Title: Renewable Chemicals Act of 2017
Policy area: Taxation

Summary:
Renewable Chemicals Act of 2017
This bill amends the Internal Revenue Code to allow: (1) a business-related tax credit for the production of renewable chemicals, and (2) a tax credit for investment in renewable chemical production facilities.
The bill defines "renewable chemical" as any chemical that: (1) is produced in the United States from renewable biomass; (2) is sold or used for the production of chemical products, polymers, plastics, or formulated products or as chemicals, polymers, plastics, or formulated products; (3) has a biobased content of not less than 95%; (4) is the product of, or reliant upon, biological or thermal conversion of renewable biomass; (5) is not sold or used for the production of any food, feed, or fuel; and (6) is not a chemical for which either of the tax credits established by this bill have been claimed by the taxpayer in any taxable year.
The bill requires the Department of the Treasury to establish a program to allocate renewable chemical tax credit amounts to eligible taxpayers and imposes an aggregate limit on the amount of credits that may be allocated to not more than $500 million during the 5-year period after enactment of this bill. The amount of the credits that may be allocated to any taxpayer for any taxable year may not exceed $25 million.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 1980 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  1st Session
                                S. 1980

 To amend the Internal Revenue Code of 1986 to provide credits for the 
production of renewable chemicals and investments in renewable chemical 
             production facilities, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 18, 2017

Ms. Stabenow (for herself, Ms. Collins, Mr. Coons, Mr. Franken, and Ms. 
   Baldwin) 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 credits for the 
production of renewable chemicals and investments in renewable chemical 
             production facilities, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Renewable Chemicals Act of 2017''.

SEC. 2. CREDITS FOR PRODUCTION OF RENEWABLE CHEMICALS AND INVESTMENTS 
              IN RENEWABLE CHEMICAL PRODUCTION FACILITIES.

    (a) Production of Renewable Chemicals.--
            (1) In general.--Subpart D of part IV of subchapter A of 
        chapter 1 of the Internal Revenue Code of 1986 is amended by 
        adding at the end the following new section:

``SEC. 45S. CREDIT FOR PRODUCTION OF RENEWABLE CHEMICALS.

    ``(a) In General.--For purposes of section 38, the production 
credit for renewable chemicals for any taxable year is an amount 
(determined separately for each renewable chemical) equal to $0.15 per 
pound of biobased content of each renewable chemical produced during 
the taxable year--
            ``(1) by the taxpayer, or
            ``(2) for the taxpayer by a contract manufacturer under a 
        binding written agreement.
    ``(b) Limitation.--The amount of the credit determined under 
subsection (a) with respect to a renewable chemical produced during any 
taxable year shall not exceed the credit amount allocated for purposes 
of this section by the Secretary to the taxpayer with respect to such 
chemical for such taxable year under section 48E(e).
    ``(c) Definitions.--For purposes of this section--
            ``(1) Renewable chemical.--The term `renewable chemical' 
        means any chemical which--
                    ``(A) is produced in the United States (or in a 
                territory or possession of the United States) from 
                renewable biomass,
                    ``(B) is sold or used by the taxpayer--
                            ``(i) for the production of chemical 
                        products, polymers, plastics, or formulated 
                        products, or
                            ``(ii) as chemicals, polymers, plastics, or 
                        formulated products,
                    ``(C) is not less than 95 percent biobased content,
                    ``(D) is the product of, or is reliant upon, 
                biological conversion, thermal conversion, or a 
                combination of biological and thermal conversion of 
                renewable biomass,
                    ``(E) is not sold or used for the production of any 
                food, feed, or fuel, and
                    ``(F) is not a chemical for which a credit has been 
                claimed by the taxpayer in any taxable year under this 
                section or section 48E.
            ``(2) Biobased content.--The term `biobased content' means, 
        with respect to any renewable chemical, the biobased content of 
        the total mass of organic carbon in such chemical (expressed as 
        a percentage), determined by testing representative samples 
        using the American Society for Testing and Materials (ASTM) 
        D6866.
            ``(3) Renewable biomass.--The term `renewable biomass' has 
        the meaning given such term in section 9001(13) of the Farm 
        Security and Rural Investment Act of 2002 (7 U.S.C. 8101(13)).
    ``(d) National Limitation on Credits for Renewable Chemicals.--See 
section 48E(e) for rules relating to national limitation on credits 
under this section.
    ``(e) Coordination With Investment Credit for Renewable Chemical 
Production Facilities.--See section 48E(f) for rules coordinating 
section 48E with this section.
    ``(f) Termination.--Notwithstanding any other provision of this 
section or section 48E, the Secretary may not allocate any credit 
amount under this section to any taxable year which begins more than 5 
years after the date of the enactment of this section.''.
            (2) Credit to be part of general business credit.--
        Subsection (b) of section 38 of such Code is amended by 
        striking ``plus'' at the end of paragraph (35), by striking the 
        period at the end of paragraph (36) and inserting ``, plus'', 
        and by adding at the end the following new paragraph:
            ``(37) the renewable chemicals production credit determined 
        under section 45S(a).''.
    (b) Investment Credit in Lieu of Production Credit.--
            (1) In general.--Section 46 of the Internal Revenue Code of 
        1986 is amended by striking ``and'' at the end of paragraph 
        (5), by striking the period at the end of paragraph (6) and 
        inserting ``, and'', and by adding at the end the following new 
        paragraph:
            ``(7) the renewable chemical production facilities 
        credit.''.
            (2) Renewable chemical production facilities credit.--
        Subpart E of part IV of subchapter A of chapter 1 of such Code 
        is amended by inserting after section 48D the following:

``SEC. 48E. INVESTMENT CREDIT FOR RENEWABLE CHEMICAL PRODUCTION 
              FACILITIES.

    ``(a) In General.--For purposes of section 46, the renewable 
chemical production facilities credit for any taxable year is an amount 
equal to 30 percent of the basis of any eligible property which is a 
part of a renewable chemical production facility placed in service by 
the taxpayer during such taxable year.
    ``(b) Limitation.--The amount of the credit determined under 
subsection (a) with respect to a renewable chemical production facility 
of the taxpayer during any taxable year shall not exceed the credit 
amount allocated for purposes of this section by the Secretary to the 
taxpayer for such taxable year under subsection (e).
    ``(c) Renewable Chemical Production Facility.--For purposes of this 
section--
            ``(1) In general.--The term `renewable chemical production 
        facility' means a facility--
                    ``(A) which is owned by the taxpayer,
                    ``(B) which is originally placed in service after 
                the date of the enactment of this section and before 
                the first day of the taxable year which begins 6 years 
                after the date of the enactment of this section, and
                    ``(C) with respect to which--
                            ``(i) no credit has been allowed under 
                        section 45S for chemicals produced at such 
                        facility in any previous taxable year, and
                            ``(ii) the taxpayer makes an irrevocable 
                        election to have this section apply, and
                    ``(D) which is used to produce renewable chemicals.
            ``(2) Eligible property.--The term `eligible property' 
        means any property--
                    ``(A) which is--
                            ``(i) tangible personal property, or
                            ``(ii) other tangible property (not 
                        including a building or its structural 
                        components),
                but only if such property is used as an integral part 
                of the renewable chemical production facility, and
                    ``(B) with respect to which depreciation (or 
                amortization in lieu of depreciation) is allowable.
            ``(3) Renewable chemical.--The term `renewable chemical' 
        has the meaning given such term by section 45S(c)(1).
    ``(d) Certain Qualified Progress Expenditures Rules Made 
Applicable.--Rules similar to the rules of subsections (c)(4) and (d) 
of section 46 (as in effect on the day before the enactment of the 
Revenue Reconciliation Act of 1990) shall apply for purposes of this 
section.
    ``(e) National Limitation on Credits for Renewable Chemicals.--
            ``(1) In general.--Not later than 180 days after the date 
        of the enactment of this section, the Secretary, in 
        consultation with the Secretary of Agriculture, shall establish 
        a program to allocate credit amounts under this section and 
        section 45S to taxpayers who produce renewable chemicals for 
        taxable years ending after the date of the enactment of this 
        section.
            ``(2) Limitations.--
                    ``(A) Aggregate limitation.--The total amount of 
                credits that may be allocated under such program shall 
                not exceed $500,000,000.
                    ``(B) Taxpayer limitation.--The amount of credits 
                that may be allocated to any taxpayer for any taxable 
                year under such program shall not exceed $25,000,000. 
                For purposes of the preceding sentence, all persons 
                treated as a single employer under subsection (a) or 
                (b) of section 52, or subsection (m) or (o) of section 
                414, shall be treated as one taxpayer.
            ``(3) Selection criteria.--In determining to which 
        taxpayers to make allocations of the credit amount under such 
        program, the Secretary shall take into consideration--
                    ``(A) the number of jobs created and maintained 
                (directly and indirectly) in the United States 
                (including territories and possessions of the United 
                States) as result of such allocation during the credit 
                period and thereafter,
                    ``(B) the degree to which the production of the 
                renewable chemical demonstrates reduced dependence on 
                imported feedstocks, petroleum, non-renewable 
                resources, or other fossil fuels,
                    ``(C) the technological innovation involved in the 
                production method of the renewable chemical,
                    ``(D) the energy efficiency and reduction in 
                lifecycle greenhouse gases of the renewable chemical or 
                of the production method of the renewable chemical, and
                    ``(E) whether there is a reasonable expectation of 
                commercial viability.
            ``(4) Redistribution.--If a credit amount allocated to a 
        taxpayer for a taxable year with respect to any renewable 
        chemical or renewable chemical production facility (determined 
        without regard to this paragraph) exceeds the amount of the 
        credit with respect to such chemical determined under this 
        section on the taxpayer's return for such taxable year--
                    ``(A) the credit amount allocated to such taxpayer 
                for such taxable year with respect to such renewable 
                chemical shall be treated as being the amount so 
                determined on the taxpayer's return, and
                    ``(B) such excess may be reallocated by the 
                Secretary consistent with the requirements of this 
                subsection.
            ``(5) Disclosure of allocations.--The Secretary shall, upon 
        making an allocation of credit amount under this section, 
        publicly disclose the identity of the taxpayer and the amount 
        of the credit with respect to such taxpayer.
    ``(f) Coordination With Production Credit for Renewable 
Chemicals.--If a taxpayer makes an election under subsection 
(c)(1)(C)(ii) with respect to a renewable chemical production facility, 
a credit shall not be allowed under section 45S for any renewable 
chemical produced by such facility.
    ``(g) Regulations.--The Secretary shall issue such regulations or 
other guidance as may be necessary to carry out this section and 
section 45S.
    ``(h) Termination.--The Secretary may not allocate any credit 
amount under this section to any taxable year which begins more than 5 
years after the date of the enactment of this section.''.
    (c) Credits Allowable Against Alternative Minimum Tax.--
Subparagraph (B) of section 38(c)(4) of the Internal Revenue Code of 
1986 is amended by redesignating clauses (vii) through (ix) as clauses 
(ix) through (xi), respectively, and by inserting after clause (vi) the 
following new clauses:
                            ``(vii) the credit determined under section 
                        45S,
                            ``(viii) the credit determined under 
                        section 46 to the extent that such credit is 
                        attributable to the renewable chemical 
                        production facilities credit under section 
                        48E,''.
    (d) Clerical Amendments.--
            (1) 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 adding at the end the following new item:

``Sec. 45S. Credit for production of renewable chemicals.''.
            (2) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

``Sec. 48E. Investment credit for renewable chemical production 
                            facilities.''.
    (e) Effective Dates.--The amendments made by this section shall 
apply to renewable chemicals produced and renewable chemical production 
facilities placed in service after the date of the enactment of this 
Act, in taxable years ending after such date.
                                 <all>