I

106TH CONGRESS

2D SESSION H. R. 5226

To amend the Internal Revenue Code of 1986 to provide a credit for electricity produced by certain waste management facilities in United States

possessions, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 20, 2000

Mrs. CHRISTENSEN (for herself, Mr. RANGEL, and Mr. JEFFERSON) 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 provide

a credit for electricity produced by certain waste management facilities in United States possessions, and for

other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Possessions Waste

5 Management Improvement Act of 2000’’.
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1 SEC. 2. ELECTRICITY PRODUCED FROM CERTAIN WASTE

2 MANAGEMENT FACILITIES IN A POSSESSION.

3 (a) AMOUNT OF CREDIT.—Subsection (b) of section

4 38 of the Internal Revenue Code of 1986 (defining current

5 year business credit) is amended by striking ‘‘plus’’ at the

6 end of paragraph (11), by striking the period at the end

7 of paragraph (12) and inserting ‘‘, plus’’, and by adding

8 at the end the following new paragraph:

9 ‘‘(13) the possessions waste management elec10 tricity production credit determined under section

11 45D(a).’’.

12 (b) POSSESSIONS WASTE MANAGEMENT ELEC13 TRICITY PRODUCTION CREDIT.—Subpart D of part IV of

14 chapter 1 of subtitle A of the Internal Revenue Code of

15 1986 (relating to business related credits) is amended by

16 adding at the end the following new section:

17 ‘‘SEC. 45D. ELECTRICITY PRODUCED FROM CERTAIN

18 WASTE MANAGEMENT FACILITIES IN A POS19 SESSION.

20 ‘‘(a) GENERAL RULE.—For purposes of section 38,

21 the possessions waste management electricity production

22 credit for any taxable year is an amount equal to the prod23 uct of—

24 ‘‘(1) 7.5 cents, multiplied by
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1 ‘‘(2) the kilowatt hours of electricity produced

2 by the taxpayer at a qualified facility during the tax3 able year.

4 ‘‘(b) LIMITATIONS AND ADJUSTMENTS.—

5 ‘‘(1) CREDIT ADJUSTMENT BASED ON INFLA6 TION.—

7 ‘‘(A) IN GENERAL.—The 7.5 cent amount

8 in subsection (a) shall be adjusted by multi9 plying such amount by the inflation adjustment

10 factor for the calendar year in which the pro11 duction occurs. If any amount as increased

12 under the preceding sentence is not a multiple

13 of 0.1 cent, such amount shall be rounded to

14 the nearest multiple of 0.1 cent.

15 ‘‘(B) COMPUTATION OF INFLATION AD16 JUSTMENT FACTOR.—For purposes of this sec17 tion, the inflation adjustment factor shall be the

18 same as that defined in section 45(d)(2).

19 ‘‘(2) RELATED PERSONS AND CONSUMPTION BY

20 QUALIFIED FACILITY.—The amount of credit deter21 mined under subsection (a) shall not be reduced by

22 the amount of electricity either sold or provided to

23 related persons or expended by the qualified facility

24 itself.
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1 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur2 poses of this section—

3 ‘‘(1) QUALIFIED FACILITY.—The term ‘quali4 fied facility’ means any facility—

5 ‘‘(A) which is located in a possession of the

6 United States,

7 ‘‘(B) the purpose of which is to provide

8 waste management services for residents (in9 cluding both individuals and business entities)

10 of the possession without requiring the use of a

11 landfill, and

12 ‘‘(C) which is put in service after October

13 1, 2002, pursuant to a procurement request—

14 ‘‘(i) issued after January 1, 2000, by

15 a governmental entity of the possession (or

16 its agent), and

17 ‘‘(ii) the response to which was due

18 before June 30, 2000.

19 ‘‘(2) POSSESSION.—The term ‘possession of the

20 United States’ means Guam, American Samoa, the

21 Commonwealth of the Northern Mariana Islands,

22 and the United States Virgin Islands.

23 ‘‘(d) COORDINATION WITH OTHER PROVISIONS.—
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1 ‘‘(1) PASSIVE ACTIVITY LIMITATION.—Section

2 469 shall not apply to any credit amount determined

3 under this section.

4 ‘‘(2) AT RISK LIMITATION.—Section 465 shall

5 not apply to any qualified facility.’’.

6 (c) CREDIT ALLOWED AGAINST REGULAR AND MIN7 IMUM TAX.—

8 (1) IN GENERAL.—Subsection (c) of section 38

9 of such Code (relating to limitation based on amount

10 of tax) is amended by redesignating paragraph (3)

11 as paragraph (4) and by inserting after paragraph

12 (2) the following new paragraph:

13 ‘‘(3) SPECIAL RULES FOR POSSESSIONS WASTE

14 MANAGEMENT ELECTRICITY PRODUCTION CREDIT.—

15 ‘‘(A) IN GENERAL.—In the case of the pos16 sessions waste management electricity produc17 tion credit—

18 ‘‘(i) this section and section 39 shall

19 be applied separately with respect to the

20 credit, and

21 ‘‘(ii) in applying paragraph (1) to the

22 credit—

23 ‘‘(I) subparagraphs (A) and (B)

24 thereof shall not apply, and
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1 ‘‘(II) the limitation under para2 graph (1) (as modified by subclause

3 (I)) shall be reduced by the credit al4 lowed under subsection (a) for the

5 taxable year (other than the posses6 sions waste management electricity

7 production credit).

8 ‘‘(B) POSSESSIONS WASTE MANAGEMENT

9 ELECTRICITY PRODUCTION CREDIT.—For pur10 poses of this subsection, the term ‘possessions

11 waste management electricity production credit’

12 means the credit allowable under subsection (a)

13 by reason of section 45D.’’.

14 (2) CONFORMING AMENDMENT.—Subclause (II)

15 of section 38(c)(2)(A)(ii) of such Code is amended

16 by inserting ‘‘or the possessions waste management

17 electricity production credit’’ after ‘‘employment

18 credit’’.

19 (d) CLERICAL AMENDMENT.—The table of sections

20 for such subpart is amended by adding at the end the fol21 lowing new item:

‘‘Sec. 45D. Electricity produced from certain waste management

facilities in a possession.’’.
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1 (e) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 December 31, 1999.

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