[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1066 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                S. 1066

 To amend the Internal Revenue Code of 1986 to allow the alcohol fuels 
  credit to be allocated to patrons of a cooperative in certain cases.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 24, 1997

Mr. Wellstone (for himself, Mr. Grassley, Mr. Kerrey, Mr. Johnson, Mr. 
Daschle, and Mr. Conrad) introduced the following bill; which was read 
               twice and referred to the Committee on    

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to allow the alcohol fuels 
  credit to be allocated to patrons of a cooperative in certain cases.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. ALLOCATION OF ALCOHOL FUELS CREDIT TO PATRONS OF A 
              COOPERATIVE.

    (a) In General.--Subsection (d) of section 40 of the Internal 
Revenue Code of 1986 (relating to alcohol used as fuel) is amended by 
adding at the end the following new paragraph:
            ``(6) Allocation of small ethanol producer credit to 
        patrons of cooperative.--
                    ``(A) In general.--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 made on a timely filed return (including 
                extensions) for such year, be apportioned pro rata 
                among patrons on the basis of the quantity or value of 
                business done with or for such patrons for the taxable 
                year. Such an election, once made, shall be irrevocable 
                for such taxable year.
                    ``(B) Treatment of organizations and patrons.--The 
                amount of the credit apportioned to patrons pursuant to 
                subparagraph (A)--
                            ``(i) shall not be included in the amount 
                        determined under subsection (a) for the taxable 
                        year of the organization, and
                            ``(ii) shall be included in the amount 
                        determined under subsection (a) for the taxable 
                        year of each patron in which the patronage 
                        dividend for the taxable year referred to in 
                        subparagraph (A) is includible in gross income.
                    ``(C) Special rule for decreasing credit for 
                taxable year.--If the amount of the credit of a 
                cooperative organization determined under subsection 
                (a)(3) for a taxable year is less than the amount of 
                such credit shown on the cooperative organization's 
                return for such year, an amount equal to the excess of 
                such reduction over the amount not apportioned to the 
                patrons under subparagraph (A) for the taxable year 
                shall be treated as an increase in tax imposed by this 
                chapter on the organization. Any 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 of this part.''
    (b) Technical 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 new 
subsection:
    ``(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).''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1996.
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