[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2493 Introduced in Senate (IS)]

  2d Session
                                S. 2493

 To amend the Internal Revenue Code of 1986 to allow a tax credit for 
      the nutrient management costs of animal feeding operations.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 17, 1998

  Mr. Harkin 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 a tax credit for 
      the nutrient management costs of animal feeding operations.

    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 ``Animal Agriculture Environmental 
Incentives Act of 1998''.

SEC. 2. ALLOWANCE OF CREDIT FOR NUTRIENT MANAGEMENT COSTS OF 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. 45D. ANIMAL FEEDING OPERATION EQUIPMENT CREDIT.

    ``(a) In General.--For purposes of section 38, the animal feeding 
operation equipment credit determined under this section for the 
taxable year is an amount equal to 25 percent of the eligible nutrient 
management costs of a taxpayer for the taxable year.
    ``(b) Eligible Nutrient Management Costs.--For purposes of this 
section--
            ``(1) In general.--The term `eligible nutrient management 
        costs' means amounts paid or incurred by a taxpayer to purchase 
        a calibrated manure spreader or eligible processing equipment 
        for use at an animal feeding operation owned by the taxpayer.
            ``(2) Calibrated manure spreader.--The term `calibrated 
        manure spreader' means equipment (including any associated 
        geostationary positioning satellite equipment) which is used by 
        the taxpayer exclusively for the precision application of 
        manure to land in accordance with a comprehensive nutrient 
        management plan.
            ``(3) Eligible processing equipment.--
                    ``(A) In general.--The term `eligible processing 
                equipment' means equipment or structures used by the 
                taxpayer exclusively for processing manure.
                    ``(B) Exclusion.--The term `eligible processing 
                equipment' does not include equipment used exclusively 
                for the simple containment or transportation of manure.
    ``(c) Other Definitions.--For purposes of this section--
            ``(1) Animal feeding operation.--The term `animal feeding 
        operation' means a facility for the milking of dairy cows or 
        the raising of livestock or poultry (including egg production) 
        for commercial sale.
            ``(2) Application.--The term `application' means laying, 
        spreading on, irrigating, injecting, or otherwise placing 
        manure on land by any means.
            ``(3) Comprehensive nutrient management plan.--The term 
        `comprehensive nutrient management plan' means a written plan 
        prepared in accordance with applicable Federal and State laws 
        and regulations.
            ``(4) Manure.--The term `manure' means--
                    ``(A) the excreta of an animal or other organic 
                byproduct of an animal feeding operation, including 
                litter, bedding, dead animals, composted animal 
                carcasses, milk house waste, or other residual organic 
                matter, and
                    ``(B) water or any other material mixed with such 
                excreta or byproduct for purposes of collection, 
                handling, containment, or processing of such excreta or 
                byproduct.
            ``(5) Precision application.--The term `precision 
        application' means the controlled application of manure to land 
        in a manner which distributes a specified amount of manure, as 
        determined by the nitrogen or phosphorous content of the 
        manure, across a specified area of land.
            ``(6) Processing.--The term `processing' means any 
        mechanical, physical, or chemical treatment which--
                    ``(A) alters the concentration of nitrogen, 
                phosphorous, water, or other constituents in manure to 
                facilitate--
                            ``(i) manure application on land covered by 
                        the requirements of a comprehensive nutrient 
                        management plan, or
                            ``(ii) use of manure or processed manure 
                        for commercial purposes other than land 
                        application on land owned or controlled by the 
                        taxpayer,
                    ``(B) enhances the value of manure as a plant 
                fertilizer or soil amendment, or
                    ``(C) utilizes manure as an energy source.
    ``(d) Special Rules.--
            ``(1) Reduction in basis.--For purposes of this subtitle, 
        if a credit is determined under this section with respect to 
        any property, the basis of such property shall be reduced by 
        the amount of the credit so determined.
            ``(2) Pass-thru in the case of estates and trusts.--For 
        purposes of this section, under regulations prescribed by the 
        Secretary, rules similar to the rules of subsection (d) of 
        section 52 shall apply.
            ``(3) Allocation in the case of partnerships.--For purposes 
        of this section, in the case of partnerships, the credit shall 
        be allocated among partners under regulations prescribed by the 
        Secretary.''
    (b) Conforming Amendments.--
            (1) Section 38(b) of the Internal Revenue Code of 1986 is 
        amended--
                    (A) by striking ``plus'' at the end of paragraph 
                (11),
                    (B) by striking the period at the end of paragraph 
                (12), and inserting ``, plus'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(13) the animal feeding operation equipment credit 
        determined under section 45D.''
            (2) 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:

                              ``Sec. 45D. Animal feeding operation 
                                        equipment credit.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.
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