[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2884 Introduced in Senate (IS)]
106th CONGRESS
2d Session
S. 2884
To amend the Internal Revenue Code of 1986 to allow allocation of small
ethanol producer credit to patrons of cooperative, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 18, 2000
Mr. Grams introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow allocation of small
ethanol producer credit to patrons of cooperative, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SMALL ETHANOL PRODUCER CREDIT.
(a) Allocation of Alcohol Fuels Credit to Patrons of a
Cooperative.--Section 40(g) Internal Revenue Code of 1986 (relating to
definitions and special rules for eligible small ethanol producer
credit) is amended by adding at the end the following:
``(6) Allocation of small ethanol producer credit to
patrons of cooperative.--
``(A) Election to allocate.--
``(i) In general.--Notwithstanding
paragraph (4), in the case of a cooperative
organization described in section 1381(a), any
portion of the credit determined under
subsection (a)(3) for the taxable year may, at
the election of the organization, be
apportioned pro rata among patrons of the
organization on the basis of the quantity or
value of business done with or for such patrons
for the taxable year.
``(ii) Form and effect of election.--An
election under clause (i) for any taxable year
shall be made on a timely filed return for such
year. Such election, once made, shall be
irrevocable for such taxable year.
``(iii) Special rule for 1998 and 1999.--
Notwithstanding clause (ii), an election for
any taxable year ending prior to the date of
the enactment of this paragraph may be made at
any time before the expiration of the 3-year
period beginning on the last date prescribed by
law for filing the return of the taxpayer for
such taxable year (determined without regard to
extensions) by filing an amended return for
such year.
``(B) Treatment of organizations and patrons.--The
amount of the credit apportioned to patrons under
subparagraph (A)--
``(i) shall not be included in the amount
determined under subsection (a) with respect to
the organization for the taxable year,
``(ii) shall be included in the amount
determined under subsection (a) for the taxable
year of each patron for which the patronage
dividends for the taxable year described in
subparagraph (A) are included in gross income,
and
``(iii) shall be included in gross income
of such patrons for the taxable year in the
manner and to the extent provided in section
87.
``(C) Special rules for decrease in credits for
taxable year.--If the amount of the credit of a
cooperative organization (as so defined) determined
under subsection (a)(3) for a taxable year is less than
the amount of such credit shown on the return of the
cooperative organization for such year, an amount equal
to the excess of--
``(i) such reduction, over
``(ii) the amount not apportioned to such
patrons under subparagraph (A) for the taxable
year,
shall be treated as an increase in tax imposed by this
chapter on the organization. Such increase shall not be
treated as tax imposed by this chapter for purposes of
determining the amount of any credit under this subpart
or subpart A, B, E, or G.''.
(b) Definition of Small Ethanol Producer; Improvements to Small
Ethanol Producer Credit.--
(1) Definition of small ethanol producer.--Section 40(g)(1)
of the Internal Revenue Code of 1986 (relating to eligible
small ethanol producer) is amended by striking ``30,000,000''
and inserting ``60,000,000''.
(2) Small ethanol producer credit not a passive activity
credit.--Clause (i) of section 469(d)(2)(A) of such Code
(relating to passive activity credit) is amended by striking
``subpart D'' and inserting ``subpart D, other than section
40(a)(3),''.
(3) Allowing credit against minimum tax.--
(A) In general.--Subsection (c) of section 38 of
such Code (relating to limitation based on amount of
tax) is amended by redesignating paragraph (3) as
paragraph (4) and by inserting after paragraph (2) the
following:
``(3) Special rules for small ethanol producer credit.--
``(A) In general.--In the case of the small ethanol
producer credit--
``(i) this section and section 39 shall be
applied separately with respect to the credit,
and
``(ii) in applying paragraph (1) to the
credit--
``(I) subparagraphs (A) and (B)
thereof shall not apply, and
``(II) the limitation under
paragraph (1) (as modified by subclause
(I)) shall be reduced by the credit
allowed under subsection (a) for the
taxable year (other than the small
ethanol producer credit).
``(B) Small ethanol producer credit.--For purposes
of this subsection, the term `small ethanol producer
credit' means the credit allowable under subsection (a)
by reason of section 40(a)(3).''.
(B) Conforming amendment.--Subclause (II) of
section 38(c)(2)(A)(ii) of such Code is amended by
inserting ``or the small ethanol producer credit''
after ``employment credit''.
(4) Small ethanol producer credit not added back to income
under section 87.--Section 87 of such Code (relating to income
inclusion of alcohol fuel credit is amended to read as follows:
``SEC. 87. ALCOHOL FUEL CREDIT.
``Gross income includes an amount equal to the sum of--
``(1) the amount of the alcohol mixture credit determined
with respect to the taxpayer for the taxable year under section
40(a)(1), and
``(2) the alcohol credit determined with respect to the
taxpayer for the taxable year under section 40(a)(2).''.
(c) Conforming Amendment.--Section 1388 of the Internal Revenue
Code of 1986 (relating to definitions and special rules for cooperative
organizations) is amended by adding at the end the following:
``(k) Cross Reference.--For provisions relating to the
apportionment of the alcohol fuels credit between cooperative
organizations and their patrons, see section 40(d) (6).''
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 1997.
(2) Certain provisions.--The amendments made by paragraphs
(1) and (4) of subsection (b) shall apply to taxable years
ending after the date of the enactment of this Act.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S7161)
Read twice and referred to the Committee on Finance. (text of measure as introduced: CR S7161-7162)
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