Steel Industry Preservation Act

I 116TH CONGRESS 1ST SESSION H. R. 2993 To amend the Internal Revenue Code of 1986 to extend and modify the section 45 credit for refined coal from steel industry fuel, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 23, 2019 Mr. KELLY of Pennsylvania (for himself and Mr. MICHAEL F. DOYLE of Pennsylvania) 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 extend and modify the section 45 credit for refined coal from steel industry fuel, and for other purposes. 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 ‘‘Steel Industry Preser- 4 vation Act’’. 5 SEC. 2. EXTENSION AND MODIFICATION OF CREDIT FOR 6 STEEL INDUSTRY FUEL. 7 (a) CREDIT PERIOD.— 8 VerDate Sep 11 2014 05:25 Jun 07, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2993.IH H2993 kjohnson on DSK79L0C42 with BILLS 2 •HR 2993 IH (1) IN GENERAL.—Section 45(e)(8)(D)(ii)(II) 1 of the Internal Revenue Code of 1986 is amended to 2 read as follows: 3 ‘‘(II) CREDIT PERIOD.—In lieu 4 of the 10-year period referred to in 5 clauses (i) and (ii)(II) of subpara- 6 graph (A), the credit period shall be 7 the period beginning on the first date 8 that the facility first produces steel 9 industry fuel that is sold to an unre- 10 lated person after the date of the en- 11 actment of the Steel Industry Preser- 12 vation Act, and ending 10 years after 13 such first date.’’. 14 (2) CONFORMING AMENDMENT.—Section 15 45(e)(8)(D) of such Code is amended by striking 16 clause (iii) and by redesignating clause (iv) as clause 17 (iii). 18 (b) EXTENSION OF PLACED-IN-SERVICE DATE.— 19 Section 45(d)(8)(A) of such Code is amended— 20 (1) by striking ‘‘(or any modification to a facil- 21 ity)’’; 22 (2) by striking ‘‘placed in service before’’ and 23 inserting ‘‘placed in service— 24 ‘‘(i) before’’; 25 VerDate Sep 11 2014 05:25 Jun 07, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2993.IH H2993 kjohnson on DSK79L0C42 with BILLS 3 •HR 2993 IH (3) by striking ‘‘and’’ at the end and inserting 1 ‘‘or’’; and 2 (4) by adding at the end the following new 3 clause: 4 ‘‘(ii) after the date of the enactment 5 of this clause and before the date that is 6 18 months after such date, and’’. 7 (c) CLARIFICATIONS.— 8 (1) STEEL INDUSTRY FUEL.—Section 9 45(c)(7)(C)(i)(I) of such Code is amended by insert- 10 ing ‘‘, or a blend of coal and petroleum coke, or 11 other coke feedstock’’ after ‘‘on coal’’. 12 (2) OWNERSHIP INTEREST.—Section 45(d)(8) 13 of such Code is amended by adding at the end the 14 following new flush sentence: 15 ‘‘With respect to a facility producing steel industry 16 fuel, no person (including a ground lessor, customer, 17 supplier, or technology licensor) shall be treated as 18 having an ownership interest in the facility or as 19 otherwise entitled to the credit allowable under this 20 section with respect to such facility solely because 21 such person’s rent, license fee, or other entitlement 22 to net payments from the owner of such facility is 23 measured by a fixed dollar amount or a fixed 24 VerDate Sep 11 2014 05:25 Jun 07, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2993.IH H2993 kjohnson on DSK79L0C42 with BILLS 4 •HR 2993 IH amount per ton, or otherwise determined without re- 1 gard to the profit or loss of such facility.’’. 2 (3) PRODUCTION AND SALE.—Section 3 45(e)(8)(D) of such Code, as amended by subsection 4 (a)(2), is amended by redesignating clause (iii) as 5 clause (iv) and by inserting after clause (ii) the fol- 6 lowing new clause: 7 ‘‘(iii) PRODUCTION AND SALE.—The 8 owner of a facility producing steel industry 9 fuel shall be treated as producing and sell- 10 ing steel industry fuel where that owner 11 manufactures such steel industry fuel from 12 coal, a blend of coal and petroleum coke, 13 or other coke feedstock to which it has 14 title. The sale of such steel industry fuel 15 by the owner of the facility to a person 16 who is not the owner of the facility shall 17 not fail to qualify as a sale to an unrelated 18 person solely because such purchaser may 19 also be a ground lessor, supplier, or cus- 20 tomer.’’. 21 (d) ELECTION TO INCREASE CREDIT IN LIEU OF 22 STEEL INDUSTRY FUEL DEDUCTIONS.—Section 45(e)(8) 23 of such Code is amended by adding at the end the fol- 24 lowing new subparagraph: 25 VerDate Sep 11 2014 05:25 Jun 07, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2993.IH H2993 kjohnson on DSK79L0C42 with BILLS 5 •HR 2993 IH ‘‘(E) ELECTION FOR INCREASED CREDIT 1 IN LIEU OF DEDUCTIONS FOR STEEL INDUSTRY 2 FUEL.—In the case of a taxpayer who produces 3 steel industry fuel— 4 ‘‘(i) IN GENERAL.—At the election of 5 the taxpayer— 6 ‘‘(I) no deduction shall be al- 7 lowed with respect to expenses made 8 in connection with the production and 9 sale of steel industry fuel for such 10 taxable year which are otherwise de- 11 ductible under this chapter (deter- 12 mined without regard to this subpara- 13 graph), 14 ‘‘(II) no expense made in connec- 15 tion with the production of and sale of 16 steel industry fuel which is otherwise 17 chargeable to capital account in such 18 taxable year shall be so charged, and 19 ‘‘(III) the credit determined 20 under this section (without regard to 21 this subparagraph) for such taxable 22 year shall be increased by an amount 23 equal to the product of the sum of the 24 amounts to which subclauses (I) and 25 VerDate Sep 11 2014 05:25 Jun 07, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2993.IH H2993 kjohnson on DSK79L0C42 with BILLS 6 •HR 2993 IH (II) apply and the maximum rate of 1 tax applicable under section 1 or 2 11(b), as applicable to the taxpayer in 3 such taxable year. 4 ‘‘(ii) APPLICATION TO PARTNERSHIPS 5 AND S CORPORATIONS.—In the case of a 6 partnership or S corporation, the election 7 shall be made at the partnership or S cor- 8 poration level. 9 ‘‘(iii) ELECTION.—An election under 10 this subparagraph for any taxable year 11 shall be made not later than the time for 12 filing the return of tax for such year (in- 13 cluding extensions), in such manner as the 14 Secretary may prescribe. Such an election, 15 once made, shall be irrevocable.’’. 16 (e) SPECIFIED CREDIT FOR PURPOSES OF ALTER- 17 NATIVE MINIMUM TAX EXCLUSION.—Section 18 38(c)(4)(B)(iv)(II) of such Code is amended by inserting 19 ‘‘(in the case of a refined coal production facility pro- 20 ducing steel industry fuel, during the credit period set 21 forth in section 45(e)(8)(D)(ii)(II))’’ after ‘‘service’’. 22 (f) APPLICATION OF CERTAIN RULES TO STEEL IN- 23 DUSTRY FUEL.— 24 VerDate Sep 11 2014 05:25 Jun 07, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2993.IH H2993 kjohnson on DSK79L0C42 with BILLS 7 •HR 2993 IH (1) ACTIVITY NOT ENGAGED IN FOR PROFIT.— 1 Section 183 of such Code is amended by adding at 2 the end the following new subsection: 3 ‘‘(f) EXCEPTION.—This section shall not apply to any 4 deduction with respect to the production of steel industry 5 fuel (as defined in section 45(c)(7)(C)).’’. 6 (2) APPLICATION OF ECONOMIC SUBSTANCE 7 DOCTRINE.— 8 (A) IN GENERAL.—Section 7701(o) of 9 such Code is amended by adding at the end the 10 following new paragraph: 11 ‘‘(6) NON-APPLICATION TO STEEL INDUSTRY 12 FUEL.—The economic substance doctrine shall not 13 apply to any transaction to the extent such trans- 14 action relates to steel industry fuel (as defined in 15 section 45(c)(7)(C)).’’. 16 (B) CONFORMING AMENDMENT.—Section 17 7701(o)(5)(C) of such Code is amended by 18 striking ‘‘The determination’’ and inserting 19 ‘‘Except as provided in paragraph (6), the de- 20 termination’’. 21 (g) EFFECTIVE DATES.— 22 (1) IN GENERAL.—Except as provided in para- 23 graph (2), the amendments made by this section 24 shall apply to fuel produced and sold after the date 25 VerDate Sep 11 2014 05:25 Jun 07, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2993.IH H2993 kjohnson on DSK79L0C42 with BILLS 8 •HR 2993 IH of the enactment of this Act, in taxable years ending 1 after such date. 2 (2) APPLICATION OF ECONOMIC SUBSTANCE 3 RULES.—The amendments made by subsection (f)(2) 4 shall apply to transactions entered into after the 5 date of the enactment of this Act. 6 Æ VerDate Sep 11 2014 05:25 Jun 07, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H2993.IH H2993 kjohnson on DSK79L0C42 with BILLS