Restrictions on clean electricity investment credit

(a) Termination of credit Section 48E is amended by striking subsection (e) and by adding at the end the following new subsection: (j) Termination of credit (1) In general Except as provided in paragraph (2), no credit shall be allowed under this section for any qualified facility or energy storage technology— (A) the construction of which begins after the date which is 60 days after the date of the enactment of this subsection, or (B) which is placed in service after December 31, 2028. (2) Advanced nuclear facility In the case of any qualified facility that is an advanced nuclear facility (as defined in section 45J(d)(2))— (A) paragraph (1) shall not apply, and (B) no credit shall be allowed under this section for any such facility the construction of which begins after December 31, 2028.. (b) Restrictions relating to prohibited foreign entities (1) In general Section 48E is amended— (A) in subsection (b)(3), by adding at the end the following new subparagraph: (D) Material assistance from prohibited foreign entities The term qualified facility shall not include any facility the construction of which begins after December 31, 2025 if the construction of such facility includes any material assistance from a prohibited foreign entity (as defined in section 7701(a)(52))., and (B) in subsection (c), by adding at the end the following new paragraph: (3) Material assistance from prohibited foreign entities The term energy storage technology shall not include any property the construction of which begins after December 31, 2025 if the construction of such property includes any material assistance from a prohibited foreign entity (as defined in section 7701(a)(52)).. (2) Restrictions relating to prohibited foreign entities Section 48E(d) is amended by adding at the end the following new paragraph: (6) Restrictions relating to prohibited foreign entities (A) In general No credit determined under subsection (a) shall be allowed under section 38 for any taxable year beginning after the date of enactment of this paragraph if the taxpayer is a specified foreign entity (as defined in section 7701(a)(51)(B)). (B) Other prohibited foreign entities No credit determined under subsection (a) shall be allowed under section 38 for any taxable year beginning after the date which is 2 years after the date of enactment of this paragraph if— (i) the taxpayer is a foreign-influenced entity (as defined in section 7701(a)(51)(D)), or (ii) during such taxable year, the taxpayer— (I) makes a payment of dividends, interest, compensation for services, rentals or royalties, guarantees or any other fixed, determinable, annual, or periodic amount to a prohibited foreign entity (as defined in section 7701(a)(51)) in an amount which is equal to or greater than 5 percent of the total of such payments made by such taxpayer during such taxable year which are related to the production of electricity or storage of energy, or (II) makes payments described in subclause (I) to more than 1 prohibited foreign entity (as so defined) in an amount which, in the aggregate, is equal to or greater than 15 percent of the total of such payments made by such taxpayer during such taxable year which are related to the production of electricity or storage of energy.. (3) Recapture Section 50(a) is amended— (A) by redesignating paragraphs (4) through (6) as paragraphs (5) through (7), respectively, (B) by inserting after paragraph (3) the following new paragraph: (4) Payments to prohibited foreign entities (A) In general If there is an applicable payment made by a specified taxpayer before the close of the 10-year period beginning on the date such taxpayer placed in service investment credit property which is eligible for the clean electricity investment credit under section 48E(a), then the tax under this chapter for the taxable year in which such applicable payment occurs shall be increased by 100 percent of the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted solely from reducing to zero any credit determined under section 46 which is attributable to the clean electricity investment credit under section 48E(a) with respect to such property. (B) Applicable payment For purposes of this paragraph, the term applicable payment means, with respect to any taxable year, a payment or payments described in subclause (I) or (II) of section 48E(d)(6)(B)(ii). (C) Specified taxpayer For purposes of this paragraph, the term specified taxpayer means any taxpayer who has been allowed a credit under section 48E(a) for any taxable year beginning after the date which is 2 years after the date of enactment of this paragraph., (C) in paragraph (5), as redesignated by subparagraph (A), by striking or any applicable transaction to which paragraph (3)(A) applies, and inserting any applicable transaction to which paragraph (3)(A) applies, or any applicable payment to which paragraph (4)(A) applies,, and (D) in paragraph (7), as redesignated by subparagraph (A), by striking or (3) and inserting (3), or (4). (c) Denial of credit for expenditures for certain wind and solar leasing arrangements Section 48E, as amended by subsection (a), is amended by inserting after subsection (d) the following new subsection: (e) Denial of credit for expenditures for wind and solar leasing arrangements No credit shall be allowed under this section for any investment during the taxable year with respect to property described in paragraph (1), (2), or (4) of section 25D(d) if— (1) the taxpayer rents or leases such property to a third party during such taxable year, and (2) the lessee would qualify for a credit under section 25D with respect to such property if the lessee owned such property.. (d) Conforming amendments Section 48E(h)(4) is amended— (1) in subparagraph (C), by striking December 31 of the applicable year (as defined in section 45Y(d)(3)) and inserting December 31, 2028, (2) in subparagraph (D), by striking the third calendar year following the applicable year (as defined in section 45Y(d)(3)) and inserting 2028, and (3) in subparagraph (E)(i), by striking 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 and inserting the earlier of— (I) the date that is 4 years after the date of the allocation with respect to the facility of which such property is a part, or (II) December 31, 2028.. (e) Effective dates (1) In general Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after the date of enactment of this Act. (2) Termination of credit The amendment made by subsection (a) shall apply to facilities and energy storage technology for which construction begins after the date that is 60 days after the date of enactment of this Act.

(a) Termination of credit Section 48E is amended by striking subsection (e) and by adding at the end the following new subsection: (j) Termination of credit (1) In general Except as provided in paragraph (2), no credit shall be allowed under this section for any qualified facility or energy storage technology— (A) the construction of which begins after the date which is 60 days after the date of the enactment of this subsection, or (B) which is placed in service after December 31, 2028. (2) Advanced nuclear facility In the case of any qualified facility that is an advanced nuclear facility (as defined in section 45J(d)(2))— (A) paragraph (1) shall not apply, and (B) no credit shall be allowed under this section for any such facility the construction of which begins after December 31, 2028.. (b) Restrictions relating to prohibited foreign entities (1) In general Section 48E is amended— (A) in subsection (b)(3), by adding at the end the following new subparagraph: (D) Material assistance from prohibited foreign entities The term qualified facility shall not include any facility the construction of which begins after December 31, 2025 if the construction of such facility includes any material assistance from a prohibited foreign entity (as defined in section 7701(a)(52))., and (B) in subsection (c), by adding at the end the following new paragraph: (3) Material assistance from prohibited foreign entities The term energy storage technology shall not include any property the construction of which begins after December 31, 2025 if the construction of such property includes any material assistance from a prohibited foreign entity (as defined in section 7701(a)(52)).. (2) Restrictions relating to prohibited foreign entities Section 48E(d) is amended by adding at the end the following new paragraph: (6) Restrictions relating to prohibited foreign entities (A) In general No credit determined under subsection (a) shall be allowed under section 38 for any taxable year beginning after the date of enactment of this paragraph if the taxpayer is a specified foreign entity (as defined in section 7701(a)(51)(B)). (B) Other prohibited foreign entities No credit determined under subsection (a) shall be allowed under section 38 for any taxable year beginning after the date which is 2 years after the date of enactment of this paragraph if— (i) the taxpayer is a foreign-influenced entity (as defined in section 7701(a)(51)(D)), or (ii) during such taxable year, the taxpayer— (I) makes a payment of dividends, interest, compensation for services, rentals or royalties, guarantees or any other fixed, determinable, annual, or periodic amount to a prohibited foreign entity (as defined in section 7701(a)(51)) in an amount which is equal to or greater than 5 percent of the total of such payments made by such taxpayer during such taxable year which are related to the production of electricity or storage of energy, or (II) makes payments described in subclause (I) to more than 1 prohibited foreign entity (as so defined) in an amount which, in the aggregate, is equal to or greater than 15 percent of the total of such payments made by such taxpayer during such taxable year which are related to the production of electricity or storage of energy.. (3) Recapture Section 50(a) is amended— (A) by redesignating paragraphs (4) through (6) as paragraphs (5) through (7), respectively, (B) by inserting after paragraph (3) the following new paragraph: (4) Payments to prohibited foreign entities (A) In general If there is an applicable payment made by a specified taxpayer before the close of the 10-year period beginning on the date such taxpayer placed in service investment credit property which is eligible for the clean electricity investment credit under section 48E(a), then the tax under this chapter for the taxable year in which such applicable payment occurs shall be increased by 100 percent of the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted solely from reducing to zero any credit determined under section 46 which is attributable to the clean electricity investment credit under section 48E(a) with respect to such property. (B) Applicable payment For purposes of this paragraph, the term applicable payment means, with respect to any taxable year, a payment or payments described in subclause (I) or (II) of section 48E(d)(6)(B)(ii). (C) Specified taxpayer For purposes of this paragraph, the term specified taxpayer means any taxpayer who has been allowed a credit under section 48E(a) for any taxable year beginning after the date which is 2 years after the date of enactment of this paragraph., (C) in paragraph (5), as redesignated by subparagraph (A), by striking or any applicable transaction to which paragraph (3)(A) applies, and inserting any applicable transaction to which paragraph (3)(A) applies, or any applicable payment to which paragraph (4)(A) applies,, and (D) in paragraph (7), as redesignated by subparagraph (A), by striking or (3) and inserting (3), or (4). (c) Denial of credit for expenditures for certain wind and solar leasing arrangements Section 48E, as amended by subsection (a), is amended by inserting after subsection (d) the following new subsection: (e) Denial of credit for expenditures for wind and solar leasing arrangements No credit shall be allowed under this section for any investment during the taxable year with respect to property described in paragraph (1), (2), or (4) of section 25D(d) if— (1) the taxpayer rents or leases such property to a third party during such taxable year, and (2) the lessee would qualify for a credit under section 25D with respect to such property if the lessee owned such property.. (d) Conforming amendments Section 48E(h)(4) is amended— (1) in subparagraph (C), by striking December 31 of the applicable year (as defined in section 45Y(d)(3)) and inserting December 31, 2028, (2) in subparagraph (D), by striking the third calendar year following the applicable year (as defined in section 45Y(d)(3)) and inserting 2028, and (3) in subparagraph (E)(i), by striking 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 and inserting the earlier of— (I) the date that is 4 years after the date of the allocation with respect to the facility of which such property is a part, or (II) December 31, 2028.. (e) Effective dates (1) In general Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after the date of enactment of this Act. (2) Termination of credit The amendment made by subsection (a) shall apply to facilities and energy storage technology for which construction begins after the date that is 60 days after the date of enactment of this Act.