To allow a refundable tax credit for the energy costs of farmers and ranchers, and to modify the foreign tax credit rules applicable to dual capacity taxpayers.

SA 2629. Mr. DAYTON (for himself and Mr. Salazar) submitted an
amendment intended to be proposed by him to the bill S. 2020, to
provide for reconciliation pursuant to section 202(b) of the concurrent
resolution on the budget for fiscal year 2006; as follows:

On page 235, between lines 13 and 14, insert the following:

SEC. __. REFUNDABLE TAX CREDIT FOR ENERGY COST ASSISTANCE OF
FARMERS AND RANCHERS.

(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 (relating to refundable credits) is amended by
redesignating section 36 as section 37 and by inserting after
section 35 the following new section:

``SEC. 36. CREDIT FOR ENERGY COST ASSISTANCE FOR FARMERS AND
RANCHERS.

``(a) General Rule.--In the case of an eligible taxpayer,
there shall be allowed as a credit against the tax imposed by
this subtitle for the taxable year an amount equal to the
lesser of--
``(1) 30 percent of the amount paid or incurred for
qualified energy costs, or
``(2) $3,000.
``(b) Eligible Taxpayer.--For purposes of this section, the
term `eligible taxpayer' means any individual engaged in a
farming business (as defined in section 263A(e)(4)).
``(c) Residential Energy Costs.--For purposes of this
section, the term `qualified energy costs' means the cost of
any fuel, energy utility, natural gas, fertilizer, and
heating oil used in the farming business of the taxpayer
during the taxable year.
``(d) Termination.--This section shall not apply to
qualified energy costs paid or incurred after December 31,
2005.''.
(b) No Double Benefit.--Section 280C is amended by adding
at the end the following new subsection:
``(e) Energy Assistance for Farmers and Ranchers.--No
deduction shall be allowed for that portion of the expenses
otherwise allowable as a deduction for the taxable year which
is equal to the amount of the credit determined under section
36(a).''.
(c) Refundability.--Section 1324(b)(2) of title 31, United
States Code, is amended by striking ``or'' before ``enacted''
and by inserting before the period at the end ``, or from
section 36 of such Code''.
(d) Clerical Amendments.--The table of sections for subpart
C of part IV of subchapter A of chapter 1 is amended by
striking the item relating to section 35 and by adding at the
end the following new items:

``Sec. 36. Credit for energy cost assistance for farmers and ranchers.
``Sec. 37. Overpayments of tax.''.

(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2004.

SEC. ___. MODIFICATIONS OF FOREIGN TAX CREDIT RULES
APPLICABLE TO DUAL CAPACITY TAXPAYERS.

(a) In General.--Section 901 (relating to credit for taxes
of foreign countries and of possessions of the United States)
is amended by redesignating subsection (m) as subsection (n)
and by inserting after subsection (l) the following new
subsection:
``(m) Special Rules Relating To Dual Capacity Taxpayers.--
``(1) General rule.--Notwithstanding any other provision of
this chapter, any amount paid or accrued by a dual capacity
taxpayer to a foreign country or possession of the United
States for any period shall not be considered a tax--
``(A) if, for such period, the foreign country or
possession does not impose a generally applicable income tax,
or
``(B) to the extent such amount exceeds the amount
(determined in accordance with regulations) which--
``(i) is paid by such dual capacity taxpayer pursuant to
the generally applicable income tax imposed by the country or
possession, or
``(ii) would be paid if the generally applicable income tax
imposed by the country or possession were applicable to such
dual capacity taxpayer.

Nothing in this paragraph shall be construed to imply the
proper treatment of any such amount not in excess of the
amount determined under subparagraph (B).
``(2) Dual capacity taxpayer.--For purposes of this
subsection, the term `dual capacity taxpayer' means, with
respect to any foreign country or possession of the United
States, a person who--
``(A) is subject to a levy of such country or possession,
and
``(B) receives (or will receive) directly or indirectly a
specific economic benefit (as determined in accordance with
regulations) from such country or possession.
``(3) Generally applicable income tax.--For purposes of
this subsection--
``(A) In general.--The term `generally applicable income
tax' means an income tax (or a series of income taxes) which
is generally imposed under the laws of a foreign country or
possession on income derived from the conduct of a trade or
business within such country or possession.

[[Page S13222]]

``(B) Exceptions.--Such term shall not include a tax unless
it has substantial application, by its terms and in practice,
to--
``(i) persons who are not dual capacity taxpayers, and
``(ii) persons who are citizens or residents of the foreign
country or possession.''
(b) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxes paid or accrued in taxable years beginning
after the date of the enactment of this Act.
(2) Contrary treaty obligations upheld.--The amendments
made by this section shall not apply to the extent contrary
to any treaty obligation of the United States.
______