S.Amdt. 921

1. Adds SEC. __. APPLICATION OF SECTION 45 CREDIT TO AGRICULTURAL COOPERATIVES wherever appropriate

   Adds a section

   Inserted: SEC. __. APPLICATION OF SECTION 45 CREDIT TO AGRICULTURAL COOPERATIVES.

   Inserted: (a) In General.--Section 45(e) of the Internal Revenue Code of 1986 (relating to definitions and special rules) is amended by adding at the end the following:

   Inserted: "(10) Allocation of credit to patrons of agricultural cooperative.--

   Inserted: "(A) Election to allocate.--

   Inserted: "(i) In general.--In the case of an eligible cooperative organization, any portion of the credit determined under subsection (a) for the taxable year may, at the election of the organization, be apportioned among patrons of the organization on the basis of the amount of business done by the patrons during the taxable year.

   Inserted: "(ii) Form and effect of election.--An election under clause (i) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year.

   Inserted: "(B) Treatment of organizations and patrons.--The amount of the credit apportioned to any patrons under subparagraph (A)--

   Inserted: "(i) shall not be included in the amount determined under subsection (a) with respect to the organization for the taxable year, and

   Inserted: "(ii) shall be included in the amount determined under subsection (a) for the taxable year of the patrons with or within which the taxable year of the organization ends.

   Inserted: "(C) Special rules for decrease in credits for taxable year.--If the amount of the credit of a cooperative organization determined under subsection (a) for a taxable year is less than the amount of such credit shown on the return of the cooperative organization for such year, an amount equal to the excess of--

   Inserted: "(i) such reduction, over

   Inserted: "(ii) the amount not apportioned to such patrons under subparagraph (A) for the taxable year, shall be treated as an increase in tax imposed by this chapter on the organization. Such increase shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this subpart or subpart A, B, E, or G.

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   Inserted: "(D) Eligible cooperative defined.--For purposes of this section the term 'eligible cooperative' means a cooperative organization described in section 1381(a) which is owned more than 50 percent by agricultural producers or by entities owned by agricultural producers. For this purpose an entity owned by an agricultural producer is one that is more than 50 percent owned by agricultural producers.

   Inserted: "(E) Written notice to patrons.--If any portion of the credit available under subsection (a) is allocated to patrons under subparagraph (A), the eligible cooperative shall provide any patron receiving an allocation written notice of the amount of the allocation. Such notice shall be provided before the date on which the return described in subparagraph (B)(ii) is due.".

   Inserted: (b) Effective Date.--The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.

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   Original wording

   At the appropriate place, insert the following:

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As printed