂️(i) property (other than property primarily

                      used in the transportation of goods or individuals

                      and not for the production of electricity) which

                      receives, stores, and delivers energy for

                      conversion to electricity (or, in the case of

                      hydrogen, which stores energy), and has a

                      nameplate capacity of not less than 5 kilowatt

                      hours, and

                          ✂️✂️(ii) thermal energy storage property.

                    ✂️✂️(B) Modifications of certain property.—In the

                case of any property which either—

                          ✂️✂️(i) was placed in service before the date of

                      enactment of this section and would be described

                      in subparagraph (A)(i), except that such property

                      has a capacity of less than 5 kilowatt hours and

                      is modified in a manner that such property (after

                      such modification) has a nameplate capacity of not

                      less than 5 kilowatt hours, or

                          ✂️✂️(ii) is described in subparagraph (A)(i) and

                      is modified in a manner that such property (after

                      such modification) has an increase in nameplate

                      capacity of not less than 5 kilowatt hours,

                such property shall be treated as described in

                subparagraph (A)(i) except that the basis of any

                existing property prior to such modification shall not

                be taken into account for purposes of this

                section. <<NOTE: Applicability.>> In the case of any

                property to which this subparagraph applies,

                subparagraph (D) shall be applied by substituting

                ✂️modification’ for ✂️construction’.

                    ✂️✂️(C) Thermal energy storage property.—

                          ✂️✂️(i) In general.—Subject to clause (ii), for

                      purposes of this paragraph, the term ✂️thermal

                      energy storage property’ means property comprising

                      a system which—

                                    ✂️✂️(I) is directly connected to a

                                heating, ventilation, or air

                                conditioning system,

                                    ✂️✂️(II) removes heat from, or adds

                                heat to, a storage medium for subsequent

                                use, and

                                    ✂️✂️(III) provides energy for the

                                heating or cooling of the interior of a

                                residential or commercial building.

                          ✂️✂️(ii) Exclusion.—The term ✂️thermal energy

                      storage property’ shall not include—

                                    ✂️✂️(I) a swimming pool,

[[Page 136 STAT. 1916]]

                                    ✂️✂️(II) combined heat and power

                                system property, or

                                    ✂️✂️(III) a building or its structural

                                components.

                    ✂️✂️(D) Termination.—The term ✂️energy storage

                technology’ shall not include any property the

                construction of which begins after December 31, 2024.

            ✂️✂️(7) Qualified biogas property.—

                    ✂️✂️(A) In general.—The term ✂️qualified biogas

                property’ means property comprising a system which—

                          ✂️✂️(i) converts biomass (as defined in section

                      45K(c)(3), as in effect on the date of enactment

                      of this paragraph) into a gas which—

                                    ✂️✂️(I) consists of not less than 52

                                percent methane by volume, or

                                    ✂️✂️(II) is concentrated by such

                                system into a gas which consists of not

                                less than 52 percent methane, and

                          ✂️✂️(ii) captures such gas for sale or

                      productive use, and not for disposal via

                      combustion.

                    ✂️✂️(B) Inclusion of cleaning and conditioning

                property.—The term ✂️qualified biogas property’ includes

                any property which is part of such system which cleans

                or conditions such gas.

                    ✂️✂️(C) Termination.—The term ✂️qualified biogas

                property’ shall not include any property the

                construction of which begins after December 31, 2024.

            ✂️✂️(8) Microgrid controller.—

                    ✂️✂️(A) In general.—The term ✂️microgrid controller’

                means equipment which is—

                          ✂️✂️(i) part of a qualified microgrid, and

                          ✂️✂️(ii) designed and used to monitor and

                      control the energy resources and loads on such

                      microgrid.

                    ✂️✂️(B) Qualified microgrid.—The term ✂️qualified

                microgrid’ means an electrical system which—

                          ✂️✂️(i) includes equipment which is capable of

                      generating not less than 4 kilowatts and not

                      greater than 20 megawatts of electricity,

                          ✂️✂️(ii) is capable of operating—

                                    ✂️✂️(I) in connection with the

                                electrical grid and as a single

                                controllable entity with respect to such

                                grid, and

                                    ✂️✂️(II) independently (and

                                disconnected) from such grid, and

                          ✂️✂️(iii) is not part of a bulk-power system (as

                      defined in section 215 of the Federal Power Act

                      (16 U.S.C. 824o)).

                    ✂️✂️(C) Termination.—The term ✂️microgrid controller’

                shall not include any property the construction of which

                begins after December 31, 2024.’'.

            (4) Denial of double benefit for qualified biogas

        property.—Section 45(e) is <<NOTE: 26 USC 45.>> amended by

        adding at the end the following new paragraph:

            ✂️✂️(12) Coordination with energy credit for qualified biogas

        property.—The term ✂️qualified facility’ shall not include any

        facility which produces electricity from gas produced by

        qualified biogas property (as defined in section 48(c)(7)) if a

[[Page 136 STAT. 1917]]

        credit is allowed under section 48 with respect to such property

        for the taxable year or any prior taxable year.’'.

            (5) Public utility property.—Paragraph (2) of section

        50(d) <<NOTE: 26 USC 50.>> is amended—

                    (A) by adding after the first sentence the following

                new sentence: ✂️✂️At the election of a taxpayer, this

                paragraph shall not apply to any energy storage

                technology (as defined in section 48(c)(6)), provided—

                ’', and

                    (B) by adding the following new subparagraphs:

                    ✂️✂️(A) no election under this paragraph shall be

                permitted if the making of such election is prohibited

                by a State or political subdivision thereof, by any

                agency or instrumentality of the United States, or by a

                public service or public utility commission or other

                similar body of any State or political subdivision that

                regulates public utilities as described in section

                7701(a)(33)(A),

                    ✂️✂️(B) an election under this paragraph shall be made

                separately with respect to each energy storage

                technology by the due date (including extensions) of the

                Federal tax return for the taxable year in which the

                energy storage technology is placed in service by the

                taxpayer, and once made, may be revoked only with the

                consent of the Secretary, and

                    ✂️✂️(C) an election shall not apply with respect to

                any energy storage technology if such energy storage

                technology has a maximum capacity equal to or less than

                500 kilowatt hours.’'.

    (g) Fuel Cells Using Electromechanical Processes.—

            (1) In general.—Section 48(c)(1) is amended—

                    (A) in subparagraph (A)(i)—

                          (i) by inserting ✂️✂️or electromechanical’'

                      after ✂️✂️electrochemical’', and

                          (ii) by inserting ✂️✂️(1 kilowatt in the case of

                      a fuel cell power plant with a linear generator

                      assembly)’' after ✂️✂️0.5 kilowatt’', and

                    (B) in subparagraph (C)—

                          (i) by inserting ✂️✂️, or linear generator

                      assembly,’' after ✂️✂️a fuel cell stack assembly’',

                      and

                          (ii) by inserting ✂️✂️or electromechanical’'

                      after ✂️✂️electrochemical’'.

            (2) Linear generator assembly limitation.—Section 48(c)(1)

        is amended by redesignating subparagraph (D) as subparagraph (E)

        and by inserting after subparagraph (C) the following new

        subparagraph:

                    ✂️✂️(D) Linear generator assembly.—The term ✂️linear

                generator assembly’ does not include any assembly which

                contains rotating parts.’'.

    (h) Dynamic Glass.—Section 48(a)(3)(A)(ii) is amended by inserting

✂️✂️, or electrochromic glass which uses electricity to change its light

transmittance properties in order to heat or cool a structure,’' after

✂️✂️sunlight’'.

    (i) Coordination With Low Income Housing Tax Credit.—Paragraph (3)

of section 50(c) is amended—

            (1) by striking ✂️✂️and’' at the end of subparagraph (A),

            (2) by striking the period at the end of subparagraph (B)

        and inserting ✂️✂️, and’', and

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

[[Page 136 STAT. 1918]]

                    ✂️✂️(C) paragraph (1) shall not apply for purposes of

                determining eligible basis under section 42.’'.

    (j) Interconnection Property.—Section 48(a), as amended by the

preceding provisions of this Act, <<NOTE: 26 USC 48.>> is amended by

adding at the end the following new paragraph:

            ✂️✂️(8) <<NOTE: Definitions.>> Interconnection property.—

                    ✂️✂️(A) <<NOTE: Determination.>> In general.—For

                purposes of determining the credit under subsection (a),

                energy property shall include amounts paid or incurred

                by the taxpayer for qualified interconnection property

                in connection with the installation of energy property

                (as defined in paragraph (3)) which has a maximum net

                output of not greater than 5 megawatts (as measured in

                alternating current), to provide for the transmission or

                distribution of the electricity produced or stored by

                such property, and which are properly chargeable to the

                capital account of the taxpayer.

                    ✂️✂️(B) Qualified interconnection property.—The term

                ✂️qualified interconnection property’ means, with respect

                to an energy project which is not a microgrid

                controller, any tangible property—

                          ✂️✂️(i) which is part of an addition,

                      modification, or upgrade to a transmission or

                      distribution system which is required at or beyond

                      the point at which the energy project

                      interconnects to such transmission or distribution

                      system in order to accommodate such

                      interconnection,

                          ✂️✂️(ii) either—

                                    ✂️✂️(I) which is constructed,

                                reconstructed, or erected by the

                                taxpayer, or

                                    ✂️✂️(II) for which the cost with

                                respect to the construction,

                                reconstruction, or erection of such

                                property is paid or incurred by such

                                taxpayer, and

                          ✂️✂️(iii) the original use of which, pursuant to

                      an interconnection agreement, commences with a

                      utility.

                    ✂️✂️(C) Interconnection agreement.—The term

                ✂️interconnection agreement’ means an agreement with a

                utility for the purposes of interconnecting the energy

                property owned by such taxpayer to the transmission or

                distribution system of such utility.

                    ✂️✂️(D) Utility.—For purposes of this paragraph, the

                term ✂️utility’ means the owner or operator of an

                electrical transmission or distribution system which is

                subject to the regulatory authority of a State or

                political subdivision thereof, any agency or

                instrumentality of the United States, a public service

                or public utility commission or other similar body of

                any State or political subdivision thereof, or the

                governing or ratemaking body of an electric cooperative.

                    ✂️✂️(E) Special rule for interconnection property.—In

                the case of expenses paid or incurred for

                interconnection property, amounts otherwise chargeable

                to capital account with respect to such expenses shall

                be reduced under rules similar to the rules of section

                50(c).’'.

    (k) Energy Projects, Wage Requirements, and Apprenticeship

Requirements.—Section 48(a), as amended by the preceding provisions of

this Act, is amended by adding at the end the following new paragraphs:

[[Page 136 STAT. 1919]]

            ✂️✂️(9) Increased credit amount for energy projects.—

                    ✂️✂️(A) In general.—

                          ✂️✂️(i) Rule.—In the case of any energy project

                      which satisfies the requirements of subparagraph

                      (B), the amount of the credit determined under

                      this subsection (determined after the application

                      of paragraphs (1) through (8) and without regard

                      to this clause) shall be equal to such amount

                      multiplied by 5.

                          ✂️✂️(ii) Energy project defined.—For purposes

                      of this subsection, the term ✂️energy project’

                      means a project consisting of one or more energy

                      properties that are part of a single project.

                    ✂️✂️(B) Project requirements.—A project meets the

                requirements of this subparagraph if it is one of the

                following:

                          ✂️✂️(i) A project with a maximum net output of

                      less than 1 megawatt of electrical (as measured in

                      alternating current) or thermal energy.

                          ✂️✂️(ii) <<NOTE: Time

                      period. Publication. Guidelines.>> A project the

                      construction of which begins before the date that

                      is 60 days after the Secretary publishes guidance

                      with respect to the requirements of paragraphs

                      (10)(A) and (11).

                          ✂️✂️(iii) A project which satisfies the

                      requirements of paragraphs (10)(A) and (11).

            ✂️✂️(10) Prevailing wage requirements.—

                    ✂️✂️(A) In general.—The requirements described in

                this subparagraph with respect to any energy project are

                that the taxpayer shall ensure that any laborers and

                mechanics employed by the taxpayer or any contractor or

                subcontractor in—

                          ✂️✂️(i) the construction of such energy project,

                      and

                          ✂️✂️(ii) <<NOTE: Time period.>> for the 5-year

                      period beginning on the date such project is

                      originally placed in service, the alteration or

                      repair of such project,

                shall be paid wages at rates not less than the

                prevailing rates for construction, alteration, or repair

                of a similar character in the locality in which such

                project is located as most recently determined by the

                Secretary of Labor, in accordance with subchapter IV of

                chapter 31 of title 40, United States Code. Subject to

                subparagraph (C), for purposes of any determination

                under paragraph (9)(A)(i) for the taxable year in which

                the energy project is placed in service, the taxpayer

                shall be deemed to satisfy the requirement under clause

                (ii) at the time such project is placed in service.

                    ✂️✂️(B) <<NOTE: Applicability.>> Correction and

                penalty related to failure to satisfy wage

                requirements.—Rules similar to the rules of section

                45(b)(7)(B) shall apply.

                    ✂️✂️(C) <<NOTE: Regulations. Guidelines.>>

                Recapture.—The Secretary shall, by regulations or other

                guidance, provide for recapturing the benefit of any

                increase in the credit allowed under this subsection by

                reason of this paragraph with respect to any project

                which does not satisfy the requirements under

                subparagraph (A) (after application of subparagraph (B))

                for the period described in clause (ii) of subparagraph

                (A) (but which does not cease to be investment credit

                property within the meaning of section

                50(a)). <<NOTE: Determination.>> The period and

[[Page 136 STAT. 1920]]

                percentage of such recapture shall be determined under

                rules similar to the rules of section 50(a).

            ✂️✂️(11) Apprenticeship requirements.—Rules similar to the

        rules of section 45(b)(8) shall apply.’'.

    (l) Domestic Content; Phaseout for Elective Payment.—Section 48(a),

as amended by the preceding provisions of this Act, <<NOTE: 26 USC

48.>> is amended by adding at the end the following new paragraphs:

            ✂️✂️(12) Domestic content bonus credit amount.—

                    ✂️✂️(A) In general.—In the case of any energy project

                which satisfies the requirement under subparagraph (B),

                for purposes of applying paragraph (2) with respect to

                such property, the energy percentage shall be increased

                by the applicable credit rate increase.

                    ✂️✂️(B) <<NOTE: Applicability.>> Requirement.—Rules

                similar to the rules of section 45(b)(9)(B) shall apply.

                    ✂️✂️(C) Applicable credit rate increase.—For purposes

                of subparagraph (A), the applicable credit rate increase

                shall be—

                          ✂️✂️(i) in the case of an energy project which

                      does not satisfy the requirements of paragraph

                      (9)(B), 2 percentage points, and

                          ✂️✂️(ii) in the case of an energy project which

                      satisfies the requirements of paragraph (9)(B), 10

                      percentage points.

            ✂️✂️(13) <<NOTE: Applicability.>> Phaseout for elective

        payment.—In the case of a taxpayer making an election under

        section 6417 with respect to a credit under this section, rules

        similar to the rules of section 45(b)(10) shall apply.’'.

    (m) Special Rule for Property Financed by Tax-exempt Bonds.—Section

48(a)(4) is amended to read as follows:

            ✂️✂️(4) Special rule for property financed by tax-exempt

        bonds. <<NOTE: Applicability.>> —Rules similar to the rule

        under section 45(b)(3) shall apply for purposes of this

        section.’'.

    (n) Treatment of Certain Contracts Involving Energy Storage.—

Section 7701(e) is amended—

            (1) in paragraph (3)—

                    (A) in subparagraph (A)(i), by striking ✂️✂️or’' at

                the end of subclause (II), by striking ✂️✂️and’' at the

                end of subclause (III) and inserting ✂️✂️or’', and by

                adding at the end the following new subclause:

                                    ✂️✂️(IV) the operation of a storage

                                facility, and’', and

                    (B) by adding at the end the following new

                subparagraph:

                    ✂️✂️(F) <<NOTE: Definition.>> Storage facility.—For

                purposes of subparagraph (A), the term ✂️storage

                facility’ means a facility which uses energy storage

                technology within the meaning of section 48(c)(6).’',

                and

            (2) in paragraph (4), by striking ✂️✂️or water treatment works

        facility’' and inserting ✂️✂️water treatment works facility, or

        storage facility’'.

    (o) Increase in Credit Rate for Energy Communities.—Section 48(a),

as amended by the preceding provisions of this Act, is amended by adding

at the end the following new paragraph:

            ✂️✂️(14) Increase in credit rate for energy communities.—

[[Page 136 STAT. 1921]]

                    ✂️✂️(A) In general.—In the case of any energy project

                that is placed in service within an energy community (as

                defined in section 45(b)(11)(B), as applied by

                substituting ✂️energy project’ for ✂️qualified facility’

                each place it appears), for purposes of applying

                paragraph (2) with respect to energy property which is

                part of such project, the energy percentage shall be

                increased by the applicable credit rate increase.

                    ✂️✂️(B) Applicable credit rate increase.—For purposes

                of subparagraph (A), the applicable credit rate increase

                shall be equal to—

                          ✂️✂️(i) in the case of any energy project which

                      does not satisfy the requirements of paragraph

                      (9)(B), 2 percentage points, and

                          ✂️✂️(ii) in the case of any energy project which

                      satisfies the requirements of paragraph (9)(B), 10

                      percentage points.’'.

    (p) Regulations.—Section 48(a), as amended by the preceding

provisions of this Act, <<NOTE: 26 USC 48.>> is amended by adding at

the end the following new paragraph:

            ✂️✂️(15) <<NOTE: Determination. Requirements. Records.>>

        Regulations and guidance.—The Secretary shall issue such

        regulations or other guidance as the Secretary determines

        necessary to carry out the purposes of this subsection,

        including regulations or other guidance which provides for

        requirements for recordkeeping or information reporting for

        purposes of administering the requirements of this

        subsection.’'.

    (q) <<NOTE: Applicability. 26 USC 45 note.>> Effective Dates.—

            (1) In general.—Except as provided in paragraphs (2) and

        (3), the amendments made by this section shall apply to property

        placed in service after December 31, 2021.

            (2) Other property.—The amendments made by subsections (f),

        (g), (h), (i), (j), (l), (n), and (o) shall apply to property

        placed in service after December 31, 2022.

            (3) Special rule for property financed by tax-exempt

        bonds.—The amendments made by subsection (m) shall apply to

        property the construction of which begins after the date of

        enactment of this Act.

1.10.SEC13103. INCREASE IN ENERGY CREDIT FOR SOLAR AND WIND FACILITIES PLACED IN SERVICE IN CONNECTION WITH LOW-INCOME COMMUNITIES.

    (a) In General.—Section 48 is amended by adding at the end the

following new subsection:

    ✂️✂️(e) Special Rules for Certain Solar and Wind Facilities Placed in

Service in Connection With Low-income Communities.—

            ✂️✂️(1) In general.—In the case of any qualified solar and

        wind facility with respect to which the Secretary makes an

        allocation of environmental justice solar and wind capacity

        limitation under paragraph (4)—

                    ✂️✂️(A) the energy percentage otherwise determined

                under paragraph (2) or (5) of subsection (a) with

                respect to any eligible property which is part of such

                facility shall be increased by—

[[Page 136 STAT. 1922]]

                          ✂️✂️(i) in the case of a facility described in

                      subclause (I) of paragraph (2)(A)(iii) and not

                      described in subclause (II) of such paragraph, 10

                      percentage points, and

                          ✂️✂️(ii) in the case of a facility described in

                      subclause (II) of paragraph (2)(A)(iii), 20

                      percentage points, and

                    ✂️✂️(B) the increase in the credit determined under

                subsection (a) by reason of this subsection for any

                taxable year with respect to all property which is part

                of such facility shall not exceed the amount which bears

                the same ratio to the amount of such increase

                (determined without regard to this subparagraph) as—

                          ✂️✂️(i) the environmental justice solar and wind

                      capacity limitation allocated to such facility,

                      bears to

                          ✂️✂️(ii) the total megawatt nameplate capacity

                      of such facility, as measured in direct current.

            ✂️✂️(2) Qualified solar and wind facility.—For purposes of

        this subsection—

                    ✂️✂️(A) <<NOTE: Definition.>> In general.—The term

                ✂️qualified solar and wind facility’ means any facility—

                          ✂️✂️(i) which generates electricity solely from

                      property described in section 45(d)(1) or in

                      clause (i) or (vi) of subsection (a)(3)(A),

                          ✂️✂️(ii) which has a maximum net output of less

                      than 5 megawatts (as measured in alternating

                      current), and

                          ✂️✂️(iii) which—

                                    ✂️✂️(I) is located in a low-income

                                community (as defined in section 45D(e))

                                or on Indian land (as defined in section

                                2601(2) of the Energy Policy Act of 1992

                                (25 U.S.C. 3501(2))), or

                                    ✂️✂️(II) is part of a qualified low-

                                income residential building project or a

                                qualified low-income economic benefit

                                project.

                    ✂️✂️(B) Qualified low-income residential building

                project.—A facility shall be treated as part of a

                qualified low-income residential building project if—

                          ✂️✂️(i) such facility is installed on a

                      residential rental building which participates in

                      a covered housing program (as defined in section

                      41411(a) of the Violence Against Women Act of 1994

                      (34 U.S.C. 12491(a)(3)), a housing assistance

                      program administered by the Department of

                      Agriculture under title V of the Housing Act of

                      1949, a housing program administered by a tribally

                      designated housing entity (as defined in section

                      4(22) of the Native American Housing Assistance

                      and Self-Determination Act of 1996 (25 U.S.C.

                      4103(22))) or such other affordable housing

                      programs as the Secretary may provide, and

                          ✂️✂️(ii) the financial benefits of the

                      electricity produced by such facility are

                      allocated equitably among the occupants of the

                      dwelling units of such building.

                    ✂️✂️(C) Qualified low-income economic benefit

                project.—A facility shall be treated as part of a

                qualified low-income economic benefit project if at

                least 50 percent of the financial benefits of the

                electricity produced by such facility are provided to

                households with income of—

[[Page 136 STAT. 1923]]

                          ✂️✂️(i) less than 200 percent of the poverty

                      line (as defined in section 36B(d)(3)(A))

                      applicable to a family of the size involved, or

                          ✂️✂️(ii) less than 80 percent of area median

                      gross income (as determined under section

                      142(d)(2)(B)).

                    ✂️✂️(D) Financial benefit.—For purposes of

                subparagraphs (B) and (C), electricity acquired at a

                below-market rate shall not fail to be taken into

                account as a financial benefit.

            ✂️✂️(3) <<NOTE: Definition.>> Eligible property.—For

        purposes of this section, the term ✂️eligible property’ means

        energy property which—

                    ✂️✂️(A) is part of a facility described in section

                45(d)(1) for which an election was made under subsection

                (a)(5), or

                    ✂️✂️(B) is described in clause (i) or (vi) of

                subsection (a)(3)(A),

        including energy storage technology (as described in subsection

        (a)(3)(A)(ix)) installed in connection with such energy

        property.

            ✂️✂️(4) Allocations.—

                    ✂️✂️(A) <<NOTE: Deadline.>> In general.—Not later

                than 180 days after the date of enactment of this

                subsection, the Secretary shall establish a program to

                allocate amounts of environmental justice solar and wind

                capacity limitation to qualified solar and wind

                facilities. <<NOTE: Procedures.>> In establishing such

                program and to carry out the purposes of this

                subsection, the Secretary shall provide procedures to

                allow for an efficient allocation process, including,

                when determined appropriate, consideration of multiple

                projects in a single application if such projects will

                be placed in service by a single taxpayer.

                    ✂️✂️(B) Limitation.—The amount of environmental

                justice solar and wind capacity limitation allocated by

                the Secretary under subparagraph (A) during any calendar

                year shall not exceed the annual capacity limitation

                with respect to such year.

                    ✂️✂️(C) <<NOTE: Definition.>> Annual capacity

                limitation.—For purposes of this paragraph, the term

                ✂️annual capacity limitation’ means 1.8 gigawatts of

                direct current capacity for each of calendar years 2023

                and 2024, and zero thereafter.

                    ✂️✂️(D) Carryover of unused limitation.—If the annual

                capacity limitation for any calendar year exceeds the

                aggregate amount allocated for such year under this

                paragraph, such limitation for the succeeding calendar

                year shall be increased by the amount of such excess. No

                amount may be carried under the preceding sentence to

                any calendar year after 2024 except as provided in

                section 48E(h)(4)(D)(ii).

                    ✂️✂️(E) Placed in service deadline.—

                          ✂️✂️(i) <<NOTE: Time period.>> In general.—

                      Paragraph (1) shall not apply with respect to any

                      property which is placed in service after the date

                      that is 4 years after the date of the allocation

                      with respect to the facility of which such

                      property is a part.

                          ✂️✂️(ii) Application of carryover.—Any amount

                      of environmental justice solar and wind capacity

                      limitation which expires under clause (i) during

                      any calendar year shall be taken into account as

                      an excess described in subparagraph (D) (or as an

                      increase in such excess)

[[Page 136 STAT. 1924]]

                      for such calendar year, subject to the limitation

                      imposed by the last sentence of such subparagraph.

            ✂️✂️(5) <<NOTE: Regulations. Guidelines.>> Recapture.—The

        Secretary shall, by regulations or other guidance, provide for

        recapturing the benefit of any increase in the credit allowed

        under subsection (a) by reason of this subsection with respect

        to any property which ceases to be property eligible for such

        increase (but which does not cease to be investment credit

        property within the meaning of section

        50(a)). <<NOTE: Determination. Time period.>> The period and

        percentage of such recapture shall be determined under rules

        similar to the rules of section 50(a). To the extent provided by

        the Secretary, such recapture may not apply with respect to any

        property if, within 12 months after the date the taxpayer

        becomes aware (or reasonably should have become aware) of such

        property ceasing to be property eligible for such increase, the

        eligibility of such property for such increase is restored. The

        preceding sentence shall not apply more than once with respect

        to any facility.’'.

    (b) <<NOTE: 26 USC 48 note.>> Effective Date.—The amendments made

by this section shall take effect on January 1, 2023.

1.10.SEC13104. EXTENSION AND MODIFICATION OF CREDIT FOR CARBON OXIDE SEQUESTRATION.

    (a) Modification of Carbon Oxide Capture Requirements.—

            (1) In general.—Section 45Q(d) <<NOTE: 26 USC 45Q.>> is

        amended to read as follows:

    ✂️✂️(d) <<NOTE: Definition.>> Qualified Facility.—For purposes of

this section, the term ✂️qualified facility’ means any industrial

facility or direct air capture facility—

            ✂️✂️(1) <<NOTE: Effective date.>> the construction of which

        begins before January 1, 2033, and either—

                    ✂️✂️(A) construction of carbon capture equipment

                begins before such date, or

                    ✂️✂️(B) the original planning and design for such

                facility includes installation of carbon capture

                equipment, and

            ✂️✂️(2) which—

                    ✂️✂️(A) in the case of a direct air capture facility,

                captures not less than 1,000 metric tons of qualified

                carbon oxide during the taxable year,

                    ✂️✂️(B) in the case of an electricity generating

                facility—

                          ✂️✂️(i) captures not less than 18,750 metric

                      tons of qualified carbon oxide during the taxable

                      year, and

                          ✂️✂️(ii) with respect to any carbon capture

                      equipment for the applicable electric generating

                      unit at such facility, has a capture design

                      capacity of not less than 75 percent of the

                      baseline carbon oxide production of such unit, or

                    ✂️✂️(C) in the case of any other facility, captures

                not less than 12,500 metric tons of qualified carbon

                oxide during the taxable year.’'.

            (2) Definitions.—

                    (A) In general.—Section 45Q(e) is amended—

                          (i) by redesignating paragraphs (1) through

                      (3) as paragraphs (3) through (5), respectively,

                      and

                          (ii) by inserting after ✂️✂️For purposes of this

                      section—’' the following new paragraphs:

[[Page 136 STAT. 1925]]

            ✂️✂️(1) Applicable electric generating unit.—The term

        ✂️applicable electric generating unit’ means the principal

        electric generating unit for which the carbon capture equipment

        is originally planned and designed.

            ✂️✂️(2) Baseline carbon oxide production.—

                    ✂️✂️(A) <<NOTE: Time periods.>> In general.—The term

                ✂️baseline carbon oxide production’ means either of the

                following:

                          ✂️✂️(i) In the case of an applicable electric

                      generating unit which was originally placed in

                      service more than 1 year prior to the date on

                      which construction of the carbon capture equipment

                      begins, the average annual carbon oxide

                      production, by mass, from such unit during—

                                    ✂️✂️(I) in the case of an applicable

                                electric generating unit which was

                                originally placed in service more than 1

                                year prior to the date on which

                                construction of the carbon capture

                                equipment begins and on or after the

                                date which is 3 years prior to the date

                                on which construction of such equipment

                                begins, the period beginning on the date

                                such unit was placed in service and

                                ending on the date on which construction

                                of such equipment began, and

                                    ✂️✂️(II) in the case of an applicable

                                electric generating unit which was

                                originally placed in service more than 3

                                years prior to the date on which

                                construction of the carbon capture

                                equipment begins, the 3 years with the

                                highest annual carbon oxide production

                                during the 12-year period preceding the

                                date on which construction of such

                                equipment began.

                          ✂️✂️(ii) In the case of an applicable electric

                      generating unit which—

                                    ✂️✂️(I) as of the date on which

                                construction of the carbon capture

                                equipment begins, is not yet placed in

                                service, or

                                    ✂️✂️(II) was placed in service during

                                the 1-year period prior to the date on

                                which construction of the carbon capture

                                equipment begins,

                      the designed annual carbon oxide production, by

                      mass, as determined based on an assumed capacity

                      factor of 60 percent.

                    ✂️✂️(B) Capacity factor.—The term ✂️capacity factor’

                means the ratio (expressed as a percentage) of the

                actual electric output from the applicable electric

                generating unit to the potential electric output from

                such unit.’'.

                    (B) Conforming amendment.—Section

                142(o)(1)(B) <<NOTE: 26 USC 142.>> is amended by

                striking ✂️✂️section 45Q(e)(1)’' and inserting ✂️✂️section

                45Q(e)(3)’'.

    (b) Modified Applicable Dollar Amount.—Section 45Q(b)(1)(A) is

amended—

            (1) in clause (i)—

                    (A) in subclause (I), by striking ✂️✂️the dollar

                amount’' and all that follows through ✂️✂️such period’'

                and inserting ✂️✂️$17’', and

[[Page 136 STAT. 1926]]

                    (B) in subclause (II), by striking ✂️✂️the dollar

                amount’' and all that follows through ✂️✂️such period’'

                and inserting ✂️✂️$12’', and

            (2) in clause (ii)—

                    (A) in subclause (I), by striking ✂️✂️$50’' and

                inserting ✂️✂️$17’', and

                    (B) in subclause (II), by striking ✂️✂️$35’' and

                inserting ✂️✂️$12’'.

    (c) Determination of Applicable Dollar Amount.—

            (1) <<NOTE: Effective dates.>> In general.—Section

        45Q(b)(1), as amended by the preceding provisions of this

        Act, <<NOTE: 26 USC 45Q.>> is amended—

                    (A) by redesignating subparagraph (B) as

                subparagraph (D), and

                    (B) by inserting after subparagraph (A) the

                following new subparagraphs:

                    ✂️✂️(B) Special rule for direct air capture

                facilities.—In the case of any qualified facility

                described in subsection (d)(2)(A) which is placed in

                service after December 31, 2022, the applicable dollar

                amount shall be an amount equal to the applicable dollar

                amount otherwise determined with respect to such

                qualified facility under subparagraph (A), except that

                such subparagraph shall be applied—

                          ✂️✂️(i) by substituting ✂️$36’ for ✂️$17’ each

                      place it appears, and

                          ✂️✂️(ii) by substituting ✂️$26’ for ✂️$12’ each

                      place it appears.

                    ✂️✂️(C) Applicable dollar amount for additional carbon

                capture equipment.—In the case of any qualified

                facility which is placed in service before January 1,

                2023, if any additional carbon capture equipment is

                installed at such facility and such equipment is placed

                in service after December 31, 2022, the applicable

                dollar amount shall be an amount equal to the applicable

                dollar amount otherwise determined under this paragraph,

                except that subparagraph (B) shall be applied—

                          ✂️✂️(i) by substituting ✂️before January 1, 2023’

                      for ✂️after December 31, 2022’, and

                          ✂️✂️(ii) by substituting ✂️the additional carbon

                      capture equipment installed at such qualified

                      facility’ for ✂️such qualified facility’.’'.

            (2) Conforming amendments.—

                    (A) Section 45Q(b)(1)(A) is amended by striking

                ✂️✂️The applicable dollar amount’' and inserting ✂️✂️Except

                as provided in subparagraph (B) or (C), the applicable

                dollar amount’'.

                    (B) Section 45Q(b)(1)(D), as redesignated by

                paragraph (1)(A), is amended by striking ✂️✂️subparagraph

                (A)’' and inserting ✂️✂️subparagraph (A), (B), or (C)’'.

    (d) Wage and Apprenticeship Requirements.—Section 45Q is amended by

redesignating subsection (h) as subsection (i) and inserting after

subsection (g) following new subsection:

    ✂️✂️(h) Increased Credit Amount for Qualified Facilities and Carbon

Capture Equipment.—

            ✂️✂️(1) In general.—In the case of any qualified facility or

        any carbon capture equipment which satisfy the requirements of

        paragraph (2), the amount of the credit determined under

[[Page 136 STAT. 1927]]

        subsection (a) shall be equal to such amount (determined without

        regard to this sentence) multiplied by 5.

            ✂️✂️(2) <<NOTE: Time

        periods. Publication. Guidelines.>> Requirements.—The

        requirements described in this paragraph are that—

                    ✂️✂️(A) with respect to any qualified facility the

                construction of which begins on or after the date that

                is 60 days after the Secretary publishes guidance with

                respect to the requirements of paragraphs (3)(A) and

                (4), as well as any carbon capture equipment placed in

                service at such facility—

                          ✂️✂️(i) subject to subparagraph (B) of paragraph

                      (3), the taxpayer satisfies the requirements under

                      subparagraph (A) of such paragraph with respect to

                      such facility and equipment, and

                          ✂️✂️(ii) the taxpayer satisfies the requirements

                      under paragraph (4) with respect to the

                      construction of such facility and equipment,

                    ✂️✂️(B) with respect to any carbon capture equipment

                the construction of which begins on or after the date

                that is 60 days after the Secretary publishes guidance

                with respect to the requirements of paragraphs (3)(A)

                and (4), and which is installed at a qualified facility

                the construction of which began prior to such date—

                          ✂️✂️(i) subject to subparagraph (B) of paragraph

                      (3), the taxpayer satisfies the requirements under

                      subparagraph (A) of such paragraph with respect to

                      such equipment, and

                          ✂️✂️(ii) the taxpayer satisfies the requirements

                      under paragraph (4) with respect to the

                      construction of such equipment, or

                    ✂️✂️(C) the construction of carbon capture equipment

                begins prior to the date that is 60 days after the

                Secretary publishes guidance with respect to the

                requirements of paragraphs (3)(A) and (4), and such

                equipment is installed at a qualified facility the

                construction of which begins prior to such date.

            ✂️✂️(3) <<NOTE: Applicability.>> Prevailing wage

        requirements.—

                    ✂️✂️(A) In general.—The requirements described in

                this subparagraph with respect to any qualified facility

                and any carbon capture equipment placed in service at

                such facility are that the taxpayer shall ensure that

                any laborers and mechanics employed by the taxpayer or

                any contractor or subcontractor in—

                          ✂️✂️(i) the construction of such facility or

                      equipment, and

                          ✂️✂️(ii) with respect to any taxable year, for

                      any portion of such taxable year which is within

                      the period described in paragraph (3)(A) or (4)(A)

                      of subsection (a), the alteration or repair of

                      such facility or such equipment,

                shall be paid wages at rates not less than the

                prevailing rates for construction, alteration, or repair

                of a similar character in the locality in which such

                facility and equipment are located as most recently

                determined by the Secretary of Labor, in accordance with

                subchapter IV of chapter 31 of title 40, United States

                Code. For purposes

[[Page 136 STAT. 1928]]

                of determining an increased credit amount under

                paragraph (1) for a taxable year, the requirement under

                clause (ii) of this subparagraph is applied to such

                taxable year in which the alteration or repair of

                qualified facility occurs.

                    ✂️✂️(B) Correction and penalty related to failure to

                satisfy wage requirements.—Rules similar to the rules

                of section 45(b)(7)(B) shall apply.

            ✂️✂️(4) <<NOTE: Applicability.>> Apprenticeship

        requirements.—Rules similar to the rules of section 45(b)(8)

        shall apply.

            ✂️✂️(5) <<NOTE: Determination. Requirements. Records.>>

        Regulations and guidance.—The Secretary shall issue such

        regulations or other guidance as the Secretary determines

        necessary to carry out the purposes of this subsection,

        including regulations or other guidance which provides for

        requirements for recordkeeping or information reporting for

        purposes of administering the requirements of this

        subsection.’'.

    (e) Credit Reduced for Tax-exempt Bonds.—Section 45Q(f) <<NOTE: 26

USC 45Q.>> is amended—

            (1) by striking the second paragraph (3), as added at the

        end of such section by section 80402(e) of the Infrastructure

        Investment and Jobs Act (Public Law 117-58), and

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

            ✂️✂️(8) <<NOTE: Applicability.>> Credit reduced for tax-

        exempt bonds.—Rules similar to the rule under section 45(b)(3)

        shall apply for purposes of this section.’'.

    (f) Application of Section for Certain Carbon Capture Equipment.—

Section 45Q(g) is amended by inserting ✂️✂️the earlier of January 1, 2023,

and’' before ✂️✂️the end of the calendar year’'.

    (g) Election.—Section 45Q(f), as amended by subsection (e), is

amended by adding at the end the following new paragraph:

            ✂️✂️(9) <<NOTE: Time period.>> Election.—For purposes of

        paragraphs (3) and (4) of subsection (a), a person described in

        paragraph (3)(A)(ii) may elect, at such time and in such manner

        as the Secretary may prescribe, to have the 12-year period begin

        on the first day of the first taxable year in which a credit

        under this section is claimed with respect to carbon capture

        equipment which is originally placed in service at a qualified

        facility on or after the date of the enactment of the Bipartisan

        Budget Act of 2018 (after application of paragraph (6), where

        applicable) if—

                    ✂️✂️(A) no taxpayer claimed a credit under this

                section with respect to such carbon capture equipment

                for any prior taxable year,

                    ✂️✂️(B) the qualified facility at which such carbon

                capture equipment is placed in service is located in an

                area affected by a federally-declared disaster (as

                defined by section 165(i)(5)(A)) after the carbon

                capture equipment is originally placed in service, and

                    ✂️✂️(C) such federally-declared disaster results in a

                cessation of the operation of the qualified facility or

                the carbon capture equipment after such equipment is

                originally placed in service.’'.

    (h) Regulations for Baseline Carbon Oxide Production.—Subsection

(i) of section 45Q, as redesignated by subsection (d), is amended—

            (1) in paragraph (1), by striking ✂️✂️and’',

            (2) in paragraph (2), by striking the period at the end and

        inserting ✂️✂️, and’', and

[[Page 136 STAT. 1929]]

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

            ✂️✂️(3) for purposes of subsection (d)(2)(B)(ii), adjust the

        baseline carbon oxide production with respect to any applicable

        electric generating unit at any electricity generating facility

        if, after the date on which the carbon capture equipment is

        placed in service, modifications which are chargeable to capital

        account are made to such unit which result in a significant

        increase or decrease in carbon oxide production.’'.

    (i) <<NOTE: Applicability. 26 USC 45Q note.>> Effective Dates.—

            (1) In general.—Except as provided in paragraphs (2), (3),

        and (4), the amendments made by this section shall apply to

        facilities or equipment placed in service after December 31,

        2022.

            (2) Modification of carbon oxide capture requirements.—The

        amendments made by subsection (a) shall apply to facilities or

        equipment the construction of which begins after the date of

        enactment of this Act.

            (3) Application of section for certain carbon capture

        equipment.—The amendments made by subsection (f) shall take

        effect on the date of enactment of this Act.

            (4) Election.—The amendments made by subsection (g) shall

        apply to carbon oxide captured and disposed of after December

        31, 2021.

1.10.SEC13105. ZERO-EMISSION NUCLEAR POWER PRODUCTION CREDIT.

    (a) In General.—Subpart D of part IV of subchapter A of chapter 1

is amended by adding at the end the following new section:

✂️✂️SEC. 45U. <<NOTE: 26 USC 45U.>> ZERO-EMISSION NUCLEAR POWER

                        PRODUCTION CREDIT.

    ✂️✂️(a) Amount of Credit.—For purposes of section 38, the zero-

emission nuclear power production credit for any taxable year is an

amount equal to the amount by which—

            ✂️✂️(1) the product of—

                    ✂️✂️(A) 0.3 cents, multiplied by

                    ✂️✂️(B) the kilowatt hours of electricity—

                          ✂️✂️(i) produced by the taxpayer at a qualified

                      nuclear power facility, and

                          ✂️✂️(ii) sold by the taxpayer to an unrelated

                      person during the taxable year, exceeds

            ✂️✂️(2) the reduction amount for such taxable year.

    ✂️✂️(b) Definitions.—

            ✂️✂️(1) Qualified nuclear power facility.—For purposes of

        this section, the term ✂️qualified nuclear power facility’ means

        any nuclear facility—

                    ✂️✂️(A) which is owned by the taxpayer and which uses

                nuclear energy to produce electricity,

                    ✂️✂️(B) which is not an advanced nuclear power

                facility as defined in subsection (d)(1) of section 45J,

                and

                    ✂️✂️(C) which is placed in service before the date of

                the enactment of this section.

            ✂️✂️(2) Reduction amount.—

                    ✂️✂️(A) In general.—For purposes of this section, the

                term ✂️reduction amount’ means, with respect to any

                qualified nuclear power facility for any taxable year,

                the amount equal to the lesser of—

                          ✂️✂️(i) the amount determined under subsection

                      (a)(1), or

[[Page 136 STAT. 1930]]

                          ✂️✂️(ii) the amount equal to 16 percent of the

                      excess of—

                                    ✂️✂️(I) subject to subparagraph (B),

                                the gross receipts from any electricity

                                produced by such facility (including any

                                electricity services or products

                                provided in conjunction with the

                                electricity produced by such facility)

                                and sold to an unrelated person during

                                such taxable year, over

                                    ✂️✂️(II) the amount equal to the

                                product of—

                                            ✂️✂️(aa) 2.5 cents, multiplied

                                        by

                                            ✂️✂️(bb) the amount determined

                                        under subsection (a)(1)(B).

                    ✂️✂️(B) Treatment of certain receipts.—

                          ✂️✂️(i) In general.—Subject to clause (iii),

                      the amount determined under subparagraph

                      (A)(ii)(I) shall include any amount received by

                      the taxpayer during the taxable year with respect

                      to the qualified nuclear power facility from a

                      zero-emission credit program.

                      For <<NOTE: Determination.>> purposes of

                      determining the amount received during such

                      taxable year, the taxpayer shall take into account

                      any reductions required under such program.

                          ✂️✂️(ii) Zero-emission credit program.—For

                      purposes of this subparagraph, the term ✂️zero-

                      emission credit program’ means any payments with

                      respect to a qualified nuclear power facility as a

                      result of any Federal, State or local government

                      program for, in whole or in part, the zero-

                      emission, zero-carbon, or air quality attributes

                      of any portion of the electricity produced by such

                      facility.

                          ✂️✂️(iii) Exclusion.—For purposes of clause

                      (i), any amount received by the taxpayer from a

                      zero-emission credit program shall be excluded

                      from the amount determined under subparagraph

                      (A)(ii)(I) if the full amount of the credit

                      calculated pursuant to subsection (a) (determined

                      without regard to this subparagraph) is used to

                      reduce payments from such zero-emission credit

                      program.

            ✂️✂️(3) Electricity.—For purposes of this section, the term

        ✂️electricity’ means the energy produced by a qualified nuclear

        power facility from the conversion of nuclear fuel into electric

        power.

    ✂️✂️(c) Other Rules.—

            ✂️✂️(1) Inflation adjustment.—The 0.3 cent amount in

        subsection (a)(1)(A) and the 2.5 cent amount in subsection

        (b)(2)(A)(ii)(II)(aa) shall each be adjusted by multiplying such

        amount by the inflation adjustment factor (as determined under

        section 45(e)(2), as applied by substituting ✂️calendar year

        2023’ for ✂️calendar year 1992’ in subparagraph (B) thereof) for

        the calendar year in which the sale occurs. If the 0.3 cent

        amount as increased under this paragraph is not a multiple of

        0.05 cent, such amount shall be rounded to the nearest multiple

        of 0.05 cent. If the 2.5 cent amount as increased under this

        paragraph is not a multiple of 0.1 cent, such amount shall be

        rounded to the nearest multiple of 0.1 cent.

            ✂️✂️(2) <<NOTE: Applicability.>> Special rules.—Rules

        similar to the rules of paragraphs (1), (3), (4), and (5) of

        section 45(e) shall apply for purposes of this section.

[[Page 136 STAT. 1931]]

    ✂️✂️(d) Wage Requirements.—

            ✂️✂️(1) Increased credit amount for qualified nuclear power

        facilities.—In the case of any qualified nuclear power facility

        which satisfies the requirements of paragraph (2)(A), the amount

        of the credit determined under subsection (a) shall be equal to

        such amount (as determined without regard to this sentence)

        multiplied by 5.

            ✂️✂️(2) Prevailing wage requirements.—

                    ✂️✂️(A) <<NOTE: Determination.>> In general.—The

                requirements described in this subparagraph with respect

                to any qualified nuclear power facility are that the

                taxpayer shall ensure that any laborers and mechanics

                employed by the taxpayer or any contractor or

                subcontractor in the alteration or repair of such

                facility shall be paid wages at rates not less than the

                prevailing rates for alteration or repair of a similar

                character in the locality in which such facility is

                located as most recently determined by the Secretary of

                Labor, in accordance with subchapter IV of chapter 31 of

                title 40, United States Code.

                    ✂️✂️(B) Correction and penalty related to failure to

                satisfy wage requirements.—Rules

                similar <<NOTE: Applicability.>> to the rules of

                section 45(b)(7)(B) shall apply.

            ✂️✂️(3) <<NOTE: Determination. Requirements. Records.>>

        Regulations and guidance.—The Secretary shall issue such

        regulations or other guidance as the Secretary determines

        necessary to carry out the purposes of this subsection,

        including regulations or other guidance which provides for

        requirements for recordkeeping or information reporting for

        purposes of administering the requirements of this subsection.

    ✂️✂️(e) Termination.—This section shall not apply to taxable years

beginning after December 31, 2032.’'.

    (b) Conforming Amendments.—

            (1) <<NOTE: 26 USC 38.>> Section 38(b) is amended—

                    (A) in paragraph (32), by striking ✂️✂️plus’' at the

                end,

                    (B) in paragraph (33), by striking the period at the

                end and inserting ✂️✂️, plus’', and

                    (C) by adding at the end the following new

                paragraph:

            ✂️✂️(34) the zero-emission nuclear power production credit

        determined under section 45U(a).’'.

            (2) The table of sections for subpart D of part IV of

        subchapter A of chapter 1 <<NOTE: 26 USC 38 prec.>> is amended

        by adding at the end the following new item:

✂️✂️Sec. 45U. Zero-emission nuclear power production credit.’'.

    (c) <<NOTE: 26 USC 45U note.>> Effective Date.—This section shall

apply to electricity produced and sold after December 31, 2023, in

taxable years beginning after such date.

1.11.SEC13201. EXTENSION OF INCENTIVES FOR BIODIESEL, RENEWABLE DIESEL AND ALTERNATIVE FUELS.

    (a) Biodiesel and Renewable Diesel Credit.—Section 40A(g) is

amended by striking ✂️✂️December 31, 2022’' and inserting ✂️✂️December 31,

2024’'.

    (b) Biodiesel Mixture Credit.—

            (1) In general.—Section 6426(c)(6) is amended by striking

        ✂️✂️December 31, 2022’' and inserting ✂️✂️December 31, 2024’'.

[[Page 136 STAT. 1932]]

            (2) Fuels not used for taxable purposes.—Section

        6427(e)(6)(B) is amended <<NOTE: 26 USC 6427.>> by striking

        ✂️✂️December 31, 2022’' and inserting ✂️✂️December 31, 2024’'.

    (c) Alternative Fuel Credit.—Section 6426(d)(5) is amended by

striking ✂️✂️December 31, 2021’' and inserting ✂️✂️December 31, 2024’'.

    (d) Alternative Fuel Mixture Credit.—Section 6426(e)(3) is amended

by striking ✂️✂️December 31, 2021’' and inserting ✂️✂️December 31, 2024’'.

    (e) Payments for Alternative Fuels.—Section 6427(e)(6)(C) is

amended by striking ✂️✂️December 31, 2021’' and inserting ✂️✂️December 31,

2024’'.

    (f) <<NOTE: 26 USC 40A note.>> Effective Date.—The amendments made

by this section shall apply to fuel sold or used after December 31,

2021.

    (g) <<NOTE: Effective date. Deadlines. Claims. 26 USC 6426 note.>>

Special Rule.—In the case of any alternative fuel credit properly

determined under section 6426(d) of the Internal Revenue Code of 1986

for the period beginning on January 1, 2022, and ending with the close

of the last calendar quarter beginning before the date of the enactment

of this Act, such credit shall be allowed, and any refund or payment

attributable to such credit (including any payment under section 6427(e)

of such Code) shall be made, only in such manner as the Secretary of the

Treasury (or the Secretary’s delegate) shall

provide. <<NOTE: Guidelines.>> Such Secretary shall issue guidance

within 30 days after the date of the enactment of this Act providing for

a one-time submission of claims covering periods described in the

preceding sentence. <<NOTE: Guidelines.>> Such guidance shall provide

for a 180-day period for the submission of such claims (in such manner

as prescribed by such Secretary) to begin not later than 30 days after

such guidance is issued. Such claims shall be paid by such Secretary not

later than 60 days after receipt. <<NOTE: Determination.>> If such

Secretary has not paid pursuant to a claim filed under this subsection

within 60 days after the date of the filing of such claim, the claim

shall be paid with interest from such date determined by using the

overpayment rate and method under section 6621 of such Code.

1.11.SEC13202. EXTENSION OF SECOND GENERATION BIOFUEL INCENTIVES.

    (a) In General.—Section 40(b)(6)(J)(i) is amended by striking

✂️✂️2022’' and inserting ✂️✂️2025’'.

    (b) <<NOTE: 26 USC 40 note.>> Effective Date.—The amendment made

by subsection (a) shall apply to qualified second generation biofuel

production after December 31, 2021.

1.11.SEC13203. SUSTAINABLE AVIATION FUEL CREDIT.

    (a) In General.—Subpart D of part IV of subchapter A of chapter 1

is amended by inserting after section 40A the following new section:

✂️✂️SEC. 40B. <<NOTE: Definitions. 26 USC 40B.>> SUSTAINABLE

                        AVIATION FUEL CREDIT.

    ✂️✂️(a) In General.—For purposes of section 38, the sustainable

aviation fuel credit determined under this section for the taxable year

is, with respect to any sale or use of a qualified mixture which occurs

during such taxable year, an amount equal to the product of—

            ✂️✂️(1) the number of gallons of sustainable aviation fuel in

        such mixture, multiplied by

            ✂️✂️(2) the sum of—

                    ✂️✂️(A) $1.25, plus

[[Page 136 STAT. 1933]]

                    ✂️✂️(B) <<NOTE: Applicability.>> the applicable

                supplementary amount with respect to such sustainable

                aviation fuel.

    ✂️✂️(b) Applicable Supplementary Amount.—For purposes of this

section, the term ✂️applicable supplementary amount’ means, with respect

to any sustainable aviation fuel, an amount equal to $0.01 for each

percentage point by which the lifecycle greenhouse gas emissions

reduction percentage with respect to such fuel exceeds 50 percent. In no

event shall the applicable supplementary amount determined under this

subsection exceed $0.50.

    ✂️✂️(c) Qualified Mixture.—For purposes of this section, the term

✂️qualified mixture’ means a mixture of sustainable aviation fuel and

kerosene if—

            ✂️✂️(1) such mixture is produced by the taxpayer in the United

        States,

            ✂️✂️(2) such mixture is used by the taxpayer (or sold by the

        taxpayer for use) in an aircraft,

            ✂️✂️(3) such sale or use is in the ordinary course of a trade

        or business of the taxpayer, and

            ✂️✂️(4) the transfer of such mixture to the fuel tank of such

        aircraft occurs in the United States.

    ✂️✂️(d) Sustainable Aviation Fuel.—

            ✂️✂️(1) In general.—For purposes of this section, the term

        ✂️sustainable aviation fuel’ means liquid fuel, the portion of

        which is not kerosene, which—

                    ✂️✂️(A) meets the requirements of—

                          ✂️✂️(i) ASTM International Standard D7566, or

                          ✂️✂️(ii) the Fischer Tropsch provisions of ASTM

                      International Standard D1655, Annex A1,

                    ✂️✂️(B) is not derived from coprocessing an applicable

                material (or materials derived from an applicable

                material) with a feedstock which is not biomass,

                    ✂️✂️(C) is not derived from palm fatty acid

                distillates or petroleum, and

                    ✂️✂️(D) has been certified in accordance with

                subsection (e) as having a lifecycle greenhouse gas

                emissions reduction percentage of at least 50 percent.

            ✂️✂️(2) Definitions.—In this subsection—

                    ✂️✂️(A) Applicable material.—The term ✂️applicable

                material’ means—

                          ✂️✂️(i) monoglycerides, diglycerides, and

                      triglycerides,

                          ✂️✂️(ii) free fatty acids, and

                          ✂️✂️(iii) fatty acid esters.

                    ✂️✂️(B) Biomass.—The term ✂️biomass’ has the same

                meaning given such term in section 45K(c)(3).

    ✂️✂️(e) Lifecycle Greenhouse Gas Emissions Reduction Percentage.—For

purposes of this section, the term ✂️lifecycle greenhouse gas emissions

reduction percentage’ means, with respect to any sustainable aviation

fuel, the percentage reduction in lifecycle greenhouse gas emissions

achieved by such fuel as compared with petroleum-based jet fuel, as

defined in accordance with—

            ✂️✂️(1) the most recent Carbon Offsetting and Reduction Scheme

        for International Aviation which has been adopted by the

        International Civil Aviation Organization with the agreement of

        the United States, or

            ✂️✂️(2) any similar methodology which satisfies the criteria

        under section 211(o)(1)(H) of the Clean Air Act (42 U.S.C.

[[Page 136 STAT. 1934]]

        7545(o)(1)(H)), as in effect on the date of enactment of this

        section.

    ✂️✂️(f) Registration of Sustainable Aviation Fuel Producers.—No

credit shall be allowed under this section with respect to any

sustainable aviation fuel unless the producer or importer of such fuel—

            ✂️✂️(1) is registered with the Secretary under section 4101,

        and

            ✂️✂️(2) provides—

                ✂️✂️(A) <<NOTE: Certification. Compliance. Requirements.>>

                 certification (in such form and manner as the Secretary

                shall prescribe) from an unrelated party demonstrating

                compliance with—

                          ✂️✂️(i) any general requirements, supply chain

                      traceability requirements, and information

                      transmission requirements established under the

                      Carbon Offsetting and Reduction Scheme for

                      International Aviation described in paragraph (1)

                      of subsection (e), or

                          ✂️✂️(ii) in the case of any methodology

                      established under paragraph (2) of such

                      subsection, requirements similar to the

                      requirements described in clause (i), and

                    ✂️✂️(B) such other information with respect to such

                fuel as the Secretary may require for purposes of

                carrying out this section.

    ✂️✂️(g) Coordination With Credit Against Excise Tax.—The amount of

the credit determined under this section with respect to any sustainable

aviation fuel shall, under rules prescribed by the Secretary, be

properly reduced to take into account any benefit provided with respect

to such sustainable aviation fuel solely by reason of the application of

section 6426 or 6427(e).

    ✂️✂️(h) Termination.—This section shall not apply to any sale or use

after December 31, 2024.’'.

    (b) Credit Made Part of General Business Credit.— Section 38(b), as

amended by the preceding provisions of this Act, <<NOTE: 26 USC 38.>>

is amended by striking ✂️✂️plus’' at the end of paragraph (33), by

striking the period at the end of paragraph (34) and inserting ✂️✂️,

plus’', and by inserting after paragraph (34) the following new

paragraph:

            ✂️✂️(35) the sustainable aviation fuel credit determined under

        section 40B.’'.

    (c) Coordination With Biodiesel Incentives.—

            (1) In general.—Section 40A(d)(1) is amended by inserting

        ✂️✂️or 40B’' after ✂️✂️determined under section 40’'.

            (2) Conforming amendment.—Section 40A(f) is amended by

        striking paragraph (4).

    (d) Sustainable Aviation Fuel Added to Credit for Alcohol Fuel,

Biodiesel, and Alternative Fuel Mixtures.—

            (1) In general.—Section 6426 is amended by adding at the

        end the following new subsection:

    ✂️✂️(k) Sustainable Aviation Fuel Credit.—

            ✂️✂️(1) In general.—For purposes of this section, the

        sustainable aviation fuel credit for the taxable year is, with

        respect to any sale or use of a qualified mixture, an amount

        equal to the product of—

                    ✂️✂️(A) the number of gallons of sustainable aviation

                fuel in such mixture, multiplied by

                    ✂️✂️(B) the sum of—

[[Page 136 STAT. 1935]]

                          ✂️✂️(i) $1.25, plus

                          ✂️✂️(ii) <<NOTE: Applicability.>> the

                      applicable supplementary amount with respect to

                      such sustainable aviation fuel.

            ✂️✂️(2) Definitions.—Any term used in this subsection which

        is also used in section 40B shall have the meaning given such

        term by section 40B.

            ✂️✂️(3) <<NOTE: Applicability.>> Registration requirement.—

        For purposes of this subsection, rules similar to the rules of

        section 40B(f) shall apply.’'.

            (2) Conforming amendments.—

                    (A) <<NOTE: 26 USC 6426.>> Section 6426 is

                amended—

                          (i) in subsection (a)(1), by striking ✂️✂️and

                      (e)’' and inserting ✂️✂️(e), and (k)’', and

                          (ii) in subsection (h), by striking ✂️✂️under

                      section 40 or 40A’' and inserting ✂️✂️under section

                      40, 40A, or 40B’'.

                    (B) Section 6427(e) is amended—

                          (i) in the heading, by striking ✂️✂️or

                      Alternative Fuel’' and inserting, ✂️✂️Alternative

                      Fuel, or Sustainable Aviation Fuel’',

                          (ii) in paragraph (1), by inserting ✂️✂️or the

                      sustainable aviation fuel mixture credit’' after

                      ✂️✂️alternative fuel mixture credit’', and

                          (iii) in paragraph (6)—

                                    (I) in subparagraph (C), by striking

                                ✂️✂️and’' at the end,

                                    (II) in subparagraph (D), by

                                striking the period at the end and

                                inserting ✂️✂️, and’', and

                                    (III) by adding at the end the

                                following new subparagraph:

                    ✂️✂️(E) any qualified mixture of sustainable aviation

                fuel (as defined in section 6426(k)(3)) sold or used

                after December 31, 2024.’'.

                    (C) Section 4101(a)(1) is amended by inserting

                ✂️✂️every person producing or importing sustainable

                aviation fuel (as defined in section 40B),’' before

                ✂️✂️and every person producing second generation

                biofuel’'.

                    (D) The table of sections for subpart D of

                subchapter A of chapter 1 is <<NOTE: 26 USC 38 prec.>>

                amended by inserting after the item relating to section

                40A the following new item:

✂️✂️Sec. 40B. Sustainable aviation fuel credit.’'.

    (e) Amount of Credit Included in Gross Income.—Section 87 is

amended by striking ✂️✂️and’' in paragraph (1), by striking the period at

the end of paragraph (2) and inserting ✂️✂️, and’', and by adding at the

end the following new paragraph:

            ✂️✂️(3) the sustainable aviation fuel credit determined with

        respect to the taxpayer for the taxable year under section

        40B(a).’'.

    (f) <<NOTE: 26 USC 40B note.>> Effective Date.—The amendments made

by this section shall apply to fuel sold or used after December 31,

2022.

1.11.SEC13204. CLEAN HYDROGEN.

    (a) Credit for Production of Clean Hydrogen.—

            (1) In general.—Subpart D of part IV of subchapter A of

        chapter 1, as amended by the preceding provisions of this Act,

        is amended by adding at the end the following new section:

[[Page 136 STAT. 1936]]

✂️✂️SEC. 45V. <<NOTE: 26 USC 45V.>> CREDIT FOR PRODUCTION OF CLEAN

                        HYDROGEN.

    ✂️✂️(a) Amount of Credit.—For purposes of section 38, the clean

hydrogen production credit for any taxable year is an amount equal to

the product of—

            ✂️✂️(1) <<NOTE: Time period.>> the kilograms of qualified

        clean hydrogen produced by the taxpayer during such taxable year

        at a qualified clean hydrogen production facility during the 10-

        year period beginning on the date such facility was originally

        placed in service, multiplied by

            ✂️✂️(2) the applicable amount (as determined under subsection

        (b)) with respect to such hydrogen.

    ✂️✂️(b) Applicable Amount.—

            ✂️✂️(1) In general.—For purposes of subsection (a)(2), the

        applicable amount shall be an amount equal to the applicable

        percentage of $0.60. If any amount as determined under the

        preceding sentence is not a multiple of 0.1 cent, such amount

        shall be rounded to the nearest multiple of 0.1 cent.

            ✂️✂️(2) <<NOTE: Determination.>> Applicable percentage.—For

        purposes of paragraph (1), the applicable percentage shall be

        determined as follows:

                    ✂️✂️(A) In the case of any qualified clean hydrogen

                which is produced through a process that results in a

                lifecycle greenhouse gas emissions rate of—

                          ✂️✂️(i) not greater than 4 kilograms of CO2e per

                      kilogram of hydrogen, and

                          ✂️✂️(ii) not less than 2.5 kilograms of CO2e per

                      kilogram of hydrogen,

                the applicable percentage shall be 20 percent.

                    ✂️✂️(B) In the case of any qualified clean hydrogen

                which is produced through a process that results in a

                lifecycle greenhouse gas emissions rate of—

                          ✂️✂️(i) less than 2.5 kilograms of CO2e per

                      kilogram of hydrogen, and

                          ✂️✂️(ii) not less than 1.5 kilograms of CO2e per

                      kilogram of hydrogen,

                the applicable percentage shall be 25 percent.

                    ✂️✂️(C) In the case of any qualified clean hydrogen

                which is produced through a process that results in a

                lifecycle greenhouse gas emissions rate of—

                          ✂️✂️(i) less than 1.5 kilograms of CO2e per

                      kilogram of hydrogen, and

                          ✂️✂️(ii) not less than 0.45 kilograms of CO2e

                      per kilogram of hydrogen,

                the applicable percentage shall be 33.4 percent.

                    ✂️✂️(D) In the case of any qualified clean hydrogen

                which is produced through a process that results in a

                lifecycle greenhouse gas emissions rate of less than

                0.45 kilograms of CO2e per kilogram of hydrogen, the

                applicable percentage shall be 100 percent.

            ✂️✂️(3) Inflation adjustment.—The $0.60 amount in paragraph

        (1) shall be adjusted by multiplying such amount by the

        inflation adjustment factor (as determined under section

        45(e)(2), determined by substituting ✂️2022’ for ✂️1992’ in

        subparagraph (B) thereof) for the calendar year in which the

        qualified clean hydrogen is produced. If any amount as increased

        under the preceding sentence is not a multiple of 0.1 cent, such

        amount shall be rounded to the nearest multiple of 0.1 cent.

    ✂️✂️(c) Definitions.—For purposes of this section—

[[Page 136 STAT. 1937]]

            ✂️✂️(1) Lifecycle greenhouse gas emissions.—

                    ✂️✂️(A) In general.—Subject to subparagraph (B), the

                term ✂️lifecycle greenhouse gas emissions’ has the same

                meaning given such term under subparagraph (H) of

                section 211(o)(1) of the Clean Air Act (42 U.S.C.

                7545(o)(1)), as in effect on the date of enactment of

                this section.

                    ✂️✂️(B) GREET model.—The term ✂️lifecycle greenhouse

                gas emissions’ shall only include emissions through the

                point of production (well-to-gate), as determined under

                the most recent Greenhouse gases, Regulated Emissions,

                and Energy use in Transportation model (commonly

                referred to as the ✂️GREET model’) developed by Argonne

                National Laboratory, or a successor model (as determined

                by the Secretary).

            ✂️✂️(2) Qualified clean hydrogen.—

                    ✂️✂️(A) In general.—The term ✂️qualified clean

                hydrogen’ means hydrogen which is produced through a

                process that results in a lifecycle greenhouse gas

                emissions rate of not greater than 4 kilograms of CO2e

                per kilogram of hydrogen.

                    ✂️✂️(B) Additional requirements.—Such term shall not

                include any hydrogen unless—

                          ✂️✂️(i) such hydrogen is produced—

                                    ✂️✂️(I) in the United States (as

                                defined in section 638(1)) or a

                                possession of the United States (as

                                defined in section 638(2)),

                                    ✂️✂️(II) in the ordinary course of a

                                trade or business of the taxpayer, and

                                    ✂️✂️(III) for sale or use, and

                          ✂️✂️(ii) the production and sale or use of such

                      hydrogen is verified by an unrelated party.

                    ✂️✂️(C) <<NOTE: Determination.>> Provisional

                emissions rate.—In the case of any hydrogen for which a

                lifecycle greenhouse gas emissions rate has not been

                determined for purposes of this section, a taxpayer

                producing such hydrogen may file a petition with the

                Secretary for determination of the lifecycle greenhouse

                gas emissions rate with respect to such hydrogen.

            ✂️✂️(3) Qualified clean hydrogen production facility.—The

        term ✂️qualified clean hydrogen production facility’ means a

        facility—

                    ✂️✂️(A) owned by the taxpayer,

                    ✂️✂️(B) which produces qualified clean hydrogen, and

                    ✂️✂️(C) <<NOTE: Effective date.>> the construction of

                which begins before January 1, 2033.

    ✂️✂️(d) Special Rules.—

            ✂️✂️(1) Treatment of facilities owned by more than 1

        taxpayer.—Rules similar <<NOTE: Applicability.>> to the rules

        section 45(e)(3) shall apply for purposes of this section.

            ✂️✂️(2) Coordination with credit for carbon oxide

        sequestration.—No credit shall be allowed under this section

        with respect to any qualified clean hydrogen produced at a

        facility which includes carbon capture equipment for which a

        credit is allowed to any taxpayer under section 45Q for the

        taxable year or any prior taxable year.

    ✂️✂️(e) Increased Credit Amount for Qualified Clean Hydrogen

Production Facilities.—

            ✂️✂️(1) In general.—In the case of any qualified clean

        hydrogen production facility which satisfies the requirements

[[Page 136 STAT. 1938]]

        of paragraph (2), the amount of the credit determined under

        subsection (a) with respect to qualified clean hydrogen

        described in subsection (b)(2) shall be equal to such amount

        (determined without regard to this sentence) multiplied by 5.

            ✂️✂️(2) Requirements.—A facility meets the requirements of

        this paragraph if it is one of the following:

                    ✂️✂️(A) A facility—

                          ✂️✂️(i) <<NOTE: Effective date. Time

                      period. Publication. Guidelines.>> the

                      construction of which begins prior to the date

                      that is 60 days after the Secretary publishes

                      guidance with respect to the requirements of

                      paragraphs (3)(A) and (4), and

                          ✂️✂️(ii) which meets the requirements of

                      paragraph (3)(A) with respect to alteration or

                      repair of such facility which occurs after such

                      date.

                    ✂️✂️(B) A facility which satisfies the requirements of

                paragraphs (3)(A) and (4).

            ✂️✂️(3) <<NOTE: Applicability.>> Prevailing wage

        requirements.—

                    ✂️✂️(A) <<NOTE: Determination.>> In general.—The

                requirements described in this subparagraph with respect

                to any qualified clean hydrogen production facility are

                that the taxpayer shall ensure that any laborers and

                mechanics employed by the taxpayer or any contractor or

                subcontractor in—

                          ✂️✂️(i) the construction of such facility, and

                          ✂️✂️(ii) with respect to any taxable year, for

                      any portion of such taxable year which is within

                      the period described in subsection (a)(2), the

                      alteration or repair of such facility,

                shall be paid wages at rates not less than the

                prevailing rates for construction, alteration, or repair

                of a similar character in the locality in which such

                facility is located as most recently determined by the

                Secretary of Labor, in accordance with subchapter IV of

                chapter 31 of title 40, United States Code. For purposes

                of determining an increased credit amount under

                paragraph (1) for a taxable year, the requirement under

                clause (ii) of this subparagraph is applied to such

                taxable year in which the alteration or repair of

                qualified facility occurs.

                    ✂️✂️(B) Correction and penalty related to failure to

                satisfy wage requirements.—Rules similar to the rules

                of section 45(b)(7)(B) shall apply.

            ✂️✂️(4) <<NOTE: Applicability.>> Apprenticeship

        requirements.—Rules similar to the rules of section 45(b)(8)

        shall apply.

            ✂️✂️(5) <<NOTE: Determination. Requirements. Records.>>

        Regulations and guidance.—The Secretary shall issue such

        regulations or other guidance as the Secretary determines

        necessary to carry out the purposes of this subsection,

        including regulations or other guidance which provides for

        requirements for recordkeeping or information reporting for

        purposes of administering the requirements of this subsection.

    ✂️✂️(f) <<NOTE: Deadline. Guidelines. Determinations.>>

Regulations.—Not later than 1 year after the date of enactment of this

section, the Secretary shall issue regulations or other guidance to

carry out the purposes of this section, including regulations or other

guidance for determining lifecycle greenhouse gas emissions.’'.

            (2) Credit reduced for tax-exempt bonds.—Section 45V(d), as

        added by this section, <<NOTE: 26 USC 45V.>> is amended by

        adding at the end the following new paragraph:

[[Page 136 STAT. 1939]]

            ✂️✂️(3) <<NOTE: Applicability.>> Credit reduced for tax-

        exempt bonds.—Rules similar to the rule under section 45(b)(3)

        shall apply for purposes of this section.’'.

            (3) Modification of existing facilities.—Section 45V(d), as

        added and amended by the preceding provisions of this

        section, <<NOTE: 26 USC 45V.>> is amended by adding at the end

        the following new paragraph:

            ✂️✂️(4) Modification of existing facilities.—For purposes of

        subsection (a)(1), in the case of any facility which—

                    ✂️✂️(A) <<NOTE: Effective date.>> was originally

                placed in service before January 1, 2023, and, prior to

                the modification described in subparagraph (B), did not

                produce qualified clean hydrogen, and

                    ✂️✂️(B) after the date such facility was originally

                placed in service—

                          ✂️✂️(i) is modified to produce qualified clean

                      hydrogen, and

                          ✂️✂️(ii) amounts paid or incurred with respect

                      to such modification are properly chargeable to

                      capital account of the taxpayer,

        such facility shall be deemed to have been originally placed in

        service as of the date that the property required to complete

        the modification described in subparagraph (B) is placed in

        service.’'.

            (4) Conforming amendments.—

                    (A) Section 38(b), as amended by the preceding

                provisions of this Act, is amended—

                          (i) in paragraph (34), by striking ✂️✂️plus’' at

                      the end,

                          (ii) in paragraph (35), by striking the period

                      at the end and inserting ✂️✂️, plus’', and

                          (iii) by adding at the end the following new

                      paragraph:

            ✂️✂️(36) the clean hydrogen production credit determined under

        section 45V(a).’'.

                    (B) The table of sections for subpart D of part IV

                of subchapter A of chapter 1, as amended by the

                preceding provisions of this Act, <<NOTE: 26 USC 38

                prec.>> is amended by adding at the end the following

                new item:

✂️✂️Sec. 45V. Credit for production of clean hydrogen.’'.

            (5) <<NOTE: Applicability. 26 USC 45V note.>> Effective

        dates.—

                    (A) In general.—The amendments made by paragraphs

                (1) and (4) of this subsection shall apply to hydrogen

                produced after December 31, 2022.

                    (B) Credit reduced for tax-exempt bonds.—The

                amendment made by paragraph (2) shall apply to

                facilities the construction of which begins after the

                date of enactment of this Act.

                    (C) Modification of existing facilities.—The

                amendment made by paragraph (3) shall apply to

                modifications made after December 31, 2022.

    (b) Credit for Electricity Produced From Renewable Resources Allowed

if Electricity Is Used to Produce Clean Hydrogen.—

            (1) In general.—Section 45(e), as amended by the preceding

        provisions of this Act, is amended by adding at the end the

        following new paragraph:

[[Page 136 STAT. 1940]]

            ✂️✂️(13) Special rule for electricity used at a qualified

        clean hydrogen production facility.—Electricity produced by the

        taxpayer shall be treated as sold by such taxpayer to an

        unrelated person during the taxable year if—

                    ✂️✂️(A) such electricity is used during such taxable

                year by the taxpayer or a person related to the taxpayer

                at a qualified clean hydrogen production facility (as

                defined in section 45V(c)(3)) to produce qualified clean

                hydrogen (as defined in section 45V(c)(2)), and

                    ✂️✂️(B) such use and production is verified (in such

                form or manner as the Secretary may prescribe) by an

                unrelated third party.’'.

            (2) Similar rule for zero-emission nuclear power production

        credit.—Subsection (c)(2) of section 45U, as added by section

        13105 of this Act, <<NOTE: 26 USC 45U.>> is amended by striking

        ✂️✂️and (5)’' and inserting ✂️✂️(5), and (13)’'.

            (3) <<NOTE: 26 USC 45 note.>> Effective date.—The

        amendments made by this subsection shall apply to electricity

        produced after December 31, 2022.

    (c) Election to Treat Clean Hydrogen Production Facilities as Energy

Property.—

            (1) In general.—Section 48(a), as amended by the preceding

        provisions of this Act, is amended—

                    (A) by redesignating paragraph (15) as paragraph

                (16), and

                    (B) by inserting after paragraph (14) the following

                new paragraph:

            ✂️✂️(15) Election to treat clean hydrogen production

        facilities as energy property.—

                    ✂️✂️(A) In general.—In the case of any qualified

                property (as defined in paragraph (5)(D)) which is part

                of a specified clean hydrogen production facility—

                          ✂️✂️(i) such property shall be treated as energy

                      property for purposes of this section, and

                          ✂️✂️(ii) the energy percentage with respect to

                      such property is—

                                    ✂️✂️(I) in the case of a facility

                                which is designed and reasonably

                                expected to produce qualified clean

                                hydrogen which is described in a

                                subparagraph (A) of section 45V(b)(2),

                                1.2 percent,

                                    ✂️✂️(II) in the case of a facility

                                which is designed and reasonably

                                expected to produce qualified clean

                                hydrogen which is described in a

                                subparagraph (B) of such section, 1.5

                                percent,

                                    ✂️✂️(III) in the case of a facility

                                which is designed and reasonably

                                expected to produce qualified clean

                                hydrogen which is described in a

                                subparagraph (C) of such section, 2

                                percent, and

                                    ✂️✂️(IV) in the case of a facility

                                which is designed and reasonably

                                expected to produce qualified clean

                                hydrogen which is described in

                                subparagraph (D) of such section, 6

                                percent.

                    ✂️✂️(B) Denial of production credit.—No credit shall

                be allowed under section 45V or section 45Q for any

                taxable year with respect to any specified clean

                hydrogen production facility or any carbon capture

                equipment included at such facility.

[[Page 136 STAT. 1941]]

                    ✂️✂️(C) Specified clean hydrogen production

                facility.—For purposes <<NOTE: Definition.>> of this

                paragraph, the term ✂️specified clean hydrogen production

                facility’ means any qualified clean hydrogen production

                facility (as defined in section 45V(c)(3))—

                          ✂️✂️(i) <<NOTE: Effective date.>> which is

                      placed in service after December 31, 2022,

                          ✂️✂️(ii) with respect to which—

                                    ✂️✂️(I) no credit has been allowed

                                under section 45V or 45Q, and

                                    ✂️✂️(II) the taxpayer makes an

                                irrevocable election to have this

                                paragraph apply, and

                          ✂️✂️(iii) <<NOTE: Verification.>> for which an

                      unrelated third party has verified (in such form

                      or manner as the Secretary may prescribe) that

                      such facility produces hydrogen through a process

                      which results in lifecycle greenhouse gas

                      emissions which are consistent with the hydrogen

                      that such facility was designed and expected to

                      produce under subparagraph (A)(ii).

                    ✂️✂️(D) <<NOTE: Definition.>> Qualified clean

                hydrogen.—For purposes of this paragraph, the term

                ✂️qualified clean hydrogen’ has the meaning given such

                term by section 45V(c)(2).

                    ✂️✂️(E) <<NOTE: Guidelines. Determination.>>

                Regulations.—The Secretary shall issue such regulations

                or other guidance as the Secretary determines necessary

                to carry out the purposes of this section, including

                regulations or other guidance which recaptures so much

                of any credit allowed under this section as exceeds the

                amount of the credit which would have been allowed if

                the expected production were consistent with the actual

                verified production (or all of the credit so allowed in

                the absence of such verification).’'.

            (2) Conforming amendment.—Paragraph (9)(A)(i) of section

        48(a), as added by section 13102, <<NOTE: 26 USC 48.>> is

        amended by inserting ✂️✂️and paragraph (15)’' after ✂️✂️paragraphs

        (1) through (8)’'.

            (3) <<NOTE: Applicability. 26 USC 48 note.>> Effective

        date.—The amendments made by this subsection shall apply to

        property placed in service after December 31, 2022, and, for any

        property the construction of which begins prior to January 1,

        2023, only to the extent of the basis thereof attributable to

        the construction, reconstruction, or erection after December 31,

        2022.

    (d) Termination of Excise Tax Credit for Hydrogen.—

            (1) In general.—Section 6426(d)(2) is amended by striking

        subparagraph (D) and by redesignating subparagraphs (E), (F),

        and (G) as subparagraphs (D), (E), and (F), respectively.

            (2) Conforming amendment.—Section 6426(e)(2) is amended by

        striking ✂️✂️(F)’' and inserting ✂️✂️(E)’'.

            (3) <<NOTE: 26 USC 6426 note.>> Effective date.—The

        amendments made by this subsection shall apply to fuel sold or

        used after December 31, 2022.

1.12.SEC13301. EXTENSION, INCREASE, AND MODIFICATIONS OF NONBUSINESS ENERGY PROPERTY CREDIT.

    (a) Extension of Credit.—Section 25C(g)(2) is amended by striking

✂️✂️December 31, 2021’' and inserting ✂️✂️December 31, 2032’'.

[[Page 136 STAT. 1942]]

    (b) <<NOTE: 26 USC 25C.>> Allowance of Credit.—Section 25C(a) is

amended to read as follows:

    ✂️✂️(a) Allowance of Credit.—In the case of an individual, there

shall be allowed as a credit against the tax imposed by this chapter for

the taxable year an amount equal to 30 percent of the sum of—

            ✂️✂️(1) the amount paid or incurred by the taxpayer for

        qualified energy efficiency improvements installed during such

        taxable year, and

            ✂️✂️(2) the amount of the residential energy property

        expenditures paid or incurred by the taxpayer during such

        taxable year.’'.

    (c) Application of Annual Limitation in Lieu of Lifetime

Limitation.—Section 25C(b) is amended to read as follows:

    ✂️✂️(b) Limitations.—

            ✂️✂️(1) In general.—The credit allowed under this section

        with respect to any taxpayer for any taxable year shall not

        exceed $1,200.

            ✂️✂️(2) Energy property.—The credit allowed under this

        section by reason of subsection (a)(2) with respect to any

        taxpayer for any taxable year shall not exceed, with respect to

        any item of qualified energy property, $600.

            ✂️✂️(3) Windows.—The credit allowed under this section by

        reason of subsection (a)(1) with respect to any taxpayer for any

        taxable year shall not exceed, in the aggregate with respect to

        all exterior windows and skylights, $600.

            ✂️✂️(4) Doors.—The credit allowed under this section by

        reason of subsection (a)(1) with respect to any taxpayer for any

        taxable year shall not exceed—

                    ✂️✂️(A) $250 in the case of any exterior door, and

                    ✂️✂️(B) $500 in the aggregate with respect to all

                exterior doors.

            ✂️✂️(5) Heat pump and heat pump water heaters; biomass stoves

        and boilers.—Notwithstanding paragraphs (1) and (2), the credit

        allowed under this section by reason of subsection (a)(2) with

        respect to any taxpayer for any taxable year shall not, in the

        aggregate, exceed $2,000 with respect to amounts paid or

        incurred for property described in clauses (i) and (ii) of

        subsection (d)(2)(A) and in subsection (d)(2)(B).’'.

    (d) Modifications Related to Qualified Energy Efficiency

Improvements.—

            (1) Standards for energy efficient building envelope

        components.—Section 25C(c)(2) is amended by striking ✂️✂️meets—

        ’' and all that follows through the period at the end and

        inserting the following: ✂️✂️meets—

                    ✂️✂️(A) in the case of an exterior window or skylight,

                Energy Star most efficient certification requirements,

                    ✂️✂️(B) in the case of an exterior door, applicable

                Energy Star requirements, and

                    ✂️✂️(C) <<NOTE: Effective date.>> in the case of any

                other component, the prescriptive criteria for such

                component established by the most recent International

                Energy Conservation Code standard in effect as of the

                beginning of the calendar year which is 2 years prior to