Title: Renewable Energy Transferability Act
Policy area: Taxation

Summary:
Renewable Energy Transferability Act
This bill allows tax credits for renewable energy to be transferred to project partners. The bill applies to the tax credits for (1) renewable electricity production, (2) investments in renewable energy property, and (3) carbon oxide sequestration.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3032 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 3032

 To amend the Internal Revenue Code of 1986 to allow for transfers of 
the renewable electricity production credit, the energy credit, and the 
                 credit for carbon oxide sequestration.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 12, 2019

  Mr. Bennet 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 allow for transfers of 
the renewable electricity production credit, the energy credit, and the 
                 credit for carbon oxide sequestration.

    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 Energy Transferability 
Act''.

SEC. 2. TRANSFERS OF CREDITS FOR RENEWABLE ELECTRICITY PRODUCTION 
              FACILITIES AND ENERGY PROPERTY.

    (a) Renewable Electricity Production Credit.--Section 45(e) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new paragraph:
            ``(12) Transfer of credit.--
                    ``(A) In general.--If the taxpayer elects to 
                transfer all (or any portion specified in the election) 
                of the credit determined under this section for any 
                taxable year with respect to any qualified facility to 
                an eligible project partner for a specified period, 
                then, the eligible project partner specified in such 
                election (and not the taxpayer) shall be treated for 
                purposes of this title with respect to such credit (or 
                such portion thereof) as the person producing and 
                selling the electricity to which such credit (or 
                portion thereof) relates.
                    ``(B) Deduction for payments in connection with 
                transfer.--There shall be allowed as a deduction under 
                part VI of subchapter B an amount equal to the amount 
                paid by a taxpayer as consideration for a transfer 
                described in subparagraph (A).
                    ``(C) Eligible project partner.--For purposes of 
                this paragraph, the term `eligible project partner' 
                means, with respect to any qualified facility, any 
                person who--
                            ``(i) has an ownership interest in such 
                        qualified facility,
                            ``(ii) provided equipment for or services 
                        in the construction of such qualified facility,
                            ``(iii) provides electric transmission or 
                        distribution services for such qualified 
                        facility,
                            ``(iv) purchases electricity from such 
                        qualified facility pursuant to a contract, or
                            ``(v) provides financing for such qualified 
                        facility.
                For purposes of clause (v), any amount paid as 
                consideration for a transfer described in subparagraph 
                (A) shall not be treated as financing of a qualified 
                facility.
                    ``(D) Taxable year in which credit taken into 
                account.--In the case of any credit (or portion 
                thereof) with respect to which an election is made 
                under subparagraph (A), such credit shall be taken into 
                account in the first taxable year of the eligible 
                project partner ending with, or after, the electing 
                taxpayer's taxable year with respect to which the 
                credit was determined.
                    ``(E) Limitations on election.--
                            ``(i) Time for election.--An election under 
                        this paragraph to transfer any portion of the 
                        credit allowed under this section shall be made 
                        not later than the due date for the return of 
                        tax for the electing taxpayer's taxable year 
                        with respect to which the credit was 
                        determined.
                            ``(ii) No further transfers.--No election 
                        may be made under this paragraph by a taxpayer 
                        with respect to any portion of the credit 
                        allowed under this section which has been 
                        previously transferred to such taxpayer under 
                        this paragraph.
                    ``(F) Treatment of transfer under private use 
                rules.--For purposes of section 141(b)(1), any benefit 
                derived by an eligible project partner in connection 
                with an election under this paragraph shall not be 
                taken into account as a private business use.
                    ``(G) Additional election requirements.--The 
                Secretary may prescribe such regulations as may be 
                appropriate to carry out the purposes of this 
                paragraph, including--
                            ``(i) rules for determining which persons 
                        are eligible project partners with respect to 
                        any energy property, and
                            ``(ii) requiring information to be included 
                        in an election under subparagraph (A) or 
                        imposing additional reporting requirements.''.
    (b) Energy Credit.--
            (1) In general.--Section 48 of the Internal Revenue Code of 
        1986 is amended by adding at the end the following new 
        subsection:
    ``(e) Transfer of Credit.--
            ``(1) In general.--If the taxpayer elects to transfer all 
        (or any portion specified in the election) of the credit 
        determined under this section for any taxable year with respect 
        to any energy property to an eligible project partner, the 
        eligible project partner specified in such election (and not 
        the taxpayer) shall be treated as the taxpayer for purposes of 
        this title with respect to such credit (or portion thereof).
            ``(2) Deduction for payments in connection with transfer.--
        There shall be allowed as a deduction under part VI of 
        subchapter B an amount equal to the amount paid by a taxpayer 
        as consideration for a transfer described in paragraph (1).
            ``(3) Eligible project partner.--For purposes of this 
        subsection, the term `eligible project partner' means, with 
        respect to any energy property, any person who--
                    ``(A) has an ownership interest in such energy 
                property,
                    ``(B) provided equipment for or services in the 
                construction of such energy property,
                    ``(C) provides electric transmission or 
                distribution services for such energy property,
                    ``(D) purchases electricity from such qualified 
                facility pursuant to a contract, or
                    ``(E) provides financing for such energy property.
        For purposes of subparagraph (E), any amount paid as 
        consideration for a transfer described in paragraph (1) shall 
        not be treated as financing of a qualified facility.
            ``(4) Taxable year in which credit taken into account.--In 
        the case of any credit (or portion thereof) with respect to 
        which an election is made under paragraph (1), such credit 
        shall be taken into account in the first taxable year of the 
        eligible project partner ending with, or after, the electing 
        taxpayer's taxable year with respect to which the credit was 
        determined.
            ``(5) Limitations on election.--
                    ``(A) Time for election.--An election under this 
                subsection to transfer any portion of the credit 
                allowed under this section shall be made not later than 
                the due date for the return of tax for the electing 
                taxpayer's taxable year with respect to which the 
                credit was determined.
                    ``(B) No further transfers.--No election may be 
                made under this subsection by a taxpayer with respect 
                to any portion of the credit allowed under this section 
                which has been previously transferred to such taxpayer 
                under this subsection.
            ``(6) Treatment of transfer under private use rules.--For 
        purposes of section 141(b)(1), any benefit derived by an 
        eligible project partner in connection with an election under 
        this subsection shall not be taken into account as a private 
        business use.
            ``(7) Additional election requirements.--The Secretary may 
        prescribe such regulations as may be appropriate to carry out 
        the purposes of this subsection, including--
                    ``(A) rules for determining which persons are 
                eligible project partners with respect to any energy 
                property, and
                    ``(B) requiring information to be included in an 
                election under paragraph (1) or imposing additional 
                reporting requirements.''.
            (2) Normalization rules.--Section 50(d) of such Code is 
        amended by adding at the end the following: ``In the case of 
        any energy property with respect to which an election is made 
        under section 48(e)(1), the rules of the section 46(f) referred 
        to in paragraph (2) shall apply only to the extent of amounts 
        paid in consideration of the transfer to which such election 
        relates.''.
    (c) Credit for Carbon Oxide Sequestration.--Subparagraph (B) of 
section 45Q(f)(3) of the Internal Revenue Code of 1986 is amended to 
read as follows:
                    ``(B) Transfer of credit.--
                            ``(i) In general.--If the person described 
                        in subparagraph (A) elects to transfer all (or 
                        any portion specified in the election) of the 
                        credit determined under this section for any 
                        taxable year with respect to any qualified 
                        facility to an eligible project partner for a 
                        specified period, then, the eligible project 
                        partner specified in such election (and not the 
                        person described in subparagraph (A)) shall be 
                        treated for purposes of this title with respect 
                        to such credit (or such portion thereof) as the 
                        person described in clause (i) or (ii) of such 
                        subparagraph, as applicable, to which such 
                        credit (or portion thereof) relates.
                            ``(ii) Deduction for payments in connection 
                        with transfer.--There shall be allowed as a 
                        deduction under part VI of subchapter B an 
                        amount equal to the amount paid by a taxpayer 
                        as consideration for a transfer described in 
                        clause (i).
                            ``(iii) Eligible project partner.--For 
                        purposes of this subparagraph, the term 
                        `eligible project partner' means, with respect 
                        to any qualified facility, any person who--
                                    ``(I) has an ownership interest in 
                                such qualified facility or any carbon 
                                capture equipment which is placed in 
                                service at such qualified facility,
                                    ``(II) provided equipment for or 
                                services in the construction of such 
                                qualified facility or any carbon 
                                capture equipment which is placed in 
                                service at such qualified facility,
                                    ``(III) provides fuel or feedstock 
                                for the operation of such qualified 
                                facility,
                                    ``(IV) provides transportation, 
                                transmission, or distribution services 
                                for such qualified facility,
                                    ``(V) purchases, pursuant to a 
                                contract, the industrial output of such 
                                qualified facility or the commercial 
                                products produced by utilization of 
                                qualified carbon oxide captured at such 
                                qualified facility,
                                    ``(VI) disposes of the qualified 
                                carbon oxide, utilizes the qualified 
                                carbon oxide, or uses the qualified 
                                carbon oxide as a tertiary injectant, 
                                or
                                    ``(VII) provides financing for such 
                                qualified facility or any carbon 
                                capture equipment which is placed in 
                                service at such qualified facility.
                        For purposes of subclause (VII), any amount 
                        paid as consideration for a transfer described 
                        in clause (i) shall not be treated as financing 
                        of a qualified facility.
                            ``(iv) Taxable year in which credit taken 
                        into account.--In the case of any credit (or 
                        portion thereof) with respect to which an 
                        election is made under clause (i), such credit 
                        shall be taken into account in the first 
                        taxable year of the eligible project partner 
                        ending with, or after, the electing taxpayer's 
                        taxable year with respect to which the credit 
                        was determined.
                            ``(v) Limitations on election.--
                                    ``(I) Time for election.--An 
                                election under this subparagraph to 
                                transfer any portion of the credit 
                                allowed under this section shall be 
                                made not later than the due date for 
                                the return of tax for the electing 
                                taxpayer's taxable year with respect to 
                                which the credit was determined.
                                    ``(II) No further transfers.--No 
                                election may be made under this 
                                subparagraph by a taxpayer with respect 
                                to any portion of the credit allowed 
                                under this section which has been 
                                previously transferred to such taxpayer 
                                under this subparagraph.
                            ``(vi) Treatment of transfer under private 
                        use rules.--For purposes of section 141(b)(1), 
                        any benefit derived by an eligible project 
                        partner in connection with an election under 
                        this subparagraph shall not be taken into 
                        account as a private business use.
                            ``(vii) Additional election requirements.--
                        The Secretary may prescribe such regulations as 
                        may be appropriate to carry out the purposes of 
                        this subparagraph, including--
                                    ``(I) rules for determining which 
                                persons are eligible project partners 
                                with respect to any qualified facility, 
                                and
                                    ``(II) requiring information to be 
                                included in an election under clause 
                                (i) or imposing additional reporting 
                                requirements.
                            ``(viii) Transition rules.--Any election 
                        made under this subparagraph with respect to a 
                        qualified facility for any taxable years 
                        beginning before the date of enactment of the 
                        Renewable Energy Transferability Act shall not 
                        apply to any taxable years beginning after the 
                        date of enactment of such Act, and the person 
                        described in subparagraph (A) may make a new 
                        election or elections under clause (i) with 
                        respect to such qualified facility.''.
    (d) Special Rule for Proceeds of Transfers for Mutual or 
Cooperative Electric Companies.--Section 501(c)(12)(I) of such Code is 
amended by striking ``45J(e)(1)'' and inserting ``45(e)(12), 45J(e)(1), 
45Q(f)(3)(B), or 48(e)(1)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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