II

103D CONGRESS

1ST SESSION S. 1180

To amend the Internal Revenue Code of 1986 to encourage the production

and use of wind energy.

IN THE SENATE OF THE UNITED STATES

JUNE 30, 1993

Mr. GRASSLEY (for himself and Mr. CONRAD) 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 encourage

the production and use of wind energy.

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; AMENDMENT OF 1986 CODE.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Wind Energy Incentives Act of 1993’’.

6 (b) AMENDMENT OF 1986 CODE.—Except as other7 wise expressly provided, whenever in this Act an amend8 ment or repeal is expressed in terms of an amendment

9 to, or repeal of, a section or other provision, the reference
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1 shall be considered to be made to a section or other provi2 sion of the Internal Revenue Code of 1986.

3 SEC. 2. ENERGY-RELATED PRODUCTION CREDITS MAY OFF4 SET 25 PERCENT OF MINIMUM TAX.

5 (a) IN GENERAL.—Section 38(c) (relating to limita6 tion based on amount of tax) is amended by redesignating

7 paragraph (2) as paragraph (3) and by inserting after

8 paragraph (1) the following new paragraph:

9 ‘‘(2) ENERGY CREDITS MAY OFFSET 25 PER10 CENT OF MINIMUM TAX.—

11 ‘‘(A) IN GENERAL.—In the case of the en12 ergy credit—

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

14 be applied separately with respect to such

15 credit, and

16 ‘‘(ii) for purposes of applying para17 graph (1) to such credit—

18 ‘‘(I) 75 percent of the tentative

19 minimum tax shall be substituted for

20 the tentative minimum tax under sub21 paragraph (A) thereof, and

22 ‘‘(II) the limitation under para23 graph (1) (as modified by subclause

24 (I)) shall be reduced by the credit al25 lowed under subsection (a) for the
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1 taxable year (other than the energy

2 credit).

3 ‘‘(B) ENERGY CREDIT.—For purposes of

4 this paragraph, the term ‘energy credit’ means

5 the portion of the credit under subsection (a)

6 which is attributable to the credit determined

7 under section 45(a).’’

8 (b) CONFORMING AMENDMENT.—Section 38(d) is

9 amended by adding at the end the following new para10 graph:

11 ‘‘(4) SPECIAL RULE FOR ENERGY CREDIT.—

12 Notwithstanding paragraphs (1) and (2), the energy

13 credit described in subsection (b)(8) shall be treated

14 as used last.’’

15 (c) EFFECTIVE DATE.—The amendments made by

16 this section shall apply to property placed in service after

17 June 30, 1993.

18 SEC. 3. SMALL WIND TURBINES ELIGIBLE FOR ENERGY

19 CREDIT.

20 (a) IN GENERAL.—Subparagraph (A) of section

21 48(a)(3) (defining energy property) is amended by strik22 ing ‘‘or’’ at the end of clause (i), by redesignating clause

23 (ii) as clause (iii), and by inserting after clause (i) the

24 following new clause:
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1 ‘‘(ii) equipment which uses wind en2 ergy to generate electricity but only if such

3 equipment has a rated capacity of 50 kilo4 watts or less and is not primarily used in

5 the trade or business of producing elec6 tricity for sale to an unrelated person, or’’.

7 (b) EFFECTIVE DATE.—The amendment made by

8 subsection (a) shall apply to property placed in service

9 after December 31, 1993.

10 SEC. 4. LESSEES ELIGIBLE FOR CREDIT FOR ELECTRICITY

11 PRODUCED FROM CERTAIN RENEWABLE RE12 SOURCES.

13 (a) IN GENERAL.—Paragraph (3) of section 45(c)

14 (defining qualified facility) is amended by striking ‘‘owned

15 by taxpayer’’ and inserting ‘‘operated by the taxpayer’’.

16 (b) CONFORMING AMENDMENT.—Paragraph (3) of

17 section 45(d) (relating to production attributable to the

18 taxpayer) is amended to read as follows:

19 ‘‘(c) In the case of a facility in which more than 1

20 person has an interest, except to the extent prescribed in

21 regulations, production from the facility shall be allocated

22 among such persons in proportion to their respective inter23 ests in the gross sales from the facility.’’
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to facilities originally placed in

3 service after June 30, 1993.

4 SEC. 5. SECTION 45 ELIGIBILITY PERIOD.

5 Paragraph (3) of section 45(c) (defining qualified fa6 cility) is amended by striking ‘‘December 31, 1993’’ and

7 inserting ‘‘June 30, 1993’’.

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