[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1203 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                S. 1203

 To amend the Internal Revenue Code of 1986 to provide tax incentives 
for the investment in greenhouse gas intensity reduction projects, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              June 8, 2005

Mr. Hagel (for himself, Mr. Pryor, Mr. Alexander, Mr. Craig, Mrs. Dole, 
and Ms. Murkowski) introduced the following bill; which was read twice 
                and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide tax incentives 
for the investment in greenhouse gas intensity reduction projects, and 
                          for other purposes.

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

SECTION 1. SHORT TITLE; AMENDMENT OF CODE.

    (a) Short Title.--This title may be cited as the ``Climate Change 
Technology Tax Incentives Act of 2005''.
    (b) Amendment of Code.--Except as otherwise expressly provided, 
whenever in this title an amendment or repeal is expressed in terms of 
an amendment to, or repeal of, a section or other provision, the 
reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.

       TITLE I--GREENHOUSE GAS INTENSITY REDUCTION TAX INCENTIVES

SEC. 101. GREENHOUSE GAS INTENSITY REDUCTION INVESTMENT TAX CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business-related credits) is amended by adding at the end 
the following new section:

``SEC. 45J. GREENHOUSE GAS INTENSITY REDUCTION INVESTMENT CREDIT.

    ``(a) Allowance of Credit.--
            ``(1) In general.--For purposes of section 38, in the case 
        of a taxpayer's investment in a greenhouse gas intensity 
        reduction project approved by the accreditation panel, the 
        greenhouse gas intensity reduction investment credit determined 
        under this section for the taxable year is an amount equal to--
                    ``(A) percentage reduction in greenhouse gas 
                intensity certified for such project for such year by 
                the accreditation panel, multiplied by
                    ``(B) the investment in such project during such 
                year which is attributable, directly or indirectly, to 
                the taxpayer, as determined by the accreditation panel.
            ``(2) Aggregate dollar limitation.--The credit determined 
        under paragraph (1) for any taxable year, when added to any 
        credit allowed to the taxpayer with respect to the such project 
        in any preceding taxable year, shall not exceed 50 percent of 
        the investment attributable to the taxpayer with respect to 
        such project through such taxable year.
    ``(b) Limitation on Aggregate Credit Allowable.--
            ``(1) In general.--The amount of the greenhouse gas 
        intensity reduction investment credit determined under 
        subsection (a) for any project, when added to all such credits 
        allowed to all taxpayers with respect to the such project shall 
        not exceed the credit dollar amount allocated to such project 
        under this subsection by the accreditation panel from the 
        greenhouse gas intensity reduction investment credit limitation 
        for the calendar year in which such allocation is made.
            ``(2) Time for making allocation.--An allocation shall be 
        taken into account under paragraph (1) only if it is made not 
        later than the close of the calendar year in which the 
        greenhouse gas intensity reduction project proposal with 
        respect to such project is approved by the accreditation panel.
            ``(3) Overall limitation on aggregate credit allowable.--
        The accreditation panel may allocate the aggregate credit 
        dollar amount to any such project for a period not to exceed a 
        10-year period beginning with the calendar year described in 
        paragraph (2).
    ``(c) Limitation on Amount of Credits Allocated.--
            ``(1) In general.--There is a greenhouse gas intensity 
        reduction investment credit limitation amount for each calendar 
        year. Such limitation amount is--
                    ``(A) $400,000,000 for 2006,
                    ``(B) $300,000,000 for 2007,
                    ``(C) $300,000,000 for 2008,
                    ``(D) $300,000,000 for 2009,
                    ``(E) $300,000,000 for 2010, and
                    ``(F) except as provided in paragraph (2), zero 
                thereafter.
            ``(2) Carryover of unused issuance limitation.--If for any 
        calendar year the limitation amount imposed by paragraph (1) 
        exceeds the amount of greenhouse gas intensity reduction 
        investment credits allocated during such year, such excess 
        shall be carried forward to the succeeding calendar year as an 
        addition to the limitation imposed by paragraph (1).
    ``(d) Greenhouse Gas Intensity Reduction Project; Greenhouse Gas 
Intensity; Accreditation Panel.--For purposes of this section--
            ``(1) Greenhouse gas intensity reduction project.--The term 
        `greenhouse gas intensity reduction project' means any project 
        approved under this section by the accreditation panel. Such 
        approval shall be based on the following criteria:
                    ``(A) The extent of the reduction in greenhouse gas 
                intensity proposed for the project.
                    ``(B) Improvements in system efficiency.
                    ``(C) In the case of projects located outside the 
                United States, the extent of technology transfer.
                    ``(D) The existence and nature of agreements for 
                sharing project benefits and liability between the 
                taxpayer and any host government.
            ``(2) Greenhouse gas intensity.--The greenhouse gas 
        intensity for any period is equal to the volume of emissions 
        divided by the economic output associated with a project as 
        compared to a greenhouse gas intensity baseline established 
        after the date of the enactment of this section. The comparison 
        to such baseline may be made by geographic regions, industry 
        segments, or on a taxpayer basis.
            ``(3) Accreditation panel.--The term `accreditation panel' 
        means a panel jointly certified by the Secretary and the 
        Secretary of Commerce.
    ``(e) Recapture of Credit in Certain Cases.--
            ``(1) In general.--If, at any time during the 20-year 
        period of a greenhouse gas intensity reduction project, there 
        is a recapture event with respect to such project, then the tax 
        imposed by this chapter for the taxable year in which such 
        event occurs shall be increased by the credit recapture amount.
            ``(2) Credit recapture amount.--For purposes of paragraph 
        (1)--
                    ``(A) In general.--The credit recapture amount is 
                an amount equal to the recapture percentage of all 
                greenhouse gas intensity reduction investment credits 
                previously allowable to a taxpayer with respect to any 
                investment in such project that is attributable to such 
                taxpayer.
                    ``(B) Recapture percentage.--The recapture 
                percentage shall be 100 percent if the recapture event 
                occurs during the first 5 years of the project, 75 
                percent if the recapture event occurs during the second 
                5 years of the project, 50 percent if the recapture 
                event occurs during the third 5 years of the project, 
                25 percent if the recapture event occurs during the 
                fourth 5 years of the project, and 0 percent if the 
                recapture event occurs at any time after the 20th year 
                of the project.
            ``(3) Recapture event.--For purposes of paragraph (1), 
        there is a recapture event with respect to a greenhouse gas 
        intensity reduction project if--
                    ``(A) the taxpayer violates a term or condition of 
                the approval of the project by the accreditation panel 
                at any time,
                    ``(B) the taxpayer adopts a practice which the 
                accreditation panel has specified in its approval of 
                the project as a practice which would tend to defeat 
                the purposes of the program, or
                    ``(C) the taxpayer disposes of any ownership 
                interest arising out of its investment that the 
                accreditation panel has determined is attributable to 
                the project, unless the accreditation panel determines 
                that such disposition will not have any adverse effect 
                on the greenhouse gas intensity reduction project.
        If an event which otherwise would be a recapture event is 
        outside the control of the taxpayer, as determined by the 
        accreditation panel, such event shall not be treated as a 
        recapture event with respect to such taxpayer.
            ``(4) Special rules.--
                    ``(A) Tax benefit rule.--The tax for the taxable 
                year shall be increased under paragraph (1) only with 
                respect to credits allowed by reason of this section 
                which were used to reduce tax liability. In the case of 
                credits not so used to reduce tax liability, the 
                carryforwards and carrybacks under section 39 shall be 
                appropriately adjusted.
                    ``(B) No credits against tax.--Any increase in tax 
                under this subsection shall not be treated as a tax 
                imposed by this chapter for purposes of determining the 
                amount of any credit under this chapter or for purposes 
                of section 55.
    ``(f) Disallowance of Double Benefit.--
            ``(1) Basis reduction.--The basis of any investment in a 
        greenhouse gas intensity reduction project shall be reduced by 
        the amount of any credit determined under this section with 
        respect to such investment.
            ``(2) Charitable deduction disallowed.--No deduction shall 
        be allowed to a taxpayer under section 170 with respect to any 
        contribution which the accreditation panel certifies to the 
        Secretary constitutes an investment in a greenhouse gas 
        intensity reduction project that is attributable to such 
        taxpayer.
    ``(g) Certification to Secretary.--The accreditation panel shall 
certify to the Secretary before January 31 of each year with respect to 
each taxpayer which has made an investment in a greenhouse gas 
intensity reduction project--
            ``(1) the amount of the greenhouse gas intensity reduction 
        investment credit allowable to such taxpayer for the preceding 
        calendar year,
            ``(2) whether a recapture event occurred with respect to 
        such taxpayer during the preceding calendar year, and
            ``(3) the credit recapture amount, if any, with respect to 
        such taxpayer for the preceding calendar year.
    ``(h) Regulations.--The Secretary shall prescribe such regulations 
as may be appropriate to carry out this section, including 
regulations--
            ``(1) which limit the credit for investments which are 
        directly or indirectly subsidized by other Federal benefits,
            ``(2) which prevent the abuse of the provisions of this 
        section through the use of related parties, and
            ``(3) which impose appropriate reporting requirements.''.
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 is amended by striking ``plus'' at the end of paragraph 
(18), by striking the period at the end of paragraph (19) and inserting 
``, plus'', and by adding at the end the following new paragraph:
            ``(20) the greenhouse gas intensity reduction investment 
        credit determined under section 45J(a).''.
    (c) Deduction for Unused Credit.--Subsection (c) of section 196 is 
amended by striking ``and'' at the end of paragraph (11), by striking 
the period at the end of paragraph (12) and inserting ``, and'', and by 
adding at the end the following new paragraph:
            ``(13) the greenhouse gas intensity reduction investment 
        credit determined under section 45J(a).''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following new item:

``Sec. 45J. Greenhouse gas intensity reduction investment credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to investments made after December 31, 2005.

                 TITLE II--ENERGY EFFICIENCY PROVISIONS

                      Subtitle A--Renewable Energy

SEC. 201. SENSE OF THE SENATE REGARDING EXTENSION OF RENEWABLE ENERGY 
              CREDIT.

    It is the sense of the Senate that the income tax credit for 
electricity produced from certain renewable resources under section 45 
of the Internal Revenue Code of 1986 should be extended through 2010.

                       Subtitle B--Nuclear Power

SEC. 211. CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR POWER FACILITIES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits), as amended by this Act, is 
amended by adding at the end the following new section:

``SEC. 45K. CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR POWER 
              FACILITIES.

    ``(a) General Rule.--For purposes of section 38, the advanced 
nuclear power facility production credit of any taxpayer for any 
taxable year is equal to the product of--
            ``(1) 0.6 cent, multiplied by
            ``(2) the kilowatt hours of electricity--
                    ``(A) produced by the taxpayer at an advanced 
                nuclear power facility during the 10-year period 
                beginning on the date the facility was originally 
                placed in service, and
                    ``(B) sold by the taxpayer to an unrelated person 
                during the taxable year.
    ``(b) National Limitation.--
            ``(1) In general.--The amount of credit which would (but 
        for this subsection and subsection (c)) be allowed with respect 
        to any facility for any taxable year shall not exceed the 
        amount which bears the same ratio to such amount of credit as--
                    ``(A) the national megawatt capacity limitation 
                allocated to the facility, bears to
                    ``(B) the total megawatt nameplate capacity of such 
                facility.
            ``(2) Amount of national limitation.--The national megawatt 
        capacity limitation shall be 8,000 megawatts.
            ``(3) Allocation of limitation.--The Secretary shall 
        allocate the national megawatt capacity limitation in such 
        manner as the Secretary may prescribe.
            ``(4) Regulations.--Not later than 6 months after the date 
        of the enactment of this section, the Secretary shall prescribe 
        such regulations as may be necessary or appropriate to carry 
        out the purposes of this subsection. Such regulations shall 
        provide a certification process under which the Secretary, 
        after consultation with the Secretary of Energy, shall approve 
        and allocate the national megawatt capacity limitation.
    ``(c) Other Limitations.--
            ``(1) Annual limitation.--The amount of the credit 
        allowable under subsection (a) (after the application of 
        subsection (b)) for any taxable year with respect to any 
        facility shall not exceed an amount which bears the same ratio 
        to $125,000,000 as--
                    ``(A) the national megawatt capacity limitation 
                allocated under subsection (b) to the facility, bears 
                to
                    ``(B) 1000.
            ``(2) Other limitations.--Rules similar to the rules of 
        section 45(b) shall apply for purposes of this section, except 
        that paragraph (2) thereof shall not apply to the 0.6 cent 
        under subsection (a)(1).
    ``(d) Advanced Nuclear Power Facility.--For purposes of this 
section, the term `advanced nuclear power facility' means any advanced 
nuclear facility--
            ``(1) which is owned by the taxpayer and which uses nuclear 
        energy to produce electricity, and
            ``(2) which is originally placed in service after the date 
        of the enactment of this paragraph and before January 1, 2010.
    ``(e) Other Rules to Apply.--Rules similar to the rules of 
paragraphs (1), (2), (3), (4), and (5) of section 45(e) shall apply for 
purposes of this section.''
    (b) Credit Treated as Business Credit.--Section 38(b), as amended 
by this Act, is amended by striking ``plus'' at the end of paragraph 
(19), by striking the period at the end of paragraph (20) and inserting 
``, plus'', and by adding at the end the following new paragraph:
            ``(21) the advanced nuclear power facility production 
        credit determined under section 45K(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1, as amended by this Act, is 
amended by adding at the end the following new item:

``Sec. 45K. Credit for production from advanced nuclear power 
                            facilities.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to production in taxable years ending after the date of the 
enactment of this Act.

SEC. 212. INVESTMENT TAX CREDIT FOR INVESTMENTS IN NUCLEAR POWER 
              FACILITIES.

    (a) New Credit for Nuclear Power Facilities.--Section 46 is amended 
by--
            (1) striking ``and'' at the end of paragraph (1),
            (2) striking the period at the end of paragraph (2) and 
        inserting ``, and'', and
            (3) inserting after paragraph (2) the following new 
        paragraph:
            ``(3) the nuclear power facility construction credit.''.
    (b) Nuclear Power Facility Construction Credit.--Subpart E of part 
IV of subchapter A of chapter 1 is amended by inserting after section 
48 the following new section:

``SEC. 48A. NUCLEAR POWER FACILITY CONSTRUCTION CREDIT.

    ``(a) In General.--For purposes of section 46, the nuclear power 
facility construction credit for any taxable year is 10 percent of so 
much of the qualified nuclear power facility expenditures paid or 
incurred by the taxpayer with respect to a qualified nuclear power 
facility.
    ``(b) When Expenditures Taken Into Account.--
            ``(1) In general.--Qualified nuclear power facility 
        expenditures shall be taken into account for the taxable year 
        in which the qualified nuclear power facility is placed in 
        service.
            ``(2) Coordination with subsection (c).--The amount which 
        would (but for this paragraph) be taken into account under 
        paragraph (1) with respect to any qualified nuclear power 
        facility shall be reduced (but not below zero) by any amount of 
        qualified nuclear power facility expenditures taken into 
        account under subsection (c) by the taxpayer or a predecessor 
        of the taxpayer (or, in the case of a sale and leaseback 
        described in section 50(a)(2)(C), by the lessee), to the extent 
        any amount so taken into account has not been required to be 
        recaptured under section 50(a).
    ``(c) Progress Expenditures.--
            ``(1) In general.--A taxpayer may elect to take into 
        account qualified nuclear power facility expenditures.
                    ``(A) Self-constructed property.--In the case of a 
                qualified nuclear power facility which is a self-
                constructed facility, in the taxable year for which 
                such expenditures are properly chargeable to capital 
                account with respect to such facility.
                    ``(B) Acquired facility.--In the case of a 
                qualified nuclear facility which is not self-
                constructed property, in the taxable year in which such 
                expenditures are paid.
            ``(2) Special rules for applying paragraph (1).--For 
        purposes of paragraph (1)--
                    ``(A) Component parts, etc.--Property which is not 
                self-constructed property and which is to be a 
                component part of, or is otherwise to be included in, 
                any facility to which this subsection applies shall be 
                taken into account in accordance with paragraph (1)(B).
                    ``(B) Certain borrowing disregarded.--Any amount 
                borrowed directly or indirectly by the taxpayer on a 
                nonrecourse basis from the person constructing the 
                facility for the taxpayer shall not be treated as an 
                amount expended for such facility.
                    ``(C) Limitation for facilities or components which 
                are not self-constructed.--
                            ``(i) In general.--In the case of a 
                        facility or a component of a facility which is 
                        not self-constructed, the amount taken into 
                        account under paragraph (1)(B) for any taxable 
                        year shall not exceed the amount which 
                        represents the portion of the overall cost to 
                        the taxpayer of the facility or component of a 
                        facility which is properly attributable to the 
                        portion of the facility or component which is 
                        completed during such taxable year.
                            ``(ii) Carry-over of certain amounts.--In 
                        the case of a facility or component of a 
                        facility which is not self-constructed, if for 
                        the taxable year--
                                    ``(I) the amount which (but for 
                                clause (i)) would have been taken into 
                                account under paragraph (1)(B) exceeds 
                                the limitation of clause (i), then the 
                                amount of such excess shall be taken 
                                into account under paragraph (1)(B) for 
                                the succeeding taxable year, or
                                    ``(II) the limitation of clause (i) 
                                exceeds the amount taken into account 
                                under paragraph (1)(B), then the amount 
                                of such excess shall increase the 
                                limitation of clause (i) for the 
                                succeeding taxable year.
                    ``(D) Determination of percentage of completion.--
                The determination under subparagraph (C)(i) of the 
                portion of the overall cost to the taxpayer of the 
                construction which is properly attributable to 
                construction completed during any taxable year shall be 
                made on the basis of engineering or architectural 
                estimates or on the basis of cost accounting records. 
                Unless the taxpayer establishes otherwise by clear and 
                convincing evidence, the construction shall be deemed 
                to be completed not more rapidly than ratably over the 
                normal construction period.
                    ``(E) No progress expenditures for certain prior 
                periods.--No qualified nuclear facility expenditures 
                shall be taken into account under this subsection for 
                any period before the first day of the first taxable 
                year to which an election under this subsection 
                applies.
                    ``(F) No progress expenditures for property for 
                year it is placed in service, etc.--In the case of any 
                qualified nuclear facility, no qualified nuclear 
                facility expenditures shall be taken into account under 
                this subsection for the earlier of--
                            ``(i) the taxable year in which the 
                        facility is placed in service, or
                            ``(ii) the first taxable year for which 
                        recapture is required under section 50(a)(2) 
                        with respect to such facility, or for any 
                        taxable year thereafter.
            ``(3) Self-constructed.--For purposes of this subsection--
                    ``(A) the term `self-constructed facility' means 
                any facility if it is reasonable to believe that more 
                than half of the qualified nuclear facility 
                expenditures for such facility will be made directly by 
                the taxpayer, and
                    ``(B) a component of a facility shall be treated as 
                not self-constructed if the cost of the component is at 
                least 5 percent of the expected cost of the facility 
                and the component is acquired by the taxpayer.
            ``(4) Election.--An election shall be made under this 
        section for a qualified nuclear power facility by claiming the 
        nuclear power facility construction credit for expenditures 
        described in paragraph (1) on a tax return filed by the due 
        date for such return (taking into account extensions). Such an 
        election shall apply to the taxable year for which made and all 
        subsequent taxable years. Such an election, once made, may be 
        revoked only with the consent of the Secretary.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Qualified nuclear power facility.--The term 
        `qualified nuclear power facility' means a nuclear power 
        facility, as defined in section 168(e)(8), the construction of 
        which was approved by the Nuclear Regulatory Commission on or 
        before December 31, 2014, and begun on or before December 31, 
        2020.
            ``(2) Qualified nuclear power facility expenditures.--
                    ``(A) In general.--The term `qualified nuclear 
                power facility expenditures' means any amount properly 
                chargeable to capital account--
                            ``(i) with respect to a qualified nuclear 
                        power facility,
                            ``(ii) for which depreciation is allowable 
                        under section 168, and
                            ``(iii) which are incurred before the 
                        qualified nuclear power facility is placed in 
                        service or in connection with the placement of 
                        such facility in service.
                    ``(B) Limitation per facility.--The amount of 
                qualified nuclear power facility expenditures which may 
                be taken into account under subsection (a) with respect 
                to any qualified nuclear power facility shall not 
                exceed $10,000,000.
                    ``(C) Pre-effective date expenditures.--Qualified 
                nuclear power facility expenditures do not include any 
                expenditures incurred by the taxpayer before January 1, 
                2008, unless such expenditures constitute less than 20 
                percent of the total qualified nuclear power facility 
                expenditures (determined without regard to this 
                subparagraph) for the qualified nuclear power facility.
            ``(3) Delays and suspension of construction.--
                    ``(A) In general.--For purposes of applying this 
                section and section 50, a nuclear power facility that 
                is under construction shall cease to be treated as a 
                facility that will be a qualified nuclear power 
                facility as of the earlier of--
                            ``(i) the date on which the taxpayer 
                        decides to terminate construction of the 
                        facility, or
                            ``(ii) the last day of any 24 month period 
                        in which the taxpayer has failed to incur 
                        qualified nuclear power facility expenditures 
                        totaling at least 20 percent of the expected 
                        total cost of the nuclear power facility.
                    ``(B) Authority to waive.--The Secretary may waive 
                the application of clause (ii) of subparagraph (A) if 
                the Secretary determines that the taxpayer intended to 
                continue the construction of the qualified nuclear 
                power facility and the expenditures were not incurred 
                for reasons outside the control of the taxpayer.
                    ``(C) Resumption of construction.--If a nuclear 
                power facility that is under construction ceases to be 
                a qualified nuclear power facility by reason of 
                paragraph (2) and work is subsequently resumed on the 
                construction of such facility--
                            ``(i) the date work is subsequently resumed 
                        shall be treated as the date that construction 
                        began for purposes of paragraph (1), and
                            ``(ii) if the facility is a qualified 
                        nuclear power facility, the qualified nuclear 
                        power facility expenditures shall be determined 
                        without regard to any delay or temporary 
                        termination of construction of the facility.''.
    (c) Provisions Relating to Credit Recapture.--
            (1) Progress expenditure recapture rules.--
                    (A) Basic rules.--Subparagraph (A) of section 
                50(a)(2) is amended to read as follows:
                    ``(A) In general.--If during any taxable year any 
                building to which section 47(d) applied or any facility 
                to which section 48A(c) applied ceases (by reason of 
                sale or other disposition, cancellation or abandonment 
                of contract, or otherwise) to be, with respect to the 
                taxpayer, property which, when placed in service, will 
                be a qualified rehabilitated building or a qualified 
                nuclear power facility, then the tax under this chapter 
                for such taxable year shall be increased by an amount 
                equal to the aggregate decrease in the credits allowed 
                under section 38 for all prior taxable years which 
                would have resulted solely from reducing to zero the 
                credit determined under this subpart with respect to 
                such building or facility.''.
                    (B) Amendment to excess credit recapture rule.--
                Subparagraph (B) of section 50(a)(2) is amended--
                            (i) by inserting ``or paragraph (2) of 
                        section 48A(b)'' after ``paragraph (2) of 
                        section 47(b)'',
                            (ii) by inserting ``or section 48A(b)(1)'' 
                        after ``section 47(b)(1)'', and
                            (iii) by inserting ``or facility'' after 
                        ``building''.
                    (C) Amendment of sale and leaseback rule.--
                Subparagraph (C) of section 50(a)(2) is amended--
                            (i) by inserting ``or section 48A(c)'' 
                        after ``section 47(d)'', and
                            (ii) by inserting ``or qualified nuclear 
                        power facility expenditures'' after ``qualified 
                        rehabilitation expenditures''.
                    (D) Conforming amendment.--Subparagraph (D) of 
                section 50(a)(2) is amended by inserting ``or section 
                48A(c)'' after ``section 47(d)''.
    (d) No Basis Adjustment.--Section 50(c) is amended by inserting at 
the end the following new paragraph:
            ``(6) Nuclear power facility construction credit.--
        Paragraphs (1) and (2) shall not apply to the nuclear power 
        facility construction credit.''.
    (e) Technical Amendments.--The table of sections for subpart E of 
part IV of subchapter A of chapter 1 is amended by inserting after the 
item for section 48 the following new item:

        ``Sec. 48A. Nuclear power facility construction credit.''.
    (f) Effective Date.--The amendments made by this section of this 
Act shall apply to expenditures incurred in taxable years beginning 
after December 31, 2007.

SEC. 213. TAX-EXEMPT FINANCING OF NUCLEAR POWER FACILITIES.

    (a) In General.--Subsection (a) of section 142 is amended--
            (1) by striking ``or'' at the end of paragraph (13),
            (2) by striking the period at the end of paragraph (14) and 
        inserting ``, or'', and
            (3) by inserting at the end the following new paragraph:
            ``(15) nuclear power facility.''.
    (b) Definition.--Section 142 is amended by inserting at the end the 
following new subsection:
    ``(m) Nuclear Power Facility.--For purposes of subsection (a)(15), 
the term `nuclear power facility' means a nuclear power facility 
(within the meaning of section 168(e)(8)) and any nuclear fuel 
assemblies (within the meaning of section 168(e)(8)(B)) initially 
included in any such facility.''.
    (c) Exemption From Volume Cap.--Paragraph (3) of section 146(g) 
(exempting certain exempt facility bonds from the state volume caps) is 
amended--
            (1) by striking ``or (14)'' and inserting ``(14), or 
        (15)'', and
            (2) by striking ``and qualified green building and 
        sustainable design projects'' and inserting ``qualified green 
        building and sustainable design projects and nuclear power 
        facilities''.
    (d) Exemption From Alternative Depreciation.--Paragraph (5) of 
section 168(g) is amended by inserting at the end the following new 
subparagraph:
                    ``(D) Nuclear power facility.--The term `tax-exempt 
                bond financed property' does not include any nuclear 
                power facility that is financed with bonds described in 
                section 142(a)(15).''.
    (e) Effective Date.--The amendments made by this section of this 
Act shall apply with respect to bonds issued on or after January 1, 
2006, and before January 1, 2011.

                      TITLE III--RESEARCH CREDITS

SEC. 301. SENSE OF THE SENATE REGARDING PERMANENT EXTENSION OF RESEARCH 
              CREDIT.

    It is the sense of the Senate that the income tax credit for 
increasing research activities under section 41 of the Internal Revenue 
Code of 1986 should be permanently extended, the rates of the 
alternative incremental credit under such section should be increased, 
and an alternative simplified credit for qualified research expenses 
should be instituted.

                            TITLE IV--SUNSET

SEC. 401. SUNSET.

    (a) In General.--All provisions of, and amendments made by, this 
Act shall not apply to taxable years beginning after December 31, 2010.
    (b) Application of Certain Laws.--The Internal Revenue Code of 1986 
shall be applied and administered to taxable years beginning after 
December 31, 2010, as if the provisions and amendments described in 
subsection (a) had never been enacted.
                                 <all>