S.Amdt. 2366

1. Adds SEC. __. EXTENSION AND EXPANSION OF CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE RESOURCES wherever appropriate

   Adds a section

   Inserted: SEC. __. EXTENSION AND EXPANSION OF CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE RESOURCES.

   Inserted: (a) Expansion of Qualified Energy Resources.--Subsection (c) of section 45 of the Internal Revenue Code of 1986 (relating to electricity produced from certain renewable resources) is amended to read as follows:

   Inserted: "(c) Qualified Energy Resources.--For purposes of this section--

   Inserted: "(1) In general.--The term 'qualified energy resources' means--

   Inserted: "(A) wind,

   Inserted: "(B) closed-loop biomass,

   Inserted: "(C) open-loop biomass,

   Inserted: "(D) geothermal energy,

   Inserted: "(E) solar energy,

   Inserted: "(F) small irrigation power, and

   Inserted: "(G) municipal solid waste.

   Inserted: "(2) Closed-loop biomass.--The term 'closed-loop biomass' means any organic material from a plant which is planted exclusively for purposes of being used at a qualified facility to produce electricity.

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   Inserted: "(3) Open-loop biomass.--

   Inserted: "(A) In general.--The term 'open-loop biomass' means--

   Inserted: "(i) any agricultural livestock waste nutrients, or

   Inserted: "(ii) any solid, nonhazardous, cellulosic waste material which is segregated from other waste materials and which is derived from--

   Inserted: "(I) any of the following forest-related resources: mill and harvesting residues, precommercial thinnings, slash, and brush,

   Inserted: "(II) solid wood waste materials, including waste pallets, crates, dunnage, manufacturing and construction wood wastes (other than pressure-treated, chemically-treated, or painted wood wastes), and landscape or right-of-way tree trimmings, but not including municipal solid waste, gas derived from the biodegradation of solid waste, or paper which is commonly recycled, or

   Inserted: "(III) agriculture sources, including orchard tree crops, vineyard, grain, legumes, sugar, and other crop by-products or residues.

   Inserted: Such term shall not include closed-loop biomass.

   Inserted: "(B) Agricultural livestock waste nutrients.--

   Inserted: "(i) In general.--The term 'agricultural livestock waste nutrients' means agricultural livestock manure and litter, including wood shavings, straw, rice hulls, and other bedding material for the disposition of manure.

   Inserted: "(ii) Agricultural livestock.--The term 'agricultural livestock' includes bovine, swine, poultry, and sheep.

   Inserted: "(4) Geothermal energy.--The term 'geothermal energy' means energy derived from a geothermal deposit (within the meaning of section 613(e)(2)).

   Inserted: "(5) Small irrigation power.--The term 'small irrigation power' means power--

   Inserted: "(A) generated without any dam or impoundment of water through an irrigation system canal or ditch, and

   Inserted: "(B) the nameplate capacity rating of which is not less than 150 kilowatts but is less than 5 megawatts.

   Inserted: "(6) Municipal solid waste.--The term 'municipal solid waste' has the meaning given the term 'solid waste' under section 2(27) of the Solid Waste Disposal Act (42 U.S.C. 6903).".

   Inserted: (b) Extension and Expansion of Qualified Facilities.--

   Inserted: (1) In general.--Section 45 of the Internal Revenue Code of 1986 is amended by redesignating subsection (d) as subsection (e) and by inserting after subsection (c) the following new subsection:

   Inserted: "(d) Qualified Facilities.--For purposes of this section--

   Inserted: "(1) Wind facility.--In the case of a facility using wind to produce electricity, the term 'qualified facility' means any facility owned by the taxpayer which is originally placed in service after December 31, 1993, and before January 1, 2007.

   Inserted: "(2) Closed-loop biomass facility.--

   Inserted: "(A) In general.--In the case of a facility using closed-loop biomass to produce electricity, the term 'qualified facility' means any facility--

   Inserted: "(i) owned by the taxpayer which is originally placed in service after December 31, 1992, and before January 1, 2007, or

   Inserted: "(ii) owned by the taxpayer which before January 1, 2007, is originally placed in service and modified to use closed-loop biomass to co-fire with coal, with other biomass, or with both, but only if the modification is approved under the Biomass Power for Rural Development Programs or is part of a pilot project of the Commodity Credit Corporation as described in 65 Fed. Reg. 63052.

   Inserted: "(B) Special rules.--In the case of a qualified facility described in subparagraph (A)(ii)--

   Inserted: "(i) the 10-year period referred to in subsection (a) shall be treated as beginning no earlier than January 1, 2004,

   Inserted: "(ii) the amount of the credit determined under subsection (a) with respect to the facility shall be an amount equal to the amount determined without regard to this clause multiplied by the ratio of the thermal content of the closed-loop biomass used in such facility to the thermal content of all fuels used in such facility, and

   Inserted: "(iii) if the owner of such facility is not the producer of the electricity, the person eligible for the credit allowable under subsection (a) shall be the lessee or the operator of such facility.

   Inserted: "(3) Open-loop biomass facilities.--

   Inserted: "(A) In general.--In the case of a facility using open-loop biomass to produce electricity, the term 'qualified facility' means any facility owned by the taxpayer which--

   Inserted: "(i) in the case of a facility using agricultural livestock waste nutrients--

   Inserted: "(I) is originally placed in service after December 31, 2003, and before January 1, 2007, and

   Inserted: "(II) the nameplate capacity rating of which is not less than 150 kilowatts, and

   Inserted: "(ii) in the case of any other facility, is originally placed in service before January 1, 2007.

   Inserted: "(B) Credit eligibility.--In the case of any facility described in subparagraph (A), if the owner of such facility is not the producer of the electricity, the person eligible for the credit allowable under subsection (a) shall be the lessee or the operator of such facility.

   Inserted: "(4) Geothermal or solar energy facility.--In the case of a facility using geothermal or solar energy to produce electricity, the term 'qualified facility' means any facility owned by the taxpayer which is originally placed in service after December 31, 2003, and before January 1, 2007. Such term shall not include any property described in section 48(a)(3) the basis of which is taken into account by the taxpayer for purposes of determining the energy credit under section 48.

   Inserted: "(5) Small irrigation power facility.--In the case of a facility using small irrigation power to produce electricity, the term 'qualified facility' means any facility owned by the taxpayer which is originally placed in service after December 31, 2003, and before January 1, 2007.

   Inserted: "(6) Landfill gas facilities.--In the case of a facility producing electricity from gas derived from the biodegradation of municipal solid waste, the term 'qualified facility' means any facility owned by the taxpayer which is originally placed in service after December 31, 2003, and before January 1, 2007.

   Inserted: "(7) Trash combustion facilities.--In the case of a facility which burns municipal solid waste to produce electricity, the term 'qualified facility' means any facility owned by the taxpayer which is originally placed in service after December 31, 2003, and before January 1, 2007.".

   Inserted: (2) Conforming amendment.--Section 45(e) of such Code, as so redesignated, is amended by striking "subsection (c)(3)(A)" in paragraph (7)(A)(i) and inserting "subsection (d)(1)".

   Inserted: (c) Special Credit Rate and Period for Electricity Produced and Sold After Enactment Date.--Section 45(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

   Inserted: "(4) Credit rate and period for electricity produced and sold from certain facilities.--

   Inserted: "(A) Credit rate.--In the case of electricity produced and sold after the date of the enactment of this paragraph at any qualified facility described in paragraph (3), (5), (6), or (7) of subsection (d), the amount in effect under subsection (a)(1) for any calendar year beginning with the calendar year in which such date occurs (determined before the application of the last sentence of paragraph (2) of this subsection) shall be reduced by one-third.

   Inserted: "(B) Credit period.--

   Inserted: "(i) In general.--Except as provided in clause (ii), in the case of any facility described in paragraph (3), (4), (5), (6), or (7) of subsection (d), the 5-year period beginning on the date the facility was originally placed in service shall be substituted for the 10-year period in subsection (a)(2)(A)(ii).

   Inserted: "(ii) Certain open-loop biomass facilities.--In the case of any facility described in subsection (d)(3)(A)(ii) placed in service before January 1, 2004, the 5-year period beginning on January 1, 2004, shall be substituted for the 10-year period in subsection (a)(2)(A)(ii).".

   Inserted: (d) Coordination With Section 48.--Section 48(a)(3) of the Internal Revenue Code of 1986 (defining energy property) is amended by adding at the end the following new sentence: "Such term shall not include any property which is part of a facility the production from which is allowed as a credit under section 45 for the taxable year or any prior taxable year.".

   Inserted: (e) Elimination of Certain Credit Reductions.--Section 45(b)(3) of the Internal Revenue Code of 1986 (relating to credit reduced for grants, tax-exempt bonds, subsidized energy financing, and other credits) is amended--

   Inserted: (1) by inserting "the lesser of \1/2\ or" before "a fraction" in the matter preceding subparagraph (A), and

   Inserted: (2) by adding at the end the following new sentence: "This paragraph shall not apply with respect to any facility described in subsection (d)(2)(A)(ii).".

   Inserted: (f) Credit Allowed Against Regular and Minimum Tax.--

   Inserted: (1) In general.--Subsection (c) of section 38 of the Internal Revenue Code of 1986 (relating to limitation based on amount of tax) is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph:

   Inserted: "(4) Special rules for wind energy credit.--

   Inserted: "(A) In general.--In the case of any wind energy credit--

   Inserted: "(i) this section and section 39 shall be applied separately with respect to such credit, and

   Inserted: "(ii) in applying paragraph (1) to such credit--

   Inserted: "(I) the tentative minimum tax shall be treated as being zero, and

   Inserted: "(II) the limitation under paragraph (1) (as modified by subclause (I)) shall be reduced by the credit allowed under subsection (a) for the taxable year (other than the wind energy credit).

   Inserted: "(B) Wind energy credit.--For purposes of this subsection, the term 'wind energy credit' means the credit determined under section 45 to the extent that such credit is attributable to electricity produced--

   Inserted: "(i) at a facility which is originally placed in service after the date of the enactment of this paragraph, and

   Inserted: "(ii) during the 4-year period beginning on the date that such facility was originally placed in service.".

   Inserted: (2) Conforming amendments.--

   Inserted: (A) Paragraph (2)(A)(ii)(II) of section 38(c) of such Code is amended by striking "or" and inserting a comma and by inserting ", and the wind energy credit" after "employee credit".

   Inserted: (B) Paragraph (3)(A)(ii)(II) of section 38(c) of such Code is amended by inserting "and the wind energy credit" after "employee credit".

   Inserted: (g) Effective Dates.--

   Inserted: (1) In general.--Except as otherwise provided in this subsection, the amendments made by this section shall apply to electricity produced and sold after December 31, 2003, in taxable years ending after such date.

   Inserted: (2) Certain biomass facilities.--With respect to any facility described in section 45(d)(3)(A)(ii) of the Internal Revenue Code of 1986, as added by subsection (b)(1), which is placed in service before January 1, 2004, the amendments made by this section shall apply to electricity produced and sold after December 31, 2003, in taxable years ending after such date.

   Inserted: (3) Credit rate and period for new facilities.--The amendments made by subsection (c) shall apply to electricity produced and sold after the date of the enactment of this Act, in taxable years ending after such date.

   Inserted: (4) Nonapplication of amendments to preeffective date poultry waste facilities.--The amendments made by this section shall not apply with respect to any poultry waste facility (within the meaning of section 45(c)(3)(C), as in effect on the day before the date of the enactment of this Act) placed in service before January 1, 2004.

   Inserted: (5) Wind credit allowed against regular and minimum tax.--The amendments made by subsection (f) shall apply to taxable years ending after the date of the enactment of this Act.

   Inserted: (h) GAO Study.--The Comptroller General of the United States shall conduct a study on the market viability of producing electricity from resources with respect to which credit is allowed under section 45 of the Internal Revenue Code of 1986 but without such credit. In the case of open-loop biomass and municipal solid waste resources, the study should take into account savings associated with not having to dispose of such resources. In conducting such study, the Comptroller shall estimate the dollar value of the environmental impact of producing electricity from such resources relative to producing electricity from fossil fuels using the latest generation of technology. Not later than June 30, 2006, the Comptroller shall report on such study to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate.

   Inserted: (i) Extension of Customs User Fees.--Section 13031(j)(3) of the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended by striking "March 31, 2004" and inserting "December 31, 2013".

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