The corporate tax bill conference report is on track to be passed by the House tonight. Sen. Bingaman, a conferee, signed the report and intends to vote for it when the Senate takes it up, maybe as early as tonight. H.R. 4520 contains 18 energy-related tax provisions. My Senate Energy colleagues compiled this list, and Senate Finance provided the descriptions which follow it. List of Energy Tax Provisions in the Conference Report on HR4520 II. Business Tax Incentives E. Other Business Incentives 241. Repeal of 4.3 cent General Fund excise taxes on railroad diesel fuel and inland waterway fuel. III. Agriculture Tax Relief and Incentives Provisions A. Volumetric Ethanol Excise Tax Credit 301. Alcohol and biodiesel excise tax credit and extension of alcohol fuels income tax credit 302. Biodiesel income tax credit 303. Information reporting for persons claiming certain tax benefits B. Agriculture Incentives 313. Apportionment of small ethanol producer credit 319. Treatment of certain income from cooperatives C. Other incentives 321. Distributions from publicly traded partnerships treated as qualified income for regulated investment company. 328. Expensing of capital cost incurred from production in complying with EPA sulfur regulations for small refiners 329. Credit for small refiners for production for diesel fuel in compliance with EPA sulfur regulations for small refiners VII. Miscellaneous Provisions 701. Brownfields demonstration program for qualified green building and sustainable design projects. 706. Certain Alaska pipeline property treated as 7-year property 707. Extension of enhanced oil recovery credit to certain Alaska facilities 711. Extension and expansion of credit for electricity produced from certain renewable resources 712. Certain business credits allowed against regular and minimum tax 714. Temporary suspension of customs duty on certain ceiling fans 715. Temporary suspension of customs duty on certain steam generators VIII. Other Revenue Provisions 909. Dispositions of transmission property to implement FERC restructuring policy 910. Expansion of Limitation on Depreciation of Certain Passenger Automobiles Excerpts from Finance Committee Summary TITLE II—BUSINESS TAX INCENTIVES Subtitle E—Other Business Incentives Sec. 241. Phaseout of 4.3-cent motor fuel excise taxes on railroads and inland waterway transportation which remain in general fund. Repeals the 4.3-cents-per-gallon General Fund excise tax on diesel fuel used in trains and fuels used in barges operating on the designated inland waterways system. Phases out from 2005 through 2009. Repealed after 2009. TITLE III—AGRICULTURAL TAX RELIEF AND INCENTIVES Subtitle A—Volumetric Ethanol Excise Tax Credit Sec. 301. Alcohol and biodiesel excise tax credit and extension of alcohol fuels income tax credit. Repeals reduced-rate sales of fuel for blending with alcohol. Provides a per-gallon excise tax credit for each gallon of alcohol used to produced a qualified fuel mixture to be used against 4081 liability. Effective date.–Generally for fuel sold or used after September 30, 2004. The repeal of the General Fund retention requirement is effective for taxes imposed after September 30, 2003. Sec. 302. Biodiesel income tax credit. Provides a 50 cent-per-gallon income tax credit similar to the present-law ethanol benefits for each gallon biodiesel used or sold as fuel or used in the production of a qualified biodiesel mixture that is used or sold as fuel. Effective date.–Fuel produced and sold or used after September 30, 2004 in taxable years ending after such date and before January 1, 2007. Sec. 303. Information reporting for persons claiming certain tax benefits. Subtitle B—Agricultural Incentives. Importers and producers of biodiesel must be registered with the Secretary. Effective date.–Fuel produced and sold, used or removed after September 30, 2004. Registration requirements are effective April 1, 2005. Sec. 313. Apportionment of small ethanol producer credit. Provision clarifies that the small producers tax credit flows through to members of a cooperative. Effective date – applies to taxable years after the date of enactment. Sec. 319. Electric Coop 85/15 rule change. Allows tax-exempt cooperatives to receive income from nonmembers and to participate in open access transactions without losing their tax-exempt status. Subtitle C—Other Incentives Sec. 321. Net income from publicly traded partnerships treated as qualifying income of regulated investment companies. Modifies the 90 percent test to include as qualifying income of a RIC the income derived from a publicly traded partnership, and modifies the look-through rule to apply to partnerships other than publicly traded partnerships. Effective for taxable years beginning after date of enactment. Sec. 328. Expensing of capital costs incurred in complying with Environmental Protection Agency sulfur regulations. AND Sec. 329. Credit for production of low sulfur diesel fuel. These provisions permit small business refiners to claim an immediate deduction (i.e., expensing) for up to 75 percent of the costs paid to comply with the EPA sulfur regulations. In addition, a small business refiner may claim a credit equal to 5 cents per gallon. The total production credit is limited to 25 percent of the capital costs incurred to come into compliance with the EPA requirements. A small business refiner employs not more than 1,500 employees directly in refining and has average daily refinery runs less than 205,000 barrels. The allowable deduction and production credit are both phased out on a pro rata basis from 155,000 barrels. In addition, the production credit may be passed through to members of a cooperative. The provision is effective for expenses paid after December 31, 2002 (and before January 1, 2006.) Sec. 341. Marginal Wells. Adds the marginal well production tax credit. The credit is $3 per barrel of oil or $0.50 per thousand cubic feet of gas. The credit is not available if the reference price of oil exceeds $18 ($2 for natural gas). TITLE VII—MISCELLANEOUS PROVISIONS Sec. 701. Brownfields demonstration program for qualified green building and sustainable design projects. Authorizes the issuance of tax-exempt facility bonds for certain green building and sustainable design projects (projects) designated by the Secretary. Limits the amount of bonds that may be issued to $2 billion. Requires designated projects to: (1) register at least 75 percent of the square footage of the structures included in a project for certification by the U.S. Green Building Council's Leadership in Energy and Environmental Design; (2) include a brownfield site; (3) identify other State or local financial contributions that will be provided to support a project; (4) include at least one million square feet of building or 20 acres of land; and (5) provide at least 1,500 full time jobs (150 jobs in rural States) when completed and at least 1,000 full time jobs (100 jobs in rural States) during construction. Prohibits more than one project in a single State and requires at least one project in an empowerment zone and one project in a rural State. Effective for bonds issued after 2004. Terminates the authority for issuing bonds after September 30, 2009. Sec. 702. Exclusion of gain or loss on sale or exchange of certain brownfield sites from unrelated business taxable income. Under current law, income produced from debt financed property generally produces UBIT to tax-exempt investors. The proposal waives UBIT for tax exempt investors that invest in the clean up and remediation of qualified brownfield sites. Applies to property acquired after 2004. Sec. 706. Certain Alaska natural gas pipeline property treated as 7-year property. Allows 7-year depreciation for certain Alaska natural gas pipelines placed in service after 2013, or treated as placed in service after 2013 at the taxpayer’s election. Effective for property placed in service after December 31, 2004. Sec. 707. Extension of enhanced oil recovery credit to certain Alaska facilities. The enhanced oil recovery credit is extended to Alaskan gas treatment plants. Effective for costs paid or incurred in taxable years beginning after December 31, 2004. Sec. 711. Expansion of credit for electricity produced from certain renewable resources. Qualified facilities are expanded to include open-loop biomass, geothermal and solar energy, small irrigation power, landfill gas, trash combustion and refined coal production facilities. The credit for electricity sold and produced after 2003 is reduced by one-half for open-loop biomass, small irrigation, landfill gas and trash combustion facilities. The credit period is also reduced from 10 years to 5 years for these facilities. The provision is generally effective for electricity sold and produced after date of enactment. Sec. 712. Certain business credits allowed against regular and minimum tax. Allows the tax credits for alcohol fuels and for the production of electricity to be applied against income tax and alternative minimum tax liabilities. Effective for taxable years ending after the date of enactment. Sec. 714. Ceiling fans. Amends the Harmonized Tariff Schedule of the United States to suspend duties on ceiling fans through December 31, 2006. Effective on the 15th day after enactment. Sec. 715. Certain steam generators, and certain reactor vessel heads and pressurizers, used in nuclear facilities. Amends the Harmonized Tariff Schedule of the United States to extend duty-free entry of nuclear steam generators and suspend duties on nuclear reactor vessel heads through December 31, 2008. Effective on the 15th day after enactment. Subtitle D – Other Revenue Provisions Sec. 909. Sales or dispositions to implement Federal Energy Regulatory Commission or State electric restructuring policy. Provides special rules for sales or dispositions of assets sales before January 1, 2007 to implement an electric restructuring policy. Applies to transactions after the date of enactment, for taxable years ending after the date of enactment. [Not from either bills’ energy tax title, but of interest:] Sec. 910. Expansion of Limitation on Depreciation of Certain Passenger Automobiles. (SUV loophole closer) The cost of the SUV for any taxable year may not exceed $25,000. Vehicles designed with certain seating capacity, cargo area, and integral enclosure are excluded from the definition of sport utility vehicle.
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