II
111th CONGRESS
2d Session
S. 15
IN THE SENATE OF THE UNITED STATES
September 29, 2010
Mr. Brownback 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 provide a carbon sequestration investment tax credit, and for other purposes.
Short title
This Act may be cited as the
Global Forest Restoration Investment
Tax Credit Act
.
Carbon sequestration investment tax credit
In general
Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business-related credits) is amended by adding at the end the following new section:
Carbon sequestration investment credit
Allowance of credit
In general
For purposes of section 38, in the case of an eligible taxpayer’s investment in a carbon sequestration project approved by the implementing panel under section 2 of the International Carbon Conservation Act, the carbon sequestration investment credit determined under this section for the taxable year is an amount equal to—
$3.00, multiplied by
the number of tons of carbon the implementing panel determines was sequestrated in such project during the calendar year ending with or within such taxable year, multiplied by
the percentage of the total investment in such project which is represented by the investment in such project which is attributable, directly or indirectly, to the eligible taxpayer, as determined by the implementing panel.
Aggregate dollar limitation
The credit determined under paragraph (1) for any taxable year, when added to any credit allowed to the eligible taxpayer with respect to the such project in any preceding taxable year, shall not exceed 50 percent of the investment attributable to the eligible taxpayer with respect to such project through such taxable year.
Annual limitation on aggregate credit allowable
In general
The amount of the carbon sequestration investment credit determined under subsection (a) for any taxable year, when added to all such credits allowed to all eligible taxpayers with respect to the such project for such taxable year shall not exceed the credit dollar amount allocated to such project under this subsection by the implementing panel for the calendar year ending with or within such taxable year.
Time for making allocation
An allocation shall be taken into account under paragraph (1) only if it is made not later than the close of the calendar year in which the carbon sequestration project proposal with respect to such project is approved by the implementing panel under section 2 of the International Carbon Conservation Act.
Aggregate credit dollar amount
The aggregate credit dollar amount which the implementing panel may allocate for any calendar year is equal to $250,000,000.
Eligible taxpayer; implementing panel
For purposes of this section—
Eligible taxpayer
A taxpayer is eligible for the credit under this section with respect to a carbon sequestration project if such taxpayer has not elected the application of sections 3 and 4 of the International Carbon Conservation Act with respect to such project.
Implementing panel
The term implementing panel means the implementing panel established under section 2 of such Act.
Recapture of credit in certain cases
In general
If, at any time during the 30-year period of a carbon sequestration project, there is a recapture event with respect to such project, then the tax imposed by this chapter for the taxable year in which such event occurs shall be increased by the credit recapture amount.
Credit recapture amount
For purposes of paragraph (1)—
In general
The credit recapture amount is an amount equal to the recapture percentage of all carbon sequestration investment credits previously allowable to an eligible taxpayer with respect to any investment in such project that is attributable to such taxpayer.
Recapture percentage
The recapture percentage shall be 100 percent if the recapture event occurs during the first 10 years of the project, 662/3 percent if the recapture event occurs during the second 10 years of the project, 331/3 percent if the recapture event occurs during the third 10 years of the project, and 0 percent if the recapture event occurs at any time after the 30th year of the project.
Recapture event
For purposes of paragraph (1), there is a recapture event with respect to a carbon sequestration project if—
the eligible taxpayer violates a term or condition of the approval of the project by the implementing panel at any time,
the eligible taxpayer adopts a practice which the implementing panel has specified in its approval of the project as a practice which would tend to defeat the purposes of the carbon sequestration program, or
the eligible taxpayer disposes of any ownership interest arising out of its investment that the implementing panel has determined is attributable to the project, unless the implementing panel determines that such disposition will not have any adverse effect on the carbon sequestration project.
Special rules
Tax benefit rule
The tax for the taxable year shall be increased under paragraph (1) only with respect to credits allowed by reason of this section which were used to reduce tax liability. In the case of credits not so used to reduce tax liability, the carryforwards and carrybacks under section 39 shall be appropriately adjusted.
No credits against tax
Any increase in tax under this subsection shall not be treated as a tax imposed by this chapter for purposes of determining the amount of any credit under this chapter or for purposes of section 55.
Disallowance of double benefit
Basis reduction
The basis of any investment in a carbon sequestration project shall be reduced by the amount of any credit determined under this section with respect to such investment.
Charitable deduction disallowed
No deduction shall be allowed to an eligible taxpayer under section 170 with respect to any contribution which the implementing panel certifies pursuant to section 2 of the International Carbon Conservation Act to the Secretary constitutes an investment in a carbon sequestration project that is attributable to such taxpayer.
Certification to Secretary
The implementing panel shall certify to the Secretary before January 31 of each year with respect to each eligible taxpayer which has made an investment in a carbon sequestration project—
the amount of the carbon sequestration investment credit allowable to such taxpayer for the preceding calendar year,
whether a recapture event occurred with respect to such taxpayer during the preceding calendar year, and
the credit recapture amount, if any, with respect to such taxpayer for the preceding calendar year.
Regulations
The Secretary shall prescribe such regulations as may be appropriate to carry out this section, including regulations—
which limit the credit for investments which are directly or indirectly subsidized by other Federal benefits,
which prevent the abuse of the provisions of this section through the use of related parties, and
which impose appropriate reporting requirements.
.
Credit made part of general business credit
Subsection (b) of section 38 of
the Internal Revenue Code of 1986 is amended by striking plus
at
the end of paragraph (35), by striking the period at the end of paragraph (36)
and inserting , plus
, and by adding at the end the following new
paragraph:
the carbon sequestration investment credit determined under section 45S(a).
.
Deduction for unused credit
Subsection (c) of section 196 of the Internal
Revenue Code of 1986 is amended by striking and
at the end of
paragraph (13), by striking the period at the end of paragraph (14) and
inserting , and
, and by adding at the end the following new
paragraph:
the carbon sequestration investment credit determined under section 45S(a).
.
Clerical amendment
The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:
Sec. 45S. Carbon sequestration investment credit
.
Effective date
The amendments made by this section shall apply to investments made after December 31, 2010.
Allowance of deduction for dividends received from controlled foreign corporations for additional year
In general
Section 965 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
Allowance for deduction for an additional year
In general
In the case of an election under this subsection,
subsection (f)(1) shall be applied by substituting January 1,
2011,
for the date of the enactment of this
section
.
Special rules
For purposes of paragraph (1)—
Extraordinary dividends
Subsection (b)(2) shall be applied by substituting
June 30, 2010
for June 30, 2003
.
Determinations relating to related party indebtedness
Subsection (b)(3)(B) shall be applied by
substituting October 3, 2011
for October 3,
2004
.
Applicable financial statement
Subsection (c)(1) shall be applied by
substituting June 30, 2010
for June 30, 2003
each
place it occurs.
Determinations relating to base period
Subsection (c)(2) shall be applied by
substituting June 30, 2010
for June 30,
2003
.
.
Effective date
The amendment made by subsection (a) shall apply to taxable years ending on or after January 1, 2011.