49–010 

Calendar No. 52 

114TH CONGRESS REPORT " ! SENATE 1st Session 114–29 

A BILL TO EXCLUDE FROM GROSS INCOME CERTAIN 

CLEAN COAL POWER GRANTS 

APRIL 14, 2015.—Ordered to be printed 

Mr. HATCH, from the Committee on Finance, 

submitted the following 

R E P O R T 

[To accompany S. 919] 

The Committee on Finance, having considered an original bill, S. 

919, to exclude from gross income certain clean coal power grants 

to non-corporate taxpayers, having considered the same, reports favorably thereon without amendment and recommends that the bill 

do pass. 

CONTENTS 

Page 

I. LEGISLATIVE BACKGROUND ..................................................................... 1 

II. EXPLANATION OF THE BILL ...................................................................... 2 

A. Exclusion from Gross Income of Certain Clean Coal Power Grants 

(sec. 1 of the bill) ................................................................................ 2 

III. BUDGET EFFECTS OF THE BILL ............................................................... 3 

IV. VOTES OF THE COMMITTEE ...................................................................... 3 

V. REGULATORY IMPACT AND OTHER MATTERS ..................................... 5 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED 5 

I. LEGISLATIVE BACKGROUND 

The Committee on Finance, having considered S. 919, a bill to 

exclude from gross income certain clean coal power grants to noncorporate taxpayers, reports favorably thereon without amendment 

and recommends that the bill do pass. 

Background and need for legislative action 

Background.—Based on a proposal recommended by Senator Cornyn, the Committee on Finance marked up original legislation (a 

bill to amend the Internal Revenue Code of 1986 to exclude from 

gross income certain clean coal power grants) on February 11, 


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2015, and, with a majority present, ordered the bill favorably reported. 

Need for legislative action.—Section 402 of the Energy Policy Act 

of 2005 provides criteria for Federal financial assistance under the 

Clean Coal Power Initiative. To the extent this financial assistance 

comes in the form of a grant, award, or allowance, it must generally be included in income. Corporate taxpayers may be eligible 

to exclude such financial assistance from gross income as a contribution of capital under section 118 of the Code, but this exclusion is not available to non-corporate taxpayers. Federal financial 

assistance under the Clean Coal Power Initiative should be excludable from the income of investors, regardless of whether they operate as a corporation, in order to make such assistance as effective 

as possible in encouraging clean coal power. 

II. EXPLANATION OF THE BILL 

A. EXCLUSION FROM GROSS INCOME OF CERTAIN CLEAN COAL

POWER GRANTS (SEC. 1 OF THE BILL) 

PRESENT LAW

Section 402 of the Energy Policy Act of 2005 provides criteria for 

Federal financial assistance under the Clean Coal Power Initiative. 

To the extent this financial assistance comes in the form of a grant, 

award, or allowance, it must generally be included in income under 

section 61 of the Internal Revenue Code (the ‘‘Code’’). 

Corporate taxpayers may be eligible to exclude such financial assistance from gross income as a contribution of capital under section 118 of the Code. The basis of any property acquired by reason 

of such a contribution of capital must be reduced by the amount 

of the contribution. This exclusion is not available to non-corporate 

taxpayers. 

REASONS FOR CHANGE

The Committee believes that Federal financial assistance under 

the Clean Coal Power Initiative should be excludable from the income of investors in order to make such assistance as effective as 

possible in encouraging clean coal power. In addition, the Committee believes that a corresponding basis reduction is necessary in 

all cases to prevent any unintended double benefit under the incentive. 

EXPLANATION OF PROVISION

With respect to eligible non-corporate recipients, the proposal excludes from gross income and alternative minimum taxable income 

any grant, award, or allowance made pursuant to section 402 of the 

Energy Policy Act of 2005. The proposal requires that, to the extent 

the grant, award or allowance is related to depreciable property, 

the adjusted basis is reduced by the amount excluded from income 

under the proposal. The proposal requires eligible non-corporate recipients to pay an upfront payment to the Federal government 

equal to 1.18 percent of the value of the grant, award, or allowance. 

Under the proposal, eligible non-corporate recipients are defined 

as (1) any recipient (other than a corporation) of any grant, award, 

or allowance made pursuant to Section 402 of the Energy Policy 


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Act of 2005 that (2) makes the upfront 1.18-percent payment, 

where (3) the grant, award, or allowance would have been excludable from income by reason of Code section 118 if the taxpayer had 

been a corporation. In the case of a partnership, the eligible noncorporate recipients are the partners. 

EFFECTIVE DATE

The proposal is effective for payments received in taxable years 

beginning after December 31, 2011. 

III. BUDGET EFFECTS OF THE BILL 

A. COMMITTEE ESTIMATES

In compliance with paragraph 11(a) of rule XXVI of the Standing 

Rules of the Senate and section 308(a)(1) of the Congressional 

Budget and Impoundment Control Act of 1974, as amended (the 

‘‘Budget Act’’), the following statement is made concerning the estimated budget effects of the revenue provisions of the bill as reported. 

The bill is estimated to alter Federal fiscal year budget receipts 

by the following amounts for the period 2015–2025: 

FISCAL YEARS 

[Millions of Dollars] 

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2015– 

20 2015–25 

¥96 52 ¥25 8 41 48 34 24 17 8 2 ¥79 6 

NOTE: Details do not add to totals due to rounding. 

B. BUDGET AUTHORITY AND TAX EXPENDITURES

Budget authority 

In compliance with section 308(a)(1) of the Budget Act, the Committee states that no provisions of the bill as reported involve new 

or increased budget authority. 

Tax expenditures 

In compliance with section 308(a)(1) of the Budget Act, the Committee states that certain provisions of the bill as reported affect 

the levels of tax expenditures (see revenue table in part A., above). 

C. CONSULTATION WITH CONGRESSIONAL BUDGET OFFICE

In accordance with section 402 of the Budget Act, the Committee 

advises that the Congressional Budget Office has not submitted a 

statement on the bill. The letter from the Congressional Budget Office will be provided separately. 

IV. VOTES OF THE COMMITTEE 

In compliance with paragraph 7(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee states that, with a majority 

present, the bill was ordered favorably reported by voice vote on 

February 11, 2015. 


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V. REGULATORY IMPACT AND OTHER MATTERS 

A. REGULATORY IMPACT

Pursuant to paragraph 11(b) of rule XXVI of the Standing Rules 

of the Senate, the Committee makes the following statement concerning the regulatory impact that might be incurred in carrying 

out the provisions of the bill. 

Impact on individuals and businesses, personal privacy and paperwork 

The bill excludes from gross income certain clean coal power 

grants. The provisions of the bill are not expected to impose additional administrative requirements or regulatory burdens on individuals or businesses. 

The provisions of the bill do not impact personal privacy. 

B. UNFUNDED MANDATES STATEMENT

This information is provided in accordance with section 423 of 

the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104–4). 

The Committee has determined that the tax provisions of the reported bill do not contain Federal private sector mandates or Federal intergovernmental mandates on State, local, or tribal governments within the meaning of Public Law 104–4, the Unfunded 

Mandates Reform Act of 1995. 

C. TAX COMPLEXITY ANALYSIS

Section 4022(b) of the Internal Revenue Service Reform and Restructuring Act of 1998 (‘‘IRS Reform Act’’) requires the staff of the 

Joint Committee on Taxation (in consultation with the Internal 

Revenue Service and the Treasury Department) to provide a tax 

complexity analysis. The complexity analysis is required for all legislation reported by the Senate Committee on Finance, the House 

Committee on Ways and Means, or any committee of conference if 

the legislation includes a provision that directly or indirectly 

amends the Internal Revenue Code and has widespread applicability to individuals or small businesses. The staff of the Joint 

Committee on Taxation has determined that there are no provisions that are of widespread applicability to individuals or small 

businesses. 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS 

REPORTED 

In the opinion of the Committee, it is necessary in order to expedite the business of the Senate, to dispense with the requirements 

of paragraph 12 of rule XXVI of the Standing Rules of the Senate 

(relating to the showing of changes in existing law made by the bill 

as reported by the Committee). 

Æ 


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