Renewable Energy Transferability Act

I 116TH CONGRESS 1ST SESSION H. R. 2704 To amend the Internal Revenue Code of 1986 to allow for transfers of the renewable electricity production credit and the energy credit. IN THE HOUSE OF REPRESENTATIVES MAY 14, 2019 Mr. BLUMENAUER (for himself and Mr. LAHOOD) 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 allow for transfers of the renewable electricity production credit and the energy credit. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Renewable Energy 4 Transferability Act’’. 5 SEC. 2. TRANSFERS OF CREDITS FOR RENEWABLE ELEC- 6 TRICITY PRODUCTION FACILITIES AND EN- 7 ERGY PROPERTY. 8 (a) RENEWABLE ELECTRICITY PRODUCTION CRED- 9 IT.—Section 45(e) of the Internal Revenue Code of 1986 10 VerDate Sep 11 2014 05:33 May 23, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2704.IH H2704 kjohnson on DSK79L0C42 with BILLS 2 •HR 2704 IH is amended by adding at the end the following new para- 1 graph: 2 ‘‘(12) TRANSFER OF CREDIT.— 3 ‘‘(A) IN GENERAL.—If the taxpayer elects 4 to transfer all (or any portion specified in the 5 election) of the credit determined under this 6 section for any taxable year with respect to any 7 qualified facility to an eligible project partner 8 for a specified period, then, the eligible project 9 partner specified in such election (and not the 10 taxpayer) shall be treated for purposes of this 11 title with respect to such credit (or such portion 12 thereof) as the person producing and selling the 13 electricity to which such credit (or portion 14 thereof) relates. 15 ‘‘(B) DEDUCTION FOR PAYMENTS IN CON- 16 NECTION WITH TRANSFER.—There shall be al- 17 lowed as a deduction under part VI of sub- 18 chapter B an amount equal to the amount paid 19 by a taxpayer as consideration for a transfer 20 described in subparagraph (A). 21 ‘‘(C) ELIGIBLE PROJECT PARTNER.—For 22 purposes of this paragraph, the term ‘eligible 23 project partner’ means, with respect to any 24 qualified facility, any person who— 25 VerDate Sep 11 2014 05:33 May 23, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2704.IH H2704 kjohnson on DSK79L0C42 with BILLS 3 •HR 2704 IH ‘‘(i) has an ownership interest in such 1 qualified facility, 2 ‘‘(ii) provided equipment for or serv- 3 ices in the construction of such qualified 4 facility, 5 ‘‘(iii) provides electric transmission or 6 distribution services for such qualified fa- 7 cility, 8 ‘‘(iv) purchases electricity from such 9 qualified facility pursuant to a contract, or 10 ‘‘(v) provides financing for such quali- 11 fied facility. 12 For purposes of clause (v), any amount paid as 13 consideration for a transfer described in sub- 14 paragraph (A) shall not be treated as financing 15 of a qualified facility. 16 ‘‘(D) TAXABLE YEAR IN WHICH CREDIT 17 TAKEN INTO ACCOUNT.—In the case of any 18 credit (or portion thereof) with respect to which 19 an election is made under subparagraph (A), 20 such credit shall be taken into account in the 21 first taxable year of the eligible project partner 22 ending with, or after, the electing taxpayer’s 23 taxable year with respect to which the credit 24 was determined. 25 VerDate Sep 11 2014 05:33 May 23, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2704.IH H2704 kjohnson on DSK79L0C42 with BILLS 4 •HR 2704 IH ‘‘(E) LIMITATIONS ON ELECTION.— 1 ‘‘(i) TIME FOR ELECTION.—An elec- 2 tion under this paragraph to transfer any 3 portion of the credit allowed under this 4 paragraph shall be made not later than the 5 due date for the return of tax for the elect- 6 ing taxpayer’s taxable year with respect to 7 which the credit was determined 8 ‘‘(ii) NO FURTHER TRANSFERS.—No 9 election may be made under this paragraph 10 by a taxpayer with respect to any portion 11 of the credit allowed under this section 12 which has been previously transferred to 13 such taxpayer under this paragraph. 14 ‘‘(F) TREATMENT OF TRANSFER UNDER 15 PRIVATE USE RULES.—For purposes of section 16 141(b)(1), any benefit derived by an eligible 17 project partner in connection with an election 18 under this subsection shall not be taken into ac- 19 count as a private business use. 20 ‘‘(G) ADDITIONAL ELECTION REQUIRE- 21 MENTS.—The Secretary may prescribe such 22 regulations as may be appropriate to carry out 23 the purposes of this paragraph, including— 24 VerDate Sep 11 2014 05:33 May 23, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2704.IH H2704 kjohnson on DSK79L0C42 with BILLS 5 •HR 2704 IH ‘‘(i) rules for determining which per- 1 sons are eligible project partners with re- 2 spect to any energy property, and 3 ‘‘(ii) requiring information to be in- 4 cluded in an election under subparagraph 5 (A) or imposing additional reporting re- 6 quirements.’’. 7 (b) ENERGY CREDIT.— 8 (1) IN GENERAL.—Section 48 of the Internal 9 Revenue Code of 1986 is amended by adding at the 10 end the following new subsection: 11 ‘‘(e) TRANSFER OF CREDIT.— 12 ‘‘(1) IN GENERAL.—If the taxpayer elects to 13 transfer all (or any portion specified in the election) 14 of the credit determined under this section for any 15 taxable year with respect to any energy property to 16 an eligible project partner, the eligible project part- 17 ner specified in such election (and not the taxpayer) 18 shall be treated as the taxpayer for purposes of this 19 title with respect to such credit (or portion thereof). 20 ‘‘(2) DEDUCTION FOR PAYMENTS IN CONNEC- 21 TION WITH TRANSFER.—There shall be allowed as a 22 deduction under part VI of subchapter B an amount 23 equal to the amount paid by a taxpayer as consider- 24 ation for a transfer described in paragraph (1). 25 VerDate Sep 11 2014 05:33 May 23, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2704.IH H2704 kjohnson on DSK79L0C42 with BILLS 6 •HR 2704 IH ‘‘(3) ELIGIBLE PROJECT PARTNER.—For pur- 1 poses of this subparagraph, the term ‘eligible project 2 partner’ means, with respect to any energy property, 3 any person who— 4 ‘‘(A) has an ownership interest in such en- 5 ergy property, 6 ‘‘(B) provided equipment for or services in 7 the construction of such energy property, 8 ‘‘(C) provides electric transmission or dis- 9 tribution services for such energy property, 10 ‘‘(D) purchases electricity from such quali- 11 fied facility pursuant to a contract, or 12 ‘‘(E) provides financing for such energy 13 property. 14 For purposes of subparagraph (E), any amount paid 15 as consideration for a transfer described in para- 16 graph (1) shall not be treated as financing of a 17 qualified facility. 18 ‘‘(4) TAXABLE YEAR IN WHICH CREDIT TAKEN 19 INTO ACCOUNT.—In the case of any credit (or por- 20 tion thereof) with respect to which an election is 21 made under paragraph (1), such credit shall be 22 taken into account in the first taxable year of the el- 23 igible project partner ending with, or after, the elect- 24 VerDate Sep 11 2014 05:33 May 23, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2704.IH H2704 kjohnson on DSK79L0C42 with BILLS 7 •HR 2704 IH ing taxpayer’s taxable year with respect to which the 1 credit was determined. 2 ‘‘(5) LIMITATIONS ON ELECTION.— 3 ‘‘(A) TIME FOR ELECTION.—An election 4 under this subsection to transfer any portion of 5 the credit allowed under this section shall be 6 made not later than the due date for the return 7 of tax for the electing taxpayer’s taxable year 8 with respect to which the credit was deter- 9 mined. 10 ‘‘(B) NO FURTHER TRANSFERS.—No elec- 11 tion may be made under this paragraph by a 12 taxpayer with respect to any portion of the 13 credit allowed under this section which has been 14 previously transferred to such taxpayer under 15 this subsection. 16 ‘‘(6) TREATMENT OF TRANSFER UNDER PRI- 17 VATE USE RULES.—For purposes of section 18 141(b)(1), any benefit derived by an eligible project 19 partner in connection with an election under this 20 subsection shall not be taken into account as a pri- 21 vate business use. 22 ‘‘(7) ADDITIONAL ELECTION REQUIREMENTS.— 23 The Secretary may prescribe such regulations as 24 VerDate Sep 11 2014 05:33 May 23, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2704.IH H2704 kjohnson on DSK79L0C42 with BILLS 8 •HR 2704 IH may be appropriate to carry out the purposes of this 1 subsection, including— 2 ‘‘(A) rules for determining which persons 3 are eligible project partners with respect to any 4 energy property, and 5 ‘‘(B) requiring information to be included 6 in an election under paragraph (1) or imposing 7 additional reporting requirements.’’. 8 (2) NORMALIZATION RULES.—Section 50(d) of 9 such Code is amended by adding at the end the fol- 10 lowing: ‘‘In the case of any energy property with re- 11 spect to which an election is made under section 12 48(e)(1), the rules of the section 46(f) referred to in 13 paragraph (2) shall apply only to the extent of 14 amounts paid in consideration of the transfer to 15 which such election relates.’’ 16 (c) SPECIAL RULE FOR PROCEEDS OF TRANSFERS 17 FOR MUTUAL OR COOPERATIVE ELECTRIC COMPANIES.— 18 Section 501(c)(12)(I) of such Code is amended by striking 19 ‘‘45J(e)(1)’’ and inserting ‘‘45(e)(12), 45J(e)(1), or 20 48(e)(1)’’. 21 (d) EFFECTIVE DATE.—The amendments made by 22 this section shall apply to taxable years beginning after 23 the date of the enactment of this Act. 24 Æ VerDate Sep 11 2014 05:33 May 23, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H2704.IH H2704 kjohnson on DSK79L0C42 with BILLS