A bill to amend the Internal Revenue Code of 1986 to provide a consumer renewable credit for a utility that sells renewable power, and for other purposes.

Bill: 113-s-1899
Sponsor: full_name: Sen. Klobuchar, Amy [D-MN]
Introduced: 2014-01-09
Policy area: Taxation
Subjects: Alternative and renewable resources

Electric power generation and transmission

Income tax credits

Public utilities and utility rates
Latest action: action_date: 2014-01-09
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2014-01-09
action_desc: Introduced in Senate
text: <p>Amends the Internal Revenue Code to allow, through December 31, 2018: (1) a new business-related tax credit for sales by an electric utility of renewable electricity generated by a facility using wind or solar energy to a retail customer; and (2) payments to such utilities, in lieu of such tax credit, for sales of renewable electricity to retail customers. Delays, until 2023, the application of rules relating to the allocation and apportionment of the interest expense of domestic corporations that are members of a worldwide affiliated group.</p>

tv_txt: II 113th CONGRESS 2d Session S. 1899 IN THE SENATE OF THE UNITED STATES January 9, 2014 Ms. Klobuchar (for herself, Mr. Hoeven , and Mr. Johnson of South Dakota ) 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 consumer renewable credit for a utility that sells renewable power, and for other purposes.

1. Consumer Renewable Credit (a) Business credit (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: 45S. Consumer renewable credit (a) General rule For purposes of section 38, in the case of an eligible taxpayer, the consumer renewable credit for any taxable year is an amount equal to the product of— (1) the renewable portfolio factor of such eligible taxpayer, and (2) subject to subsection (e), the number of kilowatt hours of renewable electricity— (A) purchased or produced by such taxpayer, and (B) sold by such taxpayer to a retail customer during the taxable year. (b) Renewable portfolio factor In the case of taxable years beginning before January 1, 2019, the renewable portfolio factor for an eligible taxpayer shall be determined as follows: Renewable electricity  percentage: Renewable portfolio factor: Less than 6 percent zero cents At least 6 percent but less than 8 percent 0.1 cents At least 8 percent but less than 12 percent 0.2 cents At least 12 percent but less than 16 percent 0.3 cents At least 16 percent but less than 20 percent 0.4 cents At least 20 percent but less than 24 percent 0.5 cents Equal to or greater than 24 percent 0.6 cents. (c) Definitions and special rules For purposes of this section— (1) Eligible taxpayer The term eligible taxpayer means an electric utility, as defined in section 3(22) of the Federal Power Act (16 U.S.C. 796(22)). (2) Renewable electricity The term renewable electricity means electricity generated by any facility using wind or solar energy to generate such electricity. (3) Renewable electricity percentage The term renewable electricity percentage means the percentage of an eligible taxpayer’s total sales of electricity to retail customers which is derived from renewable electricity (determined without regard to whether such electricity was produced by the taxpayer). (4) Application of other rules For purposes of this section, rules similar to the rules of paragraphs (1), (3), and (5) of section 45(e) shall apply. (5) Credit allowed only with respect to one eligible entity No credit shall be allowed under subsection (a) with respect to renewable electricity purchased from another eligible entity if a credit has been allowed under this section to such other eligible entity. (d) Coordination with payments The amount of the credit determined under this section with respect to any electricity shall be reduced to take into account any payment provided with respect to such electricity solely by reason of the application of section 6433. (e) Renewable electricity enhancement (1) Native American wind and solar In the case of renewable electricity generated by a wind or solar energy facility which is located on an Indian reservation (as defined in section 168(j)(6)), the number of kilowatt hours of such renewable electricity shall, for purposes of subsection (a)(2), be equal to 200 percent of the kilowatt hours of such renewable electricity actually purchased or produced and sold during the taxable year. (2) Electric cooperative wind and solar In the case of renewable electricity generated by a wind or solar energy facility which is wholly owned by a mutual or cooperative electric company (as described in section 501(c)(12) or 1381(a)(2)(C)), the number of kilowatt hours of such renewable electricity shall, for purposes of subsection (a)(2), be equal to 150 percent of the kilowatt hours of such renewable electricity actually purchased or produced and sold during the taxable year. . (2) Credit made part of general business credit Subsection (b) of section 38 of the Internal Revenue Code of 1986 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 consumer renewable credit determined under section 45S(a). . (3) Specified credit Subparagraph (B) of section 38(c)(4) of the Internal Revenue Code of 1986 is amended by redesignating clauses (vii) through (ix) as clauses (viii) through (x), respectively, and by inserting after clause (v) the following new clause: (vi) the credit determined under section 45S. . (4) 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 adding at the end the following new item: Sec. 45S. Consumer renewable credit. . (b) Payments in lieu of credit (1) In general Subchapter B of chapter 65 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: 6433. Consumer renewable credit payments (a) In general If any eligible person sells renewable electricity to a retail customer, the Secretary shall pay (without interest) to any such person who elects to receive a payment an amount equal to the product of— (1) the intermittent renewable portfolio factor of such eligible person, and (2) the number of kilowatt hours of renewable electricity— (A) purchased or produced by such person, and (B) sold by such person in the trade or business of such person to a retail customer. (b) Timing of payments (1) In general Except as provided in paragraph (2), rules similar to the rules of section 6427(i)(1) shall apply for purposes of this section. (2) Quarterly payments (A) In general If, at the close of any quarter of the taxable year of any person (or, in the case of an eligible person that does not have a taxable year, the close of any quarter of the fiscal year), at least $750 is payable in the aggregate under subsection (a), to such person with respect to electricity purchased or produced during— (i) such quarter, or (ii) any prior quarter (for which no other claim has been filed) during such year, a claim may be filed under this section with respect to such electricity. (B) Time for filing claim No claim filed under this paragraph shall be allowed unless filed on or before the last day of the first quarter following the earliest quarter included in the claim. (c) Definitions and special rules For purposes of this section— (1) Eligible person The term eligible person means— (A) an electric utility, as defined in section 3(22) of the Federal Power Act (16 U.S.C. 796(22)), or (B) a Federal power marketing agency, as defined in section 3(19) of such Act ( 16 U.S.C. 796(19) ). (2) Other definitions Any term used in this section which is also used in section 45S shall have the meaning given such term under section 45S. (3) Application of other rules For purposes of this section, rules similar to the rules of paragraphs (1) and (3) of section 45(e) shall apply. (d) Payment disallowed unless amount passed to third-Party generators charged for integration costs (1) In general In the case of renewable electricity eligible for the payment under subsection (a) that is purchased and not produced by an eligible person, no payment shall be made under this section unless any charge the eligible person has assessed the seller to recover the integration costs associated with such electricity has been reduced (but not below zero) to the extent of the payment received under subsection (a) associated with such electricity. (2) Definitions For purposes of paragraph (1), charges intended to recover integration costs do not include amounts paid by the producer of the electricity for interconnection facilities, distribution upgrades, network upgrades, or stand alone network upgrades as those terms have been defined by the Federal Energy Regulatory Commission in its Standard Interconnection Procedures. (e) Payment allowed for special generating and transmitting entities (1) In general Notwithstanding subsection (a)(2), a special generating and transmitting entity shall be eligible for payment under subsection (a) based on the number of kilowatt hours of renewable electricity transmitted, regardless of whether such entity purchased or sold such electricity to retail customers. (2) Definition For purposes of this subsection, the term special generating and transmitting entity means— (A) an entity which is— (i) primarily engaged in marketing electricity, (ii) provides transmissions services for greater than 4,000 megawatts of renewable electricity generating facilities, as determined by reference to the machine or nameplate capacity thereof, and (iii) transmits the majority of such renewable electricity to customers located outside of the region that it serves, or (B) a generation and transmission cooperative which engages primarily in providing wholesale electric services to its members (generally consisting of distribution cooperatives). . (2) Clerical amendment The table of sections for subpart B of chapter 65 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Sec. 6433. Consumer renewable credit payments. . (c) Effective date The amendments made by this section shall apply to electricity produced or purchased and sold after December 31, 2013, and before January 1, 2019. 2. Delay in application of worldwide interest (a) In general Paragraphs (5)(D) and (6) of section 864(f) of the Internal Revenue Code of 1986 are each amended by striking “December 31, 2020” and inserting “December 31, 2022”. (b) Effective date The amendments made by this section shall take effect on the date of the enactment of this Act.