110th CONGRESS
1st Session
S. 285
To amend the Internal Revenue Code of 1986 to provide a credit
to certain concentrated animal feeding operations for the cost of complying
with environmental protection regulations.
IN THE SENATE OF THE UNITED STATES
January 12, 2007
Mr. HAGEL (for himself and Mr. ISAKSON) introduced the following bill;
which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to provide a credit
to certain concentrated animal feeding operations for the cost of complying
with environmental protection regulations.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `CAFO Tax Credit Act'.
SEC. 2. CREDIT FOR CONCENTRATED ANIMAL FEEDING OPERATIONS.
(a) In General- Subpart D of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to business related credits) is
amended by adding at the end the following new section:
`SEC. 45O. CREDIT FOR EPA COMPLIANCE COSTS FOR CONCENTRATED ANIMAL FEEDING
OPERATIONS.
`(a) Allowance of Credit-
`(1) IN GENERAL- For purposes of section 38, in the case of an eligible
taxpayer, the EPA compliance credit determined under this section for
the taxable year is an amount equal to the applicable percentage of the
qualified compliance costs paid or incurred by the eligible taxpayer during
the taxable year.
`(2) APPLICABLE PERCENTAGE- For purposes of paragraph (1), the applicable
percentage shall be determined as follows:
`If the amount of qualified
The applicable
compliance costs paid or incurred during the taxable year is:
percentage is:
Not over $100,000
--100
Over $100,000 but not over $200,000
--80
Over $200,000 but not over $400,000
--60
Over $400,000
--40.
`(b) Limitation- The amount of credit allowed under subsection (a) for any
taxable year shall not exceed $500,000.
`(c) Eligible Taxpayer- For purposes of this section, the term `eligible
taxpayer' means an owner or operator of a concentrated animal feeding operation
(as defined under section 122.23 of title 40, Code of Federal Regulations).
`(d) Qualified Compliance Costs- For purposes of this section--
`(1) IN GENERAL- The term `qualified compliance costs' means costs paid
or incurred for compliance with a national pollutant discharge elimination
system permit issued under section 402 of the Federal Water Pollution
Control Act (33 U.S.C. 1342).
`(2) EXCLUSION FOR AMOUNTS FUNDED BY GRANTS, ETC- The term `qualified
compliance costs' shall not include any amount to the extent such amount
is funded by any grant, contract, or otherwise by another person (or any
governmental entity).
`(1) REDUCTION IN BASIS- For purposes of this subtitle, if a credit is
determined under this section for any expenditure with respect to any
property, the increase in basis of such property which would (but for
this subsection) result from such expenditure shall be reduced by the
amount of the credit so determined.
`(2) WHEN COSTS PAID OR INCURRED- For purposes of this section, a cost
shall be treated as paid or incurred in the year in which the taxpayer
achieves compliance with the national pollutant discharge elimination
system permit issued under section 402 of the Federal Water Pollution
Control Act (33 U.S.C. 1342).
`(3) DENIAL OF DOUBLE BENEFIT- No deduction or other credit shall be allowed
under this chapter for any amount taken into account in determining the
credit under this section.
`(f) Termination- This section shall not apply to expenditures paid or incurred
after December 31, 2010.'.
(b) Credit Made Part of General Business Credit- Section 38(b) of the Internal
Revenue Code of 1986 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:
`(32) the EPA compliance credit determined under section 45O(a).'.
(c) Conforming Amendments-
(1) Section 1016(a) of the Internal Revenue Code of 1986 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:
`(38) to the extent provided in section 45O(e)(1).'.
(2) The table of sections for subpart D of part IV of subchapter A of
chapter 1 of such Code is amended by adding at the end the following new
item:
`Sec. 45O. Credit for compliance costs for concentrated animal feeding
operations.'.
(d) Effective Date- The amendments made by this section shall apply to expenditures
incurred after December 31, 2002.
END
