Text: S.3032 — 116th Congress (2019-2020)All Information (Except Text)

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Introduced in Senate (12/12/2019)


116th CONGRESS
1st Session
S. 3032


To amend the Internal Revenue Code of 1986 to allow for transfers of the renewable electricity production credit, the energy credit, and the credit for carbon oxide sequestration.


IN THE SENATE OF THE UNITED STATES

December 12, 2019

Mr. Bennet introduced the following bill; which was read twice and referred to the Committee on Finance


A BILL

To amend the Internal Revenue Code of 1986 to allow for transfers of the renewable electricity production credit, the energy credit, and the credit for carbon oxide sequestration.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title.

This Act may be cited as the “Renewable Energy Transferability Act”.

SEC. 2. Transfers of credits for renewable electricity production facilities and energy property.

(a) Renewable electricity production credit.—Section 45(e) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(12) TRANSFER OF CREDIT.—

“(A) IN GENERAL.—If the taxpayer elects to transfer all (or any portion specified in the election) of the credit determined under this section for any taxable year with respect to any qualified facility to an eligible project partner for a specified period, then, the eligible project partner specified in such election (and not the taxpayer) shall be treated for purposes of this title with respect to such credit (or such portion thereof) as the person producing and selling the electricity to which such credit (or portion thereof) relates.

“(B) DEDUCTION FOR PAYMENTS IN CONNECTION WITH TRANSFER.—There shall be allowed as a deduction under part VI of subchapter B an amount equal to the amount paid by a taxpayer as consideration for a transfer described in subparagraph (A).

“(C) ELIGIBLE PROJECT PARTNER.—For purposes of this paragraph, the term ‘eligible project partner’ means, with respect to any qualified facility, any person who—

“(i) has an ownership interest in such qualified facility,

“(ii) provided equipment for or services in the construction of such qualified facility,

“(iii) provides electric transmission or distribution services for such qualified facility,

“(iv) purchases electricity from such qualified facility pursuant to a contract, or

“(v) provides financing for such qualified facility.

For purposes of clause (v), any amount paid as consideration for a transfer described in subparagraph (A) shall not be treated as financing of a qualified facility.

“(D) TAXABLE YEAR IN WHICH CREDIT TAKEN INTO ACCOUNT.—In the case of any credit (or portion thereof) with respect to which an election is made under subparagraph (A), such credit shall be taken into account in the first taxable year of the eligible project partner ending with, or after, the electing taxpayer’s taxable year with respect to which the credit was determined.

“(E) LIMITATIONS ON ELECTION.—

“(i) TIME FOR ELECTION.—An election under this paragraph to transfer any portion of the credit allowed under this section shall be made not later than the due date for the return of tax for the electing taxpayer’s taxable year with respect to which the credit was determined.

“(ii) NO FURTHER TRANSFERS.—No election may be made under this paragraph by a taxpayer with respect to any portion of the credit allowed under this section which has been previously transferred to such taxpayer under this paragraph.

“(F) TREATMENT OF TRANSFER UNDER PRIVATE USE RULES.—For purposes of section 141(b)(1), any benefit derived by an eligible project partner in connection with an election under this paragraph shall not be taken into account as a private business use.

“(G) ADDITIONAL ELECTION REQUIREMENTS.—The Secretary may prescribe such regulations as may be appropriate to carry out the purposes of this paragraph, including—

“(i) rules for determining which persons are eligible project partners with respect to any energy property, and

“(ii) requiring information to be included in an election under subparagraph (A) or imposing additional reporting requirements.”.

(b) Energy credit.—

(1) IN GENERAL.—Section 48 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

“(e) Transfer of credit.—

“(1) IN GENERAL.—If the taxpayer elects to transfer all (or any portion specified in the election) of the credit determined under this section for any taxable year with respect to any energy property to an eligible project partner, the eligible project partner specified in such election (and not the taxpayer) shall be treated as the taxpayer for purposes of this title with respect to such credit (or portion thereof).

“(2) DEDUCTION FOR PAYMENTS IN CONNECTION WITH TRANSFER.—There shall be allowed as a deduction under part VI of subchapter B an amount equal to the amount paid by a taxpayer as consideration for a transfer described in paragraph (1).

“(3) ELIGIBLE PROJECT PARTNER.—For purposes of this subsection, the term ‘eligible project partner’ means, with respect to any energy property, any person who—

“(A) has an ownership interest in such energy property,

“(B) provided equipment for or services in the construction of such energy property,

“(C) provides electric transmission or distribution services for such energy property,

“(D) purchases electricity from such qualified facility pursuant to a contract, or

“(E) provides financing for such energy property.

For purposes of subparagraph (E), any amount paid as consideration for a transfer described in paragraph (1) shall not be treated as financing of a qualified facility.

“(4) TAXABLE YEAR IN WHICH CREDIT TAKEN INTO ACCOUNT.—In the case of any credit (or portion thereof) with respect to which an election is made under paragraph (1), such credit shall be taken into account in the first taxable year of the eligible project partner ending with, or after, the electing taxpayer’s taxable year with respect to which the credit was determined.

“(5) LIMITATIONS ON ELECTION.—

“(A) TIME FOR ELECTION.—An election under this subsection to transfer any portion of the credit allowed under this section shall be made not later than the due date for the return of tax for the electing taxpayer’s taxable year with respect to which the credit was determined.

“(B) NO FURTHER TRANSFERS.—No election may be made under this subsection by a taxpayer with respect to any portion of the credit allowed under this section which has been previously transferred to such taxpayer under this subsection.

“(6) TREATMENT OF TRANSFER UNDER PRIVATE USE RULES.—For purposes of section 141(b)(1), any benefit derived by an eligible project partner in connection with an election under this subsection shall not be taken into account as a private business use.

“(7) ADDITIONAL ELECTION REQUIREMENTS.—The Secretary may prescribe such regulations as may be appropriate to carry out the purposes of this subsection, including—

“(A) rules for determining which persons are eligible project partners with respect to any energy property, and

“(B) requiring information to be included in an election under paragraph (1) or imposing additional reporting requirements.”.

(2) NORMALIZATION RULES.—Section 50(d) of such Code is amended by adding at the end the following: “In the case of any energy property with respect to which an election is made under section 48(e)(1), the rules of the section 46(f) referred to in paragraph (2) shall apply only to the extent of amounts paid in consideration of the transfer to which such election relates.”.

(c) Credit for carbon oxide sequestration.—Subparagraph (B) of section 45Q(f)(3) of the Internal Revenue Code of 1986 is amended to read as follows:

“(B) TRANSFER OF CREDIT.—

“(i) IN GENERAL.—If the person described in subparagraph (A) elects to transfer all (or any portion specified in the election) of the credit determined under this section for any taxable year with respect to any qualified facility to an eligible project partner for a specified period, then, the eligible project partner specified in such election (and not the person described in subparagraph (A)) shall be treated for purposes of this title with respect to such credit (or such portion thereof) as the person described in clause (i) or (ii) of such subparagraph, as applicable, to which such credit (or portion thereof) relates.

“(ii) DEDUCTION FOR PAYMENTS IN CONNECTION WITH TRANSFER.—There shall be allowed as a deduction under part VI of subchapter B an amount equal to the amount paid by a taxpayer as consideration for a transfer described in clause (i).

“(iii) ELIGIBLE PROJECT PARTNER.—For purposes of this subparagraph, the term ‘eligible project partner’ means, with respect to any qualified facility, any person who—

“(I) has an ownership interest in such qualified facility or any carbon capture equipment which is placed in service at such qualified facility,

“(II) provided equipment for or services in the construction of such qualified facility or any carbon capture equipment which is placed in service at such qualified facility,

“(III) provides fuel or feedstock for the operation of such qualified facility,

“(IV) provides transportation, transmission, or distribution services for such qualified facility,

“(V) purchases, pursuant to a contract, the industrial output of such qualified facility or the commercial products produced by utilization of qualified carbon oxide captured at such qualified facility,

“(VI) disposes of the qualified carbon oxide, utilizes the qualified carbon oxide, or uses the qualified carbon oxide as a tertiary injectant, or

“(VII) provides financing for such qualified facility or any carbon capture equipment which is placed in service at such qualified facility.

For purposes of subclause (VII), any amount paid as consideration for a transfer described in clause (i) shall not be treated as financing of a qualified facility.

“(iv) TAXABLE YEAR IN WHICH CREDIT TAKEN INTO ACCOUNT.—In the case of any credit (or portion thereof) with respect to which an election is made under clause (i), such credit shall be taken into account in the first taxable year of the eligible project partner ending with, or after, the electing taxpayer’s taxable year with respect to which the credit was determined.

“(v) LIMITATIONS ON ELECTION.—

“(I) TIME FOR ELECTION.—An election under this subparagraph to transfer any portion of the credit allowed under this section shall be made not later than the due date for the return of tax for the electing taxpayer’s taxable year with respect to which the credit was determined.

“(II) NO FURTHER TRANSFERS.—No election may be made under this subparagraph by a taxpayer with respect to any portion of the credit allowed under this section which has been previously transferred to such taxpayer under this subparagraph.

“(vi) TREATMENT OF TRANSFER UNDER PRIVATE USE RULES.—For purposes of section 141(b)(1), any benefit derived by an eligible project partner in connection with an election under this subparagraph shall not be taken into account as a private business use.

“(vii) ADDITIONAL ELECTION REQUIREMENTS.—The Secretary may prescribe such regulations as may be appropriate to carry out the purposes of this subparagraph, including—

“(I) rules for determining which persons are eligible project partners with respect to any qualified facility, and

“(II) requiring information to be included in an election under clause (i) or imposing additional reporting requirements.

“(viii) TRANSITION RULES.—Any election made under this subparagraph with respect to a qualified facility for any taxable years beginning before the date of enactment of the Renewable Energy Transferability Act shall not apply to any taxable years beginning after the date of enactment of such Act, and the person described in subparagraph (A) may make a new election or elections under clause (i) with respect to such qualified facility.”.

(d) Special rule for proceeds of transfers for mutual or cooperative electric companies.—Section 501(c)(12)(I) of such Code is amended by striking “45J(e)(1)” and inserting “45(e)(12), 45J(e)(1), 45Q(f)(3)(B), or 48(e)(1)”.

(e) Effective date.—The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.


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