IN THE SENATE OF THE UNITED STATES—110th Cong., 2d Sess.
H. R. 1424 (FULL TEXT: CLICK HERE)

11 DIVISION B—ENERGY IMPROVE12
MENT AND EXTENSION ACT
13 OF 2008
14 SECTION 1. SHORT TITLE, ETC.
15 (a) SHORT TITLE.—This division may be cited as the
16 ‘‘Energy Improvement and Extension Act of 2008’’.
17 (b) REFERENCE.—Except as otherwise expressly pro18
vided, whenever in this division an amendment or repeal
19 is expressed in terms of an amendment to, or repeal of,
20 a section or other provision, the reference shall be consid21
ered to be made to a section or other provision of the In22
ternal Revenue Code of 1986.
23 (c) TABLE OF CONTENTS.—The table of contents for
24 this division is as follows:
Sec. 1. Short title, etc.
TITLE I—ENERGY PRODUCTION INCENTIVES
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Subtitle A—Renewable Energy Incentives
Sec. 101. Renewable energy credit.
Sec. 102. Production credit for electricity produced from marine renewables.
Sec. 103. Energy credit.
Sec. 104. Energy credit for small wind property.
Sec. 105. Energy credit for geothermal heat pump systems.
Sec. 106. Credit for residential energy efficient property.
Sec. 107. New clean renewable energy bonds.
Sec. 108. Credit for steel industry fuel.
Sec. 109. Special rule to implement FERC and State electric restructuring policy.
Subtitle B—Carbon Mitigation and Coal Provisions
Sec. 111. Expansion and modification of advanced coal project investment credit.
Sec. 112. Expansion and modification of coal gasification investment credit.
Sec. 113. Temporary increase in coal excise tax; funding of Black Lung Disability
Trust Fund.
Sec. 114. Special rules for refund of the coal excise tax to certain coal producers
and exporters.
Sec. 115. Tax credit for carbon dioxide sequestration.
Sec. 116. Certain income and gains relating to industrial source carbon dioxide
treated as qualifying income for publicly traded partnerships.
Sec. 117. Carbon audit of the tax code.
TITLE II—TRANSPORTATION AND DOMESTIC FUEL SECURITY
PROVISIONS
Sec. 201. Inclusion of cellulosic biofuel in bonus depreciation for biomass ethanol
plant property.
Sec. 202. Credits for biodiesel and renewable diesel.
Sec. 203. Clarification that credits for fuel are designed to provide an incentive
for United States production.
Sec. 204. Extension and modification of alternative fuel credit.
Sec. 205. Credit for new qualified plug-in electric drive motor vehicles.
Sec. 206. Exclusion from heavy truck tax for idling reduction units and advanced
insulation.
Sec. 207. Alternative fuel vehicle refueling property credit.
Sec. 208. Certain income and gains relating to alcohol fuels and mixtures, biodiesel
fuels and mixtures, and alternative fuels and mixtures
treated as qualifying income for publicly traded partnerships.
Sec. 209. Extension and modification of election to expense certain refineries.
Sec. 210. Extension of suspension of taxable income limit on percentage depletion
for oil and natural gas produced from marginal properties.
Sec. 211. Transportation fringe benefit to bicycle commuters.
TITLE III—ENERGY CONSERVATION AND EFFICIENCY
PROVISIONS
Sec. 301. Qualified energy conservation bonds.
Sec. 302. Credit for nonbusiness energy property.
Sec. 303. Energy efficient commercial buildings deduction.
Sec. 304. New energy efficient home credit.
Sec. 305. Modifications of energy efficient appliance credit for appliances produced
after 2007.
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Sec. 306. Accelerated recovery period for depreciation of smart meters and
smart grid systems.
Sec. 307. Qualified green building and sustainable design projects.
Sec. 308. Special depreciation allowance for certain reuse and recycling property.
TITLE IV—REVENUE PROVISIONS
Sec. 401. Limitation of deduction for income attributable to domestic production
of oil, gas, or primary products thereof.
Sec. 402. Elimination of the different treatment of foreign oil and gas extraction
income and foreign oil related income for purposes of the
foreign tax credit.
Sec. 403. Broker reporting of customer’s basis in securities transactions.
Sec. 404. 0.2 percent FUTA surtax.
Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax.
1 TITLE I—ENERGY PRODUCTION
2 INCENTIVES
3 Subtitle A—Renewable Energy
4 Incentives
5 SEC. 101. RENEWABLE ENERGY CREDIT.
6 (a) EXTENSION OF CREDIT.—
7 (1) 1-YEAR EXTENSION FOR WIND AND RE8
FINED COAL FACILITIES.—Paragraphs (1) and (8)
9 of section 45(d) are each amended by striking ‘‘Jan10
uary 1, 2009’’ and inserting ‘‘January 1, 2010’’.
11 (2) 2-YEAR EXTENSION FOR CERTAIN OTHER
12 FACILITIES.—Each of the following provisions of
13 section 45(d) is amended by striking ‘‘January 1,
14 2009’’ and inserting ‘‘January 1, 2011’’:
15 (A) Clauses (i) and (ii) of paragraph
16 (2)(A).
17 (B) Clauses (i)(I) and (ii) of paragraph
18 (3)(A).
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1 (C) Paragraph (4).
2 (D) Paragraph (5).
3 (E) Paragraph (6).
4 (F) Paragraph (7).
5 (G) Subparagraphs (A) and (B) of para6
graph (9).
7 (b) MODIFICATION OF REFINED COAL AS A QUALI8
FIED ENERGY RESOURCE.—
9 (1) ELIMINATION OF INCREASED MARKET
10 VALUE TEST.—Section 45(c)(7)(A)(i) (defining re11
fined coal), as amended by section 108, is amend12
ed—
13 (A) by striking subclause (IV),
14 (B) by adding ‘‘and’’ at the end of sub15
clause (II), and
16 (C) by striking ‘‘, and’’ at the end of sub17
clause (III) and inserting a period.
18 (2) INCREASE IN REQUIRED EMISSION REDUC19
TION.—Section 45(c)(7)(B) (defining qualified emis20
sion reduction) is amended by inserting ‘‘at least 40
21 percent of the emissions of’’ after ‘‘nitrogen oxide
22 and’’.
23 (c) TRASH FACILITY CLARIFICATION.—Paragraph
24 (7) of section 45(d) is amended—
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1 (1) by striking ‘‘facility which burns’’ and in2
serting ‘‘facility (other than a facility described in
3 paragraph (6)) which uses’’, and
4 (2) by striking ‘‘COMBUSTION’’.
5 (d) EXPANSION OF BIOMASS FACILITIES.—
6 (1) OPEN-LOOP BIOMASS FACILITIES.—Para7
graph (3) of section 45(d) is amended by redesig8
nating subparagraph (B) as subparagraph (C) and
9 by inserting after subparagraph (A) the following
10 new subparagraph:
11 ‘‘(B) EXPANSION OF FACILITY.—Such
12 term shall include a new unit placed in service
13 after the date of the enactment of this subpara14
graph in connection with a facility described in
15 subparagraph (A), but only to the extent of the
16 increased amount of electricity produced at the
17 facility by reason of such new unit.’’.
18 (2) CLOSED-LOOP BIOMASS FACILITIES.—Para19
graph (2) of section 45(d) is amended by redesig20
nating subparagraph (B) as subparagraph (C) and
21 inserting after subparagraph (A) the following new
22 subparagraph:
23 ‘‘(B) EXPANSION OF FACILITY.—Such
24 term shall include a new unit placed in service
25 after the date of the enactment of this subpara118
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1 graph in connection with a facility described in
2 subparagraph (A)(i), but only to the extent of
3 the increased amount of electricity produced at
4 the facility by reason of such new unit.’’.
5 (e) MODIFICATION OF RULES FOR HYDROPOWER
6 PRODUCTION.—Subparagraph (C) of section 45(c)(8) is
7 amended to read as follows:
8 ‘‘(C) NONHYDROELECTRIC DAM.—For pur9
poses of subparagraph (A), a facility is de10
scribed in this subparagraph if—
11 ‘‘(i) the hydroelectric project installed
12 on the nonhydroelectric dam is licensed by
13 the Federal Energy Regulatory Commis14
sion and meets all other applicable environ15
mental, licensing, and regulatory require16
ments,
17 ‘‘(ii) the nonhydroelectric dam was
18 placed in service before the date of the en19
actment of this paragraph and operated
20 for flood control, navigation, or water sup21
ply purposes and did not produce hydro22
electric power on the date of the enactment
23 of this paragraph, and
24 ‘‘(iii) the hydroelectric project is oper25
ated so that the water surface elevation at
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1 any given location and time that would
2 have occurred in the absence of the hydro3
electric project is maintained, subject to
4 any license requirements imposed under
5 applicable law that change the water sur6
face elevation for the purpose of improving
7 environmental quality of the affected wa8
terway.
9 The Secretary, in consultation with the Federal
10 Energy Regulatory Commission, shall certify if
11 a hydroelectric project licensed at a nonhydro12
electric dam meets the criteria in clause (iii).
13 Nothing in this section shall affect the stand14
ards under which the Federal Energy Regu15
latory Commission issues licenses for and regu16
lates hydropower projects under part I of the
17 Federal Power Act.’’.
18 (f) EFFECTIVE DATE.—
19 (1) IN GENERAL.—Except as otherwise pro20
vided in this subsection, the amendments made by
21 this section shall apply to property originally placed
22 in service after December 31, 2008.
23 (2) REFINED COAL.—The amendments made by
24 subsection (b) shall apply to coal produced and sold
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1 from facilities placed in service after December 31,
2 2008.
3 (3) TRASH FACILITY CLARIFICATION.—The
4 amendments made by subsection (c) shall apply to
5 electricity produced and sold after the date of the
6 enactment of this Act.
7 (4) EXPANSION OF BIOMASS FACILITIES.—The
8 amendments made by subsection (d) shall apply to
9 property placed in service after the date of the en10
actment of this Act.
11 SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRO12
DUCED FROM MARINE RENEWABLES.
13 (a) IN GENERAL.—Paragraph (1) of section 45(c) is
14 amended by striking ‘‘and’’ at the end of subparagraph
15 (G), by striking the period at the end of subparagraph
16 (H) and inserting ‘‘, and’’, and by adding at the end the
17 following new subparagraph:
18 ‘‘(I) marine and hydrokinetic renewable en19
ergy.’’.
20 (b) MARINE RENEWABLES.—Subsection (c) of sec21
tion 45 is amended by adding at the end the following
22 new paragraph:
23 ‘‘(10) MARINE AND HYDROKINETIC RENEW24
ABLE ENERGY.—
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1 ‘‘(A) IN GENERAL.—The term ‘marine and
2 hydrokinetic renewable energy’ means energy
3 derived from—
4 ‘‘(i) waves, tides, and currents in
5 oceans, estuaries, and tidal areas,
6 ‘‘(ii) free flowing water in rivers,
7 lakes, and streams,
8 ‘‘(iii) free flowing water in an irriga9
tion system, canal, or other man-made
10 channel, including projects that utilize non11
mechanical structures to accelerate the
12 flow of water for electric power production
13 purposes, or
14 ‘‘(iv) differentials in ocean tempera15
ture (ocean thermal energy conversion).
16 ‘‘(B) EXCEPTIONS.—Such term shall not
17 include any energy which is derived from any
18 source which utilizes a dam, diversionary struc19
ture (except as provided in subparagraph
20 (A)(iii)), or impoundment for electric power
21 production purposes.’’.
22 (c) DEFINITION OF FACILITY.—Subsection (d) of
23 section 45 is amended by adding at the end the following
24 new paragraph:
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1 ‘‘(11) MARINE AND HYDROKINETIC RENEW2
ABLE ENERGY FACILITIES.—In the case of a facility
3 producing electricity from marine and hydrokinetic
4 renewable energy, the term ‘qualified facility’ means
5 any facility owned by the taxpayer—
6 ‘‘(A) which has a nameplate capacity rat7
ing of at least 150 kilowatts, and
8 ‘‘(B) which is originally placed in service
9 on or after the date of the enactment of this
10 paragraph and before January 1, 2012.’’.
11 (d) CREDIT RATE.—Subparagraph (A) of section
12 45(b)(4) is amended by striking ‘‘or (9)’’ and inserting
13 ‘‘(9), or (11)’’.
14 (e) COORDINATION WITH SMALL IRRIGATION
15 POWER.—Paragraph (5) of section 45(d), as amended by
16 section 101, is amended by striking ‘‘January 1, 2012’’
17 and inserting ‘‘the date of the enactment of paragraph
18 (11)’’.
19 (f) EFFECTIVE DATE.—The amendments made by
20 this section shall apply to electricity produced and sold
21 after the date of the enactment of this Act, in taxable
22 years ending after such date.
23 SEC. 103. ENERGY CREDIT.
24 (a) EXTENSION OF CREDIT.—
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1 (1) SOLAR ENERGY PROPERTY.—Paragraphs
2 (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) are each
3 amended by striking ‘‘January 1, 2009’’ and insert4
ing ‘‘January 1, 2017’’.
5 (2) FUEL CELL PROPERTY.—Subparagraph (E)
6 of section 48(c)(1) is amended by striking ‘‘Decem7
ber 31, 2008’’ and inserting ‘‘December 31, 2016’’.
8 (3) MICROTURBINE PROPERTY.—Subparagraph
9 (E) of section 48(c)(2) is amended by striking ‘‘De10
cember 31, 2008’’ and inserting ‘‘December 31,
11 2016’’.
12 (b) ALLOWANCE OF ENERGY CREDIT AGAINST AL13
TERNATIVE MINIMUM TAX.—
14 (1) IN GENERAL.—Subparagraph (B) of section
15 38(c)(4), as amended by the Housing Assistance
16 Tax Act of 2008, is amended by redesignating clause
17 (vi) as clause (vi) and (vii), respectively, and by in18
serting after clause (iv) the following new clause:
19 ‘‘(v) the credit determined under sec20
tion 46 to the extent that such credit is at21
tributable to the energy credit determined
22 under section 48,’’.
23 (2) TECHNICAL AMENDMENT.—Clause (vi) of
24 section 38(c)(4)(B), as redesignated by paragraph
25 (1), is amended by striking ‘‘section 47 to the extent
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1 attributable to’’ and inserting ‘‘section 46 to the ex2
tent that such credit is attributable to the rehabilita3
tion credit under section 47, but only with respect
4 to’’.
5 (c) ENERGY CREDIT FOR COMBINED HEAT AND
6 POWER SYSTEM PROPERTY.—
7 (1) IN GENERAL.—Section 48(a)(3)(A) is
8 amended by striking ‘‘or’’ at the end of clause (iii),
9 by inserting ‘‘or’’ at the end of clause (iv), and by
10 adding at the end the following new clause:
11 ‘‘(v) combined heat and power system
12 property,’’.
13 (2) COMBINED HEAT AND POWER SYSTEM
14 PROPERTY.—Subsection (c) of section 48 is amend15
ed—
16 (A) by striking ‘‘QUALIFIED FUEL CELL
17 PROPERTY; QUALIFIED MICROTURBINE PROP18
ERTY’’ in the heading and inserting ‘‘DEFINI19
TIONS’’, and
20 (B) by adding at the end the following new
21 paragraph:
22 ‘‘(3) COMBINED HEAT AND POWER SYSTEM
23 PROPERTY.—
24 ‘‘(A) COMBINED HEAT AND POWER SYS25
TEM PROPERTY.—The term ‘combined heat and
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1 power system property’ means property com2
prising a system—
3 ‘‘(i) which uses the same energy
4 source for the simultaneous or sequential
5 generation of electrical power, mechanical
6 shaft power, or both, in combination with
7 the generation of steam or other forms of
8 useful thermal energy (including heating
9 and cooling applications),
10 ‘‘(ii) which produces—
11 ‘‘(I) at least 20 percent of its
12 total useful energy in the form of
13 thermal energy which is not used to
14 produce electrical or mechanical power
15 (or combination thereof), and
16 ‘‘(II) at least 20 percent of its
17 total useful energy in the form of elec18
trical or mechanical power (or com19
bination thereof),
20 ‘‘(iii) the energy efficiency percentage
21 of which exceeds 60 percent, and
22 ‘‘(iv) which is placed in service before
23 January 1, 2017.
24 ‘‘(B) LIMITATION.—
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1 ‘‘(i) IN GENERAL.—In the case of
2 combined heat and power system property
3 with an electrical capacity in excess of the
4 applicable capacity placed in service during
5 the taxable year, the credit under sub6
section (a)(1) (determined without regard
7 to this paragraph) for such year shall be
8 equal to the amount which bears the same
9 ratio to such credit as the applicable ca10
pacity bears to the capacity of such prop11
erty.
12 ‘‘(ii) APPLICABLE CAPACITY.—For
13 purposes of clause (i), the term ‘applicable
14 capacity’ means 15 megawatts or a me15
chanical energy capacity of more than
16 20,000 horsepower or an equivalent com17
bination of electrical and mechanical en18
ergy capacities.
19 ‘‘(iii) MAXIMUM CAPACITY.—The term
20 ‘combined heat and power system property’
21 shall not include any property comprising a
22 system if such system has a capacity in ex23
cess of 50 megawatts or a mechanical en24
ergy capacity in excess of 67,000 horse127
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1 power or an equivalent combination of elec2
trical and mechanical energy capacities.
3 ‘‘(C) SPECIAL RULES.—
4 ‘‘(i) ENERGY EFFICIENCY PERCENT5
AGE.—For purposes of this paragraph, the
6 energy efficiency percentage of a system is
7 the fraction—
8 ‘‘(I) the numerator of which is
9 the total useful electrical, thermal,
10 and mechanical power produced by
11 the system at normal operating rates,
12 and expected to be consumed in its
13 normal application, and
14 ‘‘(II) the denominator of which is
15 the lower heating value of the fuel
16 sources for the system.
17 ‘‘(ii) DETERMINATIONS MADE ON BTU
18 BASIS.—The energy efficiency percentage
19 and the percentages under subparagraph
20 (A)(ii) shall be determined on a Btu basis.
21 ‘‘(iii) INPUT AND OUTPUT PROPERTY
22 NOT INCLUDED.—The term ‘combined heat
23 and power system property’ does not in24
clude property used to transport the en128
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1 ergy source to the facility or to distribute
2 energy produced by the facility.
3 ‘‘(D) SYSTEMS USING BIOMASS.—If a sys4
tem is designed to use biomass (within the
5 meaning of paragraphs (2) and (3) of section
6 45(c) without regard to the last sentence of
7 paragraph (3)(A)) for at least 90 percent of the
8 energy source—
9 ‘‘(i) subparagraph (A)(iii) shall not
10 apply, but
11 ‘‘(ii) the amount of credit determined
12 under subsection (a) with respect to such
13 system shall not exceed the amount which
14 bears the same ratio to such amount of
15 credit (determined without regard to this
16 subparagraph) as the energy efficiency per17
centage of such system bears to 60 per18
cent.’’.
19 (3) CONFORMING AMENDMENT.—Section
20 48(a)(1) is amended by striking ‘‘paragraphs (1)(B)
21 and (2)(B)’’ and inserting ‘‘paragraphs (1)(B),
22 (2)(B), and (3)(B)’’.
23 (d) INCREASE OF CREDIT LIMITATION FOR FUEL
24 CELL PROPERTY.—Subparagraph (B) of section 48(c)(1)
25 is amended by striking ‘‘$500’’ and inserting ‘‘$1,500’’.
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1 (e) PUBLIC UTILITY PROPERTY TAKEN INTO AC2
COUNT.—
3 (1) IN GENERAL.—Paragraph (3) of section
4 48(a) is amended by striking the second sentence
5 thereof.
6 (2) CONFORMING AMENDMENTS.—
7 (A) Paragraph (1) of section 48(c) is
8 amended by striking subparagraph (D) and re9
designating subparagraph (E) as subparagraph
10 (D).
11 (B) Paragraph (2) of section 48(c) is
12 amended by striking subparagraph (D) and re13
designating subparagraph (E) as subparagraph
14 (D).
15 (f) EFFECTIVE DATE.—
16 (1) IN GENERAL.—Except as otherwise pro17
vided in this subsection, the amendments made by
18 this section shall take effect on the date of the en19
actment of this Act.
20 (2) ALLOWANCE AGAINST ALTERNATIVE MIN21
IMUM TAX.—The amendments made by subsection
22 (b) shall apply to credits determined under section
23 46 of the Internal Revenue Code of 1986 in taxable
24 years beginning after the date of the enactment of
25 this Act and to carrybacks of such credits.
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1 (3) COMBINED HEAT AND POWER AND FUEL
2 CELL PROPERTY.—The amendments made by sub3
sections (c) and (d) shall apply to periods after the
4 date of the enactment of this Act, in taxable years
5 ending after such date, under rules similar to the
6 rules of section 48(m) of the Internal Revenue Code
7 of 1986 (as in effect on the day before the date of
8 the enactment of the Revenue Reconciliation Act of
9 1990).
10 (4) PUBLIC UTILITY PROPERTY.—The amend11
ments made by subsection (e) shall apply to periods
12 after February 13, 2008, in taxable years ending
13 after such date, under rules similar to the rules of
14 section 48(m) of the Internal Revenue Code of 1986
15 (as in effect on the day before the date of the enact16
ment of the Revenue Reconciliation Act of 1990).
17 SEC. 104. ENERGY CREDIT FOR SMALL WIND PROPERTY.
18 (a) IN GENERAL.—Section 48(a)(3)(A), as amended
19 by section 103, is amended by striking ‘‘or’’ at the end
20 of clause (iv), by adding ‘‘or’’ at the end of clause (v),
21 and by inserting after clause (v) the following new clause:
22 ‘‘(vi) qualified small wind energy
23 property,’’.
24 (b) 30 PERCENT CREDIT.—Section 48(a)(2)(A)(i) is
25 amended by striking ‘‘and’’ at the end of subclause (II)
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1 and by inserting after subclause (III) the following new
2 subclause:
3 ‘‘(IV) qualified small wind energy
4 property, and’’.
5 (c) QUALIFIED SMALL WIND ENERGY PROPERTY.—
6 Section 48(c), as amended by section 103, is amended by
7 adding at the end the following new paragraph:
8 ‘‘(4) QUALIFIED SMALL WIND ENERGY PROP9
ERTY.—
10 ‘‘(A) IN GENERAL.—The term ‘qualified
11 small wind energy property’ means property
12 which uses a qualifying small wind turbine to
13 generate electricity.
14 ‘‘(B) LIMITATION.—In the case of quali15
fied small wind energy property placed in serv16
ice during the taxable year, the credit otherwise
17 determined under subsection (a)(1) for such
18 year with respect to all such property of the
19 taxpayer shall not exceed $4,000.
20 ‘‘(C) QUALIFYING SMALL WIND TUR21
BINE.—The term ‘qualifying small wind tur22
bine’ means a wind turbine which has a name23
plate capacity of not more than 100 kilowatts.
24 ‘‘(D) TERMINATION.—The term ‘qualified
25 small wind energy property’ shall not include
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1 any property for any period after December 31,
2 2016.’’.
3 (d) CONFORMING AMENDMENT.—Section 48(a)(1),
4 as amended by section 103, is amended by striking ‘‘para5
graphs (1)(B), (2)(B), and (3)(B)’’ and inserting ‘‘para6
graphs (1)(B), (2)(B), (3)(B), and (4)(B)’’.
7 (e) EFFECTIVE DATE.—The amendments made by
8 this section shall apply to periods after the date of the
9 enactment of this Act, in taxable years ending after such
10 date, under rules similar to the rules of section 48(m) of
11 the Internal Revenue Code of 1986 (as in effect on the
12 day before the date of the enactment of the Revenue Rec13
onciliation Act of 1990).
14 SEC. 105. ENERGY CREDIT FOR GEOTHERMAL HEAT PUMP
15 SYSTEMS.
16 (a) IN GENERAL.—Subparagraph (A) of section
17 48(a)(3), as amended by this Act, is amended by striking
18 ‘‘or’’ at the end of clause (v), by inserting ‘‘or’’ at the
19 end of clause (vi), and by adding at the end the following
20 new clause:
21 ‘‘(vii) equipment which uses the
22 ground or ground water as a thermal en23
ergy source to heat a structure or as a
24 thermal energy sink to cool a structure,
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1 but only with respect to periods ending be2
fore January 1, 2017,’’.
3 (b) EFFECTIVE DATE.—The amendments made by
4 this section shall apply to periods after the date of the
5 enactment of this Act, in taxable years ending after such
6 date, under rules similar to the rules of section 48(m) of
7 the Internal Revenue Code of 1986 (as in effect on the
8 day before the date of the enactment of the Revenue Rec9
onciliation Act of 1990).
10 SEC. 106. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT
11 PROPERTY.
12 (a) EXTENSION.—Section 25D(g) is amended by
13 striking ‘‘December 31, 2008’’ and inserting ‘‘December
14 31, 2016’’.
15 (b) REMOVAL OF LIMITATION FOR SOLAR ELECTRIC
16 PROPERTY.—
17 (1) IN GENERAL.—Section 25D(b)(1), as
18 amended by subsections (c) and (d), is amended—
19 (A) by striking subparagraph (A), and
20 (B) by redesignating subparagraphs (B)
21 through (E) as subparagraphs (A) through and
22 (D), respectively.
23 (2) CONFORMING AMENDMENT.—Section
24 25D(e)(4)(A), as amended by subsections (c) and
25 (d), is amended—
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1 (A) by striking clause (i), and
2 (B) by redesignating clauses (ii) through
3 (v) as clauses (i) and (iv), respectively.
4 (c) CREDIT FOR RESIDENTIAL WIND PROPERTY.—
5 (1) IN GENERAL.—Section 25D(a) is amended
6 by striking ‘‘and’’ at the end of paragraph (2), by
7 striking the period at the end of paragraph (3) and
8 inserting ‘‘, and’’, and by adding at the end the fol9
lowing new paragraph:
10 ‘‘(4) 30 percent of the qualified small wind en11
ergy property expenditures made by the taxpayer
12 during such year.’’.
13 (2) LIMITATION.—Section 25D(b)(1) is amend14
ed by striking ‘‘and’’ at the end of subparagraph
15 (B), by striking the period at the end of subpara16
graph (C) and inserting ‘‘, and’’, and by adding at
17 the end the following new subparagraph:
18 ‘‘(D) $500 with respect to each half kilo19
watt of capacity (not to exceed $4,000) of wind
20 turbines for which qualified small wind energy
21 property expenditures are made.’’.
22 (3) QUALIFIED SMALL WIND ENERGY PROP23
ERTY EXPENDITURES.—
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1 (A) IN GENERAL.—Section 25D(d) is
2 amended by adding at the end the following
3 new paragraph:
4 ‘‘(4) QUALIFIED SMALL WIND ENERGY PROP5
ERTY EXPENDITURE.—The term ‘qualified small
6 wind energy property expenditure’ means an expend7
iture for property which uses a wind turbine to gen8
erate electricity for use in connection with a dwelling
9 unit located in the United States and used as a resi10
dence by the taxpayer.’’.
11 (B) NO DOUBLE BENEFIT.—Section
12 45(d)(1) is amended by adding at the end the
13 following new sentence: ‘‘Such term shall not
14 include any facility with respect to which any
15 qualified small wind energy property expendi16
ture (as defined in subsection (d)(4) of section
17 25D) is taken into account in determining the
18 credit under such section.’’.
19 (4) MAXIMUM EXPENDITURES IN CASE OF
20 JOINT OCCUPANCY.—Section 25D(e)(4)(A) is
21 amended by striking ‘‘and’’ at the end of clause (ii),
22 by striking the period at the end of clause (iii) and
23 inserting ‘‘, and’’, and by adding at the end the fol24
lowing new clause:
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1 ‘‘(iv) $1,667 in the case of each half
2 kilowatt of capacity (not to exceed
3 $13,333) of wind turbines for which quali4
fied small wind energy property expendi5
tures are made.’’.
6 (d) CREDIT FOR GEOTHERMAL HEAT PUMP SYS7
TEMS.—
8 (1) IN GENERAL.—Section 25D(a), as amended
9 by subsection (c), is amended by striking ‘‘and’’ at
10 the end of paragraph (3), by striking the period at
11 the end of paragraph (4) and inserting ‘‘, and’’, and
12 by adding at the end the following new paragraph:
13 ‘‘(5) 30 percent of the qualified geothermal
14 heat pump property expenditures made by the tax15
payer during such year.’’.
16 (2) LIMITATION.—Section 25D(b)(1), as
17 amended by subsection (c), is amended by striking
18 ‘‘and’’ at the end of subparagraph (C), by striking
19 the period at the end of subparagraph (D) and in20
serting ‘‘, and’’, and by adding at the end the fol21
lowing new subparagraph:
22 ‘‘(E) $2,000 with respect to any qualified
23 geothermal heat pump property expenditures.’’.
24 (3) QUALIFIED GEOTHERMAL HEAT PUMP
25 PROPERTY EXPENDITURE.—Section 25D(d), as
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1 amended by subsection (c), is amended by adding at
2 the end the following new paragraph:
3 ‘‘(5) QUALIFIED GEOTHERMAL HEAT PUMP
4 PROPERTY EXPENDITURE.—
5 ‘‘(A) IN GENERAL.—The term ‘qualified
6 geothermal heat pump property expenditure’
7 means an expenditure for qualified geothermal
8 heat pump property installed on or in connec9
tion with a dwelling unit located in the United
10 States and used as a residence by the taxpayer.
11 ‘‘(B) QUALIFIED GEOTHERMAL HEAT
12 PUMP PROPERTY.—The term ‘qualified geo13
thermal heat pump property’ means any equip14
ment which—
15 ‘‘(i) uses the ground or ground water
16 as a thermal energy source to heat the
17 dwelling unit referred to in subparagraph
18 (A) or as a thermal energy sink to cool
19 such dwelling unit, and
20 ‘‘(ii) meets the requirements of the
21 Energy Star program which are in effect
22 at the time that the expenditure for such
23 equipment is made.’’.
24 (4) MAXIMUM EXPENDITURES IN CASE OF
25 JOINT OCCUPANCY.—Section 25D(e)(4)(A), as
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1 amended by subsection (c), is amended by striking
2 ‘‘and’’ at the end of clause (iii), by striking the pe3
riod at the end of clause (iv) and inserting ‘‘, and’’,
4 and by adding at the end the following new clause:
5 ‘‘(v) $6,667 in the case of any quali6
fied geothermal heat pump property ex7
penditures.’’.
8 (e) CREDIT ALLOWED AGAINST ALTERNATIVE MIN9
IMUM TAX.—
10 (1) IN GENERAL.—Subsection (c) of section
11 25D is amended to read as follows:
12 ‘‘(c) LIMITATION BASED ON AMOUNT OF TAX;
13 CARRYFORWARD OF UNUSED CREDIT.—
14 ‘‘(1) LIMITATION BASED ON AMOUNT OF
15 TAX.—In the case of a taxable year to which section
16 26(a)(2) does not apply, the credit allowed under
17 subsection (a) for the taxable year shall not exceed
18 the excess of—
19 ‘‘(A) the sum of the regular tax liability
20 (as defined in section 26(b)) plus the tax im21
posed by section 55, over
22 ‘‘(B) the sum of the credits allowable
23 under this subpart (other than this section) and
24 section 27 for the taxable year.
25 ‘‘(2) CARRYFORWARD OF UNUSED CREDIT.—
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1 ‘‘(A) RULE FOR YEARS IN WHICH ALL
2 PERSONAL CREDITS ALLOWED AGAINST REG3
ULAR AND ALTERNATIVE MINIMUM TAX.—In
4 the case of a taxable year to which section
5 26(a)(2) applies, if the credit allowable under
6 subsection (a) exceeds the limitation imposed by
7 section 26(a)(2) for such taxable year reduced
8 by the sum of the credits allowable under this
9 subpart (other than this section), such excess
10 shall be carried to the succeeding taxable year
11 and added to the credit allowable under sub12
section (a) for such succeeding taxable year.
13 ‘‘(B) RULE FOR OTHER YEARS.—In the
14 case of a taxable year to which section 26(a)(2)
15 does not apply, if the credit allowable under
16 subsection (a) exceeds the limitation imposed by
17 paragraph (1) for such taxable year, such ex18
cess shall be carried to the succeeding taxable
19 year and added to the credit allowable under
20 subsection (a) for such succeeding taxable
21 year.’’.
22 (2) CONFORMING AMENDMENTS.—
23 (A) Section 23(b)(4)(B) is amended by in24
serting ‘‘and section 25D’’ after ‘‘this section’’.
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1 (B) Section 24(b)(3)(B) is amended by
2 striking ‘‘and 25B’’ and inserting ‘‘, 25B, and
3 25D’’.
4 (C) Section 25B(g)(2) is amended by strik5
ing ‘‘section 23’’ and inserting ‘‘sections 23 and
6 25D’’.
7 (D) Section 26(a)(1) is amended by strik8
ing ‘‘and 25B’’ and inserting ‘‘25B, and 25D’’.
9 (f) EFFECTIVE DATE.—
10 (1) IN GENERAL.—Except as provided in para11
graph (2), the amendments made by this section
12 shall apply to taxable years beginning after Decem13
ber 31, 2007.
14 (2) SOLAR ELECTRIC PROPERTY LIMITATION.—
15 The amendments made by subsection (b) shall apply
16 to taxable years beginning after December 31, 2008.
17 (3) APPLICATION OF EGTRRA SUNSET.—The
18 amendments made by subparagraphs (A) and (B) of
19 subsection (e)(2) shall be subject to title IX of the
20 Economic Growth and Tax Relief Reconciliation Act
21 of 2001 in the same manner as the provisions of
22 such Act to which such amendments relate.
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1 SEC. 107. NEW CLEAN RENEWABLE ENERGY BONDS.
2 (a) IN GENERAL.—Subpart I of part IV of sub3
chapter A of chapter 1 is amended by adding at the end
4 the following new section:
5 ‘‘SEC. 54C. NEW CLEAN RENEWABLE ENERGY BONDS.
6 ‘‘(a) NEW CLEAN RENEWABLE ENERGY BOND.—For
7 purposes of this subpart, the term ‘new clean renewable
8 energy bond’ means any bond issued as part of an issue
9 if—
10 ‘‘(1) 100 percent of the available project pro11
ceeds of such issue are to be used for capital expend12
itures incurred by governmental bodies, public power
13 providers, or cooperative electric companies for one
14 or more qualified renewable energy facilities,
15 ‘‘(2) the bond is issued by a qualified issuer,
16 and
17 ‘‘(3) the issuer designates such bond for pur18
poses of this section.
19 ‘‘(b) REDUCED CREDIT AMOUNT.—The annual credit
20 determined under section 54A(b) with respect to any new
21 clean renewable energy bond shall be 70 percent of the
22 amount so determined without regard to this subsection.
23 ‘‘(c) LIMITATION ON AMOUNT OF BONDS DES24
IGNATED.—
25 ‘‘(1) IN GENERAL.—The maximum aggregate
26 face amount of bonds which may be designated
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1 under subsection (a) by any issuer shall not exceed
2 the limitation amount allocated under this sub3
section to such issuer.
4 ‘‘(2) NATIONAL LIMITATION ON AMOUNT OF
5 BONDS DESIGNATED.—There is a national new clean
6 renewable energy bond limitation of $800,000,000
7 which shall be allocated by the Secretary as provided
8 in paragraph (3), except that—
9 ‘‘(A) not more than 331⁄3 percent thereof
10 may be allocated to qualified projects of public
11 power providers,
12 ‘‘(B) not more than 331⁄3 percent thereof
13 may be allocated to qualified projects of govern14
mental bodies, and
15 ‘‘(C) not more than 331⁄3 percent thereof
16 may be allocated to qualified projects of cooper17
ative electric companies.
18 ‘‘(3) METHOD OF ALLOCATION.—
19 ‘‘(A) ALLOCATION AMONG PUBLIC POWER
20 PROVIDERS.—After the Secretary determines
21 the qualified projects of public power providers
22 which are appropriate for receiving an alloca23
tion of the national new clean renewable energy
24 bond limitation, the Secretary shall, to the max25
imum extent practicable, make allocations
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1 among such projects in such manner that the
2 amount allocated to each such project bears the
3 same ratio to the cost of such project as the
4 limitation under paragraph (2)(A) bears to the
5 cost of all such projects.
6 ‘‘(B) ALLOCATION AMONG GOVERNMENTAL
7 BODIES AND COOPERATIVE ELECTRIC COMPA8
NIES.—The Secretary shall make allocations of
9 the amount of the national new clean renewable
10 energy bond limitation described in paragraphs
11 (2)(B) and (2)(C) among qualified projects of
12 governmental bodies and cooperative electric
13 companies, respectively, in such manner as the
14 Secretary determines appropriate.
15 ‘‘(d) DEFINITIONS.—For purposes of this section—
16 ‘‘(1) QUALIFIED RENEWABLE ENERGY FACIL17
ITY.—The term ‘qualified renewable energy facility’
18 means a qualified facility (as determined under sec19
tion 45(d) without regard to paragraphs (8) and
20 (10) thereof and to any placed in service date)
21 owned by a public power provider, a governmental
22 body, or a cooperative electric company.
23 ‘‘(2) PUBLIC POWER PROVIDER.—The term
24 ‘public power provider’ means a State utility with a
25 service obligation, as such terms are defined in sec144
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1 tion 217 of the Federal Power Act (as in effect on
2 the date of the enactment of this paragraph).
3 ‘‘(3) GOVERNMENTAL BODY.—The term ‘gov4
ernmental body’ means any State or Indian tribal
5 government, or any political subdivision thereof.
6 ‘‘(4) COOPERATIVE ELECTRIC COMPANY.—The
7 term ‘cooperative electric company’ means a mutual
8 or cooperative electric company described in section
9 501(c)(12) or section 1381(a)(2)(C).
10 ‘‘(5) CLEAN RENEWABLE ENERGY BOND LEND11
ER.—The term ‘clean renewable energy bond lender’
12 means a lender which is a cooperative which is
13 owned by, or has outstanding loans to, 100 or more
14 cooperative electric companies and is in existence on
15 February 1, 2002, and shall include any affiliated
16 entity which is controlled by such lender.
17 ‘‘(6) QUALIFIED ISSUER.—The term ‘qualified
18 issuer’ means a public power provider, a cooperative
19 electric company, a governmental body, a clean re20
newable energy bond lender, or a not-for-profit elec21
tric utility which has received a loan or loan guar22
antee under the Rural Electrification Act.’’.
23 (b) CONFORMING AMENDMENTS.—
24 (1) Paragraph (1) of section 54A(d) is amended
25 to read as follows:
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1 ‘‘(1) QUALIFIED TAX CREDIT BOND.—The term
2 ‘qualified tax credit bond’ means—
3 ‘‘(A) a qualified forestry conservation
4 bond, or
5 ‘‘(B) a new clean renewable energy bond,
6 which is part of an issue that meets requirements of
7 paragraphs (2), (3), (4), (5), and (6).’’.
8 (2) Subparagraph (C) of section 54A(d)(2) is
9 amended to read as follows:
10 ‘‘(C) QUALIFIED PURPOSE.—For purposes
11 of this paragraph, the term ‘qualified purpose’
12 means—
13 ‘‘(i) in the case of a qualified forestry
14 conservation bond, a purpose specified in
15 section 54B(e), and
16 ‘‘(ii) in the case of a new clean renew17
able energy bond, a purpose specified in
18 section 54C(a)(1).’’.
19 (3) The table of sections for subpart I of part
20 IV of subchapter A of chapter 1 is amended by add21
ing at the end the following new item:
‘‘Sec. 54C. Qualified clean renewable energy bonds.’’.
22 (c) EXTENSION FOR CLEAN RENEWABLE ENERGY
23 BONDS.—Subsection (m) of section 54 is amended by
24 striking ‘‘December 31, 2008’’ and inserting ‘‘December
25 31, 2009’’.
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1 (d) EFFECTIVE DATE.—The amendments made by
2 this section shall apply to obligations issued after the date
3 of the enactment of this Act.
4 SEC. 108. CREDIT FOR STEEL INDUSTRY FUEL.
5 (a) TREATMENT AS REFINED COAL.—
6 (1) IN GENERAL.—Subparagraph (A) of section
7 45(c)(7) of the Internal Revenue Code of 1986 (re8
lating to refined coal), as amended by this Act, is
9 amended to read as follows:
10 ‘‘(A) IN GENERAL.—The term ‘refined
11 coal’ means a fuel—
12 ‘‘(i) which—
13 ‘‘(I) is a liquid, gaseous, or solid
14 fuel produced from coal (including lig15
nite) or high carbon fly ash, including
16 such fuel used as a feedstock,
17 ‘‘(II) is sold by the taxpayer with
18 the reasonable expectation that it will
19 be used for purpose of producing
20 steam,
21 ‘‘(III) is certified by the taxpayer
22 as resulting (when used in the produc23
tion of steam) in a qualified emission
24 reduction, and
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1 ‘‘(IV) is produced in such a man2
ner as to result in an increase of at
3 least 50 percent in the market value
4 of the refined coal (excluding any in5
crease caused by materials combined
6 or added during the production proc7
ess), as compared to the value of the
8 feedstock coal, or
9 ‘‘(ii) which is steel industry fuel.’’.
10 (2) STEEL INDUSTRY FUEL DEFINED.—Para11
graph (7) of section 45(c) of such Code is amended
12 by adding at the end the following new subpara13
graph:
14 ‘‘(C) STEEL INDUSTRY FUEL.—
15 ‘‘(i) IN GENERAL.—The term ‘steel in16
dustry fuel’ means a fuel which—
17 ‘‘(I) is produced through a proc18
ess of liquifying coal waste sludge and
19 distributing it on coal, and
20 ‘‘(II) is used as a feedstock for
21 the manufacture of coke.
22 ‘‘(ii) COAL WASTE SLUDGE.—The
23 term ‘coal waste sludge’ means the tar de24
canter sludge and related byproducts of
25 the coking process, including such mate148
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1 rials that have been stored in ground, in
2 tanks and in lagoons, that have been treat3
ed as hazardous wastes under applicable
4 Federal environmental rules absent lique5
faction and processing with coal into a
6 feedstock for the manufacture of coke.’’.
7 (b) CREDIT AMOUNT.—
8 (1) IN GENERAL.—Paragraph (8) of section
9 45(e) of the Internal Revenue Code of 1986 (relat10
ing to refined coal production facilities) is amended
11 by adding at the end the following new subpara12
graph
13 ‘‘(D) SPECIAL RULE FOR STEEL INDUSTRY
14 FUEL.—
15 ‘‘(i) IN GENERAL.—In the case of a
16 taxpayer who produces steel industry
17 fuel—
18 ‘‘(I) this paragraph shall be ap19
plied separately with respect to steel
20 industry fuel and other refined coal,
21 and
22 ‘‘(II) in applying this paragraph
23 to steel industry fuel, the modifica24
tions in clause (ii) shall apply.
25 ‘‘(ii) MODIFICATIONS.—
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1 ‘‘(I) CREDIT AMOUNT.—Subpara2
graph (A) shall be applied by sub3
stituting ‘$2 per barrel-of-oil equiva4
lent’ for ‘$4.375 per ton’.
5 ‘‘(II) CREDIT PERIOD.—In lieu
6 of the 10-year period referred to in
7 clauses (i) and (ii)(II) of subpara8
graph (A), the credit period shall be
9 the period beginning on the later of
10 the date such facility was originally
11 placed in service, the date the modi12
fications described in clause (iii) were
13 placed in service, or October 1, 2008,
14 and ending on the later of December
15 31, 2009, or the date which is 1 year
16 after the date such facility or the
17 modifications described in clause (iii)
18 were placed in service.
19 ‘‘(III) NO PHASEOUT.—Subpara20
graph (B) shall not apply.
21 ‘‘(iii) MODIFICATIONS.—The modifica22
tions described in this clause are modifica23
tions to an existing facility which allow
24 such facility to produce steel industry fuel.
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1 ‘‘(iv) BARREL-OF-OIL EQUIVALENT.—
2 For purposes of this subparagraph, a bar3
rel-of-oil equivalent is the amount of steel
4 industry fuel that has a Btu content of
5 5,800,000 Btus.’’.
6 (2) INFLATION ADJUSTMENT.—Paragraph (2)
7 of section 45(b) of such Code is amended by insert8
ing ‘‘the $3 amount in subsection (e)(8)(D)(ii)(I),’’
9 after ‘‘subsection (e)(8)(A),’’.
10 (c) TERMINATION.—Paragraph (8) of section 45(d)
11 of the Internal Revenue Code of 1986 (relating to refined
12 coal production facility), as amended by this Act, is
13 amended to read as follows:
14 ‘‘(8) REFINED COAL PRODUCTION FACILITY.—
15 In the case of a facility that produces refined coal,
16 the term ‘refined coal production facility’ means—
17 ‘‘(A) with respect to a facility producing
18 steel industry fuel, any facility (or any modi19
fication to a facility) which is placed in service
20 before January 1, 2010, and
21 ‘‘(B) with respect to any other facility pro22
ducing refined coal, any facility placed in serv23
ice after the date of the enactment of the Amer24
ican Jobs Creation Act of 2004 and before Jan25
uary 1, 2010.’’.
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1 (d) COORDINATION WITH CREDIT FOR PRODUCING
2 FUEL FROM A NONCONVENTIONAL SOURCE.—
3 (1) IN GENERAL.—Subparagraph (B) of section
4 45(e)(9) of the Internal Revenue Code of 1986 is
5 amended—
6 (A) by striking ‘‘The term’’ and inserting
7 the following:
8 ‘‘(i) IN GENERAL.—The term’’, and
9 (B) by adding at the end the following new
10 clause:
11 ‘‘(ii) EXCEPTION FOR STEEL INDUS12
TRY COAL.—In the case of a facility pro13
ducing steel industry fuel, clause (i) shall
14 not apply to so much of the refined coal
15 produced at such facility as is steel indus16
try fuel.’’.
17 (2) NO DOUBLE BENEFIT.—Section 45K(g)(2)
18 of such Code is amended by adding at the end the
19 following new subparagraph:
20 ‘‘(E) COORDINATION WITH SECTION 45.—
21 No credit shall be allowed with respect to any
22 qualified fuel which is steel industry fuel (as de23
fined in section 45(c)(7)) if a credit is allowed
24 to the taxpayer for such fuel under section
25 45.’’.
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1 (e) EFFECTIVE DATE.—The amendments made by
2 this section shall apply to fuel produced and sold after
3 September 30, 2008.
4 SEC. 109. SPECIAL RULE TO IMPLEMENT FERC AND STATE
5 ELECTRIC RESTRUCTURING POLICY.
6 (a) EXTENSION FOR QUALIFIED ELECTRIC UTILI7
TIES.—
8 (1) IN GENERAL.—Paragraph (3) of section
9 451(i) is amended by inserting ‘‘(before January 1,
10 2010, in the case of a qualified electric utility)’’
11 after ‘‘January 1, 2008’’.
12 (2) QUALIFIED ELECTRIC UTILITY.—Subsection
13 (i) of section 451 is amended by redesignating para14
graphs (6) through (10) as paragraphs (7) through
15 (11), respectively, and by inserting after paragraph
16 (5) the following new paragraph:
17 ‘‘(6) QUALIFIED ELECTRIC UTILITY.—For pur18
poses of this subsection, the term ‘qualified electric
19 utility’ means a person that, as of the date of the
20 qualifying electric transmission transaction, is
21 vertically integrated, in that it is both—
22 ‘‘(A) a transmitting utility (as defined in
23 section 3(23) of the Federal Power Act (16
24 U.S.C. 796(23))) with respect to the trans153
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1 mission facilities to which the election under
2 this subsection applies, and
3 ‘‘(B) an electric utility (as defined in sec4
tion 3(22) of the Federal Power Act (16 U.S.C.
5 796(22))).’’.
6 (b) EXTENSION OF PERIOD FOR TRANSFER OF
7 OPERATIONAL CONTROL AUTHORIZED BY FERC.—
8 Clause (ii) of section 451(i)(4)(B) is amended by striking
9 ‘‘December 31, 2007’’ and inserting ‘‘the date which is
10 4 years after the close of the taxable year in which the
11 transaction occurs’’.
12 (c) PROPERTY LOCATED OUTSIDE THE UNITED
13 STATES NOT TREATED AS EXEMPT UTILITY PROP14
ERTY.—Paragraph (5) of section 451(i) is amended by
15 adding at the end the following new subparagraph:
16 ‘‘(C) EXCEPTION FOR PROPERTY LOCATED
17 OUTSIDE THE UNITED STATES.—The term ‘ex18
empt utility property’ shall not include any
19 property which is located outside the United
20 States.’’.
21 (d) EFFECTIVE DATES.—
22 (1) EXTENSION.—The amendments made by
23 subsection (a) shall apply to transactions after De24
cember 31, 2007.
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1 (2) TRANSFERS OF OPERATIONAL CONTROL.—
2 The amendment made by subsection (b) shall take
3 effect as if included in section 909 of the American
4 Jobs Creation Act of 2004.
5 (3) EXCEPTION FOR PROPERTY LOCATED OUT6
SIDE THE UNITED STATES.—The amendment made
7 by subsection (c) shall apply to transactions after
8 the date of the enactment of this Act.
9 Subtitle B—Carbon Mitigation and
10 Coal Provisions
11 SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED
12 COAL PROJECT INVESTMENT CREDIT.
13 (a) MODIFICATION OF CREDIT AMOUNT.—Section
14 48A(a) is amended by striking ‘‘and’’ at the end of para15
graph (1), by striking the period at the end of paragraph
16 (2) and inserting ‘‘, and’’, and by adding at the end the
17 following new paragraph:
18 ‘‘(3) 30 percent of the qualified investment for
19 such taxable year in the case of projects described
20 in clause (iii) of subsection (d)(3)(B).’’.
21 (b) EXPANSION OF AGGREGATE CREDITS.—Section
22 48A(d)(3)(A) is amended by striking ‘‘$1,300,000,000’’
23 and inserting ‘‘$2,550,000,000’’.
24 (c) AUTHORIZATION OF ADDITIONAL PROJECTS.—
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1 (1) IN GENERAL.—Subparagraph (B) of section
2 48A(d)(3) is amended to read as follows:
3 ‘‘(B) PARTICULAR PROJECTS.—Of the dol4
lar amount in subparagraph (A), the Secretary
5 is authorized to certify—
6 ‘‘(i) $800,000,000 for integrated gas7
ification combined cycle projects the appli8
cation for which is submitted during the
9 period described in paragraph (2)(A)(i),
10 ‘‘(ii) $500,000,000 for projects which
11 use other advanced coal-based generation
12 technologies the application for which is
13 submitted during the period described in
14 paragraph (2)(A)(i), and
15 ‘‘(iii) $1,250,000,000 for advanced
16 coal-based generation technology projects
17 the application for which is submitted dur18
ing the period described in paragraph
19 (2)(A)(ii).’’.
20 (2) APPLICATION PERIOD FOR ADDITIONAL
21 PROJECTS.—Subparagraph (A) of section 48A(d)(2)
22 is amended to read as follows:
23 ‘‘(A) APPLICATION PERIOD.—Each appli24
cant for certification under this paragraph shall
25 submit an application meeting the requirements
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1 of subparagraph (B). An applicant may only
2 submit an application—
3 ‘‘(i) for an allocation from the dollar
4 amount specified in clause (i) or (ii) of
5 paragraph (3)(B) during the 3-year period
6 beginning on the date the Secretary estab7
lishes the program under paragraph (1),
8 and
9 ‘‘(ii) for an allocation from the dollar
10 amount specified in paragraph (3)(B)(iii)
11 during the 3-year period beginning at the
12 earlier of the termination of the period de13
scribed in clause (i) or the date prescribed
14 by the Secretary.’’.
15 (3) CAPTURE AND SEQUESTRATION OF CARBON
16 DIOXIDE EMISSIONS REQUIREMENT.—
17 (A) IN GENERAL.—Section 48A(e)(1) is
18 amended by striking ‘‘and’’ at the end of sub19
paragraph (E), by striking the period at the
20 end of subparagraph (F) and inserting ‘‘; and’’,
21 and by adding at the end the following new sub22
paragraph:
23 ‘‘(G) in the case of any project the applica24
tion for which is submitted during the period
25 described in subsection (d)(2)(A)(ii), the project
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1 includes equipment which separates and seques2
ters at least 65 percent (70 percent in the case
3 of an application for reallocated credits under
4 subsection (d)(4)) of such project’s total carbon
5 dioxide emissions.’’.
6 (B) HIGHEST PRIORITY FOR PROJECTS
7 WHICH SEQUESTER CARBON DIOXIDE EMIS8
SIONS.—Section 48A(e)(3) is amended by strik9
ing ‘‘and’’ at the end of subparagraph (A)(iii),
10 by striking the period at the end of subpara11
graph (B)(iii) and inserting ‘‘, and’’, and by
12 adding at the end the following new subpara13
graph:
14 ‘‘(C) give highest priority to projects with
15 the greatest separation and sequestration per16
centage of total carbon dioxide emissions.’’.
17 (C) RECAPTURE OF CREDIT FOR FAILURE
18 TO SEQUESTER.—Section 48A is amended by
19 adding at the end the following new subsection:
20 ‘‘(i) RECAPTURE OF CREDIT FOR FAILURE TO SE21
QUESTER.—The Secretary shall provide for recapturing
22 the benefit of any credit allowable under subsection (a)
23 with respect to any project which fails to attain or main24
tain the separation and sequestration requirements of sub25
section (e)(1)(G).’’.
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1 (4) ADDITIONAL PRIORITY FOR RESEARCH
2 PARTNERSHIPS.—Section 48A(e)(3)(B), as amended
3 by paragraph (3)(B), is amended—
4 (A) by striking ‘‘and’’ at the end of clause
5 (ii),
6 (B) by redesignating clause (iii) as clause
7 (iv), and
8 (C) by inserting after clause (ii) the fol9
lowing new clause:
10 ‘‘(iii) applicant participants who have
11 a research partnership with an eligible edu12
cational institution (as defined in section
13 529(e)(5)), and’’.
14 (5) CLERICAL AMENDMENT.—Section 48A(e)(3)
15 is amended by striking ‘‘INTEGRATED GASIFICATION
16 COMBINED CYCLE’’ in the heading and inserting
17 ‘‘CERTAIN’’.
18 (d) DISCLOSURE OF ALLOCATIONS.—Section 48A(d)
19 is amended by adding at the end the following new para20
graph:
21 ‘‘(5) DISCLOSURE OF ALLOCATIONS.—The Sec22
retary shall, upon making a certification under this
23 subsection or section 48B(d), publicly disclose the
24 identity of the applicant and the amount of the cred25
it certified with respect to such applicant.’’.
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1 (e) EFFECTIVE DATES.—
2 (1) IN GENERAL.—Except as otherwise pro3
vided in this subsection, the amendments made by
4 this section shall apply to credits the application for
5 which is submitted during the period described in
6 section 48A(d)(2)(A)(ii) of the Internal Revenue
7 Code of 1986 and which are allocated or reallocated
8 after the date of the enactment of this Act.
9 (2) DISCLOSURE OF ALLOCATIONS.—The
10 amendment made by subsection (d) shall apply to
11 certifications made after the date of the enactment
12 of this Act.
13 (3) CLERICAL AMENDMENT.—The amendment
14 made by subsection (c)(5) shall take effect as if in15
cluded in the amendment made by section 1307(b)
16 of the Energy Tax Incentives Act of 2005.
17 SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFI18
CATION INVESTMENT CREDIT.
19 (a) MODIFICATION OF CREDIT AMOUNT.—Section
20 48B(a) is amended by inserting ‘‘(30 percent in the case
21 of credits allocated under subsection (d)(1)(B))’’ after ‘‘20
22 percent’’.
23 (b) EXPANSION OF AGGREGATE CREDITS.—Section
24 48B(d)(1) is amended by striking ‘‘shall not exceed
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1 $350,000,000’’ and all that follows and inserting ‘‘shall
2 not exceed—
3 ‘‘(A) $350,000,000, plus
4 ‘‘(B) $250,000,000 for qualifying gasifi5
cation projects that include equipment which
6 separates and sequesters at least 75 percent of
7 such project’s total carbon dioxide emissions.’’.
8 (c) RECAPTURE OF CREDIT FOR FAILURE TO SE9
QUESTER.—Section 48B is amended by adding at the end
10 the following new subsection:
11 ‘‘(f) RECAPTURE OF CREDIT FOR FAILURE TO SE12
QUESTER.—The Secretary shall provide for recapturing
13 the benefit of any credit allowable under subsection (a)
14 with respect to any project which fails to attain or main15
tain the separation and sequestration requirements for
16 such project under subsection (d)(1).’’.
17 (d) SELECTION PRIORITIES.—Section 48B(d) is
18 amended by adding at the end the following new para19
graph:
20 ‘‘(4) SELECTION PRIORITIES.—In determining
21 which qualifying gasification projects to certify
22 under this section, the Secretary shall—
23 ‘‘(A) give highest priority to projects with
24 the greatest separation and sequestration per25
centage of total carbon dioxide emissions, and
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1 ‘‘(B) give high priority to applicant partici2
pants who have a research partnership with an
3 eligible educational institution (as defined in
4 section 529(e)(5)).’’.
5 (e) ELIGIBLE PROJECTS INCLUDE TRANSPORTATION
6 GRADE LIQUID FUELS.—Section 48B(c)(7) (defining eli7
gible entity) is amended by striking ‘‘and’’ at the end of
8 subparagraph (F), by striking the period at the end of
9 subparagraph (G) and inserting ‘‘, and’’, and by adding
10 at the end the following new subparagraph:
11 ‘‘(H) transportation grade liquid fuels.’’.
12 (f) EFFECTIVE DATE.—The amendments made by
13 this section shall apply to credits described in section
14 48B(d)(1)(B) of the Internal Revenue Code of 1986 which
15 are allocated or reallocated after the date of the enactment
16 of this Act.
17 SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX;
18 FUNDING OF BLACK LUNG DISABILITY TRUST
19 FUND.
20 (a) EXTENSION OF TEMPORARY INCREASE.—Para21
graph (2) of section 4121(e) is amended—
22 (1) by striking ‘‘January 1, 2014’’ in subpara23
graph (A) and inserting ‘‘December 31, 2018’’, and
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1 (2) by striking ‘‘January 1 after 1981’’ in sub2
paragraph (B) and inserting ‘‘December 31 after
3 2007’’.
4 (b) RESTRUCTURING OF TRUST FUND DEBT.—
5 (1) DEFINITIONS.—For purposes of this sub6
section—
7 (A) MARKET VALUE OF THE OUTSTANDING
8 REPAYABLE ADVANCES, PLUS ACCRUED INTER9
EST.—The term ‘‘market value of the out10
standing repayable advances, plus accrued in11
terest’’ means the present value (determined by
12 the Secretary of the Treasury as of the refi13
nancing date and using the Treasury rate as
14 the discount rate) of the stream of principal
15 and interest payments derived assuming that
16 each repayable advance that is outstanding on
17 the refinancing date is due on the 30th anniver18
sary of the end of the fiscal year in which the
19 advance was made to the Trust Fund, and that
20 all such principal and interest payments are
21 made on September 30 of the applicable fiscal
22 year.
23 (B) REFINANCING DATE.—The term ‘‘refi24
nancing date’’ means the date occurring 2 days
25 after the enactment of this Act.
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1 (C) REPAYABLE ADVANCE.—The term ‘‘re2
payable advance’’ means an amount that has
3 been appropriated to the Trust Fund in order
4 to make benefit payments and other expendi5
tures that are authorized under section 9501 of
6 the Internal Revenue Code of 1986 and are re7
quired to be repaid when the Secretary of the
8 Treasury determines that monies are available
9 in the Trust Fund for such purpose.
10 (D) TREASURY RATE.—The term ‘‘Treas11
ury rate’’ means a rate determined by the Sec12
retary of the Treasury, taking into consider13
ation current market yields on outstanding
14 marketable obligations of the United States of
15 comparable maturities.
16 (E) TREASURY 1-YEAR RATE.—The term
17 ‘‘Treasury 1-year rate’’ means a rate deter18
mined by the Secretary of the Treasury, taking
19 into consideration current market yields on out20
standing marketable obligations of the United
21 States with remaining periods to maturity of
22 approximately 1 year, to have been in effect as
23 of the close of business 1 business day prior to
24 the date on which the Trust Fund issues obliga164
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1 tions to the Secretary of the Treasury under
2 paragraph (2)(B).
3 (F) TRUST FUND.—The term ‘‘Trust
4 Fund’’ means the Black Lung Disability Trust
5 Fund established under section 9501 of the In6
ternal Revenue Code of 1986.
7 (2) REFINANCING OF OUTSTANDING PRINCIPAL
8 OF REPAYABLE ADVANCES AND UNPAID INTEREST
9 ON SUCH ADVANCES.—
10 (A) TRANSFER TO GENERAL FUND.—On
11 the refinancing date, the Trust Fund shall
12 repay the market value of the outstanding re13
payable advances, plus accrued interest, by
14 transferring into the general fund of the Treas15
ury the following sums:
16 (i) The proceeds from obligations that
17 the Trust Fund shall issue to the Sec18
retary of the Treasury in such amounts as
19 the Secretaries of Labor and the Treasury
20 shall determine and bearing interest at the
21 Treasury rate, and that shall be in such
22 forms and denominations and be subject to
23 such other terms and conditions, including
24 maturity, as the Secretary of the Treasury
25 shall prescribe.
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1 (ii) All, or that portion, of the appro2
priation made to the Trust Fund pursuant
3 to paragraph (3) that is needed to cover
4 the difference defined in that paragraph.
5 (B) REPAYMENT OF OBLIGATIONS.—In the
6 event that the Trust Fund is unable to repay
7 the obligations that it has issued to the Sec8
retary of the Treasury under subparagraph
9 (A)(i) and this subparagraph, or is unable to
10 make benefit payments and other authorized ex11
penditures, the Trust Fund shall issue obliga12
tions to the Secretary of the Treasury in such
13 amounts as may be necessary to make such re14
payments, payments, and expenditures, with a
15 maturity of 1 year, and bearing interest at the
16 Treasury 1-year rate. These obligations shall be
17 in such forms and denominations and be sub18
ject to such other terms and conditions as the
19 Secretary of the Treasury shall prescribe.
20 (C) AUTHORITY TO ISSUE OBLIGATIONS.—
21 The Trust Fund is authorized to issue obliga22
tions to the Secretary of the Treasury under
23 subparagraphs (A)(i) and (B). The Secretary of
24 the Treasury is authorized to purchase such ob25
ligations of the Trust Fund. For the purposes
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1 of making such purchases, the Secretary of the
2 Treasury may use as a public debt transaction
3 the proceeds from the sale of any securities
4 issued under chapter 31 of title 31, United
5 States Code, and the purposes for which securi6
ties may be issued under such chapter are ex7
tended to include any purchase of such Trust
8 Fund obligations under this subparagraph.
9 (3) ONE-TIME APPROPRIATION.—There is here10
by appropriated to the Trust Fund an amount suffi11
cient to pay to the general fund of the Treasury the
12 difference between—
13 (A) the market value of the outstanding
14 repayable advances, plus accrued interest; and
15 (B) the proceeds from the obligations
16 issued by the Trust Fund to the Secretary of
17 the Treasury under paragraph (2)(A)(i).
18 (4) PREPAYMENT OF TRUST FUND OBLIGA19
TIONS.—The Trust Fund is authorized to repay any
20 obligation issued to the Secretary of the Treasury
21 under subparagraphs (A)(i) and (B) of paragraph
22 (2) prior to its maturity date by paying a prepay23
ment price that would, if the obligation being pre24
paid (including all unpaid interest accrued thereon
25 through the date of prepayment) were purchased by
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1 a third party and held to the maturity date of such
2 obligation, produce a yield to the third-party pur3
chaser for the period from the date of purchase to
4 the maturity date of such obligation substantially
5 equal to the Treasury yield on outstanding market6
able obligations of the United States having a com7
parable maturity to this period.
8 SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EX9
CISE TAX TO CERTAIN COAL PRODUCERS
10 AND EXPORTERS.
11 (a) REFUND.—
12 (1) COAL PRODUCERS.—
13 (A) IN GENERAL.—Notwithstanding sub14
sections (a)(1) and (c) of section 6416 and sec15
tion 6511 of the Internal Revenue Code of
16 1986, if—
17 (i) a coal producer establishes that
18 such coal producer, or a party related to
19 such coal producer, exported coal produced
20 by such coal producer to a foreign country
21 or shipped coal produced by such coal pro22
ducer to a possession of the United States,
23 or caused such coal to be exported or
24 shipped, the export or shipment of which
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1 was other than through an exporter who
2 meets the requirements of paragraph (2),
3 (ii) such coal producer filed an excise
4 tax return on or after October 1, 1990,
5 and on or before the date of the enactment
6 of this Act, and
7 (iii) such coal producer files a claim
8 for refund with the Secretary not later
9 than the close of the 30-day period begin10
ning on the date of the enactment of this
11 Act,
12 then the Secretary shall pay to such coal pro13
ducer an amount equal to the tax paid under
14 section 4121 of such Code on such coal ex15
ported or shipped by the coal producer or a
16 party related to such coal producer, or caused
17 by the coal producer or a party related to such
18 coal producer to be exported or shipped.
19 (B) SPECIAL RULES FOR CERTAIN TAX20
PAYERS.—For purposes of this section—
21 (i) IN GENERAL.—If a coal producer
22 or a party related to a coal producer has
23 received a judgment described in clause
24 (iii), such coal producer shall be deemed to
25 have established the export of coal to a for169
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1 eign country or shipment of coal to a pos2
session of the United States under sub3
paragraph (A)(i).
4 (ii) AMOUNT OF PAYMENT.—If a tax5
payer described in clause (i) is entitled to
6 a payment under subparagraph (A), the
7 amount of such payment shall be reduced
8 by any amount paid pursuant to the judg9
ment described in clause (iii).
10 (iii) JUDGMENT DESCRIBED.—A judg11
ment is described in this subparagraph if
12 such judgment—
13 (I) is made by a court of com14
petent jurisdiction within the United
15 States,
16 (II) relates to the constitu17
tionality of any tax paid on exported
18 coal under section 4121 of the Inter19
nal Revenue Code of 1986, and
20 (III) is in favor of the coal pro21
ducer or the party related to the coal
22 producer.
23 (2) EXPORTERS.—Notwithstanding subsections
24 (a)(1) and (c) of section 6416 and section 6511 of
25 the Internal Revenue Code of 1986, and a judgment
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1 described in paragraph (1)(B)(iii) of this subsection,
2 if—
3 (A) an exporter establishes that such ex4
porter exported coal to a foreign country or
5 shipped coal to a possession of the United
6 States, or caused such coal to be so exported or
7 shipped,
8 (B) such exporter filed a tax return on or
9 after October 1, 1990, and on or before the
10 date of the enactment of this Act, and
11 (C) such exporter files a claim for refund
12 with the Secretary not later than the close of
13 the 30-day period beginning on the date of the
14 enactment of this Act,
15 then the Secretary shall pay to such exporter an
16 amount equal to $0.825 per ton of such coal ex17
ported by the exporter or caused to be exported or
18 shipped, or caused to be exported or shipped, by the
19 exporter.
20 (b) LIMITATIONS.—Subsection (a) shall not apply
21 with respect to exported coal if a settlement with the Fed22
eral Government has been made with and accepted by, the
23 coal producer, a party related to such coal producer, or
24 the exporter, of such coal, as of the date that the claim
25 is filed under this section with respect to such exported
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1 coal. For purposes of this subsection, the term ‘‘settlement
2 with the Federal Government’’ shall not include any settle3
ment or stipulation entered into as of the date of the en4
actment of this Act, the terms of which contemplate a
5 judgment concerning which any party has reserved the
6 right to file an appeal, or has filed an appeal.
7 (c) SUBSEQUENT REFUND PROHIBITED.—No refund
8 shall be made under this section to the extent that a credit
9 or refund of such tax on such exported or shipped coal
10 has been paid to any person.
11 (d) DEFINITIONS.—For purposes of this section—
12 (1) COAL PRODUCER.—The term ‘‘coal pro13
ducer’’ means the person in whom is vested owner14
ship of the coal immediately after the coal is severed
15 from the ground, without regard to the existence of
16 any contractual arrangement for the sale or other
17 disposition of the coal or the payment of any royal18
ties between the producer and third parties. The
19 term includes any person who extracts coal from
20 coal waste refuse piles or from the silt waste product
21 which results from the wet washing (or similar proc22
essing) of coal.
23 (2) EXPORTER.—The term ‘‘exporter’’ means a
24 person, other than a coal producer, who does not
25 have a contract, fee arrangement, or any other
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1 agreement with a producer or seller of such coal to
2 export or ship such coal to a third party on behalf
3 of the producer or seller of such coal and—
4 (A) is indicated in the shipper’s export
5 declaration or other documentation as the ex6
porter of record, or
7 (B) actually exported such coal to a for8
eign country or shipped such coal to a posses9
sion of the United States, or caused such coal
10 to be so exported or shipped.
11 (3) RELATED PARTY.—The term ‘‘a party re12
lated to such coal producer’’ means a person who—
13 (A) is related to such coal producer
14 through any degree of common management,
15 stock ownership, or voting control,
16 (B) is related (within the meaning of sec17
tion 144(a)(3) of the Internal Revenue Code of
18 1986) to such coal producer, or
19 (C) has a contract, fee arrangement, or
20 any other agreement with such coal producer to
21 sell such coal to a third party on behalf of such
22 coal producer.
23 (4) SECRETARY.—The term ‘‘Secretary’’ means
24 the Secretary of Treasury or the Secretary’s des25
ignee.
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1 (e) TIMING OF REFUND.—With respect to any claim
2 for refund filed pursuant to this section, the Secretary
3 shall determine whether the requirements of this section
4 are met not later than 180 days after such claim is filed.
5 If the Secretary determines that the requirements of this
6 section are met, the claim for refund shall be paid not
7 later than 180 days after the Secretary makes such deter8
mination.
9 (f) INTEREST.—Any refund paid pursuant to this
10 section shall be paid by the Secretary with interest from
11 the date of overpayment determined by using the overpay12
ment rate and method under section 6621 of the Internal
13 Revenue Code of 1986.
14 (g) DENIAL OF DOUBLE BENEFIT.—The payment
15 under subsection (a) with respect to any coal shall not ex16
ceed—
17 (1) in the case of a payment to a coal producer,
18 the amount of tax paid under section 4121 of the
19 Internal Revenue Code of 1986 with respect to such
20 coal by such coal producer or a party related to such
21 coal producer, and
22 (2) in the case of a payment to an exporter, an
23 amount equal to $0.825 per ton with respect to such
24 coal exported by the exporter or caused to be ex25
ported by the exporter.
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1 (h) APPLICATION OF SECTION.—This section applies
2 only to claims on coal exported or shipped on or after Oc3
tober 1, 1990, through the date of the enactment of this
4 Act.
5 (i) STANDING NOT CONFERRED.—
6 (1) EXPORTERS.—With respect to exporters,
7 this section shall not confer standing upon an ex8
porter to commence, or intervene in, any judicial or
9 administrative proceeding concerning a claim for re10
fund by a coal producer of any Federal or State tax,
11 fee, or royalty paid by the coal producer.
12 (2) COAL PRODUCERS.—With respect to coal
13 producers, this section shall not confer standing
14 upon a coal producer to commence, or intervene in,
15 any judicial or administrative proceeding concerning
16 a claim for refund by an exporter of any Federal or
17 State tax, fee, or royalty paid by the producer and
18 alleged to have been passed on to an exporter.
19 SEC. 115. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRA20
TION.
21 (a) IN GENERAL.—Subpart D of part IV of sub22
chapter A of chapter 1 (relating to business credits) is
23 amended by adding at the end the following new section:
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1 ‘‘SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION.
2 ‘‘(a) GENERAL RULE.—For purposes of section 38,
3 the carbon dioxide sequestration credit for any taxable
4 year is an amount equal to the sum of—
5 ‘‘(1) $20 per metric ton of qualified carbon di6
oxide which is—
7 ‘‘(A) captured by the taxpayer at a quali8
fied facility, and
9 ‘‘(B) disposed of by the taxpayer in secure
10 geological storage, and
11 ‘‘(2) $10 per metric ton of qualified carbon di12
oxide which is—
13 ‘‘(A) captured by the taxpayer at a quali14
fied facility, and
15 ‘‘(B) used by the taxpayer as a tertiary
16 injectant in a qualified enhanced oil or natural
17 gas recovery project.
18 ‘‘(b) QUALIFIED CARBON DIOXIDE.—For purposes of
19 this section—
20 ‘‘(1) IN GENERAL.—The term ‘qualified carbon
21 dioxide’ means carbon dioxide captured from an in22
dustrial source which—
23 ‘‘(A) would otherwise be released into the
24 atmosphere as industrial emission of green25
house gas, and
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1 ‘‘(B) is measured at the source of capture
2 and verified at the point of disposal or injec3
tion.
4 ‘‘(2) RECYCLED CARBON DIOXIDE.—The term
5 ‘qualified carbon dioxide’ includes the initial deposit
6 of captured carbon dioxide used as a tertiary
7 injectant. Such term does not include carbon dioxide
8 that is re-captured, recycled, and re-injected as part
9 of the enhanced oil and natural gas recovery process.
10 ‘‘(c) QUALIFIED FACILITY.—For purposes of this
11 section, the term ‘qualified facility’ means any industrial
12 facility—
13 ‘‘(1) which is owned by the taxpayer,
14 ‘‘(2) at which carbon capture equipment is
15 placed in service, and
16 ‘‘(3) which captures not less than 500,000 met17
ric tons of carbon dioxide during the taxable year.
18 ‘‘(d) SPECIAL RULES AND OTHER DEFINITIONS.—
19 For purposes of this section—
20 ‘‘(1) ONLY CARBON DIOXIDE CAPTURED AND
21 DISPOSED OF OR USED WITHIN THE UNITED STATES
22 TAKEN INTO ACCOUNT.—The credit under this sec23
tion shall apply only with respect to qualified carbon
24 dioxide the capture and disposal or use of which is
25 within—
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1 ‘‘(A) the United States (within the mean2
ing of section 638(1)), or
3 ‘‘(B) a possession of the United States
4 (within the meaning of section 638(2)).
5 ‘‘(2) SECURE GEOLOGICAL STORAGE.—The Sec6
retary, in consultation with the Administrator of the
7 Environmental Protection Agency, shall establish
8 regulations for determining adequate security meas9
ures for the geological storage of carbon dioxide
10 under subsection (a)(1)(B) such that the carbon di11
oxide does not escape into the atmosphere. Such
12 term shall include storage at deep saline formations
13 and unminable coal seems under such conditions as
14 the Secretary may determine under such regulations.
15 ‘‘(3) TERTIARY INJECTANT.—The term ‘ter16
tiary injectant’ has the same meaning as when used
17 within section 193(b)(1).
18 ‘‘(4) QUALIFIED ENHANCED OIL OR NATURAL
19 GAS RECOVERY PROJECT.—The term ‘qualified en20
hanced oil or natural gas recovery project’ has the
21 meaning given the term ‘qualified enhanced oil re22
covery project’ by section 43(c)(2), by substituting
23 ‘crude oil or natural gas’ for ‘crude oil’ in subpara24
graph (A)(i) thereof.
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1 ‘‘(5) CREDIT ATTRIBUTABLE TO TAXPAYER.—
2 Any credit under this section shall be attributable to
3 the person that captures and physically or contrac4
tually ensures the disposal of or the use as a tertiary
5 injectant of the qualified carbon dioxide, except to
6 the extent provided in regulations prescribed by the
7 Secretary.
8 ‘‘(6) RECAPTURE.—The Secretary shall, by reg9
ulations, provide for recapturing the benefit of any
10 credit allowable under subsection (a) with respect to
11 any qualified carbon dioxide which ceases to be cap12
tured, disposed of, or used as a tertiary injectant in
13 a manner consistent with the requirements of this
14 section.
15 ‘‘(7) INFLATION ADJUSTMENT.—In the case of
16 any taxable year beginning in a calendar year after
17 2009, there shall be substituted for each dollar
18 amount contained in subsection (a) an amount equal
19 to the product of—
20 ‘‘(A) such dollar amount, multiplied by
21 ‘‘(B) the inflation adjustment factor for
22 such calendar year determined under section
23 43(b)(3)(B) for such calendar year, determined
24 by substituting ‘2008’ for ‘1990’.
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1 ‘‘(e) APPLICATION OF SECTION.—The credit under
2 this section shall apply with respect to qualified carbon
3 dioxide before the end of the calendar year in which the
4 Secretary, in consultation with the Administrator of the
5 Environmental Protection Agency, certifies that
6 75,000,000 metric tons of qualified carbon dioxide have
7 been captured and disposed of or used as a tertiary
8 injectant.’’.
9 (b) CONFORMING AMENDMENT.—Section 38(b) (re10
lating to general business credit) is amended by striking
11 ‘‘plus’’ at the end of paragraph (32), by striking the period
12 at the end of paragraph (33) and inserting ‘‘, plus’’, and
13 by adding at the end of following new paragraph:
14 ‘‘(34) the carbon dioxide sequestration credit
15 determined under section 45Q(a).’’.
16 (c) CLERICAL AMENDMENT.—The table of sections
17 for subpart B of part IV of subchapter A of chapter 1
18 (relating to other credits) is amended by adding at the
19 end the following new section:
‘‘Sec. 45Q. Credit for carbon dioxide sequestration.’’.
20 (d) EFFECTIVE DATE.—The amendments made by
21 this section shall apply to carbon dioxide captured after
22 the date of the enactment of this Act.
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1 SEC. 116. CERTAIN INCOME AND GAINS RELATING TO IN2
DUSTRIAL SOURCE CARBON DIOXIDE TREAT3
ED AS QUALIFYING INCOME FOR PUBLICLY
4 TRADED PARTNERSHIPS.
5 (a) IN GENERAL.—Subparagraph (E) of section
6 7704(d)(1) (defining qualifying income) is amended by in7
serting ‘‘or industrial source carbon dioxide’’ after ‘‘tim8
ber)’’.
9 (b) EFFECTIVE DATE.—The amendment made by
10 this section shall take effect on the date of the enactment
11 of this Act, in taxable years ending after such date.
12 SEC. 117. CARBON AUDIT OF THE TAX CODE.
13 (a) STUDY.—The Secretary of the Treasury shall
14 enter into an agreement with the National Academy of
15 Sciences to undertake a comprehensive review of the Inter16
nal Revenue Code of 1986 to identify the types of and
17 specific tax provisions that have the largest effects on car18
bon and other greenhouse gas emissions and to estimate
19 the magnitude of those effects.
20 (b) REPORT.—Not later than 2 years after the date
21 of enactment of this Act, the National Academy of
22 Sciences shall submit to Congress a report containing the
23 results of study authorized under this section.
24 (c) AUTHORIZATION OF APPROPRIATIONS.—There is
25 authorized to be appropriated to carry out this section
26 $1,500,000 for the period of fiscal years 2009 and 2010.
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1 TITLE II—TRANSPORTATION
2 AND DOMESTIC FUEL SECU3
RITY PROVISIONS
4 SEC. 201. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS
5 DEPRECIATION FOR BIOMASS ETHANOL
6 PLANT PROPERTY.
7 (a) IN GENERAL.—Paragraph (3) of section 168(l)
8 is amended to read as follows:
9 ‘‘(3) CELLULOSIC BIOFUEL.—The term ‘cel10
lulosic biofuel’ means any liquid fuel which is pro11
duced from any lignocellulosic or hemicellulosic mat12
ter that is available on a renewable or recurring
13 basis.’’.
14 (b) CONFORMING AMENDMENTS.—Subsection (l) of
15 section 168 is amended—
16 (1) by striking ‘‘cellulosic biomass ethanol’’
17 each place it appears and inserting ‘‘cellulosic
18 biofuel’’,
19 (2) by striking ‘‘CELLULOSIC BIOMASS ETH20
ANOL’’ in the heading of such subsection and insert21
ing ‘‘CELLULOSIC BIOFUEL’’, and
22 (3) by striking ‘‘CELLULOSIC BIOMASS ETH23
ANOL’’ in the heading of paragraph (2) thereof and
24 inserting ‘‘CELLULOSIC BIOFUEL’’.
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1 (c) EFFECTIVE DATE.—The amendments made by
2 this section shall apply to property placed in service after
3 the date of the enactment of this Act, in taxable years
4 ending after such date.
5 SEC. 202. CREDITS FOR BIODIESEL AND RENEWABLE DIE6
SEL.
7 (a) IN GENERAL.—Sections 40A(g), 6426(c)(6), and
8 6427(e)(5)(B) are each amended by striking ‘‘December
9 31, 2008’’ and inserting ‘‘December 31, 2009’’.
10 (b) INCREASE IN RATE OF CREDIT.—
11 (1) INCOME TAX CREDIT.—Paragraphs (1)(A)
12 and (2)(A) of section 40A(b) are each amended by
13 striking ‘‘50 cents’’ and inserting ‘‘$1.00’’.
14 (2) EXCISE TAX CREDIT.—Paragraph (2) of
15 section 6426(c) is amended to read as follows:
16 ‘‘(2) APPLICABLE AMOUNT.—For purposes of
17 this subsection, the applicable amount is $1.00.’’.
18 (3) CONFORMING AMENDMENTS.—
19 (A) Subsection (b) of section 40A is
20 amended by striking paragraph (3) and by re21
designating paragraphs (4) and (5) as para22
graphs (3) and (4), respectively.
23 (B) Paragraph (2) of section 40A(f) is
24 amended to read as follows:
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1 ‘‘(2) EXCEPTION.—Subsection (b)(4) shall not
2 apply with respect to renewable diesel.’’.
3 (C) Paragraphs (2) and (3) of section
4 40A(e) are each amended by striking ‘‘sub5
section (b)(5)(C)’’ and inserting ‘‘subsection
6 (b)(4)(C)’’.
7 (D) Clause (ii) of section 40A(d)(3)(C) is
8 amended by striking ‘‘subsection (b)(5)(B)’’
9 and inserting ‘‘subsection (b)(4)(B)’’.
10 (c) UNIFORM TREATMENT OF DIESEL PRODUCED
11 FROM BIOMASS.—Paragraph (3) of section 40A(f) is
12 amended—
13 (1) by striking ‘‘diesel fuel’’ and inserting ‘‘liq14
uid fuel’’,
15 (2) by striking ‘‘using a thermal
16 depolymerization process’’, and
17 (3) by inserting ‘‘, or other equivalent standard
18 approved by the Secretary’’ after ‘‘D396’’.
19 (d) COPRODUCTION OF RENEWABLE DIESEL WITH
20 PETROLEUM FEEDSTOCK.—
21 (1) IN GENERAL.—Paragraph (3) of section
22 40A(f) is amended by adding at the end the fol23
lowing new sentences: ‘‘Such term does not include
24 any fuel derived from coprocessing biomass with a
25 feedstock which is not biomass. For purposes of this
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1 paragraph, the term ‘biomass’ has the meaning
2 given such term by section 45K(c)(3).’’.
3 (2) CONFORMING AMENDMENT.—Paragraph (3)
4 of section 40A(f) is amended by striking ‘‘(as de5
fined in section 45K(c)(3))’’.
6 (e) ELIGIBILITY OF CERTAIN AVIATION FUEL.—Sub7
section (f) of section 40A (relating to renewable diesel)
8 is amended by adding at the end the following new para9
graph:
10 ‘‘(4) CERTAIN AVIATION FUEL.—
11 ‘‘(A) IN GENERAL.—Except as provided in
12 the last 3 sentences of paragraph (3), the term
13 ‘renewable diesel’ shall include fuel derived from
14 biomass which meets the requirements of a De15
partment of Defense specification for military
16 jet fuel or an American Society of Testing and
17 Materials specification for aviation turbine fuel.
18 ‘‘(B) APPLICATION OF MIXTURE CRED19
ITS.—In the case of fuel which is treated as re20
newable diesel solely by reason of subparagraph
21 (A), subsection (b)(1) and section 6426(c) shall
22 be applied with respect to such fuel by treating
23 kerosene as though it were diesel fuel.’’.
24 (f) MODIFICATION RELATING TO DEFINITION OF
25 AGRI-BIODIESEL.—Paragraph (2) of section 40A(d) (re185
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1 lating to agri-biodiesel) is amended by striking ‘‘and mus2
tard seeds’’ and inserting ‘‘mustard seeds, and camelina’’.
3 (g) EFFECTIVE DATE.—
4 (1) IN GENERAL.—Except as otherwise pro5
vided in this subsection, the amendments made by
6 this section shall apply to fuel produced, and sold or
7 used, after December 31, 2008.
8 (2) COPRODUCTION OF RENEWABLE DIESEL
9 WITH PETROLEUM FEEDSTOCK.—The amendment
10 made by subsection (d) shall apply to fuel produced,
11 and sold or used, after the date of the enactment of
12 this Act.
13 SEC. 203. CLARIFICATION THAT CREDITS FOR FUEL ARE
14 DESIGNED TO PROVIDE AN INCENTIVE FOR
15 UNITED STATES PRODUCTION.
16 (a) ALCOHOL FUELS CREDIT.—Subsection (d) of
17 section 40 is amended by adding at the end the following
18 new paragraph:
19 ‘‘(7) LIMITATION TO ALCOHOL WITH CONNEC20
TION TO THE UNITED STATES.—No credit shall be
21 determined under this section with respect to any al22
cohol which is produced outside the United States
23 for use as a fuel outside the United States. For pur24
poses of this paragraph, the term ‘United States’ in25
cludes any possession of the United States.’’.
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1 (b) BIODIESEL FUELS CREDIT.—Subsection (d) of
2 section 40A is amended by adding at the end the following
3 new paragraph:
4 ‘‘(5) LIMITATION TO BIODIESEL WITH CONNEC5
TION TO THE UNITED STATES.—No credit shall be
6 determined under this section with respect to any
7 biodiesel which is produced outside the United
8 States for use as a fuel outside the United States.
9 For purposes of this paragraph, the term ‘United
10 States’ includes any possession of the United
11 States.’’.
12 (c) EXCISE TAX CREDIT.—
13 (1) IN GENERAL.—Section 6426 is amended by
14 adding at the end the following new subsection:
15 ‘‘(i) LIMITATION TO FUELS WITH CONNECTION TO
16 THE UNITED STATES.—
17 ‘‘(1) ALCOHOL.—No credit shall be determined
18 under this section with respect to any alcohol which
19 is produced outside the United States for use as a
20 fuel outside the United States.
21 ‘‘(2) BIODIESEL AND ALTERNATIVE FUELS.—
22 No credit shall be determined under this section
23 with respect to any biodiesel or alternative fuel
24 which is produced outside the United States for use
25 as a fuel outside the United States.
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1 For purposes of this subsection, the term ‘United States’
2 includes any possession of the United States.’’.
3 (2) CONFORMING AMENDMENT.—Subsection (e)
4 of section 6427 is amended by redesignating para5
graph (5) as paragraph (6) and by inserting after
6 paragraph (4) the following new paragraph:
7 ‘‘(5) LIMITATION TO FUELS WITH CONNECTION
8 TO THE UNITED STATES.—No amount shall be pay9
able under paragraph (1) or (2) with respect to any
10 mixture or alternative fuel if credit is not allowed
11 with respect to such mixture or alternative fuel by
12 reason of section 6426(i).’’.
13 (d) EFFECTIVE DATE.—The amendments made by
14 this section shall apply to claims for credit or payment
15 made on or after May 15, 2008.
16 SEC. 204. EXTENSION AND MODIFICATION OF ALTER17
NATIVE FUEL CREDIT.
18 (a) EXTENSION.—
19 (1) ALTERNATIVE FUEL CREDIT.—Paragraph
20 (4) of section 6426(d) (relating to alternative fuel
21 credit) is amended by striking ‘‘September 30,
22 2009’’ and inserting ‘‘December 31, 2009’’.
23 (2) ALTERNATIVE FUEL MIXTURE CREDIT.—
24 Paragraph (3) of section 6426(e) (relating to alter25
native fuel mixture credit) is amended by striking
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1 ‘‘September 30, 2009’’ and inserting ‘‘December 31,
2 2009’’.
3 (3) PAYMENTS.—Subparagraph (C) of section
4 6427(e)(5) (relating to termination) is amended by
5 striking ‘‘September 30, 2009’’ and inserting ‘‘De6
cember 31, 2009’’.
7 (b) MODIFICATIONS.—
8 (1) ALTERNATIVE FUEL TO INCLUDE COM9
PRESSED OR LIQUIFIED BIOMASS GAS.—Paragraph
10 (2) of section 6426(d) (relating to alternative fuel
11 credit) is amended by striking ‘‘and’’ at the end of
12 subparagraph (E), by redesignating subparagraph
13 (F) as subparagraph (G), and by inserting after sub14
paragraph (E) the following new subparagraph:
15 ‘‘(F) compressed or liquefied gas derived
16 from biomass (as defined in section 45K(c)(3)),
17 and’’.
18 (2) CREDIT ALLOWED FOR AVIATION USE OF
19 FUEL.—Paragraph (1) of section 6426(d) is amend20
ed by inserting ‘‘sold by the taxpayer for use as a
21 fuel in aviation,’’ after ‘‘motorboat,’’.
22 (c) CARBON CAPTURE REQUIREMENT FOR CERTAIN
23 FUELS.—
24 (1) IN GENERAL.—Subsection (d) of section
25 6426, as amended by subsection (a), is amended by
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1 redesignating paragraph (4) as paragraph (5) and
2 by inserting after paragraph (3) the following new
3 paragraph:
4 ‘‘(4) CARBON CAPTURE REQUIREMENT.—
5 ‘‘(A) IN GENERAL.—The requirements of
6 this paragraph are met if the fuel is certified,
7 under such procedures as required by the Sec8
retary, as having been derived from coal pro9
duced at a gasification facility which separates
10 and sequesters not less than the applicable per11
centage of such facility’s total carbon dioxide
12 emissions.
13 ‘‘(B) APPLICABLE PERCENTAGE.—For
14 purposes of subparagraph (A), the applicable
15 percentage is—
16 ‘‘(i) 50 percent in the case of fuel pro17
duced after September 30, 2009, and on or
18 before December 30, 2009, and
19 ‘‘(ii) 75 percent in the case of fuel
20 produced after December 30, 2009.’’.
21 (2) CONFORMING AMENDMENT.—Subparagraph
22 (E) of section 6426(d)(2) is amended by inserting
23 ‘‘which meets the requirements of paragraph (4) and
24 which is’’ after ‘‘any liquid fuel’’.
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1 (d) EFFECTIVE DATE.—The amendments made by
2 this section shall apply to fuel sold or used after the date
3 of the enactment of this Act.
4 SEC. 205. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC
5 DRIVE MOTOR VEHICLES.
6 (a) PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE
7 CREDIT.—Subpart B of part IV of subchapter A of chap8
ter 1 (relating to other credits) is amended by adding at
9 the end the following new section:
10 ‘‘SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE
11 MOTOR VEHICLES.
12 ‘‘(a) ALLOWANCE OF CREDIT.—
13 ‘‘(1) IN GENERAL.—There shall be allowed as a
14 credit against the tax imposed by this chapter for
15 the taxable year an amount equal to the applicable
16 amount with respect to each new qualified plug-in
17 electric drive motor vehicle placed in service by the
18 taxpayer during the taxable year.
19 ‘‘(2) APPLICABLE AMOUNT.—For purposes of
20 paragraph (1), the applicable amount is sum of—
21 ‘‘(A) $2,500, plus
22 ‘‘(B) $417 for each kilowatt hour of trac23
tion battery capacity in excess of 4 kilowatt
24 hours.
25 ‘‘(b) LIMITATIONS.—
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1 ‘‘(1) LIMITATION BASED ON WEIGHT.—The
2 amount of the credit allowed under subsection (a) by
3 reason of subsection (a)(2) shall not exceed—
4 ‘‘(A) $7,500, in the case of any new quali5
fied plug-in electric drive motor vehicle with a
6 gross vehicle weight rating of not more than
7 10,000 pounds,
8 ‘‘(B) $10,000, in the case of any new
9 qualified plug-in electric drive motor vehicle
10 with a gross vehicle weight rating of more than
11 10,000 pounds but not more than 14,000
12 pounds,
13 ‘‘(C) $12,500, in the case of any new
14 qualified plug-in electric drive motor vehicle
15 with a gross vehicle weight rating of more than
16 14,000 pounds but not more than 26,000
17 pounds, and
18 ‘‘(D) $15,000, in the case of any new
19 qualified plug-in electric drive motor vehicle
20 with a gross vehicle weight rating of more than
21 26,000 pounds.
22 ‘‘(2) LIMITATION ON NUMBER OF PASSENGER
23 VEHICLES AND LIGHT TRUCKS ELIGIBLE FOR CRED24
IT.—
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1 ‘‘(A) IN GENERAL.—In the case of a new
2 qualified plug-in electric drive motor vehicle
3 sold during the phaseout period, only the appli4
cable percentage of the credit otherwise allow5
able under subsection (a) shall be allowed.
6 ‘‘(B) PHASEOUT PERIOD.—For purposes
7 of this subsection, the phaseout period is the
8 period beginning with the second calendar quar9
ter following the calendar quarter which in10
cludes the first date on which the total number
11 of such new qualified plug-in electric drive
12 motor vehicles sold for use in the United States
13 after December 31, 2008, is at least 250,000.
14 ‘‘(C) APPLICABLE PERCENTAGE.—For
15 purposes of subparagraph (A), the applicable
16 percentage is—
17 ‘‘(i) 50 percent for the first 2 cal18
endar quarters of the phaseout period,
19 ‘‘(ii) 25 percent for the 3d and 4th
20 calendar quarters of the phaseout period,
21 and
22 ‘‘(iii) 0 percent for each calendar
23 quarter thereafter.
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1 ‘‘(D) CONTROLLED GROUPS.—Rules simi2
lar to the rules of section 30B(f)(4) shall apply
3 for purposes of this subsection.
4 ‘‘(c) NEW QUALIFIED PLUG-IN ELECTRIC DRIVE
5 MOTOR VEHICLE.—For purposes of this section, the term
6 ‘new qualified plug-in electric drive motor vehicle’ means
7 a motor vehicle—
8 ‘‘(1) which draws propulsion using a traction
9 battery with at least 4 kilowatt hours of capacity,
10 ‘‘(2) which uses an offboard source of energy to
11 recharge such battery,
12 ‘‘(3) which, in the case of a passenger vehicle
13 or light truck which has a gross vehicle weight rat14
ing of not more than 8,500 pounds, has received a
15 certificate of conformity under the Clean Air Act
16 and meets or exceeds the equivalent qualifying Cali17
fornia low emission vehicle standard under section
18 243(e)(2) of the Clean Air Act for that make and
19 model year, and
20 ‘‘(A) in the case of a vehicle having a gross
21 vehicle weight rating of 6,000 pounds or less,
22 the Bin 5 Tier II emission standard established
23 in regulations prescribed by the Administrator
24 of the Environmental Protection Agency under
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1 section 202(i) of the Clean Air Act for that
2 make and model year vehicle, and
3 ‘‘(B) in the case of a vehicle having a gross
4 vehicle weight rating of more than 6,000
5 pounds but not more than 8,500 pounds, the
6 Bin 8 Tier II emission standard which is so es7
tablished,
8 ‘‘(4) the original use of which commences with
9 the taxpayer,
10 ‘‘(5) which is acquired for use or lease by the
11 taxpayer and not for resale, and
12 ‘‘(6) which is made by a manufacturer.
13 ‘‘(d) APPLICATION WITH OTHER CREDITS.—
14 ‘‘(1) BUSINESS CREDIT TREATED AS PART OF
15 GENERAL BUSINESS CREDIT.—So much of the credit
16 which would be allowed under subsection (a) for any
17 taxable year (determined without regard to this sub18
section) that is attributable to property of a char19
acter subject to an allowance for depreciation shall
20 be treated as a credit listed in section 38(b) for such
21 taxable year (and not allowed under subsection (a)).
22 ‘‘(2) PERSONAL CREDIT.—
23 ‘‘(A) IN GENERAL.—For purposes of this
24 title, the credit allowed under subsection (a) for
25 any taxable year (determined after application
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1 of paragraph (1)) shall be treated as a credit
2 allowable under subpart A for such taxable
3 year.
4 ‘‘(B) LIMITATION BASED ON AMOUNT OF
5 TAX.—In the case of a taxable year to which
6 section 26(a)(2) does not apply, the credit al7
lowed under subsection (a) for any taxable year
8 (determined after application of paragraph (1))
9 shall not exceed the excess of—
10 ‘‘(i) the sum of the regular tax liabil11
ity (as defined in section 26(b)) plus the
12 tax imposed by section 55, over
13 ‘‘(ii) the sum of the credits allowable
14 under subpart A (other than this section
15 and sections 23 and 25D) and section 27
16 for the taxable year.
17 ‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.—
18 For purposes of this section—
19 ‘‘(1) MOTOR VEHICLE.—The term ‘motor vehi20
cle’ has the meaning given such term by section
21 30(c)(2).
22 ‘‘(2) OTHER TERMS.—The terms ‘passenger
23 automobile’, ‘light truck’, and ‘manufacturer’ have
24 the meanings given such terms in regulations pre25
scribed by the Administrator of the Environmental
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1 Protection Agency for purposes of the administra2
tion of title II of the Clean Air Act (42 U.S.C. 7521
3 et seq.).
4 ‘‘(3) TRACTION BATTERY CAPACITY.—Traction
5 battery capacity shall be measured in kilowatt hours
6 from a 100 percent state of charge to a zero percent
7 state of charge.
8 ‘‘(4) REDUCTION IN BASIS.—For purposes of
9 this subtitle, the basis of any property for which a
10 credit is allowable under subsection (a) shall be re11
duced by the amount of such credit so allowed.
12 ‘‘(5) NO DOUBLE BENEFIT.—The amount of
13 any deduction or other credit allowable under this
14 chapter for a new qualified plug-in electric drive
15 motor vehicle shall be reduced by the amount of
16 credit allowed under subsection (a) for such vehicle
17 for the taxable year.
18 ‘‘(6) PROPERTY USED BY TAX-EXEMPT ENTI19
TY.—In the case of a vehicle the use of which is de20
scribed in paragraph (3) or (4) of section 50(b) and
21 which is not subject to a lease, the person who sold
22 such vehicle to the person or entity using such vehi23
cle shall be treated as the taxpayer that placed such
24 vehicle in service, but only if such person clearly dis25
closes to such person or entity in a document the
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1 amount of any credit allowable under subsection (a)
2 with respect to such vehicle (determined without re3
gard to subsection (b)(2)).
4 ‘‘(7) PROPERTY USED OUTSIDE UNITED
5 STATES, ETC., NOT QUALIFIED.—No credit shall be
6 allowable under subsection (a) with respect to any
7 property referred to in section 50(b)(1) or with re8
spect to the portion of the cost of any property
9 taken into account under section 179.
10 ‘‘(8) RECAPTURE.—The Secretary shall, by reg11
ulations, provide for recapturing the benefit of any
12 credit allowable under subsection (a) with respect to
13 any property which ceases to be property eligible for
14 such credit (including recapture in the case of a
15 lease period of less than the economic life of a vehi16
cle).
17 ‘‘(9) ELECTION TO NOT TAKE CREDIT.—No
18 credit shall be allowed under subsection (a) for any
19 vehicle if the taxpayer elects not to have this section
20 apply to such vehicle.
21 ‘‘(10) INTERACTION WITH AIR QUALITY AND
22 MOTOR VEHICLE SAFETY STANDARDS.—Unless oth23
erwise provided in this section, a motor vehicle shall
24 not be considered eligible for a credit under this sec25
tion unless such vehicle is in compliance with—
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1 ‘‘(A) the applicable provisions of the Clean
2 Air Act for the applicable make and model year
3 of the vehicle (or applicable air quality provi4
sions of State law in the case of a State which
5 has adopted such provision under a waiver
6 under section 209(b) of the Clean Air Act), and
7 ‘‘(B) the motor vehicle safety provisions of
8 sections 30101 through 30169 of title 49,
9 United States Code.
10 ‘‘(f) REGULATIONS.—
11 ‘‘(1) IN GENERAL.—Except as provided in para12
graph (2), the Secretary shall promulgate such regu13
lations as necessary to carry out the provisions of
14 this section.
15 ‘‘(2) COORDINATION IN PRESCRIPTION OF CER16
TAIN REGULATIONS.—The Secretary of the Treas17
ury, in coordination with the Secretary of Transpor18
tation and the Administrator of the Environmental
19 Protection Agency, shall prescribe such regulations
20 as necessary to determine whether a motor vehicle
21 meets the requirements to be eligible for a credit
22 under this section.
23 ‘‘(g) TERMINATION.—This section shall not apply to
24 property purchased after December 31, 2014.’’.
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1 (b) COORDINATION WITH ALTERNATIVE MOTOR VE2
HICLE CREDIT.—Section 30B(d)(3) is amended by adding
3 at the end the following new subparagraph:
4 ‘‘(D) EXCLUSION OF PLUG-IN VEHICLES.—
5 Any vehicle with respect to which a credit is al6
lowable under section 30D (determined without
7 regard to subsection (d) thereof) shall not be
8 taken into account under this section.’’.
9 (c) CREDIT MADE PART OF GENERAL BUSINESS
10 CREDIT.—Section 38(b), as amended by this Act, is
11 amended by striking ‘‘plus’’ at the end of paragraph (33),
12 by striking the period at the end of paragraph (34) and
13 inserting ‘‘plus’’, and by adding at the end the following
14 new paragraph:
15 ‘‘(35) the portion of the new qualified plug-in
16 electric drive motor vehicle credit to which section
17 30D(d)(1) applies.’’.
18 (d) CONFORMING AMENDMENTS.—
19 (1)(A) Section 24(b)(3)(B), as amended by sec20
tion 106, is amended by striking ‘‘and 25D’’ and in21
serting ‘‘25D, and 30D’’.
22 (B) Section 25(e)(1)(C)(ii) is amended by in23
serting ‘‘30D,’’ after ‘‘25D,’’.
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1 (C) Section 25B(g)(2), as amended by section
2 106, is amended by striking ‘‘and 25D’’ and insert3
ing ‘‘, 25D, and 30D’’.
4 (D) Section 26(a)(1), as amended by section
5 106, is amended by striking ‘‘and 25D’’ and insert6
ing ‘‘25D, and 30D’’.
7 (E) Section 1400C(d)(2) is amended by striking
8 ‘‘and 25D’’ and inserting ‘‘25D, and 30D’’.
9 (2) Section 1016(a) is amended by striking
10 ‘‘and’’ at the end of paragraph (35), by striking the
11 period at the end of paragraph (36) and inserting ‘‘,
12 and’’, and by adding at the end the following new
13 paragraph:
14 ‘‘(37) to the extent provided in section
15 30D(e)(4).’’.
16 (3) Section 6501(m) is amended by inserting
17 ‘‘30D(e)(9),’’ after ‘‘30C(e)(5),’’.
18 (4) The table of sections for subpart B of part
19 IV of subchapter A of chapter 1 is amended by add20
ing at the end the following new item:
‘‘Sec. 30D. New qualified plug-in electric drive motor vehicles.’’.
21 (e) EFFECTIVE DATE.—The amendments made by
22 this section shall apply to taxable years beginning after
23 December 31, 2008.
24 (f) APPLICATION OF EGTRRA SUNSET.—The
25 amendment made by subsection (d)(1)(A) shall be subject
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1 to title IX of the Economic Growth and Tax Relief Rec2
onciliation Act of 2001 in the same manner as the provi3
sion of such Act to which such amendment relates.
4 SEC. 206. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING
5 REDUCTION UNITS AND ADVANCED INSULA6
TION.
7 (a) IN GENERAL.—Section 4053 is amended by add8
ing at the end the following new paragraphs:
9 ‘‘(9) IDLING REDUCTION DEVICE.—Any device
10 or system of devices which—
11 ‘‘(A) is designed to provide to a vehicle
12 those services (such as heat, air conditioning, or
13 electricity) that would otherwise require the op14
eration of the main drive engine while the vehi15
cle is temporarily parked or remains stationary
16 using one or more devices affixed to a tractor,
17 and
18 ‘‘(B) is determined by the Administrator of
19 the Environmental Protection Agency, in con20
sultation with the Secretary of Energy and the
21 Secretary of Transportation, to reduce idling of
22 such vehicle at a motor vehicle rest stop or
23 other location where such vehicles are tempo24
rarily parked or remain stationary.
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1 ‘‘(10) ADVANCED INSULATION.—Any insulation
2 that has an R value of not less than R35 per inch.’’.
3 (b) EFFECTIVE DATE.—The amendment made by
4 this section shall apply to sales or installations after the
5 date of the enactment of this Act.
6 SEC. 207. ALTERNATIVE FUEL VEHICLE REFUELING PROP7
ERTY CREDIT.
8 (a) EXTENSION OF CREDIT.—Paragraph (2) of sec9
tion 30C(g) is amended by striking ‘‘December 31, 2009’’
10 and inserting ‘‘December 31, 2010’’.
11 (b) INCLUSION OF ELECTRICITY AS A CLEAN-BURN12
ING FUEL.—Section 30C(c)(2) is amended by adding at
13 the end the following new subparagraph:
14 ‘‘(C) Electricity.’’.
15 (c) EFFECTIVE DATE.—The amendments made by
16 this section shall apply to property placed in service after
17 the date of the enactment of this Act, in taxable years
18 ending after such date.
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1 SEC. 208. CERTAIN INCOME AND GAINS RELATING TO AL2
COHOL FUELS AND MIXTURES, BIODIESEL
3 FUELS AND MIXTURES, AND ALTERNATIVE
4 FUELS AND MIXTURES TREATED AS QUALI5
FYING INCOME FOR PUBLICLY TRADED
6 PARTNERSHIPS.
7 (a) IN GENERAL.—Subparagraph (E) of section
8 7704(d)(1), as amended by this Act, is amended by strik9
ing ‘‘or industrial source carbon dioxide’’ and inserting ‘‘,
10 industrial source carbon dioxide, or the transportation or
11 storage of any fuel described in subsection (b), (c), (d),
12 or (e) of section 6426, or any alcohol fuel defined in sec13
tion 6426(b)(4)(A) or any biodiesel fuel as defined in sec14
tion 40A(d)(1)’’ after ‘‘timber)’’.
15 (b) EFFECTIVE DATE.—The amendment made by
16 this section shall take effect on the date of the enactment
17 of this Act, in taxable years ending after such date.
18 SEC. 209. EXTENSION AND MODIFICATION OF ELECTION TO
19 EXPENSE CERTAIN REFINERIES.
20 (a) EXTENSION.—Paragraph (1) of section 179C(c)
21 (relating to qualified refinery property) is amended—
22 (1) by striking ‘‘January 1, 2012’’ in subpara23
graph (B) and inserting ‘‘January 1, 2014’’, and
24 (2) by striking ‘‘January 1, 2008’’ each place
25 it appears in subparagraph (F) and inserting ‘‘Janu26
ary 1, 2010’’.
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1 (b) INCLUSION OF FUEL DERIVED FROM SHALE AND
2 TAR SANDS.—
3 (1) IN GENERAL.—Subsection (d) of section
4 179C is amended by inserting ‘‘, or directly from
5 shale or tar sands’’ after ‘‘(as defined in section
6 45K(c))’’.
7 (2) CONFORMING AMENDMENT.—Paragraph (2)
8 of section 179C(e) is amended by inserting ‘‘shale,
9 tar sands, or’’ before ‘‘qualified fuels’’.
10 (c) EFFECTIVE DATE.—The amendments made by
11 this section shall apply to property placed in service after
12 the date of the enactment of this Act.
13 SEC. 210. EXTENSION OF SUSPENSION OF TAXABLE IN14
COME LIMIT ON PERCENTAGE DEPLETION
15 FOR OIL AND NATURAL GAS PRODUCED
16 FROM MARGINAL PROPERTIES.
17 Subparagraph (H) of section 613A(c)(6) (relating to
18 oil and gas produced from marginal properties) is amend19
ed by striking ‘‘for any taxable year’’ and all that follows
20 and inserting ‘‘for any taxable year—
21 ‘‘(i) beginning after December 31,
22 1997, and before January 1, 2008, or
23 ‘‘(ii) beginning after December 31,
24 2008, and before January 1, 2010.’’.
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1 SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE
2 COMMUTERS.
3 (a) IN GENERAL.—Paragraph (1) of section 132(f)
4 is amended by adding at the end the following:
5 ‘‘(D) Any qualified bicycle commuting re6
imbursement.’’.
7 (b) LIMITATION ON EXCLUSION.—Paragraph (2) of
8 section 132(f) is amended by striking ‘‘and’’ at the end
9 of subparagraph (A), by striking the period at the end
10 of subparagraph (B) and inserting ‘‘, and’’, and by adding
11 at the end the following new subparagraph:
12 ‘‘(C) the applicable annual limitation in
13 the case of any qualified bicycle commuting re14
imbursement.’’.
15 (c) DEFINITIONS.—Paragraph (5) of section 132(f)
16 is amended by adding at the end the following:
17 ‘‘(F) DEFINITIONS RELATED TO BICYCLE
18 COMMUTING REIMBURSEMENT.—
19 ‘‘(i) QUALIFIED BICYCLE COMMUTING
20 REIMBURSEMENT.—The term ‘qualified bi21
cycle commuting reimbursement’ means,
22 with respect to any calendar year, any em23
ployer reimbursement during the 15-month
24 period beginning with the first day of such
25 calendar year for reasonable expenses in26
curred by the employee during such cal206
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1 endar year for the purchase of a bicycle
2 and bicycle improvements, repair, and stor3
age, if such bicycle is regularly used for
4 travel between the employee’s residence
5 and place of employment.
6 ‘‘(ii) APPLICABLE ANNUAL LIMITA7
TION.—The term ‘applicable annual limita8
tion’ means, with respect to any employee
9 for any calendar year, the product of $20
10 multiplied by the number of qualified bicy11
cle commuting months during such year.
12 ‘‘(iii) QUALIFIED BICYCLE COM13
MUTING MONTH.—The term ‘qualified bi14
cycle commuting month’ means, with re15
spect to any employee, any month during
16 which such employee—
17 ‘‘(I) regularly uses the bicycle for
18 a substantial portion of the travel be19
tween the employee’s residence and
20 place of employment, and
21 ‘‘(II) does not receive any benefit
22 described in subparagraph (A), (B),
23 or (C) of paragraph (1).’’.
24 (d) CONSTRUCTIVE RECEIPT OF BENEFIT.—Para25
graph (4) of section 132(f) is amended by inserting
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1 ‘‘(other than a qualified bicycle commuting reimburse2
ment)’’ after ‘‘qualified transportation fringe’’.
3 (e) EFFECTIVE DATE.—The amendments made by
4 this section shall apply to taxable years beginning after
5 December 31, 2008.
6 TITLE III—ENERGY CONSERVA7
TION AND EFFICIENCY PRO8
VISIONS
9 SEC. 301. QUALIFIED ENERGY CONSERVATION BONDS.
10 (a) IN GENERAL.—Subpart I of part IV of sub11
chapter A of chapter