II 

109TH CONGRESS 

1ST SESSION S. 715 

To amend the Internal Revenue Code of 1986 to encourage investment in 

facilities using wind to produce electricity, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 6, 2005 

Mr. HARKIN (for himself, Mr. DAYTON, Mr. DURBIN, and Mr. LAUTENBERG) 

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 

investment in facilities using wind to produce electricity, 

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 ‘‘Wind Power Tax In5 centives Act of 2005’’. 
2 

•S 715 IS

1 SEC. 2. OFFSET OF PASSIVE ACTIVITY LOSSES AND CRED2 ITS OF AN ELIGIBLE TAXPAYER FROM WIND 

3 ENERGY FACILITIES. 

4 (a) IN GENERAL.—Section 469 of the Internal Rev5 enue Code of 1986 (relating to passive activity losses and 

6 credits limited) is amended— 

7 (1) by redesignating subsections (l) and (m) as 

8 subsections (m) and (n), respectively; and 

9 (2) by inserting after subsection (k) the fol10 lowing: 

11 ‘‘(l) OFFSET OF PASSIVE ACTIVITY LOSSES AND

12 CREDITS FROM WIND ENERGY FACILITIES.— 

13 ‘‘(1) IN GENERAL.—Subsection (a) shall not 

14 apply to the portion of the passive activity loss, or 

15 the deduction equivalent (within the meaning of sub16 section (j)(5)) of the portion of the passive activity 

17 credit, for any taxable year which is attributable to 

18 all interests of an eligible taxpayer in qualified facili19 ties described in section 45(d)(1). 

20 ‘‘(2) ELIGIBLE TAXPAYER.—For purposes of 

21 this subsection— 

22 ‘‘(A) IN GENERAL.—The term ‘eligible tax23 payer’ means, with respect to any taxable year, 

24 a taxpayer the adjusted gross income (taxable 

25 income in the case of a corporation) of which 

26 does not exceed $1,000,000. 
3 

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1 ‘‘(B) RULES FOR COMPUTING ADJUSTED

2 GROSS INCOME.—Adjusted gross income shall 

3 be computed in the same manner as under sub4 section (i)(3)(F). 

5 ‘‘(C) AGGREGATION RULES.—All persons 

6 treated as a single employer under subsection 

7 (a) or (b) of section 52 shall be treated as a 

8 single taxpayer for purposes of this paragraph. 

9 ‘‘(D) PASS-THRU ENTITIES.—In the case 

10 of a pass-thru entity, this paragraph shall be 

11 applied at the level of the person to which the 

12 credit is allocated by the entity.’’. 

13 (b) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to facilities placed in service after 

15 the date of the enactment of this Act. 

16 SEC. 3. APPLICATION OF CREDIT TO COOPERATIVES. 

17 (a) IN GENERAL.—Section 45(e) of the Internal Rev18 enue Code of 1986 (relating to definitions and special 

19 rules) is amended by adding at the end the following: 

20 ‘‘(10) ALLOCATION OF CREDIT TO SHARE21 HOLDERS OF COOPERATIVE.— 

22 ‘‘(A) ELECTION TO ALLOCATE.— 

23 ‘‘(i) IN GENERAL.—In the case of a 

24 cooperative organization described in sec25 tion 1381(a), any portion of the credit de-
4 

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1 termined under subsection (a) for the tax2 able year may, at the election of the orga3 nization, be apportioned pro rata among 

4 shareholders of the organization on the 

5 basis of the capital contributions of the 

6 shareholders to the organization. 

7 ‘‘(ii) FORM AND EFFECT OF ELEC8 TION.—An election under clause (i) for any 

9 taxable year shall be made on a timely 

10 filed return for such year. Such election, 

11 once made, shall be irrevocable for such 

12 taxable year. 

13 ‘‘(B) TREATMENT OF ORGANIZATIONS AND

14 PATRONS.—The amount of the credit appor15 tioned to any shareholders under subparagraph 

16 (A)— 

17 ‘‘(i) shall not be included in the 

18 amount determined under subsection (a) 

19 with respect to the organization for the 

20 taxable year, and 

21 ‘‘(ii) shall be included in the amount 

22 determined under subsection (a) for the 

23 taxable year of the shareholder with or 

24 within which the taxable year of the orga25 nization ends. 
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1 ‘‘(C) SPECIAL RULES FOR DECREASE IN

2 CREDITS FOR TAXABLE YEAR.—If the amount 

3 of the credit of a cooperative organization de4 termined under subsection (a) for a taxable 

5 year is less than the amount of such credit 

6 shown on the return of the cooperative organi7 zation for such year, an amount equal to the 

8 excess of— 

9 ‘‘(i) such reduction, over 

10 ‘‘(ii) the amount not apportioned to 

11 such shareholders under subparagraph (A) 

12 for the taxable year, shall be treated as an 

13 increase in tax imposed by this chapter on 

14 the organization. Such increase shall not 

15 be treated as tax imposed by this chapter 

16 for purposes of determining the amount of 

17 any credit under this subpart or subpart 

18 A, B, E, or G.’’. 

19 (b) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to taxable years ending after the 

21 date of the enactment of this Act. 

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