110 HR 2776 RH: Renewable Energy and Energy Conservation Tax Act of 2007
U.S. House of Representatives
2007-06-27
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Short title; amendment of 1986 Code; table of contents
(a)This Act may be cited as the Renewable Energy and Energy Conservation Tax Act of 2007
.
(b)Except as otherwise expressly provided, whenever in this Act 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.
(c)The table of contents of this Act is as follows:
Sec. 1. Short title; amendment of 1986 Code; table of contents.
Title I—Production incentives
Sec. 101. Extension and modification of renewable energy credit.
Sec. 102. Production credit for electricity produced from marine renewables.
Sec. 103. Extension and modification of energy credit.
Sec. 104. New clean renewable energy bonds.
Sec. 105. Extension and modification of special rule to implement FERC and State electric restructuring policy.
Sec. 106. Repeal of dollar limitation and allowance against alternative minimum tax for residential solar and fuel cell property credit.
Title II—Conservation
Subtitle A—Transportation
Sec. 201. Credit for plug-in hybrid vehicles.
Sec. 202. Extension and modification of alternative fuel vehicle refueling property credit.
Sec. 203. Extension and modification of credits for biodiesel and renewable diesel.
Sec. 204. Credit for production of cellulosic alcohol.
Sec. 205. Extension of transportation fringe benefit to bicycle commuters.
Sec. 206. Modification of limitation on automobile depreciation.
Sec. 207. Restructuring of New York Liberty Zone tax credits.
Subtitle B—Other conservation provisions
Sec. 211. Qualified energy conservation bonds.
Sec. 212. Qualified residential energy efficiency assistance bonds.
Sec. 213. Extension of energy efficient commercial buildings deduction.
Sec. 214. Modifications of energy efficient appliance credit for appliances produced after 2007.
Sec. 215. Five-year applicable recovery period for depreciation of qualified energy management devices.
Title III—Revenue provisions
Subtitle A—Denial of oil and gas tax benefits
Sec. 301. Denial of deduction for income attributable to domestic production of oil, natural gas, or primary products thereof.
Sec. 302. 7-year amortization of geological and geophysical expenditures for certain major integrated oil companies.
Sec. 303. Clarification of determination of foreign oil and gas extraction income.
Subtitle B—Clarification of eligibility for certain fuel credits
Sec. 311. Clarification of eligibility for renewable diesel credit.
Sec. 312. Clarification that credits for fuel are designed to provide an incentive for United States production.
Title IV—Other provisions
Subtitle A—Studies
Sec. 401. Carbon audit of the tax code.
Sec. 402. Comprehensive study of biofuels.
Subtitle B—Application of certain labor standards on projects financed under tax credit bonds
Sec. 411. Application of certain labor standards on projects financed under tax credit bonds.
<enum>I</enum><header>Production incentives</header>
<section id="HA938087E87C94E5F9696C3DBA6CFC2B5"><enum>101.</enum><header>Extension and modification of renewable energy credit</header>
<subsection id="HB3A3D75C7DBF4F87A740A800662229C8"><enum>(a)</enum><header>Extension of credit</header><text display-inline="yes-display-inline">Each of the following provisions of section 45(d) (relating to qualified facilities) is amended by striking <quote>January 1, 2009</quote> and inserting <quote>January 1, 2013</quote>:</text>
<paragraph id="HD8B5638C8EEA42B8B4D4C2EADDD2F0BB"><enum>(1)</enum><text>Paragraph (1).</text></paragraph>
<paragraph id="H474C58B505E0445F97E17ECD127C6EDC"><enum>(2)</enum><text>Clauses (i) and (ii) of paragraph (2)(A).</text></paragraph>
<paragraph id="H078400861F1A4C04BAFFB9D39889F4B4"><enum>(3)</enum><text>Clauses (i)(I) and (ii) of paragraph (3)(A).</text></paragraph>
<paragraph id="HD048853483384465B4545F1C77ADB0F5"><enum>(4)</enum><text>Paragraph (4).</text></paragraph>
<paragraph id="H320A855BE61A49C8B59DBD6D004B00FB"><enum>(5)</enum><text>Paragraph (5).</text></paragraph>
<paragraph id="HFB119BD127604671B8D7E0E355BE5D99"><enum>(6)</enum><text>Paragraph (6).</text></paragraph>
<paragraph id="HA2D2D8B872C9436B844D1F903FC1D2A3"><enum>(7)</enum><text>Paragraph (7).</text></paragraph>
<paragraph id="HB1DB4892349248E7A7ADA5C1308C86F3"><enum>(8)</enum><text>Subparagraphs (A) and (B) of paragraph (9).</text></paragraph></subsection>
<subsection id="H9FEC519CDFBC4B3BBDA55B2E208247F1" display-inline="no-display-inline"><enum>(b)</enum><header>Modification of credit phaseout</header>
<paragraph id="H75ED6B0D098D4966B1216627F3294200"><enum>(1)</enum><header>Repeal of phaseout</header><text>Subsection (b) of <external-xref legal-doc="usc" parsable-cite="usc/26/45">section 45</external-xref> is amended—</text>
<subparagraph id="H7ACA2AF88F674F4987EF9390AB5324B3"><enum>(A)</enum><text>by striking paragraph (1), and</text></subparagraph>
<subparagraph id="H641668C2FDDF4D7A87A0A5FA96D0C4"><enum>(B)</enum><text>by striking <quote>the 8 cent amount in paragraph (1),</quote> in paragraph (2) thereof.</text></subparagraph></paragraph>
<paragraph id="H2568C2D5E1DB479DA9022CD09FEAE680"><enum>(2)</enum><header>Limitation based on investment in facility</header><text>Subsection (b) of <external-xref legal-doc="usc" parsable-cite="usc/26/45">section 45</external-xref> is amended by inserting before paragraph (2) the following new paragraph:</text>
<quoted-block style="OLC" id="HA8D45CFE818749FAAC46EE065C9526BC" display-inline="no-display-inline">
<paragraph id="H82AD5461148D49FCAA4BD802FB852672"><enum>(1)</enum><header>Limitation based on investment in facility</header>
<subparagraph id="H5F84DDCB7A5C4964ADBDB6019EB22168"><enum>(A)</enum><header>In general</header><text>In the case of any qualified facility originally placed in service after December 31, 2008, the amount of the credit determined under subsection (a) for any taxable year with respect to electricity produced at such facility shall not exceed the product of—</text>
<clause id="HF917499336DB49C887ECD2415FA376C2"><enum>(i)</enum><text>the applicable percentage with respect to such facility, multiplied by</text></clause>
<clause id="HBA452046641C4F7DB9B304842BBA93E2"><enum>(ii)</enum><text>the eligible basis of such facility.</text></clause></subparagraph>
<subparagraph id="HD668DBC972F44A06B1B6E1B7A08FA556" commented="no"><enum>(B)</enum><header>Carryforward of unused limitation and excess credit</header>
<clause id="HCAF72346CEFB4A7CA97B08B2F7B0B900" commented="no"><enum>(i)</enum><header>Unused limitation</header><text>If the limitation imposed under subparagraph (A) with respect to any facility for any taxable year exceeds the credit determined under subsection (a) (determined without regard to this paragraph) with respect to such facility for such taxable year, the limitation imposed under subparagraph (A) with respect to such facility for the succeeding taxable year shall be increased by the amount of such excess.</text></clause>
<clause id="H3FF4AAFE6BD34C0386E20072F32EA6B7" commented="no"><enum>(ii)</enum><header>Excess credit</header><text>If the credit determined under subsection (a) (determined without regard to this paragraph) with respect to any facility for any taxable year exceeds the limitation imposed under subparagraph (A) with respect to such facility for such taxable year, the credit determined under subsection (a) with respect to such facility for the succeeding taxable year (determined before the application of subparagraph (A) for such succeeding taxable year) shall be increased by the amount of such excess. With respect to any facility, no amount may carried forward under this clause to any taxable year beginning after the 10-year period described in subsection (a)(2)(A)(ii) with respect to such facility.</text></clause></subparagraph>
<subparagraph id="H175950EB419C469FAE6C79BE1097EFED"><enum>(C)</enum><header>Applicable percentage</header><text>For purposes of this paragraph—</text>
<clause id="H881554C857EB4911BEFF9EA6169C91CD"><enum>(i)</enum><header>In general</header><text>The term <term>applicable percentage</term> means, with respect to any facility, the appropriate percentage prescribed by the Secretary for the month in which such facility is originally placed in service.</text></clause>
<clause id="HE06BED2673FE47A19D1DA3A2A0A9DE2"><enum>(ii)</enum><header>Method of prescribing percentages</header><text>The percentages prescribed by the Secretary for any month under clause (i) shall be percentages which yield over a 10-year period amounts of limitation under subparagraph (A) which have a present value equal to 35 percent of the eligible basis of the facility.</text></clause>
<clause id="H1110D37DAAAD420EA147C06BFFE7B095"><enum>(iii)</enum><header>Method of discounting</header><text>The present value under clause (ii) shall be determined—</text>
<subclause id="H1E607D54D1504AFF9B3C32467B6F80C2"><enum>(I)</enum><text>as of the last day of the 1st year of the 10-year period referred to in clause (ii),</text></subclause>
<subclause id="H970FB8ED4320408E810395BA233EC5F"><enum>(II)</enum><text>by using a discount rate equal to the average annual interest rate of tax-exempt obligations having a term of 10 years or more which are issued during the month preceding the month for which the percentage is being prescribed, and</text></subclause>
<subclause id="H06AD3903E0DB47E0B0BF9663C07153CF"><enum>(III)</enum><text>by taking into account the limitation under subparagraph (A) for any year on the last day of such year.</text></subclause></clause></subparagraph>
<subparagraph id="H85F4DEC139614969A93082C751F6955F"><enum>(D)</enum><header>Eligible basis</header><text>For purposes of this paragraph, the term <term>eligible basis</term> means, with respect to any facility, the basis of such facility determined as of the time that such facility is originally placed in service.</text></subparagraph>
<subparagraph id="HD35365125F13432C8C35F42253EA93D4"><enum>(E)</enum><header>Special rule for first and last year of credit period</header><text>In the case of any taxable year any portion of which is not within the 10-year period described in subsection (a)(2)(A)(ii) with respect to any facility, the amount of the limitation under subparagraph (A) with respect to such facility shall be reduced by an amount which bears the same ratio to the amount of such limitation (determined without regard to this subparagraph) as such portion of the taxable year which is not within such period bears to the entire taxable year.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HAF799571D2FF428A8007E66ED0B15654"><enum>(c)</enum><header>Effective date</header>
<paragraph id="H194EA3C46DA44D4AB0091E5DF92AFBB"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (2), the amendments made by this section shall apply to property originally placed in service after December 31, 2008.</text></paragraph>
<paragraph id="HE44050D75D9B4846B63F8D17A3742BA3"><enum>(2)</enum><header>Repeal of credit phaseout</header><text>The amendments made by subsection (b)(1) shall apply to taxable years ending after December 31, 2008.</text></paragraph></subsection></section>
<section display-inline="no-display-inline" id="HBD45BDA2EFF94F26B7B9004203977156" section-type="subsequent-section"><enum>102.</enum><header>Production credit for electricity produced from marine renewables</header>
<subsection id="H16A90A25CEFA4DBA91F64821C6C10076"><enum>(a)</enum><header>In general</header><text>Paragraph (1) of section 45(c) (relating to resources) is amended by striking <quote>and</quote> at the end of subparagraph (G), by striking the period at the end of subparagraph (H) and inserting <quote>, and</quote>, and by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="HCF71B448B8AA477AB4A579E5756FFC81" style="OLC">
<subparagraph id="H6F908E463BC340EFBAED3C91F11086E"><enum>(I)</enum><text display-inline="yes-display-inline">marine and hydrokinetic renewable energy.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection commented="no" id="H892C3416C7864B248247007D6D5F543E"><enum>(b)</enum><header>Marine renewables</header><text>Subsection (c) of <external-xref legal-doc="usc" parsable-cite="usc/26/45">section 45</external-xref> is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HD446CF27EF5F432D8DF24861884BA89C" style="OLC">
<paragraph commented="no" id="HF135BE6191FF46BCBCCA34042230E400"><enum>(10)</enum><header>Marine and hydrokinetic renewable energy</header>
<subparagraph id="HCA38F2AFDC874E87966E8200522B6CD9"><enum>(A)</enum><header>In general</header><text>The term <term>marine and hydrokinetic renewable energy</term> means energy derived from—</text>
<clause display-inline="no-display-inline" id="H8B8BE69E4DFD4D549677C2777CD26CE0"><enum>(i)</enum><text>waves, tides, and currents in oceans, estuaries, and tidal areas,</text></clause>
<clause id="HFFE3A03906DD467D8C648B89D0346607"><enum>(ii)</enum><text>free flowing water in rivers, lakes, and streams,</text></clause>
<clause id="HC8BCFB17299F48A1887FC674E5BDE6EA"><enum>(iii)</enum><text>free flowing water in an irrigation system, canal, or other man-made channel, including projects that utilize nonmechanical structures to accelerate the flow of water for electric power production purposes, or</text></clause>
<clause id="HD98CE7DC1EB844B382F124E249ECC37"><enum>(iv)</enum><text>differentials in ocean temperature (ocean thermal energy conversion).</text></clause></subparagraph>
<subparagraph id="H4AA469D20E5146978B1822397D6D21DE"><enum>(B)</enum><header>Exceptions</header><text display-inline="yes-display-inline">Such term shall not include any energy which is derived from any source which utilizes a dam, diversionary structure (except as provided in subparagraph (A)(iii)), or impoundment for electric power production purposes.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HC1BC9633400C44A4AC8571D8A0849E22"><enum>(c)</enum><header>Definition of facility</header><text>Subsection (d) of <external-xref legal-doc="usc" parsable-cite="usc/26/45">section 45</external-xref> is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HFCF569CF84E5494590134DEC252B1200" style="OLC">
<paragraph id="HA038ACFDBC304AC5B200F150FC8107E8"><enum>(11)</enum><header>Marine and hydrokinetic renewable energy facilities</header><text display-inline="yes-display-inline">In the case of a facility producing electricity from marine and hydrokinetic renewable energy, the term <term>qualified facility</term> means any facility owned by the taxpayer—</text>
<subparagraph id="HAEBD56ACAB584D3785F6B200C4782093"><enum>(A)</enum><text display-inline="yes-display-inline">which has a nameplate capacity rating of at least 150 kilowatts, and</text></subparagraph>
<subparagraph id="H8D30221DFA9F4D2C9D7109A9FE008800"><enum>(B)</enum><text>which is originally placed in service on or after the date of the enactment of this paragraph and before January 1, 2013.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H55A3E5B06FE243BABADF3D483560AE00"><enum>(d)</enum><header>Credit rate</header><text>Subparagraph (A) of <external-xref legal-doc="usc" parsable-cite="usc/26/45">section 45(b)(4)</external-xref> is amended by striking <quote>or (9)</quote> and inserting <quote>(9), or (11)</quote>. </text></subsection>
<subsection id="H3A70A499E2F147D48E85CFF5EADFFC5" commented="no"><enum>(e)</enum><header>Coordination with small irrigation power</header><text>Paragraph (5) of section 45(d), as amended by this Act, is amended by striking <quote>January 1, 2013</quote> and inserting <quote>the date of the enactment of paragraph (11)</quote>.</text></subsection>
<subsection id="H30ACD118E88F479AA3B41E3BBE004FBD"><enum>(f)</enum><header>Effective date</header><text>The amendments made by this section shall apply to electricity produced and sold after the date of the enactment of this Act, in taxable years ending after such date.</text></subsection></section>
<section id="HEEB25F88DBEA49DAB9EAB9AF00B25700"><enum>103.</enum><header>Extension and modification of energy credit</header>
<subsection id="HDBC273B8CB1046DEA303B266A625C792"><enum>(a)</enum><header>Extension of credit</header>
<paragraph id="HEC2E838381EC4DAFA63EFD0018172FBD"><enum>(1)</enum><header>Solar energy property</header><text>Paragraphs (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) (relating to energy credit) are each amended by striking <quote>January 1, 2009</quote> and inserting <quote>January 1, 2017</quote>.</text></paragraph>
<paragraph id="H2532970DD07146169187D868D828837C"><enum>(2)</enum><header>Fuel cell property</header><text>Subparagraph (E) of section 48(c)(1) (relating to qualified fuel cell property) is amended by striking <quote>December 31, 2008</quote> and inserting <quote>December 31, 2016</quote>.</text></paragraph></subsection>
<subsection id="HD20E09DA2DFB445FBC4D478716C600CF"><enum>(b)</enum><header>Allowance of energy credit against alternative minimum tax</header><text>Subparagraph (B) of section 38(c)(4) (relating to specified credits) is amended by striking <quote>and</quote> at the end of clause (iii), by striking the period at the end of clause (iv) and inserting <quote>, and</quote>, and by adding at the end the following new clause: </text>
<quoted-block style="OLC" id="H2BA38D0682F04A5E92AD9257C367E266" display-inline="no-display-inline">
<clause id="H36A746B147E047E4A307AB57FADD2280"><enum>(v)</enum><text>the credit determined under section 46 to the extent that such credit is attributable to the energy credit determined under section 48.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H958DC3379F4C4741B7C9B33E567C0072"><enum>(c)</enum><header>Increase of credit limitation for fuel cell property</header><text>Subparagraph (B) of <external-xref legal-doc="usc" parsable-cite="usc/26/48">section 48(c)(1)</external-xref> is amended by striking <quote>$500</quote> and inserting <quote>$1,500</quote>.</text></subsection>
<subsection id="HAA228657F96B40108E9BE1DB77E24D37"><enum>(d)</enum><header>Public electric utility property taken into account</header>
<paragraph id="H4BC0B134533B4AEE976E72160321FA18"><enum>(1)</enum><header>In general</header><text>Paragraph (3) of <external-xref legal-doc="usc" parsable-cite="usc/26/48">section 48(a)</external-xref> is amended by striking the second sentence thereof.</text></paragraph>
<paragraph id="H7D2C495B4CE74E55BCBEEF9908F3D21D"><enum>(2)</enum><header>Conforming amendments</header>
<subparagraph id="H1227F2745F0147999FD48539FD18C0C1"><enum>(A)</enum><text>Paragraph (1) of <external-xref legal-doc="usc" parsable-cite="usc/26/48">section 48(c)</external-xref> is amended by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D).</text></subparagraph>
<subparagraph id="HB5BD1991CC5649ABB8005658557F4666"><enum>(B)</enum><text display-inline="yes-display-inline">Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/48">section 48(c)</external-xref> is amended by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D).</text></subparagraph></paragraph></subsection>
<subsection id="H6041C07548A145A38B2C00D323EBCA18"><enum>(e)</enum><header>Clerical amendments</header><text>Paragraphs (1)(B) and (2)(B) of section 48(c) are each amended by striking <quote>paragraph (1)</quote> and inserting <quote>subsection (a)</quote>. </text></subsection>
<subsection id="H193DB01D400747D5892588FCE8216729"><enum>(f)</enum><header>Effective date</header>
<paragraph id="H33D2BDDD3F724AF4884E041CADA69DD1"><enum>(1)</enum><header>In general</header><text>Except as otherwise provided in this subsection, the amendments made by this section shall take effect on the date of the enactment of this Act.</text></paragraph>
<paragraph id="HE89D944B6A6A47D4AE5400BBA71B777F"><enum>(2)</enum><header>Allowance against alternative minimum tax</header><text>The amendments made by subsection (b) shall apply to credits determined under <external-xref legal-doc="usc" parsable-cite="usc/26/46">section 46</external-xref> of the Internal Revenue Code of 1986 in taxable years beginning after the date of the enactment of this Act and to carrybacks of such credits.</text></paragraph>
<paragraph id="H84E1CEE610A34E44869DC20862634425"><enum>(3)</enum><header>Increase in limitation for fuel cell property</header><text>The amendment made by subsection (c) shall apply to periods after the date of the enactment of this Act, in taxable years ending after such date, under rules similar to the rules of <external-xref legal-doc="usc" parsable-cite="usc/26/48">section 48(m)</external-xref> of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).</text></paragraph>
<paragraph id="HEC390CD8F32D4C54AC9B99793DD4B1E9"><enum>(4)</enum><header> Public electric utility property</header><text display-inline="yes-display-inline">The amendments made by subsection (d) shall apply to periods after June 20, 2007, in taxable years ending after such date, under rules similar to the rules of <external-xref legal-doc="usc" parsable-cite="usc/26/48">section 48(m)</external-xref> of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).</text></paragraph></subsection></section>
<section id="H34B83C6C1A394D29B5E8DFBB5045F5F6" display-inline="no-display-inline"><enum>104.</enum><header>New clean renewable energy bonds</header>
<subsection id="HE799EE3374A84799B3E04751E3D7BC51"><enum>(a)</enum><header>In general</header><text>Part IV of subchapter A of chapter 1 (relating to credits against tax) is amended by adding at the end the following new subpart:</text>
<quoted-block style="OLC" id="H1DBA20F4390B4B0FABE72BC6997F959" display-inline="no-display-inline">
<subpart id="H06C4FFD937074C5E8F74A800BDFC41AE"><enum>I</enum><header>Qualified tax credit bonds</header>
<toc container-level="subpart-container" quoted-block="no-quoted-block" lowest-level="section" idref="H06C4FFD937074C5E8F74A800BDFC41AE" regeneration="yes-regeneration" lowest-bolded-level="division-lowest-bolded">
<toc-entry idref="H7E5E8470733845C091AA97B72365E1E8" level="section">Sec. 54A. Credit to holders of qualified tax credit bonds.</toc-entry>
<toc-entry idref="HA01B814F0E0C43599D1DB06501942D20" level="section">Sec. 54B. New clean renewable energy bonds.</toc-entry></toc>
<section id="H7E5E8470733845C091AA97B72365E1E8" display-inline="no-display-inline" section-type="subsequent-section"><enum>54A.</enum><header>Credit to holders of qualified tax credit bonds</header>
<subsection id="H7B1E763EEA8841C38ECE9266F9C50071"><enum>(a)</enum><header>Allowance of credit</header><text>If a taxpayer holds a qualified tax credit bond on one or more credit allowance dates of the bond during any taxable year, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credits determined under subsection (b) with respect to such dates.</text></subsection>
<subsection id="HEC4A43A5608A4372B2D65D63F5C784D1"><enum>(b)</enum><header>Amount of credit</header>
<paragraph id="H016745DC3DBA438FABAD99C347AB248D"><enum>(1)</enum><header>In general</header><text>The amount of the credit determined under this subsection with respect to any credit allowance date for a qualified tax credit bond is 25 percent of the annual credit determined with respect to such bond.</text></paragraph>
<paragraph id="H6871097847354CB1B54B2424838FB231"><enum>(2)</enum><header>Annual credit</header><text>The annual credit determined with respect to any qualified tax credit bond is the product of—</text>
<subparagraph id="H197BE0253D664A8AAD1EBC166E611358"><enum>(A)</enum><text>the applicable credit rate, multiplied by</text></subparagraph>
<subparagraph id="H933E00EABF60407493B8C67401E07787"><enum>(B)</enum><text>the outstanding face amount of the bond.</text></subparagraph></paragraph>
<paragraph id="H95E98A993A77488482C6ACB971B4460"><enum>(3)</enum><header>Applicable credit rate</header><text display-inline="yes-display-inline">For purposes of paragraph (2), the applicable credit rate is the rate which the Secretary estimates will permit the issuance of qualified tax credit bonds with a specified maturity or redemption date without discount and without interest cost to the qualified issuer. The applicable credit rate with respect to any qualified tax credit bond shall be determined as of the first day on which there is a binding, written contract for the sale or exchange of the bond. </text></paragraph>
<paragraph id="H7736C2370A2C473A92BF81161E8148AE"><enum>(4)</enum><header>Special rule for issuance and redemption</header><text>In the case of a bond which is issued during the 3-month period ending on a credit allowance date, the amount of the credit determined under this subsection with respect to such credit allowance date shall be a ratable portion of the credit otherwise determined based on the portion of the 3-month period during which the bond is outstanding. A similar rule shall apply when the bond is redeemed or matures.</text></paragraph></subsection>
<subsection id="H8D1B7D2392FC43EEBF1D072FE35E070"><enum>(c)</enum><header>Limitation based on amount of tax</header>
<paragraph id="HE5A531565D2C447ABBA64BFD932ED24"><enum>(1)</enum><header>In general</header><text>The credit allowed under subsection (a) for any taxable year shall not exceed the excess of—</text>
<subparagraph id="H1F650E7B6EC7427A00168D5100A8DDB"><enum>(A)</enum><text>the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over</text></subparagraph>
<subparagraph id="HF36FADDBA0FF40088FED00BD351B95F5"><enum>(B)</enum><text>the sum of the credits allowable under this part (other than subpart C and this subpart).</text></subparagraph></paragraph>
<paragraph id="HF10640182B4D4C9C866B6285F8F4FDF"><enum>(2)</enum><header>Carryover of unused credit</header><text display-inline="yes-display-inline">If the credit allowable under subsection (a) exceeds the limitation imposed by paragraph (1) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such taxable year (determined before the application of paragraph (1) for such succeeding taxable year).</text></paragraph></subsection>
<subsection id="H6CEA7DF39C4E4F30B2A3277F9069E715" display-inline="no-display-inline"><enum>(d)</enum><header>Qualified tax credit bond</header><text>For purposes of this section—</text>
<paragraph id="H5772DDB74678492382CEA53423F45211" commented="no"><enum>(1)</enum><header>Qualified tax credit bond</header><text>The term <term>qualified tax credit bond</term> means a new clean renewable energy bond which is part of an issue that meets the requirements of paragraphs (2), (3), (4), (5), and (6).</text></paragraph>
<paragraph id="H8DAD29A6B5AB4841B8A251E0399D82DE" display-inline="no-display-inline"><enum>(2)</enum><header>Special rules relating to expenditures</header>
<subparagraph id="H9EFFA61979CF4F1CAB70CE4787AE4569"><enum>(A)</enum><header>In general</header><text>An issue shall be treated as meeting the requirements of this paragraph if, as of the date of issuance, the issuer reasonably expects—</text>
<clause id="H3E747E6991A2401A9FD286D74B688551"><enum>(i)</enum><text>100 percent or more of the available project proceeds to be spent for 1 or more qualified purposes within the 3-year period beginning on such date of issuance, and</text></clause>
<clause id="H87C26EF46D974B5AB025B2A4E8A9AA3D"><enum>(ii)</enum><text>a binding commitment with a third party to spend at least 10 percent of such available project proceeds will be incurred within the 6-month period beginning on such date of issuance. </text></clause></subparagraph>
<subparagraph id="H73AB54E78BFD43E186B161556B565659"><enum>(B)</enum><header>Failure to spend required amount of bond proceeds within 3 years</header>
<clause id="H7A1D8CCECF6541818B3F01D00586A108"><enum>(i)</enum><header>In general</header><text>To the extent that less than 100 percent of the available project proceeds of the issue are expended by the close of the expenditure period for 1 or more qualified purposes, the issuer shall redeem all of the nonqualified bonds within 90 days after the end of such period. For purposes of this paragraph, the amount of the nonqualified bonds required to be redeemed shall be determined in the same manner as under section 142.</text></clause>
<clause id="HE205BDC1E2964732B48EC48394758138"><enum>(ii)</enum><header>Expenditure period</header><text>For purposes of this subpart, the term <term>expenditure period</term> means, with respect to any issue, the 3-year period beginning on the date of issuance. Such term shall include any extension of such period under clause (iii).</text></clause>
<clause id="H15F67B7FE0834D948F645E8119D8EEB9"><enum>(iii)</enum><header>Extension of period</header><text>Upon submission of a request prior to the expiration of the expenditure period (determined without regard to any extension under this clause), the Secretary may extend such period if the issuer establishes that the failure to expend the proceeds within the original expenditure period is due to reasonable cause and the expenditures for qualified purposes will continue to proceed with due diligence. </text></clause></subparagraph>
<subparagraph id="H5260EB4802F24680A800C5C08B7DD28" commented="no"><enum>(C)</enum><header>Qualified purpose</header><text>For purposes of this paragraph, the term <term>qualified purpose</term> means a purpose specified in section 54B(a)(1).</text></subparagraph>
<subparagraph id="H2D6A24B3AC5E4D62ACE82D61FBB39D16" commented="no"><enum>(D)</enum><header>Reimbursement</header><text display-inline="yes-display-inline">For purposes of this subtitle, available project proceeds of an issue shall be treated as spent for a qualified purpose if such proceeds are used to reimburse the issuer for amounts paid for a qualified purpose after the date that the Secretary makes an allocation of bond limitation with respect to such issue, but only if—</text>
<clause id="H40E58D3B2B9948A19564CE1500CA64C7" commented="no"><enum>(i)</enum><text>prior to the payment of the original expenditure, the issuer declared its intent to reimburse such expenditure with the proceeds of a qualified tax credit bond,</text></clause>
<clause id="H51C8CC78728E462884539357AF6B084C" commented="no"><enum>(ii)</enum><text>not later than 60 days after payment of the original expenditure, the issuer adopts an official intent to reimburse the original expenditure with such proceeds, and </text></clause>
<clause id="H094131FEBA9B4B91AEBB1EF2F751099" commented="no"><enum>(iii)</enum><text>the reimbursement is made not later than 18 months after the date the original expenditure is paid.</text></clause></subparagraph></paragraph>
<paragraph id="H03500ABD865A40D6AE00B9D121403093" commented="no" display-inline="no-display-inline"><enum>(3)</enum><header>Reporting</header><text display-inline="yes-display-inline">An issue shall be treated as meeting the requirements of this paragraph if the issuer of qualified tax credit bonds submits reports similar to the reports required under section 149(e).</text></paragraph>
<paragraph id="H8CBE9551E34E4DAD82EA872496EC384C"><enum>(4)</enum><header>Special rules relating to arbitrage</header>
<subparagraph id="HE8EABCE800C44122A12D7600AE74DA49"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">An issue shall be treated as meeting the requirements of this paragraph if the issuer satisfies the requirements of section 148 with respect to the proceeds of the issue.</text></subparagraph>
<subparagraph id="H22111B25ED8940259335C36D17C8E963"><enum>(B)</enum><header>Special rule for investments during expenditure period</header><text>An issue shall not be treated as failing to meet the requirements of subparagraph (A) by reason of any investment of available project proceeds during the expenditure period.</text></subparagraph>
<subparagraph id="HF8ED89600BF045DFA61688210007EA13"><enum>(C)</enum><header>Special rule for reserve funds</header><text>An issue shall not be treated as failing to meet the requirements of subparagraph (A) by reason of any fund which is expected to be used to repay such issue if—</text>
<clause id="H8A979DFF86614DB384384C00548D3580"><enum>(i)</enum><text display-inline="yes-display-inline">such fund is funded at a rate not more rapid than equal annual installments,</text></clause>
<clause id="H1158FDBBE10C4A9587565178DE161200"><enum>(ii)</enum><text>such fund is funded in a manner that such fund will not exceed the amount necessary to repay the issue if invested at the maximum rate permitted under clause (iii), and</text></clause>
<clause id="H94F02F5512EE49FCBD475DFBBCC815FE"><enum>(iii)</enum><text>the yield on such fund is not greater than the discount rate determined under paragraph (5)(B) with respect to the issue.</text></clause></subparagraph></paragraph>
<paragraph id="HEF8DF1A8ECB948B4AA766BBD01B0213B"><enum>(5)</enum><header>Maturity limitation</header>
<subparagraph id="H09B78C16AD78499AAFDE01F5F49682E"><enum>(A)</enum><header>In general</header><text>An issue shall not be treated as meeting the requirements of this paragraph if the maturity of any bond which is part of such issue exceeds the maximum term determined by the Secretary under subparagraph (B).</text></subparagraph>
<subparagraph id="H796D89DBF6854F918EABD99FB7CE5DCB"><enum>(B)</enum><header>Maximum term</header><text display-inline="yes-display-inline">During each calendar month, the Secretary shall determine the maximum term permitted under this paragraph for bonds issued during the following calendar month. Such maximum term shall be the term which the Secretary estimates will result in the present value of the obligation to repay the principal on the bond being equal to 50 percent of the face amount of such bond. Such present value shall be determined using as a discount rate the average annual interest rate of tax-exempt obligations having a term of 10 years or more which are issued during the month. If the term as so determined is not a multiple of a whole year, such term shall be rounded to the next highest whole year. </text></subparagraph></paragraph>
<paragraph id="H08C50D0D0B3A4118BEC2CDCDC308AF30" display-inline="no-display-inline"><enum>(6)</enum><header>Prohibition on financial conflicts of interest</header><text>An issue shall be treated as meeting the requirements of this paragraph if the issuer certifies that—</text>
<subparagraph id="HD3327BC0004846D3A35F1C0593BC379C"><enum>(A)</enum><text>applicable State and local law requirements governing conflicts of interest are satisfied with respect to such issue, and</text></subparagraph>
<subparagraph id="HFEA754F7436C4EF5974BFAA457E74300"><enum>(B)</enum><text>if the Secretary prescribes additional conflicts of interest rules governing the appropriate Members of Congress, Federal, State, and local officials, and their spouses, such additional rules are satisfied with respect to such issue.</text></subparagraph></paragraph></subsection>
<subsection id="HA15920F278C74813BE624C29CB2B4886"><enum>(e)</enum><header>Other definitions</header><text>For purposes of this subchapter—</text>
<paragraph id="HCE27BA44034F4255B94EBA24FEB66722"><enum>(1)</enum><header>Credit allowance date</header><text>The term <term>credit allowance date</term> means—</text>
<subparagraph id="H9C85A5EC2E5A465A96A8281BA1003D55"><enum>(A)</enum><text>March 15,</text></subparagraph>
<subparagraph id="HBB570CA09E5744E7A600927E36231677"><enum>(B)</enum><text>June 15,</text></subparagraph>
<subparagraph id="H68FE2D1AF66C477C93E86F3D1EE907A3"><enum>(C)</enum><text>September 15, and</text></subparagraph>
<subparagraph id="H8FDF2E6520DF42E1ADBE680000BE1256"><enum>(D)</enum><text>December 15.</text></subparagraph><continuation-text continuation-text-level="paragraph">Such term includes the last day on which the bond is outstanding.</continuation-text></paragraph>
<paragraph id="H93A35FD7E09C4C81BC976657CC514263"><enum>(2)</enum><header>Bond</header><text>The term <term>bond</term> includes any obligation.</text></paragraph>
<paragraph id="H1154230D45544BFDA2CB5CD24E00D24B"><enum>(3)</enum><header>State</header><text>The term <term>State</term> includes the District of Columbia and any possession of the United States.</text></paragraph>
<paragraph id="H63ABFF5954B8488DB56293D0649186C3"><enum>(4)</enum><header>Available project proceeds</header><text>The term <term>available project proceeds</term> means—</text>
<subparagraph id="HAB165FF5816E4A47BF9D6C6F52CDAEB9"><enum>(A)</enum><text display-inline="yes-display-inline">the excess of—</text>
<clause id="HE21562C91A54481D893260876429792E"><enum>(i)</enum><text>the proceeds from the sale of an issue, over</text></clause>
<clause id="H363C024EFCD54EC2AF3700A8FFA701F0"><enum>(ii)</enum><text>the issuance costs financed by the issue (to the extent that such costs do not exceed 2 percent of such proceeds), and</text></clause></subparagraph>
<subparagraph id="H3552FCFFF24A4201938511E789DD2F7B"><enum>(B)</enum><text>the proceeds from any investment of the excess described in subparagraph (A).</text></subparagraph></paragraph></subsection>
<subsection id="H5E87AE699B40489E9334002BA5A50200"><enum>(f)</enum><header>Credit treated as interest</header><text>For purposes of this subtitle, the credit determined under subsection (a) shall be treated as interest which is includible in gross income.</text></subsection>
<subsection id="HAA1A81D887424508A9677C31A37FE9A3"><enum>(g)</enum><header>S Corporations and partnerships</header><text>In the case of a tax credit bond held by an S corporation or partnership, the allocation of the credit allowed by this section to the shareholders of such corporation or partners of such partnership shall be treated as a distribution.</text></subsection>
<subsection id="H9779E36A8B9841970077CFD68899D6E"><enum>(h)</enum><header>Bonds held by regulated investment companies and real estate investment trusts</header><text>If any qualified tax credit bond is held by a regulated investment company or a real estate investment trust, the credit determined under subsection (a) shall be allowed to shareholders of such company or beneficiaries of such trust (and any gross income included under subsection (f) with respect to such credit shall be treated as distributed to such shareholders or beneficiaries) under procedures prescribed by the Secretary.</text></subsection>
<subsection id="H8EB5367E60B14CAFAC00CB8EBDD1A4E3"><enum>(i)</enum><header>Credits may be stripped</header><text>Under regulations prescribed by the Secretary—</text>
<paragraph id="HBFF47097000A4F9EAAD92BD4F5E2EBE"><enum>(1)</enum><header>In general</header><text>There may be a separation (including at issuance) of the ownership of a qualified tax credit bond and the entitlement to the credit under this section with respect to such bond. In case of any such separation, the credit under this section shall be allowed to the person who on the credit allowance date holds the instrument evidencing the entitlement to the credit and not to the holder of the bond.</text></paragraph>
<paragraph id="HD76ECFC1579243DA9999761BD1AE82AD"><enum>(2)</enum><header>Certain rules to apply</header><text>In the case of a separation described in paragraph (1), the rules of section 1286 shall apply to the qualified tax credit bond as if it were a stripped bond and to the credit under this section as if it were a stripped coupon.</text></paragraph></subsection></section>
<section id="HA01B814F0E0C43599D1DB06501942D20" display-inline="no-display-inline" section-type="subsequent-section"><enum>54B.</enum><header>New clean renewable energy bonds</header>
<subsection id="H3E90F1DA9B28414D98D9A72E00E4DD48"><enum>(a)</enum><header>New clean renewable energy bond</header><text>For purposes of this subpart, the term <term>new clean renewable energy bond</term> means any bond issued as part of an issue if—</text>
<paragraph id="H1A5A2B5038954D1EBEF857F39479C523"><enum>(1)</enum><text>100 percent of the available project proceeds of such issue are to be used for capital expenditures incurred by public power providers or cooperative electric companies for one or more qualified renewable energy facilities,</text></paragraph>
<paragraph id="H91B4FE6CC1714D738EA506FD5FC5BFA"><enum>(2)</enum><text>the bond is issued by a qualified issuer, and</text></paragraph>
<paragraph id="HCC1E596A34C84C1F82168C14D0235897"><enum>(3)</enum><text>the issuer designates such bond for purposes of this section.</text></paragraph></subsection>
<subsection id="H07B715A4EE054FB18930D2A7A1A0D8E"><enum>(b)</enum><header>Reduced credit amount</header><text>The annual credit determined under section 54A(b) with respect to any new clean renewable energy bond shall be 70 percent of the amount so determined without regard to this subsection.</text></subsection>
<subsection id="H71DF0CA5A7694235826617E91881F187" display-inline="no-display-inline"><enum>(c)</enum><header>Limitation on amount of bonds designated</header>
<paragraph id="HC1F08F923EDF47D6876C89CFDD455F7B"><enum>(1)</enum><header>In general</header><text>The maximum aggregate face amount of bonds which may be designated under subsection (a) by any issuer shall not exceed the limitation amount allocated under this subsection to such issuer.</text></paragraph>
<paragraph id="HD89DDFE955B047DCA055B000057010C9"><enum>(2)</enum><header>National limitation on amount of bonds designated</header><text>There is a national new clean renewable energy bond limitation of $2,000,000,000 which shall be allocated by the Secretary as provided in paragraph (3), except that—</text>
<subparagraph id="H01A2EB0DB0874B8590AFD4D76F746D00"><enum>(A)</enum><text>not more than 60 percent thereof may be allocated to qualified projects of public power providers, and</text></subparagraph>
<subparagraph id="H1FEB05D396D34B099B9FF6F29DF50025"><enum>(B)</enum><text>not more than 40 percent thereof may be allocated to qualified projects of cooperative electric companies.</text></subparagraph></paragraph>
<paragraph id="H9F0CBACA59AD406BA56571182C24061D"><enum>(3)</enum><header>Method of allocation</header>
<subparagraph id="H8FA397F273D942F1A1D5D1EE53B1C15"><enum>(A)</enum><header>Allocation among public power providers</header><text>After the Secretary determines the qualified projects of public power providers which are appropriate for receiving an allocation of the national new clean renewable energy bond limitation, the Secretary shall, to the maximum extent practicable, make allocations among such projects in such manner that the amount allocated to each such project bears the same ratio to the cost of such project as the limitation under subparagraph (2)(A) bears to the cost of all such projects.</text></subparagraph>
<subparagraph id="HB48776AB494842BB0091557C29459FE7"><enum>(B)</enum><header>Allocation among cooperative electric companies</header><text>The Secretary shall make allocations of the amount of the national new clean renewable energy bond limitation described in paragraph (2)(B) among qualified projects of cooperative electric companies in such manner as the Secretary determines appropriate.</text></subparagraph></paragraph></subsection>
<subsection id="H5CCA5B74E0E148D0AB7B80126E2FB4E0"><enum>(d)</enum><header>Definitions</header><text>For purposes of this section—</text>
<paragraph id="HD3DFA718FE124EE5996200B6EDDE618B"><enum>(1)</enum><header>Qualified renewable energy facility</header><text>The term <term>qualified renewable energy facility</term> means a qualified facility (as determined under section 45(d) without regard to paragraphs (8) and (10) thereof and to any placed in service date) owned by a public power provider or a cooperative electric company.</text></paragraph>
<paragraph id="H3F2B5FCE466044A890F319BA3E3C0000"><enum>(2)</enum><header>Public power provider</header><text display-inline="yes-display-inline">The term <term>public power provider</term> means a State utility with a service obligation, as such terms are defined in section 217 of the Federal Power Act (as in effect on the date of the enactment of this paragraph).</text></paragraph>
<paragraph id="HB117FBA0F5F247B49257C3F1F89C74E"><enum>(3)</enum><header>Cooperative electric company</header><text display-inline="yes-display-inline">The term <term>cooperative electric company</term> means a mutual or cooperative electric company described in section 501(c)(12) or section 1381(a)(2)(C).</text></paragraph>
<paragraph id="H2A1244AA9EF14C828BD184F8C94F0266"><enum>(4)</enum><header>Clean renewable energy bond lender</header><text display-inline="yes-display-inline">The term <term>clean renewable energy bond lender</term> means a lender which is a cooperative which is owned by, or has outstanding loans to, 100 or more cooperative electric companies and is in existence on February 1, 2002, and shall include any affiliated entity which is controlled by such lender.</text></paragraph>
<paragraph id="H3823B06A4CF741DDADF15319D967D697"><enum>(5)</enum><header>Qualified issuer</header><text display-inline="yes-display-inline">The term <term>qualified issuer</term> means a public power provider, a cooperative electric company, a clean renewable energy bond lender, or a not-for-profit electric utility which has received a loan or loan guarantee under the Rural Electrification Act.</text></paragraph></subsection></section></subpart><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H918D9420685046479C05D52B39854858"><enum>(b)</enum><header>Reporting</header><text>Subsection (d) of section 6049 (relating to returns regarding payments of interest) is amended by adding at the end the following new paragraph:</text>
<quoted-block style="OLC" id="HD8A17DFD0102438EB2EBBB38807543E9" display-inline="no-display-inline">
<paragraph id="H4197F142B5774B7AADC8E1B7CF065831"><enum>(9)</enum><header>Reporting of credit on qualified tax credit bonds</header>
<subparagraph id="H8E638FD04ADD4E178255C28264451760"><enum>(A)</enum><header>In general</header><text>For purposes of subsection (a), the term <term>interest</term> includes amounts includible in gross income under section 54A and such amounts shall be treated as paid on the credit allowance date (as defined in section 54A(e)(1)).</text></subparagraph>
<subparagraph id="H889B10756E5E48E0A9C7B2606895B16E"><enum>(B)</enum><header>Reporting to corporations, etc</header><text>Except as otherwise provided in regulations, in the case of any interest described in subparagraph (A) of this paragraph, subsection (b)(4) of this section shall be applied without regard to subparagraphs (A), (H), (I), (J), (K), and (L)(i).</text></subparagraph>
<subparagraph id="H9A426077A9CD476B9E522C06DA42247D"><enum>(C)</enum><header>Regulatory authority</header><text>The Secretary may prescribe such regulations as are necessary or appropriate to carry out the purposes of this paragraph, including regulations which require more frequent or more detailed reporting.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HC06AE819A8F94837A8789093D66B7FDE"><enum>(c)</enum><header>Conforming amendments</header>
<paragraph id="HC977633C18D444110042AA33A04B5169"><enum>(1)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/54">Sections 54(c)(2)</external-xref> and <external-xref legal-doc="usc" parsable-cite="usc/26/1400N"> 1400N(l)(3)(B)</external-xref> are each amended by striking <quote>subpart C</quote> and inserting <quote>subparts C and I</quote>.</text></paragraph>
<paragraph id="HF6249F3F58E94A51AA3D002CD14495FA"><enum>(2)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/1397E">Section 1397E(c)(2)</external-xref> is amended by striking <quote>subpart H</quote> and inserting <quote>subparts H and I</quote>.</text></paragraph>
<paragraph id="H0A39829F49FF40F2A562425355834681"><enum>(3)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/6401">Section 6401(b)(1)</external-xref> is amended by striking <quote>and H</quote> and inserting <quote>H, and I</quote>.</text></paragraph>
<paragraph id="HAC7176FFE8834DBD8589C9B11F07A6F1"><enum>(4)</enum><text>The heading of subpart H of part IV of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by striking <quote><header-in-text level="subpart" style="OLC">certain bonds</header-in-text></quote> and inserting <quote><header-in-text level="subpart" style="OLC">clean renewable energy bonds</header-in-text></quote>. </text></paragraph>
<paragraph id="H6AC442B8C4AE437D00FB146BBD5612CD"><enum>(5)</enum><text>The table of subparts for part IV of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by striking the item relating to subpart H and inserting the following new items:</text>
<quoted-block style="OLC" id="H148CE4E17FD548E2BC79B677B464FA6">
<toc regeneration="no-regeneration">
<toc-entry level="subchapter">Subpart H. Nonrefundable credit to holders of clean renewable energy bonds.</toc-entry>
<toc-entry level="subchapter">Subpart I. Qualified tax credit bonds.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H3A760BE9F61F45FA9203B083F66D0000"><enum>(d)</enum><header>Effective dates</header><text>The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act.</text></subsection></section>
<section id="HA4E180431B8B410FB8AE1472A4F29E94"><enum>105.</enum><header>Extension and modification of special rule to implement FERC and State electric restructuring policy</header>
<subsection id="H35A2B8D6071A4F10AB09B9B0145D588"><enum>(a)</enum><header>Extension for qualified electric utilities</header>
<paragraph id="H2EB9804713BF48BBA1F4F8C1A185F32D"><enum>(1)</enum><header>In general</header><text>Paragraph (3) of section 451(i) (relating to special rule for sales or dispositions to implement Federal Energy Regulatory Commission or State electric restructuring policy) is amended by striking <quote>before January 1, 2008,</quote> and inserting <quote>before January 1, 2010, by a qualified electric utility,</quote>.</text></paragraph>
<paragraph id="HE27FEA7B0F93464E88B9A72CF64FEDE4"><enum>(2)</enum><header>Qualified electric utility</header><text>Subsection (i) of <external-xref legal-doc="usc" parsable-cite="usc/26/451">section 451</external-xref> is amended by redesignating paragraphs (6) through (10) as paragraphs (7) through (11), respectively, and by inserting after paragraph (5) the following new paragraph:</text>
<quoted-block style="OLC" id="HAA292097655E4602B1FF6FE57D8EE800" display-inline="no-display-inline">
<paragraph id="H837640B3C35849D9ADF750F718F3C615"><enum>(6)</enum><header>Qualified electric utility</header><text>For purposes of this subsection, the term <term>qualified electric utility</term> means—</text>
<subparagraph id="HE2163398B607495C8FB58D8E15E617A1"><enum>(A)</enum><text display-inline="yes-display-inline">an electric utility (as defined in section 3(22) of the Federal Power Act (<external-xref legal-doc="usc" parsable-cite="usc/16/796">16 U.S.C. 796(22)</external-xref>)), and</text></subparagraph>
<subparagraph id="H373DFE25580F4AC1A3A58183FE41D3EF"><enum>(B)</enum><text display-inline="yes-display-inline">any person in the same holding company system (as defined in section 1262(9) of the Public Utility Holding Company Act of 2005 (<external-xref legal-doc="usc" parsable-cite="usc/42/16451">42 U.S.C. 16451(9)</external-xref>)) as an electric utility referred to subparagraph (A).</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HCAFCB178CC3E4914B21200E4CFE4708B" commented="no"><enum>(b)</enum><header>Extension of period for transfer of operational control authorized by FERC</header><text>Clause (ii) of <external-xref legal-doc="usc" parsable-cite="usc/26/451">section 451(i)(4)(B)</external-xref> is amended by striking <quote>December 31, 2007</quote> and inserting <quote>the date which is 4 years after the close of the taxable year in which the transaction occurs</quote>.</text></subsection>
<subsection id="HDFC52A214802458CB78EF6C600A225F2"><enum>(c)</enum><header>Property located outside the United States not treated as exempt utility property</header><text>Paragraph (5) of <external-xref legal-doc="usc" parsable-cite="usc/26/451">section 451(i)</external-xref> is amended by adding at the end the following new subparagraph:</text>
<quoted-block style="OLC" id="H16C6D7F278FD44989D8BFED6850082A9" display-inline="no-display-inline">
<subparagraph id="H871ECF6C9C99493196CFD5039258B2DE"><enum>(C)</enum><header>Exception for property located outside the United States</header><text>The term <term>exempt utility property</term> shall not include any property which is located outside the United States. </text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H9E76CD7177684FBD8F8484CA87F563A9" commented="no"><enum>(d)</enum><header>Effective dates</header>
<paragraph id="HE13CA08FD617497800CBFD4B9DD67FEA" commented="no"><enum>(1)</enum><header>Extension</header><text>The amendment made by subsection (a) shall apply to transactions after December 31, 2007.</text></paragraph>
<paragraph id="H6E10F8EE5AEF423096B924E1C73FCF57"><enum>(2)</enum><header>Transfers of operational control</header><text>The amendment made by subsection (b) shall take effect as if included in section 909 of the American Jobs Creation Act of 2004.</text></paragraph>
<paragraph id="H5FE65EF7AA3C4FA08B0117A7A3D4C491"><enum>(3)</enum><header>Exception for property located outside the United States</header><text>The amendment made by subsection (c) shall apply to transactions after the date of the enactment of this Act.</text></paragraph></subsection></section>
<section id="HA928959D008F4302009FCADFCEBAA9BB"><enum>106.</enum><header>Repeal of dollar limitation and allowance against alternative minimum tax for residential solar and fuel cell property credit</header>
<subsection id="H0A2BAB3B9918467D965CE8EF54238483"><enum>(a)</enum><header>Repeal of maximum dollar limitation</header>
<paragraph id="H2792330257354D44897EF0154ED80561"><enum>(1)</enum><header>In general</header><text>Subsection (b) of section 25D (relating to limitations) is amended to read as follows:</text>
<quoted-block style="OLC" id="HBCA9EA5620B749B180BB188590F73E86" display-inline="no-display-inline">
<subsection id="HA2DF623EBDDB4D32B33386E2D100B4F9"><enum>(b)</enum><header>Certification of solar water heating property</header><text display-inline="yes-display-inline">No credit shall be allowed under this section for an item of property described in subsection (d)(1) unless such property is certified for performance by the non-profit Solar Rating Certification Corporation or a comparable entity endorsed by the government of the State in which such property is installed.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HAC365EF1B6994E0394F093D9B8C8EFC7"><enum>(2)</enum><header>Conforming amendments</header>
<subparagraph id="H143DE8E4B89E48439F1CF9DCCE9DEF29"><enum>(A)</enum><text>Subsection (e) of <external-xref legal-doc="usc" parsable-cite="usc/26/25D">section 25D</external-xref> is amended by striking paragraph (4) and by redesignating paragraphs (5) through (9) as paragraphs (4) through (8), respectively.</text></subparagraph>
<subparagraph id="H7A90D9CF20494A9DB94C607E6747ED80"><enum>(B)</enum><text>Paragraph (1) of <external-xref legal-doc="usc" parsable-cite="usc/26/25C">section 25C(e)</external-xref> is amended by striking <quote>(8), and (9)</quote> and inserting <quote>and (8) (and paragraph (4) as in effect before its repeal by the <short-title>Renewable Energy and Energy Conservation Tax Act of 2007</short-title>)</quote>.</text></subparagraph></paragraph></subsection>
<subsection id="H94CB89540A17418CAE1E52DE86AA64E8"><enum>(b)</enum><header>Credit allowed against alternative minimum tax</header>
<paragraph id="HF6DE15B4EBAD42E49E3C765BE86E3914"><enum>(1)</enum><header>In general</header><text>Subsection (c) of <external-xref legal-doc="usc" parsable-cite="usc/26/25D">section 25D</external-xref> is amended to read as follows:</text>
<quoted-block style="OLC" id="H9EB1E0B0B6E4469892E77391BB6F1800" display-inline="no-display-inline">
<subsection id="H028C2A0863FB4C90826EAF078EA2F4F"><enum>(c)</enum><header>Limitation based on amount of tax; carryforward of unused credit</header>
<paragraph id="H24E53B6EB2E14B5085B4874E6B3C9B00"><enum>(1)</enum><header>Limitation based on amount of tax</header><text>In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for the taxable year shall not exceed the excess of—</text>
<subparagraph id="H715618D37A9B46B4AE1C11323EC1F55"><enum>(A)</enum><text>the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over</text></subparagraph>
<subparagraph id="H623A7DCB5C5047328523EE00128FC13"><enum>(B)</enum><text>the sum of the credits allowable under this subpart (other than this section) and section 27 for the taxable year.</text></subparagraph></paragraph>
<paragraph id="H7169C774E0444D66A6FA3FCF34E6DC82"><enum>(2)</enum><header>Carryforward of unused credit</header>
<subparagraph id="H143FC693E5F344E9BE9455AC291D72D6"><enum>(A)</enum><header>Rule for years in which all personal credits allowed against regular and alternative minimum tax</header><text display-inline="yes-display-inline">In the case of a taxable year to which section 26(a)(2) applies, if the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a)(2) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.</text></subparagraph>
<subparagraph id="H9DD6EEDA519C4E529B9E5D9528C2A8AB"><enum>(B)</enum><header>Rule for other years</header><text>In the case of a taxable year to which section 26(a)(2) does not apply, if the credit allowable under subsection (a) exceeds the limitation imposed by paragraph (1) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HD0606BF908FE4001A9956534008BD3F"><enum>(2)</enum><header>Conforming amendments</header>
<subparagraph id="HFA38973717E149DE8002392114BC6FA8"><enum>(A)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/23">Section 23(b)(4)(B)</external-xref> is amended by inserting <quote>and section 25D</quote> after <quote>this section</quote>.</text></subparagraph>
<subparagraph id="HC3ABF96ED33544E284F7180405A249D"><enum>(B)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/24">Section 24(b)(3)(B)</external-xref> is amended by striking <quote>and 25B</quote> and inserting <quote>, 25B, and 25D</quote>.</text></subparagraph>
<subparagraph id="H5E9796FA1A0E49ACB0F06D696F3400FF"><enum>(C)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/25B">Section 25B(g)(2)</external-xref> is amended by striking <quote>section 23</quote> and inserting <quote>sections 23 and 25D</quote>.</text></subparagraph>
<subparagraph id="HB96E7DC3246145928FB740257E517D37"><enum>(D)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/26">Section 26(a)(1)</external-xref> is amended by striking <quote>and 25B</quote> and inserting <quote>25B, and 25D</quote>. </text></subparagraph></paragraph></subsection>
<subsection id="HED20656AF40D456EB14203D0776F6200"><enum>(c)</enum><header>Effective dates</header>
<paragraph id="H8CB1D1F35104471B90B680540000398D"><enum>(1)</enum><header>In general</header><text>Except as otherwise provided in this subsection, the amendments made by this section shall apply to expenditures made after the date of the enactment of this Act.</text></paragraph>
<paragraph id="H323209D1A63448BEB049F476C7581CF2"><enum>(2)</enum><header>Allowance against alternative minimum tax</header>
<subparagraph id="H71170D72AAEB4AFFA0EEBC2E01C2E800"><enum>(A)</enum><header>In general</header><text>The amendments made by subsection (b) shall apply to taxable years beginning after the date of the enactment of this Act.</text></subparagraph>
<subparagraph id="H6206C4A0966D463FA7713D1060EAEC2D"><enum>(B)</enum><header>Application of EGTRRA sunset</header><text>The amendments made by subparagraphs (A) and (B) of subsection (b)(2) shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 in the same manner as the provisions of such Act to which such amendments relate.</text></subparagraph></paragraph></subsection></section>
<enum>II</enum><header>Conservation</header>
<subtitle id="HE5702D38A0B8478D8D23DF109D28898B"><enum>A</enum><header>Transportation</header>
<section id="HC4C4C09E60304A8BAF37CB9D5898AE7F" section-type="subsequent-section" display-inline="no-display-inline"><enum>201.</enum><header>Credit for plug-in hybrid vehicles</header>
<subsection id="HEC04802B994841068F478767220587F5"><enum>(a)</enum><header>In general</header><text>Subpart B of part IV of subchapter A of chapter 1 (relating to other credits) is amended by adding at the end the following new section:</text>
<quoted-block id="H1B18CC1308BF49E4B841047EE8E8E7BF">
<section id="H0A9236F082F946A48CB788D318E090CC"><enum>30D.</enum><header>Plug-in hybrid vehicles</header>
<subsection id="HFC2739DAD4C840C2B2D9B005BEF9FEA"><enum>(a)</enum><header>Allowance of credit</header><text>There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credit amounts determined under subsection (b) with respect to each qualified plug-in hybrid vehicle placed in service by the taxpayer during the taxable year.</text></subsection>
<subsection id="H9DB43DFBE2544CAEA3C5D6A89645CC3F"><enum>(b)</enum><header>Per vehicle dollar limitation</header>
<paragraph id="H77EDE906516F4B1FBC3B857BB92E247F"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The amount determined under this subsection with respect to any qualified plug-in hybrid vehicle is the sum of the amounts determined under paragraphs (2) and (3) with respect to such vehicle.</text></paragraph>
<paragraph id="H924879D3B4CE48C9B6C9882AD8CEC73"><enum>(2)</enum><header>Base amount</header><text>The amount determined under this paragraph is $4,000.</text></paragraph>
<paragraph id="HFD06384B86D24E3BB2718D5817AFF35"><enum>(3)</enum><header>Battery capacity</header><text display-inline="yes-display-inline">In the case of vehicle which draws propulsion energy from a battery with not less than 5 kilowatt hours of capacity, the amount determined under this paragraph is $200, plus $200 for each kilowatt hour of capacity in excess of 5 kilowatt hours. The amount determined under this paragraph shall not exceed $2,000.</text></paragraph></subsection>
<subsection id="HCE6AB897711D458E83219204A8D3CC43" display-inline="no-display-inline"><enum>(c)</enum><header>Application with other credits</header>
<paragraph id="HA73255756A8047C0BB59DFDAD206713F" commented="no"><enum>(1)</enum><header>Business credit treated as part of general business credit</header><text display-inline="yes-display-inline">So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)).</text></paragraph>
<paragraph id="H127296C557C04D33A48037299C86A2F5"><enum>(2)</enum><header>Personal credit</header>
<subparagraph id="H803465A059994A64964B474BCDD0B24D"><enum>(A)</enum><header>In general</header><text>For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.</text></subparagraph>
<subparagraph id="H9FA42146A5004389BE18279232CAAE9B"><enum>(B)</enum><header>Limitation based on amount of tax</header><text>In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall not exceed the excess of—</text>
<clause id="H9ADCCC54E1E8471E8DAF1902D383FB67"><enum>(i)</enum><text>the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over</text></clause>
<clause id="HD43F8AE99915430999F14CADF37E1E3C"><enum>(ii)</enum><text>the sum of the credits allowable under subpart A (other than this section and sections 23 and 25D) and section 27 for the taxable year.</text></clause></subparagraph></paragraph></subsection>
<subsection id="HFDB73EBB583540AEA3976C8794EEC894" display-inline="no-display-inline"><enum>(d)</enum><header>Qualified plug-In hybrid vehicle</header><text>For purposes of this section—</text>
<paragraph id="H4F1108C6F1D14E73B0B4A957E81D10CA"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The term <term>qualified plug-in hybrid vehicle</term> means a motor vehicle (as defined in section 30(c)(2))—</text>
<subparagraph id="HC3ACA0E350944D209530E100A061C6D"><enum>(A)</enum><text>the original use of which commences with the taxpayer,</text></subparagraph>
<subparagraph id="H2371B5C67E174F59A6712E7927849B08"><enum>(B)</enum><text>which is acquired for use or lease by the taxpayer and not for resale,</text></subparagraph>
<subparagraph id="H8532066FAE0A4511A203ECD1133BD3D9"><enum>(C)</enum><text>which is made by a manufacturer,</text></subparagraph>
<subparagraph id="H8B4DF79C861D487F8274AEDE11D697F4"><enum>(D)</enum><text display-inline="yes-display-inline">which has a gross vehicle weight rating of less than 14,000 pounds,</text></subparagraph>
<subparagraph id="HC245163989594B258B54E4C209D0469B"><enum>(E)</enum><text display-inline="yes-display-inline">which has received a certificate of conformity under the Clean Air Act and meets or exceeds the Bin 5 Tier II emission standard established in regulations prescribed by the Administrator of the Environmental Protection Agency under section 202(i) of the Clean Air Act for that make and model year vehicle,</text></subparagraph>
<subparagraph id="H8E2B0DACCA9F42139E079DCCB51EC164"><enum>(F)</enum><text>which is propelled to a significant extent by an electric motor which draws electricity from a battery which—</text>
<clause id="H6074CA276D274A95B08B98D94CD5C41"><enum>(i)</enum><text>has a capacity of not less than 4 kilowatt hours, and</text></clause>
<clause id="H88C832132DC04F3A81E54FF5AD201452"><enum>(ii)</enum><text>is capable of being recharged from an external source of electricity, and</text></clause></subparagraph>
<subparagraph id="HD7AD28A0DC0647D5A885F2194FA91664"><enum>(G)</enum><text>which either—</text>
<clause id="H3E01C32A336343579895AD6F1E002BBE"><enum>(i)</enum><text>is also propelled to a significant extent by other than an electric motor, or</text></clause>
<clause id="H12A9B2D3669B40D8812D6E20081BDE60"><enum>(ii)</enum><text>has a significant onboard source of electricity which also recharges the battery referred to in subparagraph (F). </text></clause></subparagraph></paragraph>
<paragraph id="H61421646FE5E44AC8500DA8D86B5F111"><enum>(2)</enum><header>Exception</header><text display-inline="yes-display-inline">The term <term>qualified plug-in hybrid vehicle</term> shall not include any vehicle which is not a passenger automobile or light truck if such vehicle has a gross vehicle weight rating of less than 8,500 pounds.</text></paragraph>
<paragraph id="H734930E447804BAC8E2E6D8CC00501F"><enum>(3)</enum><header>Other terms</header><text display-inline="yes-display-inline">The terms <term>passenger automobile</term>, <term>light truck</term>, and <term>manufacturer</term> have the meanings given such terms in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (<external-xref legal-doc="usc" parsable-cite="usc/42/7521">42 U.S.C. 7521 et seq.</external-xref>).</text></paragraph>
<paragraph id="H1F8A98C390B540F3BA9F2436BD00B82D"><enum>(4)</enum><header>Battery capacity</header><text display-inline="yes-display-inline">The term <term>capacity</term> means, with respect to any battery, the quantity of electricity which the battery is capable of storing, expressed in kilowatt hours, as measured from a 100 percent state of charge to a 0 percent state of charge.</text></paragraph></subsection>
<subsection id="H9AFB8254CD8144BC96006EC701F277BF" display-inline="no-display-inline"><enum>(e)</enum><header>Limitation on number of qualified plug-In hybrid vehicles eligible for credit</header>
<paragraph id="H483E3570947047989C00387010DBF2D"><enum>(1)</enum><header>In general</header><text>In the case of a qualified plug-in hybrid vehicle sold during the phaseout period, only the applicable percentage of the credit otherwise allowable under subsection (a) shall be allowed.</text></paragraph>
<paragraph id="H8887091E55414261BF62D0AB5940F217"><enum>(2)</enum><header>Phaseout period</header><text display-inline="yes-display-inline">For purposes of this subsection, the phaseout period is the period beginning with the second calendar quarter following the calendar quarter which includes the first date on which the number of qualified plug-in hybrid vehicles manufactured by the manufacturer of the vehicle referred to in paragraph (1) sold for use in the United States after the date of the enactment of this section, is at least 60,000.</text></paragraph>
<paragraph id="H80A0194B60BD45C7A404000085A8F326"><enum>(3)</enum><header>Applicable percentage</header><text display-inline="yes-display-inline">For purposes of paragraph (1), the applicable percentage is—</text>
<subparagraph id="HFD7EF63A53CE49AEB4B27F77479750B5"><enum>(A)</enum><text>50 percent for the first 2 calendar quarters of the phaseout period, </text></subparagraph>
<subparagraph id="H0B1341CC4E8E4DD78EEFDC04FAD7860"><enum>(B)</enum><text>25 percent for the 3d and 4th calendar quarters of the phaseout period, and </text></subparagraph>
<subparagraph id="H5F39AA31A8454F0199264483A92F84D7"><enum>(C)</enum><text>0 percent for each calendar quarter thereafter.</text></subparagraph></paragraph>
<paragraph id="HE21BCF778D0A4FF4B84F00025DB1F3B6"><enum>(4)</enum><header>Controlled groups</header><text>Rules similar to the rules of section 30B(f)(4) shall apply for purposes of this subsection.</text></paragraph></subsection>
<subsection id="HB92129978B6A442B8BE1AC6B009F12F9" display-inline="no-display-inline"><enum>(f)</enum><header>Special rules</header>
<paragraph id="H03463E772EDE4AC2ABA9F3CFAF23B1DB"><enum>(1)</enum><header>Basis reduction</header><text>The basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit (determined without regard to subsection (c)).</text></paragraph>
<paragraph id="H5C134789078C4C929DF105FC27A76DEB"><enum>(2)</enum><header>Recapture</header><text>The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit.</text></paragraph>
<paragraph id="HCC5F1FF1908844FFB7A4CF1E631BD7E2"><enum>(3)</enum><header>Property used outside United States, etc., not qualified</header><text>No credit shall be allowed under subsection (a) with respect to any property referred to in section 50(b)(1) or with respect to the portion of the cost of any property taken into account under section 179.</text></paragraph>
<paragraph id="H0398EF2AE8B84262A6EE6E6F920257FB"><enum>(4)</enum><header>Election not to take credit</header><text>No credit shall be allowed under subsection (a) for any vehicle if the taxpayer elects to not have this section apply to such vehicle.</text></paragraph>
<paragraph id="H932D4459B4474C679581CE96B6108F8B"><enum>(5)</enum><header>Property used by tax-exempt entity; interaction with air quality and motor vehicle safety standards</header><text>Rules similar to the rules of paragraphs (6) and (10) of section 30B(h) shall apply for purposes of this section.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H9565F2EDBD094CAFBE399D07DC18C03" display-inline="no-display-inline"><enum>(b)</enum><header>Plug-In vehicles not treated as new qualified hybrid vehicles</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/30B">Section 30B(d)(3)</external-xref> is amended by adding at the end the following new subparagraph:</text>
<quoted-block style="OLC" id="HD7EB1D0299EB4337AD39ABF72CD0DB44" display-inline="no-display-inline">
<subparagraph id="H953A323038F74C03AAEC5D1FACCDDA60"><enum>(D)</enum><header>Exclusion of plug-in vehicles</header><text>Any vehicle with respect to which a credit is allowable under section 30D (determined without regard to subsection (c) thereof) shall not be taken into account under this section.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection commented="no" id="H6129180680FD40B2A1B434533302AE6E" display-inline="no-display-inline"><enum>(c)</enum><header>Credit made part of general business credit</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/38">Section 38(b)</external-xref> is amended—</text>
<paragraph id="HFEDA829C880D47E9A8CF5F260300A598"><enum>(1)</enum><text>by striking <quote>and</quote> each place it appears at the end of any paragraph,</text></paragraph>
<paragraph id="H551B904E328F4B0F98B52FC04FDE7000"><enum>(2)</enum><text>by striking <quote>plus</quote> each place it appears at the end of any paragraph, </text></paragraph>
<paragraph id="HD8BDF83BA8AD4FB082C520C7D9305841"><enum>(3)</enum><text>by striking the period at the end of paragraph (31) and inserting ‘‘, plus’’, and</text></paragraph>
<paragraph id="HBEB556812BBD4DB5A0278470BD23CDF"><enum>(4)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H9A631AC4750D432BB828F6700784BC6" style="OLC">
<paragraph commented="no" id="H9A8D6FBE25C74753B1901758BEA47E3B"><enum>(32)</enum><text display-inline="yes-display-inline">the portion of the plug-in hybrid vehicle credit to which section 30D(c)(1) applies.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H5A00A6C31B31423C92F0BE72D551E181" display-inline="no-display-inline"><enum>(d)</enum><header>Conforming amendments</header>
<paragraph id="H4CA8ADFCB7A34FB886F9D8E9678B99B0"><enum>(1)</enum>
<subparagraph id="HFD69AE944E5348198D00DE96C16EF56C" display-inline="yes-display-inline"><enum>(A)</enum><text>Section 24(b)(3)(B), as amended by this Act, is amended by striking <quote>and 25D</quote> and inserting <quote>25D, and 30D</quote>.</text></subparagraph>
<subparagraph id="H5CBA036903D44B24B8381370D549D412" indent="up1"><enum>(B)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/25">Section 25(e)(1)(C)(ii)</external-xref> is amended by inserting <quote>30D,</quote> after <quote>25D,</quote>.</text></subparagraph>
<subparagraph id="H2222818996F24467A78C309D6F430040" indent="up1"><enum>(C)</enum><text>Section 25B(g)(2), as amended by this Act, is amended by striking <quote>and 25D</quote> and inserting <quote>, 25D, and 30D</quote>.</text></subparagraph>
<subparagraph id="H689F5E15A0DB439D971B83D5B8E34307" indent="up1"><enum>(D)</enum><text>Section 26(a)(1), as amended by this Act, is amended by striking <quote>and 25D</quote> and inserting <quote>25D, and 30D</quote>.</text></subparagraph>
<subparagraph id="H007C3ECBA35846DE84CAF1DA89232568" indent="up1"><enum>(E)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/1400C">Section 1400C(d)(2)</external-xref> is amended by striking <quote>and 25D</quote> and inserting <quote>25D, and 30D</quote>.</text></subparagraph></paragraph>
<paragraph id="H317A24B3BEEC414386EDACFE3910001B"><enum>(2)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/1016">Section 1016(a)</external-xref> is amended by striking <quote>and</quote> at the end of paragraph (36), by striking the period at the end of paragraph (37) and inserting <quote>, and</quote>, and by adding at the end the following new paragraph:</text>
<quoted-block style="OLC" id="HC6B00E8ECFA2468E8FDFB611947C3E00" display-inline="no-display-inline">
<paragraph id="H732FF477A2BA40CB8071AC5220DCE8BE"><enum>(38)</enum><text>to the extent provided in section 30D(f)(1).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H11C87E4220FE46CDBA408E3E00255862"><enum>(3)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/6501">Section 6501(m)</external-xref> is amended by inserting <quote>30D(f)(4),</quote> after <quote>30C(e)(5),</quote>.</text></paragraph>
<paragraph id="H1EC5591400CE4653AE50F1BD247C20E0"><enum>(4)</enum><text>The table of sections for subpart B of part IV of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by adding at the end the following new item:</text>
<quoted-block style="OLC" id="H5BB1FFC2C906484085C6264CEACA22B8">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 30D. Plug-in hybrid vehicles.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HC63F9E0AB94A4586AF0900D7C3FFC942"><enum>(e)</enum><header>Treatment of alternative motor vehicle credit as a personal credit</header>
<paragraph id="H8925C3FA802F4607A4FCBCEA7F11C593"><enum>(1)</enum><header>In general</header><text>Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/30B">section 30B(g)</external-xref> is amended to read as follows:</text>
<quoted-block style="OLC" id="H10EAA614DFDD4F779D003B48C5C07D89" display-inline="no-display-inline">
<paragraph id="H94DE0020A93047DB818D670026F8629F"><enum>(2)</enum><header>Personal credit</header><text display-inline="yes-display-inline">The credit allowed under subsection (a) for any taxable year (after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HDD8AA897E9C1409EB2077595D5429B00"><enum>(2)</enum><header>Conforming amendments</header>
<subparagraph id="HD8C3B17A3BF045A29C160919F200A082"><enum>(A)</enum><text display-inline="yes-display-inline">Subparagraph (A) of <external-xref legal-doc="usc" parsable-cite="usc/26/30C">section 30C(d)(2)</external-xref> is amended by striking <quote>sections 27, 30, and 30B</quote> and inserting <quote>sections 27 and 30</quote>.</text></subparagraph>
<subparagraph id="H8FC6327F6D6A4BC69FC45F896434AC23"><enum>(B)</enum><text>Paragraph (3) of <external-xref legal-doc="usc" parsable-cite="usc/26/55">section 55(c)</external-xref> is amended by striking <quote>30B(g)(2),</quote>.</text></subparagraph></paragraph></subsection>
<subsection id="HA92C5E5977914AB28BE1B25D4523A4BF"><enum>(f)</enum><header>Effective date</header>
<paragraph id="HAB8F1B7A95DC4631B9220114B448007C"><enum>(1)</enum><header>In general</header><text>Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years beginning after December 31, 2007.</text></paragraph>
<paragraph id="H02D4770B767E46D78DB593F109CEA00"><enum>(2)</enum><header>Treatment of alternative motor vehicle credit as personal credit</header><text>The amendments made by subsection (e) shall apply to taxable years beginning after December 31, 2006.</text></paragraph></subsection>
<subsection id="H28F16105F5F347349BE513D92E86008F"><enum>(g)</enum><header>Application of EGTRRA sunset</header><text>The amendment made by subsection (d)(1)(A) shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 in the same manner as the provision of such Act to which such amendment relates.</text></subsection></section>
<section id="HDB1399D89581494DA4F15585E555565F" section-type="subsequent-section" display-inline="no-display-inline"><enum>202.</enum><header>Extension and modification of alternative fuel vehicle refueling property credit</header>
<subsection id="HDC22F79C4FF34ACBBA334EF616D880F5"><enum>(a)</enum><header>Increase in credit amount</header><text>Section 30C (relating to alternative fuel vehicle refueling property credit) is amended—</text>
<paragraph id="H2F4BDDF22680437695B8DB74A68FCE03"><enum>(1)</enum><text>by striking <quote>30 percent</quote> in subsection (a) and inserting <quote>50 percent</quote>, and</text></paragraph>
<paragraph id="H8E00CA28EC8547ACBAB757CF5BDA5343"><enum>(2)</enum><text>by striking <quote>$30,000</quote> in subsection (b)(1) and inserting <quote>$50,000</quote>.</text></paragraph></subsection>
<subsection id="H04FF15DE2E094161A7AF007700902B29"><enum>(b)</enum><header>Extension of credit</header><text>Paragraph (2) of section 30C(g) (relating to termination) is amended by striking <quote>December 31, 2009</quote> and inserting <quote>December 31, 2010</quote>. </text></subsection>
<subsection commented="no" display-inline="no-display-inline" id="HAE67FB9ECA974C5CBEAB79317C3FA69E"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.</text></subsection></section>
<section id="H4BFAF61961054AF9B422F8166E3B7D48" display-inline="no-display-inline" section-type="subsequent-section"><enum>203.</enum><header>Extension and modification of credits for biodiesel and renewable diesel</header>
<subsection id="HB16B9B7EC7E84195A7C001BAEA309978"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) are each amended by striking <quote>December 31, 2008</quote> and inserting <quote>December 31, 2010</quote>.</text></subsection>
<subsection id="H7945CFA3681E4753A19EC3D9F5697FE7"><enum>(b)</enum><header>Uniform treatment of diesel produced from biomass</header><text>Paragraph (3) of <external-xref legal-doc="usc" parsable-cite="usc/26/40A">section 40A(f)</external-xref> is amended—</text>
<paragraph id="H7181038680A647C18BC11FE416F0007"><enum>(1)</enum><text>by striking <quote>using a thermal depolymerization process</quote>, and</text></paragraph>
<paragraph id="H956C2EF5B9E74E3F0039FB33F87C658"><enum>(2)</enum><text>by striking <quote>or D396</quote> in subparagraph (B) and inserting <quote>or other equivalent standard approved by the Secretary for fuels to be used in diesel-powered highway vehicles</quote>.</text></paragraph></subsection>
<subsection id="HC5FD8B6D7DE841BEAACE2200F3108421"><enum>(c)</enum><header>Effective date</header>
<paragraph id="H0FEFADDB7CFA43BEBA61889887397CC7"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in paragraph (2), the amendments made by this section shall apply to fuel produced, and sold or used, after the date of the enactment of this Act.</text></paragraph>
<paragraph id="H9738A4D627BF45BBB842A2341BCA51FE"><enum>(2)</enum><header>Uniform treatment of diesel produced from biomass</header><text>The amendments made by subsection (b) shall apply to fuel produced, and sold or used, after the date which is 30 days after the date of the enactment of this Act.</text></paragraph></subsection></section>
<section id="H2D5CC2E6E8E3405D8454B9013FAF0098" section-type="subsequent-section" display-inline="no-display-inline"><enum>204.</enum><header>Credit for production of cellulosic alcohol</header>
<subsection id="H685B0F62AB1D468190A936C639806900"><enum>(a)</enum><header>In general</header><text>Subsection (b) of <external-xref legal-doc="usc" parsable-cite="usc/26/40">section 40</external-xref> is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph: </text>
<quoted-block style="OLC" id="H15E9F7690D9543560013D2C300663487" display-inline="no-display-inline">
<paragraph id="H6FD1A9AFD3274593A35183F8EE70281C"><enum>(5)</enum><header>Cellulosic alcohol fuel producer credit</header>
<subparagraph id="HA84DEF5802AC4595BF7DFE2D067C67A8"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The cellulosic alcohol fuel producer credit of any cellulosic alcohol fuel producer for any taxable year is 50 cents for each gallon of qualified cellulosic fuel production of such producer. </text></subparagraph>
<subparagraph id="H9D525F9099FC44CAA0677577289D8B80"><enum>(B)</enum><header>Qualified cellulosic fuel production</header><text>For purposes of this paragraph, the term <term>qualified cellulosic fuel production</term> means any cellulosic alcohol which is produced by a cellulosic alcohol fuel producer, and which during the taxable year—</text>
<clause id="HBA8EDA9C2CEC4CD984BAD56CD46B00C7"><enum>(i)</enum><text>is sold by such producer to another person—</text>
<subclause id="H8ADE53E0891D48E5B633A16BFE0058A2"><enum>(I)</enum><text>for use by such other person in the production of a qualified mixture in such other person’s trade or business (other than casual off-farm production),</text></subclause>
<subclause id="H55DD72B2CECF4DF9B9A55596C6435047"><enum>(II)</enum><text>for use by such other person as a fuel in a trade or business, or </text></subclause>
<subclause id="HC1ED8C07BA28435EBDD9C6453FEAA62D"><enum>(III)</enum><text>who sells such alcohol at retail to another person and places such alcohol in the fuel tank of such other person, or </text></subclause></clause>
<clause id="H859988E962B34405BF9F273097C8F563"><enum>(ii)</enum><text>is used or sold by such producer for any purpose described in clause (i).</text></clause></subparagraph>
<subparagraph id="H0CBA14D824C640D39895DC561D484EB7" display-inline="no-display-inline"><enum>(C)</enum><header>Cellulosic alcohol</header><text>For purposes of this paragraph, the term <term>cellulosic alcohol</term> means any alcohol which—</text>
<clause id="HA99D8D2E1C9E44B5BAB08EDA1261851C"><enum>(i)</enum><text>is produced in the United States for use as a fuel in the United States, and</text></clause>
<clause id="H3DF01D505DAD4A68B2B4E369D9FA41E9"><enum>(ii)</enum><text>is derived from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis.</text></clause><continuation-text continuation-text-level="subparagraph">For purposes of this subparagraph, the term <term>United States</term> includes any possession of the United States.</continuation-text></subparagraph>
<subparagraph id="H0B2A3F72A6B04F72B5AEBA4D4E79A63F"><enum>(D)</enum><header>Cellulosic alcohol fuel producer</header><text>For purposes of this paragraph, the term <term>cellulosic alcohol fuel producer</term> means any person who produces cellulosic alcohol in a trade or business and is registered with the Secretary as a cellulosic alcohol fuel producer.</text></subparagraph>
<subparagraph id="HAFC77F9BFAA94A839F5E2E7015F6085F"><enum>(E)</enum><header>Additional distillation excluded</header><text display-inline="yes-display-inline">The qualified cellulosic fuel production of any producer for any taxable year shall not include any alcohol which is purchased by the producer and with respect to which such producer increases the proof of the alcohol by additional distillation.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HE6809C886FC04E0EB7CB600610386ED"><enum>(b)</enum><header>Conforming amendments</header>
<paragraph id="HD66CAA53930C42B188A86FC7C6137466"><enum>(1)</enum><text>Subsection (a) of <external-xref legal-doc="usc" parsable-cite="usc/26/40">section 40</external-xref> is amended by striking <quote>plus</quote> at the end of paragraph (1), by striking <quote>plus</quote> at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting <quote>, plus</quote>, and by adding at the end the following new paragraph: </text>
<quoted-block style="OLC" id="H36460AD66CC146D48C119D458B866124" display-inline="no-display-inline">
<paragraph id="HD0CEA7D8E4C944D7847BC60029FFD66F"><enum>(4)</enum><text>in the case of a cellulosic alcohol fuel producer, the cellulosic alcohol fuel producer credit.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HEA847C994E704289B52E2F60C6DDFD2"><enum>(2)</enum><text>Clause (ii) of <external-xref legal-doc="usc" parsable-cite="usc/26/40">section 40(d)(3)(C)</external-xref> is amended by striking <quote>subsection (b)(4)(B)</quote> and inserting <quote>paragraph (4)(B) or (5)(B) of subsection (b)</quote>. </text></paragraph></subsection>
<subsection id="H2985BB2D1B45421A9026B4BFD140EF86"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to alcohol produced after December 31, 2007.</text></subsection></section>
<section display-inline="no-display-inline" id="HB65AE3E37DD4444ABC31937BD8589DBE" section-type="subsequent-section"><enum>205.</enum><header>Extension of transportation fringe benefit to bicycle commuters</header>
<subsection id="H9CA1B8C18AF049DF9657CC28C84D3F45"><enum>(a)</enum><header>In general</header><text>Paragraph (1) of <external-xref legal-doc="usc" parsable-cite="usc/26/132">section 132(f)</external-xref> of the Internal Revenue Code of 1986 (relating to general rule for qualified transportation fringe) is amended by adding at the end the following:</text>
<quoted-block id="H53BFF7A0FBE2404997545C69B8969DD9">
<subparagraph id="H4397AA24D2FB42A7A1A9C83FEA33F16F"><enum>(D)</enum><text>Any qualified bicycle commuting reimbursement.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HD8D56412AF8B47CEB2279EA6EB6FA58"><enum>(b)</enum><header>Limitation on exclusion</header><text>Paragraph (2) of section 132(f) of such Code is amended by striking <quote>and</quote> at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting <quote>, and</quote>, and by adding at the end the following new subparagraph:</text>
<quoted-block style="OLC" id="H10FCD08FA72149C08D00F6F7E821D1AD" display-inline="no-display-inline">
<subparagraph id="H0875DDA535534A57B25BDFF00A2A98D"><enum>(C)</enum><text>the applicable annual limitation in the case of any qualified bicycle commuting reimbursement.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H984A0B57B4564FC38555D915E28ECA6E"><enum>(c)</enum><header>Definitions</header><text>Paragraph (5) of section 132(f) of such Code (relating to definitions) is amended by adding at the end the following:</text>
<quoted-block id="HAEDBE5DD150F4F02A8FA643BC7C3DA5C">
<subparagraph id="H985FBDF97A914C7D8800E1A8E744B0D0"><enum>(F)</enum><header>Definitions related to bicycle commuting reimbursement</header>
<clause id="H8CFD47136F8A4029BBC800C444C924D1"><enum>(i)</enum><header>Qualified bicycle commuting reimbursement</header><text display-inline="yes-display-inline">The term <term>qualified bicycle commuting reimbursement</term> means, with respect to any calendar year, any employer reimbursement during the 15-month period beginning with the first day of such calendar year for reasonable expenses incurred by the employee during such calendar year for the purchase of a bicycle and bicycle improvements, repair, and storage, if such bicycle is regularly used for travel between the employee’s residence and place of employment. </text></clause>
<clause id="HCBBDEE30C879489AA3A588F8E904E118"><enum>(ii)</enum><header>Applicable annual limitation</header><text>The term <term>applicable annual limitation</term> means, with respect to any employee for any calendar year, the product of $20 multiplied by the number of qualified bicycle commuting months during such year.</text></clause>
<clause id="H5CF41D717AAA42B1A3B58BEA7C7B50A0"><enum>(iii)</enum><header>Qualified bicycle commuting month</header><text>The term <term>qualified bicycle commuting month</term> means, with respect to any employee, any month during which such employee—</text>
<subclause id="H000C96BDA33745CDAFF74362BF79582"><enum>(I)</enum><text display-inline="yes-display-inline">regularly uses the bicycle for a substantial portion of the travel between the employee’s residence and place of employment, and</text></subclause>
<subclause id="H638C9373FB4E4397AEEF4CE9BC67CEC"><enum>(II)</enum><text display-inline="yes-display-inline">does not receive any benefit described in subparagraph (A), (B), or (C) of paragraph (1). </text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HB72B364B7A80410EAB2856621E8DCF18"><enum>(d)</enum><header>Constructive receipt of benefit</header><text>Paragraph (4) of <external-xref legal-doc="usc" parsable-cite="usc/26/132">section 132(f)</external-xref> is amended by inserting <quote>(other than a qualified bicycle commuting reimbursement)</quote> after <quote>qualified transportation fringe</quote>. </text></subsection>
<subsection id="H6108F87EDBCF451791FC368B3D16E972"><enum>(e)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after December 31, 2007.</text></subsection></section>
<section id="H5564DB5A08B948839D7D64D1D5314E99" section-type="subsequent-section" display-inline="no-display-inline"><enum>206.</enum><header>Modification of limitation on automobile depreciation</header>
<subsection id="H2803DED4F530499B826801365880CC5"><enum>(a)</enum><header>In general</header><text>Paragraph (5) of <external-xref legal-doc="usc" parsable-cite="usc/26/280F">section 280F(d)</external-xref> of the Internal Revenue Code of 1986 (defining passenger automobile) is amended to read as follows:</text>
<quoted-block style="OLC" id="H3CB24D12E6D24C818E054E70CE1FE0F6" display-inline="no-display-inline">
<paragraph id="H158B56667D804142812EF128AE52BF09"><enum>(5)</enum><header>Passenger automobile</header>
<subparagraph id="HA7DA278514A7474291021BB4319D743"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), the term <term>passenger automobile</term> means any 4-wheeled vehicle—</text>
<clause id="H6091F18A1F35498ABFC4E71666941B54"><enum>(i)</enum><text display-inline="yes-display-inline">which is primarily designed or which can be used to carry passengers over public streets, roads, or highways (except any vehicle operated exclusively on a rail or rails), and </text></clause>
<clause id="HBE7142594B03477EA56081FC2619C21E" commented="no"><enum>(ii)</enum><text>which is rated at not more than 14,000 pounds gross vehicle weight. </text></clause></subparagraph>
<subparagraph id="H8C0A97577BFE4CFAB5C04BB79DC5C8D1"><enum>(B)</enum><header>Exceptions</header><text>The term <term>passenger automobile</term> shall not include—</text>
<clause id="H4CFC2912282143EE9511B69C95151400"><enum>(i)</enum><text display-inline="yes-display-inline">any exempt-design vehicle, and </text></clause>
<clause id="HA9886B7B2F9B4160AA27CB1CD93D74F"><enum>(ii)</enum><text>any exempt-use vehicle.</text></clause></subparagraph>
<subparagraph id="H9B07D7920E4D454F9188B6CA00300049"><enum>(C)</enum><header>Exempt-design vehicle</header><text>The term <term>exempt-design vehicle</term> means—</text>
<clause id="H88F99C155B4243B8902911DCB0604267"><enum>(i)</enum><text>any vehicle which, by reason of its nature or design, is not likely to be used more than a de minimis amount for personal purposes, and</text></clause>
<clause id="H0814CB8615D344949484A7FA18747F0"><enum>(ii)</enum><text>any vehicle—</text>
<subclause id="H215AE549292F4E24AF67596CAA009795"><enum>(I)</enum><text>which is designed to have a seating capacity of more than 9 persons behind the driver’s seat, </text></subclause>
<subclause id="H5E04B17C6F354EFB827246BB6921258"><enum>(II)</enum><text>which is equipped with a cargo area of at least 5 feet in interior length which is an open area or is designed for use as an open area but is enclosed by a cap and is not readily accessible directly from the passenger compartment, or</text></subclause>
<subclause id="HB2884E0D878A43C4BBB0072345D4B72E"><enum>(III)</enum><text>has an integral enclosure, fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver’s seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield.</text></subclause></clause></subparagraph>
<subparagraph id="HF79D6C1D9BF742F89FD22BA61C913889"><enum>(D)</enum><header>Exempt-use vehicle</header><text>The term <term>exempt-use vehicle</term> means—</text>
<clause id="HDEABB553388747178C9F1DEB0008EC80"><enum>(i)</enum><text>any ambulance, hearse, or combination ambulance-hearse used by the taxpayer directly in a trade or business, </text></clause>
<clause id="H619B3D0DABAD408C94752B02D6780053"><enum>(ii)</enum><text>any vehicle used by the taxpayer directly in the trade or business of transporting persons or property for compensation or hire, and</text></clause>
<clause id="HBFA11CCF0D7A4949AE56B629283470EB"><enum>(iii)</enum><text>any truck or van if substantially all of the use of such vehicle by the taxpayer is directly in—</text>
<subclause id="HD193044647464FD38DA036DF592EAAE"><enum>(I)</enum><text>a farming business (within the meaning of section 263A(e)(4)),</text></subclause>
<subclause id="H267725DA381240A38FE4F0A2A2F63F03"><enum>(II)</enum><text display-inline="yes-display-inline">the transportation of a substantial amount of equipment, supplies, or inventory, or</text></subclause>
<subclause id="H065F08A82EDF44C3A46F74C2714940D2"><enum>(III)</enum><text display-inline="yes-display-inline">the moving or delivery of property which requires substantial cargo capacity.</text></subclause></clause></subparagraph>
<subparagraph id="H1F9B642A33074C77B2A6196D7078B659"><enum>(E)</enum><header>Recapture</header><text>In the case of any vehicle which is not a passenger automobile by reason of being an exempt-use vehicle, if such vehicle ceases to be an exempt-use vehicle in any taxable year after the taxable year in which such vehicle is placed in service, a rule similar to the rule of subsection (b) shall apply.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HBDE9BB9D70544D008526CF15AFA8B61C"><enum>(b)</enum><header>Conforming amendment</header><text>Section 179(b) of such Code (relating to limitations) is amended by striking paragraph (6).</text></subsection>
<subsection id="H8907FA5FEC134CBC8284D6946950B897"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to property placed in service after December 31, 2007.</text></subsection></section>
<section id="H5CDF603E5A9749D1949D8092FEF4B123" display-inline="no-display-inline" section-type="subsequent-section"><enum>207.</enum><header>Restructuring of New York Liberty Zone tax credits</header>
<subsection id="H82BBF56AFB0C4B4A84244D70A051B336"><enum>(a)</enum><header>In general</header><text>Part I of subchapter Y of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by redesignating section 1400L as section 1400K and by adding at the end the following new section:</text>
<quoted-block id="H6613B7C9D38C4F449385AE4E93CD3200" style="OLC">
<section id="H4C783292D2FE4B01BC7FF19291F2672"><enum>1400L.</enum><header>New York Liberty Zone tax credits</header>
<subsection id="H2C1A6A156DDC43839E159D00F3CD1692"><enum>(a)</enum><header>In general</header><text>In the case of a New York Liberty Zone governmental unit, there shall be allowed as a credit against any taxes imposed for any payroll period by section 3402 for which such governmental unit is liable under section 3403 an amount equal to so much of the portion of the qualifying project expenditure amount allocated under subsection (b)(3) to such governmental unit for the calendar year as is allocated by such governmental unit to such period under subsection (b)(4).</text></subsection>
<subsection id="HF30C1F71C94C42BC9EA220DF274589E5"><enum>(b)</enum><header>Qualifying project expenditure amount</header><text>For purposes of this section—</text>
<paragraph id="HA05A9B10820F4B0B9917A5251177901"><enum>(1)</enum><header>In general</header><text>The term <term>qualifying project expenditure amount</term> means, with respect to any calendar year, the sum of—</text>
<subparagraph id="H8E7314137DD54F4FBC86DCEE00EC5142"><enum>(A)</enum><text>the total expenditures paid or incurred during such calendar year by all New York Liberty Zone governmental units and the Port Authority of New York and New Jersey for any portion of qualifying projects located wholly within the City of New York, New York, and</text></subparagraph>
<subparagraph id="HBC9BB94A277D4421B4DC5EE2F9CD5F7D"><enum>(B)</enum><text>any such expenditures—</text>
<clause id="HA0F1721353F5463CBC1B0098DDB1CC81"><enum>(i)</enum><text>paid or incurred in any preceding calendar year which begins after the date of enactment of this section, and</text></clause>
<clause id="HE62746C586A34A2D9BB562A57754340"><enum>(ii)</enum><text>not previously allocated under paragraph (3).</text></clause></subparagraph></paragraph>
<paragraph id="H10A67B2B6C204F1693088FCB2A46CAA"><enum>(2)</enum><header>Qualifying project</header><text>The term <term>qualifying project</term> means any transportation infrastructure project, including highways, mass transit systems, railroads, airports, ports, and waterways, in or connecting with the New York Liberty Zone (as defined in section 1400K(h)), which is designated as a qualifying project under this section jointly by the Governor of the State of New York and the Mayor of the City of New York, New York.</text></paragraph>
<paragraph id="HF1DEB837F19F47C69B4690DE00AE1F7C"><enum>(3)</enum><header>General allocation</header>
<subparagraph id="H4109911B6C3D486E94581BC635E6825B"><enum>(A)</enum><header>In general</header><text>The Governor of the State of New York and the Mayor of the City of New York, New York, shall jointly allocate to each New York Liberty Zone governmental unit the portion of the qualifying project expenditure amount which may be taken into account by such governmental unit under subsection (a) for any calendar year in the credit period.</text></subparagraph>
<subparagraph id="HDC87725F80744501B056DEFB67E9AC82"><enum>(B)</enum><header>Aggregate limit</header><text>The aggregate amount which may be allocated under subparagraph (A) for all calendar years in the credit period shall not exceed $2,000,000,000.</text></subparagraph>
<subparagraph id="H5083FB698B6F493EA560173C6B04D818" commented="no"><enum>(C)</enum><header>Annual limit</header><text>The aggregate amount which may be allocated under subparagraph (A) for any calendar year in the credit period shall not exceed the sum of—</text>
<clause id="H94871E5C320F4098B81E8994779CED" commented="no"><enum>(i)</enum><text>$169,000,000, plus</text></clause>
<clause id="HD1509C30E40A479500FDA81CF3B04CAA" commented="no"><enum>(ii)</enum><text>the aggregate amount authorized to be allocated under this paragraph for all preceding calendar years in the credit period which was not so allocated.</text></clause></subparagraph>
<subparagraph id="H74D1E10AC4A2414BBE957DDB01395B76"><enum>(D)</enum><header>Unallocated amounts at end of credit period</header><text>If, as of the close of the credit period, the amount under subparagraph (B) exceeds the aggregate amount allocated under subparagraph (A) for all calendar years in the credit period, the Governor of the State of New York and the Mayor of the City of New York, New York, may jointly allocate to New York Liberty Zone governmental units for any calendar year in the 5-year period following the credit period an amount equal to—</text>
<clause id="H0661AAD75A114EEE9CC5C197A9762E3F"><enum>(i)</enum><text>the lesser of—</text>
<subclause id="HC7E88385372B48498918B5A6668E6994"><enum>(I)</enum><text>such excess, or</text></subclause>
<subclause id="HC4A10E8BEF1B4BC3A85F47FD5E8FCE8C"><enum>(II)</enum><text>the qualifying project expenditure amount for such calendar year, reduced by</text></subclause></clause>
<clause id="HBDBFC276ADFB4BF781C9B0A654F9A624"><enum>(ii)</enum><text>the aggregate amount allocated under this subparagraph for all preceding calendar years.</text></clause></subparagraph></paragraph>
<paragraph id="H02C8F07B0C2842C1A2AE47613C24E1D"><enum>(4)</enum><header>Allocation to payroll periods</header><text>Each New York Liberty Zone governmental unit which has been allocated a portion of the qualifying project expenditure amount under paragraph (3) for a calendar year may allocate such portion to payroll periods beginning in such calendar year as such governmental unit determines appropriate.</text></paragraph></subsection>
<subsection id="H1B43B68AE21B4AD297CA6872B6002DC"><enum>(c)</enum><header>Carryover of unused allocations</header>
<paragraph id="H4A1F659A0DDE4410006E8CEE92B511B"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (2), if the amount allocated under subsection (b)(3) to a New York Liberty Zone governmental unit for any calendar year exceeds the aggregate taxes imposed by section 3402 for which such governmental unit is liable under section 3403 for periods beginning in such year, such excess shall be carried to the succeeding calendar year and added to the allocation of such governmental unit for such succeeding calendar year.</text></paragraph>
<paragraph id="H62888651EE5A4580A79F1046F246BD36"><enum>(2)</enum><header>Reallocation</header><text>If a New York Liberty Zone governmental unit does not use an amount allocated to it under subsection (b)(3) within the time prescribed by the Governor of the State of New York and the Mayor of the City of New York, New York, then such amount shall after such time be treated for purposes of subsection (b)(3) in the same manner as if it had never been allocated.</text></paragraph></subsection>
<subsection id="H5964E0D19ABB47EEB422C0E2D100A5E5"><enum>(d)</enum><header>Definitions and special rules</header><text>For purposes of this section—</text>
<paragraph id="HC8B0546BB09944E189B5DB1125BECEC7"><enum>(1)</enum><header>Credit period</header><text>The term <term>credit period</term> means the 12-year period beginning on January 1, 2008.</text></paragraph>
<paragraph id="H4EE42F5374F04E8F977CD0AA6900004F"><enum>(2)</enum><header>New york liberty zone governmental unit</header><text>The term <term>New York Liberty Zone governmental unit</term> means—</text>
<subparagraph id="H5742CD0FACFD43A6895C7FDB3DA62500"><enum>(A)</enum><text>the State of New York,</text></subparagraph>
<subparagraph id="HC69918CEE215494D8CBBA5A400733DF1"><enum>(B)</enum><text>the City of New York, New York, and</text></subparagraph>
<subparagraph id="H800684DC5386469FB36C77F14C14564F"><enum>(C)</enum><text>any agency or instrumentality of such State or City.</text></subparagraph></paragraph>
<paragraph id="H55901AC0060A4E3B81CB73775EBDA2F"><enum>(3)</enum><header>Treatment of funds</header><text>Any expenditure for a qualifying project taken into account for purposes of the credit under this section shall be considered State and local funds for the purpose of any Federal program.</text></paragraph>
<paragraph id="HA242B3062D354C54B1C6BB7BA9F2854"><enum>(4)</enum><header>Treatment of credit amounts for purposes of withholding taxes</header><text>For purposes of this title, a New York Liberty Zone governmental unit shall be treated as having paid to the Secretary, on the day on which wages are paid to employees, an amount equal to the amount of the credit allowed to such entity under subsection (a) with respect to such wages, but only if such governmental unit deducts and withholds wages for such payroll period under section 3401 (relating to wage withholding).</text></paragraph></subsection>
<subsection id="H75FBCF3E6F7D4619AAA032004FDABE4B"><enum>(e)</enum><header>Reporting</header><text>The Governor of the State of New York and the Mayor of the City of New York, New York, shall jointly submit to the Secretary an annual report—</text>
<paragraph id="H47DC052E506C4623BA27260003642EC5"><enum>(1)</enum><text>which certifies—</text>
<subparagraph id="HCFC4073E5481413690F4A5EDBE066EDC"><enum>(A)</enum><text>the qualifying project expenditure amount for the calendar year, and</text></subparagraph>
<subparagraph id="H01B1EA89480E4905BEAF8EAA31BF2612"><enum>(B)</enum><text>the amount allocated to each New York Liberty Zone governmental unit under subsection (b)(3) for the calendar year, and</text></subparagraph></paragraph>
<paragraph id="H1660AE91F8234FD598BEEFF84FBE4088"><enum>(2)</enum><text>includes such other information as the Secretary may require to carry out this section.</text></paragraph></subsection>
<subsection id="H41E75C79712C4A45BED05546EAF1F8DC"><enum>(f)</enum><header>Guidance</header><text>The Secretary may prescribe such guidance as may be necessary or appropriate to ensure compliance with the purposes of this section.</text></subsection></section><after-quoted-block></after-quoted-block></quoted-block></subsection>
<subsection id="HBCC0D2AB1BDD4DF1BE1E3C96D48EF536" commented="no"><enum>(b)</enum><header>Termination of special allowance and expensing</header><text>Subparagraph (A) of section 1400K(b)(2), as redesignated by subsection (a), is amended by striking the parenthetical therein and inserting <quote>(in the case of nonresidential real property and residential rental property, the date of the enactment of the <short-title>Renewable Energy and Energy Conservation Tax Act of 2007</short-title> or, if acquired pursuant to a binding contract in effect on such enactment date, December 31, 2009)</quote>. </text></subsection>
<subsection id="H383B77D84C9A4B5FA15FDFB200CB242F"><enum>(c)</enum><header>Conforming amendments</header>
<paragraph id="H1553948910DC49FCBCEAF51807153538"><enum>(1)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/38">Section 38(c)(3)(B)</external-xref> is amended by striking <quote>section 1400L(a)</quote> and inserting <quote>section 1400K(a)</quote>.</text></paragraph>
<paragraph id="HC64216BBB96647DE9CF95153A0FBECA8"><enum>(2)</enum><text><external-xref legal-doc="usc" parsable-cite="usc/26/168">Section 168(k)(2)(D)(ii)</external-xref> is amended by striking <quote>section 1400L(c)(2)</quote> and inserting <quote>section 1400K(c)(2)</quote>.</text></paragraph>
<paragraph id="H51FD1502F0A440029455FD51DF3FF238"><enum>(3)</enum><text>The table of sections for part I of subchapter Y of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by redesignating the item relating to section 1400L as an item relating to section 1400K and by inserting after such item the following new item:</text>
<quoted-block style="OLC" id="HA85D410FF9F2428DABF3BB3FA19C9571" display-inline="no-display-inline">
<toc container-level="quoted-block-container" quoted-block="no-quoted-block" lowest-level="section" idref="H6613B7C9D38C4F449385AE4E93CD3200" regeneration="yes-regeneration" lowest-bolded-level="division-lowest-bolded">
<toc-entry idref="H4C783292D2FE4B01BC7FF19291F2672" level="section">Sec. 1400L. New York Liberty Zone tax credits.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H4A2D82AF489C43FFB7FC6DCFCD087552" commented="no"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall take effect on the date of the enactment of this Act.</text></subsection></section></subtitle>
<subtitle id="H69D1E30A4F4349ACA0583DEF05A91BA6"><enum>B</enum><header>Other conservation provisions</header>
<section id="H6B3EB7BB41EF40DA8F216B5271AE199D"><enum>211.</enum><header>Qualified energy conservation bonds</header>
<subsection id="H18040197F205487C93D269C41A679E1"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subpart I of part IV of subchapter A of chapter 1, as added by <external-xref legal-doc="usc" parsable-cite="usc/26/104">section 104,</external-xref> is amended by adding at the end the following new section:</text>
<quoted-block style="OLC" id="H21739C30103F4F5484270064F43F1E9C" display-inline="no-display-inline">
<section id="HCE6C1D4AF1AF4B85ACC2F4F07F6558FF" display-inline="no-display-inline" section-type="subsequent-section"><enum>54C.</enum><header>Qualified energy conservation bonds</header>
<subsection id="H7832E8EFA1154CA6827E744C895D8EB3"><enum>(a)</enum><header>Qualified energy conservation bond</header><text>For purposes of this subchapter, the term <term>qualified energy conservation bond</term> means any bond issued as part of an issue if—</text>
<paragraph id="H9B13DA06B80D43C1867D7DE7F57C1D9C" display-inline="no-display-inline"><enum>(1)</enum><text>100 percent of the available project proceeds of such issue are to be used for one or more qualified conservation purposes,</text></paragraph>
<paragraph id="H9805FB48460C4DA19F641856037D121F"><enum>(2)</enum><text>the bond is issued by a State or local government, and</text></paragraph>
<paragraph id="H92E605BB155D46B0AF8EE0F669E77AA"><enum>(3)</enum><text>the issuer designates such bond for purposes of this section.</text></paragraph></subsection>
<subsection id="HA4D86E87F46D4FAD90C049B4B3694109" display-inline="no-display-inline"><enum>(b)</enum><header>Limitation on amount of bonds designated</header><text>The maximum aggregate face amount of bonds which may be designated under subsection (a) by any issuer shall not exceed the limitation amount allocated to such issuer under subsection (d).</text></subsection>
<subsection id="HF4CEB418BB3B4F44A8BFEAF6C9F588B"><enum>(c)</enum><header>National limitation on amount of bonds designated</header><text>There is a national qualified energy conservation bond limitation of $3,600,000,000.</text></subsection>
<subsection id="H9ED59E58E4AB4EBCB8A452B5B18C3D65"><enum>(d)</enum><header>Allocations</header>
<paragraph id="H3C544C659F5040D88255DB3C81F2022E"><enum>(1)</enum><header>In general</header><text>The limitation applicable under subsection (c) shall be allocated by the Secretary among the States in proportion to the population of the States. </text></paragraph>
<paragraph id="H6722D883CCF14FF2B4AC829C2F614DF0"><enum>(2)</enum><header>Allocations to largest local governments</header>
<subparagraph id="H21FF38611865498AA8E5249203CADFDC"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">In the case of any State in which there is a large local government, each such local government shall be allocated a portion of such State’s allocation which bears the same ratio to the State’s allocation (determined without regard to this subparagraph) as the population of such large local government bears to the population of such State.</text></subparagraph>
<subparagraph id="H968E9ED2AF2845A5B2E02927DCB2B21C"><enum>(B)</enum><header>Allocation of unused limitation to State</header><text>The amount allocated under this subsection to a large local government may be reallocated by such local government to the State in which such local government is located.</text></subparagraph>
<subparagraph id="HD0A5C387C8274902BA37D5035EBEC000"><enum>(C)</enum><header>Large local government</header><text>For purposes of this section, the term <term>large local government</term> means any municipality or county if such municipality or county has a population of 100,000 or more.</text></subparagraph></paragraph>
<paragraph id="H86076186DE1D447689DE23D87BB5A547"><enum>(3)</enum><header>Allocation to issuers; restriction on private activity bonds</header><text>Any allocation under this subsection to a State or large local government shall be allocated by such State or large local government to issuers within the State in a manner that results in not less than 70 percent of the allocation to such State or large local government being used to designate bonds which are not private activity bonds.</text></paragraph></subsection>
<subsection id="HDBB1B5787ABC4B1CBF42E1C9926CAA3E"><enum>(e)</enum><header>Qualified conservation purpose</header><text>For purposes of this section—</text>
<paragraph id="H4CE9C505E97A4965A2C60438072B8D8D"><enum>(1)</enum><header>In general</header><text>The term <term>qualified conservation purpose</term> means any of the following:</text>
<subparagraph id="HD9E4C604BA64421AB636D9B850710061"><enum>(A)</enum><text display-inline="yes-display-inline">Capital expenditures incurred for purposes of—</text>
<clause id="H71C9F76379DD4B87ACBF33C0912F7AA"><enum>(i)</enum><text>reducing energy consumption in publicly-owned buildings by at least 20 percent,</text></clause>
<clause id="HCA260D32615549E884D8AF01B0C49B2"><enum>(ii)</enum><text>implementing green community programs, or</text></clause>
<clause id="H79EDC76C6AE94113B321FC73ADC00D"><enum>(iii)</enum><text>rural development involving the production of electricity from renewable energy resources.</text></clause></subparagraph>
<subparagraph id="HB5C85071FD36490CBCAE854FA4C94D15"><enum>(B)</enum><text>Expenditures with respect to research facilities, and research grants, to support research in—</text>
<clause id="HD486C81A89F240CBA2C2B67C60EE700"><enum>(i)</enum><text>development of cellulosic ethanol or other nonfossil fuels,</text></clause>
<clause id="H1422DE9CB16A42BFBF1E2BB5955A9C1"><enum>(ii)</enum><text>technologies for the capture and sequestration of carbon dioxide produced through the use of fossil fuels,</text></clause>
<clause id="H69FF7141404B4188B533C6480782FDD4"><enum>(iii)</enum><text>increasing the efficiency of existing technologies for producing nonfossil fuels,</text></clause>
<clause id="H01BB025A067045AC82EC482D64038805"><enum>(iv)</enum><text>automobile battery technologies and other technologies to reduce fossil fuel consumption in transportation, or</text></clause>
<clause id="H7FB3664733494F85BA791C01EFECAEF"><enum>(v)</enum><text>technologies to reduce energy use in buildings. </text></clause></subparagraph>
<subparagraph id="H65EF16F92D8C46F789EA65445CEEFD36"><enum>(C)</enum><text>Mass commuting facilities and related facilities that reduce the consumption of energy, including expenditures to reduce pollution from vehicles used for mass commuting.</text></subparagraph>
<subparagraph id="HA394BEC885E548C1A2558EC6DA912157"><enum>(D)</enum><text>Demonstration projects designed to promote the commercialization of—</text>
<clause id="HD7F594F9BE0D4CADB967B1B23D4D0029"><enum>(i)</enum><text>green building technology, </text></clause>
<clause id="H8B8260C965DD4968A687A300D95D3D93"><enum>(ii)</enum><text>conversion of agricultural waste for use in the production of fuel or otherwise, </text></clause>
<clause id="H95B15DEDCF8343509B4D1608A1598C78"><enum>(iii)</enum><text>advanced battery manufacturing technologies,</text></clause>
<clause id="HFDE31700BA074CF3A38E8255B500BD35"><enum>(iv)</enum><text>technologies to reduce peak use of electricity, or</text></clause>
<clause id="H5E2779F321044B65B4C364CA6E6315D"><enum>(v)</enum><text>technologies for the capture and sequestration of carbon dioxide emitted from combusting fossil fuels in order to produce electricity. </text></clause></subparagraph>
<subparagraph id="HD1E55D1CF33D467F8300B9427683B49C"><enum>(E)</enum><text>Public education campaigns to promote energy efficiency.</text></subparagraph></paragraph>
<paragraph id="H649ED48E929A46B2A5003F83711CFFF0"><enum>(2)</enum><header>Special rules for private activity bonds</header><text>For purposes of this section, in the case of any private activity bond, the term <term>qualified conservation purposes</term> shall not include any expenditure which is not a capital expenditure.</text></paragraph></subsection>
<subsection id="HCF903463765D4E4FB8996F2846390704"><enum>(f)</enum><header>Population</header>
<paragraph id="H9E91A3092DFB48BB80B95EA6366FBFA0"><enum>(1)</enum><header>In general</header><text>The population of any State or local government shall be determined for purposes of this section as provided in section 146(j) for the calendar year which includes the date of the enactment of this section.</text></paragraph>
<paragraph id="HFD6E38FB7A524710BA0867C2411B9087"><enum>(2)</enum><header>Special rule for counties</header><text>In determining the population of any county for purposes of this section, any population of such county which is taken into account in determining the population of any municipality which is a large local government shall not be taken into account in determining the population of such county.</text></paragraph></subsection>
<subsection id="H83D5C485D2A046DE838C4B591EB79538" display-inline="no-display-inline"><enum>(g)</enum><header>Application to Indian tribal governments</header><text>An Indian tribal government shall be treated for purposes of this section in the same manner as a large local government, except that—</text>
<paragraph id="H6F5353D8A7E8407F9B6EEBA26FFAC4AE"><enum>(1)</enum><text>an Indian tribal government shall be treated for purposes of subsection (d) as located within a State to the extent of so much of the population of such government as resides within such State, and</text></paragraph>
<paragraph id="H6EA12E47E4294FFEBE3DD9C5EF004997"><enum>(2)</enum><text>any bond issued by an Indian tribal government shall be treated as a qualified energy conservation bond only if issued as part of an issue the available project proceeds of which are used for purposes for which such Indian tribal government could issue bonds to which section 103(a) applies.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H5AC8789636334A82A23455A2F9B42573"><enum>(b)</enum><header>Conforming amendments</header>
<paragraph id="HB42E261217C64667ADCC200598690345"><enum>(1)</enum><text>Paragraph (1) of section 54A(d), as added by <external-xref legal-doc="usc" parsable-cite="usc/26/104">section 104,</external-xref> is amended to read as follows:</text>
<quoted-block style="OLC" id="H943AEBAC20934FA18CDFC5C68F93BDF8" display-inline="no-display-inline">
<paragraph id="H20D21B3C4BB547B68C995B97732B57B" commented="no"><enum>(1)</enum><header>Qualified tax credit bond</header><text>The term <term>qualified tax credit bond</term> means—</text>
<subparagraph id="H05719D47FF8E440BBC4C4990B7C05D18"><enum>(A)</enum><text>a new clean renewable energy bond, or</text></subparagraph>
<subparagraph id="H6A2E811C6B14455784BAF88DE6DEB2B7"><enum>(B)</enum><text>a qualified energy conservation bond,</text></subparagraph><continuation-text continuation-text-level="paragraph">which is part of an issue that meets requirements of paragraphs (2), (3), (4), and (5).</continuation-text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H54EBDA3011F74A67A38F603300D55CE5"><enum>(2)</enum><text>Subparagraph (C) of section 54A(d)(2), as added by <external-xref legal-doc="usc" parsable-cite="usc/26/104">section 104,</external-xref> is amended to read as follows:</text>
<quoted-block style="OLC" id="H480D89D31040445B99AB11E81646A1F1" display-inline="no-display-inline">
<subparagraph id="H31F0F9EC4BC649C90000AF86DC34A2C1" commented="no"><enum>(C)</enum><header>Qualified purpose</header><text>For purposes of this paragraph, the term <term>qualified purpose</term> means—</text>
<clause id="H820FA5D3B97B4748A1FF4FCAC26F97C"><enum>(i)</enum><text>in the case of a new clean renewable energy bond, a purpose specified in section 54B(a)(1), and</text></clause>
<clause id="HAA84F40581F743C08B29533571AC41C6"><enum>(ii)</enum><text>in the case of a qualified energy conservation bond, a purpose specified in section 54C(a)(1).</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HC465EB8F98494C548140B43FD46376F6"><enum>(3)</enum><text display-inline="yes-display-inline">The table of sections for subpart I of part IV of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by adding at the end the following new item:</text>
<quoted-block style="OLC" id="H999FC19F1F924AAA8207B500C1689E90" display-inline="no-display-inline">
<toc container-level="quoted-block-container" quoted-block="no-quoted-block" lowest-level="section" idref="H21739C30103F4F5484270064F43F1E9C" regeneration="yes-regeneration" lowest-bolded-level="division-lowest-bolded">
<toc-entry idref="HCE6C1D4AF1AF4B85ACC2F4F07F6558FF" level="section">Sec. 54C. Qualified energy conservation bonds.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HF29564F1BE9F49E0A2D0F25000E3555F"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act.</text></subsection></section>
<section id="H4781AB18DBF24EDB98D7D429253C2300" display-inline="no-display-inline" section-type="subsequent-section"><enum>212.</enum><header>Qualified residential energy efficiency assistance bonds</header>
<subsection id="H8C04A93F495E468595E751807668F56F"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subpart I of part IV of subchapter A of chapter 1 (as amended by this Act) is amended by adding at the end the following new section:</text>
<quoted-block style="OLC" id="HC41190D24D904303ADC6A2733B37F677" display-inline="no-display-inline">
<section id="H16919DDD68254BE782FBAC9027112FF1" display-inline="no-display-inline" section-type="subsequent-section"><enum>54D.</enum><header>Qualified residential energy efficiency assistance bonds</header>
<subsection id="HD82DCF6B09DA45670000096BC8F0AD14"><enum>(a)</enum><header>Qualified residential energy efficiency assistance bond</header><text>For purposes of this subchapter, the term <term>qualified residential energy efficiency assistance bond</term> means any bond issued as part of an issue if—</text>
<paragraph id="HD374EA4088C04AAB8E5D11CC725300BF"><enum>(1)</enum><text>100 percent of the available project proceeds of such issue are to be used for 1 or more qualified residential energy efficiency assistance purposes,</text></paragraph>
<paragraph id="H7551B256DC6A4EED8BB3813EB679508D"><enum>(2)</enum><text>not less than 20 percent of the available project proceeds of such issue are to be used for 1 or more qualified low-income residential energy efficiency assistance purposes,</text></paragraph>
<paragraph id="H5CD025A731474BE2A52904F789746DCD"><enum>(3)</enum><text display-inline="yes-display-inline">repayments of principal and applicable interest on financing provided by the issue are used not later than the close of the 3-month period beginning on the date the prepayment (or complete repayment) is received to redeem bonds which are part of the issue or to provide for 1 or more qualified residential energy efficiency assistance purposes,</text></paragraph>
<paragraph id="H686DA8DCEFDA45B590773008EEFE4330"><enum>(4)</enum><text>the bond is issued by a State, and</text></paragraph>
<paragraph id="H98071579460842C9AEFFCB0005ABE90"><enum>(5)</enum><text>the issuer designates such bond for purposes of this section.</text></paragraph></subsection>
<subsection id="H989B700AC5CC403DA6B6CF20667FAC85" display-inline="no-display-inline"><enum>(b)</enum><header>Limitation on amount of bonds designated</header><text>The maximum aggregate face amount of bonds which may be designated under subsection (a) by any issuer shall not exceed the limitation amount allocated under subsection (d) to such issuer.</text></subsection>
<subsection id="HC213575D1FB54F658D3628EDF03EC591"><enum>(c)</enum><header>National limitation on amount of bonds designated</header><text>There is a national qualified energy conservation bond limitation of $2,400,000,000.</text></subsection>
<subsection id="H70B1E8A3FF1A41DEA36B0042F2003648"><enum>(d)</enum><header>Limitation allocated among States</header><text>The limitation under subsection (c) shall be allocated by the Secretary among the States in proportion to the population of the States.</text></subsection>
<subsection id="H2E38716EF7CA491394B27B00FFA40410"><enum>(e)</enum><header>Qualified residential energy efficiency assistance purpose</header><text>For purposes of this section—</text>
<paragraph id="H5EC4E36C47214E8C99B2C4AB9B148E28"><enum>(1)</enum><header>In general</header><text>The term <term>qualified residential energy efficiency assistance purpose</term> means any grant or low-interest loan to acquire (including reasonable installation costs)—</text>
<subparagraph id="HB10C3939C438463087D2F1101C123728"><enum>(A)</enum><text>any property which meets (at a minimum) the requirements of the Energy Star program and which is to be installed in a dwelling unit,</text></subparagraph>
<subparagraph id="H2F5087F5509E413900775857E43CEBB9"><enum>(B)</enum><text>any property which uses wind, solar, or geothermal energy or qualified fuel cell property (as defined in section 48(c)(1)) to generate electricity, or to heat or cool water, for use in a dwelling unit (other than property described in section 25D(e)(3)), and</text></subparagraph>
<subparagraph id="H5C793CE7690A479FA081CA21700036BC"><enum>(C)</enum><text>any improvements to a dwelling unit which are made pursuant to a plan certified by an energy efficiency expert that such improvement will yield at least a 20 percent reduction in total household energy consumption related to heating, cooling, lighting, and appliances.</text></subparagraph></paragraph>
<paragraph id="H25B64EA276704520BD9541FF56B7F693"><enum>(2)</enum><header>Geothermal heat pump</header><text>Any geothermal heat pump to provide heating or cooling in a dwelling unit described in paragraph (1)(B) shall be treated as described in paragraph (1)(B).</text></paragraph>
<paragraph id="H8B4F9EB907354D839F26F8B5AC5BC12F"><enum>(3)</enum><header>Dollar limitations</header>
<subparagraph id="HC84017F45C8847908BC5FB347F4987A8"><enum>(A)</enum><header>In general</header><text>Such term shall not include any grant or loan for improvements described in paragraph (1)(C) with respect to any dwelling unit to the extent that such grant or loan (when added to all other grants or loans for such improvements) exceeds $5,000.</text></subparagraph>
<subparagraph id="HAA5593F2149347179B35C49700E4EA26"><enum>(B)</enum><header>Increased limitation for certain principal residences</header><text>In the case of a dwelling unit which is used as a principal residence (within the meaning of section 121) by the recipient of the grant or loan referred to in subparagraph (A)— </text>
<clause id="H1FEF4FB1A18C4D6DB2D499B9B5F912EF"><enum>(i)</enum><text>subparagraph (A) shall be applied by substituting <quote>$12,000</quote> for <quote>$5,000</quote> if such grant or loan would satisfy the requirements of paragraph (1)(A) if such paragraph were applied by substituting <quote>50 percent</quote> for <quote>20 percent</quote>, and </text></clause>
<clause id="HA6BAA00CC67E433B9F17905E00024B98"><enum>(ii)</enum><text display-inline="yes-display-inline">in any case to which clause (i) does not apply, subparagraph (A) shall be applied by substituting <quote>$8,000</quote> for <quote>$5,000</quote> if such grant or loan would satisfy the requirements of paragraph (1)(A) if such paragraph were applied by substituting <quote>35 percent</quote> for <quote>20 percent</quote>.</text></clause></subparagraph></paragraph>
<paragraph id="H3E2FE2A42ECB4FDBBDF0007FB08E298F"><enum>(4)</enum><header>Low-interest loan</header><text>The term <term>low interest loan</term> means any loan which charges interest at a rate which does not exceed the applicable Federal rate in effect under section 1288(b)(1) determined as of the issuance of the loan.</text></paragraph>
<paragraph id="HE70D5A2D33E24AE8A675E20017006F32"><enum>(5)</enum><header>Exclusion of certain property</header><text>The following property shall not be taken into account for purposes of paragraph (1)(A):</text>
<subparagraph id="H49F0FCCB82274910BF95E16EECF23228"><enum>(A)</enum><text display-inline="yes-display-inline">Any equipment used in connection with a swimming pool, hot tub, or similar property.</text></subparagraph>
<subparagraph id="H710CFB94ABEE4309A7009B355392B927"><enum>(B)</enum><text>Any television.</text></subparagraph>
<subparagraph id="H4E89E03C5FB249839D0084F63004C440"><enum>(C)</enum><text>Any device for converting digital signal to analog.</text></subparagraph>
<subparagraph id="HD7E8E8FAE41A490DAFAF41DC98E768F9"><enum>(D)</enum><text>Any DVD player.</text></subparagraph>
<subparagraph id="H105084DE1C374A5A9725DC226D13E219"><enum>(E)</enum><text>Any video cassette recorder (VCR).</text></subparagraph>
<subparagraph id="H67D84B37001A4C5B9462292155001DB9"><enum>(F)</enum><text>Any audio equipment.</text></subparagraph>
<subparagraph id="HC2078C43E317472E9D0050C63E656E04"><enum>(G)</enum><text>Any cordless phone.</text></subparagraph>
<subparagraph id="H607E813DF8624A2983F45CA791018C0"><enum>(H)</enum><text>Any other item of property where there is substantial recreational use.</text></subparagraph></paragraph></subsection>
<subsection id="H5525E36FB2DE4990884099E66077F3A3"><enum>(f)</enum><header>Qualified low-income residential efficiency assistance purpose</header><text>For purposes of this section—</text>
<paragraph id="H385DCBFFDFD7438092F93904B75989C"><enum>(1)</enum><header>In general</header><text>The term <term>qualified low-income residential energy efficiency assistance purpose</term> means any qualified residential energy efficiency assistance purpose with respect to a dwelling unit which is occupied (at the time of the grant or loan) by individuals whose income is 50 percent or less of area median gross income. Rules similar to the rules of section 142(d)(2)(B) shall apply for purposes of this paragraph.</text></paragraph>
<paragraph id="H1B481E5FAC33407B916B823BE96B0025"><enum>(2)</enum><header>Restriction to grants</header><text>Such term shall not include any loan.</text></paragraph></subsection>
<subsection id="H31F72FBAB0EA4ACCAAFB529B95633B32"><enum>(g)</enum><header>Definitions and special rules</header><text>For purposes of this section—</text>
<paragraph id="H53A1DBB5975F48FE82A824AB86004341"><enum>(1)</enum><header>Applicable interest</header><text display-inline="yes-display-inline">The term <term>applicable interest</term> means, with respect to any loan, so much of any interest on such loan which exceeds 1 percentage point.</text></paragraph>
<paragraph id="H692BDD33225C4B7099C0C75113B9DD3E"><enum>(2)</enum><header>Special rule relating to arbitrage</header><text display-inline="yes-display-inline">An issue shall not be treated as failing to meet the requirements of section 54A(d)(4)(A) by reason of any investment of available project proceeds in 1 or more qualified residential energy efficiency assistance purposes.</text></paragraph>
<paragraph id="H18E9D535F9B947E8BF6958C5574D9DAA"><enum>(3)</enum><header>Population</header><text>The population of any State or local government shall be determined as provided in section 146(j) for the calendar year which includes the date of the enactment of this section.</text></paragraph>
<paragraph id="H51A059D449A9421CBCEEA3D52460E94E"><enum>(4)</enum><header>Reporting</header>
<subparagraph id="H43018D7FD240473C00B420F0E95F343F"><enum>(A)</enum><header>Reports by issuers</header><text>Issuers of qualified residential energy efficiency assistance bonds shall, not later than 6 months after the expenditure period (as defined in section 54A) and annually thereafter until the last such bond is redeemed, submit reports to the Secretary regarding such bonds, including information regarding—</text>
<clause id="HDC502CB784554540BBEBB59D0073EC3D"><enum>(i)</enum><text>the number and monetary value of loans and grants provided and the purposes for which provided,</text></clause>
<clause id="H08ED086A28F3451CB58F7840DE1B8554"><enum>(ii)</enum><text>the number of dwelling units the energy efficiency of which improved as result of such loans and grants,</text></clause>
<clause id="H00B659CDE86D4D8491FE410707E7F113"><enum>(iii)</enum><text>the types of property described in subsection (e)(1)(A) installed as a result of such loans and grants and the projected energy savings with respect to such property,</text></clause>
<clause id="H4D9BD2AB5990495FB400D87B333C608"><enum>(iv)</enum><text>the types of property described in subsection (e)(1)(B) installed as a result of such loans and grants and the projected production of such property, and</text></clause>
<clause id="H720F28ABB7F44544A9FCC0D66790251"><enum>(v)</enum><text>the projected energy savings as a result of such loans and grants for improvements described in subsection (e)(1)(C).</text></clause></subparagraph>
<subparagraph id="HCF36301FEEC04C5EA7F5314D57938000"><enum>(B)</enum><header>Report to Congress</header><text>Not later than 12 months after receipt of the first report under subparagraph (A) and annually thereafter until the last such report is required to be submitted, the Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, shall submit a report to Congress regarding the bond program under this section, including information regarding—</text>
<clause id="H1A1943D8C2674A829EEBFE1CFC6C8097"><enum>(i)</enum><text>the aggregate of each category of information described in subparagraph (A) (including any independent assessment of projected energy savings), and</text></clause>
<clause id="H3F6ACAB0B46F48A3814B5BC1BEA645A3"><enum>(ii)</enum><text>an estimate of the amount of greenhouse gas emissions reduced as a result of such bond program.</text></clause></subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H8F8F041C3CBF4FAB8775607991C02FE0"><enum>(b)</enum><header>Conforming amendments</header>
<paragraph id="HDAF3286B3E92475198266DFA710048DB"><enum>(1)</enum><text>Paragraph (1) of section 54A(d), as added by section 104 and amended by <external-xref legal-doc="usc" parsable-cite="usc/26/211">section 211,</external-xref> is amended by striking <quote>or</quote> at the end of subparagraph (A), by inserting <quote>or</quote> at the end of subparagraph (B), and by inserting after subparagraph (B) the following new subparagraph:</text>
<quoted-block style="OLC" id="H16A385EC3F4D4AACB4834DCF8FBE6320" display-inline="no-display-inline">
<subparagraph id="H2C4FAEABB623410C81107581FD000067"><enum>(C)</enum><text>a qualified residential energy efficiency assistance bond,</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HF6A9627CAC13470FACA8F23DEF1FF622"><enum>(2)</enum><text>Subparagraph (C) of section 54A(d)(2), as added by section 104 and amended by <external-xref legal-doc="usc" parsable-cite="usc/26/211">section 211,</external-xref> is amended by striking <quote>and</quote> at the end of clause (i), by striking the period at the end of clause (ii) and inserting <quote>, and</quote>, and by adding at the end the following new clause:</text>
<quoted-block style="OLC" id="H72A7BB9D9445478789E0436C3DFE2969" display-inline="no-display-inline">
<clause id="HA9EC698D139D4B6200D4BEE9FBFE11BC"><enum>(iii)</enum><text>in the case of a qualified residential energy efficiency assistance bond, a purpose specified in section 54D(a)(1).</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HE58CDEB12A53432D877B127454559DEB"><enum>(3)</enum><text display-inline="yes-display-inline">The table of sections for subpart I 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:</text>
<quoted-block style="OLC" id="H72CD6576DAA241F6B2B4036878E9B6AC" display-inline="no-display-inline">
<toc container-level="quoted-block-container" quoted-block="no-quoted-block" lowest-level="section" idref="HC41190D24D904303ADC6A2733B37F677" regeneration="yes-regeneration" lowest-bolded-level="division-lowest-bolded">
<toc-entry idref="H16919DDD68254BE782FBAC9027112FF1" level="section">Sec. 54D. Qualified residential energy efficiency assistance bonds.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H037DAB5FF9714A2FA8AB34F300880008"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act.</text></subsection></section>
<section id="H55A9A712E31D4248AA83F4CCCDB111F1" display-inline="no-display-inline" section-type="subsequent-section"><enum>213.</enum><header>Extension of energy efficient commercial buildings deduction</header><text display-inline="no-display-inline">Subsection (h) of section 179D (relating to termination) is amended by striking <quote>December 31, 2008</quote> and inserting <quote>December 31, 2013</quote>.</text></section>
<section id="HDF567A00CCF14ADB81CC0C21CE30089" section-type="subsequent-section" display-inline="no-display-inline"><enum>214.</enum><header>Modifications of energy efficient appliance credit for appliances produced after 2007</header>
<subsection id="HFA8A33CDD8F34F3292AB00AF583022D"><enum>(a)</enum><header>In general</header><text>Subsection (b) of section 45M (relating to applicable amount) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H4564E4C757E142F4BAF68B2B545E9F" style="OLC">
<subsection id="HCF5CBE12A9DA42C4B920A89800814732"><enum>(b)</enum><header>Applicable amount</header><text>For purposes of subsection (a)—</text>
<paragraph id="HA805F78A6887456AB6C8EF8B4B692E62"><enum>(1)</enum><header>Dishwashers</header><text>The applicable amount is—</text>
<subparagraph id="H32F95F5FD3374EB1886F7F582800AAD2"><enum>(A)</enum><text>$45 in the case of a dishwasher which is manufactured in calendar year 2008 or 2009 and which uses no more than 324 kilowatt hours per year and 5.8 gallons per cycle, and</text></subparagraph>
<subparagraph id="H9C890871B8D04D1991C806178989F72F"><enum>(B)</enum><text>$75 in the case of a dishwasher which is manufactured in calendar year 2008, 2009, or 2010 and which uses no more than 307 kilowatt hours per year and 5.0 gallons per cycle (5.5 gallons per cycle for dishwashers designed for greater than 12 place settings).</text></subparagraph></paragraph>
<paragraph id="HBDEDF3D746544CDDA81251859DEAFBDF"><enum>(2)</enum><header>Clothes washers</header><text>The applicable amount is—</text>
<subparagraph id="H76899DDBEA31473C834795662DA42980"><enum>(A)</enum><text>$75 in the case of a residential top-loading clothes washer manufactured in calendar year 2008 which meets or exceeds a 1.72 modified energy factor and does not exceed a 8.0 water consumption factor,</text></subparagraph>
<subparagraph id="H97A25AD036F14497A090BAC8B5335286"><enum>(B)</enum><text>$125 in the case of a residential top-loading clothes washer manufactured in calendar year 2008 or 2009 which meets or exceeds a 1.8 modified energy factor and does not exceed a 7.5 water consumption factor,</text></subparagraph>
<subparagraph id="H4A72D98478954E2F97422291837146A1"><enum>(C)</enum><text>$150 in the case of a residential or commercial clothes washer manufactured in calendar year 2008, 2009 or 2010 which meets or exceeds 2.0 modified energy factor and does not exceed a 6.0 water consumption factor, and</text></subparagraph>
<subparagraph id="HAD8098C0050D4B2BB834B6C84DE3BAE9"><enum>(D)</enum><text>$250 in the case of a residential or commercial clothes washer manufactured in calendar year 2008, 2009, or 2010 which meets or exceeds 2.2 modified energy factor and does not exceed a 4.5 water consumption factor.</text></subparagraph></paragraph>
<paragraph id="HD3C7A09D90C342C8B95FD81004C1FB54"><enum>(3)</enum><header>Refrigerators</header><text>The applicable amount is—</text>
<subparagraph id="HEF44701C0E6042C1BDDC6B2B42755593"><enum>(A)</enum><text>$50 in the case of a refrigerator which is manufactured in calendar year 2008, and consumes at least 20 percent but not more than 22.9 percent less kilowatt hours per year than the 2001 energy conservation standards,</text></subparagraph>
<subparagraph id="H9B1CFAC5BB6E4F4CBB150808F23982F6"><enum>(B)</enum><text>$75 in the case of a refrigerator which is manufactured in calendar year 2008 or 2009, and consumes at least 23 percent but no more than 24.9 percent less kilowatt hours per year than the 2001 energy conservation standards,</text></subparagraph>
<subparagraph id="HACB7C1E5230B49E498E5903EF65D545E"><enum>(C)</enum><text>$100 in the case of a refrigerator which is manufactured in calendar year 2008, 2009 or 2010, and consumes at least 25 percent but not more than 29.9 percent less kilowatt hours per year than the 2001 energy conservation standards, and</text></subparagraph>
<subparagraph id="H24DCE9980D8B4A29003F1515B32F47C"><enum>(D)</enum><text>$200 in the case of a refrigerator manufactured in calendar year 2008, 2009 or 2010 and which consumes at least 30 percent less energy than the 2001 energy conservation standards.</text></subparagraph></paragraph>
<paragraph id="H76EBE1AABBE44C00B600C59DE9A68FFA"><enum>(4)</enum><header>Dehumidifiers</header><text>The applicable amount is—</text>
<subparagraph id="HE62A1313A0204FC4BC7F5E1B2995185E"><enum>(A)</enum><text>$15 in the case of a dehumidifier manufactured in calendar year 2008 that has a capacity less than or equal to 45 pints per day and is 7.5 percent more efficient than the applicable Department of Energy energy conservation standard effective October 2012, and</text></subparagraph>
<subparagraph id="H985441CC4A7B4904A7C471C35EA7476E"><enum>(B)</enum><text>$25 in the case of a dehumidifier manufactured in calendar year 2008 that has a capacity greater than 45 pints per day and is 7.5 percent more efficient than the applicable Department of Energy energy conservation standard effective October 2012.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HB9115982641E417C85EE52005944B7A0"><enum>(b)</enum><header>Eligible production</header>
<paragraph id="HFEC88D211F9A48B896D3BF009E089424"><enum>(1)</enum><header>Similar treatment for all appliances</header><text>Subsection (c) of section 45M (relating to eligible production) is amended—</text>
<subparagraph id="HEDAD36C73DBC4ACFA9346DE59776003B"><enum>(A)</enum><text>by striking paragraph (2),</text></subparagraph>
<subparagraph id="H72A628905B80441AB4617468377FE596"><enum>(B)</enum><text>by striking <quote>(1) <header-in-text level="paragraph" style="OLC">In general</header-in-text></quote> and all that follows through <quote>the eligible</quote> and inserting <quote>The eligible</quote>, and</text></subparagraph>
<subparagraph id="H840BE412233140A2BFC5201C7D28F262"><enum>(C)</enum><text>by moving the text of such subsection in line with the subsection heading and redesignating subparagraphs (A) and (B) as paragraphs (1) and (2), respectively.</text></subparagraph></paragraph>
<paragraph id="H248864C9875A4BA6B1FC151F58675297"><enum>(2)</enum><header>Modification of base period</header><text>Paragraph (2) of section 45M(c), as amended by paragraph (1) of this section, is amended by striking <quote>3-calendar year</quote> and inserting <quote>2-calendar year</quote>.</text></paragraph></subsection>
<subsection id="HC979BF0741ED4D6EAC5076F014866948"><enum>(c)</enum><header>Types of energy efficient appliances</header><text>Subsection (d) of section 45M (defining types of energy efficient appliances) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H5909E16FF635450CBFF2A20014D8EBE5" style="OLC">
<subsection id="H47DE1A5801944AF3945FE96710D94582"><enum>(d)</enum><header>Types of energy efficient appliance</header><text display-inline="yes-display-inline">For purposes of this section, the types of energy efficient appliances are—</text>
<paragraph id="H28A92087CEFC47B5A051BFD9993DC24F"><enum>(1)</enum><text>dishwashers described in subsection (b)(1),</text></paragraph>
<paragraph id="H42103643B66A44C19B29DB4D0873DF81"><enum>(2)</enum><text>clothes washers described in subsection (b)(2),</text></paragraph>
<paragraph id="H3070AFEAA5FA4956B774B298A435042D"><enum>(3)</enum><text>refrigerators described in subsection (b)(3), and</text></paragraph>
<paragraph id="HE5CEAE9A4B5D446983B93F71793200F1"><enum>(4)</enum><text>dehumidifiers described in subsection (b)(4).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HBCCED4A883484EBA82A577D2FC3E9C6"><enum>(d)</enum><header>Aggregate credit amount allowed</header>
<paragraph id="HF72C158AF91944DE002536C78D02BBD"><enum>(1)</enum><header>Increase in limit</header><text>Paragraph (1) of section 45M(e) (relating to aggregate credit amount allowed) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H494D428AC19049B381D1D3129101B3D" style="OLC">
<paragraph id="HD1286B7DCD7A4F1CACD02EBA00C3360"><enum>(1)</enum><header>Aggregate credit amount allowed</header><text display-inline="yes-display-inline">The aggregate amount of credit allowed under subsection (a) with respect to a taxpayer for any taxable year shall not exceed $75,000,000 reduced by the amount of the credit allowed under subsection (a) to the taxpayer (or any predecessor) for all prior taxable years beginning after December 31, 2007.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H8E550BAB70DB4CD900F0AD2F799F7D"><enum>(2)</enum><header>Exception for certain refrigerator and clothes washers</header><text>Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/45M">section 45M(e)</external-xref> is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H23C939B89BF84A82BB594D7DED7E51F9" style="OLC">
<paragraph id="H28A1544A98C344F7BE7E967F3FB4123D"><enum>(2)</enum><header>Amount allowed for certain refrigerators and clothes washers</header><text display-inline="yes-display-inline">Refrigerators described in subsection (b)(3)(D) and clothes washers described in subsection (b)(2)(D) shall not be taken into account under paragraph (1).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H5F09582EF67F4DFB92A882EFB6FF6333"><enum>(e)</enum><header>Qualified energy efficient appliances</header>
<paragraph id="HCB56D0FBADC742DCB38E59E299BADB65"><enum>(1)</enum><header>In general</header><text>Paragraph (1) of section 45M(f) (defining qualified energy efficient appliance) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H703B76702D574C0D9808F27E3EBE2AE" style="OLC">
<paragraph id="H0795C6FFF3724AA1875C873C5DD21B4F"><enum>(1)</enum><header>Qualified energy efficient appliance</header><text display-inline="yes-display-inline">The term <term>qualified energy efficient appliance</term> means—</text>
<subparagraph id="H1F1926965B52490C86AAF8DC041EBFB4"><enum>(A)</enum><text display-inline="yes-display-inline">any dishwasher described in subsection (b)(1),</text></subparagraph>
<subparagraph id="HBF4AAC1CF3EF46698476836F29704556"><enum>(B)</enum><text>any clothes washer described in subsection (b)(2),</text></subparagraph>
<subparagraph id="H6844159A39AF43CDBFC345E031AD3F2"><enum>(C)</enum><text>any refrigerator described in subsection (b)(3), and</text></subparagraph>
<subparagraph id="HC5426B70C5C14B21948500C7C001B27"><enum>(D)</enum><text>any dehumidifier described in subsection (b)(4).</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H5602FA1C576443A8B0EEC7DD4BD2C5CE"><enum>(2)</enum><header>Clothes washer</header><text>Section 45M(f)(3) (defining clothes washer) is amended by inserting <quote>commercial</quote> before <quote>residential</quote> the second place it appears.</text></paragraph>
<paragraph id="H202748D66FA94F67A51818F6CAB44DAF"><enum>(3)</enum><header>Top-loading clothes washer</header><text>Subsection (f) of section 45M (relating to definitions) is amended by redesignating paragraphs (4), (5), (6), and (7) as paragraphs (5), (6), (7), and (8), respectively, and by inserting after paragraph (3) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HB0C570EA723E4FEFA9B4EB35B49E4339" style="OLC">
<paragraph id="H4BEDE35FAC384439A0C8E06B051700D7"><enum>(4)</enum><header>Top-loading clothes washer</header><text display-inline="yes-display-inline">The term <quote>top-loading clothes washer</quote> means a clothes washer which has the clothes container compartment access located on the top of the machine and which operates on a vertical axis.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HCED0696226F4478A878D1284F29D566C"><enum>(4)</enum><header>Dehumidifier</header><text>Subsection (f) of <external-xref legal-doc="usc" parsable-cite="usc/26/45M">section 45M</external-xref>, as amended by paragraph (3), is amended by redesignating paragraphs (6), (7), and (8) as paragraphs (7), (8) and (9), respectively, and by inserting after paragraph (5) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HA68718B8081A446982B646DDD26E5933" style="OLC">
<paragraph id="H6E48B257A95A49BC940655E652AF8DF"><enum>(6)</enum><header>Dehumidifier</header><text display-inline="yes-display-inline">The term <term>dehumidifier</term> means a self-contained, electrically operated, and mechanically refrigerated encased assembly consisting of—</text>
<subparagraph id="H3A04B89F374848C0A1CC95085E5894D8"><enum>(A)</enum><text>a refrigerated surface that condenses moisture from the atmosphere,</text></subparagraph>
<subparagraph id="H3381E40B4AD44A33B5C1FCDCFBE7D2DD"><enum>(B)</enum><text>a refrigerating system, including an electric motor,</text></subparagraph>
<subparagraph id="H3A3E1653590E47C4BC00769454076C3D"><enum>(C)</enum><text>an air-circulating fan, and</text></subparagraph>
<subparagraph id="H1F3F732C547D4F1EAD881F85CDA82959"><enum>(D)</enum><text>means for collecting or disposing of condensate.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HCF1155F2789F44CBB65CEB6484D5247"><enum>(5)</enum><header>Replacement of energy factor</header><text>Section 45M(f)(7), as amended by paragraph (4), is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HFB8DCE5C0B7A42EB9148FD4001400F2" style="OLC">
<paragraph id="HC4ACC118E74C4725BA13ACCE4E3446F3"><enum>(7)</enum><header>Modified energy factor</header><text display-inline="yes-display-inline">The term <term>modified energy factor</term> means the modified energy factor established by the Department of Energy for compliance with the Federal energy conservation standard.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HBE0AD2052DA349AEA64B7350EC1B39A2"><enum>(6)</enum><header>Gallons per cycle; water consumption factor</header><text>Section 45M(f) (relating to definitions) is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="HA73F9C4F97074ACBABADCEEABD1C0286" style="OLC">
<paragraph id="H6B8D64F84CF34E058F30008527A91D68"><enum>(10)</enum><header>Gallons per cycle</header><text display-inline="yes-display-inline">The term <term>gallons per cycle</term> means, with respect to a dishwasher, the amount of water, expressed in gallons, required to complete a normal cycle of a dishwasher.</text></paragraph>
<paragraph id="H96B7C162CBB7420A8CC01D16A3FB4B90"><enum>(11)</enum><header>Water consumption factor</header><text display-inline="yes-display-inline">The term <term>water consumption factor</term> means, with respect to a clothes washer, the quotient of the total weighted per-cycle water consumption divided by the cubic foot (or liter) capacity of the clothes washer.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H955A77DCC70B47248DE943AF37F560F2"><enum>(f)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to appliances produced after December 31, 2007.</text></subsection></section>
<section display-inline="no-display-inline" id="H266887194A49444083847CF8C8226DC" section-type="subsequent-section"><enum>215.</enum><header>Five-year applicable recovery period for depreciation of qualified energy management devices</header>
<subsection id="H1F3FEAA8EBD44BCD9B000048D4FC7750"><enum>(a)</enum><header>In general</header><text>Section 168(e)(3)(B) (relating to 5-year property) is amended by striking <quote>and</quote> at the end of clause (v), by striking the period at the end of clause (vi) and inserting <quote>, and</quote>, and by inserting after clause (vi) the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="HEAC30CCCFE4C43C18EF96158959022DD" style="OLC">
<clause id="HFDE9BB9889214D289944C42987BDAE2D"><enum>(vii)</enum><text>any qualified energy management device.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HA52F2F19EE83469FB1C518A3ECFBB800"><enum>(b)</enum><header>Definition of qualified energy management device</header><text>Section 168(i) (relating to definitions and special rules) is amended by inserting at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H8B58CC307FF54BA39621C0E7AEA9B339" style="OLC">
<paragraph id="HF7214D51CBF8433EACBF98C3E934FC2"><enum>(18)</enum><header>Qualified energy management device</header>
<subparagraph id="HC123F75F324E483CA69CFEBE722817A3"><enum>(A)</enum><header>In general</header><text>The term <term>qualified energy management device</term> means any energy management device which is installed on real property of a customer of the taxpayer and is placed in service by a taxpayer who—</text>
<clause id="H0AF51F30F9D8422F80AC98730000D38E"><enum>(i)</enum><text> is a supplier of electric energy or a provider of electric energy services, and</text></clause>
<clause id="HCB3641E12CA14A66B602D9D1BC490000"><enum>(ii)</enum><text>provides all commercial and residential customers of such supplier or provider with net metering upon the request of such customer.</text></clause></subparagraph>
<subparagraph id="HF9ECC61375664B1EBD2D96A72FD6249B"><enum>(B)</enum><header>Energy management device</header><text>For purposes of subparagraph (A), the term <term>energy management device</term> means any time-based meter and related communication equipment which is capable of being used by the taxpayer as part of a system that—</text>
<clause id="H85DFB4E05DE249278174B4004600F822"><enum>(i)</enum><text>measures and records electricity usage data on a time-differentiated basis in at least 24 separate time segments per day,</text></clause>
<clause id="H78BF3010927941E080E26CD7FAFE522"><enum>(ii)</enum><text>provides for the exchange of information between supplier or provider and the customer’s energy management device in support of time-based rates or other forms of demand response, and</text></clause>
<clause id="HAB55B3AA86B34572A57700EA031F078C"><enum>(iii)</enum><text>provides data to such supplier or provider so that the supplier or provider can provide energy usage information to customers electronically.</text></clause></subparagraph>
<subparagraph id="H45FFF8E5651E4BFA92BC4366F894E1F7"><enum>(C)</enum><header>Net metering</header><text>For purposes of subparagraph (A), the term <term>net metering</term> means allowing customers a credit for providing electricity to the supplier or provider.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HF76A1ED2E48B4204B190A17470B9B5F4"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.</text></subsection></section></subtitle>
<enum>III</enum><header>Revenue provisions</header>
<subtitle id="H0242987F519E4634BC38F5045B7918BA"><enum>A</enum><header>Denial of oil and gas tax benefits</header>
<section display-inline="no-display-inline" id="HB0BBDC3D9EDF4F36822D4C85DF167B3D"><enum>301.</enum><header>Denial of deduction for income attributable to domestic production of oil, natural gas, or primary products thereof</header>
<subsection id="HE96DC5730F3F49F482A83948625EF0BA"><enum>(a)</enum><header>In general</header><text>Subparagraph (B) of section 199(c)(4) (relating to exceptions) is amended by striking <quote>or</quote> at the end of clause (ii), by striking the period at the end of clause (iii) and inserting <quote>, or</quote>, and by inserting after clause (iii) the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="H4E43EE4B4DB84A998533D0FD56E52B67" style="OLC">
<clause id="H5F47C03966364386B56B5FCC3E7808E2"><enum>(iv)</enum><text>the sale, exchange, or other disposition of oil, natural gas, or any primary product thereof.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HB19752FD58CA47A4BA3380495F807F91"><enum>(b)</enum><header>Primary product</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/199">Section 199(c)(4)(B)</external-xref> is amended by adding at the end the following flush sentence:</text>
<quoted-block display-inline="no-display-inline" id="H414CD57839334390AE8353E875FBC747" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="subparagraph">For purposes of clause (iv), the term <term>primary product</term> has the same meaning as when used in section 927(a)(2)(C), as in effect before its repeal.</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HC43F260F456F4FE5ACB8C92D7499C5A2"><enum>(c)</enum><header>Conforming amendments</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/199">Section 199(c)(4)</external-xref> is amended—</text>
<paragraph id="H14D6C7F184B348A88F2C1CD07E6E0047"><enum>(1)</enum><text display-inline="yes-display-inline">in subparagraph (A)(i)(III) by striking <quote>electricity, natural gas,</quote> and inserting <quote>electricity</quote>, and</text></paragraph>
<paragraph id="H45345490178942A4941DF0F73031145C"><enum>(2)</enum><text display-inline="yes-display-inline">in subparagraph (B)(ii) by striking <quote>electricity, natural gas,</quote> and inserting <quote>electricity</quote>.</text></paragraph></subsection>
<subsection id="H945C0331723A4F518BAD75A482B853E7"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after December 31, 2007.</text></subsection></section>
<section id="H961F48F3B2B04DBC8D0071F05C555977"><enum>302.</enum><header>7-year amortization of geological and geophysical expenditures for certain major integrated oil companies</header>
<subsection id="H7000B8872EA04BEFBD7142A26DCA69F2"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subparagraph (A) of section 167(h)(5) (relating to special rule for major integrated oil companies) is amended by striking <quote>5-year</quote> and inserting <quote>7-year</quote>.</text></subsection>
<subsection id="H620365D08D134E03ADE89387F01F0860"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.</text></subsection></section>
<section id="HFF7A5438EDF2407C8634DAB5DC01E04D" section-type="subsequent-section" display-inline="no-display-inline"><enum>303.</enum><header>Clarification of determination of foreign oil and gas extraction income</header>
<subsection id="H96361E61BCBA4B54A11ED7ED6BFCB7AF"><enum>(a)</enum><header>In general</header><text>Paragraph (1) of <external-xref legal-doc="usc" parsable-cite="usc/26/907">section 907(c)</external-xref> is amended by redesignating subparagraph (B) as subparagraph (C), by striking <quote>or</quote> at the end of subparagraph (A), and by inserting after subparagraph (A) the following new subparagraph:</text>
<quoted-block style="OLC" id="H314D18A3A4BB4A45B2EF3B68B8B8340" display-inline="no-display-inline">
<subparagraph id="H7834E086FEAC4813AEADEB5F400A173"><enum>(B)</enum><text>so much of any transportation of such minerals as occurs before the fair market value event, or</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H15947B6165C14238005F1970003D4DE2"><enum>(b)</enum><header>Fair market value event</header><text>Subsection (c) of <external-xref legal-doc="usc" parsable-cite="usc/26/907">section 907</external-xref> is amended by adding at the end the following new paragraph:</text>
<quoted-block style="OLC" id="HBC5C0336D70144E78723B98FECCB8CA7" display-inline="no-display-inline">
<paragraph id="HE4C7A268672F469692DA683F8C78EC"><enum>(6)</enum><header>Fair market value event</header><text>For purposes of this section, the term <term>fair market value event</term> means, with respect to any mineral, the first point in time at which such mineral—</text>
<subparagraph id="H938BB54DA25A45A591F00FB07009482"><enum>(A)</enum><text display-inline="yes-display-inline">has a fair market value which can be determined on the basis of a transfer, which is an arm’s length transaction, of such mineral from the taxpayer to a person who is not related (within the meaning of section 482) to such taxpayer, or</text></subparagraph>
<subparagraph id="H1CA5B2B0102E4EBAA71CA5247189A44E"><enum>(B)</enum><text>is at a location at which the fair market value is readily ascertainable by reason of transactions among unrelated third parties with respect to the same mineral (taking into account source, location, quality, and chemical composition).</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H78348A4A54354A82AABAD8FD6632EEC3"><enum>(c)</enum><header>Special rule for certain petroleum taxes</header><text>Subsection (c) of <external-xref legal-doc="usc" parsable-cite="usc/26/907">section 907</external-xref>, as amended by subsection (b), is amended to by adding at the end the following new paragraph: </text>
<quoted-block style="OLC" id="H4F7698E58A9642A09B3C00AFE5FBBACF" display-inline="no-display-inline">
<paragraph id="H3B4364F69A6745AE8CE2C0DD6D1B62B7"><enum>(7)</enum><header>Oil and gas taxes</header><text>In the case of any tax imposed by a foreign country which is limited in its application to taxpayers engaged in oil or gas activities—</text>
<subparagraph id="H5FF452DD5162406C8E56DEC2024F2690"><enum>(A)</enum><text>the term <term>oil and gas extraction taxes</term> shall include such tax,</text></subparagraph>
<subparagraph id="H66C4F92CAA824DE200602E0224045D76"><enum>(B)</enum><text>the term <term>foreign oil and gas extraction income</term> shall include any taxable income which is taken into account in determining such tax (or is directly attributable to the activity to which such tax relates), and</text></subparagraph>
<subparagraph id="H88378A40B58C4DDBA8F5C500619B0000"><enum>(C)</enum><text>the term <term>foreign oil related income</term> shall not include any taxable income which is treated as foreign oil and gas extraction income under subparagraph (B). </text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H6CC76F0E8E154921A858CF6FD6842587"><enum>(d)</enum><header>Conforming amendments</header>
<paragraph id="H3AD7FB149ADA465A8E42008936EAC068"><enum>(1)</enum><text>Subparagraph (C) of section 907(c)(1), as redesignated by this section, is amended by inserting <quote>or used by the taxpayer in the activity described in subparagraph (B)</quote> before the period at the end.</text></paragraph>
<paragraph id="H43F183ABE6A04898B412FB3990419C6"><enum>(2)</enum><text>Subparagraph (B) of <external-xref legal-doc="usc" parsable-cite="usc/26/907">section 907(c)(2)</external-xref> is amended to read as follows:</text>
<quoted-block style="OLC" id="H5B7B0D23B9B94ED7AB72C47BDCE0E859" display-inline="no-display-inline">
<subparagraph id="H8BFDD7436946425085869FD37E3922B8"><enum>(B)</enum><text>so much of the transportation of such minerals or primary products as is not taken into account under paragraph (1)(B),</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H2C257AB0BC8946388FDBFCAE04EEBFD5" commented="no"><enum>(e)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text></subsection></section></subtitle>
<subtitle id="H5AEEF1C004554CC795A02136E1E7BBB6"><enum>B</enum><header>Clarification of eligibility for certain fuel credits</header>
<section id="H9684E6D95E8E4668AA2C0084F322637B"><enum>311.</enum><header>Clarification of eligibility for renewable diesel credit</header>
<subsection id="H8E85AA6E3D8748388F368E61F1B89FB4"><enum>(a)</enum><header>Coproduction with petroleum feedstock</header>
<paragraph id="H8C5D8180FD824EE7A681805887C5B453"><enum>(1)</enum><header>In general</header><text>Paragraph (3) of section 40A(f) (defining renewable diesel) is amended by adding at the end the following flush sentence:</text>
<quoted-block display-inline="no-display-inline" id="H424E56D3BDE146EF8BFBEC5EB100EDA2" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="paragraph">Such term does not include any fuel derived from coprocessing biomass with a feedstock which is not biomass. For purposes of this paragraph, the term <term>biomass</term> has the meaning given such term by section 45K(c)(3).</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HBF8991A5D2F34DE9B01483A42EE3EA4"><enum>(2)</enum><header>Conforming amendment</header><text>Paragraph (3) of <external-xref legal-doc="usc" parsable-cite="usc/26/40A">section 40A(f)</external-xref> is amended by striking <quote>(as defined in section 45K(c)(3))</quote>.</text></paragraph></subsection>
<subsection id="H1AB6D1D0FAA246F294101763475221A3"><enum>(b)</enum><header>Clarification of eligibility for alternative fuel credit</header>
<paragraph id="H0CFB9DD2294349E2B3150939A9C1B8EA"><enum>(1)</enum><header>In general</header><text>Subparagraph (F) of <external-xref legal-doc="usc" parsable-cite="usc/26/6426">section 6426(d)(2)</external-xref> is amended by striking <quote>hydrocarbons</quote> and inserting <quote>fuel</quote>.</text></paragraph>
<paragraph id="HAE90CE79017543A2BEFC25500000BEF0"><enum>(2)</enum><header>Conforming amendment</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/6426">Section 6426</external-xref> is amended by adding at the end the following new subsection:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H3CCE1C40C7B347CCA88079B40972D972">
<subsection id="H983A9750475B4659B700322029004715"><enum>(h)</enum><header>Denial of double benefit</header><text>No credit shall be determined under subsection (d) or (e) with respect to any fuel with respect to which credit may be determined under subsection (b) or (c) or under section 40 or 40A.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H66A8CB22B13640BBA3F7301070373B44"><enum>(c)</enum><header>Effective date</header>
<paragraph id="HB94EB8F646A6462200E2C3A4A55BF7C8"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (2), the amendments made by this section shall apply to fuel produced, and sold or used, after June 30, 2007.</text></paragraph>
<paragraph id="HA56BED315FBE4AA3ABFA4F069E391DA7"><enum>(2)</enum><header>Clarification of eligibility for alternative fuel credit</header><text display-inline="yes-display-inline">The amendment made by subsection (b) shall take effect as if included in section 11113 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users.</text></paragraph></subsection></section>
<section id="H96B0E4C8C95A49FBB8B7817D49F85D35" display-inline="no-display-inline"><enum>312.</enum><header>Clarification that credits for fuel are designed to provide an incentive for United States production</header>
<subsection id="HBB3EB6052EAB4B8BAC51D3BBAF00DA95" commented="no"><enum>(a)</enum><header>Biodiesel fuels credit</header><text>Paragraph (5) of section 40A(d), as added by subsection (c), is amended to read as follows:</text>
<quoted-block style="OLC" id="H9245E3D36D5744089DA394D90066F194" display-inline="no-display-inline">
<paragraph id="H329E696B53D54C43B8A1F3CD1781C55F" commented="no"><enum>(5)</enum><header>Limitation to biodiesel with connection to the United States</header><text display-inline="yes-display-inline">No credit shall be determined under this section with respect to any biodiesel unless—</text>
<subparagraph id="H4555E13BA02F47ADB000DC7897C300AD"><enum>(A)</enum><text>such biodiesel is produced in the United States for use as a fuel in the United States, and</text></subparagraph>
<subparagraph id="H36E54ECBB7E145FCB50209E27068C6FE"><enum>(B)</enum><text>the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer of the biodiesel which identifies the product produced and the location of such production.</text></subparagraph><continuation-text continuation-text-level="paragraph">For purposes of this paragraph, the term <term>United States</term> includes any possession of the United States.</continuation-text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H5772C196AB974C9AA0653DA0AB4B3D77" commented="no" display-inline="no-display-inline"><enum>(b)</enum><header>Excise tax credit</header><text>Paragraph (2) of section 6426(i), as added by subsection (c), is amended to read as follows:</text>
<quoted-block style="OLC" id="HD1B847A4ACB84EB9A21EE2F7783523CD" display-inline="no-display-inline">
<paragraph id="H9C7949D97BF94B8B865FFD54C8BBE69" commented="no"><enum>(2)</enum><header>Biodiesel and alternative fuels</header><text>No credit shall be determined under this section with respect to any biodiesel or alternative fuel unless—</text>
<subparagraph id="H8C16ACC8891B404FAF0183F2D1A78635" commented="no"><enum>(A)</enum><text display-inline="yes-display-inline">such biodiesel or alternative fuel is produced in the United States for use as a fuel in the United States, and</text></subparagraph>
<subparagraph id="HDCCD4913378344EC9D0034E888D3BC3F" commented="no"><enum>(B)</enum><text display-inline="yes-display-inline">the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer of such biodiesel or alternative fuel which identifies the product produced and the location of such production.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H27920A4C532E4BCAB61EA1C5DE6C08F4"><enum>(c)</enum><header>Provisions clarifying treatment of fuels with no nexus to the United States</header>
<paragraph id="H9C95AD2D138F4666A8AAB601CC4473D8" commented="no" display-inline="no-display-inline"><enum>(1)</enum><header>Alcohol fuels credit</header><text>Subsection (d) of <external-xref legal-doc="usc" parsable-cite="usc/26/40">section 40</external-xref> is amended by adding at the end the following new paragraph: </text>
<quoted-block style="OLC" display-inline="no-display-inline" id="H20CA515652314451A38060B9DBABAA31">
<paragraph id="HCF3FD182012E4BBBBE22CBD6760374CE" commented="no"><enum>(6)</enum><header>Limitation to alcohol with connection to the United States</header><text display-inline="yes-display-inline">No credit shall be determined under this section with respect to any alcohol which is produced outside the United States for use as a fuel outside the United States. For purposes of this paragraph, the term <term>United States</term> includes any possession of the United States.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H8CB87847CEF04891A164ECB8F80754A1"><enum>(2)</enum><header>Biodiesel fuels credit</header><text>Subsection (d) of <external-xref legal-doc="usc" parsable-cite="usc/26/40A">section 40A</external-xref> is amended by adding at the end the following new paragraph:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="HC203283A359F49A7B2C28B3CF5E085C4">
<paragraph id="H2F83D77818BD44ABBEB76BDE4D4C2023" commented="no"><enum>(5)</enum><header>Limitation to biodiesel with connection to the United States</header><text display-inline="yes-display-inline">No credit shall be determined under this section with respect to any biodiesel which is produced outside the United States for use as a fuel outside the United States. For purposes of this paragraph, the term <term>United States</term> includes any possession of the United States.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H561CAA252A4049028070CF1D326856BE" commented="no" display-inline="no-display-inline"><enum>(3)</enum><header>Excise tax credit</header>
<subparagraph id="H800B867B0317419DBFB97BA4E506F400"><enum>(A)</enum><header>In general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/6426">Section 6426</external-xref>, as amended by <external-xref legal-doc="usc" parsable-cite="usc/26/311">section 311,</external-xref> is amended by adding at the end the following new subsection:</text>
<quoted-block style="OLC" id="HF9F0CFA3FAEA4096AAC0602567E57871" display-inline="no-display-inline">
<subsection id="H9375C742F46E4DCCBB72393983F42083" commented="no"><enum>(i)</enum><header>Limitation to fuels with connection to the United States</header>
<paragraph id="HADEFA5A578B94DBAA8F047E927048B43"><enum>(1)</enum><header>Alcohol</header><text display-inline="yes-display-inline">No credit shall be determined under this section with respect to any alcohol which is produced outside the United States for use as a fuel outside the United States.</text></paragraph>
<paragraph id="H16837C3934B94B25BCDB187828A3AB3E"><enum>(2)</enum><header>Biodiesel and alternative fuels</header><text display-inline="yes-display-inline">No credit shall be determined under this section with respect to any biodiesel or alternative fuel which is produced outside the United States for use as a fuel outside the United States.</text></paragraph><continuation-text continuation-text-level="subsection">For purposes of this subsection, the term <term>United States</term> includes any possession of the United States.</continuation-text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="H70E76ADD87634E53A6D91D8D63666B13" commented="no"><enum>(B)</enum><header>Conforming amendment</header><text>Subsection (e) of <external-xref legal-doc="usc" parsable-cite="usc/26/6427">section 6427</external-xref> is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph:</text>
<quoted-block style="OLC" id="H5BB9FC93B795447F9CF229EFE3005006" display-inline="no-display-inline">
<paragraph id="HFA327F9F28544339BA4713BE00BD6F21" commented="no"><enum>(5)</enum><header>Limitation to fuels with connection to the United States</header><text>No amount shall be payable under paragraph (1) or (2) with respect to any mixture or alternative fuel if credit is not allowed with respect to such mixture or alternative fuel by reason of section 6426(i).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection>
<subsection id="HF88C93A776534BB18FD303CD64E27C2" commented="no"><enum>(d)</enum><header>Effective date</header>
<paragraph id="H817A9D39297C47859DEF79124E8C526B"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (2), the amendments made by this section shall apply to fuel produced, and sold or used, after the date of the enactment of this Act.</text></paragraph>
<paragraph id="H78CC33E5B9154E88AC7B998200C08620"><enum>(2)</enum><header>Provisions clarifying treatment of fuels with no nexus to the United States</header>
<subparagraph id="H9D1736D8784447E3B24960A93BE877F"><enum>(A)</enum><header>In general</header><text>Except as otherwise provided in this paragraph, the amendments made by subsection (c) shall take effect as if included in section 301 of the American Jobs Creation Act of 2004.</text></subparagraph>
<subparagraph id="H9BFEDB4864204801963B2BCF7871114C" commented="no" display-inline="no-display-inline"><enum>(B)</enum><header>Alternative fuel credits</header><text display-inline="yes-display-inline">So much of the amendments made by subsection (c) as relate to the alternative fuel credit or the alternative fuel mixture credit shall take effect as if included in section 11113 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users.</text></subparagraph>
<subparagraph id="H1692C21F693848D3AAC1D95044EACB2C"><enum>(C)</enum><header>Renewable diesel</header><text display-inline="yes-display-inline">So much of the amendments made by subsection (c) as relate to renewable diesel shall take effect as if included in section 1346 of the Energy Policy Act of 2005.</text></subparagraph></paragraph></subsection></section></subtitle>
<enum>IV</enum><header>Other provisions</header>
<subtitle id="HEAD39327EBDB445AB4F2252D1948DBD"><enum>A</enum><header>Studies</header>
<section id="H00F0D09721274B9E9068E218562B721D"><enum>401.</enum><header>Carbon audit of the tax code</header>
<subsection id="H9491695D542248B6BF50D05EB9CAB052"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">The Secretary of the Treasury shall enter into an agreement with the National Academy of Sciences to undertake a comprehensive review of the Internal Revenue Code of 1986 to identify the types of and specific tax provisions that have the largest effects on carbon and other greenhouse gas emissions and to estimate the magnitude of those effects. </text></subsection>
<subsection id="H699BAD9C0819489A80F4E02800CD1710"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">Not later than 2 years after the date of enactment of this Act, the National Academy of Sciences shall submit to Congress a report containing the results of study authorized under this section.</text></subsection>
<subsection id="H8AC3A89C870444B1A8537B1E11614DE9"><enum>(c)</enum><header>Authorization of appropriations</header><text>There is authorized to be appropriated to carry out this section $1,500,000 for the period of fiscal years 2008 and 2009.</text></subsection></section>
<section id="HDD6047A81DB84C3899EC54A820242ED4" section-type="subsequent-section" display-inline="no-display-inline"><enum>402.</enum><header>Comprehensive study of biofuels</header>
<subsection id="H551439614952495AAA97D1425E85EF8C"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">The Secretary of the Treasury, in consultation with the Secretary of Agriculture, the Secretary of Energy, and the Administrator of the Environmental Protection Agency, shall enter into an agreement with the National Academy of Sciences to produce an analysis of current scientific findings to determine—</text>
<paragraph id="H164BE468B7D847559E498E67F693E29E"><enum>(1)</enum><text>current biofuels production, as well as projections for future production, </text></paragraph>
<paragraph id="H5FEAE1E7791046A5A2D0CA665895329F"><enum>(2)</enum><text>the maximum amount of biofuels production capable on United States farmland, </text></paragraph>
<paragraph id="HF6942201F2CA45CC9EB4CCBC98DB271D"><enum>(3)</enum><text>the domestic effects of a dramatic increase in biofuels production on, for example—</text>
<subparagraph id="H7D22D80DDD3A47B0850006DEE16D624"><enum>(A)</enum><text>the price of fuel,</text></subparagraph>
<subparagraph id="HBBF0B07E898844609EE6E456DC40AA30"><enum>(B)</enum><text>the price of land in rural and suburban communities,</text></subparagraph>
<subparagraph id="H4A59161AE7504B4500A04947E5B3189F"><enum>(C)</enum><text>crop acreage and other land use,</text></subparagraph>
<subparagraph id="HC0AA929C25714F5281A009D8D0C5AC00"><enum>(D)</enum><text>the environment, due to changes in crop acreage, fertilizer use, runoff, water use, emissions from vehicles utilizing biofuels, and other factors, </text></subparagraph>
<subparagraph id="HD7B3CA81CD5B4EC0BAF005EA4CEA809"><enum>(E)</enum><text>the price of feed,</text></subparagraph>
<subparagraph id="H1736169B25044E599C67F4ACE584AEC"><enum>(F)</enum><text>the selling price of grain crops, </text></subparagraph>
<subparagraph id="H0B379B8FA54048C3BD738BA53A2942"><enum>(G)</enum><text>exports and imports of grains,</text></subparagraph>
<subparagraph id="HE2176A6D194E4FF2ACD996BAEEFAC03E"><enum>(H)</enum><text>taxpayers, through cost or savings to commodity crop payments, and</text></subparagraph>
<subparagraph id="HDDF58E7131BE4580A2001301D25FA3AA"><enum>(I)</enum><text>the expansion of refinery capacity, </text></subparagraph></paragraph>
<paragraph id="H208AF83744514FF7A7AB00DAEAE914EE"><enum>(4)</enum><text>the ability to convert corn ethanol plants for other uses, such as cellulosic ethanol or biodiesel, </text></paragraph>
<paragraph id="HE2993A8F601D4B5084FF4166E03D5837"><enum>(5)</enum><text>a comparative analysis of corn ethanol versus other biofuels and renewable energy sources, considering cost, energy output, and ease of implementation, and </text></paragraph>
<paragraph id="H0F89919CD7C249DAAAA4B167004E7215"><enum>(6)</enum><text>the need for additional scientific inquiry, and specific areas of interest for future research. </text></paragraph></subsection>
<subsection id="H12AAB08F721F4A89BAFA9600248CC2A2"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">The National Academy of Sciences shall submit an initial report of the findings of the report required under subsection (a) to the Congress not later than 3 months after the date of the enactment of this Act, and a final report not later than 6 months after such date of enactment.</text></subsection></section></subtitle>
<subtitle id="HE476DA6AC9B74B5BA834D61859001460"><enum>B</enum><header>Application of certain labor standards on projects financed under tax credit bonds</header>
<section id="H3A9A9EB707954B699B6C1FA8D8F3CC00" display-inline="no-display-inline" section-type="subsequent-section"><enum>411.</enum><header>Application of certain labor standards on projects financed under tax credit bonds</header><text display-inline="no-display-inline">Subchapter IV of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/40/31">chapter 31</external-xref> of title 40, United States Code, shall apply to projects financed with the proceeds of any tax credit bond (as defined in <external-xref legal-doc="usc" parsable-cite="usc/26/54A">section 54A</external-xref> of the Internal Revenue Code of 1986). </text></section></subtitle>
June 27, 2007
Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed