To amend the Internal Revenue Code of 1986 to establish tax credits for the production of, and investment in, certain renewable materials.

in service, or ``(iii) the date of enactment of this section. ``(B) Modifications.--The modifications described in this subparagraph are substantial modifications to an existing facility which allow such facility to produce qualified renewable material. ``(c) Special Rules.-- ``(1) Credit attributable to taxpayer.-- ``(A) In general.--Except as otherwise provided in subparagraph (B) or in any regulations prescribed by the Secretary, any credit under this section shall be attributable to the person that sells or uses the qualified renewable material. ``(B) Election.--If the person described in subparagraph (A) makes an election under this subparagraph in such time and manner as the Secretary may prescribe by regulations, the credit under this section-- ``(i) shall be allowable to the person to whom the qualified renewable material is sold, and ``(ii) shall not be allowable to the person described in subparagraph (A). ``(2) Coordination with investment credit.--The term `renewable material production facility' shall not include any facility for which a renewable materials investment credit determined under section 48F is allowed under section 38 for the taxable year or any prior taxable year. ``(3) Credit reduced for tax-exempt bonds.--Rules similar to the rules of section 45(b)(3) shall apply. ``(4) Limitation.--The amount of the credit determined under subsection (a) with respect to any facility for any taxable year (determined after the application of paragraph (3)) shall not exceed $10,000,000.''. (b) Coordination With Clean Fuel Production Credit.--Section 45Z(d)(4)(B) is amended by adding at the end the following: ``(iv) The renewable materials production credit under section 45BB.''. (c) Credit Made Transferable.--Section 6418(f)(1) is amended-- (1) in subparagraph (A) by adding at the end the following: ``(xii) The renewable materials production credit determined under section 45BB.'', and (2) in subparagraph (B), by striking ``or (vii)'' and inserting ``(vii), or (xii)''. (d) Credit Made Part of General Business Credit.--Subsection (b) of section 38 of such Code is amended by striking ``plus'' at the end of paragraph (40), by striking the period at the end of paragraph (41) and inserting ``, plus'', and by adding at the end the following new paragraph: ``(42) the renewable materials production credit determined under section 45BB.''. (e) Clerical Amendment.--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: ``Sec. 45BB. Renewable materials production credit.''. (f) Regulations.--The Secretary, in consultation with the Secretary of Agriculture, shall establish regulations or other guidance for implementing the credit established under this section within 180 days of the date of enactment. (g) Effective Date.--The amendments made by this section shall apply to qualified renewable material produced on or after the date of enactment. SEC. 2. CREDIT FOR RENEWABLE MATERIALS INVESTMENT. (a) In General.--Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: ``SEC. 48F. RENEWABLE MATERIALS INVESTMENT CREDIT. ``(a) Allowance of Credit.--For purposes of section 46, the renewable materials investment credit for any taxable year is an amount equal to 30 percent of the qualified investment for the taxable year with respect to any qualified facility. ``(b) Qualified Investment.-- ``(1) In general.--For purposes of subsection (a), the qualified investment for any taxable year with respect to any qualified facility is the basis of any qualified property placed in service by the taxpayer during such taxable year which-- ``(A) is used in the production of qualified renewable material, and ``(B) is part of a qualified facility. ``(2) Qualified property.--For purposes of this section, the term `qualified property' means property-- ``(A) which is-- ``(i) tangible personal property, or ``(ii) other tangible property (not including a building or its structural components), but only if such property is used as an integral part of the qualified facility, ``(B) with respect to which depreciation (or amortization in lieu of depreciation) is allowable, ``(C) which is constructed, reconstructed, erected, or acquired by the taxpayer, and ``(D) the original use of which commences with the taxpayer. ``(3) Qualified facility.-- ``(A) In general.--The term `qualified facility' means a renewable material production facility within the meaning of section 45BB(b)(3). ``(B) Exclusion.--The term `qualified facility' shall not include any facility for which a renewable materials production credit determined under section 45BB is allowed under section 38 for the taxable year or any prior taxable year. ``(4) Coordination with rehabilitation credit.--The qualified investment with respect to any qualified facility for any taxable year shall not include that portion of the basis of any property which is attributable to qualified rehabilitation expenditures (as defined in section 47(c)(2)). ``(c) Special Rules.-- ``(1) Certain progress expenditure rules made applicable.-- Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of subsection (a). ``(2) Credit reduced for tax-exempt bonds.--Rules similar to the rules of section 45(b)(3) shall apply.''. (b) Coordination With Clean Fuel Production Credit.--Section 45Z(d)(4)(B), as amended by section 1, is amended by adding at the end the following: ``(v) The credit determined under section 46 to the extent that such credit is attributable to the renewable materials investment credit.''. (c) Credit Made Transferable.--Section 6418, as amended by section 1, is amended-- (1) in subsection (f)(1)(A) by adding at the end the following: ``(xiii) The renewable materials investment credit determined under section 48F.'', and (2) in paragraph (g)(3) by striking ``(xi)'' and inserting ``(xi), or (xiii),''. (d) Conforming Amendments.-- (1) Section 46 of such Code is amended-- (A) in paragraph (6) by striking ``and'' at the end, (B) in paragraph (7) by striking the period at the end and inserting ``, and'', and (C) by adding at the end the following: ``(8) the renewable materials investment credit.''. (2) Section 49(a)(1)(C) of such Code is amended-- (A) by striking ``and'' at the end of clause (vii), (B) by striking the period at the end of clause (viii) and inserting ``, and'', and (C) by adding at the end the following new clause: ``(ix) the basis of any qualified property which is part of a qualified facility under section 48F.''. (3) Section 50(a)(2)(E) of such Code is amended by striking ``or 48E(e)'' and inserting ``48E(e), or 48F(c)(1)''. (4) The table of sections for subpart E of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 48E the following new item: ``Sec. 48F. Renewable materials investment credit.''. (e) Regulations.--The Secretary, in consultation with the Secretary of Agriculture, shall establish regulations or other guidance for implementing the credit established under this section within 180 days of the date of enactment. (f) Effective Date.--The amendments made by this section shall apply to property placed in service after the date of enactment. <all>