Renewables and Energy Efficiency Incentives Act of 1993

Summary: TABLE OF CONTENTS: 
     Title I:  Incentives for Production and Use of 
          Renewable Energy Sources 
     Title II:  Incentives to Promote Energy Efficiency 
     Title III:  Revenue Increases 
Renewables and Energy Efficiency Incentives Act of 1993 - 
Title I:  Incentives for Production and Use of Renewable Energy Sources
 - Amends the Internal Revenue Code to allow energy tax credits to offset 25 percent of tentative minimum tax. 
Includes certain small wind turbine equipment as energy property for purposes of the energy credit. 
Makes lessees of electric facilities eligible for the credit for producing electricity from renewable resources. 
Title II:  Incentives to Promote Energy Efficiency
 - Makes certain trucks, vans, and buses eligible for the deduction for clean-fuel vehicles.  Denies any credit for which such deduction is allowable. 
Allows electric or gas utilities a deduction for energy conservation expenditures. 
Removes the limitation on the exclusion from gross income for nonresidential property for energy conservation subsidies provided by public utilities. 
Title III:  Revenue Increases
 - Reduces the credit for ethanol blenders.  Increases the Highway Trust Fund financing rate for determining the tax on gasoline mixed with alcohol at a refinery. Reduces such financing rate for methanol and ethanol fuels. 
Prohibits an exemption from tax for interest on any bond used to finance certain electric generating facilities. 
Repeals the tax-exempt status of electric companies. 
Imposes a security rate tax on petroleum. 
Limits the deduction for percentage depletion for oil and gas wells to their adjusted basis. 
Repeals the exception from passive loss limitations for working interests in oil and gas properties.

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title.--This Act may be cited as the ``Renewables and 
Energy Efficiency Incentives Act of 1993''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.

 TITLE I--INCENTIVES FOR PRODUCTION AND USE OF RENEWABLE ENERGY SOURCES

SEC. 101. ENERGY-RELATED CREDITS MAY OFFSET 25 PERCENT OF MINIMUM TAX.

    (a) In General.--Section 38(c) (relating to limitation based on 
amount of tax) is amended by redesignating paragraph (2) as paragraph 
(3) and by inserting after paragraph (1) the following new paragraph:
            ``(2) Energy credits may offset 25 percent of minimum 
        tax.--
                    ``(A) In general.--In the case of the energy 
                credit--
                            ``(i) this section and section 39 shall be 
                        applied separately with respect to such credit, 
                        and
                            ``(ii) for purposes of applying paragraph 
                        (1) to such credit--
                                    ``(I) 75 percent of the tentative 
                                minimum tax shall be substituted for 
                                the tentative minimum tax under 
                                subparagraph (A) thereof, and
                                    ``(II) the limitation under 
                                paragraph (1) (as modified by subclause 
                                (I)) shall be reduced by the credit 
                                allowed under subsection (a) for the 
                                taxable year (other than the energy 
                                credit).
                    ``(B) Energy credit.--For purposes of this 
                paragraph, the term `energy credit' means the portion 
                of the credit under subsection (a) which is 
                attributable to the credits determined under sections 
                45 and 48(a).''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 1993.

SEC. 102. SMALL WIND TURBINES ELIGIBLE FOR ENERGY CREDIT.

    (a) In General.--Subparagraph (A) of section 48(a)(3) (defining 
energy property) is amended by striking ``or'' at the end of clause 
(i), by redesignating clause (ii) as clause (iii), and by inserting 
after clause (i) the following new clause:
                            ``(ii) equipment which uses wind energy to 
                        generate electricity but only if such equipment 
                        has a rated capacity of 50 kilowatts or less 
                        and is not primarily used in the trade or 
                        business of producing electricity for sale to 
                        an unrelated person, or''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to property placed in service after December 31, 1993.

SEC. 103. LESSEES ELIGIBLE FOR CREDIT FOR ELECTRICITY PRODUCED FROM 
              CERTAIN RENEWABLE RESOURCES.

    (a) In General.--Paragraph (3) of section 45(c) (defining qualified 
facility) is amended by striking ``owned by the taxpayer'' and 
inserting ``operated by the taxpayer''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 1993.

SEC. 104. CLARIFICATION OF APPLICATION OF ENERGY CREDIT TO PROPERTY 
              USING SOLAR ENERGY.

    (a) In General.--Paragraph (3) of section 48(a) (relating to energy 
credit) is amended by adding at the end thereof the following: 
``Equipment shall be treated as satisfying the requirement of 
subparagraph (A)(i) that it use solar energy if its average annual use 
of energy from sources other than solar energy does not exceed 50 
percent of its total energy input.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to property placed in service after December 31, 1993.

           TITLE II--INCENTIVES TO PROMOTE ENERGY EFFICIENCY

SEC. 201. LARGE ELECTRIC TRUCKS, VANS, AND BUSES ELIGIBLE FOR DEDUCTION 
              FOR CLEAN-FUEL VEHICLES.

    (a) In General.--Paragraph (3) of section 179A(c) (defining 
qualified clean-fuel vehicle property) is amended by adding at the end 
thereof the following: ``The preceding sentence shall not apply to any 
vehicle described in subclause (I) or (II) of subsection 
(b)(1)(A)(iii).''
    (b) Denial of Credit.--Subsection (c) of section 30 is amended by 
adding at the end thereof the following new paragraph:
            ``(3) Denial of credit for vehicles for which deduction 
        allowable.--The term `qualified electric vehicle' shall not 
        include any vehicle described in subclause (I) or (II) of 
        section 179A(b)(1)(A)(iii).''
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 1993.

SEC. 202. DEDUCTION FOR ENERGY CONSERVATION EXPENDITURES BY CERTAIN 
              UTILITIES.

    (a) In General.--Part VI of subchapter B of chapter 1 (relating to 
itemized deductions for individuals and corporations) is amended by 
inserting after section 196 the following new section:

``SEC. 197. ENERGY CONSERVATION EXPENDITURES BY ELECTRIC AND GAS 
              UTILITIES.

    ``(a) General Rule.--In the case of an electric or gas utility, 
there shall be allowed as a deduction for the taxable year an amount 
equal to the energy conservation expenditures paid or incurred by the 
taxpayer during such taxable year.
    ``(b) Energy Conservation Expenditures.--For purposes of this 
section, the term `energy conservation expenditures' means expenditures 
for--
            ``(1) subsidies provided directly or indirectly to 
        customers for the purchase, installation, or modification of--
                    ``(A) any device or service primarily designed to 
                reduce consumption of electricity, natural gas, or 
                steam or to improve the management of energy demand, or
                    ``(B) any specially defined energy property (as 
                defined in section 136(c)(2)(A)),
            ``(2) energy use consulting and audits of commercial, 
        residential, and industrial properties, or
            ``(3) administrative, promotional, and other costs 
        associated with expenditures described in paragraph (1) or (2).
Such term shall not include any expenditure taken into account in 
determining the basis of any tangible property which is owned by the 
taxpayer and which is of a character subject to the allowance for 
depreciation.
    ``(c) Electric or Gas Utility.--For purposes of this section, the 
term `electric or gas utility' means any corporation engaged in the 
furnishing or sale of electric energy, natural gas, or steam if the 
rates for such furnishing or sale have been established or approved by 
a State or political subdivision thereof, by any agency or 
instrumentality of the United States, or by a public utility or public 
service commission or other similar body of any State or political 
subdivision thereof or of the District of Columbia.''
    (b) Conforming Amendments.--
            (1) Paragraph (1) of section 263(a) is amended by striking 
        ``; or'' at the end of subparagraph (F) and inserting a comma, 
        by striking the period at the end of subparagraph (G) and 
        inserting ``, or'', and by adding at the end thereof the 
        following new subparagraph:
                    ``(H) expenditures for which a deduction is allowed 
                under section 197.''
            (2) The table of sections for part VI of subchapter B of 
        chapter 1 is amended by adding at the end thereof the following 
        new item:

                              ``Sec. 197. Energy conservation 
                                        expenditures by electric and 
                                        gas utilities.''
    (c) Effective Date.--The amendments made by this section shall 
apply to expenditures paid or incurred in taxable years beginning after 
December 31, 1980.

SEC. 203. FULL EXCLUSION FOR ENERGY CONSERVATION SUBSIDIES PROVIDED 
              WITH RESPECT TO NONRESIDENTIAL PROPERTY.

    (a) In General.--Subsection (a) of section 136 (relating to energy 
conservation subsidies provided by public utilities) is amended to read 
as follows:
    ``(a) Exclusion.--Gross income shall not include the value of any 
subsidy provided (directly or indirectly) by a public utility to a 
customer for the purchase or installation of any energy conservation 
measure.''
    (b) Conforming Amendment.--Paragraph (1) of section 136(c) 
(defining energy conservation measure) is amended by striking 
``demand--'' and all that follows and inserting ``demand with respect 
to any property.''
    (c) Effective Date.--The amendments made by this section shall 
apply to subsidies provided after December 31, 1993.

                      TITLE III--REVENUE INCREASES

SEC. 301. REDUCTION OF TAX SUBSIDIES FOR ETHANOL FUEL MIXTURES.

    (a) Reduction of Credit for Ethanol Blenders.--Subsection (h) of 
section 40 (relating to alcohol used as fuel) is amended--
            (1) by striking ``54 cents'' each place it appears and 
        inserting ``35 cents'', and
            (2) by striking ``40 cents'' each place it appears and 
        inserting ``21 cents''.
    (b) Reduction of Fuel Tax Subsidies.--
            (1) Subparagraph (A) of section 4081(c)(1) (relating to 
        gasoline mixed with alcohol at refinery, etc.) is amended--
                    (A) by striking ``6.1 cents'' each place it appears 
                and inserting ``8.0 cents'',
                    (B) by striking ``7.342 cents'' each place it 
                appears and inserting ``8.805 cents'', and
                    (C) by striking ``8.422 cents'' each place it 
                appears and inserting ``9.505 cents''
            (2) Clause (i) of section 4041(b)(2)(A) (relating to 
        reduction in special fuels tax for qualified methanol and 
        ethanol fuel) is amended by striking ``5.4 cents'' and 
        inserting ``3.5 cents''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1994.

SEC. 302. REPEAL OF EXCLUSION FOR INTEREST ON BONDS ISSUED TO FINANCE 
              ELECTRIC GENERATING FACILITIES FUELED BY COAL, PETROLEUM, 
              OR NUCLEAR POWER.

    (a) In General.--Section 149 (relating to bonds must be registered 
to be tax exempt; other requirements) is amended by adding at the end 
thereof the following new subsection:
    ``(h) Bonds Used To Finance Certain Electric Generating Facilities 
Not Tax-Exempt.--Nothing in section 103(a) or in any other provision of 
law shall be construed to provide an exemption from Federal income tax 
for interest on any bond issued as part of an issue if any portion of 
such issue is used to provide facilities for the furnishing of 
electricity if such electricity is generating using nuclear power, 
coal, crude oil, or any petroleum product.''
    (b) Conforming Amendment.--Paragraph (8) of section 142(a) is 
amended by inserting ``except as provided in section 149(h),'' before 
``facilities''.
    (c) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of the enactment of this Act.

SEC. 303. REPEAL OF TAX-EXEMPT STATUS FOR ELECTRIC COOPERATIVES.

    (a) In General.--Subparagraph (A) of section 501(c)(12) (relating 
to list of exempt organizations) is amended by inserting ``(other than 
electric companies)'' after ``like organizations''.
    (b) Conforming Amendments.--
            (1) Paragraph (12) of section 501(c) is amended by striking 
        subparagraph (C) and by redesignating subparagraph (D) as 
        subparagraph (C).
            (2) Subparagraph (C) of section 501(c)(12), as redesignated 
        by paragraph (1), is amended--
                    (A) by striking ``or electric'' each place it 
                appears, and
                    (B) by striking ``of electricity or''.
            (3) Subsection (d) of section 513 is amended by striking 
        ``or electric''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 304. INCREASED TAXES ON CRUDE OIL.

    (a) In General.--Paragraph (1) of section 4611(c) (relating to rate 
of tax on petroleum) is amended by striking ``and'' at the end of 
subparagraph (A), by striking the period at the end of subparagraph (B) 
and inserting ``, and'', and by adding at the end thereof the following 
new subparagraph:
                    ``(C) the petroleum security rate.''
    (b) Rate of Tax.--Paragraph (2) of section 4611(c) is amended by 
striking ``and'' at the end of subparagraph (A), by striking the period 
at the end of subparagraph (B) and inserting ``, and'', and by adding 
at the end thereof the following new subparagraph:
                    ``(C) the petroleum security rate is 5 cents a 
                barrel.''
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1994.

SEC. 305. DEDUCTION FOR PERCENTAGE DEPLETION FOR OIL AND GAS WELLS 
              LIMITED TO ADJUSTED BASIS.

    (a) In General.--Subsection (d) of section 613A (relating to 
limitations on percentage depletion in case of oil and gas wells) is 
amended by adding at the end thereof the following new paragraph:
            ``(6) Limitation based on adjusted basis.--The deduction 
        for the taxable year attributable to the application of 
        subsection (c) with respect to any property shall not exceed 
        the adjusted basis of such property at the end of the taxable 
        year (determined without regard to the depletion deduction for 
        such taxable year).''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1993.

SEC. 306. REPEAL OF EXCEPTION FROM PASSIVE LOSS LIMITATION FOR WORKING 
              INTERESTS IN OIL AND GAS PROPERTIES.

    (a) In General.--Subsection (c) of section 469 (relating to passive 
activity losses and credits limited) is amended by striking paragraph 
(3) and by redesignating paragraphs (4) through (6) as paragraphs (3) 
through (5), respectively.
    (b) Conforming Amendment.--Paragraph (3) of section 469(c), as 
redesignated by subsection (a), is amended--
            (1) by striking ``paragraphs (2) and (3)'' in the heading 
        and inserting ``paragraph (2)'', and
            (2) by striking ``Paragraphs (2) and (3)'' in the text and 
        inserting ``Paragraph (2)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.