II 109th CONGRESS 2d Session S. 3600 IN THE SENATE OF THE UNITED STATES June 29, 2006 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 the allocation of the alternative fuel vehicle refueling property credit to patrons of agricultural cooperatives.

1.

Allocation of alternative fuel vehicle refueling property credit to patrons of agricultural cooperatives

(a)

In general

Subsection (e) of section 30C of the Internal Revenue Code of 1986 (relating to special rules) is amended by adding at the end the following new paragraph: (6)

Allocation of credit to patrons of agricultural cooperative

(A)

Election to allocate

(i)

In general

In the case of an eligible cooperative organization, any portion of the credit determined under subsection (a) for the taxable year may, at the election of the organization, be apportioned among patrons of the organization on the basis of the amount of business done by the patrons during 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. Such election shall not take effect unless the organization designates the apportionment as such in a written notice mailed to its patrons during the payment period described in section 1382(d). (B)

Treatment of organizations and patrons

The amount of the credit apportioned to any 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, and (ii)shall be included in the amount determined under subsection (a) for the first taxable year of each patron ending on or after the last day of the payment period (as defined in section 1382(d)) for the taxable year of the organization or, if earlier, for the taxable year of each patron ending on or after the date on which the patron receives notice from the cooperative of the apportionment. (C)

Special rules for decrease in credits for taxable year

If the amount of the credit of a cooperative organization determined under subsection (a) 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 chapter.(D)

Eligible cooperative defined

For purposes of this section the term eligible cooperative means a cooperative organization described in section 1381(a) which is owned more than 50 percent by agricultural producers or by entities owned by agricultural producers. For this purpose an entity owned by an agricultural producer is one that is more than 50 percent owned by agricultural producers. . (b)

Conforming amendment

The last sentence of section 55(c)(1) is amended by inserting 30C(e)(6), after section. (c)

Effective date

The amendment made by this section shall apply to taxable years of cooperative organizations ending after the date of the enactment of this Act.