SECTION 2. BACKGROUND

.01 Section 45Q was enacted by § 115 of the Energy Improvement and Extension Act of 2008, Pub. L. No. 110–343, 122 Stat. 3829 (October 3, 2008), as amended by § 1131 of the American Recovery and Reinvestment Tax Act of 2009, Division B of Pub. L. 111–5, 123 Stat 115 (Feb. 17, 2009). Section 45Q(a) provides that a credit for CO 2 sequestration (§ 45Q credit) is generally available to a taxpayer that captures qualified CO 2 at a qualified facility and disposes of the CO in secure ge2 ological storage within the United States, effective for CO 2 captured after October 3, 2008. As originally enacted, § 45Q(a)(1) provides for a credit of $20 per metric ton of qualified CO that is captured and dis2 posed of in secure geological storage, and § 45Q(a)(2) provides for a credit of $10 per metric ton of qualified CO 2 that is captured and used as a tertiary injectant in a qualified enhanced oil or natural gas recovery project (EOR project). Section 45Q(a), as amended, provides additional requirements effective after February 17, 2009, that, for purposes of the $20 per metric ton credit under § 45Q(a)(1), the qualified CO must not be used as a tertiary injec2 tant; and, for purposes of the $10 per met

ric ton credit under § 45Q(a)(2), the qualified CO 2 used as a tertiary injectant must be disposed of in secure geological storage.

.02 Section 45Q(d)(2) as amended provides that the Secretary of Treasury or his or her delegate (the Secretary), in consultation with the Administrator of the Environmental Protection Agency (EPA), the Secretary of Energy (DOE), and the Secretary of the Interior (DOI), shall establish regulations for determining adequate security measures for the geological storage of CO 2 such that the CO 2 does not escape into the atmosphere.

.03 Section 45Q(d)(5) provides that the § 45Q credit is attributable to the person that captures and physically or contractually ensures the disposal of or the use as a tertiary injectant of the qualified CO 2, except to the extent provided in regulations prescribed by the Secretary.

.04 Section 45Q(d)(6) provides for a recapture of the benefit of any credit allowable under § 45Q(a) with respect to any qualified CO ceases to be captured, 2 that disposed of, or used as a tertiary injectant in a manner consistent with the requirements of § 45Q.

.05 Section 45Q(d)(7) provides that, for taxable years beginning in a calendar year after 2009, the dollar amount contained in § 45Q(a) will be substituted for an amount equal to the product of such dollar amount multiplied by the inflation adjustment factor for such calendar year determined under § 43(b)(3)(B), determined by substituting “2008” for “1990.”

.06 Section 45Q(e) as amended provides that the § 45Q credit will apply with respect to qualified CO before the end 2 of the calendar year in which the Secretary, in consultation with EPA, certifies that 75,000,000 metric tons of qualified CO been taken into account in ac2 have cordance with § 45Q(a).