H.R. 4599 – Reading Mode

111th CONGRESS

2d Session

H. R. 4599

IN THE HOUSE OF REPRESENTATIVES

February 4, 2010

Mr. Blumenauer (for himself, Mr. McDermott, Mr. Van Hollen, Ms. Linda T. Sánchez of California, Mr. Walz, Mr. Larson of Connecticut, Mr. Thompson of California, Mr. Doggett, Mr. Pascrell, and Mr. Pomeroy) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide an elective payment for specified energy property.

Short title

This Act may be cited as the Renewable Energy Expansion Act of 2010.

Elective payment for specified energy property

(a)

In general

Chapter 65 of the Internal Revenue Code of 1986 (relating to abatements, credits, and refunds) is amended by adding at the end the following new subchapter:

Direct payment provisions

Sec. 6451. Elective payment for specified energy property.

6451.

Elective payment for specified energy property

(a)

In general

Any person making an election under this section with respect to any specified energy property originally placed in service by such person during the taxable year shall be treated as making a payment, against the tax imposed by subtitle A for the taxable year, equal to the applicable percentage of the basis of such property. Such payment shall be treated as made on the later of the due date of the return of such tax or the date on which such return is filed.

(b)

Applicable percentage

For purposes of this section, the term applicable percentage means—

(1)

30 percent in the case of any property described in paragraph (2)(A)(i) or (5) of section 48(a), and

(2)

10 percent in the case of any other property.

(c)

Dollar limitations

In the case of property described in paragraph (1), (2), or (3) of section 48(c), the payment otherwise treated as made under subsection (a) with respect to such property shall not exceed the limitation applicable to such property under such paragraph.

(d)

Specified energy property

For purposes of this section—

(1)

In general

The term specified energy property means energy property (within the meaning of section 48) which—

(A)

is originally placed in service before January 1, 2013, or

(B)

is originally placed in service on or after such date and before the credit termination date with respect to such property, but only if the construction of such property began before January 1, 2013.

(2)

Credit termination date

The term credit termination date means—

(A)

in the case of any energy property which is part of a facility described in paragraph (1) of section 45(d), January 1, 2013,

(B)

in the case of any energy property which is part of a facility described in paragraph (2), (3), (4), (6), (7), (9), or (11) of section 45(d), January 1, 2014, and

(C)

in the case of any energy property described in section 48(a)(3), January 1, 2017.

In the case of any property which is described in subparagraph (C) and also in another subparagraph of this paragraph, subparagraph (C) shall apply with respect to such property.

(e)

Special rules for certain non-Taxpayers

(1)

Denial of payment

Subsection (a) shall not apply with respect to any property originally placed in service by—

(A)

any governmental entity,

(B)

any organization described in section 501(c) or 401(a) and exempt from tax under section 501(a), or

(C)

any entity referred to in paragraph (4) of section 54(j).

(2)

Exception for property used in unrelated trade or business

Paragraph (1) shall not apply with respect to any property originally placed in service by an entity described in section 511(a)(2) if substantially all of the income derived from such property by such entity is unrelated business taxable income (as defined in section 512).

(3)

Special rules for partnerships and S corporations

In the case of property originally placed in service by a partnership or an S corporation—

(A)

the election under subsection (a) may be made only by such partnership or S corporation,

(B)

such partnership or S corporation shall be treated as making the payment referred to in subsection (a) only to the extent of the proportionate share of such partnership or S corporation as is owned by persons who would be treated as making such payment if the property were originally placed in service by such persons, and

(C)

the return required to be made by such partnership or S corporation under section 6031 or 6037 (as the case may be) shall be treated as a return of tax for purposes of subsection (a).

For purposes of subparagraph (B), rules similar to the rules of section 168(h)(6) (other than subparagraph (F) thereof) shall apply.

(f)

Coordination with production and investment credits

In the case of any property with respect to which an election is made under this section—

(1)

Denial of production and investment credits

No credit shall be determined under section 45 or 48 with respect to such property for the taxable year in which such property is originally placed in service or any subsequent taxable year.

(2)

Reduction of payment by progress expenditures already taken into account

The amount of the payment treated as made under subsection (a) with respect to such property shall be reduced by the aggregate amount of credits determined under section 48 with respect to such property for all taxable years preceding the taxable year in which such property is originally placed in service.

(g)

Other definitions and special rules

For purposes of this section—

(1)

Other definitions

Terms used in this section which are also used in section 45 or 48 shall have the same meaning for purposes of this section as when used in such sections.

(2)

Application of recapture rules, etc

Except as otherwise provided by the Secretary—

(A)

In general

Except as otherwise provided in this paragraph, rules similar to the rules of section 50 shall apply.

(B)

Exception to limitation on real estate investment trusts, etc

Paragraph (1) of section 50(d) shall not apply.

(C)

Application of normalization rules

Paragraph (2) of section 50(d) shall not apply with respect to property placed in service by a person in the trade or business of furnishing or selling electrical energy if any law or regulation requires that not less than a certain amount of the electrical energy so furnished or sold by such person be derived from one or more renewable resources.

(3)

Provision of information

A person shall not be treated as having elected the application of this section unless the taxpayer provides such information as the Secretary (in consultation with the Secretary of Energy) may require for purposes of verifying the proper amount to be treated as a payment under subsection (a) and evaluating the effectiveness of this section.

(4)

Exclusion from gross income

Any credit or refund allowed or made by reason of this section shall not be includible in gross income or alternative minimum taxable income.

(5)

Coordination with grant program

If a grant under section 1603 of the American Recovery and Reinvestment Tax Act of 2009 is made with respect to any specified energy property—

(A)

no election may be made under subsection (a) with respect to such property on or after the date of such grant, and

(B)

if such grant is made after such election, such property shall be treated as having ceased to be specified energy property immediately after such property was originally placed in service.

(b)

Conforming amendments

(1)

Subparagraph (A) of section 6211(b)(4)(A) of such Code is amended by inserting and subchapter C of chapter 65 (including any payment treated as made under such subchapter) after 6431.

(2)

Subparagraph (B) of section 6425(c)(1) of such Code is amended—

(A)

by striking the credits and inserting

the sum of—

(i)

the credits

(B)

by striking the period at the end of clause (i) thereof (as amended by this paragraph) and inserting , plus, and

(C)

by adding at the end the following new clause:

(ii)

the payments treated as made under subchapter C of chapter 65.

(3)

Paragraph (3) of section 6654(f) of such Code is amended—

(A)

by striking the credits and inserting

the sum of—

(A)

the credits

(B)

by striking the period at the end of subparagraph (A) thereof (as amended by this paragraph) and inserting , and, and

(C)

by adding at the end the following new subparagraph:

(B)

the payments treated as made under subchapter C of chapter 65.

(4)

Subparagraph (B) of section 6655(g)(1) of such Code is amended—

(A)

by striking the credits and inserting

the sum of—

(i)

the credits

(B)

by striking the period at the end of clause (i) thereof (as amended by this paragraph) and inserting , plus, and

(C)

by adding at the end the following new clause:

(ii)

the payments treated as made under subchapter C of chapter 65.

(5)

Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting , or from the provisions of subchapter C of chapter 65 of such Code before the period at the end.

(6)

The table of subchapters for chapter 65 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

Subchapter C. Direct payment provisions.

(c)

Effective date

The amendments made by this section shall apply to property originally placed in service after the date of the enactment of this Act.