U.S. Congress - Text of S.2242 as Placed on Calendar Senate Heartland, Habitat, Harvest, and Horticulture Act of 2007
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Donate NowS.2242 - Heartland, Habitat, Harvest, and Horticulture Act of 2007
An original bill to amend the Trade Act of 1974 to establish supplemental agricultural disaster assistance and to amend the Internal Revenue Code of 1986 to provide tax incentives for conservation and alternative energy sources and to provide tax relief for farmers, and for other purposes.
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S 2242 PCSCommentsClose CommentsPermalink
To amend the Trade Act of 1974 to establish supplemental agricultural disaster assistance and to amend the Internal Revenue Code of 1986 to provide tax incentives for conservation and alternative energy sources and to provide tax relief for farmers, and for other purposes.CommentsClose CommentsPermalink
October 25, 2007
Mr. BAUCUS, from the Committee on Finance, reported the following original bill; which was read twice and placed on the calendarCommentsClose CommentsPermalink
To amend the Trade Act of 1974 to establish supplemental agricultural disaster assistance and to amend the Internal Revenue Code of 1986 to provide tax incentives for conservation and alternative energy sources and to provide tax relief for farmers, and for other purposes.CommentsClose CommentsPermalink
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink
SECTION 1. SHORT TITLE; AMENDMENTS TO 1986 CODE; TABLE OF CONTENTS.
(a) Short Title- This Act may be cited as the `Heartland, Habitat, Harvest, and Horticulture Act of 2007'.CommentsClose CommentsPermalink
(b) Amendments to 1986 Code- Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.CommentsClose CommentsPermalink
(c) Table of Contents- The table of contents for this Act is as follows:CommentsClose CommentsPermalink
Sec. 1. Short title; amendments to 1986 Code; table of contents.CommentsClose CommentsPermalink
TITLE I--SUPPLEMENTAL AGRICULTURAL DISASTER ASSISTANCE FROM THE AGRICULTURE DISASTER RELIEF TRUST FUND
Sec. 101. Supplemental agriculture disaster assistance.CommentsClose CommentsPermalink
TITLE II--CONSERVATION PROVISIONS
Subtitle A--Land and Species Preservation Provisions
Sec. 201. Conservation reserve tax credit.CommentsClose CommentsPermalink
Sec. 202. Exclusion of Conservation Reserve Program payments from SECA tax for certain individuals.CommentsClose CommentsPermalink
Sec. 203. Permanent extension of special rule encouraging contributions of capital gain real property for conservation purposes.CommentsClose CommentsPermalink
Sec. 204. Tax credit for recovery and restoration of endangered species.CommentsClose CommentsPermalink
Sec. 205. Deduction for endangered species recovery expenditures.CommentsClose CommentsPermalink
Sec. 206. Exclusion for certain payments and programs relating to fish and wildlife.CommentsClose CommentsPermalink
Sec. 207. Credit for easements granted under certain Department of Agriculture conservation programs.CommentsClose CommentsPermalink
Subtitle B--Timber Provisions
Sec. 211. Forest conservation bonds.CommentsClose CommentsPermalink
Sec. 212. Deduction for qualified timber gain.CommentsClose CommentsPermalink
Sec. 213. Excise tax not applicable to section 1203 deduction of real estate investment trusts.CommentsClose CommentsPermalink
Sec. 214. Timber REIT modernization.CommentsClose CommentsPermalink
Sec. 215. Mineral royalty income qualifying income for timber REITs.CommentsClose CommentsPermalink
Sec. 216. Modification of taxable REIT subsidiary asset test for timber REITs.CommentsClose CommentsPermalink
Sec. 217. Safe harbor for timber property.CommentsClose CommentsPermalink
TITLE III--ENERGY PROVISIONS
Subtitle A--Electricity Generation
Sec. 301. Credit for residential and business wind property.CommentsClose CommentsPermalink
Sec. 302. Landowner incentive to encourage electric transmission build-out.CommentsClose CommentsPermalink
Sec. 303. Exception to reduction of renewable electricity credit.CommentsClose CommentsPermalink
Subtitle B--Alcohol Fuel
Sec. 311. Expansion of special allowance to cellulosic biomass alcohol fuel plant property.CommentsClose CommentsPermalink
Sec. 312. Credit for production of cellulosic biomass alcohol.CommentsClose CommentsPermalink
Sec. 313. Extension of small ethanol producer credit.CommentsClose CommentsPermalink
Sec. 314. Credit for producers of fossil free alcohol.CommentsClose CommentsPermalink
Sec. 315. Modification of alcohol credit.CommentsClose CommentsPermalink
Sec. 316. Calculation of volume of alcohol for fuel credits.CommentsClose CommentsPermalink
Sec. 317. Ethanol tariff extension.CommentsClose CommentsPermalink
Sec. 318. Elimination and reductions of duty drawback on certain imported ethanol.CommentsClose CommentsPermalink
Subtitle C--Biodiesel and Renewable Diesel Fuel
Sec. 321. Extension and modification of credit for biodiesel and renewable diesel used as fuel.CommentsClose CommentsPermalink
Sec. 322. Treatment of qualified alcohol fuel mixtures and qualified biodiesel fuel mixtures as taxable fuels.CommentsClose CommentsPermalink
Subtitle D--Alternative Fuel
Sec. 331. Extension and modification of alternative fuel credit.CommentsClose CommentsPermalink
Sec. 332. Extension of alternative fuel vehicle refueling property credit.CommentsClose CommentsPermalink
TITLE IV--AGRICULTURAL PROVISIONS
Sec. 401. Increase in loan limits on agricultural bonds.CommentsClose CommentsPermalink
Sec. 402. Modification of installment sale rules for certain farm property.CommentsClose CommentsPermalink
Sec. 403. Allowance of section 1031 treatment for exchanges involving certain mutual ditch, reservoir, or irrigation company stock.CommentsClose CommentsPermalink
Sec. 404. Credit to holders of rural renaissance bonds.CommentsClose CommentsPermalink
Sec. 405. Agricultural chemicals security credit.CommentsClose CommentsPermalink
Sec. 406. Credit for drug safety and effectiveness testing for minor animal species.CommentsClose CommentsPermalink
Sec. 407. Certain farming business machinery and equipment treated as 5-year property.CommentsClose CommentsPermalink
Sec. 408. Expensing of broadband Internet access expenditures.CommentsClose CommentsPermalink
Sec. 409. Credit for energy efficient motors.CommentsClose CommentsPermalink
TITLE V--REVENUE RAISING PROVISIONS
Subtitle A--Miscellaneous Revenue Provisions
Sec. 501. Limitation on farming losses of certain taxpayers.CommentsClose CommentsPermalink
Sec. 502. Modification to optional method of computing net earnings from self-employment.CommentsClose CommentsPermalink
Sec. 503. Information reporting for Commodity Credit Corporation transactions.CommentsClose CommentsPermalink
Sec. 504. Modification of section 1031 treatment for certain real estate.CommentsClose CommentsPermalink
Sec. 505. Modification of effective date of leasing provisions of the American Jobs Creation Act of 2004.CommentsClose CommentsPermalink
Sec. 506. Time for payment of corporate estimated taxes.CommentsClose CommentsPermalink
Sec. 507. Ineligibility of collectibles for nontaxable like kind exchange treatment.CommentsClose CommentsPermalink
Sec. 508. Denial of deduction for certain fines, penalties, and other amounts.CommentsClose CommentsPermalink
Sec. 509. Increase in information return penalties.CommentsClose CommentsPermalink
Subtitle B--Economic Substance Doctrine
Sec. 511. Clarification of economic substance doctrine.CommentsClose CommentsPermalink
Sec. 512. Penalty for understatements attributable to transactions lacking economic substance, etc.CommentsClose CommentsPermalink
Sec. 513. Denial of deduction for interest on underpayments attributable to noneconomic substance transactions.CommentsClose CommentsPermalink
TITLE I--SUPPLEMENTAL AGRICULTURAL DISASTER ASSISTANCE FROM THE AGRICULTURE DISASTER RELIEF TRUST FUND
SEC. 101. SUPPLEMENTAL AGRICULTURE DISASTER ASSISTANCE.
(a) In General- The Trade Act of 1974 (
`TITLE IX--SUPPLEMENTAL AGRICULTURE DISASTER ASSISTANCE
`SEC. 901. PERMANENT AUTHORITY FOR SUPPLEMENTAL REVENUE ASSISTANCE.
`(a) Definitions- In this section:CommentsClose CommentsPermalink
`(1) ACTUAL PRODUCTION HISTORY YIELD- The term `actual production history yield' means the weighted average actual production history for each insurable commodity or noninsurable commodity, as calculated under the Federal Crop Insurance Act (
`(2) COUNTER-CYCLICAL PROGRAM PAYMENT YIELD- The term `counter-cyclical program payment yield' means the weighted average payment yield established under section 1102 of the Farm Security and Rural Investment Act of 2002 (
`(3) DISASTER COUNTY-CommentsClose CommentsPermalink
`(A) IN GENERAL- The term `disaster county' means a county included in the geographic area covered by a qualifying natural disaster declaration.CommentsClose CommentsPermalink
`(B) INCLUSION- The term `disaster county' includes--CommentsClose CommentsPermalink
`(i) a county contiguous to a county described in subparagraph (A); andCommentsClose CommentsPermalink
`(ii) any farm in which, during a calendar year, the total loss of production of the farm relating to weather is greater than 50 percent of the normal production of the farm, as determined by the Secretary.CommentsClose CommentsPermalink
`(4) ELIGIBLE PRODUCER ON A FARM-CommentsClose CommentsPermalink
`(A) IN GENERAL- The term `eligible producer on a farm' means an individual or entity described in subparagraph (B) that, as determined by the Secretary, assumes the production and market risks associated with the agricultural production of crops or livestock.CommentsClose CommentsPermalink
`(B) DESCRIPTION- An individual or entity referred to in subparagraph (A) is--CommentsClose CommentsPermalink
`(i) a citizen of the United States;CommentsClose CommentsPermalink
`(ii) a resident alien;CommentsClose CommentsPermalink
`(iii) a partnership of citizens of the United States; orCommentsClose CommentsPermalink
`(iv) a corporation, limited liability corporation, or other farm organizational structure organized under State law.CommentsClose CommentsPermalink
`(5) FARM-CommentsClose CommentsPermalink
`(A) IN GENERAL- The term `farm' means, in relation to an eligible producer on a farm, the sum of all crop acreage in all counties that--CommentsClose CommentsPermalink
`(i) is used for grazing by the eligible producer; orCommentsClose CommentsPermalink
`(ii) is planted or intended to be planted for harvest by the eligible producer.CommentsClose CommentsPermalink
`(B) AQUACULTURE- In the case of aquaculture, the term `farm' means, in relation to an eligible producer on a farm, all fish being produced in all counties that are intended to be harvested for sale by the eligible producer.CommentsClose CommentsPermalink
`(C) HONEY- In the case of honey, the term `farm' means, in relation to an eligible producer on a farm, all bees and beehives in all counties that are intended to be harvested for a honey crop by the eligible producer.CommentsClose CommentsPermalink
`(6) FARM-RAISED FISH- The term `farm-raised fish' means any aquatic species (including any species of finfish, mollusk, crustacean, or other aquatic invertebrate, amphibian, reptile, or aquatic plant) that is propagated and reared in a controlled or semicontrolled environment.CommentsClose CommentsPermalink
`(7) INSURABLE COMMODITY- The term `insurable commodity' means an agricultural commodity (excluding livestock) for which the producer on a farm is eligible to obtain a policy or plan of insurance under the Federal Crop Insurance Act (
`(8) LIVESTOCK- The term `livestock' includes--CommentsClose CommentsPermalink
`(A) cattle (including dairy cattle);CommentsClose CommentsPermalink
`(B) bison;CommentsClose CommentsPermalink
`(C) poultry;CommentsClose CommentsPermalink
`(D) sheep;CommentsClose CommentsPermalink
`(E) swine;CommentsClose CommentsPermalink
`(F) horses; andCommentsClose CommentsPermalink
`(G) other livestock, as determined by the Secretary.CommentsClose CommentsPermalink
`(9) MOVING 5-YEAR OLYMPIC AVERAGE COUNTY YIELD- The term `moving 5-year Olympic average county yield' means the weighted average yield obtained from the 5 most recent years of yield data provided by the National Agriculture Statistics Service obtained from data after dropping the highest and the lowest yields.CommentsClose CommentsPermalink
`(10) NONINSURABLE COMMODITY- The term `noninsurable commodity' means a crop for which the eligible producers on a farm are eligible to obtain assistance under the noninsured crop assistance program.CommentsClose CommentsPermalink
`(11) NONINSURED CROP ASSISTANCE PROGRAM- The term `noninsured crop assistance program' means the program carried out under section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (
`(12) QUALIFYING NATURAL DISASTER DECLARATION- The term `qualifying natural disaster declaration' means a natural disaster declared by the Secretary for production losses under section 321(a) of the Consolidated Farm and Rural Development Act (
`(13) SECRETARY- The term `Secretary' means the Secretary of Agriculture.CommentsClose CommentsPermalink
`(14) STATE- The term `State' means--CommentsClose CommentsPermalink
`(A) a State;CommentsClose CommentsPermalink
`(B) the District of Columbia;CommentsClose CommentsPermalink
`(C) the Commonwealth of Puerto Rico; andCommentsClose CommentsPermalink
`(D) any other territory or possession of the United States.CommentsClose CommentsPermalink
`(15) TRUST FUND- The term `Trust Fund' means the Agriculture Disaster Relief Trust Fund established under section 902.CommentsClose CommentsPermalink
`(16) UNITED STATES- The term `United States' when used in a geographical sense, means all of the States.CommentsClose CommentsPermalink
`(b) Supplemental Revenue Assistance Payments-CommentsClose CommentsPermalink
`(1) IN GENERAL- The Secretary shall use such sums as are necessary from the Trust Fund to make crop disaster assistance payments to eligible producers on farms in disaster counties that have incurred crop production losses or crop quality losses, or both, during the crop year.CommentsClose CommentsPermalink
`(2) AMOUNT-CommentsClose CommentsPermalink
`(A) IN GENERAL- Subject to subparagraph (B), the Secretary shall provide crop disaster assistance payments under this section to an eligible producer on a farm in an amount equal to 52 percent of the difference between--CommentsClose CommentsPermalink
`(i) the disaster assistance program guarantee, as described in paragraph (3); andCommentsClose CommentsPermalink
`(ii) the total farm revenue for a farm, as described in paragraph (4).CommentsClose CommentsPermalink
`(B) LIMITATION- The disaster assistance program guarantee for a crop used to calculate the payments for a farm under subparagraph (A)(i) may not be greater than 90 percent of the sum of the expected revenue, as described in paragraph (5) for each of the crops on a farm, as determined by the Secretary.CommentsClose CommentsPermalink
`(3) SUPPLEMENTAL REVENUE ASSISTANCE PROGRAM GUARANTEE-CommentsClose CommentsPermalink
`(A) IN GENERAL- Except as otherwise provided in this paragraph, the supplemental assistance program guarantee shall be the sum obtained by adding--CommentsClose CommentsPermalink
`(i) for each insurable commodity on the farm, the product obtained by multiplying--CommentsClose CommentsPermalink
`(I) the greatest of--CommentsClose CommentsPermalink
`(aa) the actual production history yield;CommentsClose CommentsPermalink
`(bb) 85 percent of the moving 5-year Olympic average county yield; andCommentsClose CommentsPermalink
`(cc) the counter-cyclical program payment yield for each crop;CommentsClose CommentsPermalink
`(II) the percentage of the crop insurance yield guarantee;CommentsClose CommentsPermalink
`(III) the percentage of crop insurance price elected by the eligible producer;CommentsClose CommentsPermalink
`(IV) the crop insurance price; andCommentsClose CommentsPermalink
`(V) 115 percent; andCommentsClose CommentsPermalink
`(ii) for each noninsurable commodity on a farm, the product obtained by multiplying--CommentsClose CommentsPermalink
`(I) the weighted noninsured crop assistance program yield guarantee;CommentsClose CommentsPermalink
`(II) except as provided in subparagraph (B), 100 percent of the noninsured crop assistance program established price; andCommentsClose CommentsPermalink
`(III) 115 percent.CommentsClose CommentsPermalink
`(B) SUPPLEMENTAL BUY-UP NONINSURED ASSISTANCE PROGRAM- Beginning on the date that the Secretary makes available supplemental buy-up coverage under the noninsured assistance program in accordance with subsection (h), the percentage described in subclause (II) of subparagraph (A)(ii) shall be equal to the percentage of the noninsured assistance program price guarantee elected by the producer.CommentsClose CommentsPermalink
`(C) ADJUSTMENT INSURANCE GUARANTEE- Notwithstanding subparagraph (A), in the case of an insurable commodity for which a plan of insurance provides for an adjustment in the guarantee, such as in the case of prevented planting, the adjusted insurance guarantee shall be the basis for determining the disaster assistance program guarantee for the insurable commodity.CommentsClose CommentsPermalink
`(D) ADJUSTED ASSISTANCE LEVEL- Notwithstanding subparagraph (A), in the case of a noninsurable commodity for which the noninsured crop assistance program provides for an adjustment in the level of assistance, such as in the case of prevented harvesting, the adjusted assistance level shall be the basis for determining the disaster assistance program guarantee for the noninsurable commodity.CommentsClose CommentsPermalink
`(E) EQUITABLE TREATMENT FOR NON-YIELD BASED POLICIES- The Secretary shall establish equitable treatment for non-yield based policies and plans of insurance, such as the Adjusted Gross Revenue Lite insurance program.CommentsClose CommentsPermalink
`(F) PUBLIC MANAGED LAND- Notwithstanding subparagraph (A), if rangeland is managed by a Federal agency and the carrying capacity of the managed rangeland is reduced as a result of a disaster in the preceding year that was the basis for a qualifying natural disaster declaration--CommentsClose CommentsPermalink
`(i) the calculation for the supplemental assistance program guarantee determined under subparagraph (A) as the guarantee applies to the managed rangeland shall be not less than 75 percent of the guarantee for the preceding year; andCommentsClose CommentsPermalink
`(ii) the requirement for a designation by the Secretary for the current year is waived.CommentsClose CommentsPermalink
`(4) FARM REVENUE-CommentsClose CommentsPermalink
`(A) IN GENERAL- For purposes of this subsection, the total farm revenue for a farm, shall equal the sum obtained by adding--CommentsClose CommentsPermalink
`(i) the estimated actual value for grazing and for each crop produced on a farm by using the product obtained by multiplying--CommentsClose CommentsPermalink
`(I) the actual crop acreage grazed or harvested by an eligible producer on a farm;CommentsClose CommentsPermalink
`(II) the estimated actual yield of the grazing land or crop production; andCommentsClose CommentsPermalink
`(III) subject to subparagraphs (B) and (C), the average market price received or value of the production during the first 5 months of the marketing year for the county in which the farm or portion of a farm is located;CommentsClose CommentsPermalink
`(ii) 20 percent of amount of any direct payments made to the producer under section 1103 of the Farm Security and Rural Investment Act of 2002 (
`(iii) the amount of payments for prevented planting on a farm;CommentsClose CommentsPermalink
`(iv) the amount of crop insurance indemnities received by an eligible producer on a farm for each crop on a farm, including indemnities for grazing losses;CommentsClose CommentsPermalink
`(v) the amount of payments an eligible producer on a farm received under the noninsured crop assistance program for each crop on a farm, including grazing losses; andCommentsClose CommentsPermalink
`(vi) the value of any other natural disaster assistance payments provided by the Federal Government to an eligible producer on a farm for each crop on a farm for the same loss for which the eligible producer is seeking assistance.CommentsClose CommentsPermalink
`(B) ADJUSTMENT- The Secretary shall adjust the average market price received by the eligible producer on a farm--CommentsClose CommentsPermalink
`(i) to reflect the average quality discounts applied to the local or regional market price of a crop, hay, or forage due to a reduction in the intrinsic characteristics of the production resulting from adverse weather, as determined annually by the State office of the Farm Service Agency; andCommentsClose CommentsPermalink
`(ii) to account for a crop the value of which is reduced due to excess moisture resulting from a disaster-related condition.CommentsClose CommentsPermalink
`(C) MAXIMUM AMOUNT FOR CERTAIN CROPS- With respect to a crop for which an eligible producer on a farm receives assistance under the noninsured crop assistance program, the average market price received or value of the production during the first 5 months of the marketing year for the county in which the farm or portion of a farm is located shall be an amount not more than 100 percent of the price of the crop established under the noninsured crop assistance program.CommentsClose CommentsPermalink
`(5) EXPECTED REVENUE- The expected revenue for each crop on a farm shall equal the sum obtained by adding--CommentsClose CommentsPermalink
`(A) the expected value of grazing;CommentsClose CommentsPermalink
`(B) the product obtained by multiplying--CommentsClose CommentsPermalink
`(i) the greatest of--CommentsClose CommentsPermalink
`(I) the actual production history yield of the eligible producer on a farm;CommentsClose CommentsPermalink
`(II) the moving 5-year Olympic average county yield; andCommentsClose CommentsPermalink
`(III) the counter-cyclical program payment yield;CommentsClose CommentsPermalink
`(ii) the acreage planted or intended to be planted for each crop; andCommentsClose CommentsPermalink
`(iii) 100 percent of the insurance price guarantee; andCommentsClose CommentsPermalink
`(C) the product obtained by multiplying--CommentsClose CommentsPermalink
`(i) 100 percent of the noninsured crop assistance program yield; andCommentsClose CommentsPermalink
`(ii) 100 percent of the noninsured crop assistance program price for each of the crops on a farm.CommentsClose CommentsPermalink
`(c) Livestock Indemnity Payments-CommentsClose CommentsPermalink
`(1) IN GENERAL- The Secretary shall use such sums as are necessary from the Trust Fund to make livestock indemnity payments to eligible producers on farms that have incurred livestock death losses in excess of the normal mortality due to adverse weather, as determined by the Secretary, during the calendar year, including losses due to hurricanes, floods, blizzards, disease, wildfires, extreme heat, and extreme cold.CommentsClose CommentsPermalink
`(2) PAYMENT RATES- Indemnity payments to an eligible producer on a farm under paragraph (1) shall be made at a rate of 75 percent of the market value of the applicable livestock on the day before the date of death of the livestock, as determined by the Secretary.CommentsClose CommentsPermalink
`(d) Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish-CommentsClose CommentsPermalink
`(1) IN GENERAL- The Secretary shall use up to $35,000,000 per year from the Trust Fund to provide emergency relief to eligible producers of livestock, honey bees, and farm-raised fish to aid in the reduction of losses due to adverse weather or other environmental conditions, such as blizzards and wildfires, as determined by the Secretary, that are not covered under the authority of the Secretary to make qualifying natural disaster declarations.CommentsClose CommentsPermalink
`(2) USE OF FUNDS- Funds made available under this subsection shall be used to reduce losses caused by feed or water shortages, disease, or other factors as determined by the Secretary.CommentsClose CommentsPermalink
`(3) AVAILABILITY OF FUNDS- Any funds made available under this subsection and not used in a crop year shall remain available until expended.CommentsClose CommentsPermalink
`(e) Tree Assistance Program-CommentsClose CommentsPermalink
`(1) DEFINITIONS- In this subsection:CommentsClose CommentsPermalink
`(A) ELIGIBLE ORCHARDIST- The term `eligible orchardist' means a person that--CommentsClose CommentsPermalink
`(i) produces annual crops from trees for commercial purposes; orCommentsClose CommentsPermalink
`(ii) produces nursery, ornamental, fruit, nut, or Christmas trees for commercial sale.CommentsClose CommentsPermalink
`(B) NATURAL DISASTER- The term `natural disaster' means plant disease, insect infestation, drought, fire, freeze, flood, earthquake, lightning, or other occurrence, as determined by the Secretary.CommentsClose CommentsPermalink
`(C) TREE- The term `tree' includes a tree, bush, and vine.CommentsClose CommentsPermalink
`(2) ELIGIBILITY-CommentsClose CommentsPermalink
`(A) LOSS- Subject to subparagraph (B), the Secretary shall provide assistance under paragraph (3) to eligible orchardists that planted trees for commercial purposes but lost the trees as a result of a natural disaster, as determined by the Secretary.CommentsClose CommentsPermalink
`(B) LIMITATION- An eligible orchardist shall qualify for assistance under subparagraph (A) only if the tree mortality of the eligible orchardist, as a result of damaging weather or related condition, exceeds 15 percent (adjusted for normal mortality).CommentsClose CommentsPermalink
`(3) ASSISTANCE- The assistance provided by the Secretary to eligible orchardists for losses described in paragraph (2) shall consist of--CommentsClose CommentsPermalink
`(A)(i) reimbursement of 75 percent of the cost of replanting trees lost due to a natural disaster, as determined by the Secretary, in excess of 15 percent mortality (adjusted for normal mortality); orCommentsClose CommentsPermalink
`(ii) at the option of the Secretary, sufficient seedlings to reestablish a stand; andCommentsClose CommentsPermalink
`(B) reimbursement of 50 percent of the cost of pruning, removal, and other costs incurred by an eligible orchardist to salvage existing trees or, in the case of tree mortality, to prepare the land to replant trees as a result of damage or tree mortality due to a natural disaster, as determined by the Secretary, in excess of 15 percent damage or mortality (adjusted for normal tree damage and mortality).CommentsClose CommentsPermalink
`(f) Pest and Disease Management and Disaster Prevention-CommentsClose CommentsPermalink
`(1) DEFINITIONS- In this subsection:CommentsClose CommentsPermalink
`(A) EARLY PEST DETECTION AND SURVEILLANCE- The term `early pest detection and surveillance' means the full range of activities undertaken to find newly introduced pests, whether the pests are new to the United States or new to certain areas of the United States, before--CommentsClose CommentsPermalink
`(i) the pests become established; orCommentsClose CommentsPermalink
`(ii) the pest infestations become too large and costly to eradicate or control.CommentsClose CommentsPermalink
`(B) PEST- The term `pest' has the meaning given the term `plant pest' in section 403 of the Plant Protection Act (
`(C) SPECIALTY CROP- The term `specialty crop' has the meaning given the term in section 3 of the Specialty Crops Competitiveness Act of 2004 (
`(D) STATE DEPARTMENT OF AGRICULTURE- The term `State department of agriculture' means an agency of a State that has a legal responsibility to perform early pest detection and surveillance activities.CommentsClose CommentsPermalink
`(2) ESTABLISHMENT- The Secretary shall establish a program--CommentsClose CommentsPermalink
`(A) to conduct early pest detection and surveillance activities in cooperation with State departments of agriculture;CommentsClose CommentsPermalink
`(B) to determine and prioritize pest and disease threats to domestic production of specialty crops;CommentsClose CommentsPermalink
`(C) to create an audit-based certification approach to protect against the spread of plant pests and to facilitate the interstate movement of plants and plant products; andCommentsClose CommentsPermalink
`(D) to prevent potential damage from crop disasters caused by pests and diseases.CommentsClose CommentsPermalink
`(3) EARLY PEST DETECTION AND SURVEILLANCE IMPROVEMENT PROGRAM-CommentsClose CommentsPermalink
`(A) COOPERATIVE AGREEMENTS- The Secretary shall enter into cooperative agreements with State departments of agriculture to provide grants to the State departments of agriculture for early pest detection and surveillance activities.CommentsClose CommentsPermalink
`(B) APPLICATION-CommentsClose CommentsPermalink
`(i) IN GENERAL- A State department of agriculture seeking to enter into a cooperative agreement under this subsection shall submit to the Secretary an application containing such information as the Secretary may require.CommentsClose CommentsPermalink
`(ii) NOTIFICATION- The Secretary shall notify applicants of--CommentsClose CommentsPermalink
`(I) the requirements to be imposed on a State department of agriculture for auditing of, and reporting on, the use of any funds provided by the Secretary under the cooperative agreement;CommentsClose CommentsPermalink
`(II) the criteria to be used to ensure that early pest detection and surveillance activities supported under the cooperative agreement are based on sound scientific data or thorough risk assessments; andCommentsClose CommentsPermalink
`(III) the means of identifying pathways of pest introductions.CommentsClose CommentsPermalink
`(C) USE OF FUNDS-CommentsClose CommentsPermalink
`(i) PEST DETECTION AND SURVEILLANCE ACTIVITIES- A State department of agriculture that receives funds under this subsection shall use the funds to carry out early pest detection and surveillance activities approved by the Secretary to prevent the introduction or spread of a pest.CommentsClose CommentsPermalink
`(ii) SUBAGREEMENTS- A State department of agriculture may use funds received under this subsection to enter into subagreements with political subdivisions in the State that have legal responsibilities relating to agricultural pest and disease surveillance.CommentsClose CommentsPermalink
`(D) SPECIAL FUNDING CONSIDERATIONS- Subject to the availability of funds under paragraph (9), the Secretary shall provide funds to a State department of agriculture that the Secretary determines is in a State that has a high risk of being affected by 1 or more pest, based on--CommentsClose CommentsPermalink
`(i) the number of international airports and maritime facilities in the State;CommentsClose CommentsPermalink
`(ii) the volume of international passenger and cargo entry into the State;CommentsClose CommentsPermalink
`(iii)(I) the geographic location of the State; andCommentsClose CommentsPermalink
`(II) whether the location is conducive to agricultural pest and disease establishment due to the climate or crop diversity of the State;CommentsClose CommentsPermalink
`(iv)(I) the types of agricultural commodities or plants produced in the State; andCommentsClose CommentsPermalink
`(II) whether the commodities or plants produced are conducive to agricultural pest and disease establishment due to the climate or crop diversity of the State;CommentsClose CommentsPermalink
`(v) whether the Secretary has declared an emergency in the State pursuant to section 442 of the Plant Protection Act (
`(vi) such other factors as the Secretary considers appropriate.CommentsClose CommentsPermalink
`(E) COST-SHARE-CommentsClose CommentsPermalink
`(i) FEDERAL COST SHARE; FORM OF NON-FEDERAL COST SHARE- Except as provided in clause (ii), a cooperative agreement entered into under subparagraph (A) shall provide that--CommentsClose CommentsPermalink
`(I) the Federal share of carrying out the cooperative agreement shall not exceed 75 percent of the total cost;CommentsClose CommentsPermalink
`(II) the non-Federal share of the cost of carrying out the agreement may be provided in-kind; andCommentsClose CommentsPermalink
`(III) any in-kind costs may include indirect costs as considered appropriate by the Secretary.CommentsClose CommentsPermalink
`(ii) ABILITY TO PROVIDE FUNDS- The Secretary shall not take the ability to provide non-Federal costs to carry out a cooperative agreement entered into under subparagraph (A) into consideration in deciding whether to enter into a cooperative agreement with a State department of agriculture.CommentsClose CommentsPermalink
`(iii) SPECIAL FUNDING CONSIDERATIONS- The non-Federal share of carrying out subparagraph (D) shall not exceed 40 percent of the total costs of carrying out that subparagraph.CommentsClose CommentsPermalink
`(F) REPORTING REQUIREMENT- Not later than 180 days after the date of completion of an early pest detection and surveillance activity conducted by a State department of agriculture using funds provided under this subsection, the State department of agriculture shall submit to the Secretary a report that describes the purposes and results of the activities, including any activities conducted pursuant to a subagreement referred to in subparagraph (C)(ii).CommentsClose CommentsPermalink
`(4) THREAT IDENTIFICATION AND MITIGATION PROGRAM-CommentsClose CommentsPermalink
`(A) IN GENERAL- In conducting the program established under paragraph (2), the Secretary shall--CommentsClose CommentsPermalink
`(i) develop risk assessments of the existing and potential threat to the specialty crop industry in the United States from pests and disease;CommentsClose CommentsPermalink
`(ii) prepare a list that prioritizes pest and disease threats to the specialty crop industry;CommentsClose CommentsPermalink
`(iii) develop action plans, in consultation with State departments of agriculture and other State or regional resource partnerships, that effectively address pest and disease threats to the specialty crop industry, including pathway analysis, domestic and offshore mitigation measures, and comprehensive exclusion measures at ports of entry and other key distribution centers, in addition to strategies to employ if a pest or disease is introduced;CommentsClose CommentsPermalink
`(iv) implement the action plans as soon as the action plans are developed to test the effectiveness of the action plans and help prevent new foreign and domestic pest and disease threats from being introduced or widely disseminated in the United States; andCommentsClose CommentsPermalink
`(v) collaborate with the nursery industry, research institutions, and other appropriate entities to develop a nursery pest risk management system--CommentsClose CommentsPermalink
`(I) to identify nursery pests and diseases;CommentsClose CommentsPermalink
`(II) to prevent the introduction, establishment, and spread of the pests and diseases; andCommentsClose CommentsPermalink
`(III) to reduce the risk of, prioritize, mitigate, and eradicate the pests and diseases.CommentsClose CommentsPermalink
`(B) REPORTS- Not later than 1 year after the date of enactment of this title, and annually thereafter, the Secretary shall update and submit to Congress the priority list and action plans described in subparagraph (A), including an accounting of funds expended on the action plans.CommentsClose CommentsPermalink
`(5) AUDIT-BASED APPROACH TO SPECIALTY CROP PHYTOSANITARY CERTIFICATION- In conducting the program established under paragraph (2), the Secretary shall provide funds and technical assistance to specialty crop growers, organizations representing specialty crop growers, and State and local agencies working with specialty crop growers and organizations for the development and implementation of certification systems based on audit-based approaches (such as best management practices or nursery pest risk management systems) to address plant pests and mitigate the risk of plant pests in the movement of plants and plant products.CommentsClose CommentsPermalink
`(6) COOPERATIVE AGREEMENTS- The Secretary may enter into cooperative agreements with other Federal departments or agencies, States or political subdivisions of States, national governments, local governments of other nations, domestic or international organizations, domestic or international associations, and other persons to carry out this subsection.CommentsClose CommentsPermalink
`(7) CONSULTATION- The Secretary shall consult with the National Plant Board, State departments of agriculture, and specialty crop grower organizations to establish funding priorities under this subsection for each fiscal year.CommentsClose CommentsPermalink
`(8) ADMINISTRATIVE COSTS- Not more than 5 percent of the funds provided under this subsection may be used for administrative costs.CommentsClose CommentsPermalink
`(9) FUNDING- The Secretary shall use from the Trust Fund to carry out this subsection--CommentsClose CommentsPermalink
`(A) $10,000,000 for fiscal year 2008;CommentsClose CommentsPermalink
`(B) $15,000,000 for fiscal year 2009;CommentsClose CommentsPermalink
`(C) $30,000,000 for fiscal year 2010;CommentsClose CommentsPermalink
`(D) $45,000,000 for fiscal year 2011; andCommentsClose CommentsPermalink
`(E) $60,000,000 for fiscal year 2012.CommentsClose CommentsPermalink
`(g) Risk Management Purchase Requirement-CommentsClose CommentsPermalink
`(1) IN GENERAL- Except as otherwise provided in this subsection, the eligible producers on a farm shall not be eligible for assistance under this section with respect to losses to an insurable commodity or noninsurable commodity if the eligible producers on the farm--CommentsClose CommentsPermalink
`(A) in the case of an insurable commodity, did not obtain a policy or plan of insurance for the insurable commodity under the Federal Crop Insurance Act (
`(B) in the case of a noninsurable commodity, did not file the required paperwork, and pay the administrative fee by the applicable State filing deadline, for the noninsurable commodity under the noninsured crop assistance program for the crop incurring the losses.CommentsClose CommentsPermalink
`(2) MINIMUM- To be considered to have obtained insurance under paragraph (1), an eligible producer on a farm shall have obtained a policy or plan of insurance with not less than 50 percent yield coverage at 55 percent of the insurable price for each crop grazed, planted, or intended to be planted for harvest on a whole farm.CommentsClose CommentsPermalink
`(3) WAIVER- With respect to eligible producers that are limited resource, minority, or beginning farmers or ranchers, as determined by the Secretary, the Secretary may--CommentsClose CommentsPermalink
`(A) waive paragraph (1); andCommentsClose CommentsPermalink
`(B) provide disaster assistance under this section at a level that the Secretary determines to be equitable and appropriate.CommentsClose CommentsPermalink
`(4) EQUITABLE RELIEF- The Secretary may provide equitable relief to eligible producers on a farm that unintentionally fail to meet the requirements of paragraph (1) for 1 or more crops on a farm on a case-by-case basis, as determined by the Secretary.CommentsClose CommentsPermalink
`(h) Supplemental Buy-up Noninsured Assistance Program-CommentsClose CommentsPermalink
`(1) IN GENERAL- The Secretary shall establish a program under which eligible producers on a farm may purchase under the noninsured crop assistance program additional yield and price coverage for a crop, including a forage, hay, or honey crop, of--CommentsClose CommentsPermalink
`(A) 60 or 65 percent (as elected by the producers on the farm) of the yield established for the crop under the program; andCommentsClose CommentsPermalink
`(B) 100 percent of the price established for the crop under the program.CommentsClose CommentsPermalink
`(2) FEES- The Secretary shall establish and collect fees from eligible producers on a farm participating in the program established under paragraph (1) to offset all of the costs of the program, as determined by the Secretary.CommentsClose CommentsPermalink
`(i) Payment Limitations-CommentsClose CommentsPermalink
`(1) IN GENERAL- The total amount of disaster assistance that an eligible producer on a farm may receive under this section may not exceed $100,000.CommentsClose CommentsPermalink
`(2) AGI LIMITATION- Section 1001D of the Food Security Act of 1985 (
`(j) Period of Effectiveness- This section shall be effective only for losses that are incurred as the result of a disaster, adverse weather, or other environmental condition that occurs on or before September 30, 2012, as determined by the Secretary.CommentsClose CommentsPermalink
`SEC. 902. AGRICULTURE DISASTER RELIEF TRUST FUND.
`(a) Creation of Trust Fund- There is established in the Treasury of the United States a trust fund to be known as the `Agriculture Disaster Relief Trust Fund', consisting of such amounts as may be appropriated or credited to such Trust Fund as provided in this section.CommentsClose CommentsPermalink
`(b) Transfer to Trust Fund-CommentsClose CommentsPermalink
`(1) IN GENERAL- There are appropriated to the Agriculture Disaster Relief Trust Fund amounts equivalent to 3.34 percent of the amounts received in the general fund of the Treasury of the United States during fiscal years 2008 through 2012 attributable to the duties collected on articles entered, or withdrawn from warehouse, for consumption under the Harmonized Tariff Schedule of the United States.CommentsClose CommentsPermalink
`(2) AMOUNTS BASED ON ESTIMATES- The amounts appropriated under this section shall be transferred at least monthly from the general fund of the Treasury of the United States to the Agriculture Disaster Relief Trust Fund on the basis of estimates made by the Secretary of the Treasury. Proper adjustments shall be made in the amounts subsequently transferred to the extent prior estimates were in excess of or less than the amounts required to be transferred.CommentsClose CommentsPermalink
`(c) Administration-CommentsClose CommentsPermalink
`(1) REPORTS- The Secretary of the Treasury shall be the trustee of the Agriculture Disaster Relief Trust Fund and shall submit an annual report to Congress each year on the financial condition and the results of the operations of such Trust Fund during the preceding fiscal year and on its expected condition and operations during the 5 fiscal years succeeding such fiscal year. Such report shall be printed as a House document of the session of Congress to which the report is made.CommentsClose CommentsPermalink
`(2) INVESTMENT-CommentsClose CommentsPermalink
`(A) IN GENERAL- The Secretary of the Treasury shall invest such portion of the Agriculture Disaster Relief Trust Fund as is not in his judgment required to meet current withdrawals. Such investments may be made only in interest bearing obligations of the United States. For such purpose, such obligations may be acquired--CommentsClose CommentsPermalink
`(i) on original issue at the issue price, orCommentsClose CommentsPermalink
`(ii) by purchase of outstanding obligations at the market price.CommentsClose CommentsPermalink
`(B) SALE OF OBLIGATIONS- Any obligation acquired by the Agriculture Disaster Relief Trust Fund may be sold by the Secretary of the Treasury at the market price.CommentsClose CommentsPermalink
`(C) INTEREST ON CERTAIN PROCEEDS- The interest on, and the proceeds from the sale or redemption of, any obligations held in the Agriculture Disaster Relief Trust Fund shall be credited to and form a part of such Trust Fund.CommentsClose CommentsPermalink
`(d) Expenditures From Trust Fund- Amounts in the Agriculture Disaster Relief Trust Fund shall be available for the purposes of making expenditures to meet those obligations of the United States incurred under section 901.CommentsClose CommentsPermalink
`(e) Authority to Borrow-CommentsClose CommentsPermalink
`(1) IN GENERAL- There are authorized to be appropriated, and are appropriated, to the Agriculture Disaster Relief Trust Fund, as repayable advances, such sums as may be necessary to carry out the purposes of such Trust Fund.CommentsClose CommentsPermalink
`(2) REPAYMENT OF ADVANCES-CommentsClose CommentsPermalink
`(A) IN GENERAL- Advances made to the Agriculture Disaster Relief Trust Fund shall be repaid, and interest on such advances shall be paid, to the general fund of the Treasury when the Secretary determines that moneys are available for such purposes in such Trust Fund.CommentsClose CommentsPermalink
`(B) RATE OF INTEREST- Interest on advances made pursuant to this subsection shall be--CommentsClose CommentsPermalink
`(i) at a rate determined by the Secretary of the Treasury (as of the close of the calendar month preceding the month in which the advance is made) to be equal to the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the anticipated period during which the advance will be outstanding, andCommentsClose CommentsPermalink
`(ii) compounded annually.'.CommentsClose CommentsPermalink
(b) Secretarial Discretion- Section 442(c) of the Plant Protection Act (
TITLE II--CONSERVATION PROVISIONS
Subtitle A--Land and Species Preservation Provisions
SEC. 201. CONSERVATION RESERVE TAX CREDIT.
(a) Allowance of Credit- Subpart B of part IV of subchapter A of chapter 1 is amended by adding at the end the following new section:CommentsClose CommentsPermalink
`SEC. 30D. CONSERVATION RESERVE CREDIT.
`(a) In General- There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the rental value of any land enrolled in the conservation reserve program.CommentsClose CommentsPermalink
`(b) Limitations-CommentsClose CommentsPermalink
`(1) LIMITATION BASED ON AMOUNT OF TAX- The credit allowed under this section for any taxable year shall not exceed the excess of--CommentsClose CommentsPermalink
`(A) the regular tax liability for the taxable year reduced by the sum of the credits allowable under subpart A and sections 27, 30, 30B, and 30C, overCommentsClose CommentsPermalink
`(B) the tentative minimum tax for the taxable year.CommentsClose CommentsPermalink
`(2) LIMITATION BASED ON ALLOCATED PORTION OF NATIONAL LIMITATION- The credit allowed under subsection (a) for any taxpayer for any taxable year shall not exceed the excess of--CommentsClose CommentsPermalink
`(A) the amount of the national credit limitation allocated to such taxpayer under subsection (c) for the fiscal year in which such taxable year ends and all prior fiscal years, overCommentsClose CommentsPermalink
`(B) the credit allowed under subsection (a) for all prior taxable years.CommentsClose CommentsPermalink
`(c) Conservation Reserve Credit Limitation-CommentsClose CommentsPermalink
`(1) IN GENERAL- There is a conservation reserve credit limitation for each fiscal year of the United States. Such limitation is--CommentsClose CommentsPermalink
`(A) $750,000,000 for each of fiscal years 2008 through 2012, andCommentsClose CommentsPermalink
`(B) zero thereafter.CommentsClose CommentsPermalink
`(2) ALLOCATION-CommentsClose CommentsPermalink
`(A) IN GENERAL- The Secretary, in consultation with the Secretary of Agriculture, shall allocate the conservation reserve credit limitation to taxpayers--CommentsClose CommentsPermalink
`(i) who are owners or operators of land enrolled in the conservation reserve program, andCommentsClose CommentsPermalink
`(ii) who have entered into an agreement with the Secretary of Agriculture to receive an allocation under this paragraph in lieu of a rental payment for such year under section 1234 of the Food Security Act of 1985.CommentsClose CommentsPermalink
`(B) ALLOCATION LIMITATION- The Secretary may not allocate more than $50,000 to any 1 taxpayer for any fiscal year.CommentsClose CommentsPermalink
`(3) CARRYFORWARD OF LIMITATION-CommentsClose CommentsPermalink
`(A) IN GENERAL- If for any fiscal year the limitation under paragraph (1) (after the application of this paragraph) exceeds the amount allocated to all eligible taxpayers for such fiscal year, the limitation amount for the following fiscal year shall be increased by the amount of such excess.CommentsClose CommentsPermalink
`(B) SPECIAL RULE FOR 2012- Notwithstanding subparagraph (A), no amount of the conservation reserve credit limitation may be carried to any fiscal year following fiscal year 2012.CommentsClose CommentsPermalink
`(d) Carryforward- If the amount of the credit allowable under subsection (a) for any taxpayer for any taxable year (determined without regard to subsection (b)(1)) exceeds the limitation under subsection (b)(1), such excess may be carried forward to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.CommentsClose CommentsPermalink
`(e) Other Definitions and Special Rules- For purposes of this section--CommentsClose CommentsPermalink
`(1) CONSERVATION RESERVE PROGRAM- For purposes of this subsection, the term `conservation reserve program' means the conservation reserve program established under subchapter B of chapter 1 of subtitle D of title XII of the Food Security Act of 1985.CommentsClose CommentsPermalink
`(2) DENIAL OF DOUBLE BENEFIT- No deduction or other credit shall be allowed under this chapter for any amount with respect to which a credit is allowed under subsection (a).CommentsClose CommentsPermalink
`(3) RECAPTURE OF ALLOCATION- If a taxpayer terminates a contract under the conservation reserve program before the end of the fiscal year with respect to which an allocation under subsection (c)(2) is made, the Secretary shall recapture the amount of the credit allowed under this section which bears the same ratio to the amount so allocated as the number of days in the fiscal year during which the contract was not in effect bears to 365.CommentsClose CommentsPermalink
`(4) TREATMENT OF CREDIT UNDER INCOME TAX AND SELF-EMPLOYMENT INCOME TAX- Notwithstanding any agreement between the taxpayer and the Secretary of Agriculture, for purposes of this chapter and chapter 2, the amount of any credit received under this section shall not be treated as income.'.CommentsClose CommentsPermalink
(b) Conforming Amendment- The table of sections for subpart B of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 30C the following new item:CommentsClose CommentsPermalink
`Sec. 30D. Conservation reserve credit.'.CommentsClose CommentsPermalink
(c) Effective Date- The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 202. EXCLUSION OF CONSERVATION RESERVE PROGRAM PAYMENTS FROM SECA TAX FOR CERTAIN INDIVIDUALS.
(a) Internal Revenue Code- Section 1402(a)(1) (defining net earnings from self-employment) is amended by inserting `, and including payments under section 1233(2) of the Food Security Act of 1985 (
(b) Social Security Act- Section 211(a)(1) of the Social Security Act is amended by inserting `, and including payments under section 1233(2) of the Food Security Act of 1985 (
(c) Effective Date- The amendments made by this section shall apply to payments made after December 31, 2007.CommentsClose CommentsPermalink
SEC. 203. PERMANENT EXTENSION OF SPECIAL RULE ENCOURAGING CONTRIBUTIONS OF CAPITAL GAIN REAL PROPERTY FOR CONSERVATION PURPOSES.
(a) In General-CommentsClose CommentsPermalink
(1) INDIVIDUALS- Subparagraph (E) of section 170(b)(1) (relating to contributions of qualified conservation contributions) is amended by striking clause (vi).CommentsClose CommentsPermalink
(2) CORPORATIONS- Subparagraph (B) of section 170(b)(2) (relating to qualified conservation contributions by certain corporate farmers and ranchers) is amended by striking clause (iii).CommentsClose CommentsPermalink
(b) Effective Date- The amendments made by this section shall apply to contributions made in taxable years beginning after December 31, 2007.CommentsClose CommentsPermalink
SEC. 204. TAX CREDIT FOR RECOVERY AND RESTORATION OF ENDANGERED SPECIES.
(a) In General- Subpart B of part IV of subchapter A of chapter 1, as amended by this Act, is amended by adding at the end the following new section:CommentsClose CommentsPermalink
`SEC. 30E. ENDANGERED SPECIES RECOVERY AND RESTORATION CREDIT.
`(a) In General- In the case of an eligible taxpayer, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of--CommentsClose CommentsPermalink
`(1) the habitat protection easement credit, plusCommentsClose CommentsPermalink
`(2) the habitat restoration credit.CommentsClose CommentsPermalink
`(b) Limitation-CommentsClose CommentsPermalink
`(1) IN GENERAL- The credit allowed under subsection (a) for any taxpayer for any taxable year shall not exceed the endangered species recovery credit limitation allocated to the eligible taxpayer under subsection (f) for the calendar year in which the taxpayer's taxable year ends.CommentsClose CommentsPermalink
`(2) CARRYFORWARDS-CommentsClose CommentsPermalink
`(A) IN GENERAL- If the amount of the credit allowable under subsection (a) for any taxpayer for any taxable year (determined without regard to paragraph (1)) exceeds the endangered species recovery credit limitation allocated under subsection (f) to such taxpayer for the calendar year in which the taxpayer's taxable year ends, such excess may be carried forward to the next taxable year for which an allocation is made to such taxpayer under subsection (f). Any amount carried to another taxable year under this subparagraph shall be treated as added to the credit allowable under subsection (a)(1) or (a)(2), whichever is appropriate, for such taxable year.CommentsClose CommentsPermalink
`(B) CARRYFORWARD OF ALLOCATION AMOUNT- If the amount of the endangered species recovery credit limitation allocated to a taxpayer for any calendar year under subsection (f) exceeds the amount of the credit allowed to the taxpayer under subsection (a) for the taxable year ending in such calendar year, such excess may be carried forward to the next taxable year of the taxpayer. Any amount carried to another taxable year under this subparagraph shall be treated as allocated to the taxpayer for use in such taxable year under subsection (f).CommentsClose CommentsPermalink
`(c) Eligible Taxpayer; Qualified Agreements- For purposes of this section--CommentsClose CommentsPermalink
`(1) IN GENERAL- The term `eligible taxpayer' means--CommentsClose CommentsPermalink
`(A) a taxpayer who--CommentsClose CommentsPermalink
`(i) owns real property which contains the habitat of a qualified species, andCommentsClose CommentsPermalink
`(ii) enters into a qualified perpetual habitat protection agreement, a qualified 30-year habitat protection agreement, or a qualified habitat protection agreement with respect to such real property, andCommentsClose CommentsPermalink
`(B) any other taxpayer who--CommentsClose CommentsPermalink
`(i) is a party to a qualified perpetual habitat protection agreement, a qualified 30-year habitat protection agreement, or a qualified habitat protection agreement, andCommentsClose CommentsPermalink
`(ii) as part of any such agreement, agrees to assume responsibility for costs paid or incurred as a result of implementing such agreement.CommentsClose CommentsPermalink
`(2) QUALIFIED PERPETUAL HABITAT PROTECTION AGREEMENT- The term `qualified perpetual habitat protection agreement' means an agreement--CommentsClose CommentsPermalink
`(A) under which a taxpayer described in paragraph (1)(A) grants to the appropriate Secretary, the Secretary of Agriculture, the Secretary of Defense, or a State an easement in perpetuity for the protection of the habitat of a qualified species, andCommentsClose CommentsPermalink
`(B) which meets the requirements of paragraph (5).CommentsClose CommentsPermalink
`(3) QUALIFIED 30-YEAR HABITAT PROTECTION AGREEMENT- The term `qualified 30-year habitat protection agreement' means an agreement not described in paragraph (2)--CommentsClose CommentsPermalink
`(A) under which a taxpayer described in paragraph (1)(A) grants to the appropriate Secretary, the Secretary of Agriculture, the Secretary of Defense, or a State an easement for a period of 30 years or greater for the protection of the habitat of a qualified species, andCommentsClose CommentsPermalink
`(B) which meets the requirements of paragraph (5).CommentsClose CommentsPermalink
`(4) QUALIFIED HABITAT PROTECTION AGREEMENT- The term `qualified habitat protection agreement' means an agreement--CommentsClose CommentsPermalink
`(A) under which a taxpayer described in paragraph (1)(A) enters into an agreement not described in paragraph (2) or (3) with the appropriate Secretary, the Secretary of Agriculture, the Secretary of Defense, or a State to protect the habitat of a qualified species for a specified period of time, andCommentsClose CommentsPermalink
`(B) which meets the requirements of paragraph (5).CommentsClose CommentsPermalink
`(5) REQUIREMENTS- An agreement meets the requirements of this paragraph if the agreement--CommentsClose CommentsPermalink
`(A) is consistent with any recovery plan which is applicable and which has been approved for a qualified species under section 4 of the Endangered Species Act of 1973,CommentsClose CommentsPermalink
`(B) includes a habitat management plan agreed to by the appropriate Secretary and the eligible taxpayer, andCommentsClose CommentsPermalink
`(C) requires that technical assistance with respect to the duties under the habitat management plan be provided to the taxpayer by the appropriate Secretary or an entity approved by the appropriate Secretary.CommentsClose CommentsPermalink
`(d) Habitat Protection Easement Credit-CommentsClose CommentsPermalink
`(1) IN GENERAL- For purposes of subsection (a)(1), the habitat protection easement credit for any taxable year is an amount equal to--CommentsClose CommentsPermalink
`(A) in the case of a taxpayer described in subsection (c)(1)(A) who has entered into a qualified perpetual habitat protection agreement during such taxable year, 100 percent of the excess (if any) of--CommentsClose CommentsPermalink
`(i) the fair market value of the real property with respect to which the qualified perpetual habitat protection agreement is made, determined on the day before such agreement is entered into, overCommentsClose CommentsPermalink
`(ii) the fair market value of such property, determined on the day after such agreement is entered into,CommentsClose CommentsPermalink
`(B) in the case of a taxpayer described in subsection (c)(1)(A) who has entered into a qualified 30-year habitat protection agreement during such taxable year, 75 percent of such excess, andCommentsClose CommentsPermalink
`(C) in the case of any other taxpayer, zero.CommentsClose CommentsPermalink
`(2) REDUCTION FOR AMOUNT RECEIVED FOR EASEMENT- The amount determined under paragraph (1) shall be reduced by any amount received by the taxpayer in connection with the easement.CommentsClose CommentsPermalink
`(3) LIMITATION BASED ON AMOUNT OF TAX- The credit allowed under subsection (a)(1) for any taxable year shall not exceed the sum of--CommentsClose CommentsPermalink
`(A) the taxpayer's regular tax liability for the taxable year reduced by the sum of the credits allowable under subpart A and sections 27, 30, 30B, 30C, and 30D, andCommentsClose CommentsPermalink
`(B) the tax imposed by section 55(a) for the taxable year.CommentsClose CommentsPermalink
`(4) CARRYFORWARD OF UNUSED CREDIT- If the credit allowable under subsection (a)(1) for any taxable year exceeds the limitation imposed by paragraph (3) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a)(1) for such succeeding taxable year.CommentsClose CommentsPermalink
`(5) QUALIFIED APPRAISALS REQUIRED- No amount shall be taken into account under this subsection unless the eligible taxpayer includes with the taxpayer's return for the taxable year a qualified appraisal (within the meaning of section 170(f)(11)(E)) of the real property.CommentsClose CommentsPermalink
`(e) Habitat Restoration Credit-CommentsClose CommentsPermalink
`(1) IN GENERAL- For purposes of subsection (a)(2), the habitat restoration credit for any taxable year shall be an amount equal to--CommentsClose CommentsPermalink
`(A) in the case of a qualified perpetual habitat protection agreement, 100 percent of the costs paid or incurred by an eligible taxpayer during such taxable year pursuant to the habitat management plan under such agreement,CommentsClose CommentsPermalink
`(B) in the case of a qualified 30-year habitat protection agreement, 75 percent of the costs paid or incurred by an eligible taxpayer during such taxable year pursuant to the habitat management plan under such agreement, andCommentsClose CommentsPermalink
`(C) in the case of a qualified habitat protection agreement, 50 percent of the costs paid or incurred by an eligible taxpayer during such taxable year pursuant to the habitat management plan under such agreement.CommentsClose CommentsPermalink
`(2) LIMITATION BASED ON AMOUNT OF TAX- The credit allowed under subsection (a)(2) for any taxable year shall not exceed the excess (if any) of--CommentsClose CommentsPermalink
`(A) the regular tax liability for the taxable year reduced by the sum of the credits allowable under subpart A, sections 27, 30, 30B, 30C, 30D, and subsection (a)(1), overCommentsClose CommentsPermalink
`(B) the tentative minimum tax for the taxable year.CommentsClose CommentsPermalink
`(3) CARRYFORWARD OF UNUSED CREDIT- If the credit allowable under subsection (a)(2) for any taxable year exceeds the limitation imposed by paragraph (2) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a)(2) for such succeeding taxable year.CommentsClose CommentsPermalink
`(4) SPECIAL RULES-CommentsClose CommentsPermalink
`(A) CERTAIN COSTS NOT INCLUDED- No amount shall be taken into account with respect to any cost which is paid or incurred by a taxpayer to comply with any requirement of a Federal, State, or local government (other than costs required under an agreement described in subsection (c)).CommentsClose CommentsPermalink
`(B) SUBSIDIZED FINANCING- For purposes of paragraph (1), the amount of costs paid or incurred by an eligible taxpayer pursuant to any habitat management plan described in subsection (c)(5)(B) shall be reduced by the amount of any financing provided under any Federal or State program a principal purpose of which is to subsidize financing for the conservation of the habitat of a qualified species.CommentsClose CommentsPermalink
`(f) Endangered Species Recovery Credit Limitation-CommentsClose CommentsPermalink
`(1) IN GENERAL- There is an endangered species recovery credit limitation for each calendar year. Such limitation is--CommentsClose CommentsPermalink
`(A) for 2008, 2009, 2010, 2011, and 2012--CommentsClose CommentsPermalink
`(i) with respect to allocations described in paragraph (2)(A)--CommentsClose CommentsPermalink
`(I) $5,000,000 with respect to qualified perpetual habitat protection agreements,CommentsClose CommentsPermalink
`(II) $2,000,000 with respect to qualified 30-year habitat protection agreements, andCommentsClose CommentsPermalink
`(III) $1,000,000 with respect to qualified habitat protection agreements, andCommentsClose CommentsPermalink
`(ii) with respect to allocations described in paragraph (2)(B)--CommentsClose CommentsPermalink
`(I) $290,000,000 with respect to qualified perpetual habitat protection agreements,CommentsClose CommentsPermalink
`(II) $55,000,000 with respect to qualified 30-year habitat protection agreements, andCommentsClose CommentsPermalink
`(III) $35,000,000 with respect to qualified habitat protection agreements, andCommentsClose CommentsPermalink
`(B) except as provided in paragraph (3), zero thereafter.CommentsClose CommentsPermalink
`(2) ALLOCATION OF LIMITATION-CommentsClose CommentsPermalink
`(A) ALLOCATIONS IN COORDINATION WITH THE SECRETARY OF AGRICULTURE- The limitations described in paragraph (1)(A)(i) shall be allocated to eligible taxpayers by the Secretary in consultation with the Secretary of Agriculture.CommentsClose CommentsPermalink
`(B) OTHER ALLOCATIONS-CommentsClose CommentsPermalink
`(i) IN GENERAL- The limitations described in paragraph (1)(A)(ii) shall be allocated to eligible taxpayers in consultation with the Secretary of the Interior and the Secretary of Commerce.CommentsClose CommentsPermalink
`(ii) ESTABLISHMENT OF ALLOCATION PROGRAM- Not later than 180 days after the date of the enactment of this Act, the Secretary, in consultation with the Secretary of the Interior and the Secretary of Commerce, shall, by regulation, establish a program to process applications from eligible taxpayers and to determine how to best allocate the credit limitations under clause (i) taking into account the considerations described in clause (iii).CommentsClose CommentsPermalink
`(iii) CONSIDERATIONS- In accepting applications to make allocations to eligible taxpayers under this section, priority shall be given to taxpayers with agreements--CommentsClose CommentsPermalink
`(I) relating to habitats that will significantly increase the likelihood of recovering and delisting a species as an endangered species or a threatened species (as defined under section 2 of the Endangered Species Act of 1973),CommentsClose CommentsPermalink
`(II) that are cost-effective and maximize the benefits to a qualified species per dollar expended,CommentsClose CommentsPermalink
`(III) relating to habitats of species which have a federally approved recovery plan pursuant to section 4 of the Endangered Species Act of 1973,CommentsClose CommentsPermalink
`(IV) relating to habitats with the potential to contribute significantly to the improvement of the status of a qualified species,CommentsClose CommentsPermalink
`(V) relating to habitats with the potential to contribute significantly to the eradication or control of invasive species that are imperiling a qualified species,CommentsClose CommentsPermalink
`(VI) with habitat management plans that will manage multiple qualified species,CommentsClose CommentsPermalink
`(VII) with habitat management plans that will create adjacent or proximate habitat for the recovery of a qualified species,CommentsClose CommentsPermalink
`(VIII) relating to habitats for qualified species with an urgent need for protection,CommentsClose CommentsPermalink
`(IX) with habitat management plans that assist in preventing the listing of a species as endangered or threatened under the Endangered Species Act of 1973 or a similar State law,CommentsClose CommentsPermalink
`(X) with habitat management plans that may resolve conflicts between the protection of qualified species and otherwise lawful human activities, andCommentsClose CommentsPermalink
`(XI) with habitat management plans that may resolve conflicts between the protection of a qualified species and military training or other military operations.CommentsClose CommentsPermalink
`(3) CARRYOVER OF UNUSED LIMITATION- If for any calendar year any of the limitations under paragraph (1) (after the application of this paragraph) exceeds the amount allocated to eligible taxpayers for such calendar year, such limitation amount for the following calendar year shall be increased by the amount of such excess.CommentsClose CommentsPermalink
`(g) Other Definitions and Special Rules-CommentsClose CommentsPermalink
`(1) APPROPRIATE SECRETARY- The term `appropriate Secretary' has the meaning given to the term `Secretary' under section 3(15) of the Endangered Species Act of 1973.CommentsClose CommentsPermalink
`(2) HABITAT MANAGEMENT PLAN- The term `habitat management plan' means, with respect to any habitat, a plan which--CommentsClose CommentsPermalink
`(A) identifies one or more qualified species to which the plan applies,CommentsClose CommentsPermalink
`(B) is designed to--CommentsClose CommentsPermalink
`(i) restore or enhance the habitat of the qualified species, orCommentsClose CommentsPermalink
`(ii) reduce threats to the qualified species through the management of the habitat,CommentsClose CommentsPermalink
`(C) describes the current condition of the habitat to be restored or enhanced,CommentsClose CommentsPermalink
`(D) describes the threats to the qualified species that are intended to be reduced through the plan,CommentsClose CommentsPermalink
`(E) describes the management practices to be undertaken by the taxpayer,CommentsClose CommentsPermalink
`(F) provides a schedule of deadlines for undertaking such management practices and the expected responses of the habitat and the species,CommentsClose CommentsPermalink
`(G) requires monitoring of the management practices and the status of the qualified species and its habitat, andCommentsClose CommentsPermalink
`(H) describes the technical assistance to be provided to the taxpayer and identifies the entity that will provide such assistance.CommentsClose CommentsPermalink
`(3) QUALIFIED SPECIES- The term `qualified species' means--CommentsClose CommentsPermalink
`(A) any species listed as an endangered species or threatened species under the Endangered Species Act of 1973, orCommentsClose CommentsPermalink
`(B) any species for which a finding has been made under section 4(b)(3) of the Endangered Species Act of 1973 that listing under such Act may be warranted.CommentsClose CommentsPermalink
`(4) TAKING- The term `taking' has the meaning given to such term under the Endangered Species Act of 1973.CommentsClose CommentsPermalink
`(5) REDUCTION IN BASIS- For purposes of this subtitle--CommentsClose CommentsPermalink
`(A) HABITAT PROTECTION EASEMENT CREDIT- The basis of any property for which a credit is allowed under subsection (a)(1) shall be reduced by the amount of basis which is allocated, under regulations prescribed by the Secretary, to the easement granted as part of a qualified perpetual habitat protection agreement or a qualified 30-year habitat protection agreement.CommentsClose CommentsPermalink
`(B) HABITAT RESTORATION CREDIT- If a credit is allowed under subsection (a)(2) for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subparagraph) result from such expenditure shall be reduced by the amount of the credit so allowed.CommentsClose CommentsPermalink
`(6) DENIAL OF DOUBLE BENEFIT- No deduction or other credit shall be allowed under this chapter for any amount with respect to which a credit is allowed under subsection (a).CommentsClose CommentsPermalink
`(7) CERTIFICATION- No credit shall be allowed under subsection (a) unless the appropriate Secretary certifies that any agreement described in subsection (c) will contribute to the recovery of a qualified species.CommentsClose CommentsPermalink
`(8) REQUEST FOR AUTHORIZATION OF INCIDENTAL TAKINGS- The Secretary shall request the appropriate Secretary to consider whether to authorize under the Endangered Species Act of 1973 takings by an eligible taxpayer of a qualified species to which an agreement described in subsection (c) relates if the takings are incidental to--CommentsClose CommentsPermalink
`(A) the restoration, enhancement, or management of the habitat pursuant to the habitat management plan under the agreement, orCommentsClose CommentsPermalink
`(B) the use of the property to which the agreement pertains at any time after the expiration of the easement or the specified period described in subsection (c)(4)(A), but only if such use will leave the qualified species at least as well off on the property as it was before the agreement was made.CommentsClose CommentsPermalink
`(9) RECAPTURE- The Secretary shall, by regulations, provide for recapturing the benefit under any credit allowable under subsection (a) if the Secretary determines that--CommentsClose CommentsPermalink
`(A) the taxpayer has failed to carry out the duties of the taxpayer under the terms of a qualified perpetual habitat protection agreement, a qualified 30-year habitat protection agreement, or a qualified habitat protection agreement, andCommentsClose CommentsPermalink
`(B) there are no other available means to remediate such failure.'.CommentsClose CommentsPermalink
(b) GAO Study-CommentsClose CommentsPermalink
(1) IN GENERAL- The Comptroller General of the United States shall undertake a study on the effectiveness of the credit allowed under section 30E of the Internal Revenue Code of 1986 (as added by this Act).CommentsClose CommentsPermalink
(2) ISSUES TO BE STUDIED- The study under paragraph (1) shall--CommentsClose CommentsPermalink
(A) evaluate--CommentsClose CommentsPermalink
(i) the contributions that habitat management plans established under such credit have made in restoring or enhancing species habitat and reducing threats to species, andCommentsClose CommentsPermalink
(ii) the implementation of the credit allocation program established in section 30E(f)(2) of such Code (as so added), andCommentsClose CommentsPermalink
(B) include recommendations for improving the effectiveness of such credit.CommentsClose CommentsPermalink
(3) REPORTS-CommentsClose CommentsPermalink
(A) INTERIM REPORT- Not later than 3 years after the date of the enactment of this Act, the Comptroller General of the United States shall submit to Congress an interim report on the study conducted under paragraph (1).CommentsClose CommentsPermalink
(B) FINAL REPORT- Not later than 5 years after the date of the enactment of this Act, the Comptroller General of the United States shall submit to Congress a final report on the study conducted under paragraph (1).CommentsClose CommentsPermalink
(c) Conforming Amendments-CommentsClose CommentsPermalink
(1) Section 1016(a) is amended by striking `and' at the end of paragraph (36), by striking the period at the end of paragraph (37) and inserting `, and', and by inserting after paragraph (37) the following new paragraph:CommentsClose CommentsPermalink
`(38) to the extent provided in section 30E(g)(5).'.CommentsClose CommentsPermalink
(2) The table of sections for subpart B of part IV of subchapter A of chapter 1, as amended by this Act, is amended by inserting after the item relating to section 30D the following new item:CommentsClose CommentsPermalink
`Sec. 30E. Endangered species recovery and restoration credit.'.CommentsClose CommentsPermalink
(d) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2007.CommentsClose CommentsPermalink
SEC. 205. DEDUCTION FOR ENDANGERED SPECIES RECOVERY EXPENDITURES.
(a) Deduction for Endangered Species Recovery Expenditures-CommentsClose CommentsPermalink
(1) IN GENERAL- Paragraph (1) of section 175(c) (relating to definitions) is amended by inserting after the first sentence the following new sentence: `Such term shall include expenditures paid or incurred for the purpose of achieving site-specific management actions recommended in recovery plans approved pursuant to the Endangered Species Act of 1973.'.CommentsClose CommentsPermalink
(2) CONFORMING AMENDMENTS-CommentsClose CommentsPermalink
(A) Section 175 is amended by inserting `, or for endangered species recovery' after `prevention of erosion of land used in farming' each place it appears in subsections (a) and (c).CommentsClose CommentsPermalink
(B) The heading of section 175 is amended by inserting `; endangered species recovery expenditures' before the period.CommentsClose CommentsPermalink
(C) The item relating to section 175 in the table of sections for part VI of subchapter B of chapter 1 is amended by inserting `; endangered species recovery expenditures' before the period.CommentsClose CommentsPermalink
(b) Limitations- Paragraph (3) of section 175(c) (relating to additional limitations) is amended--CommentsClose CommentsPermalink
(1) in the heading, by inserting `OR ENDANGERED SPECIES RECOVERY PLAN' after `CONSERVATION PLAN', andCommentsClose CommentsPermalink
(2) in subparagraph (A)(i), by inserting `or the recovery plan approved pursuant to the Endangered Species Act of 1973' after `Department of Agriculture'.CommentsClose CommentsPermalink
(c) Effective Date- The amendments made by this section shall apply to expenditures paid or incurred after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 206. EXCLUSION FOR CERTAIN PAYMENTS AND PROGRAMS RELATING TO FISH AND WILDLIFE.
(a) In General- Subsection (a) of section 126 (relating to certain cost-sharing payments) is amended by redesignating paragraph (10) as paragraph (13) and by inserting after paragraph (9) the following new paragraphs:CommentsClose CommentsPermalink
`(10) The Partners for Fish and Wildlife Program authorized by the Partners for Fish and Wildlife Act.CommentsClose CommentsPermalink
`(11) The Landowner Incentive Program, the State Wildlife Grants Program, and the Private Stewardship Grants Program authorized by the Fish and Wildlife Act of 1956.CommentsClose CommentsPermalink
`(12) The Forest Health Protection Program and the program related to integrated pest management authorized by the Cooperative Forestry Assistance Act of 1978.'.CommentsClose CommentsPermalink
(b) Effective Date- The amendments made by this section shall apply to payments received after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 207. CREDIT FOR EASEMENTS GRANTED UNDER CERTAIN DEPARTMENT OF AGRICULTURE CONSERVATION PROGRAMS.
(a) In General- Subpart B of part IV of subchapter A of chapter 1, as amended by this Act, is amended by adding at the end the following new section:CommentsClose CommentsPermalink
`SEC. 30F. AGRICULTURE CONSERVATION EASEMENT CREDIT.
`(a) In General- There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of--CommentsClose CommentsPermalink
`(1) the wetlands reserve conservation credit, plusCommentsClose CommentsPermalink
`(2) the working grassland protection credit.CommentsClose CommentsPermalink
`(b) Limitations-CommentsClose CommentsPermalink
`(1) LIMITATION BASED ON AMOUNT OF TAX- The credit allowed under this section for any taxable year shall not exceed the excess of--CommentsClose CommentsPermalink
`(A) the regular tax liability for the taxable year reduced by the sum of the credits allowable under subpart A and sections 27, 30, 30B, 30C, 30D, 30E(a)(1), and 30E(a)(2), overCommentsClose CommentsPermalink
`(B) the tentative minimum tax for the taxable year.CommentsClose CommentsPermalink
`(2) LIMITATION BASED ON ALLOCATED PORTION OF NATIONAL LIMITATION- The credit allowed under subsection (a) for any taxpayer for any taxable year shall not exceed the excess of--CommentsClose CommentsPermalink
`(A) the amount of the national credit limitation allocated to such taxpayer under subsection (e) for such taxable year and all prior taxable years, overCommentsClose CommentsPermalink
`(B) the credit allowed under subsection (a) for all prior taxable years.CommentsClose CommentsPermalink
`(c) Wetlands Reserve Conservation Credit-CommentsClose CommentsPermalink
`(1) IN GENERAL- For purposes of subsection (a)(1), in the case of a wetlands reserve eligible taxpayer, the wetlands reserve conservation credit for any taxable year is an amount equal to the applicable percentage of the wetlands reserve easement value.CommentsClose CommentsPermalink
`(2) WETLANDS RESERVE ELIGIBLE TAXPAYER- For purposes of this section, the term `wetlands reserve eligible taxpayer' means any taxpayer who--CommentsClose CommentsPermalink
`(A) has granted an easement to the Secretary of Agriculture under the wetlands reserve program, andCommentsClose CommentsPermalink
`(B) who has entered into an agreement with the Secretary of Agriculture to receive an allocation under subsection (e)(2) in lieu of a payment under section 1237A(f) of the Food Security Act of 1985.CommentsClose CommentsPermalink
`(3) APPLICABLE PERCENTAGE- For purposes of paragraph (1), the term `applicable percentage' means the percentage equal to--CommentsClose CommentsPermalink
`(A) 100 percent, minusCommentsClose CommentsPermalink
`(B) the highest percentage of tax which would apply under section 1 or 11 with respect to the taxpayer if the taxable income of the taxpayer were increased by an amount equal to the wetlands reserve easement value.CommentsClose CommentsPermalink
`(4) WETLANDS RESERVE EASEMENT VALUE- For purposes of this section, the term `wetlands reserve easement value' means the lesser of--CommentsClose CommentsPermalink
`(A) the product of--CommentsClose CommentsPermalink
`(i) the wetlands reserve geographic area rate for the area in which the real property to which the easement pertains is located, andCommentsClose CommentsPermalink
`(ii) the number of acres to which the easement applies, orCommentsClose CommentsPermalink
`(B) the value of any payment to which the taxpayer would be entitled with respect to such easement under section 1237A(f) of the Food Security Act of 1985 if the taxpayer had not entered into an agreement described in paragraph (2)(B).CommentsClose CommentsPermalink
`(5) WETLANDS RESERVE GEOGRAPHIC AREA RATE- For purposes of paragraph (4)(A)(i), the wetlands reserve geographic area rate shall be the rate per acre, determined by the Secretary in consultation with the Secretary of Agriculture, appropriate for easements granted under the wetlands reserve program in different geographic areas.CommentsClose CommentsPermalink
`(d) Working Grassland Protection Credit-CommentsClose CommentsPermalink
`(1) IN GENERAL- For purposes of subsection (a)(2), in the case of any working grassland eligible taxpayer, the working grassland protection credit for any taxable year is an amount equal to the applicable percentage of the working grassland easement value.CommentsClose CommentsPermalink
`(2) WORKING GRASSLAND ELIGIBLE TAXPAYER- For purposes of this section, the term `working grassland eligible taxpayer' means any taxpayer who--CommentsClose CommentsPermalink
`(A) has granted an easement under the working grassland protection program to an eligible easement holder, andCommentsClose CommentsPermalink
`(B) who has entered into an agreement with the Secretary of Agriculture to receive an allocation under subsection (e)(2) in lieu of a payment under section 1238P(b) of the Food Security Act of 1985.CommentsClose CommentsPermalink
`(3) APPLICABLE PERCENTAGE- For purposes of paragraph (1), the term `applicable percentage' means the percentage equal to--CommentsClose CommentsPermalink
`(A) 100 percent, minusCommentsClose CommentsPermalink
`(B) the highest percentage of tax which would apply under section 1 or 11 with respect to the taxpayer if the taxable income of the taxpayer were increased by an amount equal to the working grassland easement value.CommentsClose CommentsPermalink
`(4) WORKING GRASSLAND EASEMENT VALUE- For purposes of this section, the term `working grassland easement value' means--CommentsClose CommentsPermalink
`(A) in the case of a permanent conservation easement (within the meaning of section 1238N of the Food Security Act of 1985), the lesser of--CommentsClose CommentsPermalink
`(i) the product of--CommentsClose CommentsPermalink
`(I) the working grassland protection geographic area rate for the area in which the real property to which the easement pertains is located, andCommentsClose CommentsPermalink
`(II) the number of acres to which the easement applies, orCommentsClose CommentsPermalink
`(ii) the value of any payment to which the taxpayer would be entitled in return for such easement under section 1238P(b)(1)(A)(i) of the Food Security Act of 1985 if the taxpayer had not entered into an agreement described in paragraph (2)(B), andCommentsClose CommentsPermalink
`(B) in the case of a 30-year conservation easement (within the meaning of section 1238N of such Act), the lesser of--CommentsClose CommentsPermalink
`(i) 30 percent of the lesser of the amount determined under clause (i) or (ii) of subparagraph (A), orCommentsClose CommentsPermalink
`(ii) the value of any payment to which the taxpayer would be entitled in return for such easement under section 1238P(b)(1)(A)(ii) of such Act if the taxpayer had not entered into an agreement described in paragraph (2)(B).CommentsClose CommentsPermalink
`(5) WORKING GRASSLAND PROTECTION GEOGRAPHIC AREA RATE- For purposes of paragraph (4)(A)(i)(I), the working grassland protection geographic area rate shall be the rate, determined by the Secretary in consultation with the Secretary of Agriculture, appropriate for easements granted under the working grassland protection program in different geographic areas.CommentsClose CommentsPermalink
`(e) National Conservation Credit Limitation-CommentsClose CommentsPermalink
`(1) IN GENERAL- The aggregate credits allowed under subsection (a) for all taxpayers shall not exceed $1,000,000,000.CommentsClose CommentsPermalink
`(2) ALLOCATION- The Secretary, in consultation with the Secretary of Agriculture, shall allocate the credit limitation under paragraph (1) to taxpayers who grant easements under the wetlands reserve program and the working grassland protection program.CommentsClose CommentsPermalink
`(3) LIMITATION ON ALLOCATION- No amount of the credit limitation may be allocated to any taxpayer for any taxable year which ends after September 30, 2012.CommentsClose CommentsPermalink
`(f) Carryforward- If the amount of the credit allowable under subsection (a) for any taxpayer for any taxable year (determined without regard to subsection (b)(1)) exceeds the limitation under subsection (b)(1), such excess may be carried forward to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.CommentsClose CommentsPermalink
`(g) Other Definitions and Special Rules- For purposes of this section--CommentsClose CommentsPermalink
`(1) WETLANDS RESERVE PROGRAM- The term `wetlands reserve program' means the wetlands reserve program established under subchapter C of chapter 1 of subtitle D of title XII of the Food Security Act of 1985.CommentsClose CommentsPermalink
`(2) WORKING GRASSLAND PROTECTION PROGRAM- The term `working grassland protection program' means the grassland reserve program established under subchapter C of chapter 2 of subtitle D of title XII of the Food Security Act of 1985.CommentsClose CommentsPermalink
`(3) ELIGIBLE EASEMENT HOLDER- The term `eligible easement holder' means the Secretary of Agriculture or a State.CommentsClose CommentsPermalink
`(4) DENIAL OF DOUBLE BENEFIT- No deduction or other credit shall be allowed under this chapter for any amount with respect to which a credit is allowed under subsection (a).CommentsClose CommentsPermalink
`(5) REDUCTION IN BASIS- For purposes of this subtitle, the basis of any property for which a credit is allowed under subsection (a) shall be reduced by the amount of basis which is allocated, under regulations prescribed by the Secretary, to the easement granted under the wetlands reserve program or the working grassland protection program.CommentsClose CommentsPermalink
`(6) RECAPTURE- The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) if the Secretary, in consultation with the Secretary of Agriculture, determines that--CommentsClose CommentsPermalink
`(A) the eligible taxpayer has failed to carry out the duties of the taxpayer under the terms of the easement, andCommentsClose CommentsPermalink
`(B) there are no other available means to remediate such failure.'.CommentsClose CommentsPermalink
(b) Conforming Amendments-CommentsClose CommentsPermalink
(1) Section 1016(a), as amended by this Act, is amended by striking `and' at the end of paragraph (37), by striking the period at the end of paragraph (38) and inserting `, and', and by inserting after paragraph (38) the following new paragraph:CommentsClose CommentsPermalink
`(39) to the extent provided in section 30F(g)(5).'.CommentsClose CommentsPermalink
(2) The table of sections for subpart B of part IV of subchapter A of chapter 1, as amended by this Act, is amended by inserting after the item relating to section 30E the following new item:CommentsClose CommentsPermalink
`Sec. 30F. Agriculture conservation easement credit.'.CommentsClose CommentsPermalink
(c) Effective Date- The amendments made by this section shall apply to easements granted after September 30, 2007, in taxable years ending after such date.CommentsClose CommentsPermalink
Subtitle B--Timber Provisions
SEC. 211. FOREST CONSERVATION BONDS.
(a) Tax-Exempt Bond Financing-CommentsClose CommentsPermalink
(1) IN GENERAL- For purposes of the Internal Revenue Code of 1986, any qualified forest conservation bond shall be treated as an exempt facility bond under section 142 of such Code.CommentsClose CommentsPermalink
(2) QUALIFIED FOREST CONSERVATION BOND- For purposes of this section, the term `qualified forest conservation bond' means any bond issued as part of an issue if--CommentsClose CommentsPermalink
(A) 95 percent or more of the net proceeds (as defined in section 150(a)(3) of such Code) of such issue are to be used for qualified project costs, andCommentsClose CommentsPermalink
(B) such bond is issued before the date which is 36 months after the date of the enactment of this Act.CommentsClose CommentsPermalink
(3) LIMITATION ON AGGREGATE AMOUNT ISSUED-CommentsClose CommentsPermalink
(A) IN GENERAL- The maximum aggregate face amount of bonds which may be issued under this subsection shall not exceed $1,500,000,000 for all projects (excluding refunding bonds).CommentsClose CommentsPermalink
(B) ENFORCEMENT OF LIMITATION- An issue shall not be treated as an issue described in paragraph (2) if the aggregate face amount of bonds issued pursuant to such issue for any qualified projects costs (when added to the aggregate face amount of bonds previously so issued for such costs) exceeds the amount allocated under subparagraph (C).CommentsClose CommentsPermalink
(C) INITIAL ALLOCATION OF LIMITATION- The limitation described in subparagraph (A) shall be allocated by the Secretary of the Treasury among qualified organizations as follows:CommentsClose CommentsPermalink
(i) 35 percent for qualified project costs with respect to the cost of acquisition by any qualified organization in the Pacific Northwest region.CommentsClose CommentsPermalink
(ii) 30 percent for qualified project costs with respect to the cost of acquisition by any qualified organization in the Western region.CommentsClose CommentsPermalink
(iii) 17.5 percent for qualified project costs with respect to the cost of acquisition by any qualified organization in the Southeast region.CommentsClose CommentsPermalink
(iv) 17.5 percent for qualified project costs with respect to the cost of acquisition by any qualified organization in the Northeast region.CommentsClose CommentsPermalink
(D) SECONDARY ALLOCATION PROCEDURE- If for the period ending on the last day of the 24th month after the date of the enactment of this Act, the limitation amount for any region under subparagraph (C) exceeds the amount of bonds allocated by the Secretary of the Treasury during such period, the Secretary of the Treasury may allocate such excess among qualified organizations in any other region in such manner as the Secretary of the Treasury determines appropriate.CommentsClose CommentsPermalink
(E) REGIONS- For purposes of this paragraph--CommentsClose CommentsPermalink
(i) PACIFIC NORTHWEST REGION- The term `Pacific Northwest region' means Region 6 as defined by the United States Forest Service of the Department of Agriculture under section 200.2 of title 36, Code of Federal Regulations.CommentsClose CommentsPermalink
(ii) WESTERN REGION- The term `Western region' means Regions 1, 2, 3, 4, 5, and 10 (as so defined).CommentsClose CommentsPermalink
(iii) SOUTHEAST REGION- The term `Southeast region' means Region 8 (as so defined).CommentsClose CommentsPermalink
(iv) NORTHEAST REGION- The term `Northeast region' means Region 9 (as so defined).CommentsClose CommentsPermalink
(4) QUALIFIED PROJECT COSTS- For purposes of this subsection, the term `qualified project costs' means the costs of acquisition by a qualified organization from an unrelated person of forests and forest land which, at the time of acquisition or immediately thereafter, are subject to a conservation restriction described in subsection (c)(2).CommentsClose CommentsPermalink
(5) SPECIAL RULES- In applying the Internal Revenue Code of 1986 to any qualified forest conservation bond, the following modifications shall apply:CommentsClose CommentsPermalink
(A) Section 146 of such Code (relating to volume cap) shall not apply.CommentsClose CommentsPermalink
(B) For purposes of section 147(b) of such Code (relating to maturity may not exceed 120 percent of economic life), the land and standing timber acquired with proceeds of qualified forest conservation bonds shall have an economic life of 35 years.CommentsClose CommentsPermalink
(C) Subsections (c) and (d) of section 147 of such Code (relating to limitations on acquisition of land and existing property) shall not apply.CommentsClose CommentsPermalink
(6) TREATMENT OF CURRENT REFUNDING BONDS- Paragraphs (2)(B) and (3) shall not apply to any bond (or series of bonds) issued to refund a qualified forest conservation bond issued before the date which is 36 months after the date of the enactment of this Act, if--CommentsClose CommentsPermalink
(A) the average maturity date of the issue of which the refunding bond is a part is not later than the average maturity date of the bonds to be refunded by such issue,CommentsClose CommentsPermalink
(B) the amount of the refunding bond does not exceed the outstanding amount of the refunded bond, andCommentsClose CommentsPermalink
(C) the net proceeds of the refunding bond are used to redeem the refunded bond not later than 90 days after the date of the issuance of the refunding bond.CommentsClose CommentsPermalink
For purposes of subparagraph (A), average maturity shall be determined in accordance with section 147(b)(2)(A) of such Code.CommentsClose CommentsPermalink
(7) EFFECTIVE DATE- This subsection shall apply to obligations issued on or after the date which is 180 days after the date of the enactment of this Act.CommentsClose CommentsPermalink
(b) Items From Qualified Harvesting Activities Not Subject to Tax or Taken Into Account-CommentsClose CommentsPermalink
(1) IN GENERAL- Income, gains, deductions, losses, or credits from a qualified harvesting activity conducted by a qualified organization shall not be subject to tax or taken into account under subtitle A of the Internal Revenue Code of 1986.CommentsClose CommentsPermalink
(2) LIMITATION- The amount of income excluded from gross income under paragraph (1) for any taxable year shall not exceed the amount used by the qualified organization to make debt service payments during such taxable year for qualified forest conservation bonds.CommentsClose CommentsPermalink
(3) QUALIFIED HARVESTING ACTIVITY- For purposes of paragraph (1)--CommentsClose CommentsPermalink
(A) IN GENERAL- The term `qualified harvesting activity' means the sale, lease, or harvesting, of standing timber--CommentsClose CommentsPermalink
(i) on land owned by a qualified organization which was acquired with proceeds of qualified forest conservation bonds, andCommentsClose CommentsPermalink
(ii) pursuant to a qualified conservation plan adopted by the qualified organization.CommentsClose CommentsPermalink
(B) EXCEPTIONS-CommentsClose CommentsPermalink
(i) CESSATION AS QUALIFIED ORGANIZATION- The term `qualified harvesting activity' shall not include any sale, lease, or harvesting for any period during which the organization ceases to qualify as a qualified organization.CommentsClose CommentsPermalink
(ii) EXCEEDING LIMITS ON HARVESTING- The term `qualified harvesting activity' shall not include any sale, lease, or harvesting of standing timber on land acquired with proceeds of qualified forest conservation bonds to the extent that--CommentsClose CommentsPermalink
(I) the average annual area of timber harvested from such land exceeds 2.5 percent of the total area of such land, orCommentsClose CommentsPermalink
(II) the quantity of timber removed from such land exceeds the quantity which can be removed from such land annually in perpetuity on a sustained-yield basis with respect to such land.CommentsClose CommentsPermalink
The limitations under subclauses (I) and (II) shall not apply to post-fire restoration and rehabilitation or sanitation harvesting of timber stands which are substantially damaged by fire, windthrow, or other catastrophes, or which are in imminent danger from insect or disease attack.CommentsClose CommentsPermalink
(4) TERMINATION- This subsection shall not apply to any qualified harvesting activity of a qualified organization occurring after the date on which--CommentsClose CommentsPermalink
(A) there is no outstanding qualified forest conservation bond with respect to such qualified organization, orCommentsClose CommentsPermalink
(B) any such bond ceases to be a tax-exempt bond.CommentsClose CommentsPermalink
(5) PARTIAL RECAPTURE OF BENEFITS IF HARVESTING LIMIT EXCEEDED- If, as of the date that this subsection ceases to apply under paragraph (4)(B), the average annual area of timber harvested from the land exceeds the requirement of subclause (I) or (II) of paragraph (3)(B)(ii), the tax imposed by chapter 1 of the Internal Revenue Code of 1986 shall be increased, under rules prescribed by the Secretary of the Treasury, by the sum of the tax benefits attributable to such excess and interest at the underpayment rate under section 6621 of such Code for the period of the underpayment.CommentsClose CommentsPermalink
(c) Definitions- For purposes of this section--CommentsClose CommentsPermalink
(1) QUALIFIED CONSERVATION PLAN- The term `qualified conservation plan' means a multiple land use program or plan which--CommentsClose CommentsPermalink
(A) is designed and administered primarily for the purposes of protecting and enhancing wildlife and fish, timber, scenic attributes, recreation, and soil and water quality of the forest and forest land,CommentsClose CommentsPermalink
(B) mandates that conservation of forest and forest land is the single-most significant use of the forest and forest land, andCommentsClose CommentsPermalink
(C) requires that timber harvesting be consistent with--CommentsClose CommentsPermalink
(i) restoring and maintaining reference conditions for the region's ecotype,CommentsClose CommentsPermalink
(ii) restoring and maintaining a representative sample of young, mid, and late successional forest age classes,CommentsClose CommentsPermalink
(iii) maintaining or restoring the resources' ecological health for purposes of preventing damage from fire, insect, or disease,CommentsClose CommentsPermalink
(iv) maintaining or enhancing wildlife or fish habitat, orCommentsClose CommentsPermalink
(v) enhancing research opportunities in sustainable renewable resource uses.CommentsClose CommentsPermalink
(2) CONSERVATION RESTRICTION- The conservation restriction described in this paragraph is a restriction which--CommentsClose CommentsPermalink
(A) is granted in perpetuity to an unrelated person which is described in section 170(h)(3) of such Code and which, in the case of a nongovernmental unit, is organized and operated for conservation purposes,CommentsClose CommentsPermalink
(B) meets the requirements of clause (ii) or (iii)(II) of section 170(h)(4)(A) of such Code,CommentsClose CommentsPermalink
(C) obligates the qualified organization to pay the costs incurred by the holder of the conservation restriction in monitoring compliance with such restriction, andCommentsClose CommentsPermalink
(D) requires an increasing level of conservation benefits to be provided whenever circumstances allow it.CommentsClose CommentsPermalink
(3) QUALIFIED ORGANIZATION- The term `qualified organization' means a nonprofit organization--CommentsClose CommentsPermalink
(A) substantially all the activities of which are charitable, scientific, or educational, including acquiring, protecting, restoring, managing, and developing forest lands and other renewable resources for the long-term charitable, educational, scientific, and public benefit,CommentsClose CommentsPermalink
(B) which periodically conducts educational programs designed to inform the public of environmentally sensitive forestry management and conservation techniques,CommentsClose CommentsPermalink
(C) which has at all times a board of directors--CommentsClose CommentsPermalink
(i) at least 20 percent of the members of which are representatives of the conservation community,CommentsClose CommentsPermalink
(ii) at least 20 percent of the members of which are public officials, andCommentsClose CommentsPermalink
(iii) not more than one-third of the members of which are individuals who are or were at any time within 5 years before the beginning of a term of membership on the board, an employee of, independent contractor with respect to, officer of, director of, or held a material financial interest in, a commercial forest products enterprise with which the qualified organization has a contractual or other financial arrangement,CommentsClose CommentsPermalink
(D) the bylaws of which require at least two-thirds of the members of the board of directors to vote affirmatively to approve the qualified conservation plan and any change thereto, andCommentsClose CommentsPermalink
(E) upon dissolution, is required to dedicate its assets to--CommentsClose CommentsPermalink
(i) an organization described in section 501(c)(3) of such Code which is organized and operated for conservation purposes, orCommentsClose CommentsPermalink
(ii) a governmental unit described in section 170(c)(1) of such Code.CommentsClose CommentsPermalink
(4) UNRELATED PERSON- The term `unrelated person' means a person who is not a related person.CommentsClose CommentsPermalink
(5) RELATED PERSON- A person shall be treated as related to another person if--CommentsClose CommentsPermalink
(A) such person bears a relationship to such other person described in section 267(b) (determined without regard to paragraph (9) thereof), or 707(b)(1), of such Code, determined by substituting `25 percent' for `50 percent' each place it appears therein, andCommentsClose CommentsPermalink
(B) in the case such other person is a non-profit organization, if such person controls directly or indirectly more than 25 percent of the governing body of such organization.CommentsClose CommentsPermalink
SEC. 212. DEDUCTION FOR QUALIFIED TIMBER GAIN.
(a) In General- Part I of subchapter P of chapter 1 is amended by adding at the end the following new section:CommentsClose CommentsPermalink
`SEC. 1203. DEDUCTION FOR QUALIFIED TIMBER GAIN.
`(a) In General- In the case of a taxpayer which elects the application of this section for a taxable year, there shall be allowed a deduction against gross income in an amount equal to 60 percent of the lesser of--CommentsClose CommentsPermalink
`(1) the taxpayer's qualified timber gain for such year, orCommentsClose CommentsPermalink
`(2) the taxpayer's net capital gain for such year.CommentsClose CommentsPermalink
`(b) Qualified Timber Gain- For purposes of this section, the term `qualified timber gain' means, with respect to any taxpayer for any taxable year, the excess (if any) of--CommentsClose CommentsPermalink
`(1) the sum of the taxpayer's gains described in subsections (a) and (b) of section 631 for such year, overCommentsClose CommentsPermalink
`(2) the sum of the taxpayer's losses described in such subsections for such year.CommentsClose CommentsPermalink
`(c) Special Rules for Pass-Thru Entities-CommentsClose CommentsPermalink
`(1) In the case of any qualified timber gain of a pass-thru entity (as defined in section 1(h)(10)) other than a real estate investment trust, the election under this section shall be made separately by each taxpayer subject to tax on such gain.CommentsClose CommentsPermalink
`(2) In the case of any qualified timber gain of a real estate investment trust, the election under this section shall be made by the real estate investment trust.CommentsClose CommentsPermalink
`(d) Election- An election under this section may be made only with respect to the first taxable year beginning after the date of the enactment of this section.'.CommentsClose CommentsPermalink
(b) Coordination With Maximum Capital Gains Rates-CommentsClose CommentsPermalink
(1) TAXPAYERS OTHER THAN CORPORATIONS- Paragraph (2) of section 1(h) is amended to read as follows:CommentsClose CommentsPermalink
`(2) REDUCTION OF NET CAPITAL GAIN- For purposes of this subsection, the net capital gain for any taxable year shall be reduced (but not below zero) by the sum of--CommentsClose CommentsPermalink
`(A) the amount which the taxpayer takes into account as investment income under section 163(d)(4)(B)(iii), andCommentsClose CommentsPermalink
`(B) in the case of a taxable year with respect to which an election is in effect under section 1203, the lesser of--CommentsClose CommentsPermalink
`(i) the amount described in paragraph (1) of section 1203(a), orCommentsClose CommentsPermalink
`(ii) the amount described in paragraph (2) of such section.'.CommentsClose CommentsPermalink
(2) CORPORATIONS- Section 1201 is amended by redesignating subsection (b) as subsection (c) and inserting after subsection (a) the following new subsection:CommentsClose CommentsPermalink
`(b) Qualified Timber Gain Not Taken Into Account- For purposes of this section, in the case of a corporation with respect to which an election is in effect under section 1203, the net capital gain for any taxable year shall be reduced (but not below zero) by the corporation's qualified timber gain (as defined in section 1203(b)).'.CommentsClose CommentsPermalink
(c) Deduction Allowed Whether or Not Individual Itemizes Other Deductions- Subsection (a) of section 62 is amended by inserting before the last sentence the following new paragraph:CommentsClose CommentsPermalink
`(22) QUALIFIED TIMBER GAINS- The deduction allowed by section 1203.'.CommentsClose CommentsPermalink
(d) Deduction Allowed in Computing Adjusted Current Earnings- Subparagraph (C) of section 56(g)(4) is amended by adding at the end the following new clause:CommentsClose CommentsPermalink
`(vii) DEDUCTION FOR QUALIFIED TIMBER GAIN- Clause (i) shall not apply to any deduction allowed under section 1203.'.CommentsClose CommentsPermalink
(e) Deduction Allowed in Computing Taxable Income of Electing Small Business Trusts- Subparagraph (C) of section 641(c)(2) is amended by inserting after clause (iii) the following new clause:CommentsClose CommentsPermalink
`(iv) The deduction allowed under section 1203.'.CommentsClose CommentsPermalink
(f) Treatment of Qualified Timber Gain of Real Estate Investment Trusts- Paragraph (3) of section 857(b) is amended by inserting after subparagraph (F) the following new subparagraph:CommentsClose CommentsPermalink
`(G) TREATMENT OF QUALIFIED TIMBER GAIN- For purposes of this part, in the case of a real estate investment trust with respect to which an election is in effect under section 1203--CommentsClose CommentsPermalink
`(i) REDUCTION OF NET CAPITAL GAIN- The net capital gain of the real estate investment trust for any taxable year shall be reduced (but not below zero) by the real estate investment trust's qualified timber gain (as defined in section 1203(b)).CommentsClose CommentsPermalink
`(ii) ADJUSTMENT TO SHAREHOLDER'S BASIS ATTRIBUTABLE TO DEDUCTION FOR QUALIFIED TIMBER GAINS-CommentsClose CommentsPermalink
`(I) IN GENERAL- The adjusted basis of shares in the hands of the shareholder shall be increased by the amount of the deduction allowable under section 1203(a) as provided in subclauses (II) and (III).CommentsClose CommentsPermalink
`(II) ALLOCATION OF BASIS INCREASE FOR DISTRIBUTIONS MADE DURING TAXABLE YEAR- For any taxable year of a real estate investment trust for which an election is in effect under section 1203, in the case of a distribution made with respect to shares during such taxable year of amounts attributable to the deduction allowable under section 1203(a), the adjusted basis of such shares shall be increased by the amount of such distributions.CommentsClose CommentsPermalink
`(III) ALLOCATION OF EXCESS- If the deduction allowable under section 1203(a) for a taxable year exceeds the amount of distributions described in subclause (II), the excess shall be allocated to every shareholder of the real estate investment trust at the close of the trust's taxable year in the same manner as if a distribution of such excess were made with respect to such shares.CommentsClose CommentsPermalink
`(IV) DESIGNATIONS- To the extent provided in regulations, a real estate investment trust shall designate the amounts described in subclauses (II) and (III) in a manner similar to the designations provided with respect to capital gains described in subparagraphs (C) and (D).CommentsClose CommentsPermalink
`(V) DEFINITIONS- As used in this subparagraph, the terms `share' and `shareholder' shall include beneficial interests and holders of beneficial interests, respectively.CommentsClose CommentsPermalink
`(iii) EARNINGS AND PROFITS DEDUCTION FOR QUALIFIED TIMBER GAINS- The deduction allowable under section 1203(a) for a taxable year shall be allowed as a deduction in computing the earnings and profits of the real estate investment trust for such taxable year. The earnings and profits of any such shareholder which is a corporation shall be appropriately adjusted in accordance with regulations prescribed by the Secretary.'.CommentsClose CommentsPermalink
(g) Loss Attributable to Basis Adjustment for Deduction for Qualified Timber Gain of Real Estate Investment Trusts-CommentsClose CommentsPermalink
(1) Section 857(b)(8) is amended by redesignating subparagraphs (B) and (C) as subparagraphs (C) and (D), respectively, and by inserting after subparagraph (A) the following new subparagraph:CommentsClose CommentsPermalink
`(B) LOSS ATTRIBUTABLE TO BASIS ADJUSTMENT FOR DEDUCTION FOR QUALIFIED TIMBER GAIN- If--CommentsClose CommentsPermalink
`(i) a shareholder of a real estate investment trust receives a basis adjustment provided under subsection (b)(3)(G)(ii), andCommentsClose CommentsPermalink
`(ii) the taxpayer has held such share or interest for 6 months or less,CommentsClose CommentsPermalink
then any loss on the sale or exchange of such share or interest shall, to the extent of the amount described in clause (i), be disallowed.'.CommentsClose CommentsPermalink
(2) Subparagraph (D) of section 857(b)(8), as redesignated by paragraph (1), is amended by striking `subparagraph (A)' and inserting `subparagraphs (A) and (B)'.CommentsClose CommentsPermalink
(h) Conforming Amendments-CommentsClose CommentsPermalink
(1) Subparagraph (B) of section 172(d)(2) is amended to read as follows:CommentsClose CommentsPermalink
`(B) the exclusion under section 1202, and the deduction under section 1203, shall not be allowed.'.CommentsClose CommentsPermalink
(2) Paragraph (4) of section 642(c) is amended by striking the first sentence and inserting `To the extent that the amount otherwise allowable as a deduction under this subsection consists of gain described in section 1202(a) or qualified timber gain (as defined in section 1203(b)), proper adjustment shall be made for any exclusion allowable to the estate or trust under section 1202 and for any deduction allowable to the estate or trust under section 1203.'CommentsClose CommentsPermalink
(3) Paragraph (3) of section 643(a) is amended by striking the last sentence and inserting `The exclusion under section 1202 and the deduction under section 1203 shall not be taken into account.'.CommentsClose CommentsPermalink
(4) Subparagraph (C) of section 643(a)(6) is amended to read as follows:CommentsClose CommentsPermalink
`(C) Paragraph (3) shall not apply to a foreign trust. In the case of such a trust--CommentsClose CommentsPermalink
`(i) there shall be included gains from the sale or exchange of capital assets, reduced by losses from such sales or exchanges to the extent such losses do not exceed gains from such sales or exchanges, andCommentsClose CommentsPermalink
`(ii) the deduction under section 1203 shall not be taken into account.'.CommentsClose CommentsPermalink
(5) Paragraph (4) of section 691(c) is amended by inserting `1203,' after `1202,'.CommentsClose CommentsPermalink
(6) Paragraph (2) of section 871(a) is amended by inserting `or 1203,' after `1202,'.CommentsClose CommentsPermalink
(7) The table of sections for part I of subchapter P of chapter 1 is amended by adding at the end the following new item:CommentsClose CommentsPermalink
`Sec. 1203. Deduction for qualified timber gain.'.CommentsClose CommentsPermalink
(i) Effective Date- The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 213. EXCISE TAX NOT APPLICABLE TO SECTION 1203 DEDUCTION OF REAL ESTATE INVESTMENT TRUSTS.
(a) In General-CommentsClose CommentsPermalink
(1) ORDINARY INCOME- Subparagraph (B) of section 4981(e)(1) is amended to read as follows:CommentsClose CommentsPermalink
`(B) by not taking into account--CommentsClose CommentsPermalink
`(i) any gain or loss from the sale or exchange of capital assets (determined without regard to any reduction that would be applied for purposes of section 857(b)(3)(G)(i)), andCommentsClose CommentsPermalink
`(ii) any deduction allowable under section 1203, and'.CommentsClose CommentsPermalink
(2) CAPITAL GAIN NET INCOME- Section 4981(e)(2) is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink
`(D) QUALIFIED TIMBER GAIN- The amount determined under subparagraph (A) shall be determined without regard to any reduction that would be applied for purposes of section 857(b)(3)(G)(i) but shall be reduced for any deduction allowable under section 1203 for such calendar year.'.CommentsClose CommentsPermalink
(b) Effective Date- The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 214. TIMBER REIT MODERNIZATION.
(a) In General- Section 856(c)(5) is amended by adding after subparagraph (G) the following new subparagraph:CommentsClose CommentsPermalink
`(H) TREATMENT OF TIMBER GAINS-CommentsClose CommentsPermalink
`(i) IN GENERAL- Gain from the sale of real property described in paragraph (2)(D) and (3)(C) shall include gain which is--CommentsClose CommentsPermalink
`(I) recognized by an election under section 631(a) from timber owned by the real estate investment trust, the cutting of which is provided by a taxable REIT subsidiary of the real estate investment trust;CommentsClose CommentsPermalink
`(II) recognized under section 631(b); orCommentsClose CommentsPermalink
`(III) income which would constitute gain under subclause (I) or (II) but for the failure to meet the 1-year holding period requirement.CommentsClose CommentsPermalink
`(ii) SPECIAL RULES-CommentsClose CommentsPermalink
`(I) For purposes of this subtitle, cut timber, the gain of which is recognized by a real estate investment trust pursuant to an election under section 631(a) described in clause (i)(I) or so much of clause (i)(III) as relates to clause (i)(I), shall be deemed to be sold to the taxable REIT subsidiary of the real estate investment trust on the first day of the taxable year.CommentsClose CommentsPermalink
`(II) For purposes of this subtitle, income described in this subparagraph shall not be treated as gain from the sale of property described in section 1221(a)(1).CommentsClose CommentsPermalink
`(iii) TERMINATION- This subparagraph shall not apply to dispositions after the termination date.'.CommentsClose CommentsPermalink
(b) Termination Date- Subsection (c) of section 856 is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(8) TERMINATION DATE- For purposes of this subsection, the term `termination date' means the last day of the first taxable year beginning after the date of the enactment of this paragraph.'.CommentsClose CommentsPermalink
(c) Effective Date- The amendments made by subsection (a) shall apply to dispositions in taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 215. MINERAL ROYALTY INCOME QUALIFYING INCOME FOR TIMBER REITS.
(a) In General- Section 856(c)(2) is amended by striking `and' at the end of subparagraph (G), by inserting `and' at the end of subparagraph (H), and by adding after subparagraph (H) the following new subparagraph:CommentsClose CommentsPermalink
`(I) mineral royalty income earned in the first taxable year beginning after the date of the enactment of this subparagraph from real property owned by a timber real estate investment trust held, or once held, in connection with the trade or business of producing timber by such real estate investment trust;'.CommentsClose CommentsPermalink
(b) Timber Real Estate Investment Trust- Section 856(c)(5), as amended by this Act, is amended by adding after subparagraph (H) the following new subparagraph:CommentsClose CommentsPermalink
`(I) TIMBER REAL ESTATE INVESTMENT TRUST- The term `timber real estate investment trust' means a real estate investment trust in which more than 50 percent in value of its total assets consists of real property held in connection with the trade or business of producing timber.'.CommentsClose CommentsPermalink
(c) Effective Date- The amendments by this section shall apply to taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 216. MODIFICATION OF TAXABLE REIT SUBSIDIARY ASSET TEST FOR TIMBER REITS.
(a) In General- Section 856(c)(4)(B)(ii) is amended by inserting `(in the case of a quarter which closes on or before the termination date, 25 percent in the case of a timber real estate investment trust)' after `not more than 20 percent of the value of its total assets is represented by securities of one or more taxable REIT subsidiaries'.CommentsClose CommentsPermalink
(b) Effective Date- The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 217. SAFE HARBOR FOR TIMBER PROPERTY.
(a) In General- Section 857(b)(6) (relating to income from prohibited transactions) is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink
`(G) SPECIAL RULES FOR SALES TO QUALIFIED ORGANIZATIONS-CommentsClose CommentsPermalink
`(i) IN GENERAL- In the case of sale of a real estate asset (as defined in section 856(c)(5)(B)) to a qualified organization (as defined in section 170(h)(3)) exclusively for conservation purposes (within the meaning of section 170(h)(1)(C)), subparagraph (D) shall be applied--CommentsClose CommentsPermalink
`(I) by substituting `2 years' for `4 years' in clause (i), andCommentsClose CommentsPermalink
`(II) by substituting `2-year period' for `4-year period' in clauses (ii) and (iii).CommentsClose CommentsPermalink
`(ii) TERMINATION- This subparagraph shall not apply to sales after the termination date.'.CommentsClose CommentsPermalink
(b) Prohibited Transactions- Section 857(b)(6)(D)(v) is amended by inserting `or, in the case of a sale on or before the termination date, a taxable REIT subsidiary' after `independent contractor (as defined in section 856(d)(3)) from whom the trust itself does not derive or receive any income'.CommentsClose CommentsPermalink
(c) Sales That Are Not Prohibited Transactions- Section 857(b)(6), as amended by subsection (a), is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink
`(H) SALES OF PROPERTY THAT ARE NOT A PROHIBITED TRANSACTION- In the case of a sale on or before the termination date, the sale of property which is not a prohibited transaction through application of subparagraph (D) shall be considered property held for investment or for use in a trade or business and not property described in section 1221(a)(1) for all purposes of this subtitle.'.CommentsClose CommentsPermalink
(d) Termination Date- Section 857(b)(6), as amended by subsections (a) and (c), is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink
`(I) TERMINATION DATE- For purposes of this paragraph, the term `termination date' means the last day of the first taxable year beginning after the date of the enactment of this subparagraph.'.CommentsClose CommentsPermalink
(e) Effective Date- The amendments made by this section shall apply to dispositions in taxable years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink
TITLE III--ENERGY PROVISIONS
Subtitle A--Electricity Generation
SEC. 301. CREDIT FOR RESIDENTIAL AND BUSINESS WIND PROPERTY.
(a) Residential Wind Property-CommentsClose CommentsPermalink
(1) IN GENERAL- Section 25D(a) (relating to allowance of credit) is amended by striking `and' at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting `, and', and by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(4) 30 percent of the qualified small wind energy property expenditures made by the taxpayer during such year.'.CommentsClose CommentsPermalink
(2) LIMITATION- Section 25D(b)(1) (relating to maximum credit) is amended by striking `and' at the end of subparagraph (B), by striking the period at the end of subparagraph (C) and inserting `, and', and by adding at the end the following new subparagraph:CommentsClose CommentsPermalink
`(D) $4,000 with respect to any qualified small wind energy property expenditures.'.CommentsClose CommentsPermalink
(3) QUALIFIED SMALL WIND ENERGY PROPERTY EXPENDITURES-CommentsClose CommentsPermalink
(A) IN GENERAL- Section 25D(d) (relating to definitions) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(4) QUALIFIED SMALL WIND ENERGY PROPERTY EXPENDITURE- The term `qualified small wind energy property expenditure' means an expenditure for qualified small wind energy property (as defined in section 48(c)(3)(A)) installed on or in connection with a dwelling unit located in the United States and used as a residence by the taxpayer.'.CommentsClose CommentsPermalink
(B) NO DOUBLE BENEFIT- Section 45(d)(1) (relating to wind facility) is amended by adding at the end the following new sentence: `Such term shall not include any facility with respect to which any qualified small wind energy property expenditure (as defined in subsection (d)(4) of section 25D) is taken into account in determining the credit under such section.'.CommentsClose CommentsPermalink
(4) MAXIMUM EXPENDITURES IN CASE OF JOINT OCCUPANCY- Section 25D(e)(4)(A) (relating to maximum expenditures) is amended by striking `and' at the end of clause (ii), by striking the period at the end of clause (iii) and inserting `, and', and by adding at the end the following new clause:CommentsClose CommentsPermalink
`(iv) $1,667 in the case of wind turbines for which qualified small wind energy property expenditures are made.'.CommentsClose CommentsPermalink
(b) Business Wind Property-CommentsClose CommentsPermalink
(1) IN GENERAL- Section 48(a)(3)(A) (defining energy property) is amended by striking `or' at the end of clause (iii), by adding `or' at the end of clause (iv), and by inserting after clause (iv) the following new clause:CommentsClose CommentsPermalink
`(v) qualified small wind energy property,'.CommentsClose CommentsPermalink
(2) 30 PERCENT CREDIT- Section 48(a)(2)(A)(i) is amended by striking `and' at the end of subclause (II) and by inserting after subclause (III) the following new subclause:CommentsClose CommentsPermalink
`(IV) qualified small wind energy property, and'.CommentsClose CommentsPermalink
(3) QUALIFIED SMALL WIND ENERGY PROPERTY- Section 48(c) is amended--CommentsClose CommentsPermalink
(A) by inserting `; Qualified Small Wind Energy Property' after `Qualified Microturbine Property' in the heading,CommentsClose CommentsPermalink
(B) by striking `For purposes of this subsection' and inserting `For purposes of this section',CommentsClose CommentsPermalink
(C) by striking `paragraph (1)' in paragraphs (1)(B) and (2)(B) and inserting `subsection (a)(1)', andCommentsClose CommentsPermalink
(D) by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(3) QUALIFIED SMALL WIND ENERGY PROPERTY-CommentsClose CommentsPermalink
`(A) IN GENERAL- The term `qualified small wind energy property' means property which uses a qualifying small wind turbine to generate electricity.CommentsClose CommentsPermalink
`(B) LIMITATION- In the case of qualified small wind energy property placed in service during the taxable year, the credit otherwise determined under subsection (a)(1) for such year with respect to such property shall not exceed $4,000 with respect to any taxpayer.CommentsClose CommentsPermalink
`(C) QUALIFYING SMALL WIND TURBINE- The term `qualifying small wind turbine' means a wind turbine which--CommentsClose CommentsPermalink
`(i) has a nameplate capacity of not more than 100 kilowatts, andCommentsClose CommentsPermalink
`(ii) meets the performance standards of the American Wind Energy Association.CommentsClose CommentsPermalink
`(D) TERMINATION- The term `qualified small wind energy property' shall not include any property for any period after December 31, 2008.'.CommentsClose CommentsPermalink
(4) CONFORMING AMENDMENT- Section 48(a)(1) is amended by striking `paragraphs (1)(B) and (2)(B)' and inserting `paragraphs (1)(B), (2)(B), and (3)(B)'.CommentsClose CommentsPermalink
(c) Effective Date- The amendments made by this section shall apply to expenditures after December 31, 2007.CommentsClose CommentsPermalink
SEC. 302. LANDOWNER INCENTIVE TO ENCOURAGE ELECTRIC TRANSMISSION BUILD-OUT.
(a) In General- Part III of subchapter B of chapter 1 (relating to items specifically excluded from gross income) is amended by inserting after section 139A the following new section:CommentsClose CommentsPermalink
`SEC. 139B. ELECTRIC TRANSMISSION EASEMENT PAYMENTS.
`(a) In General- Gross income shall not include any qualified electric transmission easement payment.CommentsClose CommentsPermalink
`(b) Qualified Electric Transmission Easement Payment- For purposes of this section, the term `qualified electric transmission payment' means any payment which is made--CommentsClose CommentsPermalink
`(1) by an electric utility or electric transmission entity pursuant to an easement or other agreement granted by the payee (or any predecessor of such payee), andCommentsClose CommentsPermalink
`(2) for the right of such entity (or any successors of such entity) to locate on such payee's property transmission lines and equipment used to transmit electricity at 230 or more kilovolts, primarily from qualified facilities described in section 45(d) (without regard to any placed in service date or the last sentence of paragraph (4) thereof) or energy property (as defined in section 48(a)(3)) placed in service after the date of the enactment of this section.CommentsClose CommentsPermalink
`(c) No Increase in Basis- Notwithstanding any other provision of this subtitle, no increase in the basis or adjusted basis of any property shall result from any amount excluded under this subsection with respect to such property.CommentsClose CommentsPermalink
`(d) Denial of Double Benefit- Notwithstanding any other provision of this subtitle, no deduction or credit shall be allowed (to the person for whose benefit a qualified electric transmission easement payment is made) for, or by reason of, any expenditure to the extent of the amount excluded under this section with respect to such expenditure.'.CommentsClose CommentsPermalink
(b) Clerical Amendment- The table of sections for such part III is amended by inserting after the item relating to section 139A the following new item:CommentsClose CommentsPermalink
`Sec. 139B. Electric transmission easement payments.'.CommentsClose CommentsPermalink
(c) Effective Date- The amendments made by this section shall apply to payments received after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 303. EXCEPTION TO REDUCTION OF RENEWABLE ELECTRICITY CREDIT.
(a) In General- Section 45(b)(3) (relating to credit reduced for grants, tax-exempt bonds, subsidized energy financing, and other credits) is amended by adding after the last sentence the following: `This paragraph shall not apply with respect to any loans, loan guarantees, or grants issued by the Secretary of Agriculture under authority granted by section 9006 of the Farm Security and Rural Investment Act of 2002.'CommentsClose CommentsPermalink
(b) Effective Date- The amendment made by this section shall apply to facilities placed in service after the date of the enactment of this Act.CommentsClose CommentsPermalink
Subtitle B--Alcohol Fuel
SEC. 311. EXPANSION OF SPECIAL ALLOWANCE TO CELLULOSIC BIOMASS ALCOHOL FUEL PLANT PROPERTY.
(a) In General- Paragraph (3) of section 168(l) (relating to special allowance for cellulosic biomass ethanol plant property) is amended to read as follows:CommentsClose CommentsPermalink
`(3) CELLULOSIC BIOMASS ALCOHOL- For purposes of this subsection, the term `cellulosic biomass alcohol' means any alcohol produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis.'.CommentsClose CommentsPermalink
(b) Conforming Amendments-CommentsClose CommentsPermalink
(1) Subsection (l) of section 168 is amended by striking `cellulosic biomass ethanol' each place it appears and inserting `cellulosic biomass alcohol'.CommentsClose CommentsPermalink
(2) The heading of section 168(l) is amended by striking `Cellulosic Biomass Ethanol' and inserting `Cellulosic Biomass Alcohol'.CommentsClose CommentsPermalink
(3) The heading of paragraph (2) of section 168(l) is amended by striking `CELLULOSIC BIOMASS ETHANOL' and inserting `CELLULOSIC BIOMASS ALCOHOL'.CommentsClose CommentsPermalink
(c) Effective Date- The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.CommentsClose CommentsPermalink
SEC. 312. CREDIT FOR PRODUCTION OF CELLULOSIC BIOMASS ALCOHOL.
(a) In General- Subsection (a) of section 40 (relating to alcohol used as fuel) is amended by striking `plus' at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting `, plus', and by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(4) the small cellulosic alcohol producer credit.'.CommentsClose CommentsPermalink
(b) Small Cellulosic Alcohol Producer Credit-CommentsClose CommentsPermalink
(1) IN GENERAL- Subsection (b) of section 40 is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(6) SMALL CELLULOSIC ALCOHOL PRODUCER CREDIT-CommentsClose CommentsPermalink
`(A) IN GENERAL- In addition to any other credit allowed under this section, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable amount for each gallon of not more than 60,000,000 gallons of qualified cellulosic alcohol production.CommentsClose CommentsPermalink
`(B) APPLICABLE AMOUNT- For purposes of subparagraph (A), the applicable amount means the excess of--CommentsClose CommentsPermalink
`(i) $1.28, overCommentsClose CommentsPermalink
`(ii) the sum of--CommentsClose CommentsPermalink
`(I) the amount of the credit in effect for alcohol which is ethanol under subsection (b)(1) (without regard to subsection (b)(3)) at the time of the qualified cellulosic alcohol production, plusCommentsClose CommentsPermalink
`(II) the amount of the credit in effect under subsection (b)(4) at the time of such production.CommentsClose CommentsPermalink
`(C) QUALIFIED CELLULOSIC ALCOHOL PRODUCTION- For purposes of this section, the term `qualified cellulosic alcohol production' means any cellulosic biomass alcohol which is produced by an eligible small cellulosic alcohol producer and which during the taxable year--CommentsClose CommentsPermalink
`(i) is sold by the taxpayer to another person--CommentsClose CommentsPermalink
`(I) for use by such other person in the production of a qualified alcohol mixture in such other person's trade or business (other than casual off-farm production),CommentsClose CommentsPermalink
`(II) for use by such other person as a fuel in a trade or business, orCommentsClose CommentsPermalink
`(III) who sells such cellulosic biomass alcohol at retail to another person and places such cellulosic biomass alcohol in the fuel tank of such other person, orCommentsClose CommentsPermalink
`(ii) is used or sold by the taxpayer for any purpose described in clause (i).CommentsClose CommentsPermalink
`(D) ADDITIONAL DISTILLATION EXCLUDED- The qualified cellulosic alcohol production of any taxpayer for any taxable year shall not include any alcohol which is purchased by the taxpayer and with respect to which such producer increases the proof of the alcohol by additional distillation.CommentsClose CommentsPermalink
`(E) APPLICATION OF PARAGRAPH- This paragraph shall apply with respect to qualified cellulosic alcohol production after December 31, 2007, and before April 1, 2015.'.CommentsClose CommentsPermalink
(2) TERMINATION DATE NOT TO APPLY- Subsection (e) of section 40 (relating to termination) is amended--CommentsClose CommentsPermalink
(A) by inserting `or subsection (b)(6)(E)' after `by reason of paragraph (1)' in paragraph (2), andCommentsClose CommentsPermalink
(B) by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(3) EXCEPTION FOR SMALL CELLULOSIC ALCOHOL PRODUCER CREDIT- Paragraph (1) shall not apply to the portion of the credit allowed under this section by reason of subsection (a)(4).'.CommentsClose CommentsPermalink
(c) Eligible Small Cellulosic Alcohol Producer- Section 40 is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink
`(i) Definitions and Special Rules for Small Cellulosic Alcohol Producer- For purposes of this section--CommentsClose CommentsPermalink
`(1) IN GENERAL- The term `eligible small cellulosic alcohol producer' means a person, who at all times during the taxable year, has a productive capacity for cellulosic biomass alcohol not in excess of 60,000,000 gallons.CommentsClose CommentsPermalink
`(2) CELLULOSIC BIOMASS ALCOHOL-CommentsClose CommentsPermalink
`(A) IN GENERAL- The term `cellulosic biomass alcohol' has the meaning given such term under section 168(l)(3), but does not include any alcohol with a proof of less than 150.CommentsClose CommentsPermalink
`(B) DETERMINATION OF PROOF- The determination of the proof of any alcohol shall be made without regard to any added denaturants.CommentsClose CommentsPermalink
`(3) AGGREGATION RULE- For purposes of the 60,000,000 gallon limitation under paragraph (1) and subsection (b)(6)(A), all members of the same controlled group of corporations (within the meaning of section 267(f)) and all persons under common control (within the meaning of section 52(b) but determined by treating an interest of more than 50 percent as a controlling interest) shall be treated as 1 person.CommentsClose CommentsPermalink
`(4) PARTNERSHIP, S CORPORATIONS, AND OTHER PASS-THRU ENTITIES- In the case of a partnership, trust, S corporation, or other pass-thru entity, the limitation contained in paragraph (1) shall be applied at the entity level and at the partner or similar level.CommentsClose CommentsPermalink
`(5) ALLOCATION- For purposes of this subsection, in the case of a facility in which more than 1 person has an interest, productive capacity shall be allocated among such persons in such manner as the Secretary may prescribe.CommentsClose CommentsPermalink
`(6) REGULATIONS- The Secretary may prescribe such regulations as may be necessary to prevent the credit provided for in subsection (a)(4) from directly or indirectly benefitting any person with a direct or indirect productive capacity of more than 60,000,000 gallons of cellulosic biomass alcohol during the taxable year.CommentsClose CommentsPermalink
`(7) ALLOCATION OF SMALL CELLULOSIC PRODUCER CREDIT TO PATRONS OF COOPERATIVE- Rules similar to the rules under subsection (g)(6) shall apply for purposes of this subsection.'.CommentsClose CommentsPermalink
(d) Alcohol Not Used as a Fuel, etc-CommentsClose CommentsPermalink
(1) IN GENERAL- Paragraph (3) of section 40(d) is amended by redesignating subparagraph (D) as subparagraph (E) and by inserting after subparagraph (C) the following new subparagraph:CommentsClose CommentsPermalink
`(D) SMALL CELLULOSIC ALCOHOL PRODUCER CREDIT- If--CommentsClose CommentsPermalink
`(i) any credit is allowed under subsection (a)(4), andCommentsClose CommentsPermalink
`(ii) any person does not use such fuel for a purpose described in subsection (b)(6)(C),CommentsClose CommentsPermalink
then there is hereby imposed on such person a tax equal to the applicable amount for each gallon of such cellulosic biomass alcohol.'.CommentsClose CommentsPermalink
(2) CONFORMING AMENDMENTS-CommentsClose CommentsPermalink
(A) Subparagraph (C) of section 40(d)(3) is amended by striking `PRODUCER' in the heading and inserting `SMALL ETHANOL PRODUCER'.CommentsClose CommentsPermalink
(B) Subparagraph (E) of section 40(d)(3), as redesignated by paragraph (1), is amended by striking `or (C)' and inserting `(C), or (D)'.CommentsClose CommentsPermalink
(e) Alcohol Produced in the United States- Section 40(d), as amended by this section, is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(6) SPECIAL RULE FOR SMALL CELLULOSIC ALCOHOL PRODUCERS- No small cellulosic alcohol producer credit shall be determined under subsection (a) with respect to any alcohol unless such alcohol is produced in the United States.'.CommentsClose CommentsPermalink
(f) Effective Date- The amendments made by this section shall apply to fuel produced after December 31, 2007.CommentsClose CommentsPermalink
SEC. 313. EXTENSION OF SMALL ETHANOL PRODUCER CREDIT.
Paragraph (1) of section 40(e) (relating to termination) is amended--CommentsClose CommentsPermalink
(1) in subparagraph (A), by inserting `(December 31, 2012, in the case of the credit allowed by reason of subsection (a)(3))' after `December 31, 2010', andCommentsClose CommentsPermalink
(2) in subparagraph (B), by inserting `(January 1, 2013, in the case of the credit allowed by reason of subsection (a)(3))' after `January 1, 2011'.CommentsClose CommentsPermalink
SEC. 314. CREDIT FOR PRODUCERS OF FOSSIL FREE ALCOHOL.
(a) In General- Subsection (a) of section 40 (relating to alcohol used as fuel), as amended by this Act, is amended by striking `plus' at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting `, plus', and by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(5) the small fossil free alcohol producer credit.'.CommentsClose CommentsPermalink
(b) Small Fossil Free Alcohol Producer Credit- Subsection (b) of section 40, as amended by this Act, is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(7) SMALL FOSSIL FREE ALCOHOL PRODUCER CREDIT-CommentsClose CommentsPermalink
`(A) IN GENERAL- In addition to any other credit allowed under this section, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 25 cents for each gallon of not more than 60,000,000 gallons of qualified fossil free alcohol production.CommentsClose CommentsPermalink
`(B) QUALIFIED FOSSIL FREE ALCOHOL PRODUCTION- For purposes of this section, the term `qualified fossil free alcohol production' means alcohol which is produced by an eligible small fossil free alcohol producer at a fossil free alcohol production facility and which during the taxable year--CommentsClose CommentsPermalink
`(i) is sold by the taxpayer to another person--CommentsClose CommentsPermalink
`(I) for use by such other person in the production of a qualified alcohol mixture in such other person's trade or business (other than casual off-farm production),CommentsClose CommentsPermalink
`(II) for use by such other person as a fuel in a trade or business, orCommentsClose CommentsPermalink
`(III) who sells such alcohol at retail to another person and places such alcohol in the fuel tank of such other person, orCommentsClose CommentsPermalink
`(ii) is used or sold by the taxpayer for any purpose described in clause (i).CommentsClose CommentsPermalink
`(C) ADDITIONAL DISTILLATION EXCLUDED- The qualified fossil free alcohol production of any taxpayer for any taxable year shall not include any alcohol which is purchased by the taxpayer and with respect to which such producer increases the proof of the alcohol by additional distillation.'.CommentsClose CommentsPermalink
(c) Eligible Small Fossil Free Alcohol Producer- Section 40, as amended by this Act, is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink
`(j) Definitions and Special Rules for Small Fossil Free Alcohol Producer- For purposes of this section--CommentsClose CommentsPermalink
`(1) IN GENERAL- The term `eligible small fossil free alcohol producer' means a person, who at all times during the taxable year, has a productive capacity for alcohol from all fossil free alcohol production facilities of the taxpayer which is not in excess of 60,000,000 gallons.CommentsClose CommentsPermalink
`(2) FOSSIL FREE ALCOHOL PRODUCTION FACILITY- The term `fossil free alcohol production facility' means any facility at which 90 percent of the energy used in the production of alcohol is produced from biomass (as defined in section 45K(c)(3)).CommentsClose CommentsPermalink
`(3) AGGREGATION RULE- For purposes of the 60,000,000 gallon limitation under paragraph (1) and subsection (b)(7)(A), all members of the same controlled group of corporations (within the meaning of section 267(f)) and all persons under common control (within the meaning of section 52(b) but determined by treating an interest of more than 50 percent as a controlling interest) shall be treated as 1 person.CommentsClose CommentsPermalink
`(4) PARTNERSHIP, S CORPORATIONS, AND OTHER PASS-THRU ENTITIES- In the case of a partnership, trust, S corporation, or other pass-thru entity, the limitation contained in paragraph (1) shall be applied at the entity level and at the partner or similar level.CommentsClose CommentsPermalink
`(5) ALLOCATION- For purposes of this subsection, in the case of a facility in which more than 1 person has an interest, productive capacity shall be allocated among such persons in such manner as the Secretary may prescribe.CommentsClose CommentsPermalink
`(6) REGULATIONS- The Secretary may prescribe such regulations as may be necessary to prevent the credit provided for in subsection (a)(5) from directly or indirectly benefitting any person with a direct or indirect productive capacity of more than 60,000,000 gallons of alcohol from fossil free alcohol production facilities during the taxable year.CommentsClose CommentsPermalink
`(7) ALLOCATION OF SMALL FOSSIL FREE ALCOHOL PRODUCER CREDIT TO PATRONS OF COOPERATIVE- Rules similar to the rules under subsection (g)(6) shall apply for purposes of this subsection.'.CommentsClose CommentsPermalink
(d) Alcohol Not Used as a Fuel, etc-CommentsClose CommentsPermalink
(1) IN GENERAL- Paragraph (3) of section 40(d), as amended by this Act, is amended by redesignating subparagraph (E) as subparagraph (F) and by inserting after subparagraph (D) the following new subparagraph:CommentsClose CommentsPermalink
`(E) SMALL FOSSIL FREE ALCOHOL PRODUCER CREDIT- If--CommentsClose CommentsPermalink
`(i) any credit is allowed under subsection (a)(5), andCommentsClose CommentsPermalink
`(ii) any person does not use such fuel for a purpose described in subsection (b)(7)(B),CommentsClose CommentsPermalink
then there is hereby imposed on such person a tax equal to 25 cents for each gallon of such alcohol.'.CommentsClose CommentsPermalink
(2) CONFORMING AMENDMENT- Subparagraph (F) of section 40(d)(3), as redesignated by paragraph (1) and amended by this Act, is amended by striking `or (D)' and inserting `(D), or (E)'.CommentsClose CommentsPermalink
(e) Alcohol Produced in the United States- Section 40(d)(6), as added by section 312 of this Act, is amended--CommentsClose CommentsPermalink
(1) by inserting `or small fossil free alcohol producer credit' after `cellulosic alcohol producer credit', andCommentsClose CommentsPermalink
(2) by inserting `and fossil free' after `cellulosic' in the heading.CommentsClose CommentsPermalink
(f) Termination- Paragraph (1) of section 40(e), as amended by this Act, is amended--CommentsClose CommentsPermalink
(1) in subparagraph (A), by striking `(December 31, 2012, in the case of the credit allowed by reason of subsection (a)(3))' and inserting `(December 31, 2012, in the case of the credits allowed by reason of paragraphs (3) and (5) of subsection (a))', andCommentsClose CommentsPermalink
(2) in subparagraph (B), by striking `(January 1, 2013, in the case of the credit allowed by reason of subsection (a)(3))' and inserting `(January 1, 2013, in the case of the credits allowed by reason of paragraphs (3) and (5) of subsection (a))'.CommentsClose CommentsPermalink
(g) Effective Date- The amendments made by this section shall apply to fuel produced after December 31, 2007.CommentsClose CommentsPermalink
SEC. 315. MODIFICATION OF ALCOHOL CREDIT.
(a) Income Tax Credit- Subsection (h) of section 40 (relating to reduced credit for ethanol blenders) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(3) REDUCED AMOUNT AFTER SALE OF 7,500,000,000 GALLONS-CommentsClose CommentsPermalink
`(A) IN GENERAL- In the case of any calendar year beginning after the date described in subparagraph (B), the last row in the table in paragraph (2) shall be applied by substituting `46 cents' for `51 cents'.CommentsClose CommentsPermalink
`(B) DATE DESCRIBED- The date described in this subparagraph is the first date on which 7,500,000,000 gallons of ethanol (including cellulosic ethanol) have been produced in or imported into the United States after the date of the enactment of this paragraph, as certified by the Secretary, in consultation with the Administrator of the Environmental Protection Agency.'.CommentsClose CommentsPermalink
(b) Excise Tax Credit-CommentsClose CommentsPermalink
(1) IN GENERAL- Paragraph (2) of section 6426(b) (relating to alcohol fuel mixture credit) is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink
`(C) REDUCED AMOUNT AFTER SALE OF 7,500,000,000 GALLONS- In the case of any alcohol fuel mixture produced in a calendar year beginning after the date described in section 40(h)(3)(B), subparagraph (A) shall be applied by substituting `46 cents' for `51 cents'.'.CommentsClose CommentsPermalink
(2) CONFORMING AMENDMENT- Subparagraph (A) of section 6426(b)(2) is amended by striking `subparagraph (B)' and inserting `subparagraphs (B) and (C)'.CommentsClose CommentsPermalink
(c) Effective Date- The amendments made by this section shall take effect on the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 316. CALCULATION OF VOLUME OF ALCOHOL FOR FUEL CREDITS.
(a) In General- Paragraph (4) of section 40(d) (relating to volume of alcohol) is amended by striking `the volume of alcohol' and all that follows and inserting `the volume of alcohol shall not include any denaturant added to such alcohol.'.CommentsClose CommentsPermalink
(b) Conforming Amendment for Excise Tax Credit- Section 6426(b) (relating to alcohol fuel mixture credit) is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph:CommentsClose CommentsPermalink
`(5) VOLUME OF ALCOHOL- For purposes of determining under subsection (a) the number of gallons of alcohol with respect to which a credit is allowable under subsection (a), the volume of alcohol shall not include any denaturant added to such alcohol.'.CommentsClose CommentsPermalink
(c) Effective Date- The amendments made by this section shall apply to fuel sold or used after December 31, 2007.CommentsClose CommentsPermalink
SEC. 317. ETHANOL TARIFF EXTENSION.
Headings 9901.00.50 and 9901.00.52 of the Harmonized Tariff Schedule of the United States are each amended in the effective period column by striking `1/1/2009' and inserting `1/1/2011'.CommentsClose CommentsPermalink
SEC. 318. ELIMINATION AND REDUCTIONS OF DUTY DRAWBACK ON CERTAIN IMPORTED ETHANOL.
(a) In General- Section 313(p) of the Tariff Act of 1930 (
`(5) SPECIAL RULES FOR ETHYL ALCOHOL- For purposes of this subsection and subsections (b) and (j), ethyl alcohol or a mixture of ethyl alcohol (whether imported with payment of duty or made in the United States), may not be substituted for a finished petroleum product for purposes of claiming a duty drawback unless the exported finished petroleum product contains ethyl alcohol.'.CommentsClose CommentsPermalink
(b) Limitations on, and Reductions of, Drawbacks- Section 313 of the Tariff Act of 1930 (
`(z) Limitations on, and Reductions of, Drawbacks-CommentsClose CommentsPermalink
`(1) LIMITATIONS-CommentsClose CommentsPermalink
`(A) IN GENERAL- Ethyl alcohol or mixture containing ethyl alcohol described in subparagraph (B) may be treated as being of the same kind and quality under subsection (b) of this section or may be treated as being commercially interchangeable with any other ethyl alcohol or mixture containing ethyl alcohol under subsection (j)(2) of this section, only if the other ethyl alcohol or mixture--CommentsClose CommentsPermalink
`(i) if imported, is subject to the additional duty under subheading 9901.00.50 of the Harmonized Tariff Schedule of the United States; orCommentsClose CommentsPermalink
`(ii) if domestic, is subject to Federal excise tax under section 4041 or 4081 of the Internal Revenue Code of 1986 in an amount equal to or greater than the amount of drawback claimed.CommentsClose CommentsPermalink
`(B) ETHYL ALCOHOL OR MIXTURE CONTAINING ETHYL ALCOHOL DESCRIBED- Ethyl alcohol or mixture containing ethyl alcohol described in this subparagraph means--CommentsClose CommentsPermalink
`(i) ethyl alcohol classifiable under subheading 2207.10.60 or 2207.20.00 of the Harmonized Tariff Schedule of the United States, orCommentsClose CommentsPermalink
`(ii) a mixture containing ethyl alcohol classifiable under heading 2710 or 3824 of the Harmonized Tariff Schedule of the United States,CommentsClose CommentsPermalink
which, if imported would be subject to additional duty under subheading 9901.00.50 of such Schedule.CommentsClose CommentsPermalink
`(2) REDUCTION OF DRAWBACK- For purposes of subsections (b), (j)(2), and (p) of this section, the amount of the refund as drawback under this section shall be reduced by an amount equal to any Federal tax credit or refund of any Federal tax paid on the merchandise with respect to which the drawback is claimed.'.CommentsClose CommentsPermalink
(c) Effective Date- The amendments made by this section apply to articles exported on or after the date that is 15 days after the date of the enactment of this Act.CommentsClose CommentsPermalink
Subtitle C--Biodiesel and Renewable Diesel Fuel
SEC. 321. EXTENSION AND MODIFICATION OF CREDIT FOR BIODIESEL AND RENEWABLE DIESEL USED AS FUEL.
(a) Extension-CommentsClose CommentsPermalink
(1) INCOME TAX CREDITS FOR BIODIESEL AND RENEWABLE DIESEL AND SMALL AGRI-BIODIESEL PRODUCER CREDIT- Section 40A(g) (relating to termination) is amended by striking `December 31, 2008' and inserting `December 31, 2010 (December 31, 2012, in the case of the credit allowed by reason of subsection (a)(3))'.CommentsClose CommentsPermalink
(2) EXCISE TAX CREDIT- Section 6426(c)(6) (relating to termination) is amended by striking `2008' and inserting `2010'.CommentsClose CommentsPermalink
(3) FUELS NOT USED FOR TAXABLE PURPOSES- Section 6427(e)(5)(B) (relating to termination) is amended by striking `2008' and inserting `2010'.CommentsClose CommentsPermalink
(b) Modification of Credit for Renewable Diesel- Section 40A(f) (relating to renewable diesel) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(4) SPECIAL RULE FOR CO-PROCESSED RENEWABLE DIESEL- In the case of a taxpayer which produces renewable diesel through the co-processing of biomass and petroleum at any facility, this subsection shall not apply to so much of the renewable diesel produced at such facility and sold or used during the taxable year in a mixture described in subsection (b)(1)(B) as exceeds 60,000,000 gallons.'.CommentsClose CommentsPermalink
(c) Modification Relating to Definition of Agri-Biodiesel- Paragraph (2) of section 40A(d) (relating to agri-biodiesel) is amended by striking `and mustard seeds' and inserting `mustard seeds, and camelina'.CommentsClose CommentsPermalink
(d) Effective Dates- The amendments made by this section shall apply to fuel sold or used after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 322. TREATMENT OF QUALIFIED ALCOHOL FUEL MIXTURES AND QUALIFIED BIODIESEL FUEL MIXTURES AS TAXABLE FUELS.
(a) In General-CommentsClose CommentsPermalink
(1) QUALIFIED ALCOHOL FUEL MIXTURES- Paragraph (2) of section 4083(a) (relating to gasoline) is amended--CommentsClose CommentsPermalink
(A) by striking `and' at the end of subparagraph (A),CommentsClose CommentsPermalink
(B) by redesignating subparagraph (B) as subparagraph (C), andCommentsClose CommentsPermalink
(C) by inserting after subparagraph (A) the following new subparagraph:CommentsClose CommentsPermalink
`(B) includes any qualified mixture (as defined in section 40(b)(1)(B)), and'.CommentsClose CommentsPermalink
(2) QUALIFIED BIODIESEL FUEL MIXTURES- Subparagraph (A) of section 4083(a)(3) (relating to diesel fuel) is amended by striking `and' at the end of clause (ii), by redesignating clause (iii) as clause (iv), and inserting after clause (ii) the following new clause:CommentsClose CommentsPermalink
`(iii) any qualified biodiesel mixture (as defined in section 40A(b)(1)(B)), and'.CommentsClose CommentsPermalink
(b) Modification of Biodiesel Certification Requirement- Paragraph (4) of section 40A(b) is amended by striking `which identifies' and all that follows and inserting `which--CommentsClose CommentsPermalink
`(A) identifies the product produced and the percentage of biodiesel and agri-biodiesel in the product, andCommentsClose CommentsPermalink
`(B) documents that the biodiesel was independently tested and meets the requirements of ASTM D6751.'.CommentsClose CommentsPermalink
(c) Information Reporting Requirement for Producers of Qualified Mixtures- Section 4101(d) (relating to information reporting) is amended to read as follows:CommentsClose CommentsPermalink
`(d) Information Reporting- The Secretary--CommentsClose CommentsPermalink
`(1) may require--CommentsClose CommentsPermalink
`(A) information reporting by any person registered under this section, andCommentsClose CommentsPermalink
`(B) information reporting by such other persons as the Secretary deems necessary to carry out this part, andCommentsClose CommentsPermalink
`(2) shall require information reporting by any person registered under this section and producing any qualified mixture (as defined in section 40(b)(1)(B)) or any qualified biodiesel mixture (as defined in section 40A(b)(1)(B)).CommentsClose CommentsPermalink
Any person who is required to report under this subsection and who has 25 or more reportable transactions in a month shall file such report in electronic format.'.CommentsClose CommentsPermalink
(d) Effective Date- The amendments made by this section shall apply to fuels removed, entered, or sold after December 31, 2007.CommentsClose CommentsPermalink
Subtitle D--Alternative Fuel
SEC. 331. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL CREDIT.
(a) Extension-CommentsClose CommentsPermalink
(1) ALTERNATIVE FUEL CREDIT- Paragraph (4) of section 6426(d) (relating to alternative fuel credit) is amended by striking `September 30, 2009' and inserting `December 31, 2010'.CommentsClose CommentsPermalink
(2) ALTERNATIVE FUEL MIXTURE CREDIT- Paragraph (3) of section 6426(e) (relating to alternative fuel mixture credit) is amended by striking `September 30, 2009' and inserting `December 31, 2010'.CommentsClose CommentsPermalink
(3) PAYMENTS- Subparagraph (C) of section 6427(e)(5) (relating to termination) is amended by striking `September 30, 2009' and inserting `December 31, 2010'.CommentsClose CommentsPermalink
(b) Modifications-CommentsClose CommentsPermalink
(1) ALTERNATIVE FUEL TO INCLUDE COMPRESSED OR LIQUIFIED BIOMASS GAS- Paragraph (2) of section 6426(d) (relating to alternative fuel credit) is amended by striking `and' at the end of subparagraph (E), by redesignating subparagraph (F) as subparagraph (G), and by inserting after subparagraph (E) the following new subparagraph:CommentsClose CommentsPermalink
`(F) compressed or liquefied biomass gas, and'.CommentsClose CommentsPermalink
(2) CREDIT ALLOWED FOR AVIATION USE OF FUEL- Paragraph (1) of section 6426(d) is amended by inserting `sold by the taxpayer for use as a fuel in aviation,' after `motorboat,'.CommentsClose CommentsPermalink
(c) Carbon Capture Requirement for Certain Fuels-CommentsClose CommentsPermalink
(1) IN GENERAL- Subsection (d) of section 6426, as amended by subsection (a), is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph:CommentsClose CommentsPermalink
`(4) CARBON CAPTURE REQUIREMENT-CommentsClose CommentsPermalink
`(A) IN GENERAL- The requirements of this paragraph are met if the fuel is certified, under such procedures as required by the Secretary, as having been derived from coal produced at a gasification facility which separates and sequesters not less than the applicable percentage of such facility's total carbon dioxide emissions.CommentsClose CommentsPermalink
`(B) APPLICABLE PERCENTAGE- For purposes of subparagraph (A), the applicable percentage is--CommentsClose CommentsPermalink
`(i) 50 percent in the case of fuel produced after the date of the enactment of this paragraph and on or before the earlier of--CommentsClose CommentsPermalink
`(I) the date the Secretary makes a determination under subparagraph (C), orCommentsClose CommentsPermalink
`(II) December 30, 2010, andCommentsClose CommentsPermalink
`(ii) 75 percent in the case of fuel produced after the date on which the applicable percentage under clause (i) ceases to apply.CommentsClose CommentsPermalink
`(C) DETERMINATION TO INCREASE APPLICABLE PERCENTAGE BEFORE DECEMBER 31, 2010- If the Secretary, after considering the recommendations of the Carbon Sequestration Capability Panel, finds that the applicable percentage under subparagraph (B) should be 75 percent for fuel produced before December 31, 2010, the Secretary shall make a determination under this subparagraph. Any determination made under this subparagraph shall be made not later than 30 days after the Secretary receives from the Carbon Sequestration Panel the report required under section 331(c)(3)(D) of the Heartland, Habitat, Harvest, and Horticulture Act of 2007.'.CommentsClose CommentsPermalink
(2) CONFORMING AMENDMENT- Subparagraph (E) of section 6426(d)(2) is amended by inserting `which meets the requirements of paragraph (4) and which is' after `any liquid fuel'.CommentsClose CommentsPermalink
(3) CARBON SEQUESTRATION CAPABILITY PANEL-CommentsClose CommentsPermalink
(A) ESTABLISHMENT OF PANEL- There is established a panel to be known as the `Carbon Sequestration Capability Panel' (hereafter in this paragraph referred to as the `Panel').CommentsClose CommentsPermalink
(B) MEMBERSHIP- The Panel shall be composed of--CommentsClose CommentsPermalink
(i) 1 individual appointed by the National Academy of Sciences,CommentsClose CommentsPermalink
(ii) 1 individual appointed by the Chairman of the Committee on Finance of the Senate, in consultation with the Ranking Member of the Committee, andCommentsClose CommentsPermalink
(iii) 1 individual appointed jointly by the individuals appointed under clauses (i) and (ii).CommentsClose CommentsPermalink
(C) STUDY- The Panel shall study the appropriate percentage of carbon dioxide for separation and sequestration under section 6426(d)(4) of the Internal Revenue Code of 1986 consistent with the purposes of such section. The panel shall consider--CommentsClose CommentsPermalink
(i) whether it is feasible to separate and sequester 75 percent of the carbon dioxide emissions of a facility, andCommentsClose CommentsPermalink
(ii) costs and other factors associated with separating and sequestering such percentage of carbon dioxide emissions.CommentsClose CommentsPermalink
(D) REPORT- Not later than 6 months after the date of the enactment of this Act, the Panel shall report to the Secretary of Treasury, the Committee on Finance of the Senate, and the Committee on Ways and Means of the House of Representatives on the study under subparagraph (C) .CommentsClose CommentsPermalink
(d) Effective Date- The amendments made by this section shall apply to fuel sold or used after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 332. EXTENSION OF ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.
Paragraph (2) of section 30C(g) (relating to termination) is amended by striking `December 31, 2009' and inserting `December 31, 2010'.CommentsClose CommentsPermalink
TITLE IV--AGRICULTURAL PROVISIONS
SEC. 401. INCREASE IN LOAN LIMITS ON AGRICULTURAL BONDS.
(a) In General- Subparagraph (A) of section 147(c)(2) (relating to exception for first-time farmers) is amended by striking `$250,000' and inserting `$450,000'.CommentsClose CommentsPermalink
(b) Inflation Adjustment- Section 147(c)(2) is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink
`(H) ADJUSTMENTS FOR INFLATION- In the case of any calendar year after 2008, the dollar amount in subparagraph (A) shall be increased by an amount equal to--CommentsClose CommentsPermalink
`(i) such dollar amount, multiplied byCommentsClose CommentsPermalink
`(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting `calendar year 2007' for `calendar year 1992' in subparagraph (B) thereof.CommentsClose CommentsPermalink
If any amount as increased under the preceding sentence is not a multiple of $100, such amount shall be rounded to the nearest multiple of $100.'.CommentsClose CommentsPermalink
(c) Modification of Substantial Farmland Definition- Section 147(c)(2)(E) (defining substantial farmland) is amended by striking `unless' and all that follows through the period and inserting `unless such parcel is smaller than 30 percent of the median size of a farm in the county in which such parcel is located.'.CommentsClose CommentsPermalink
(d) Conforming Amendment- Section 147(c)(2)(C)(i)(II) is amended by striking `$250,000' and inserting `the amount in effect under subparagraph (A)'.CommentsClose CommentsPermalink
(e) Effective Date- The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 402. MODIFICATION OF INSTALLMENT SALE RULES FOR CERTAIN FARM PROPERTY.
(a) In General- Section 453(i) (relating to recognition of recapture income in year of disposition) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(3) EXCEPTION FOR CERTAIN FARM PROPERTY- Paragraph (1) shall not apply to any installment sale of any single purpose agricultural or horticultural structure or any tree or vine bearing fruit or nuts eligible for classification as 10-year property under section 168(e)(3)(D).'.CommentsClose CommentsPermalink
(b) Effective Date- The amendment made by this section shall apply to installment sales occurring after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 403. ALLOWANCE OF SECTION 1031 TREATMENT FOR EXCHANGES INVOLVING CERTAIN MUTUAL DITCH, RESERVOIR, OR IRRIGATION COMPANY STOCK.
(a) In General- Section 1031 (relating to exchange of property held for productive use or investment) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink
`(i) Special Rules for Mutual Ditch, Reservoir, or Irrigation Company Stock- For purposes of subsection (a)(2)(B), the term `stocks' shall not include shares in a mutual ditch, reservoir, or irrigation company if at the time of the exchange--CommentsClose CommentsPermalink
`(1) the mutual ditch, reservoir, or irrigation company is an organization described in section 501(c)(12)(A) (determined without regard to the percentage of its income that is collected from its members for the purpose of meeting losses and expenses), andCommentsClose CommentsPermalink
`(2) the shares in such company have been recognized by the highest court of the State in which such company was organized or by applicable State statute as constituting or representing real property or an interest in real property.'.CommentsClose CommentsPermalink
(b) Effective Date- The amendment made by this section shall apply to exchanges completed after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 404. CREDIT TO HOLDERS OF RURAL RENAISSANCE BONDS.
(a) In General- Subpart H of part IV of subchapter A of chapter 1 (relating to credits against tax) is amended by adding at the end the following new section:CommentsClose CommentsPermalink
`SEC. 54A. CREDIT TO HOLDERS OF RURAL RENAISSANCE BONDS.
`(a) Allowance of Credit- In the case of a taxpayer who holds a rural renaissance bond on 1 or more credit allowance dates of the bond occurring during any taxable year, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credits determined under subsection (b) with respect to such dates.CommentsClose CommentsPermalink
`(b) Amount of Credit-CommentsClose CommentsPermalink
`(1) IN GENERAL- The amount of the credit determined under this subsection with respect to any credit allowance date for a rural renaissance bond is 25 percent of the annual credit determined with respect to such bond.CommentsClose CommentsPermalink
`(2) ANNUAL CREDIT- The annual credit determined with respect to any rural renaissance bond is the product of--CommentsClose CommentsPermalink
`(A) the credit rate determined by the Secretary under paragraph (3) for the day on which such bond was sold, multiplied byCommentsClose CommentsPermalink
`(B) the outstanding face amount of the bond.CommentsClose CommentsPermalink
`(3) DETERMINATION- For purposes of paragraph (2), with respect to any rural renaissance bond, the Secretary shall determine daily or caused to be determined daily a credit rate which shall apply to the first day on which there is a binding, written contract for the sale or exchange of the bond. The credit rate for any day is the credit rate which the Secretary or the Secretary's designee estimates will permit the issuance of rural renaissance bonds with a specified maturity or redemption date without discount and without interest cost to the qualified issuer.CommentsClose CommentsPermalink
`(4) CREDIT ALLOWANCE DATE- For purposes of this section, the term `credit allowance date' means--CommentsClose CommentsPermalink
`(A) March 15,CommentsClose CommentsPermalink
`(B) June 15,CommentsClose CommentsPermalink
`(C) September 15, andCommentsClose CommentsPermalink
`(D) December 15.CommentsClose CommentsPermalink
Such term also includes the last day on which the bond is outstanding.CommentsClose CommentsPermalink
`(5) SPECIAL RULE FOR ISSUANCE AND REDEMPTION- In the case of a bond which is issued during the 3-month period ending on a credit allowance date, the amount of the credit determined under this subsection with respect to such credit allowance date shall be a ratable portion of the credit otherwise determined based on the portion of the 3-month period during which the bond is outstanding. A similar rule shall apply when the bond is redeemed or matures.CommentsClose CommentsPermalink
`(c) Limitation Based on Amount of Tax- The credit allowed under subsection (a) for any taxable year shall not exceed the excess of--CommentsClose CommentsPermalink
`(1) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, overCommentsClose CommentsPermalink
`(2) the sum of the credits allowable under this part (other than subpart C, section 1400N(l), and this section).CommentsClose CommentsPermalink
`(d) Rural Renaissance Bond- For purposes of this section--CommentsClose CommentsPermalink
`(1) IN GENERAL- The term `rural renaissance bond' means any bond issued as part of an issue if--CommentsClose CommentsPermalink
`(A) the bond is issued by a qualified issuer pursuant to an allocation by the Secretary to such issuer of a portion of the national rural renaissance bond limitation under subsection (f)(2),CommentsClose CommentsPermalink
`(B) 95 percent or more of the proceeds from the sale of such issue are to be used for capital expenditures incurred by qualified borrowers for 1 or more qualified projects,CommentsClose CommentsPermalink
`(C) the qualified issuer designates such bond for purposes of this section and the bond is in registered form,CommentsClose CommentsPermalink
`(D) the issue meets the requirements of subsection (h), andCommentsClose CommentsPermalink
`(E) such bond is not a federally guaranteed bond (within the meaning of section 149(b)(2)).CommentsClose CommentsPermalink
`(2) QUALIFIED PROJECT; SPECIAL USE RULES-CommentsClose CommentsPermalink
`(A) IN GENERAL- The term `qualified project' means 1 or more projects described in subparagraph (B) located in a rural area.CommentsClose CommentsPermalink
`(B) PROJECTS DESCRIBED- A project described in this subparagraph is a project eligible for assistance under--CommentsClose CommentsPermalink
`(i) the utilities programs described in section 381E(d)(2) of the Consolidated Farm and Rural Development Act (
`(ii) the distance learning or telemedicine programs authorized pursuant to chapter 1 of subtitle D of title XXIII of the Food, Agriculture, Conservation, and Trade Act of 1990 (
`(iii) the rural electric programs authorized pursuant to the Rural Electrification Act of 1936 (
`(iv) the rural telephone programs authorized pursuant to the Rural Electrification Act of 1936 (
`(v) the broadband access programs authorized pursuant to title VI of the Rural Electrification Act of 1936 (
`(vi) the rural community facility programs as described in section 381E(d)(1) of the Consolidated Farm and Rural Development Act (
`(C) REFINANCING RULES- For purposes of paragraph (1)(B), a qualified project may be refinanced with proceeds of a rural renaissance bond only if the indebtedness being refinanced (including any obligation directly or indirectly refinanced by such indebtedness) was originally incurred by a qualified borrower after the date of the enactment of this section.CommentsClose CommentsPermalink
`(D) REIMBURSEMENT- For purposes of paragraph (1)(B), a rural renaissance bond may be issued to reimburse a qualified borrower for amounts paid after the date of the enactment of this section with respect to a qualified project, but only if--CommentsClose CommentsPermalink
`(i) prior to the payment of the original expenditure, the qualified borrower declared its intent to reimburse such expenditure with the proceeds of a rural renaissance bond,CommentsClose CommentsPermalink
`(ii) not later than 60 days after payment of the original expenditure, the qualified issuer adopts an official intent to reimburse the original expenditure with such proceeds, andCommentsClose CommentsPermalink
`(iii) the reimbursement is made not later than 18 months after the date the original expenditure is paid.CommentsClose CommentsPermalink
`(E) TREATMENT OF CHANGES IN USE- For purposes of paragraph (1)(B), the proceeds of an issue shall not be treated as used for a qualified project to the extent that a qualified borrower or qualified issuer takes any action within its control which causes such proceeds not to be used for a qualified project. The Secretary shall prescribe regulations specifying remedial actions that may be taken (including conditions to taking such remedial actions) to prevent an action described in the preceding sentence from causing a bond to fail to be a rural renaissance bond.CommentsClose CommentsPermalink
`(F) TREATMENT OF OTHER SUBSIDIES- For purposes of subparagraph (B), a qualified project does not include any portion of a project financed by grants or subsidized financing provided (directly or indirectly) under a Federal program, including any State or local obligation used to provide financing for such portion the interest on which is exempt from tax under section 103.CommentsClose CommentsPermalink
`(e) Maturity Limitations-CommentsClose CommentsPermalink
`(1) DURATION OF TERM- A bond shall not be treated as a rural renaissance bond if the maturity of such bond exceeds the maximum term determined by the Secretary under paragraph (2) with respect to such bond.CommentsClose CommentsPermalink
`(2) MAXIMUM TERM- During each calendar month, the Secretary shall determine the maximum term permitted under this paragraph for bonds issued during the following calendar month. Such maximum term shall be the term which the Secretary estimates will result in the present value of the obligation to repay the principal on the bond being equal to 50 percent of the face amount of such bond. Such present value shall be determined without regard to the requirements of paragraph (3) and using as a discount rate the average annual interest rate of tax-exempt obligations having a term of 10 years or more which are issued during the month. If the term as so determined is not a multiple of a whole year, such term shall be rounded to the next highest whole year.CommentsClose CommentsPermalink
`(3) RATABLE PRINCIPAL AMORTIZATION REQUIRED- A bond shall not be treated as a rural renaissance bond unless it is part of an issue which provides for an equal amount of principal to be paid by the qualified issuer during each calendar year that the issue is outstanding.CommentsClose CommentsPermalink
`(f) Limitation on Amount of Bonds Designated-CommentsClose CommentsPermalink
`(1) NATIONAL LIMITATION- There is a national rural renaissance bond limitation of $400,000,000.CommentsClose CommentsPermalink
`(2) ALLOCATION BY SECRETARY-CommentsClose CommentsPermalink
`(A) IN GENERAL- In accordance with subparagraph (B), the Secretary shall allocate the amount described in paragraph (1) among at least 20 qualified projects, or such lesser number of qualified projects with proper applications filed after 12 months after the adoption of the selection process under subparagraph (B).CommentsClose CommentsPermalink
`(B) SELECTION PROCESS- In consultation with the Secretary of Agriculture, the Secretary shall adopt a process to select projects described in subparagraph (A). Under such process, the Secretary shall not allocate more than 15 percent of the allocation under subparagraph (A) to qualified projects within a single State.CommentsClose CommentsPermalink
`(g) Credit Included in Gross Income- Gross income includes the amount of the credit allowed to the taxpayer under this section (determined without regard to subsection (c)) and the amount so included shall be treated as interest income.CommentsClose CommentsPermalink
`(h) Special Rules Relating to Expenditures-CommentsClose CommentsPermalink
`(1) IN GENERAL- An issue shall be treated as meeting the requirements of this subsection if, as of the date of issuance, the qualified issuer reasonably expects--CommentsClose CommentsPermalink
`(A) at least 95 percent of the proceeds from the sale of the issue are to be spent for 1 or more qualified projects within the 5-year period beginning on the date of issuance of the rural renaissance bond,CommentsClose CommentsPermalink
`(B) a binding commitment with a third party to spend at least 10 percent of the proceeds from the sale of the issue will be incurred within the 6-month period beginning on the date of issuance of the rural renaissance bond or, in the case of a rural renaissance bond the proceeds of which are to be loaned to 2 or more qualified borrowers, such binding commitment will be incurred within the 6-month period beginning on the date of the loan of such proceeds to a qualified borrower, andCommentsClose CommentsPermalink
`(C) such projects will be completed with due diligence and the proceeds from the sale of the issue will be spent with due diligence.CommentsClose CommentsPermalink
`(2) EXTENSION OF PERIOD- Upon submission of a request prior to the expiration of the period described in paragraph (1)(A), the Secretary may extend such period if the qualified issuer establishes that the failure to satisfy the 5-year requirement is due to reasonable cause and the related projects will continue to proceed with due diligence.CommentsClose CommentsPermalink
`(3) FAILURE TO SPEND REQUIRED AMOUNT OF BOND PROCEEDS WITHIN 5 YEARS- To the extent that less than 95 percent of the proceeds of such issue are expended by the close of the 5-year period beginning on the date of issuance (or if an extension has been obtained under paragraph (2), by the close of the extended period), the qualified issuer shall redeem all of the nonqualified bonds within 90 days after the end of such period. For purposes of this paragraph, the amount of the nonqualified bonds required to be redeemed shall be determined in the same manner as under section 142.CommentsClose CommentsPermalink
`(i) Special Rules Relating to Arbitrage- A bond which is part of an issue shall not be treated as a rural renaissance bond unless, with respect to the issue of which the bond is a part, the qualified issuer satisfies the arbitrage requirements of section 148 with respect to proceeds of the issue.CommentsClose CommentsPermalink
`(j) Definitions and Special Rules Relating to Issuers and Borrowers- For purposes of this section--CommentsClose CommentsPermalink
`(1) QUALIFIED ISSUER- The term `qualified issuer' means--CommentsClose CommentsPermalink
`(A) a rural renaissance bond lender,CommentsClose CommentsPermalink
`(B) a cooperative electric company, orCommentsClose CommentsPermalink
`(C) a governmental body.CommentsClose CommentsPermalink
`(2) QUALIFIED BORROWER- The term `qualified borrower' means--CommentsClose CommentsPermalink
`(A) a mutual or cooperative electric company described in section 501(c)(12) or 1381(a)(2)(C), orCommentsClose CommentsPermalink
`(B) a governmental body.CommentsClose CommentsPermalink
`(3) RURAL RENAISSANCE BOND LENDER- The term `rural renaissance bond lender' means a lender which is a cooperative which is owned by, or has outstanding loans to, 100 or more cooperative electric companies and is in existence on February 1, 2002, and shall include any affiliated entity which is controlled by such lender.CommentsClose CommentsPermalink
`(4) COOPERATIVE ELECTRIC COMPANY- The term `cooperative electric company' means a mutual or cooperative electric company described in section 501(c)(12) or section 1381(a)(2)(C), or a not-for-profit electric utility which has received a loan or loan guarantee under the Rural Electrification Act.CommentsClose CommentsPermalink
`(5) GOVERNMENTAL BODY- The term `governmental body' means any State, territory, possession of the United States, the District of Columbia, Indian tribal government, and any political subdivision thereof.CommentsClose CommentsPermalink
`(k) Special Rules Relating to Pool Bonds- No portion of a pooled financing bond may be allocable to loan unless the borrower has entered into a written loan commitment for such portion prior to the issue date of such issue.CommentsClose CommentsPermalink
`(l) Other Definitions and Special Rules- For purposes of this section--CommentsClose CommentsPermalink
`(1) BOND- The term `bond' includes any obligation.CommentsClose CommentsPermalink
`(2) POOLED FINANCING BOND- The term `pooled financing bond' shall have the meaning given such term by section 149(f)(4)(A).CommentsClose CommentsPermalink
`(3) RURAL AREA- The term `rural area' shall have the meaning given such term by section 1393(a)(2).CommentsClose CommentsPermalink
`(4) PARTNERSHIP; S CORPORATION; AND OTHER PASS-THRU ENTITIES-CommentsClose CommentsPermalink
`(A) IN GENERAL- Under regulations prescribed by the Secretary, in the case of a partnership, trust, S corporation, or other pass-thru entity, rules similar to the rules of section 41(g) shall apply with respect to the credit allowable under subsection (a).CommentsClose CommentsPermalink
`(B) NO BASIS ADJUSTMENT- In the case of a bond held by a partnership or an S corporation, rules similar to the rules under section 1397E(i) shall apply.CommentsClose CommentsPermalink
`(5) BONDS HELD BY REGULATED INVESTMENT COMPANIES- If any rural renaissance bond is held by a regulated investment company, the credit determined under subsection (a) shall be allowed to shareholders of such company under procedures prescribed by the Secretary.CommentsClose CommentsPermalink
`(6) REPORTING- Issuers of rural renaissance bonds shall submit reports similar to the reports required under section 149(e).CommentsClose CommentsPermalink
`(7) TERMINATION- This section shall not apply with respect to any bond issued after December 31, 2008.'.CommentsClose CommentsPermalink
(b) Reporting- Subsection (d) of section 6049 (relating to returns regarding payments of interest) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(9) REPORTING OF CREDIT ON RURAL RENAISSANCE BONDS-CommentsClose CommentsPermalink
`(A) IN GENERAL- For purposes of subsection (a), the term `interest' includes amounts includible in gross income under section 54A(g) and such amounts shall be treated as paid on the credit allowance date (as defined in section 54A(b)(4)).CommentsClose CommentsPermalink
`(B) REPORTING TO CORPORATIONS, ETC- Except as otherwise provided in regulations, in the case of any interest described in subparagraph (A), subsection (b)(4) shall be applied without regard to subparagraphs (A), (H), (I), (J), (K), and (L)(i) of such subsection.CommentsClose CommentsPermalink
`(C) REGULATORY AUTHORITY- The Secretary may prescribe such regulations as are necessary or appropriate to carry out the purposes of this paragraph, including regulations which require more frequent or more detailed reporting.'.CommentsClose CommentsPermalink
(c) Conforming Amendments-CommentsClose CommentsPermalink
(1) The table of sections for subpart H of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:CommentsClose CommentsPermalink
`Sec. 54A. Credit to holders of rural renaissance bonds.'.CommentsClose CommentsPermalink
(2) Section 54(c)(2) is amended by inserting `section 54A,' after `subpart C,'.CommentsClose CommentsPermalink
(d) Issuance of Regulations- The Secretary of Treasury shall issue regulations required under section 54A (as added by this section) not later than 120 days after the date of the enactment of this Act.CommentsClose CommentsPermalink
(e) Effective Date- The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 405. AGRICULTURAL CHEMICALS SECURITY CREDIT.
(a) In General- Subpart D of part IV of subchapter A of chapter 1 (relating to business related credits) is amended by adding at the end the following new section:CommentsClose CommentsPermalink
`SEC. 45O. AGRICULTURAL CHEMICALS SECURITY CREDIT.
`(a) In General- For purposes of section 38, in the case of an eligible agricultural business, the agricultural chemicals security credit determined under this section for the taxable year is 30 percent of the qualified security expenditures for the taxable year.CommentsClose CommentsPermalink
`(b) Facility Limitation- The amount of the credit determined under subsection (a) with respect to any facility for any taxable year shall not exceed--CommentsClose CommentsPermalink
`(1) $100,000, reduced byCommentsClose CommentsPermalink
`(2) the aggregate amount of credits determined under subsection (a) with respect to such facility for the 5 prior taxable years.CommentsClose CommentsPermalink
`(c) Annual Limitation- The amount of the credit determined under subsection (a) with respect to any taxpayer for any taxable year shall not exceed $2,000,000.CommentsClose CommentsPermalink
`(d) Qualified Chemical Security Expenditure- For purposes of this section, the term `qualified chemical security expenditure' means, with respect to any eligible agricultural business for any taxable year, any amount paid or incurred by such business during such taxable year for--CommentsClose CommentsPermalink
`(1) employee security training and background checks,CommentsClose CommentsPermalink
`(2) limitation and prevention of access to controls of specified agricultural chemicals stored at the facility,CommentsClose CommentsPermalink
`(3) tagging, locking tank valves, and chemical additives to prevent the theft of specified agricultural chemicals or to render such chemicals unfit for illegal use,CommentsClose CommentsPermalink
`(4) protection of the perimeter of specified agricultural chemicals,CommentsClose CommentsPermalink
`(5) installation of security lighting, cameras, recording equipment, and intrusion detection sensors,CommentsClose CommentsPermalink
`(6) implementation of measures to increase computer or computer network security,CommentsClose CommentsPermalink
`(7) conducting a security vulnerability assessment,CommentsClose CommentsPermalink
`(8) implementing a site security plan, andCommentsClose CommentsPermalink
`(9) such other measures for the protection of specified agricultural chemicals as the Secretary may identify in regulation.CommentsClose CommentsPermalink
Amounts described in the preceding sentence shall be taken into account only to the extent that such amounts are paid or incurred for the purpose of protecting specified agricultural chemicals.CommentsClose CommentsPermalink
`(e) Eligible Agricultural Business- For purposes of this section, the term `eligible agricultural business' means any person in the trade or business of--CommentsClose CommentsPermalink
`(1) selling agricultural products, including specified agricultural chemicals, at retail predominantly to farmers and ranchers, orCommentsClose CommentsPermalink
`(2) manufacturing, formulating, distributing, or aerially applying specified agricultural chemicals.CommentsClose CommentsPermalink
`(f) Specified Agricultural Chemical- For purposes of this section, the term `specified agricultural chemical' means--CommentsClose CommentsPermalink
`(1) any fertilizer commonly used in agricultural operations which is listed under--CommentsClose CommentsPermalink
`(A) section 302(a)(2) of the Emergency Planning and Community Right-to-Know Act of 1986,CommentsClose CommentsPermalink
`(B) section 101 of part 172 of title 49, Code of Federal Regulations, orCommentsClose CommentsPermalink
`(C) part 126, 127, or 154 of title 33, Code of Federal Regulations, andCommentsClose CommentsPermalink
`(2) any pesticide (as defined in section 2(u) of the Federal Insecticide, Fungicide, and Rodenticide Act), including all active and inert ingredients thereof, which is customarily used on crops grown for food, feed, or fiber.CommentsClose CommentsPermalink
`(g) Controlled Groups- Rules similar to the rules of paragraphs (1) and (2) of section 41(f) shall apply for purposes of this section.CommentsClose CommentsPermalink
`(h) Regulations- The Secretary may prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations which--CommentsClose CommentsPermalink
`(1) provide for the proper treatment of amounts which are paid or incurred for purpose of protecting any specified agricultural chemical and for other purposes, andCommentsClose CommentsPermalink
`(2) provide for the treatment of related properties as one facility for purposes of subsection (b).CommentsClose CommentsPermalink
`(i) Termination- This section shall not apply to any amount paid or incurred after December 31, 2012.'.CommentsClose CommentsPermalink
(b) Credit Allowed as Part of General Business Credit- Section 38(b) is amended by striking `plus' at the end of paragraph (30), by striking the period at the end of paragraph (31) and inserting `, plus', and by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(32) in the case of an eligible agricultural business (as defined in section 45O(e)), the agricultural chemicals security credit determined under section 45O(a).'.CommentsClose CommentsPermalink
(c) Denial of Double Benefit- Section 280C is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink
`(f) Credit for Security of Agricultural Chemicals- No deduction shall be allowed for that portion of the expenses otherwise allowable as a deduction taken into account in determining the credit under section 45O for the taxable year which is equal to the amount of the credit determined for such taxable year under section 45O(a).'.CommentsClose CommentsPermalink
(d) Clerical Amendment- The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:CommentsClose CommentsPermalink
`Sec. 45O. Agricultural chemicals security credit.'.CommentsClose CommentsPermalink
(e) Effective Date- The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 406. CREDIT FOR DRUG SAFETY AND EFFECTIVENESS TESTING FOR MINOR ANIMAL SPECIES.
(a) In General- Subpart D of part IV of subchapter A of chapter 1 (relating to business related credits), as amended by this Act, is amended by adding at the end the following new section:CommentsClose CommentsPermalink
`SEC. 45P. DRUG SAFETY AND EFFECTIVENESS TESTING FOR MINOR ANIMAL SPECIES.
`(a) Allowance of Credit- For purposes of section 38, in the case of an eligible taxpayer, the drug safety and effectiveness testing for minor animal species credit determined under this section for the taxable year shall be an amount equal to 50 percent of the qualified safety and effectiveness testing expenses paid or incurred by the taxpayer during the taxable year.CommentsClose CommentsPermalink
`(b) Eligible Taxpayer- For purposes of this section, the term `eligible taxpayer' any taxpayer--CommentsClose CommentsPermalink
`(1) which--CommentsClose CommentsPermalink
`(A) applies for the designation of a new animal drug for use on a minor animal species under section 573 of the Federal Food, Drug, and Cosmetic Act, orCommentsClose CommentsPermalink
`(B) owns animals which are the subject of safety and effectiveness testing, andCommentsClose CommentsPermalink
`(2) which elects the application of this section for the taxable year.CommentsClose CommentsPermalink
`(c) Qualified Safety and Effectiveness Testing Expenses- For purposes of this section--CommentsClose CommentsPermalink
`(1) IN GENERAL- The term `qualified safety and effectiveness testing expenses' means the sum of the following amounts which are paid or incurred by the eligible taxpayer during the taxable year in carrying on any trade or business of such taxpayer:CommentsClose CommentsPermalink
`(A) In-house safety and effectiveness testing expenses.CommentsClose CommentsPermalink
`(B) Contract safety and effectiveness testing expenses.CommentsClose CommentsPermalink
Such term does not include any amount to the extent such amount is funded by any grant, contract, or otherwise by another person (or any governmental entity).CommentsClose CommentsPermalink
`(2) IN-HOUSE SAFETY AND EFFECTIVENESS TESTING EXPENSES-CommentsClose CommentsPermalink
`(A) IN GENERAL- The term `in-house safety and effectiveness testing expenses' means--CommentsClose CommentsPermalink
`(i) any wages paid or incurred to an employee for qualified services performed by such employee,CommentsClose CommentsPermalink
`(ii) any amount paid or incurred for supplies used in the conduct of safety and effectiveness testing, andCommentsClose CommentsPermalink
`(iii) under regulations prescribed by the Secretary, any amount paid or incurred to another person for the right to use computers in the conduct of safety and effectiveness testing.CommentsClose CommentsPermalink
Clause (iii) shall not apply to any amount to the extent that the taxpayer (or any person with whom the taxpayer must aggregate expenditures under rules specified under subsection (f)(2)) receives or accrues any amount from any other person for the right to use substantially identical personal property.CommentsClose CommentsPermalink
`(B) QUALIFIED SERVICES- The term `qualified services' means services consisting of--CommentsClose CommentsPermalink
`(i) engaging in safety and effectiveness testing, orCommentsClose CommentsPermalink
`(ii) engaging in the direct supervision or direct support of such testing.CommentsClose CommentsPermalink
If substantially all of the services performed by an individual for the taxpayer during the taxable year consists of services meeting the requirements of clause (i) or (ii), the term `qualified services' means all of the services performed by such individual for the taxpayer during the taxable year.CommentsClose CommentsPermalink
`(C) WAGES AND SUPPLIES- The terms `wages' and `supplies' have the meanings given such terms by section 41(b).CommentsClose CommentsPermalink
`(3) CONTRACT SAFETY AND EFFECTIVENESS TESTING EXPENSES-CommentsClose CommentsPermalink
`(A) IN GENERAL- The term `contract safety and effectiveness testing expenses' means any amount paid or incurred by the taxpayer to any person (other than an employee of the taxpayer) for safety and effectiveness testing.CommentsClose CommentsPermalink
`(B) PREPAID AMOUNTS- If any contract safety and effectiveness testing expenses paid or incurred during any taxable year are attributable to safety and effectiveness testing to be conducted after the close of such taxable year, such amount shall be treated as paid or incurred during the period during which the safety and effectiveness testing is conducted.CommentsClose CommentsPermalink
`(d) Safety and Effectiveness Testing- For purposes of this section--CommentsClose CommentsPermalink
`(1) IN GENERAL- The term `safety and effectiveness testing' means any testing which--CommentsClose CommentsPermalink
`(A) is related to the use of a new animal drug for use on a minor animal species for which it was designated under section 573 of the Federal Food, Drug, and Cosmetic Act,CommentsClose CommentsPermalink
`(B) is carried out under an exemption for such new animal drug under section 512(j) of such Act (or regulations issued under such section),CommentsClose CommentsPermalink
`(C) occurs--CommentsClose CommentsPermalink
`(i) after the date on which the application for designation of such new animal drug under section 573 of such Act is filed, andCommentsClose CommentsPermalink
`(ii) before the date on which such application is approved under section 512(c) of such Act, andCommentsClose CommentsPermalink
`(D) which is conducted by or on behalf of an eligible taxpayer.CommentsClose CommentsPermalink
`(2) MINOR ANIMAL SPECIES-CommentsClose CommentsPermalink
`(A) IN GENERAL- The term `minor animal species' means animals, other than humans, which are not major animal species.CommentsClose CommentsPermalink
`(B) MAJOR ANIMAL SPECIES- The term `major animal species' means cattle, horses, swine, chickens, turkeys, dogs, cats, and any other species as determined by the Secretary, after consultation with the Secretary of Agriculture.CommentsClose CommentsPermalink
`(e) Treatment of Qualified Safety and Effectiveness Testing Expenses-CommentsClose CommentsPermalink
`(1) IN GENERAL- Except as provided in paragraph (2), any qualified safety and effectiveness testing expenses for a taxable year to which an election under this section applies shall not be taken into account for purposes of determining the credit allowable under section 41 for such taxable year.CommentsClose CommentsPermalink
`(2) TREATED AS BASE PERIOD RESEARCH EXPENSES- Any qualified safe and effectiveness testing expenses for any taxable year which are qualified research expenses (within the meaning of section 41(b)) shall be taken into account in determining base period research expenses for purposes of applying section 41 to subsequent taxable years.CommentsClose CommentsPermalink
`(f) Special Rules-CommentsClose CommentsPermalink
`(1) LIMITATION- No credit shall be allowed under this section with respect to any safety and effectiveness testing conducted by a corporation to which an election under section 936 applies.CommentsClose CommentsPermalink
`(2) AGGREGATION OF EXPENDITURES AND ALLOCATIONS OF CREDIT- Rules similar to the rules of paragraphs (1) and (2) of section 41(f) and section 41(g) shall apply for purposes of this section.'.CommentsClose CommentsPermalink
(b) Credit Allowed as Part of General Business Credit- Section 38(b), as amended by this Act, is amended by striking `plus' at the end of paragraph (31), by striking the period at the end of paragraph (32) and inserting `, plus', and by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(33) the drug safety and effectiveness testing for minor animal species credit determined under section 45P(a).'.CommentsClose CommentsPermalink
(c) Denial of Double Benefit- Section 280C, as amended by this Act, is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink
`(g) Drug Safety and Effectiveness Testing for Minor Animal Species Credit-CommentsClose CommentsPermalink
`(1) IN GENERAL- No deduction shall be allowed for that portion of the qualified safety and effectiveness testing expenses (as defined in section 45P(c)(1)) otherwise allowable as a deduction for the taxable year which is equal to the amount of the credit determined for such taxable year under section 45P(a).CommentsClose CommentsPermalink
`(2) SIMILAR RULE WHERE TAXPAYER CAPITALIZES RATHER THAN DEDUCTS EXPENSES- If--CommentsClose CommentsPermalink
`(A) the amount of the credit determined for the taxable year under section 45P(a), exceedsCommentsClose CommentsPermalink
`(B) the amount allowable as a deduction for such taxable year for qualified safety and effectiveness testing expenses (determined without regard to paragraph (1)),CommentsClose CommentsPermalink
the amount chargeable to capital account for the taxable year for such expenses shall be reduced by the amount of such excess.CommentsClose CommentsPermalink
`(3) CONTROLLED GROUPS- Paragraph (3) of subsection (b) shall apply for purposes of this subsection.'.CommentsClose CommentsPermalink
(d) Clerical Amendment- The table of sections for subpart D of part IV of subchapter A of chapter 1, as amended by this Act, is amended by adding at the end the following new item:CommentsClose CommentsPermalink
`Sec. 45P. Drug safety and effectiveness testing for minor animal species.'.CommentsClose CommentsPermalink
(e) Effective Date- The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 407. CERTAIN FARMING BUSINESS MACHINERY AND EQUIPMENT TREATED AS 5-YEAR PROPERTY.
(a) In General- Section 168(e)(3)(B) (defining 5-year property) is amended by striking `and' at the end of clause (v), by striking the period at the end of clause (vi)(III) and inserting `, and', and by inserting after clause (vi) the following new clause:CommentsClose CommentsPermalink
`(vii) any machinery or equipment (other than any grain bin, cotton ginning asset, fence, or other land improvement) which is used in a farming business (as defined in section 263A(e)(4)), the original use of which commences with the taxpayer after the date of the enactment of this clause, and which is placed in service before January 1, 2010.'.CommentsClose CommentsPermalink
(b) Alternative System- The table contained in section 168(g)(3)(B) (relating to special rule for certain property assigned to classes) is amended by inserting after the item relating to subparagraph (B)(iii) the following:CommentsClose CommentsPermalink
---------------CommentsClose CommentsPermalink
---------------CommentsClose CommentsPermalink
`(B)(vii) 10'. CommentsClose CommentsPermalink
---------------CommentsClose CommentsPermalink
(c) Effective Date- The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 408. EXPENSING OF BROADBAND INTERNET ACCESS EXPENDITURES.
(a) In General- Part VI of subchapter B of chapter 1 (relating to itemized deductions for individuals and corporations) is amended by inserting after section 190 the following new section:CommentsClose CommentsPermalink
`SEC. 191. BROADBAND EXPENDITURES.
`(a) Treatment of Expenditures-CommentsClose CommentsPermalink
`(1) IN GENERAL- A taxpayer may elect to treat any qualified broadband expenditure which is paid or incurred by the taxpayer as an expense which is not chargeable to a capital account. Any expenditure which is so treated shall be allowed as a deduction.CommentsClose CommentsPermalink
`(2) ELECTION- An election under paragraph (1) shall be made at such time and in such manner as the Secretary may prescribe by regulation.CommentsClose CommentsPermalink
`(b) Qualified Broadband Expenditures- For purposes of this section--CommentsClose CommentsPermalink
`(1) IN GENERAL- The term `qualified broadband expenditure' means, with respect to any taxable year, any direct or indirect costs incurred after the date of the enactment of this section, and on or before the first December 31 which is 3 years after such date, and properly taken into account with respect to--CommentsClose CommentsPermalink
`(A) the purchase or installation of qualified equipment (including any upgrades thereto), andCommentsClose CommentsPermalink
`(B) the connection of such qualified equipment to any qualified subscriber.CommentsClose CommentsPermalink
`(2) CERTAIN SATELLITE EXPENDITURES EXCLUDED- Such term shall not include any costs incurred with respect to the launching of any satellite equipment.CommentsClose CommentsPermalink
`(3) LEASED EQUIPMENT- Such term shall include so much of the purchase price paid by the lessor of qualified equipment subject to a lease described in subsection (c)(2)(B) as is attributable to expenditures incurred by the lessee which would otherwise be described in paragraph (1).CommentsClose CommentsPermalink
`(4) LIMITATION WITH REGARD TO CURRENT GENERATION BROADBAND SERVICES- Only 50 percent of the amounts taken into account under paragraph (1) with respect to qualified equipment through which current generation broadband services are provided shall be treated as qualified broadband expenditures.CommentsClose CommentsPermalink
`(c) When Expenditures Taken Into Account- For purposes of this section--CommentsClose CommentsPermalink
`(1) IN GENERAL- Qualified broadband expenditures with respect to qualified equipment shall be taken into account with respect to the first taxable year in which--CommentsClose CommentsPermalink
`(A) current generation broadband services are provided through such equipment to qualified subscribers, orCommentsClose CommentsPermalink
`(B) next generation broadband services are provided through such equipment to qualified subscribers.CommentsClose CommentsPermalink
`(2) LIMITATION-CommentsClose CommentsPermalink
`(A) IN GENERAL- Qualified expenditures shall be taken into account under paragraph (1) only with respect to qualified equipment--CommentsClose CommentsPermalink
`(i) the original use of which commences with the taxpayer, andCommentsClose CommentsPermalink
`(ii) which is placed in service after the date of the enactment of this Act.CommentsClose CommentsPermalink
`(B) SALE-LEASEBACKS- For purposes of subparagraph (A), if property--CommentsClose CommentsPermalink
`(i) is originally placed in service after the date of the enactment of this Act by any person, andCommentsClose CommentsPermalink
`(ii) sold and leased back by such person within 3 months after the date such property was originally placed in service,CommentsClose CommentsPermalink
such property shall be treated as originally placed in service not earlier than the date on which such property is used under the leaseback referred to in clause (ii).CommentsClose CommentsPermalink
`(d) Special Allocation Rules-CommentsClose CommentsPermalink
`(1) CURRENT GENERATION BROADBAND SERVICES- For purposes of determining the amount of qualified broadband expenditures under subsection (a)(1) with respect to qualified equipment through which current generation broadband services are provided, if the qualified equipment is capable of serving both qualified subscribers and other subscribers, the qualified broadband expenditures shall be multiplied by a fraction--CommentsClose CommentsPermalink
`(A) the numerator of which is the sum of the number of potential qualified subscribers within the rural areas and the underserved areas which the equipment is capable of serving with current generation broadband services, andCommentsClose CommentsPermalink
`(B) the denominator of which is the total potential subscriber population of the area which the equipment is capable of serving with current generation broadband services.CommentsClose CommentsPermalink
`(2) NEXT GENERATION BROADBAND SERVICES- For purposes of determining the amount of qualified broadband expenditures under subsection (a)(1) with respect to qualified equipment through which next generation broadband services are provided, if the qualified equipment is capable of serving both qualified subscribers and other subscribers, the qualified broadband expenditures shall be multiplied by a fraction--CommentsClose CommentsPermalink
`(A) the numerator of which is the sum of--CommentsClose CommentsPermalink
`(i) the number of potential qualified subscribers within the rural areas and underserved areas, plusCommentsClose CommentsPermalink
`(ii) the number of potential qualified subscribers within the area consisting only of residential subscribers not described in clause (i),CommentsClose CommentsPermalink
which the equipment is capable of serving with next generation broadband services, andCommentsClose CommentsPermalink
`(B) the denominator of which is the total potential subscriber population of the area which the equipment is capable of serving with next generation broadband services.CommentsClose CommentsPermalink
`(e) Definitions- For purposes of this section--CommentsClose CommentsPermalink
`(1) ANTENNA- The term `antenna' means any device used to transmit or receive signals through the electromagnetic spectrum, including satellite equipment.CommentsClose CommentsPermalink
`(2) CABLE OPERATOR- The term `cable operator' has the meaning given such term by section 602(5) of the Communications Act of 1934 (
`(3) COMMERCIAL MOBILE SERVICE CARRIER- The term `commercial mobile service carrier' means any person authorized to provide commercial mobile radio service as defined in section 20.3 of title 47, Code of Federal Regulations.CommentsClose CommentsPermalink
`(4) CURRENT GENERATION BROADBAND SERVICE- The term `current generation broadband service' means the transmission of signals at a rate of at least 5,000,000 bits per second to the subscriber and at least 1,000,000 bits per second from the subscriber.CommentsClose CommentsPermalink
`(5) MULTIPLEXING OR DEMULTIPLEXING- The term `multiplexing' means the transmission of 2 or more signals over a single channel, and the term `demultiplexing' means the separation of 2 or more signals previously combined by compatible multiplexing equipment.CommentsClose CommentsPermalink
`(6) NEXT GENERATION BROADBAND SERVICE- The term `next generation broadband service' means the transmission of signals at a rate of at least 100,000,000 bits per second to the subscriber and at least 20,000,000 bits per second from the subscriber.CommentsClose CommentsPermalink
`(7) NONRESIDENTIAL SUBSCRIBER- The term `nonresidential subscriber' means any person who purchases broadband services which are delivered to the permanent place of business of such person.CommentsClose CommentsPermalink
`(8) OPEN VIDEO SYSTEM OPERATOR- The term `open video system operator' means any person authorized to provide service under section 653 of the Communications Act of 1934 (
`(9) OTHER WIRELESS CARRIER- The term `other wireless carrier' means any person (other than a telecommunications carrier, commercial mobile service carrier, cable operator, open video system operator, or satellite carrier) providing current generation broadband services or next generation broadband service to subscribers through the radio transmission of energy.CommentsClose CommentsPermalink
`(10) PACKET SWITCHING- The term `packet switching' means controlling or routing the path of any digitized transmission signal which is assembled into packets or cells.CommentsClose CommentsPermalink
`(11) PROVIDER- The term `provider' means, with respect to any qualified equipment--CommentsClose CommentsPermalink
`(A) a cable operator,CommentsClose CommentsPermalink
`(B) a commercial mobile service carrier,CommentsClose CommentsPermalink
`(C) an open video system operator,CommentsClose CommentsPermalink
`(D) a satellite carrier,CommentsClose CommentsPermalink
`(E) a telecommunications carrier, orCommentsClose CommentsPermalink
`(F) any other wireless carrier,CommentsClose CommentsPermalink
providing current generation broadband services or next generation broadband services to subscribers through such qualified equipment.CommentsClose CommentsPermalink
`(12) PROVISION OF SERVICES- A provider shall be treated as providing services to 1 or more subscribers if--CommentsClose CommentsPermalink
`(A) such a subscriber has been passed by the provider's equipment and can be connected to such equipment for a standard connection fee,CommentsClose CommentsPermalink
`(B) the provider is physically able to deliver current generation broadband services or next generation broadband services, as applicable, to such a subscriber without making more than an insignificant investment with respect to such subscriber,CommentsClose CommentsPermalink
`(C) the provider has made reasonable efforts to make such subscribers aware of the availability of such services,CommentsClose CommentsPermalink
`(D) such services have been purchased by 1 or more such subscribers, andCommentsClose CommentsPermalink
`(E) such services are made available to such subscribers at average prices comparable to those at which the provider makes available similar services in any areas in which the provider makes available such services.CommentsClose CommentsPermalink
`(13) QUALIFIED EQUIPMENT-CommentsClose CommentsPermalink
`(A) IN GENERAL- The term `qualified equipment' means equipment which provides current generation broadband services or next generation broadband services--CommentsClose CommentsPermalink
`(i) at least a majority of the time during periods of maximum demand to each subscriber who is utilizing such services, andCommentsClose CommentsPermalink
`(ii) in a manner substantially the same as such services are provided by the provider to subscribers through equipment with respect to which no deduction is allowed under subsection (a)(1).CommentsClose CommentsPermalink
`(B) ONLY CERTAIN INVESTMENT TAKEN INTO ACCOUNT- Except as provided in subparagraph (C) or (D), equipment shall be taken into account under subparagraph (A) only to the extent it--CommentsClose CommentsPermalink
`(i) extends from the last point of switching to the outside of the unit, building, dwelling, or office owned or leased by a subscriber in the case of a telecommunications carrier or broadband-over-powerline operator,CommentsClose CommentsPermalink
`(ii) extends from the customer side of the mobile telephone switching office to a transmission/receive antenna (including such antenna) owned or leased by a subscriber in the case of a commercial mobile service carrier,CommentsClose CommentsPermalink
`(iii) extends from the customer side of the headend to the outside of the unit, building, dwelling, or office owned or leased by a subscriber in the case of a cable operator or open video system operator, orCommentsClose CommentsPermalink
`(iv) extends from a transmission/receive antenna (including such antenna) which transmits and receives signals to or from multiple subscribers, to a transmission/receive antenna (including such antenna) on the outside of the unit, building, dwelling, or office owned or leased by a subscriber in the case of a satellite carrier or other wireless carrier, unless such other wireless carrier is also a telecommunications carrier.CommentsClose CommentsPermalink
`(C) PACKET SWITCHING EQUIPMENT- Packet switching equipment, regardless of location, shall be taken into account under subparagraph (A) only if it is deployed in connection with equipment described in subparagraph (B) and is uniquely designed to perform the function of packet switching for current generation broadband services or next generation broadband services, but only if such packet switching is the last in a series of such functions performed in the transmission of a signal to a subscriber or the first in a series of such functions performed in the transmission of a signal from a subscriber.CommentsClose CommentsPermalink
`(D) MULTIPLEXING AND DEMULTIPLEXING EQUIPMENT- Multiplexing and demultiplexing equipment shall be taken into account under subparagraph (A) only to the extent it is deployed in connection with equipment described in subparagraph (B) and is uniquely designed to perform the function of multiplexing and demultiplexing packets or cells of data and making associated application adaptions, but only if such multiplexing or demultiplexing equipment is located between packet switching equipment described in subparagraph (C) and the subscriber's premises.CommentsClose CommentsPermalink
`(14) QUALIFIED SUBSCRIBER- The term `qualified subscriber' means--CommentsClose CommentsPermalink
`(A) with respect to the provision of current generation broadband services--CommentsClose CommentsPermalink
`(i) any nonresidential subscriber maintaining a permanent place of business in a rural area or underserved area, orCommentsClose CommentsPermalink
`(ii) any residential subscriber residing in a dwelling located in a rural area or underserved area which is not a saturated market, andCommentsClose CommentsPermalink
`(B) with respect to the provision of next generation broadband services--CommentsClose CommentsPermalink
`(i) any nonresidential subscriber maintaining a permanent place of business in a rural area or underserved area, orCommentsClose CommentsPermalink
`(ii) any residential subscriber.CommentsClose CommentsPermalink
`(15) RESIDENTIAL SUBSCRIBER- The term `residential subscriber' means any individual who purchases broadband services which are delivered to such individual's dwelling.CommentsClose CommentsPermalink
`(16) RURAL AREA- The term `rural area' means any census tract which--CommentsClose CommentsPermalink
`(A) is not within 10 miles of any incorporated or census designated place containing more than 25,000 people, andCommentsClose CommentsPermalink
`(B) is not within a county or county equivalent which has an overall population density of more than 500 people per square mile of land.CommentsClose CommentsPermalink
`(17) RURAL SUBSCRIBER- The term `rural subscriber' means any residential subscriber residing in a dwelling located in a rural area or nonresidential subscriber maintaining a permanent place of business located in a rural area.CommentsClose CommentsPermalink
`(18) SATELLITE CARRIER- The term `satellite carrier' means any person using the facilities of a satellite or satellite service licensed by the Federal Communications Commission and operating in the Fixed-Satellite Service under part 25 of title 47 of the Code of Federal Regulations or the Direct Broadcast Satellite Service under part 100 of title 47 of such Code to establish and operate a channel of communications for distribution of signals, and owning or leasing a capacity or service on a satellite in order to provide such point-to-multipoint distribution.CommentsClose CommentsPermalink
`(19) SATURATED MARKET- The term `saturated market' means any census tract in which, as of the date of the enactment of this section--CommentsClose CommentsPermalink
`(A) current generation broadband services have been provided by a single provider to 85 percent or more of the total number of potential residential subscribers residing in dwellings located within such census tract, andCommentsClose CommentsPermalink
`(B) such services can be utilized--CommentsClose CommentsPermalink
`(i) at least a majority of the time during periods of maximum demand by each such subscriber who is utilizing such services, andCommentsClose CommentsPermalink
`(ii) in a manner substantially the same as such services are provided by the provider to subscribers through equipment with respect to which no deduction is allowed under subsection (a)(1).CommentsClose CommentsPermalink
`(20) SUBSCRIBER- The term `subscriber' means any person who purchases current generation broadband services or next generation broadband services.CommentsClose CommentsPermalink
`(21) TELECOMMUNICATIONS CARRIER- The term `telecommunications carrier' has the meaning given such term by section 3(44) of the Communications Act of 1934 (
`(A) includes all members of an affiliated group of which a telecommunications carrier is a member, andCommentsClose CommentsPermalink
`(B) does not include a commercial mobile service carrier.CommentsClose CommentsPermalink
`(22) TOTAL POTENTIAL SUBSCRIBER POPULATION- The term `total potential subscriber population' means, with respect to any area and based on the most recent census data, the total number of potential residential subscribers residing in dwellings located in such area and potential nonresidential subscribers maintaining permanent places of business located in such area.CommentsClose CommentsPermalink
`(23) UNDERSERVED AREA- The term `underserved area' means--CommentsClose CommentsPermalink
`(A) any census tract which is located in--CommentsClose CommentsPermalink
`(i) an empowerment zone or enterprise community designated under section 1391, orCommentsClose CommentsPermalink
`(ii) the District of Columbia Enterprise Zone established under section 1400, orCommentsClose CommentsPermalink
`(B) any census tract--CommentsClose CommentsPermalink
`(i) the poverty level of which is at least 30 percent (based on the most recent census data), andCommentsClose CommentsPermalink
`(ii) the median family income of which does not exceed--CommentsClose CommentsPermalink
`(I) in the case of a census tract located in a metropolitan statistical area, 70 percent of the greater of the metropolitan area median family income or the statewide median family income, andCommentsClose CommentsPermalink
`(II) in the case of a census tract located in a nonmetropolitan statistical area, 70 percent of the nonmetropolitan statewide median family income.CommentsClose CommentsPermalink
`(24) UNDERSERVED SUBSCRIBER- The term `underserved subscriber' means any residential subscriber residing in a dwelling located in an underserved area or nonresidential subscriber maintaining a permanent place of business located in an underserved area.CommentsClose CommentsPermalink
`(f) Special Rules-CommentsClose CommentsPermalink
`(1) PROPERTY USED OUTSIDE THE UNITED STATES, ETC., NOT QUALIFIED- No expenditures shall be taken into account under subsection (a)(1) with respect to the portion of the cost of any property referred to in section 50(b) or with respect to the portion of the cost of any property specified in an election under section 179.CommentsClose CommentsPermalink
`(2) BASIS REDUCTION-CommentsClose CommentsPermalink
`(A) IN GENERAL- For purposes of this title, the basis of any property shall be reduced by the portion of the cost of such property taken into account under subsection (a)(1).CommentsClose CommentsPermalink
`(B) ORDINARY INCOME RECAPTURE- For purposes of section 1245, the amount of the deduction allowable under subsection (a)(1) with respect to any property which is of a character subject to the allowance for depreciation shall be treated as a deduction allowed for depreciation under section 167.CommentsClose CommentsPermalink
`(3) COORDINATION WITH SECTION 38- No credit shall be allowed under section 38 with respect to any amount for which a deduction is allowed under subsection (a)(1).'.CommentsClose CommentsPermalink
(b) Special Rule for Mutual or Cooperative Telephone Companies- Section 512(b) (relating to modifications) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(20) SPECIAL RULE FOR MUTUAL OR COOPERATIVE TELEPHONE COMPANIES- A mutual or cooperative telephone company which for the taxable year satisfies the requirements of section 501(c)(12)(A) may elect to reduce its unrelated business taxable income for such year, if any, by an amount that does not exceed the qualified broadband expenditures which would be taken into account under section 191 for such year by such company if such company was not exempt from taxation. Any amount which is allowed as a deduction under this paragraph shall not be allowed as a deduction under section 191 and the basis of any property to which this paragraph applies shall be reduced under section 1016(a)(40).'.CommentsClose CommentsPermalink
(c) Conforming Amendments-CommentsClose CommentsPermalink
(1) Section 263(a)(1) (relating to capital expenditures) is amended by striking `or' at the end of subparagraph (J), by striking the period at the end of subparagraph (K) and inserting `, or', and by adding at the end the following new subparagraph:CommentsClose CommentsPermalink
`(L) expenditures for which a deduction is allowed under section 191.'.CommentsClose CommentsPermalink
(2) Section 1016(a), as amended by this Act, is amended by striking `and' at the end of paragraph (38), by striking the period at the end of paragraph (39) and inserting `, and', and by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(40) to the extent provided in section 191(f)(2).'.CommentsClose CommentsPermalink
(3) The table of sections for part VI of subchapter A of chapter 1 is amended by inserting after the item relating to section 190 the following new item:CommentsClose CommentsPermalink
`Sec. 191. Broadband expenditures.'.CommentsClose CommentsPermalink
(d) Designation of Census Tracts-CommentsClose CommentsPermalink
(1) IN GENERAL- The Secretary of the Treasury shall, not later than 90 days after the date of the enactment of this Act, designate and publish those census tracts meeting the criteria described in paragraphs (16), (22), and (23) of section 191(e) of the Internal Revenue Code of 1986 (as added by this section). In making such designations, the Secretary of the Treasury shall consult with such other departments and agencies as the Secretary determines appropriate.CommentsClose CommentsPermalink
(2) SATURATED MARKET-CommentsClose CommentsPermalink
(A) IN GENERAL- For purposes of designating and publishing those census tracts meeting the criteria described in subsection (e)(19) of such section 191--CommentsClose CommentsPermalink
(i) the Secretary of the Treasury shall prescribe not later than 30 days after the date of the enactment of this Act the form upon which any provider which takes the position that it meets such criteria with respect to any census tract shall submit a list of such census tracts (and any other information required by the Secretary) not later than 60 days after the date of the publication of such form, andCommentsClose CommentsPermalink
(ii) the Secretary of the Treasury shall publish an aggregate list of such census tracts and the applicable providers not later than 30 days after the last date such submissions are allowed under clause (i).CommentsClose CommentsPermalink
(B) NO SUBSEQUENT LISTS REQUIRED- The Secretary of the Treasury shall not be required to publish any list of census tracts meeting such criteria subsequent to the list described in subparagraph (A)(ii).CommentsClose CommentsPermalink
(e) Other Regulatory Matters-CommentsClose CommentsPermalink
(1) PROHIBITION- No Federal or State agency or instrumentality shall adopt regulations or ratemaking procedures that would have the effect of eliminating or reducing any deduction or portion thereof allowed under section 191 of the Internal Revenue Code of 1986 (as added by this section) or otherwise subverting the purpose of this section.CommentsClose CommentsPermalink
(2) TREASURY REGULATORY AUTHORITY- It is the intent of Congress in providing the election to deduct qualified broadband expenditures under section 191 of the Internal Revenue Code of 1986 (as added by this section) to provide incentives for the purchase, installation, and connection of equipment and facilities offering expanded broadband access to the Internet for users in certain low income and rural areas of the United States, as well as to residential users nationwide, in a manner that maintains competitive neutrality among the various classes of providers of broadband services. Accordingly, the Secretary of the Treasury shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of section 191 of such Code, including--CommentsClose CommentsPermalink
(A) regulations to determine how and when a taxpayer that incurs qualified broadband expenditures satisfies the requirements of section 191 of such Code to provide broadband services, andCommentsClose CommentsPermalink
(B) regulations describing the information, records, and data taxpayers are required to provide the Secretary to substantiate compliance with the requirements of section 191 of such Code.CommentsClose CommentsPermalink
SEC. 409. CREDIT FOR ENERGY EFFICIENT MOTORS.
(a) In General- Subpart D of part IV of subchapter A of chapter 1 (relating to business related credits), as amended by this Act, is amended by inserting at the end the following new section:CommentsClose CommentsPermalink
`SEC. 45Q. CREDIT FOR ENERGY EFFICIENT MOTORS.
`(a) In General- For purposes of section 38, the energy efficient motors credit determined under this section for any taxable year is an amount equal to the lesser of --CommentsClose CommentsPermalink
`(1) $15 per horsepower generated by qualified energy efficient motors the original use of which begins with the taxpayer during such taxable year, orCommentsClose CommentsPermalink
`(2) $1,250,000.CommentsClose CommentsPermalink
`(b) Qualified Energy Efficient Motor- The term `qualified energy efficient motor' means a general- or definite-purpose electric motor of 500 horsepower or less which meets or exceeds the efficiency levels specified in Tables 12-12 or 12-13 of the National Electrical Manufacturers Association MG-1 (2006).CommentsClose CommentsPermalink
`(c) Special Rules-CommentsClose CommentsPermalink
`(1) BASIS REDUCTION- The basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit.CommentsClose CommentsPermalink
`(2) RECAPTURE- The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit.CommentsClose CommentsPermalink
`(3) PROPERTY USED OUTSIDE UNITED STATES, ETC., CERTAIN DEPRECIABLE PROPERTY NOT QUALIFIED- No credit shall be allowed under subsection (a) with respect to any property referred to in section 50(b) or with respect to the portion of the cost of any property taken into account under section 179.CommentsClose CommentsPermalink
`(d) Termination- This section shall not apply to any property placed in service after the date which is 3 years after the date of the enactment of this section.'.CommentsClose CommentsPermalink
(b) Credit Allowed as Part of General Business Credit- Section 38(b), as amended by this Act, is amended by striking `plus' at the end of paragraph (32), by striking the period at the end of paragraph (33) and inserting `, plus', and by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(34) the credit for energy efficient motors determined under section 45Q(a).'.CommentsClose CommentsPermalink
(c) Conforming Amendments-CommentsClose CommentsPermalink
(1) Section 1016(a), as amended by this Act, is amended by striking `and' at the end of paragraph (39), by striking the period at the end of paragraph (40) and inserting `, and', and by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(41) to the extent provided in section 45Q(c)(1).'.CommentsClose CommentsPermalink
(2) The table of sections for subpart D of part IV of subchapter A of chapter 1, as amended by this Act, is amended by adding at the end the following new item:CommentsClose CommentsPermalink
`Sec. 45Q. Credit for energy efficient motors.'.CommentsClose CommentsPermalink
(d) Effective Date- The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.CommentsClose CommentsPermalink
TITLE V--REVENUE RAISING PROVISIONS
Subtitle A--Miscellaneous Revenue Provisions
SEC. 501. LIMITATION ON FARMING LOSSES OF CERTAIN TAXPAYERS.
(a) In General- Section 461 (relating to general rule for taxable year of deduction) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink
`(j) Limitation on Farming Losses of Certain Taxpayers-CommentsClose CommentsPermalink
`(1) IN GENERAL- If an applicable taxpayer has a farming loss for the taxable year, such loss shall be allowed for such taxable year only to the extent such loss does not exceed $200,000.CommentsClose CommentsPermalink
`(2) FARMING LOSS- For purposes of this subsection, the term `farming loss' means the excess of the deductions of the taxpayer for the taxable year which are attributable to farming businesses (as defined in section 263A(e)(4)) of such taxpayer over income or gain of such taxpayer for the taxable year which is attributable to such deductions.CommentsClose CommentsPermalink
`(3) DISALLOWED LOSS CARRIED TO NEXT YEAR- Any loss which is disallowed under paragraph (1) shall be treated as a deduction of the taxpayer attributable to farming businesses in the next taxable year.CommentsClose CommentsPermalink
`(4) APPLICABLE TAXPAYER- For purposes of this subsection, the term `applicable taxpayer' means, with respect to any taxable year, any individual, partnership, estate, or trust which receives agriculture program payments or Commodity Credit Corporation loans in such taxable year.'.CommentsClose CommentsPermalink
(b) Effective Date- The amendment made by this section shall apply to taxable years beginning after December 31, 2007.CommentsClose CommentsPermalink
SEC. 502. MODIFICATION TO OPTIONAL METHOD OF COMPUTING NET EARNINGS FROM SELF-EMPLOYMENT.
(a) Amendments to the Internal Revenue Code of 1986-CommentsClose CommentsPermalink
(1) IN GENERAL- The matter following paragraph (17) of section 1402(a) is amended--CommentsClose CommentsPermalink
(A) by striking `$2,400' each place it appears and inserting `the upper limit', andCommentsClose CommentsPermalink
(B) by striking `$1,600' each place it appears and inserting `the lower limit'.CommentsClose CommentsPermalink
(2) DEFINITIONS- Section 1402 is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink
`(l) Upper and Lower Limits- For purposes of subsection (a)--CommentsClose CommentsPermalink
`(1) LOWER LIMIT- The lower limit for any taxable year is the sum of the amounts required under section 213(d) of the Social Security Act for a quarter of coverage in effect with respect to each calendar quarter ending with or within such taxable year.CommentsClose CommentsPermalink
`(2) UPPER LIMIT- The upper limit for any taxable year is the amount equal to 150 percent of the lower limit for such taxable year.'.CommentsClose CommentsPermalink
(b) Amendments to the Social Security Act-CommentsClose CommentsPermalink
(1) IN GENERAL- The matter following paragraph (16) of section 211(a) of the Social Security Act is amended--CommentsClose CommentsPermalink
(A) by striking `$2,400' each place it appears and inserting `the upper limit', andCommentsClose CommentsPermalink
(B) by striking `$1,600' each place it appears and inserting `the lower limit'.CommentsClose CommentsPermalink
(2) DEFINITIONS- Section 211 of such Act is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink
`Upper and Lower Limits
`(k) For purposes of subsection (a)--CommentsClose CommentsPermalink
`(1) The lower limit for any taxable year is the sum of the amounts required under section 213(d) for a quarter of coverage in effect with respect to each calendar quarter ending with or within such taxable year.CommentsClose CommentsPermalink
`(2) The upper limit for any taxable year is the amount equal to 150 percent of the lower limit for such taxable year.'.CommentsClose CommentsPermalink
(3) CONFORMING AMENDMENT- Section 212 of such Act is amended--CommentsClose CommentsPermalink
(A) in subsection (b), by striking `For' and inserting `Except as provided in subsection (c), for'; andCommentsClose CommentsPermalink
(B) by adding at the end the following new subsection:CommentsClose CommentsPermalink
`(c) For the purpose of determining average indexed monthly earnings, average monthly wage, and quarters of coverage in the case of any individual who elects the option described in clause (ii) or (iv) in the matter following section 211(a)(16) for any taxable year that does not begin with or during a particular calendar year and end with or during such year, the self-employment income of such individual deemed to be derived during such taxable year shall be allocated to the two calendar years, portions of which are included within such taxable year, in the same proportion to the total of such deemed self-employment income as the sum of the amounts applicable under section 213(d) for the calendar quarters ending with or within each such calendar year bears to the lower limit for such taxable year specified in section 211(k)(1).'.CommentsClose CommentsPermalink
(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2007.CommentsClose CommentsPermalink
SEC. 503. INFORMATION REPORTING FOR COMMODITY CREDIT CORPORATION TRANSACTIONS.
(a) In General- Subpart A of part III of subchapter A of chapter 61 (relating to information concerning persons subject to special provisions) is amended by inserting after section 6039I the following new section:CommentsClose CommentsPermalink
`SEC. 6039J. INFORMATION REPORTING WITH RESPECT TO COMMODITY CREDIT CORPORATION TRANSACTIONS.
`(a) Requirement of Reporting- The Commodity Credit Corporation, through the Secretary of Agriculture, shall make a return, according to the forms and regulations prescribed by the Secretary of the Treasury, setting forth any market gain realized by a taxpayer during the taxable year in relation to the repayment of a loan issued by the Commodity Credit Corporation, without regard to the manner in which such loan was repaid.CommentsClose CommentsPermalink
`(b) Statements To Be Furnished to Persons With Respect to Whom Information Is Required- The Secretary of Agriculture shall furnish to each person whose name is required to be set forth in a return required under subsection (a) a written statement showing the amount of market gain reported in such return.'.CommentsClose CommentsPermalink
(b) Clerical Amendment- The table of sections for subpart A of part III of subchapter A of chapter 61 is amended by inserting after the item relating to section 6039I the following new item:CommentsClose CommentsPermalink
`Sec. 6039J. Information reporting with respect to Commodity Credit Corporation transactions.'.CommentsClose CommentsPermalink
(c) Effective Date- The amendments made by this section shall apply to loans repaid on or after January 1, 2007.CommentsClose CommentsPermalink
SEC. 504. MODIFICATION OF SECTION 1031 TREATMENT FOR CERTAIN REAL ESTATE.
(a) In General- Section 1031 (relating to exchange of property held for productive use or investment), as amended by this Act, is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink
`(j) Special Rule for Agricultural Real Property-CommentsClose CommentsPermalink
`(1) IN GENERAL- Unimproved agricultural real property and improved real property are not property of a like kind.CommentsClose CommentsPermalink
`(2) UNIMPROVED AGRICULTURAL REAL PROPERTY- For purposes of this subsection, the term `unimproved agricultural real property' means real property--CommentsClose CommentsPermalink
`(A) which is unimproved;CommentsClose CommentsPermalink
`(B) which is used for farming purposes (within the meaning of section 2032A(e)(5)); andCommentsClose CommentsPermalink
`(C) with respect to which a taxpayer receives, in the taxable year in which an exchange of such property is made, any agriculture program payments or Commodity Credit Corporation loans.CommentsClose CommentsPermalink
`(3) EXCEPTION- Paragraph (1) shall not apply with respect to any unimproved agricultural real property which, not later than the date of the exchange, is permanently retired from any program under which any payment, loan, or benefit described in paragraph (2)(C) is made.'.CommentsClose CommentsPermalink
(b) Effective Date- The amendments made by this section shall apply to exchanges completed after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 505. MODIFICATION OF EFFECTIVE DATE OF LEASING PROVISIONS OF THE AMERICAN JOBS CREATION ACT OF 2004.
(a) Leases to Foreign Entities- Section 849(b) of the American Jobs Creation Act of 2004 is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(5) LEASES TO FOREIGN ENTITIES- In the case of tax-exempt use property leased to a tax-exempt entity which is a foreign person or entity, the amendments made by this part shall apply to taxable years beginning after December 31, 2006, with respect to leases entered into on or before March 12, 2004.'.CommentsClose CommentsPermalink
(b) Effective Date- The amendment made by this section shall take effect as if included in the enactment of the American Jobs Creation Act of 2004.CommentsClose CommentsPermalink
SEC. 506. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
The percentage under subparagraph (B) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 in effect on the date of the enactment of this Act is increased by 7.00 percentage points.CommentsClose CommentsPermalink
SEC. 507. INELIGIBILITY OF COLLECTIBLES FOR NONTAXABLE LIKE KIND EXCHANGE TREATMENT.
(a) In General- Section 1031(a)(2) (relating to exception) is amended by striking `or' at the end of subparagraph (E), by striking the period at the end of subparagraph (F) and inserting `, or', and by inserting after subparagraph (F) the following new subparagraph:CommentsClose CommentsPermalink
`(G) collectibles (as defined in section 408(m)(2)).'.CommentsClose CommentsPermalink
(b) Effective Date- The amendments made by this section shall apply to exchanges completed after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 508. DENIAL OF DEDUCTION FOR CERTAIN FINES, PENALTIES, AND OTHER AMOUNTS.
(a) In General- Subsection (f) of section 162 (relating to trade or business expenses) is amended to read as follows:CommentsClose CommentsPermalink
`(f) Fines, Penalties, and Other Amounts-CommentsClose CommentsPermalink
`(1) IN GENERAL- Except as provided in paragraph (2), no deduction otherwise allowable shall be allowed under this chapter for any amount paid or incurred (whether by suit, agreement, or otherwise) to, or at the direction of, a government or entity described in paragraph (4) in relation to--CommentsClose CommentsPermalink
`(A) the violation of any law, orCommentsClose CommentsPermalink
`(B) an investigation or inquiry into the potential violation of any law which is initiated by such government or entity.CommentsClose CommentsPermalink
`(2) EXCEPTION FOR AMOUNTS CONSTITUTING RESTITUTION OR PAID TO COME INTO COMPLIANCE WITH LAW- Paragraph (1) shall not apply to any amount which--CommentsClose CommentsPermalink
`(A) the taxpayer establishes--CommentsClose CommentsPermalink
`(i) constitutes restitution (or remediation of property) for damage or harm caused by, or which may be caused by, the violation of any law or the potential violation of any law, orCommentsClose CommentsPermalink
`(ii) is paid to come into compliance with any law which was violated or involved in the investigation or inquiry, andCommentsClose CommentsPermalink
`(B) is identified as an amount described in clause (i) or (ii) of subparagraph (A), as the case may be, in the court order or settlement agreement, except that the requirement of this subparagraph shall not apply in the case of any settlement agreement which requires the taxpayer to pay or incur an amount not greater than $1,000,000.CommentsClose CommentsPermalink
A taxpayer shall not meet the requirements of subparagraph (A) solely by reason of an identification under subparagraph (B). This paragraph shall not apply to any amount paid or incurred as reimbursement to the government or entity for the costs of any investigation or litigation unless such amount is paid or incurred for a cost or fee regularly charged for any routine audit or other customary review performed by the government or entity.CommentsClose CommentsPermalink
`(3) EXCEPTION FOR AMOUNTS PAID OR INCURRED AS THE RESULT OF CERTAIN COURT ORDERS- Paragraph (1) shall not apply to any amount paid or incurred by order of a court in a suit in which no government or entity described in paragraph (4) is a party.CommentsClose CommentsPermalink
`(4) CERTAIN NONGOVERNMENTAL REGULATORY ENTITIES- An entity is described in this paragraph if it is--CommentsClose CommentsPermalink
`(A) a nongovernmental entity which exercises self-regulatory powers (including imposing sanctions) in connection with a qualified board or exchange (as defined in section 1256(g)(7)), orCommentsClose CommentsPermalink
`(B) to the extent provided in regulations, a nongovernmental entity which exercises self-regulatory powers (including imposing sanctions) as part of performing an essential governmental function.CommentsClose CommentsPermalink
`(5) EXCEPTION FOR TAXES DUE- Paragraph (1) shall not apply to any amount paid or incurred as taxes due.'.CommentsClose CommentsPermalink
(b) Reporting of Deductible Amounts-CommentsClose CommentsPermalink
(1) IN GENERAL- Subpart B of part III of subchapter A of chapter 61 is amended by inserting after section 6050V the following new section:CommentsClose CommentsPermalink
`SEC. 6050W. INFORMATION WITH RESPECT TO CERTAIN FINES, PENALTIES, AND OTHER AMOUNTS.
`(a) Requirement of Reporting-CommentsClose CommentsPermalink
`(1) IN GENERAL- The appropriate official of any government or entity which is described in section 162(f)(4) which is involved in a suit or agreement described in paragraph (2) shall make a return in such form as determined by the Secretary setting forth--CommentsClose CommentsPermalink
`(A) the amount required to be paid as a result of the suit or agreement to which paragraph (1) of section 162(f) applies,CommentsClose CommentsPermalink
`(B) any amount required to be paid as a result of the suit or agreement which constitutes restitution or remediation of property, andCommentsClose CommentsPermalink
`(C) any amount required to be paid as a result of the suit or agreement for the purpose of coming into compliance with any law which was violated or involved in the investigation or inquiry.CommentsClose CommentsPermalink
`(2) SUIT OR AGREEMENT DESCRIBED-CommentsClose CommentsPermalink
`(A) IN GENERAL- A suit or agreement is described in this paragraph if--CommentsClose CommentsPermalink
`(i) it is--CommentsClose CommentsPermalink
`(I) a suit with respect to a violation of any law over which the government or entity has authority and with respect to which there has been a court order, orCommentsClose CommentsPermalink
`(II) an agreement which is entered into with respect to a violation of any law over which the government or entity has authority, or with respect to an investigation or inquiry by the government or entity into the potential violation of any law over which such government or entity has authority, andCommentsClose CommentsPermalink
`(ii) the aggregate amount involved in all court orders and agreements with respect to the violation, investigation, or inquiry is $600 or more.CommentsClose CommentsPermalink
`(B) ADJUSTMENT OF REPORTING THRESHOLD- The Secretary may adjust the $600 amount in subparagraph (A)(ii) as necessary in order to ensure the efficient administration of the internal revenue laws.CommentsClose CommentsPermalink
`(3) TIME OF FILING- The return required under this subsection shall be filed not later than--CommentsClose CommentsPermalink
`(A) 30 days after the date on which a court order is issued with respect to the suit or the date the agreement is entered into, as the case may be, orCommentsClose CommentsPermalink
`(B) the date specified by the Secretary.CommentsClose CommentsPermalink
`(b) Statements To Be Furnished to Individuals Involved in the Settlement- Every person required to make a return under subsection (a) shall furnish to each person who is a party to the suit or agreement a written statement showing--CommentsClose CommentsPermalink
`(1) the name of the government or entity, andCommentsClose CommentsPermalink
`(2) the information supplied to the Secretary under subsection (a)(1).CommentsClose CommentsPermalink
The written statement required under the preceding sentence shall be furnished to the person at the same time the government or entity provides the Secretary with the information required under subsection (a).CommentsClose CommentsPermalink
`(c) Appropriate Official Defined- For purposes of this section, the term `appropriate official' means the officer or employee having control of the suit, investigation, or inquiry or the person appropriately designated for purposes of this section.'.CommentsClose CommentsPermalink
(2) CONFORMING AMENDMENT- The table of sections for subpart B of part III of subchapter A of chapter 61 is amended by inserting after the item relating to section 6050V the following new item:CommentsClose CommentsPermalink
`Sec. 6050W. Information with respect to certain fines, penalties, and other amounts.'.CommentsClose CommentsPermalink
(c) Effective Date- The amendments made by this section shall apply to amounts paid or incurred on or after the date of the enactment of this Act, except that such amendments shall not apply to amounts paid or incurred under any binding order or agreement entered into before such date. Such exception shall not apply to an order or agreement requiring court approval unless the approval was obtained before such date.CommentsClose CommentsPermalink
SEC. 509. INCREASE IN INFORMATION RETURN PENALTIES.
(a) Failure To File Correct Information Returns-CommentsClose CommentsPermalink
(1) IN GENERAL- Section 6721(a)(1) is amended--CommentsClose CommentsPermalink
(A) by striking `$50' and inserting `$250', andCommentsClose CommentsPermalink
(B) by striking `$250,000' and inserting `$3,000,000'.CommentsClose CommentsPermalink
(2) REDUCTION WHERE CORRECTION IN SPECIFIED PERIOD-CommentsClose CommentsPermalink
(A) CORRECTION WITHIN 30 DAYS- Section 6721(b)(1) is amended--CommentsClose CommentsPermalink
(i) by striking `$15' and inserting `$50',CommentsClose CommentsPermalink
(ii) by striking `$50' and inserting `$250', andCommentsClose CommentsPermalink
(iii) by striking `$75,000' and inserting `$500,000'.CommentsClose CommentsPermalink
(B) FAILURES CORRECTED ON OR BEFORE AUGUST 1- Section 6721(b)(2) is amended--CommentsClose CommentsPermalink
(i) by striking `$30' and inserting `$100',CommentsClose CommentsPermalink
(ii) by striking `$50' and inserting `$250', andCommentsClose CommentsPermalink
(iii) by striking `$150,000' and inserting `$1,500,000'.CommentsClose CommentsPermalink
(3) LOWER LIMITATION FOR PERSONS WITH GROSS RECEIPTS OF NOT MORE THAN $5,000,000- Section 6721(d)(1) is amended--CommentsClose CommentsPermalink
(A) in subparagraph (A)--CommentsClose CommentsPermalink
(i) by striking `$100,000' and inserting `$1,000,000', andCommentsClose CommentsPermalink
(ii) by striking `$250,000' and inserting `$3,000,000',CommentsClose CommentsPermalink
(B) in subparagraph (B)--CommentsClose CommentsPermalink
(i) by striking `$25,000' and inserting `$175,000', andCommentsClose CommentsPermalink
(ii) by striking `$75,000' and inserting `$500,000', andCommentsClose CommentsPermalink
(C) in subparagraph (C)--CommentsClose CommentsPermalink
(i) by striking `$50,000' and inserting `$500,000', andCommentsClose CommentsPermalink
(ii) by striking `$150,000' and inserting `$1,500,000'.CommentsClose CommentsPermalink
(4) PENALTY IN CASE OF INTENTIONAL DISREGARD- Section 6721(e) is amended--CommentsClose CommentsPermalink
(A) by striking `$100' in paragraph (2) and inserting `$500', andCommentsClose CommentsPermalink
(B) by striking `$250,000' in paragraph (3)(A) and inserting `$3,000,000'.CommentsClose CommentsPermalink
(b) Failure to Furnish Correct Payee Statements-CommentsClose CommentsPermalink
(1) IN GENERAL- Section 6722(a) is amended--CommentsClose CommentsPermalink
(A) by striking `$50' and inserting `$250', andCommentsClose CommentsPermalink
(B) by striking `$100,000' and inserting `$1,000,000'.CommentsClose CommentsPermalink
(2) PENALTY IN CASE OF INTENTIONAL DISREGARD- Section 6722(c) is amended--CommentsClose CommentsPermalink
(A) by striking `$100' in paragraph (1) and inserting `$500', andCommentsClose CommentsPermalink
(B) by striking `$100,000' in paragraph (2)(A) and inserting `$1,000,000'.CommentsClose CommentsPermalink
(c) Failure To Comply With Other Information Reporting Requirements- Section 6723 is amended--CommentsClose CommentsPermalink
(1) by striking `$50' and inserting `$250', andCommentsClose CommentsPermalink
(2) by striking `$100,000' and inserting `$1,000,000'.CommentsClose CommentsPermalink
(d) Effective Date- The amendments made by this section shall apply with respect to information returns required to be filed on or after January 1, 2008.CommentsClose CommentsPermalink
Subtitle B--Economic Substance Doctrine
SEC. 511. CLARIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.
(a) In General- Section 7701 is amended by redesignating subsection (p) as subsection (q) and by inserting after subsection (o) the following new subsection:CommentsClose CommentsPermalink
`(p) Clarification of Economic Substance Doctrine; Etc-CommentsClose CommentsPermalink
`(1) GENERAL RULES-CommentsClose CommentsPermalink
`(A) IN GENERAL- In any case in which a court determines that the economic substance doctrine is relevant for purposes of this title to a transaction (or series of transactions), such transaction (or series of transactions) shall have economic substance only if the requirements of this paragraph are met.CommentsClose CommentsPermalink
`(B) DEFINITION OF ECONOMIC SUBSTANCE- For purposes of subparagraph (A)--CommentsClose CommentsPermalink
`(i) IN GENERAL- A transaction has economic substance only if--CommentsClose CommentsPermalink
`(I) the transaction changes in a meaningful way (apart from Federal tax effects) the taxpayer's economic position, andCommentsClose CommentsPermalink
`(II) subject to clause (iii), the taxpayer has a substantial purpose (other than a Federal tax purpose) for entering into such transaction.CommentsClose CommentsPermalink
`(ii) SPECIAL RULE WHERE TAXPAYER RELIES ON PROFIT POTENTIAL- A transaction shall not be treated as having economic substance solely by reason of having a potential for profit unless the present value of the reasonably expected pre-Federal tax profit from the transaction is substantial in relation to the present value of the expected net Federal tax benefits that would be allowed if the transaction were respected. In determining pre-Federal tax profit, there shall be taken into account fees and other transaction expenses and to the extent provided by the Secretary, foreign taxes.CommentsClose CommentsPermalink
`(iii) SPECIAL RULES FOR DETERMINING WHETHER NON-FEDERAL TAX PURPOSE- For purposes of clause (i)(II)--CommentsClose CommentsPermalink
`(I) a purpose of achieving a financial accounting benefit shall not be taken into account in determining whether a transaction has a substantial purpose (other than a Federal tax purpose) if the origin of such financial accounting benefit is a reduction of Federal tax, andCommentsClose CommentsPermalink
`(II) the taxpayer shall not be treated as having a substantial purpose (other than a Federal tax purpose) with respect to a transaction if the only such purpose is the reduction of non-Federal taxes and the transaction will result in a reduction of Federal taxes substantially equal to, or greater than, the reduction in non-Federal taxes because of similarities between the laws imposing the taxes.CommentsClose CommentsPermalink
`(2) DEFINITIONS AND SPECIAL RULES- For purposes of this subsection--CommentsClose CommentsPermalink
`(A) ECONOMIC SUBSTANCE DOCTRINE- The term `economic substance doctrine' means the common law doctrine under which tax benefits under subtitle A with respect to a transaction are not allowable if the transaction does not have economic substance or lacks a business purpose.CommentsClose CommentsPermalink
`(B) EXCEPTION FOR PERSONAL TRANSACTIONS OF INDIVIDUALS- In the case of an individual, this subsection shall apply only to transactions entered into in connection with a trade or business or an activity engaged in for the production of income.CommentsClose CommentsPermalink
`(3) OTHER PROVISIONS NOT AFFECTED- Except as specifically provided in this subsection, the provisions of this subsection shall not be construed as altering or supplanting any other rule of law or provision of this title, and the requirements of this subsection shall be construed as being in addition to any such other rule of law or provision of this title.CommentsClose CommentsPermalink
`(4) REGULATIONS- The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection. Such regulations may include exemptions from the application of this subsection.'.CommentsClose CommentsPermalink
(b) Effective Date- The amendments made by this section shall apply to transactions entered into after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 512. PENALTY FOR UNDERSTATEMENTS ATTRIBUTABLE TO TRANSACTIONS LACKING ECONOMIC SUBSTANCE, ETC.
(a) In General- Subchapter A of chapter 68 is amended by inserting after section 6662A the following new section:CommentsClose CommentsPermalink
`SEC. 6662B. PENALTY FOR UNDERSTATEMENTS ATTRIBUTABLE TO TRANSACTIONS LACKING ECONOMIC SUBSTANCE, ETC.
`(a) Imposition of Penalty- If a taxpayer has an noneconomic substance transaction understatement for any taxable year, there shall be added to the tax an amount equal to 30 percent of the amount of such understatement.CommentsClose CommentsPermalink
`(b) Reduction of Penalty for Disclosed Transactions- Subsection (a) shall be applied by substituting `20 percent' for `30 percent' with respect to the portion of any noneconomic substance transaction understatement with respect to which the relevant facts affecting the tax treatment of the item are adequately disclosed in the return or a statement attached to the return.CommentsClose CommentsPermalink
`(c) Noneconomic Substance Transaction Understatement- For purposes of this section--CommentsClose CommentsPermalink
`(1) IN GENERAL- The term `noneconomic substance transaction understatement' means any amount which would be an understatement under section 6662A(b)(1) if section 6662A were applied by taking into account items attributable to noneconomic substance transactions rather than items to which section 6662A would apply without regard to this paragraph.CommentsClose CommentsPermalink
`(2) NONECONOMIC SUBSTANCE TRANSACTION- The term `noneconomic substance transaction' means any transaction if there is a lack of economic substance (within the meaning of section 7701(p)(1)(B)) for the transaction giving rise to the claimed benefit.CommentsClose CommentsPermalink
`(d) Rules Applicable to Assertion, Compromise, and Collection of Penalty-CommentsClose CommentsPermalink
`(1) IN GENERAL- Only the Chief Counsel for the Internal Revenue Service may assert a penalty imposed under this section or may compromise all or any portion of such penalty. The Chief Counsel may delegate the authority under this paragraph only to an individual holding the position of chief of a branch within the Office of the Chief Counsel for the Internal Revenue Service.CommentsClose CommentsPermalink
`(2) SPECIFIC REQUIREMENTS-CommentsClose CommentsPermalink
`(A) ASSERTION OF PENALTY- The Chief Counsel for the Internal Revenue Service (or the Chief Counsel's delegate under paragraph (1)) shall not assert a penalty imposed under this section unless, before the assertion of the penalty, the taxpayer is provided--CommentsClose CommentsPermalink
`(i) a notice of intent to assert the penalty, andCommentsClose CommentsPermalink
`(ii) an opportunity to provide to the Commissioner (or the Chief Counsel's delegate under paragraph (1)) a written response to the proposed penalty within a reasonable period of time after such notice.CommentsClose CommentsPermalink
`(B) COMPROMISE OF PENALTY- A compromise shall not result in a reduction in the penalty imposed by this section in an amount greater than the amount which bears the same ratio to the amount of the penalty determined without regard to the compromise as--CommentsClose CommentsPermalink
`(i) the reduction under the compromise in the noneconomic substance transaction understatement to which the penalty relates, bears toCommentsClose CommentsPermalink
`(ii) the amount of the noneconomic substance transaction understatement determined without regard to the compromise.CommentsClose CommentsPermalink
`(3) RULES RELATING TO RELEVANCY REQUIREMENT-CommentsClose CommentsPermalink
`(A) DETERMINATION OF RELEVANCE BY CHIEF COUNSEL- The Chief Counsel for the Internal Revenue Service (or the Chief Counsel's delegate under paragraph (1)) may assert, compromise, or collect a penalty imposed by this section with respect to a noneconomic substance transaction even if there has not been a court determination that the economic substance doctrine was relevant for purposes of this title to the transaction if the Chief Counsel (or delegate) determines that either was so relevant.CommentsClose CommentsPermalink
`(B) FINAL ORDER OF COURT- If there is a final order of a court that determines that the economic substance doctrine was not relevant for purposes of this title to a transaction (or series of transactions), any penalty imposed under this section with respect to the transaction (or series of transactions) shall be rescinded.CommentsClose CommentsPermalink
`(4) APPLICABLE RULES- The rules of paragraphs (2) and (3) of section 6707A(d) shall apply to a compromise under paragraph (1).CommentsClose CommentsPermalink
`(e) Coordination With Other Penalties- Except as otherwise provided in this part, the penalty imposed by this section shall be in addition to any other penalty imposed by this title.CommentsClose CommentsPermalink
`(f) Cross References-CommentsClose CommentsPermalink
`(1) For coordination of penalty with understatements under section 6662 and other special rules, see section 6662A(e).CommentsClose CommentsPermalink
`(2) For reporting of penalty imposed under this section to the Securities and Exchange Commission, see section 6707A(e).'.CommentsClose CommentsPermalink
(b) Coordination With Other Understatements and Penalties-CommentsClose CommentsPermalink
(1) The second sentence of section 6662(d)(2)(A) is amended by inserting `and without regard to items with respect to which a penalty is imposed by section 6662B' before the period at the end.CommentsClose CommentsPermalink
(2) Subsection (e) of section 6662A is amended--CommentsClose CommentsPermalink
(A) in paragraph (1), by inserting `and noneconomic substance transaction understatements' after `reportable transaction understatements' both places it appears,CommentsClose CommentsPermalink
(B) in paragraph (2)(A)--CommentsClose CommentsPermalink
(i) by inserting `6662B or' before `6663' in the text, andCommentsClose CommentsPermalink
(ii) by striking `PENALTY' in the heading and inserting `AND ECONOMIC SUBSTANCE PENALTIES',CommentsClose CommentsPermalink
(C) in paragraph (2)(B)--CommentsClose CommentsPermalink
(i) by inserting `and section 6662B' after `This section', andCommentsClose CommentsPermalink
(ii) by striking `PENALTY' in the heading and inserting `AND ECONOMIC SUBSTANCE PENALTIES',CommentsClose CommentsPermalink
(D) in paragraph (3), by inserting `or noneconomic substance transaction understatement' after `reportable transaction understatement', andCommentsClose CommentsPermalink
(E) by adding at the end the following new paragraph:CommentsClose CommentsPermalink
`(4) NONECONOMIC SUBSTANCE TRANSACTION UNDERSTATEMENT- For purposes of this subsection, the term `noneconomic substance transaction understatement' has the meaning given such term by section 6662B(c).'.CommentsClose CommentsPermalink
(3) Subsection (e) of section 6707A is amended--CommentsClose CommentsPermalink
(A) by striking `or' at the end of subparagraph (B), andCommentsClose CommentsPermalink
(B) by striking subparagraph (C) and inserting the following new subparagraphs:CommentsClose CommentsPermalink
`(C) is required to pay a penalty under section 6662B with respect to any noneconomic substance transaction, orCommentsClose CommentsPermalink
`(D) is required to pay a penalty under section 6662(h) with respect to any transaction and would (but for section 6662A(e)(2)(B)) have been subject to penalty under section 6662A at a rate prescribed under section 6662A(c) or to penalty under section 6662B,'.CommentsClose CommentsPermalink
(c) Clerical Amendment- The table of sections for part II of subchapter A of chapter 68 is amended by inserting after the item relating to section 6662A the following new item:CommentsClose CommentsPermalink
`Sec. 6662B. Penalty for understatements attributable to transactions lacking economic substance, etc.'.CommentsClose CommentsPermalink
(d) Effective Date- The amendments made by this section shall apply to transactions entered into after the date of the enactment of this Act.CommentsClose CommentsPermalink
SEC. 513. DENIAL OF DEDUCTION FOR INTEREST ON UNDERPAYMENTS ATTRIBUTABLE TO NONECONOMIC SUBSTANCE TRANSACTIONS.
(a) In General- Section 163(m) (relating to interest on unpaid taxes attributable to nondisclosed reportable transactions) is amended--CommentsClose CommentsPermalink
(1) by striking `attributable' and all that follows and inserting the following: `attributable to--CommentsClose CommentsPermalink
`(1) the portion of any reportable transaction understatement (as defined in section 6662A(b)) with respect to which the requirement of section 6664(d)(2)(A) is not met, orCommentsClose CommentsPermalink
`(2) any noneconomic substance transaction understatement (as defined in section 6662B(c)).', andCommentsClose CommentsPermalink
(2) by inserting `and Noneconomic Substance Transactions' in the heading thereof after `Transactions'.CommentsClose CommentsPermalink
(b) Effective Date- The amendments made by this section shall apply to transactions after the date of the enactment of this Act in taxable years ending after such date.CommentsClose CommentsPermalink
Calendar No. 446CommentsClose CommentsPermalink
To amend the Trade Act of 1974 to establish supplemental agricultural disaster assistance and to amend the Internal Revenue Code of 1986 to provide tax incentives for conservation and alternative energy sources and to provide tax relief for farmers, and for other purposes.CommentsClose CommentsPermalink
October 25, 2007
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