by reason of this section which were used to re-
duce tax liability. In the case of credits not so
used to reduce tax liability, the carryforwards
and carrybacks under section 39 shall be appro-
priately adjusted.
‘‘(B) NO CREDITS AGAINST TAX.—Any in-
crease in tax under this subsection shall not be
treated as a tax imposed by this chapter for
purposes of determining the amount of any
credit under subpart A, B, or D of this part.
‘‘(C) NO RECAPTURE BY REASON OF CAS-
UALTY LOSS.—The increase in tax under this
subsection shall not apply to a cessation of op-
eration of the facility by reason of a casualty
loss to the extent such loss is restored by recon-
struction or replacement within a reasonable pe-
riod established by the Secretary.
‘‘(g) CONTROLLED GROUPS.—For purposes of this
section, all persons treated as a single employer under sub-
section (b), (c), (m), or (o) of section 414 shall be treated
as a single employer.’’.
(b) CREDIT MADE PART OF GENERAL BUSINESS
CREDIT.—Subsection (b) of section 38 of the Internal
Revenue Code of 1986 (relating to general business credit)
is amended by striking ‘‘plus’’ at the end of paragraph
(14), by striking the period at the end of paragraph (15)
and inserting ‘‘, plus’’, and by adding at the end the fol-
lowing new paragraph:
‘‘(16) in the case of a small business refiner,
the environmental tax credit determined under sec-
tion 45G(a).’’.
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C of
the Internal Revenue Code of 1986 (relating to certain
expenses for which credits are allowable) is amended by
adding at the end the following new subsection:
‘‘(d) ENVIRONMENTAL TAX CREDIT.—No deduction
shall be allowed for that portion of the expenses otherwise
allowable as a deduction for the taxable year which is
equal to the amount of the credit determined for the tax-
able year under section 45G(a).’’.
(d) CREDIT ALLOWED AGAINST REGULAR AND MIN-
IMUM TAX.—
(1) IN GENERAL.—Subsection (c) of section 38
of the Internal Revenue Code of 1986 (relating to
limitation based on amount of tax) is amended by
redesignating paragraph (3) as paragraph (4) and
by inserting after paragraph (2) the following new
paragraph:
‘‘(3) SPECIAL RULES FOR ENVIRONMENTAL TAX
CREDIT.—
‘‘(A) IN GENERAL.—In the case of the en-
vironmental tax credit—
‘‘(i) this section and section 39 shall
be applied separately with respect to the
credit, and
‘‘(ii) in applying paragraph (1) to the
credit—
‘‘(I) subparagraphs (A) and (B)
thereof shall not apply, and
‘‘(II) the limitation under para-
graph (1) (as modified by subclause
(I)) shall be reduced by the credit al-
lowed under subsection (a) for the
taxable year (other than the environ-
mental tax credit).
‘‘(B) ENVIRONMENTAL TAX CREDIT.—For
purposes of this subsection, the term ‘environ-
mental tax credit means the credit allowable
under subsection (a) by reason of section
45G.’’.
(2) CONFORMING AMENDMENT.—Subclause (II)
of section 38(c)(2)(A)(ii) of such Code is amended
by inserting ‘‘or the environmental tax credit’’ after
‘‘employment credit’’.
(e) BASIS ADJUSTMENT.—Section 1016(a) of the In-
ternal Revenue Code of 1986 (relating to adjustments to
basis) is amended by striking ‘‘and’’ at the end of para-
graph (27), by striking the period at the end of paragraph
(28) and inserting ‘‘, and’’, and by adding at the end the
following new paragraph:
‘‘(29) in the case of a facility with respect to
which a credit was allowed under section 45G, to the
extent provided in section 45G(d).’’.
(f) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by add-
ing at the end the following new item:
‘‘Sec. 45G. Environmental tax credit.’’.
(g) EFFECTIVE DATE.—The amendments made by
this section shall apply to expenses paid or incurred after
the date of the enactment of this Act.
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