II
109th CONGRESS
1st Session
S. 715
IN THE SENATE OF THE UNITED STATES
April 6, 2005
Mr. Harkin (for himself, Mr. Dayton, Mr. Durbin, and Mr. Lautenberg) 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 encourage investment in facilities using wind to produce electricity, and for other purposes.
Short title
This Act may be cited as the
Wind Power Tax Incentives Act of
2005
.
Offset of passive activity losses and credits of an eligible taxpayer from wind energy facilities
In general
Section 469 of the Internal Revenue Code of 1986 (relating to passive activity losses and credits limited) is amended—
by redesignating subsections (l) and (m) as subsections (m) and (n), respectively; and
by inserting after subsection (k) the following:
Offset of passive activity losses and credits from wind energy facilities
In general
Subsection (a) shall not apply to the portion of the passive activity loss, or the deduction equivalent (within the meaning of subsection (j)(5)) of the portion of the passive activity credit, for any taxable year which is attributable to all interests of an eligible taxpayer in qualified facilities described in section 45(d)(1).
Eligible taxpayer
For purposes of this subsection—
In general
The term eligible taxpayer means, with respect to any taxable year, a taxpayer the adjusted gross income (taxable income in the case of a corporation) of which does not exceed $1,000,000.
Rules for computing adjusted gross income
Adjusted gross income shall be computed in the same manner as under subsection (i)(3)(F).
Aggregation rules
All persons treated as a single employer under subsection (a) or (b) of section 52 shall be treated as a single taxpayer for purposes of this paragraph.
Pass-thru entities
In the case of a pass-thru entity, this paragraph shall be applied at the level of the person to which the credit is allocated by the entity.
.
Effective date
The amendments made by this section shall apply to facilities placed in service after the date of the enactment of this Act.
Application of credit to cooperatives
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:
Allocation of credit to shareholders of cooperative
Election to allocate
In general
In the case of a cooperative organization described in section 1381(a), any portion of the credit determined under subsection (a) for the taxable year may, at the election of the organization, be apportioned pro rata among shareholders of the organization on the basis of the capital contributions of the shareholders to the organization.
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.
Treatment of organizations and patrons
The amount of the credit apportioned to any shareholders under subparagraph (A)—
shall not be included in the amount determined under subsection (a) with respect to the organization for the taxable year, and
shall be included in the amount determined under subsection (a) for the taxable year of the shareholder with or within which the taxable year of the organization ends.
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—
such reduction, over
the amount not apportioned to such shareholders 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.
.
Effective date
The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.