II 

111TH CONGRESS 

2D SESSION S. 15 

To amend the Internal Revenue Code of 1986 to provide a carbon 

sequestration investment tax credit, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 29, 2010 

Mr. BROWNBACK 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 provide 

a carbon sequestration investment tax credit, 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 ‘‘Global Forest Restora5 tion Investment Tax Credit Act’’. 

6 SEC. 2. CARBON SEQUESTRATION INVESTMENT TAX CRED7 IT. 

8 (a) IN GENERAL.—Subpart D of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 (relating to business-related credits) is amended by 

2 adding at the end the following new section: 

3 ‘‘SEC. 45S. CARBON SEQUESTRATION INVESTMENT CREDIT. 

4 ‘‘(a) ALLOWANCE OF CREDIT.— 

5 ‘‘(1) IN GENERAL.—For purposes of section 38, 

6 in the case of an eligible taxpayer’s investment in a 

7 carbon sequestration project approved by the imple8 menting panel under section 2 of the International 

9 Carbon Conservation Act, the carbon sequestration 

10 investment credit determined under this section for 

11 the taxable year is an amount equal to— 

12 ‘‘(A) $3.00, multiplied by 

13 ‘‘(B) the number of tons of carbon the im14 plementing panel determines was sequestrated 

15 in such project during the calendar year ending 

16 with or within such taxable year, multiplied by 

17 ‘‘(C) the percentage of the total investment 

18 in such project which is represented by the in19 vestment in such project which is attributable, 

20 directly or indirectly, to the eligible taxpayer, as 

21 determined by the implementing panel. 

22 ‘‘(2) AGGREGATE DOLLAR LIMITATION.—The 

23 credit determined under paragraph (1) for any tax24 able year, when added to any credit allowed to the 

25 eligible taxpayer with respect to the such project in 


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1 any preceding taxable year, shall not exceed 50 per2 cent of the investment attributable to the eligible 

3 taxpayer with respect to such project through such 

4 taxable year. 

5 ‘‘(b) ANNUAL LIMITATION ON AGGREGATE CREDIT

6 ALLOWABLE.— 

7 ‘‘(1) IN GENERAL.—The amount of the carbon 

8 sequestration investment credit determined under 

9 subsection (a) for any taxable year, when added to 

10 all such credits allowed to all eligible taxpayers with 

11 respect to the such project for such taxable year 

12 shall not exceed the credit dollar amount allocated to 

13 such project under this subsection by the imple14 menting panel for the calendar year ending with or 

15 within such taxable year. 

16 ‘‘(2) TIME FOR MAKING ALLOCATION.—An allo17 cation shall be taken into account under paragraph 

18 (1) only if it is made not later than the close of the 

19 calendar year in which the carbon sequestration 

20 project proposal with respect to such project is ap21 proved by the implementing panel under section 2 of 

22 the International Carbon Conservation Act. 

23 ‘‘(3) AGGREGATE CREDIT DOLLAR AMOUNT.— 

24 The aggregate credit dollar amount which the impleVerDate Mar 15 2010 04:21 Oct 05, 2010 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S15.IS S15

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1 menting panel may allocate for any calendar year is 

2 equal to $250,000,000. 

3 ‘‘(c) ELIGIBLE TAXPAYER; IMPLEMENTING

4 PANEL.—For purposes of this section— 

5 ‘‘(1) ELIGIBLE TAXPAYER.—A taxpayer is eligi6 ble for the credit under this section with respect to 

7 a carbon sequestration project if such taxpayer has 

8 not elected the application of sections 3 and 4 of the 

9 International Carbon Conservation Act with respect 

10 to such project. 

11 ‘‘(2) IMPLEMENTING PANEL.—The term ‘imple12 menting panel’ means the implementing panel estab13 lished under section 2 of such Act. 

14 ‘‘(d) RECAPTURE OF CREDIT IN CERTAIN CASES.— 

15 ‘‘(1) IN GENERAL.—If, at any time during the 

16 30-year period of a carbon sequestration project, 

17 there is a recapture event with respect to such 

18 project, then the tax imposed by this chapter for the 

19 taxable year in which such event occurs shall be in20 creased by the credit recapture amount. 

21 ‘‘(2) CREDIT RECAPTURE AMOUNT.—For pur22 poses of paragraph (1)— 

23 ‘‘(A) IN GENERAL.—The credit recapture 

24 amount is an amount equal to the recapture 

25 percentage of all carbon sequestration investVerDate Mar 15 2010 04:21 Oct 05, 2010 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S15.IS S15

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1 ment credits previously allowable to an eligible 

2 taxpayer with respect to any investment in such 

3 project that is attributable to such taxpayer. 

4 ‘‘(B) RECAPTURE PERCENTAGE.—The re5 capture percentage shall be 100 percent if the 

6 recapture event occurs during the first 10 years 

of the project, 662 7 ⁄3 percent if the recapture 

8 event occurs during the second 10 years of the 

project, 331 9 ⁄3 percent if the recapture event oc10 curs during the third 10 years of the project, 

11 and 0 percent if the recapture event occurs at 

12 any time after the 30th year of the project. 

13 ‘‘(3) RECAPTURE EVENT.—For purposes of 

14 paragraph (1), there is a recapture event with re15 spect to a carbon sequestration project if— 

16 ‘‘(A) the eligible taxpayer violates a term 

17 or condition of the approval of the project by 

18 the implementing panel at any time, 

19 ‘‘(B) the eligible taxpayer adopts a practice 

20 which the implementing panel has specified in 

21 its approval of the project as a practice which 

22 would tend to defeat the purposes of the carbon 

23 sequestration program, or 

24 ‘‘(C) the eligible taxpayer disposes of any 

25 ownership interest arising out of its investment 


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1 that the implementing panel has determined is 

2 attributable to the project, unless the imple3 menting panel determines that such disposition 

4 will not have any adverse effect on the carbon 

5 sequestration project. 

6 If an event which otherwise would be a recapture 

7 event is outside the control of the eligible taxpayer, 

8 as determined by the implementing panel, such event 

9 shall not be treated as a recapture event with re10 spect to such taxpayer. 

11 ‘‘(4) SPECIAL RULES.— 

12 ‘‘(A) TAX BENEFIT RULE.—The tax for 

13 the taxable year shall be increased under para14 graph (1) only with respect to credits allowed 

15 by reason of this section which were used to re16 duce tax liability. In the case of credits not so 

17 used to reduce tax liability, the carryforwards 

18 and carrybacks under section 39 shall be appro19 priately adjusted. 

20 ‘‘(B) NO CREDITS AGAINST TAX.—Any in21 crease in tax under this subsection shall not be 

22 treated as a tax imposed by this chapter for 

23 purposes of determining the amount of any 

24 credit under this chapter or for purposes of sec25 tion 55. 


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1 ‘‘(e) DISALLOWANCE OF DOUBLE BENEFIT.— 

2 ‘‘(1) BASIS REDUCTION.—The basis of any in3 vestment in a carbon sequestration project shall be 

4 reduced by the amount of any credit determined 

5 under this section with respect to such investment. 

6 ‘‘(2) CHARITABLE DEDUCTION DISALLOWED.— 

7 No deduction shall be allowed to an eligible taxpayer 

8 under section 170 with respect to any contribution 

9 which the implementing panel certifies pursuant to 

10 section 2 of the International Carbon Conservation 

11 Act to the Secretary constitutes an investment in a 

12 carbon sequestration project that is attributable to 

13 such taxpayer. 

14 ‘‘(f) CERTIFICATION TO SECRETARY.—The imple15 menting panel shall certify to the Secretary before Janu16 ary 31 of each year with respect to each eligible taxpayer 

17 which has made an investment in a carbon sequestration 

18 project— 

19 ‘‘(1) the amount of the carbon sequestration in20 vestment credit allowable to such taxpayer for the 

21 preceding calendar year, 

22 ‘‘(2) whether a recapture event occurred with 

23 respect to such taxpayer during the preceding cal24 endar year, and 


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1 ‘‘(3) the credit recapture amount, if any, with 

2 respect to such taxpayer for the preceding calendar 

3 year. 

4 ‘‘(g) REGULATIONS.—The Secretary shall prescribe 

5 such regulations as may be appropriate to carry out this 

6 section, including regulations— 

7 ‘‘(1) which limit the credit for investments 

8 which are directly or indirectly subsidized by other 

9 Federal benefits, 

10 ‘‘(2) which prevent the abuse of the provisions 

11 of this section through the use of related parties, 

12 and 

13 ‘‘(3) which impose appropriate reporting re14 quirements.’’. 

15 (b) CREDIT MADE PART OF GENERAL BUSINESS

16 CREDIT.—Subsection (b) of section 38 of the Internal 

17 Revenue Code of 1986 is amended by striking ‘‘plus’’ at 

18 the end of paragraph (35), by striking the period at the 

19 end of paragraph (36) and inserting ‘‘, plus’’, and by add20 ing at the end the following new paragraph: 

21 ‘‘(37) the carbon sequestration investment cred22 it determined under section 45S(a).’’. 

23 (c) DEDUCTION FOR UNUSED CREDIT.—Subsection 

24 (c) of section 196 of the Internal Revenue Code of 1986 

25 is amended by striking ‘‘and’’ at the end of paragraph 


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1 (13), by striking the period at the end of paragraph (14) 

2 and inserting ‘‘, and’’, and by adding at the end the fol3 lowing new paragraph: 

4 ‘‘(15) the carbon sequestration investment cred5 it determined under section 45S(a).’’. 

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

7 for subpart D of part IV of subchapter A of chapter 1 

8 of the Internal Revenue Code of 1986 is amended by add9 ing at the end the following new item: 

‘‘Sec. 45S. Carbon sequestration investment credit’’. 

10 (e) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to investments made after Decem12 ber 31, 2010. 

13 SEC. 3. ALLOWANCE OF DEDUCTION FOR DIVIDENDS RE14 CEIVED FROM CONTROLLED FOREIGN COR15 PORATIONS FOR ADDITIONAL YEAR. 

16 (a) IN GENERAL.—Section 965 of the Internal Rev17 enue Code of 1986 is amended by adding at the end the 

18 following new subsection: 

19 ‘‘(g) ALLOWANCE FOR DEDUCTION FOR AN ADDI20 TIONAL YEAR.— 

21 ‘‘(1) IN GENERAL.—In the case of an election 

22 under this subsection, subsection (f)(1) shall be ap23 plied by substituting ‘January 1, 2011,’ for ‘the date 

24 of the enactment of this section’. 


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1 ‘‘(2) SPECIAL RULES.—For purposes of para2 graph (1)— 

3 ‘‘(A) EXTRAORDINARY DIVIDENDS.—Sub4 section (b)(2) shall be applied by substituting 

5 ‘June 30, 2010’ for ‘June 30, 2003’. 

6 ‘‘(B) DETERMINATIONS RELATING TO RE7 LATED PARTY INDEBTEDNESS.—Subsection 

8 (b)(3)(B) shall be applied by substituting ‘Octo9 ber 3, 2011’ for ‘October 3, 2004’. 

10 ‘‘(C) APPLICABLE FINANCIAL STATE11 MENT.—Subsection (c)(1) shall be applied by 

12 substituting ‘June 30, 2010’ for ‘June 30, 

13 2003’ each place it occurs. 

14 ‘‘(D) DETERMINATIONS RELATING TO

15 BASE PERIOD.—Subsection (c)(2) shall be ap16 plied by substituting ‘June 30, 2010’ for ‘June 

17 30, 2003’.’’. 

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

19 subsection (a) shall apply to taxable years ending on or 

20 after January 1, 2011. 

Æ 


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