S.Amdt. 656

SA 656. Mr. DORGAN submitted an amendment intended to be proposed to
amendment SA 605 proposed by Mr. Inhofe to the bill H.R. 3, to
authorize funds for Federal-aid highways, highway safety programs, and
transit programs, and for other purposes; which was ordered to lie on
the table; as follows:

On page 635, between lines 3 and 4, insert the following:

SEC. __. EXTENSION AND MODIFICATION OF RENEWABLE ENERGY
CREDIT.

(a) Extension.--Section 45(d) (relating to qualified
facilities) is amended by striking ``January 1, 2006'' each
place it appears and inserting ``January 1, 2009''
(b) Treatment of Persons Not Able to Use Entire Credit.--
(1) In general.--Section 45(e) (relating to definitions and
special rules) is amended by adding at the end the following
new paragraph:
``(10) Treatment of persons not able to use entire
credit.--
``(A) Allowance of credit.--
``(i) In general.--Except as otherwise provided in this
subsection--

``(I) any credit allowable under subsection (a) with
respect to a qualified facility owned by a person described
in clause (ii) may be transferred or used as provided in this
paragraph, and
``(II) the determination as to whether the credit is
allowable shall be made without regard to the tax-exempt
status of the person.

``(ii) Persons described.--A person is described in this
clause if the person is--

``(I) an organization described in section 501(c)(12)(C)
and exempt from tax under section 501(a),
``(II) an organization described in section 1381(a)(2)(C),
``(III) a public utility (as defined in section
136(c)(2)(B)), which is exempt from income tax under this
subtitle,
``(IV) any State or political subdivision thereof, the
District of Columbia, any possession of the United States, or
any agency or instrumentality of any of the foregoing, or
``(V) any Indian tribal government (within the meaning of
section 7871) or any agency or instrumentality thereof.

``(B) Transfer of credit.--
``(i) In general.--A person described in subparagraph
(A)(ii) may transfer any credit to which subparagraph (A)(i)
applies through an assignment to any other person not
described in subparagraph (A)(ii). Such transfer may be
revoked only with the consent of the Secretary.
``(ii) Regulations.--The Secretary shall prescribe such
regulations as necessary to ensure that any credit described
in clause (i) is assigned once and not reassigned by such
other person.
``(iii) Transfer proceeds treated as arising from essential
government function.--Any proceeds derived by a person
described in subclause (III), (IV), or (V) of subparagraph
(A)(ii) from the transfer of any credit under clause (i)
shall be treated as arising from the exercise of an essential
government function.
``(C) Use of credit as an offset.--Notwithstanding any
other provision of law, in the case of a person described in
subclause (I), (II), or (V) of subparagraph (A)(ii), any
credit to which subparagraph (A)(i) applies may be applied by
such person, to the extent provided by the Secretary of
Agriculture, as a prepayment of any loan, debt, or other
obligation the entity has incurred under subchapter I of
chapter 31 of title 7 of the Rural Electrification Act of
1936 (7 U.S.C. 901 et seq.), as in effect on the date of the
enactment of the Energy Tax Incentives Act.
``(D) Credit not income.--Any transfer under subparagraph
(B) or use under subparagraph (C) of any credit to which
subparagraph (A)(i) applies shall not be treated as income
for purposes of section 501(c)(12).
``(E) Treatment of unrelated persons.--For purposes of
subsection (a)(2)(B), sales of electricity among and between
persons described in subparagraph (A)(ii) shall be treated as
sales between unrelated parties.''.
(2) Effective date.--The amendment made by this subsection
shall apply to shall apply to electricity produced and sold
after the date of the enactment of this Act, in taxable years
ending after such date.
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