Renewable Energy Transferability Act

II 116TH CONGRESS 1ST SESSION S. 3032 To amend the Internal Revenue Code of 1986 to allow for transfers of the renewable electricity production credit, the energy credit, and the credit for carbon oxide sequestration. IN THE SENATE OF THE UNITED STATES DECEMBER 12, 2019 Mr. BENNET 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 allow for transfers of the renewable electricity production credit, the energy credit, and the credit for carbon oxide seques- tration. 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 VerDate Sep 11 2014 03:56 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3032.IS S3032 kjohnson on DSK79L0C42 with BILLS 2 •S 3032 IS SEC. 2. TRANSFERS OF CREDITS FOR RENEWABLE ELEC- 1 TRICITY PRODUCTION FACILITIES AND EN- 2 ERGY PROPERTY. 3 (a) RENEWABLE ELECTRICITY PRODUCTION CRED- 4 IT.—Section 45(e) of the Internal Revenue Code of 1986 5 is amended by adding at the end the following new para- 6 graph: 7 ‘‘(12) TRANSFER OF CREDIT.— 8 ‘‘(A) IN GENERAL.—If the taxpayer elects 9 to transfer all (or any portion specified in the 10 election) of the credit determined under this 11 section for any taxable year with respect to any 12 qualified facility to an eligible project partner 13 for a specified period, then, the eligible project 14 partner specified in such election (and not the 15 taxpayer) shall be treated for purposes of this 16 title with respect to such credit (or such portion 17 thereof) as the person producing and selling the 18 electricity to which such credit (or portion 19 thereof) relates. 20 ‘‘(B) DEDUCTION FOR PAYMENTS IN CON- 21 NECTION WITH TRANSFER.—There shall be al- 22 lowed as a deduction under part VI of sub- 23 chapter B an amount equal to the amount paid 24 by a taxpayer as consideration for a transfer 25 described in subparagraph (A). 26 VerDate Sep 11 2014 03:56 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3032.IS S3032 kjohnson on DSK79L0C42 with BILLS 3 •S 3032 IS ‘‘(C) ELIGIBLE PROJECT PARTNER.—For 1 purposes of this paragraph, the term ‘eligible 2 project partner’ means, with respect to any 3 qualified facility, any person who— 4 ‘‘(i) has an ownership interest in such 5 qualified facility, 6 ‘‘(ii) provided equipment for or serv- 7 ices in the construction of such qualified 8 facility, 9 ‘‘(iii) provides electric transmission or 10 distribution services for such qualified fa- 11 cility, 12 ‘‘(iv) purchases electricity from such 13 qualified facility pursuant to a contract, or 14 ‘‘(v) provides financing for such quali- 15 fied facility. 16 For purposes of clause (v), any amount paid as 17 consideration for a transfer described in sub- 18 paragraph (A) shall not be treated as financing 19 of a qualified facility. 20 ‘‘(D) TAXABLE YEAR IN WHICH CREDIT 21 TAKEN INTO ACCOUNT.—In the case of any 22 credit (or portion thereof) with respect to which 23 an election is made under subparagraph (A), 24 such credit shall be taken into account in the 25 VerDate Sep 11 2014 03:56 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3032.IS S3032 kjohnson on DSK79L0C42 with BILLS 4 •S 3032 IS first taxable year of the eligible project partner 1 ending with, or after, the electing taxpayer’s 2 taxable year with respect to which the credit 3 was determined. 4 ‘‘(E) LIMITATIONS ON ELECTION.— 5 ‘‘(i) TIME FOR ELECTION.—An elec- 6 tion under this paragraph to transfer any 7 portion of the credit allowed under this 8 section shall be made not later than the 9 due date for the return of tax for the elect- 10 ing taxpayer’s taxable year with respect to 11 which the credit was determined. 12 ‘‘(ii) NO FURTHER TRANSFERS.—No 13 election may be made under this paragraph 14 by a taxpayer with respect to any portion 15 of the credit allowed under this section 16 which has been previously transferred to 17 such taxpayer under this paragraph. 18 ‘‘(F) TREATMENT OF TRANSFER UNDER 19 PRIVATE USE RULES.—For purposes of section 20 141(b)(1), any benefit derived by an eligible 21 project partner in connection with an election 22 under this paragraph shall not be taken into ac- 23 count as a private business use. 24 VerDate Sep 11 2014 03:56 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3032.IS S3032 kjohnson on DSK79L0C42 with BILLS 5 •S 3032 IS ‘‘(G) ADDITIONAL ELECTION REQUIRE- 1 MENTS.—The Secretary may prescribe such 2 regulations as may be appropriate to carry out 3 the purposes of this paragraph, including— 4 ‘‘(i) rules for determining which per- 5 sons are eligible project partners with re- 6 spect to any energy property, and 7 ‘‘(ii) requiring information to be in- 8 cluded in an election under subparagraph 9 (A) or imposing additional reporting re- 10 quirements.’’. 11 (b) ENERGY CREDIT.— 12 (1) IN GENERAL.—Section 48 of the Internal 13 Revenue Code of 1986 is amended by adding at the 14 end the following new subsection: 15 ‘‘(e) TRANSFER OF CREDIT.— 16 ‘‘(1) IN GENERAL.—If the taxpayer elects to 17 transfer all (or any portion specified in the election) 18 of the credit determined under this section for any 19 taxable year with respect to any energy property to 20 an eligible project partner, the eligible project part- 21 ner specified in such election (and not the taxpayer) 22 shall be treated as the taxpayer for purposes of this 23 title with respect to such credit (or portion thereof). 24 VerDate Sep 11 2014 03:56 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3032.IS S3032 kjohnson on DSK79L0C42 with BILLS 6 •S 3032 IS ‘‘(2) DEDUCTION FOR PAYMENTS IN CONNEC- 1 TION WITH TRANSFER.—There shall be allowed as a 2 deduction under part VI of subchapter B an amount 3 equal to the amount paid by a taxpayer as consider- 4 ation for a transfer described in paragraph (1). 5 ‘‘(3) ELIGIBLE PROJECT PARTNER.—For pur- 6 poses of this subsection, the term ‘eligible project 7 partner’ means, with respect to any energy property, 8 any person who— 9 ‘‘(A) has an ownership interest in such en- 10 ergy property, 11 ‘‘(B) provided equipment for or services in 12 the construction of such energy property, 13 ‘‘(C) provides electric transmission or dis- 14 tribution services for such energy property, 15 ‘‘(D) purchases electricity from such quali- 16 fied facility pursuant to a contract, or 17 ‘‘(E) provides financing for such energy 18 property. 19 For purposes of subparagraph (E), any amount paid 20 as consideration for a transfer described in para- 21 graph (1) shall not be treated as financing of a 22 qualified facility. 23 ‘‘(4) TAXABLE YEAR IN WHICH CREDIT TAKEN 24 INTO ACCOUNT.—In the case of any credit (or por- 25 VerDate Sep 11 2014 03:56 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3032.IS S3032 kjohnson on DSK79L0C42 with BILLS 7 •S 3032 IS tion thereof) with respect to which an election is 1 made under paragraph (1), such credit shall be 2 taken into account in the first taxable year of the el- 3 igible project partner ending with, or after, the elect- 4 ing taxpayer’s taxable year with respect to which the 5 credit was determined. 6 ‘‘(5) LIMITATIONS ON ELECTION.— 7 ‘‘(A) TIME FOR ELECTION.—An election 8 under this subsection to transfer any portion of 9 the credit allowed under this section shall be 10 made not later than the due date for the return 11 of tax for the electing taxpayer’s taxable year 12 with respect to which the credit was deter- 13 mined. 14 ‘‘(B) NO FURTHER TRANSFERS.—No elec- 15 tion may be made under this subsection by a 16 taxpayer with respect to any portion of the 17 credit allowed under this section which has been 18 previously transferred to such taxpayer under 19 this subsection. 20 ‘‘(6) TREATMENT OF TRANSFER UNDER PRI- 21 VATE USE RULES.—For purposes of section 22 141(b)(1), any benefit derived by an eligible project 23 partner in connection with an election under this 24 VerDate Sep 11 2014 03:56 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3032.IS S3032 kjohnson on DSK79L0C42 with BILLS 8 •S 3032 IS subsection shall not be taken into account as a pri- 1 vate business use. 2 ‘‘(7) ADDITIONAL ELECTION REQUIREMENTS.— 3 The Secretary may prescribe such regulations as 4 may be appropriate to carry out the purposes of this 5 subsection, including— 6 ‘‘(A) rules for determining which persons 7 are eligible project partners with respect to any 8 energy property, and 9 ‘‘(B) requiring information to be included 10 in an election under paragraph (1) or imposing 11 additional reporting requirements.’’. 12 (2) NORMALIZATION RULES.—Section 50(d) of 13 such Code is amended by adding at the end the fol- 14 lowing: ‘‘In the case of any energy property with re- 15 spect to which an election is made under section 16 48(e)(1), the rules of the section 46(f) referred to in 17 paragraph (2) shall apply only to the extent of 18 amounts paid in consideration of the transfer to 19 which such election relates.’’. 20 (c) CREDIT FOR CARBON OXIDE SEQUESTRATION.— 21 Subparagraph (B) of section 45Q(f)(3) of the Internal 22 Revenue Code of 1986 is amended to read as follows: 23 ‘‘(B) TRANSFER OF CREDIT.— 24 VerDate Sep 11 2014 03:56 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S3032.IS S3032 kjohnson on DSK79L0C42 with BILLS 9 •S 3032 IS ‘‘(i) IN GENERAL.—If the person de- 1 scribed in subparagraph (A) elects to 2 transfer all (or any portion specified in the 3 election) of the credit determined under 4 this section for any taxable year with re- 5 spect to any qualified facility to an eligible 6 project partner for a specified period, then, 7 the eligible project partner specified in 8 such election (and not the person described 9 in subparagraph (A)) shall be treated for 10 purposes of this title with respect to such 11 credit (or such portion thereof) as the per- 12 son described in clause (i) or (ii) of such 13 subparagraph, as applicable, to which such 14 credit (or portion thereof) relates. 15 ‘‘(ii) DEDUCTION FOR PAYMENTS IN 16 CONNECTION WITH TRANSFER.—There 17 shall be allowed as a deduction under part 18 VI of subchapter B an amount equal to the 19 amount paid by a taxpayer as consider- 20 ation for a transfer described in clause (i). 21 ‘‘(iii) ELIGIBLE PROJECT PARTNER.— 22 For purposes of this subparagraph, the 23 term ‘eligible project partner’ means, with 24 VerDate Sep 11 2014 03:56 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S3032.IS S3032 kjohnson on DSK79L0C42 with BILLS 10 •S 3032 IS respect to any qualified facility, any person 1 who— 2 ‘‘(I) has an ownership interest in 3 such qualified facility or any carbon 4 capture equipment which is placed in 5 service at such qualified facility, 6 ‘‘(II) provided equipment for or 7 services in the construction of such 8 qualified facility or any carbon cap- 9 ture equipment which is placed in 10 service at such qualified facility, 11 ‘‘(III) provides fuel or feedstock 12 for the operation of such qualified fa- 13 cility, 14 ‘‘(IV) provides transportation, 15 transmission, or distribution services 16 for such qualified facility, 17 ‘‘(V) purchases, pursuant to a 18 contract, the industrial output of such 19 qualified facility or the commercial 20 products produced by utilization of 21 qualified carbon oxide captured at 22 such qualified facility, 23 ‘‘(VI) disposes of the qualified 24 carbon oxide, utilizes the qualified 25 VerDate Sep 11 2014 03:56 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S3032.IS S3032 kjohnson on DSK79L0C42 with BILLS 11 •S 3032 IS carbon oxide, or uses the qualified 1 carbon oxide as a tertiary injectant, or 2 ‘‘(VII) provides financing for 3 such qualified facility or any carbon 4 capture equipment which is placed in 5 service at such qualified facility. 6 For purposes of subclause (VII), any 7 amount paid as consideration for a trans- 8 fer described in clause (i) shall not be 9 treated as financing of a qualified facility. 10 ‘‘(iv) TAXABLE YEAR IN WHICH CRED- 11 IT TAKEN INTO ACCOUNT.—In the case of 12 any credit (or portion thereof) with respect 13 to which an election is made under clause 14 (i), such credit shall be taken into account 15 in the first taxable year of the eligible 16 project partner ending with, or after, the 17 electing taxpayer’s taxable year with re- 18 spect to which the credit was determined. 19 ‘‘(v) LIMITATIONS ON ELECTION.— 20 ‘‘(I) TIME FOR ELECTION.—An 21 election under this subparagraph to 22 transfer any portion of the credit al- 23 lowed under this section shall be made 24 not later than the due date for the re- 25 VerDate Sep 11 2014 03:56 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S3032.IS S3032 kjohnson on DSK79L0C42 with BILLS 12 •S 3032 IS turn of tax for the electing taxpayer’s 1 taxable year with respect to which the 2 credit was determined. 3 ‘‘(II) NO FURTHER TRANS- 4 FERS.—No election may be made 5 under this subparagraph by a tax- 6 payer with respect to any portion of 7 the credit allowed under this section 8 which has been previously transferred 9 to such taxpayer under this subpara- 10 graph. 11 ‘‘(vi) TREATMENT OF TRANSFER 12 UNDER PRIVATE USE RULES.—For pur- 13 poses of section 141(b)(1), any benefit de- 14 rived by an eligible project partner in con- 15 nection with an election under this sub- 16 paragraph shall not be taken into account 17 as a private business use. 18 ‘‘(vii) ADDITIONAL ELECTION RE- 19 QUIREMENTS.—The Secretary may pre- 20 scribe such regulations as may be appro- 21 priate to carry out the purposes of this 22 subparagraph, including— 23 ‘‘(I) rules for determining which 24 persons are eligible project partners 25 VerDate Sep 11 2014 03:56 Dec 14, 2019 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S3032.IS S3032 kjohnson on DSK79L0C42 with BILLS 13 •S 3032 IS with respect to any qualified facility, 1 and 2 ‘‘(II) requiring information to be 3 included in an election under clause 4 (i) or imposing additional reporting 5 requirements. 6 ‘‘(viii) TRANSITION RULES.—Any elec- 7 tion made under this subparagraph with 8 respect to a qualified facility for any tax- 9 able years beginning before the date of en- 10 actment of the Renewable Energy Trans- 11 ferability Act shall not apply to any tax- 12 able years beginning after the date of en- 13 actment of such Act, and the person de- 14 scribed in subparagraph (A) may make a 15 new election or el [Text truncated for display. 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