# Plain Language Summary: Qualified Agricultural Carbon Sequestration Act of 2022

This bill creates a new tax credit that pays farmers money for reducing greenhouse gas emissions and storing carbon in their soil. Essentially, the government is offering financial rewards to farms that either emit less pollution than they used to or that build up more organic matter in their soil, which naturally traps carbon dioxide. The credits would start in 2023 and continue indefinitely, with the payment amounts gradually increasing over the first few years and then adjusting for inflation.

The bill sets up three different ways farmers can earn these credits. First, farms get paid for reducing their emissions compared to a baseline year—the year they first get certified in the program. The payment starts at about $22.66 per metric ton of emissions reduced and rises to $50 per metric ton by 2027. Second, farms earn a smaller credit (10% of the payment rate) for actually storing more carbon in their soil year after year, which can continue for up to ten years. Third, there's a one-time bonus for "early adopters"—farms that already have more carbon stored in their soil than the average farm in their county when they first join the program.

To participate, farmers must apply to the Department of Treasury (working with the Department of Agriculture) and get certified. The government will verify that the carbon reductions are real, additional to what would have happened anyway, properly measured, and permanent. If a farmer receives credits for storing carbon but then stops using practices that keep that carbon in the soil within ten years, they'll have to pay back some of the tax benefits. The program is designed to encourage sustainable farming practices that fight climate change while putting money back into farmers' pockets.

Qualified Agricultural Carbon Sequestration Act of 2022

Ryan, Tim

Qualified Agricultural Carbon Sequestration Act of 2022 This bill allows certain qualified applicants (i.e., farms) a new tax credit for the abatement and sequestration of carbon dioxide emissions related to certain agricultural activities. The bill requires the Department of the Treasury to establish a qualified agricultural carbon sequestration and abatement program to consider and award certifications for farms eligible for the credit.