110 HR 5351 EH: Renewable Energy and Energy Conservation Tax Act of
U.S. House of Representatives
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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
2008
.
(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. Extension and modification of credit for residential
energy efficient property.
Title II—Conservation
Subtitle A—Transportation
Part
1—Vehicles
Sec. 201. Credit for plug-in hybrid vehicles.
Sec. 202. Extension and modification of alternative fuel
vehicle refueling property credit.
Sec. 203. Modification of limitation on automobile
depreciation.
Part
2—Fuels
Sec. 211. Extension and modification of credits for biodiesel
and renewable diesel.
Sec. 212. Clarification that credits for fuel are designed to
provide an incentive for United States production.
Sec. 213. Credit for production of cellulosic
alcohol.
Part 3—Other transportation incentives
Sec. 221. Extension of transportation fringe benefit to bicycle
commuters.
Sec. 222. Restructuring of New York Liberty Zone tax
credits.
Subtitle B—Other conservation provisions
Sec. 231. Qualified energy conservation bonds.
Sec. 232. Extension and modification of credit for nonbusiness
energy property.
Sec. 233. Extension of energy efficient commercial buildings
deduction.
Sec. 234. Modifications of energy efficient appliance credit
for appliances produced after 2007.
Sec. 235. Five-year applicable recovery period for depreciation
of qualified energy management devices.
Title III—Revenue provisions
Sec. 301. Limitation of deduction for income attributable to
domestic production of oil, gas, or primary products thereof.
Sec. 302. Clarification of determination of foreign oil and gas
extraction income.
Sec. 303. Time for payment of corporate estimated
taxes.
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="H30137A158C07472E95D75485FF5352D4"><enum>101.</enum><header>Extension and
modification of renewable energy credit</header>
<subsection id="HDB1BC1D5F4534B9890CD5FB3FDC5B4CD"><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,
2012</quote>:</text>
<paragraph id="HA1FC21D2E50D4776B6043BC132CEDEDE"><enum>(1)</enum><text>Paragraph
(1).</text>
</paragraph><paragraph id="H015765F39531443E8F024EA5476C5731"><enum>(2)</enum><text>Clauses (i) and
(ii) of paragraph (2)(A).</text>
</paragraph><paragraph id="H52BE85C8411C4D21BEC774160258C411"><enum>(3)</enum><text>Clauses (i)(I) and
(ii) of paragraph (3)(A).</text>
</paragraph><paragraph id="H466046178D79455C83BBFB931C159D00"><enum>(4)</enum><text>Paragraph
(4).</text>
</paragraph><paragraph id="H71840C7A533F4262AF0432FF54845B13"><enum>(5)</enum><text>Paragraph
(5).</text>
</paragraph><paragraph id="H515AE74519C746B690762BCB6D4EC832"><enum>(6)</enum><text>Paragraph
(6).</text>
</paragraph><paragraph id="HF59AB525B86649769DAFD8B74A2AEC2"><enum>(7)</enum><text>Paragraph
(7).</text>
</paragraph><paragraph id="HAF5CB72DBAE945B300354C20E05F416C"><enum>(8)</enum><text>Subparagraphs (A)
and (B) of paragraph (9).</text>
</paragraph></subsection><subsection display-inline="no-display-inline" id="H32C60C6DF37C410CAEACD3EDADD45E65"><enum>(b)</enum><header>Modification of
Credit Phaseout</header>
<paragraph id="HF8AF261F28F441DD9DE9428001E9CA30"><enum>(1)</enum><header>Repeal of
phaseout</header><text>Subsection (b) of section 45 is amended—</text>
<subparagraph id="H4D1FD522C95F4ACF846BA1D6ACBB9115"><enum>(A)</enum><text>by striking
paragraph (1), and</text>
</subparagraph><subparagraph id="H83E1506BC6D04E1F823BDCD336D90525"><enum>(B)</enum><text>by striking
<quote>the 8 cent amount in paragraph (1),</quote> in paragraph (2)
thereof.</text>
</subparagraph></paragraph><paragraph id="H8ACF5F7D5D4346EABF7967006D5F0140"><enum>(2)</enum><header>Limitation based
on investment in facility</header><text>Subsection (b) of section 45 is amended
by inserting before paragraph (2) the following new paragraph:</text>
<quoted-block id="HA4A022C332034819BCADF97178718519" style="OLC">
<paragraph id="H064E92F96BB34FEBA72DC57000F38410"><enum>(1)</enum><header>Limitation based
on investment in facility</header>
<subparagraph id="HD9DF5C17E47147BC8F5205D722C037E"><enum>(A)</enum><header>In
general</header><text>In the case of any qualified facility originally placed
in service after December 31, 2009, 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="H89D3086610F64B2EB56C00A7CCC75B7C"><enum>(i)</enum><text>the applicable
percentage with respect to such facility, multiplied by</text>
</clause><clause id="H8A724FA7119848D4B1B322FDFE939734"><enum>(ii)</enum><text>the eligible
basis of such facility.</text>
</clause></subparagraph><subparagraph id="H16C9DBABC85B4A8A926DE400A7CEE68E"><enum>(B)</enum><header>Carryforward of
unused limitation and excess credit</header>
<clause id="HEA518C0107AF4294896B186304AF738D"><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 prelimitation credit
for 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="HD21104A7D9E04823B9002100D33DC52F"><enum>(ii)</enum><header>Excess
credit</header><text>If the prelimitation credit 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 be 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><clause id="H2FEB3C0C84D24106A5A7E8CAAD6BA897"><enum>(iii)</enum><header>Prelimitation
credit</header><text>The term <quote>prelimitation credit</quote> with respect
to any facility for a taxable year means the credit determined under subsection
(a) with respect to such facility for such taxable year, determined without
regard to subparagraph (A) and after taking into account any increase for such
taxable year under clause (ii).</text>
</clause></subparagraph><subparagraph id="H27EBE25F6EA046A7B3BF455E4414D7D"><enum>(C)</enum><header>Applicable
percentage</header><text>For purposes of this paragraph—</text>
<clause id="H0CF458D3809D421EA8FA93DED9905988"><enum>(i)</enum><header>In
general</header><text>The term <quote>applicable percentage</quote> 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="HDDF5853BB14043508520BAFEE11218E3"><enum>(ii)</enum><header>Method of
prescribing applicable percentages</header><text>The applicable 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="HADADAEE2E1A24B5DAB00EA0681348717"><enum>(iii)</enum><header>Method of
discounting</header><text>The present value under clause (ii) shall be
determined—</text>
<subclause id="H4E96FD5389394E17B46CDA2876A7B07B"><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="H79DCAA7862564517BEFB3BF2B8C7001C"><enum>(II)</enum><text>by using a
discount rate equal to the greater of 110 percent of the Federal long-term rate
as in effect under section 1274(d) for the month preceding the month for which
the applicable percentage is being prescribed, or 4.5 percent, and</text>
</subclause><subclause id="HD76E0F304E0D41BAABE27930F86BC864"><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="H11706098EEFE48EEBA0100E60067B5F"><enum>(D)</enum><header>Eligible
basis</header><text>For purposes of this paragraph—</text>
<clause id="H5ACC0A50C57C41F1BB0026BBE5F5900"><enum>(i)</enum><header>In
general</header><text>The term <quote>eligible basis</quote> means, with
respect to any facility, the sum of—</text>
<subclause id="H2C8983C0E7B44293B5C6B778BC043FC2"><enum>(I)</enum><text>the basis of such
facility determined as of the time that such facility is originally placed in
service, and</text>
</subclause><subclause id="H72A8B26696564C3B00FAED24ED232DB6"><enum>(II)</enum><text>the portion of
the basis of any shared qualified property which is properly allocable to such
facility under clause (ii).</text>
</subclause></clause><clause id="H26CA52E9D6664C6F8600B95EE55F8CB8"><enum>(ii)</enum><header>Rules for
allocation</header><text>For purposes of subclause (II) of clause (i), the
basis of shared qualified property shall be allocated among all qualified
facilities which are projected to be placed in service and which require
utilization of such property in proportion to projected generation from such
facilities.</text>
</clause><clause id="H05BC7B1F52704B4900E4D2E79E00EA16"><enum>(iii)</enum><header>Shared
qualified property</header><text>For purposes of this paragraph, the term
<quote>shared qualified property</quote> means, with respect to any facility,
any property described in section 168(e)(3)(B)(vi)—</text>
<subclause id="H5893D11CB0024767BC49E2AE448FC1F5"><enum>(I)</enum><text>which a qualified
facility will require for utilization of such facility, and</text>
</subclause><subclause id="H4A240687C94C4F21B413A59815370C4"><enum>(II)</enum><text>which is not a
qualified facility.</text>
</subclause></clause><clause id="H95DCB19A5FE142A5A7282EEF90280170"><enum>(iv)</enum><header>Special rule
relating to geothermal facilities</header><text>In the case of any qualified
facility using geothermal energy to produce electricity, the basis of such
facility for purposes of this paragraph shall be determined as though
intangible drilling and development costs described in section 263(c) were
capitalized rather than expensed.</text>
</clause></subparagraph><subparagraph id="HC577F44694974958A6A52018CCE5C0D2"><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><subparagraph id="H057C0946403644C69FAA6C776145E900"><enum>(F)</enum><header>Election to
treat all facilities placed in service in a year as 1 facility</header><text>At
the election of the taxpayer, all qualified facilities which are part of the
same project and which are placed in service during the same calendar year
shall be treated for purposes of this section as 1 facility which is placed in
service at the mid-point of such year or the first day of the following
calendar
year.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HCE464B2A766747188E39AC1B53DED28"><enum>(c)</enum><header>Trash facility
clarification</header><text>Paragraph (7) of section 45(d) is amended—</text>
<paragraph id="H06A51C10434A4AB992A5E834C0147753"><enum>(1)</enum><text>by striking
<quote>facility which burns</quote> and inserting <quote>facility (other than a
facility described in paragraph (6)) which uses</quote>, and</text>
</paragraph><paragraph id="H9A24BA9E441F4B64BEE710018C0027BD"><enum>(2)</enum><text>by striking
<quote><header-in-text level="paragraph" style="OLC">combustion</header-in-text></quote>.</text>
</paragraph></subsection><subsection id="HBEE87D2B3D6547968EE226DD8A5481"><enum>(d)</enum><header>Expansion of
biomass facilities</header>
<paragraph id="H4FD5B78EEC3A4676A1C4A58735B5DE02"><enum>(1)</enum><header>Open-loop
biomass facilities</header><text>Paragraph (3) of section 45(d) is amended by
redesignating subparagraph (B) as subparagraph (C) and by inserting after
subparagraph (A) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H305B5E3F4D7A41BAA8DF53F248F417F4" style="OLC">
<subparagraph id="HFF4A49F9C2254F6881985911BB176068"><enum>(B)</enum><header>Expansion of
facility</header><text display-inline="yes-display-inline">Such term shall
include a new unit placed in service after the date of the enactment of this
subparagraph in connection with a facility described in subparagraph (A), but
only to the extent of the increased amount of electricity produced at the
facility by reason of such new
unit.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HB4E39DE05AAC43B59D861F10FDC891D6"><enum>(2)</enum><header>Closed-loop
biomass facilities</header><text>Paragraph (2) of section 45(d) is amended by
redesignating subparagraph (B) as subparagraph (C) and inserting after
subparagraph (A) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H2E8D7B787F4349339DAFFD8589CCBDE2" style="OLC">
<subparagraph id="HC76B26B0994A4624923D00314800968E"><enum>(B)</enum><header>Expansion of
facility</header><text display-inline="yes-display-inline">Such term shall
include a new unit placed in service after the date of the enactment of this
subparagraph in connection with a facility described in subparagraph (A)(i),
but only to the extent of the increased amount of electricity produced at the
facility by reason of such new
unit.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HF97129AE391C4E65B5471F9418D1F31"><enum>(e)</enum><header>Effective
date</header>
<paragraph id="HF7A3B656489F47E196F22B369BB8669B"><enum>(1)</enum><header>In
general</header><text>Except as otherwise provided in this subsection, the
amendments made by this section shall apply to property originally placed in
service after December 31, 2008.</text>
</paragraph><paragraph id="H3A620C9A234241FEB19632D96147C7BE"><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><paragraph id="H1642EA49D2AD402700E1BC90DA0152DA"><enum>(3)</enum><header>Limitation based
on investment in facility</header><text>The amendment made by subsection (b)(2)
shall apply to property originally placed in service after December 31,
2009.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="HF915F2921D474551A9AA94771053E531"><enum>(4)</enum><header>Trash facility
clarification</header><text>The amendments made by subsection (c) shall apply
to electricity produced and sold after the date of the enactment of this
Act.</text>
</paragraph><paragraph id="HE9EFEE4106A043CCACD85800ED7D6414"><enum>(5)</enum><header>Expansion of
biomass facilities</header><text>The amendments made by subsection (d) shall
apply to property placed in service after the date of the enactment of this
Act.</text>
</paragraph></subsection></section><section display-inline="no-display-inline" id="HB4CF1AB00EF74640BB83F48EA4A58819" section-type="subsequent-section"><enum>102.</enum><header>Production credit
for electricity produced from marine renewables</header>
<subsection id="H8AEEA1860DF5466AA3F1F4B0D7D531BC"><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="HF2AFB43401744260AD51E1C2AC3FD7DE" style="OLC">
<subparagraph id="HF5160F52F39A4CADBF00CC79BC26FD5E"><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="H449C1D2BFA274191BB88B17F00A88806"><enum>(b)</enum><header>Marine
renewables</header><text>Subsection (c) of section 45 is amended by adding at
the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HFA888FAEE6E2431E9D115B05E206F923" style="OLC">
<paragraph commented="no" id="HC54771A1613C4BCCA3EEAAB7CE6C421F"><enum>(10)</enum><header>Marine and
hydrokinetic renewable energy</header>
<subparagraph id="HD8F37DB75C58437A8479E4D059D64FFF"><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="H382B3B55DF274E0990245BE19BEE16E3"><enum>(i)</enum><text>waves, tides, and
currents in oceans, estuaries, and tidal areas,</text>
</clause><clause id="HE68273A2B925406C9427F3617EB7D7AF"><enum>(ii)</enum><text>free flowing
water in rivers, lakes, and streams,</text>
</clause><clause id="HBFF801616BB14908AF672DF770488EDF"><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="HA507A7A724994D3A8424E2E4D7008F6D"><enum>(iv)</enum><text>differentials in
ocean temperature (ocean thermal energy conversion).</text>
</clause></subparagraph><subparagraph id="H77F25B87527F45EB9035BBADC345DF54"><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="HFA40CC241F814F48ABD302B7CCA3595D"><enum>(c)</enum><header>Definition of
facility</header><text>Subsection (d) of section 45 is amended by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HF82181A480AC4662A531194093FCC26E" style="OLC">
<paragraph id="HBB99C60D83904DB49D6B78003E03F848"><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="HB3A46509FB9E4A06BC5CC516EBAE87A0"><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="HC805938B69A2485F89375B430784DBE9"><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,
2012.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H99580472C5BA4180A7CA9C969D6D81C8"><enum>(d)</enum><header>Credit
rate</header><text>Subparagraph (A) of section 45(b)(4) is amended by striking
<quote>or (9)</quote> and inserting <quote>(9), or (11)</quote>.</text>
</subsection><subsection commented="no" id="HEB22692156AA4721ACBD828B429F55DA"><enum>(e)</enum><header>Coordination
with small irrigation power</header><text>Paragraph (5) of section 45(d), as
amended by section 101(a), is amended by striking <quote>January 1,
2012</quote> and inserting <quote>the date of the enactment of paragraph
(11)</quote>.</text>
</subsection><subsection id="H9025090DB7A440CCAFDB464C01B8B5B"><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="H269D698EF0B743C7BD54C7C7DCCFC00"><enum>103.</enum><header>Extension and
modification of energy credit</header>
<subsection id="HD6B8692F800C4C708C38B801D5AE4361"><enum>(a)</enum><header>Extension of
credit</header>
<paragraph id="H33F3142BDA5F4EA689588533EAAE1578"><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="HCB3E6DE160864A639151807EB9DD0695"><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="HCD906D8944D94AE6B3C99141FF1269E8"><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 display-inline="no-display-inline" id="HAAE8DC24A64948CCB036BACC8F5CEC75" style="OLC">
<clause id="HDC98AA51221A4453973C60DE21E3A3C0"><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="H9F98965AD58143DEAB89E62079B4FAED"><enum>(c)</enum><header>Increase of
credit limitation for fuel cell property</header><text>Subparagraph (B) of
section 48(c)(1) is amended by striking <quote>$500</quote> and inserting
<quote>$1,500</quote>.</text>
</subsection><subsection id="H13585CAF81954D18BD470154A7AB2201"><enum>(d)</enum><header>Public electric
utility property taken into account</header>
<paragraph id="HEB072CE0D1814CC9A700F4129200852B"><enum>(1)</enum><header>In
general</header><text>Paragraph (3) of section 48(a) is amended by striking the
second sentence thereof.</text>
</paragraph><paragraph id="H0DB5E2619C07434889807E82929FC3EF"><enum>(2)</enum><header>Conforming
amendments</header>
<subparagraph id="H0FB44F1F632D4943905CD1B5BA827838"><enum>(A)</enum><text>Paragraph (1) of
section 48(c) is amended by striking subparagraph (D) and redesignating
subparagraph (E) as subparagraph (D).</text>
</subparagraph><subparagraph id="H9EB51D36616E4024B8222FD60507A7E7"><enum>(B)</enum><text display-inline="yes-display-inline">Paragraph (2) of section 48(c) is amended
by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph
(D).</text>
</subparagraph></paragraph></subsection><subsection id="HE42B21EED3C646A5946C4D2B1843A47D"><enum>(e)</enum><header>Effective
date</header>
<paragraph id="H398926E157C148FFBC20A1B65851CE25"><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="HBEA92A36FE9246939BC8E6B200782D9D"><enum>(2)</enum><header>Allowance
against alternative minimum tax</header><text>The amendments made by subsection
(b) shall apply to credits determined under section 46 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="HB6951B00373E40238EA688BCB084E3B3"><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="HBBD06200B6834F7FA1006D00A341D30"><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 February 13, 2008, in taxable years ending after such
date, under rules similar to the rules of section 48(m) 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 display-inline="no-display-inline" id="H3C1FD495CAE94FA4B1300054FF185FCF"><enum>104.</enum><header>New clean
renewable energy bonds</header>
<subsection id="H118B2A61A49242F09795BCF401415BB4"><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 display-inline="no-display-inline" id="H511E552651554CE4003BE2C8AA2161AC" style="OLC">
<subpart id="H54B0CA3F150B4B4C9483001C4EC20055"><enum>I</enum><header>Qualified tax
credit bonds</header>
<toc container-level="subpart-container" idref="H54B0CA3F150B4B4C9483001C4EC20055" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="H8B77988B2D8C4660B545B5E2E3D58BAF" level="section">Sec. 54A. Credit to holders of qualified tax credit
bonds.</toc-entry>
<toc-entry idref="H2F0B356459A34AED93D38C539C4218E4" level="section">Sec. 54B. New clean renewable energy bonds.</toc-entry>
</toc>
<section display-inline="no-display-inline" id="H8B77988B2D8C4660B545B5E2E3D58BAF" section-type="subsequent-section"><enum>54A.</enum><header>Credit to holders of
qualified tax credit bonds</header>
<subsection id="H7270DE9B39EC4E29BC33B6BFBE5F1700"><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="H27DB7A9EF1724EF9B3629DDA3CE056AD"><enum>(b)</enum><header>Amount of
credit</header>
<paragraph id="H60EC0FCD844F440BA332F38429352DAD"><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="HB0F579EF956E4256AAF1C628F000BFFB"><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="HFB1AABFB5A9C4DD4B2CC8189879FACB8"><enum>(A)</enum><text>the applicable
credit rate, multiplied by</text>
</subparagraph><subparagraph id="HAD13172B5A2F4D99BBFA169E6D68B5A5"><enum>(B)</enum><text>the outstanding
face amount of the bond.</text>
</subparagraph></paragraph><paragraph id="H52003D87590C456F8B1EFDB619CBD48C"><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="H7440E984A44141E5BCD58D3FEFDE619F"><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="HE25509E21B184F508C62DE7DFF675038"><enum>(c)</enum><header>Limitation based
on amount of tax</header>
<paragraph id="H6C04B199AD204B93A624A4757059C3EB"><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="HFDA3A94D1FC744498FA65B45AD63ECCA"><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="H29909960BFD546CBA517355F51D2FF7F"><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="H08165D87BE114D90A37523C943A0CF9D"><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 display-inline="no-display-inline" id="H4B04701BD0724B9FB7725E5B4E5300B4"><enum>(d)</enum><header>Qualified tax
credit bond</header><text>For purposes of this section—</text>
<paragraph commented="no" id="HEE024D5C19634664B523D3FBAFA1FA6F"><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 display-inline="no-display-inline" id="H0022863DD6104C4ABB05FA56E0935066"><enum>(2)</enum><header>Special rules
relating to expenditures</header>
<subparagraph id="HB8D09EB9292041E3A3CD5D4C9E5811FA"><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="HAD83E71DEB3444FD84A97DC6EE95AF8E"><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="H44449C5A50D345CB9698A522C1206811"><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="H33C5B6BDB61442CAB59B57A6B8D94B2E"><enum>(B)</enum><header>Failure to spend
required amount of bond proceeds within 3 years</header>
<clause id="HD35F55944E734A1D83176CEC1E2865E3"><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="H4085D1161CF74DB6B8D7171792213701"><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="HDDDDB366CBB241E699AC2DF095F87E4"><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 commented="no" id="HABA06E2DBB48457087C547B4B8C869B0"><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 commented="no" id="H432D2B57324A4167A1CEB8A8458B9C74"><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 commented="no" id="HD43508CDD4B9411EBC68BDA549B8FE1D"><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 commented="no" id="HEEED8CD003A04BFC91AB8B6FF8422588"><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 commented="no" id="H4F9E22A3203F47798627B1CDCE3ED8FF"><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 commented="no" display-inline="no-display-inline" id="HD2B46FD553A2476C9562F1155BE2BA8"><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="H6AF415862F864A32B52B2E5F43FCD0BF"><enum>(4)</enum><header>Special rules
relating to arbitrage</header>
<subparagraph id="H6B8A29CCFAD7490EB839F524DBD6D721"><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="H67700390DDD74B339B62D1F800EAB197"><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="HAFB9A9E4885445AEAC2614258E19FEBB"><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="HC3629320B67F42E1B5DE1051F0BC9974"><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="HFA59CD3B922F432BB0D73E8DD174AD2D"><enum>(ii)</enum><text display-inline="yes-display-inline">such fund is funded in a manner reasonably
expected to result in an amount not greater than an amount necessary to repay
the issue, and</text>
</clause><clause id="H5AA5CD3CB14D4582A02E7B9934A13600"><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="HD0E56C3D9C484D32A7D6EA8DBC2C50C1"><enum>(5)</enum><header>Maturity
limitation</header>
<subparagraph id="H7F89D07835B5481F9C89D67147B447A9"><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="HD322602193D24719A58F9E9F16F714BF"><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 display-inline="no-display-inline" id="HC9F09DBD49E042108C002C00F144F0BA"><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="H5EF78CACE2944291BD2726B46E82B9E"><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="H59ABF742B76B4F0BA8C8ACFE65E9A43"><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="HBD05D525B8384E9CBDD3A40025C550E2"><enum>(e)</enum><header>Other
definitions</header><text>For purposes of this subchapter—</text>
<paragraph id="H75BF4EC8BB9A4F2DBB3683C61BDFFF37"><enum>(1)</enum><header>Credit allowance
date</header><text>The term <term>credit allowance date</term> means—</text>
<subparagraph id="HD6E66A8DDD6640129CFA69AFE3245308"><enum>(A)</enum><text>March 15,</text>
</subparagraph><subparagraph id="HA413FB8F58CE42F7B899FACAF99F8690"><enum>(B)</enum><text>June 15,</text>
</subparagraph><subparagraph id="HCF8DB211978E49BE8B8CDFD8955F0489"><enum>(C)</enum><text>September 15,
and</text>
</subparagraph><subparagraph id="H0D37F17355464D8AB6842D7EB3F6006D"><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="HA178D9A2F8C84483A491EE8404143873"><enum>(2)</enum><header>Bond</header><text>The
term <term>bond</term> includes any obligation.</text>
</paragraph><paragraph id="HF57B2E8D359440C3BC6383FC877FD889"><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="HF1D25A3F284244E5A5800053D741EA59"><enum>(4)</enum><header>Available
project proceeds</header><text>The term <term>available project proceeds</term>
means—</text>
<subparagraph id="H22832613C7BF478D95C46742CF55ABE7"><enum>(A)</enum><text display-inline="yes-display-inline">the excess of—</text>
<clause id="H4DCD3C5750914DFC87AED67E8100DF00"><enum>(i)</enum><text>the proceeds from
the sale of an issue, over</text>
</clause><clause id="H49EF291FCAAA49658D7B812E60CBE92B"><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="H5BBB55FC1E464EA1BF34368F688936E5"><enum>(B)</enum><text>the proceeds from
any investment of the excess described in subparagraph (A).</text>
</subparagraph></paragraph></subsection><subsection id="H50791755978746808858C2A7988FA7B1"><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="H72D17F2477CD4B94B3A2C0709BC9109D"><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="H98902F7530844BE288D7BBAB98F3D5B"><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="HA4FA9FEE98EC4D85893415766BF1405B"><enum>(i)</enum><header>Credits may be
stripped</header><text>Under regulations prescribed by the Secretary—</text>
<paragraph id="H3DE7D6F4A42C45D297AED255D3FB24D"><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="H4B6D3C3D400C4E8BA98182F598682C83"><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 display-inline="no-display-inline" id="H2F0B356459A34AED93D38C539C4218E4" section-type="subsequent-section"><enum>54B.</enum><header>New clean renewable
energy bonds</header>
<subsection id="HFB1C4A881D3E4A4895B667B76A7EE03"><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="H2C5A783258504587BFB85C00FE13FE0"><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="H404AFBE3CC114B48B328C753C65B54C"><enum>(2)</enum><text>the bond is issued
by a qualified issuer, and</text>
</paragraph><paragraph id="HC56605E865054831AEB9856727B7AA2C"><enum>(3)</enum><text>the issuer
designates such bond for purposes of this section.</text>
</paragraph></subsection><subsection id="HAD5A61CF60DD448B87CF9FCF2464B321"><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 display-inline="no-display-inline" id="HA5871E0CD87B468C90675996F9C6DBB"><enum>(c)</enum><header>Limitation on
amount of bonds designated</header>
<paragraph id="H752CAD9008B546BF95D4B9096E9B9769"><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="H77BAE3398CEC4E5BBD00230086721B3E"><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="HE7610A1748A44938A3747DC5875C955C"><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="H4204324F595C495C975DCB4E2DE84745"><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="HA0670FFD4DD647BF8EF93443AE005B49"><enum>(3)</enum><header>Method of
allocation</header>
<subparagraph id="H972287971A464F84A96F57A2E2A8A52B"><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="HB32E075DB7FC4605919BB317D5B9C407"><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="H413391149D5B4E4F929921AE141F1BC9"><enum>(d)</enum><header>Definitions</header><text>For
purposes of this section—</text>
<paragraph id="H8ABBC7CF72694193B16B87A6FB4DB756"><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="HE61501BFE2C348C5BACADEE973FA160"><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="H8D1A564F48B44971A8958D643E8428CF"><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="H0EEB993FAE064EDF92B61C2BCB21FB93"><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="H50D59B73B3944475969CD1E9A5D1A802"><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="H50B374B05B794E90918DBED594964CDE"><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 display-inline="no-display-inline" id="H4A19CF54E7304DAB982DF5A9450945B9" style="OLC">
<paragraph id="HC24F45179A29469BB839CAAF65BB32DB"><enum>(9)</enum><header>Reporting of
credit on qualified tax credit bonds</header>
<subparagraph id="HA5CE1ECD591840040051AF62D7CF3EFE"><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="H815A62B344E04C8C8191BAC905C580A3"><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="H5B7CE89A4779487884005F2939353ED3"><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="H0C094A9E3BDB4F87ABEB00E8DB23F12"><enum>(c)</enum><header>Conforming
amendments</header>
<paragraph id="H031F984419AC4CCFB1C63FE24EA1C607"><enum>(1)</enum><text>Sections 54(c)(2)
and 1400N(l)(3)(B) are each amended by striking <quote>subpart C</quote> and
inserting <quote>subparts C and I</quote>.</text>
</paragraph><paragraph id="HC54ACAE9F7C44B2DAD562C92B9FFABCB"><enum>(2)</enum><text>Section
1397E(c)(2) is amended by striking <quote>subpart H</quote> and inserting
<quote>subparts H and I</quote>.</text>
</paragraph><paragraph id="H055E12493EA14F40B44BA6B1FEE9D4C7"><enum>(3)</enum><text>Section 6401(b)(1)
is amended by striking <quote>and H</quote> and inserting <quote>H, and
I</quote>.</text>
</paragraph><paragraph id="H142DE185CF974D9A81B06B9EF5516C95"><enum>(4)</enum><text>The heading of
subpart H of part IV of subchapter A of chapter 1 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="H3278309D082342B6BFA1F6EA839DD751"><enum>(5)</enum><text>The table of
subparts for part IV of subchapter A of chapter 1 is amended by striking the
item relating to subpart H and inserting the following new items:</text>
<quoted-block id="HD94260970ACC4670A3B868C456084FD9" style="OLC">
<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="H304A4790E0994F43B333CDE92116CD08"><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="H894507F30FD04B0FA905641FD4D79B88"><enum>105.</enum><header>Extension and
modification of special rule to implement FERC and State electric restructuring
policy</header>
<subsection id="HD8F05053BD954BEB96BD9003B80B3B8"><enum>(a)</enum><header>Extension for
qualified electric utilities</header>
<paragraph id="HBFF6A31088584BDC9B7F8D00EB329F8"><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 inserting <quote>(before
January 1, 2010, in the case of a qualified electric utility)</quote> after
<quote>January 1, 2008</quote>.</text>
</paragraph><paragraph id="H6261999EADCE434480DC142CE500D949"><enum>(2)</enum><header>Qualified
electric utility</header><text>Subsection (i) of section 451 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 id="H3EDB0FED1B3F4795915E7CA778634811" style="OLC">
<paragraph id="HAA54CE4A73674383B3270002D602D324"><enum>(6)</enum><header>Qualified
electric utility</header><text>For purposes of this subsection, the term
<quote>qualified electric utility</quote> means a person that, as of the date
of the qualifying electric transmission transaction, is vertically integrated,
in that it is both—</text>
<subparagraph id="H8E0A8C84F9D24694B9DC370066D368A2"><enum>(A)</enum><text>a transmitting
utility (as defined in section 3(23) of the Federal Power Act (16 U.S.C.
796(23))) with respect to the transmission facilities to which the election
under this subsection applies, and</text>
</subparagraph><subparagraph id="HB800A0A0389A46738DA440E36015F45F"><enum>(B)</enum><text>an electric
utility (as defined in section 3(22) of the Federal Power Act (16 U.S.C.
796(22))).</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H9081B4ECB4FC405589A5C0EE417081A3"><enum>(b)</enum><header>Extension of
period for transfer of operational control authorized by
FERC</header><text>Clause (ii) of section 451(i)(4)(B) 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="HEBBC3898EC6447DCAE2C64ADF003514"><enum>(c)</enum><header>Property located
outside the united states not treated as exempt utility
property</header><text>Paragraph (5) of section 451(i) is amended by adding at
the end the following new subparagraph:</text>
<quoted-block id="H0C80B0D3A4E14073913B66B19929D7DB" style="OLC">
<subparagraph id="H3FD68104BD264050ADF79B18F7E3E1AB"><enum>(C)</enum><header>Exception for
property located outside the united states</header><text>The term <quote>exempt
utility property</quote> 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="HE9C3309DE95347F2B5BCF75E788D2222"><enum>(d)</enum><header>Effective
Dates</header>
<paragraph id="H0F5180F60B124E1DAAB87E022E57A08B"><enum>(1)</enum><header>Extension</header><text>The
amendments made by subsection (a) shall apply to transactions after December
31, 2007.</text>
</paragraph><paragraph id="H9D7FB8BF6DFB403A813436D9D18FDB47"><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="HBCC9157BD4124E4EAE7BA5EEF01FAE7"><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 display-inline="no-display-inline" id="HA1D364429CB54725A4DCB445B2E32D46" section-type="subsequent-section"><enum>106.</enum><header>Extension and
modification of credit for residential energy efficient property</header>
<subsection id="H9349EB077AA74E2F952F418DFCE80004"><enum>(a)</enum><header>Extension</header><text>Section
25D(g) (relating to termination) is amended by striking <quote>December 31,
2008</quote> and inserting <quote>December 31, 2014</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HE46345B52DFF471495F4DDD33ED42F8"><enum>(b)</enum><header>Maximum credit
for solar electric property</header>
<paragraph commented="no" display-inline="no-display-inline" id="H938D47C10FEB43F5B3C6D268D4B321AF"><enum>(1)</enum><header>In
general</header><text>Section 25D(b)(1)(A) (relating to maximum credit) is
amended by striking <quote>$2,000</quote> and inserting
<quote>$4,000</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="HA3510519FB1D46FBB2CBF3756CC6277"><enum>(2)</enum><header>Conforming
amendment</header><text>Section 25D(e)(4)(A)(i) is amended by striking
<quote>$6,667</quote> and inserting <quote>$13,333</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="H640FB9CD2B5F4E46A2812BDA10E8EC50"><enum>(c)</enum><header>Credit for
residential wind property</header>
<paragraph commented="no" id="HC6B85184CC4145058F1DE5E544930085"><enum>(1)</enum><header>In
general</header><text>Section 25D(a) (relating to allowance of credit) is
amended by striking <quote>and</quote> at the end of paragraph (2), by striking
the period at the end of paragraph (3) and inserting <quote>, and</quote>, and
by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H97ED416843B44D5AA4A14F52001428CB" style="OLC">
<paragraph id="H92EF2CF329A04EDC89B510AE5C09ED8B"><enum>(4)</enum><text>30 percent of the
qualified small wind energy property expenditures made by the taxpayer during
such
year.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="H902B4FFC76A149C78721345E499E7800"><enum>(2)</enum><header>Limitation</header><text>Section
25D(b)(1) (relating to maximum credit) is amended by striking
<quote>and</quote> at the end of subparagraph (B), by striking the period at
the end of subparagraph (C) and inserting <quote>, and</quote>, and by adding
at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H7AC3EF06F4764F629900CDA9FE67135E" style="OLC">
<subparagraph id="H662BECC803D44D0CB44CA6D963AC7666"><enum>(D)</enum><text>$500 with respect
to each half kilowatt of capacity (not to exceed $4,000) of wind turbines for
which qualified small wind energy property expenditures are
made.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="H8A982CE8F03E415F96E88824E2FCF2EB"><enum>(3)</enum><header>Qualified small
wind energy property expenditures</header>
<subparagraph commented="no" id="HFBF9FC6902C840E6ADF7D6025263C4DD"><enum>(A)</enum><header>In
general</header><text>Section 25D(d) (relating to definitions) is amended by
adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HAA27D82EB2F14F118800E258B648D9A5" style="OLC">
<paragraph id="H63614E4E131646C5B75E79DF3813C3CA"><enum>(4)</enum><header>Qualified small
wind energy property expenditure</header><text>The term <term>qualified small
wind energy property expenditure</term> means an expenditure for property which
uses a wind turbine to generate electricity for use in connection with a
dwelling unit located in the United States and used as a residence by the
taxpayer.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" id="H55497C53FCBA4960A1173200080081F8"><enum>(B)</enum><header>No double
benefit</header><text>Section 45(d)(1) (relating to wind facility) is amended
by adding at the end the following new sentence: <quote>Such term shall not
include any facility with respect to which any qualified small wind energy
property expenditure (as defined in subsection (d)(4) of section 25D) is taken
into account in determining the credit under such section.</quote>.</text>
</subparagraph></paragraph><paragraph commented="no" id="H2E254B7F326747CDA79F9469E827139D"><enum>(4)</enum><header>Maximum
expenditures in case of joint occupancy</header><text>Section 25D(e)(4)(A)
(relating to maximum expenditures) is amended by striking <quote>and</quote> at
the end of clause (ii), by striking the period at the end of clause (iii) and
inserting <quote>, and</quote>, and by adding at the end the following new
clause:</text>
<quoted-block display-inline="no-display-inline" id="H9540A1AA0D5D434EB94420CEFEA1D49C" style="OLC">
<clause commented="no" id="HE5EE3E6C16CB45A800E8EBBFC3D6114"><enum>(iv)</enum><text>$1,667 in the case
of each half kilowatt of capacity (not to exceed $13,333) of wind turbines for
which qualified small wind energy property expenditures are
made.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HEF96505827FF4E0C90E47ED1AC05D88F"><enum>(d)</enum><header>Credit for
geothermal heat pump systems</header>
<paragraph commented="no" id="HA770DFB55BEC4D74B6109FA5B96CC6C4"><enum>(1)</enum><header>In
general</header><text>Section 25D(a) (relating to allowance of credit), as
amended by subsection (c), is amended by striking <quote>and</quote> at the end
of paragraph (3), by striking the period at the end of paragraph (4) and
inserting <quote>, and</quote>, and by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H3071C4955AD74991A7C00236646B101" style="OLC">
<paragraph id="H47DB1FA8C2194CE59949C66CCA2538B1"><enum>(5)</enum><text>30 percent of the
qualified geothermal heat pump property expenditures made by the taxpayer
during such
year.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="HDD7335B629654DF786094123EB638762"><enum>(2)</enum><header>Limitation</header><text>Section
25D(b)(1) (relating to maximum credit), as amended by subsection (c), is
amended by striking <quote>and</quote> at the end of subparagraph (C), by
striking the period at the end of subparagraph (D) and inserting <quote>,
and</quote>, and by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H4D70A1E1444E4526B2E2AF35CCA8D2D1" style="OLC">
<subparagraph id="H5E5CF4B7A2A847C5B0B49C4D5D74C169"><enum>(E)</enum><text>$2,000 with
respect to any qualified geothermal heat pump property
expenditures.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="H797EB15B129742C8A9226398310080EC"><enum>(3)</enum><header>Qualified
geothermal heat pump property expenditure</header><text>Section 25D(d)
(relating to definitions), as amended by subsection (c), is amended by adding
at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H5690B64D0A634078A3342862FE60D186" style="OLC">
<paragraph id="H8EB8EFAEC7B54DE4B5457EF3F7F05184"><enum>(5)</enum><header>Qualified
geothermal heat pump property expenditure</header>
<subparagraph id="H7548C8640B2041C58689CAB76D02DC5"><enum>(A)</enum><header>In
general</header><text>The term <term>qualified geothermal heat pump property
expenditure</term> means an expenditure for qualified geothermal heat pump
property installed on or in connection with a dwelling unit located in the
United States and used as a residence by the taxpayer.</text>
</subparagraph><subparagraph id="H1632D3C2B555477EBA67CC9E50559C9F"><enum>(B)</enum><header>Qualified
geothermal heat pump property</header><text>The term <quote>qualified
geothermal heat pump property</quote> means any equipment which—</text>
<clause id="H7EF519E8C25F4A5D96383944DDC83716"><enum>(i)</enum><text display-inline="yes-display-inline">uses the ground or ground water as a
thermal energy source to heat the dwelling unit referred to in subparagraph (A)
or as a thermal energy sink to cool such dwelling unit, and</text>
</clause><clause id="H7C56422431DA47B9A61052C14FADBD0"><enum>(ii)</enum><text display-inline="yes-display-inline">meets the requirements of the Energy Star
program which are in effect at the time that the expenditure for such equipment
is
made.</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="H88BDF02EC8F8451CA446C46643A07200"><enum>(4)</enum><header>Maximum
expenditures in case of joint occupancy</header><text>Section 25D(e)(4)(A)
(relating to maximum expenditures), as amended by subsection (c), 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 display-inline="no-display-inline" id="HC0E4F389C697417D87E6C0F09E6532D8" style="OLC">
<clause commented="no" id="H886877A999814B96BB6606598F00195E"><enum>(v)</enum><text>$6,667 in the case
of any qualified geothermal heat pump property
expenditures.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" id="H5304447515B54A94979063AB66B00B2"><enum>(e)</enum><header>Credit allowed
against alternative minimum tax</header>
<paragraph commented="no" id="H53C0979DA9A7412291AAF275F98C1E44"><enum>(1)</enum><header>In
general</header><text>Subsection (c) of section 25D is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="H992F54FA14B645E281E0FAFCE5D12B2" style="OLC">
<subsection commented="no" id="HA653FA503321480EBD4C5445D5C2141F"><enum>(c)</enum><header>Limitation based
on amount of tax; carryforward of unused credit</header>
<paragraph commented="no" id="H26D00907A7BB4778BE2769883EEC87C8"><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 commented="no" id="H3EDA6A04899B468D976736ED0377AABB"><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 commented="no" id="HEFEC12897D2B41EA9FEDF79583E0FAE7"><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 commented="no" id="H607683F7FFE446AF8629B93A8EE795E"><enum>(2)</enum><header>Carryforward of
unused credit</header>
<subparagraph commented="no" id="H525736544BE0433EB015FD3F8F2DA2E1"><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 commented="no" id="HB1FF32EA728B48DBADA6ECFC38BFC33C"><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 commented="no" id="H7C7892F923184FFBA825E3EBE484F4E7"><enum>(2)</enum><header>Conforming
amendments</header>
<subparagraph commented="no" id="HD6DFAD2A82C74CB48424BCE2F3CBB4E7"><enum>(A)</enum><text>Section
23(b)(4)(B) is amended by inserting <quote>and section 25D</quote> after
<quote>this section</quote>.</text>
</subparagraph><subparagraph commented="no" id="HEDF21F2BCA264911913B8D7051F9F267"><enum>(B)</enum><text>Section
24(b)(3)(B) is amended by striking <quote>and 25B</quote> and inserting
<quote>, 25B, and 25D</quote>.</text>
</subparagraph><subparagraph commented="no" id="H53CCB9C433474BD49196972D2CDEE169"><enum>(C)</enum><text>Section 25B(g)(2)
is amended by striking <quote>section 23</quote> and inserting <quote>sections
23 and 25D</quote>.</text>
</subparagraph><subparagraph commented="no" id="HCEB5E0974B6D467CB8B4E8F94C021CB"><enum>(D)</enum><text>Section 26(a)(1) is
amended by striking <quote>and 25B</quote> and inserting <quote>25B, and
25D</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="HC398765C0E594A88892DD06841BFE324"><enum>(f)</enum><header>Effective
date</header>
<paragraph id="H0FDACA8C21B74CA7B0220016D370ED2B"><enum>(1)</enum><header>In
general</header><text>The amendments made by this section shall apply to
taxable years beginning after December 31, 2007.</text>
</paragraph><paragraph id="H30C36D1486184C00A3ED76D8EDB42D29"><enum>(2)</enum><header>Application of
EGTRRA sunset</header><text>The amendments made by subparagraphs (A) and (B) of
subsection (e)(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>
</paragraph></subsection></section><enum>II</enum><header>Conservation</header>
<subtitle id="H8704C847342440E69FEDCE299990D3A1"><enum>A</enum><header>Transportation</header>
<part id="H518DF8ECCC614BB4ACECE704D00B1FB"><enum>1</enum><header>Vehicles</header>
<section display-inline="no-display-inline" id="HA4EDBCD842E148FBA600CF361B4E8759" section-type="subsequent-section"><enum>201.</enum><header>Credit for plug-in
hybrid vehicles</header>
<subsection id="HB5AC1FFA01AC426496A9E823A5555686"><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="H81AD65F4E7A24C7E8341653355970742">
<section id="H09AA16B3CDF44EEEB429E190000CF76"><enum>30D.</enum><header>Plug-in hybrid
vehicles</header>
<subsection id="H91734B6934FC41F498150097C270003B"><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="H50BC072455AC4AE4B0A7062218C34B55"><enum>(b)</enum><header>Per vehicle
dollar limitation</header>
<paragraph id="H22EA5AF90CFB457490693F050027F1BB"><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="HA55B89AEF5534675B81386CD0513A1E4"><enum>(2)</enum><header>Base
amount</header><text>The amount determined under this paragraph is
$4,000.</text>
</paragraph><paragraph id="HD96B624B346D4A8C00DAC7CE94C84C8"><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 display-inline="no-display-inline" id="H5A90D26F1A3D4075ADC353344C9A647"><enum>(c)</enum><header>Application with
other credits</header>
<paragraph commented="no" id="H686F290F9BD5490E8ED0A0D9FDAE2768"><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="HB361889D18F14C3CAD5D47296765CF19"><enum>(2)</enum><header>Personal
credit</header>
<subparagraph id="H0281FF7DCB8F409E945BFEB64FB3F591"><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="HF04400295E3F496FBC32496EDB15A161"><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="H82CC360CAB1643D7AE9C166CD744B845"><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="H95C531C21DB149C7B1F6926E11089B82"><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 display-inline="no-display-inline" id="H2D01F4C71E68456E92E45268E6B73685"><enum>(d)</enum><header>Qualified
plug-In hybrid vehicle</header><text>For purposes of this section—</text>
<paragraph id="H7748087AA8FB4ED7BD28AC49A5F659A2"><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="H4997C2BDB54D4AEBBA4F9EC84CF4D0C1"><enum>(A)</enum><text>the original use
of which commences with the taxpayer,</text>
</subparagraph><subparagraph id="HA1151DEF45AF466388DEE747411F733E"><enum>(B)</enum><text>which is acquired
for use or lease by the taxpayer and not for resale,</text>
</subparagraph><subparagraph id="H06FD8BCFC1ED49B7AB42396856BD915"><enum>(C)</enum><text>which is made by a
manufacturer,</text>
</subparagraph><subparagraph id="H41267D47CCC243328FB2D61FFFCBEA0"><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="H9000423E7FDD42949CBC5F86BAAEAA67"><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="HC981AE0794EF420780978000C9D3EAF8"><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="H472BD090A9654AD6AC8E5B8DA591D882"><enum>(i)</enum><text>has a capacity of
not less than 4 kilowatt hours, and</text>
</clause><clause id="H5E8AB6870B7A43DAB651638213B2A48D"><enum>(ii)</enum><text>is capable of
being recharged from an external source of electricity, and</text>
</clause></subparagraph><subparagraph id="H06C6D9E3F31E42C800D5BBE3E0E98030"><enum>(G)</enum><text>which
either—</text>
<clause id="HF7DF02ACB1EB4ADBBAA7A60001064E83"><enum>(i)</enum><text>is
also propelled to a significant extent by other than an electric motor,
or</text>
</clause><clause id="H816A4E2473224661BE2551C4005D747D"><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="HDD03447AFD3C4F60A4008DA881D2D5AA"><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="H69253CF323BC4A2CA3113EE1B984A9B4"><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 (42 U.S.C. 7521
et seq.).</text>
</paragraph><paragraph id="H75572FD6B1C74D5F969E78BF1011DE7F"><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 display-inline="no-display-inline" id="HD8E501EE66424F98BFCC0498EE0067EE"><enum>(e)</enum><header>Limitation on
number of qualified plug-In hybrid vehicles eligible for credit</header>
<paragraph id="HAAF3F15864DF45D8AB4C73DF15B513F"><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="H2854F082056E4CDE968F843EF5F260BB"><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="H57E775EAF7E04D60816F7FBEC300853F"><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="HD3F6F2F6EEE84489AA4E625F43A9D938"><enum>(A)</enum><text>50 percent for the
first 2 calendar quarters of the phaseout period,</text>
</subparagraph><subparagraph id="HB0116E5711AD428E98E4DE098320F705"><enum>(B)</enum><text>25 percent for the
3d and 4th calendar quarters of the phaseout period, and</text>
</subparagraph><subparagraph id="H2C350DC2358F434894DA1C7F976B5C6C"><enum>(C)</enum><text>0 percent for each
calendar quarter thereafter.</text>
</subparagraph></paragraph><paragraph id="HE5C684C936464DCE848521FEE8AE5500"><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 display-inline="no-display-inline" id="H9F7BA5ACC8874FBA8969DFE138D6FD2"><enum>(f)</enum><header>Special
rules</header>
<paragraph id="H1EA291E9D89641D9A896AE151EF6D910"><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="HC3625F27A91643638F275491CECC7100"><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="H8FACE4AABC8541F5ACC43EBF6FFBDFA"><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="H9C48066D8BE84475BB9F983F61E4E449"><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="HA18EEC8D5CC5470D865497B3990748A6"><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 display-inline="no-display-inline" id="HF819025DD9AA4BBDACB02395FF195183"><enum>(b)</enum><header>Plug-In vehicles
not treated as new qualified hybrid vehicles</header><text>Section 30B(d)(3) is
amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H1610FD0C5BAD45EDB56DA086D932BA04" style="OLC">
<subparagraph id="HFE647A5F8C564DD3895766DE1D2F8B29"><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" display-inline="no-display-inline" id="H1828A013E20F48E39F7332019D4995AF"><enum>(c)</enum><header>Credit made part
of general business credit</header><text display-inline="yes-display-inline">Section 38(b) is amended—</text>
<paragraph id="HB4813CC0698642CC98AB5FAF56B122D"><enum>(1)</enum><text>by
striking <quote>and</quote> each place it appears at the end of any
paragraph,</text>
</paragraph><paragraph id="H93D2C839B716471F8CC017543B562E70"><enum>(2)</enum><text>by striking
<quote>plus</quote> each place it appears at the end of any paragraph,</text>
</paragraph><paragraph id="HDF51FA637989455F865C6CCCBF793BD2"><enum>(3)</enum><text>by striking the
period at the end of paragraph (31) and inserting ‘‘, plus’’, and</text>
</paragraph><paragraph id="HE62F115D76854335BEDD8474C64FD942"><enum>(4)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H14134797E98B49339D8E4DA90042AFD0" style="OLC">
<paragraph commented="no" id="HB027F7C71D284541B20031408EF4B96C"><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 display-inline="no-display-inline" id="H4BFC80FA6F314A58B44BB9AEE8F23E5D"><enum>(d)</enum><header>Conforming
amendments</header>
<paragraph id="H6B7FEF4918224BBE83A155EB9FC812A6"><enum>(1)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="H521E6B7AF957426CAD3FC10579468FE8"><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="HE90EB6AD96D74B8E93ADBE28D640ACB" indent="up1"><enum>(B)</enum><text>Section 25(e)(1)(C)(ii) is amended by
inserting <quote>30D,</quote> after <quote>25D,</quote>.</text>
</subparagraph><subparagraph id="H42F4000C6A4A4233AC50A37DA7E9FA27" 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="H8D4C23D132D444BAB15729765B8798A1" 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="H09A79F884DFB49BBBE85E72B6738C9E0" indent="up1"><enum>(E)</enum><text>Section 1400C(d)(2) is amended by
striking <quote>and 25D</quote> and inserting <quote>25D, and
30D</quote>.</text>
</subparagraph></paragraph><paragraph id="HEEB5B1A77C664519B65BD3C8DA699E18"><enum>(2)</enum><text>Section 1016(a) is
amended by striking <quote>and</quote> at the end of paragraph (35), by
striking the period at the end of paragraph (36) and inserting <quote>,
and</quote>, and by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HFA3B81F444EC44A8B5CB7C85A5025974" style="OLC">
<paragraph id="HC4A72FFF29144FD3B5B8DEADE44154F"><enum>(37)</enum><text>to the extent
provided in section
30D(f)(1).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HEAD7D8030C9C4291AD84DF9CE821696"><enum>(3)</enum><text>Section 6501(m) is
amended by inserting <quote>30D(f)(4),</quote> after
<quote>30C(e)(5),</quote>.</text>
</paragraph><paragraph id="H84597600014F49648F5553F56BE3C78C"><enum>(4)</enum><text>The table of
sections for subpart B of part IV of subchapter A of chapter 1 is amended by
adding at the end the following new item:</text>
<quoted-block id="HF6727D481E994BBDA9112E5BFCAB2299" style="OLC">
<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="H10A4501E871B4BE2BA4B5B3ED9D9A701"><enum>(e)</enum><header>Treatment of
alternative motor vehicle credit as a personal credit</header>
<paragraph id="HC9E3B8970A4340E5A305FF03F0FFE1E"><enum>(1)</enum><header>In
general</header><text>Paragraph (2) of section 30B(g) is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="HDA0C9085326249EF81413D61EC6BC8DB" style="OLC">
<paragraph id="HB4766BD658844EA79E995441D9980081"><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="H3DAF0FE824B845DFB9CD97603B8B8F6B"><enum>(2)</enum><header>Conforming
amendments</header>
<subparagraph id="HF3D41FF3E34A4D89B90582D55DB5A0B8"><enum>(A)</enum><text display-inline="yes-display-inline">Subparagraph (A) of section 30C(d)(2) is
amended by striking <quote>sections 27, 30, and 30B</quote> and inserting
<quote>sections 27 and 30</quote>.</text>
</subparagraph><subparagraph id="H71A83A772D0D4305AE69EBFE3F18BE67"><enum>(B)</enum><text>Paragraph (3) of
section 55(c) is amended by striking <quote>30B(g)(2),</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="H044D599176CD4634A2C50800EEBB9669"><enum>(f)</enum><header>Effective
date</header>
<paragraph id="H5D7A6762260745418927A7FBD8479654"><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, 2008.</text>
</paragraph><paragraph id="HCA009DFC1115449AAEDF10C1AEF0D054"><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, 2007.</text>
</paragraph></subsection><subsection id="H4AF17D43C242476100024CDCCA2DDEE1"><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 display-inline="no-display-inline" id="HE3BB3ACB3A2C4B66BC00E661E1B8ED9C" section-type="subsequent-section"><enum>202.</enum><header>Extension and
modification of alternative fuel vehicle refueling property credit</header>
<subsection id="H1E5F9D9E936C4B4DBCCC27CAF957854"><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="H6D883F98E6AB47078FB18FFC2396C0E9"><enum>(1)</enum><text>by striking
<quote>30 percent</quote> in subsection (a) and inserting <quote>50
percent</quote>, and</text>
</paragraph><paragraph id="H5AA7229EC1A849C4BA13E3E01328C3C1"><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="HF1D52161BD844B9C84F6D9BBEA59E758"><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="H4527190993C8476FA0C8EB7F95D91CE"><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 display-inline="no-display-inline" id="H14FBF822E9E2458D9C63E71716B4DE70" section-type="subsequent-section"><enum>203.</enum><header>Modification of
limitation on automobile depreciation</header>
<subsection id="H687E6B10FECB4FB18FEBE9A8B316CBDB"><enum>(a)</enum><header>In
general</header><text>Paragraph (5) of section 280F(d) (defining passenger
automobile) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HADF096252B70472F8FA397086C8FC255" style="OLC">
<paragraph id="H099CD4ACDBFC494780A38400EEAC7064"><enum>(5)</enum><header>Passenger
automobile</header>
<subparagraph id="H1901424548324F088E00C6B9602C0008"><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="H791B0AC48F3045F7A6B7CEFF30785E7C"><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 commented="no" id="HB181C50B4E85497285BECBDB3DC65407"><enum>(ii)</enum><text>which is rated at
not more than 14,000 pounds gross vehicle weight.</text>
</clause></subparagraph><subparagraph id="H62EC12CB0609447BAABEC1CDDA8E6236"><enum>(B)</enum><header>Exceptions</header><text>The
term <term>passenger automobile</term> shall not include—</text>
<clause id="HDEC42CB61AC3484799041117F97079CC"><enum>(i)</enum><text display-inline="yes-display-inline">any exempt-design vehicle, and</text>
</clause><clause id="HD42E5BDD99CA4CAC93009D6C268371B9"><enum>(ii)</enum><text>any exempt-use
vehicle.</text>
</clause></subparagraph><subparagraph id="HF88597883AA940CD8FC0C7CD8D1274D"><enum>(C)</enum><header>Exempt-design
vehicle</header><text>The term <term>exempt-design vehicle</term> means—</text>
<clause id="H086AC2A7C13E4522B53E77A0544EFB56"><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="H7AC80896C68F47BEA741A308DAFDFB07"><enum>(ii)</enum><text>any
vehicle—</text>
<subclause id="HF460BF3BEDBF4496B0CA712FBE0098B6"><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="H28753A6DD35A42F48BF6762E43003C6B"><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="HFB908956F4EE473F81F77FAAECF3D0A"><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="H8F8B04D8E4B7430E8046FADC625B00D1"><enum>(D)</enum><header>Exempt-use
vehicle</header><text>The term <term>exempt-use vehicle</term> means—</text>
<clause id="H40A1D20DE8184AFBA3D7D6592B53B906"><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="H823CD95EB8EB4FED9557747748EEE7DA"><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="HC796F08BF5AC40B697721762176026F2"><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="H34BFCAA3348C49DC9B1BA52B000000AF"><enum>(I)</enum><text>a farming business
(within the meaning of section 263A(e)(4)),</text>
</subclause><subclause id="H1FF7919C5E5D4376B8A87411667B6187"><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="H0C6CE53175564BA485E88C6B4D48B9D5"><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="H4B97F6FC6F34403BA7858FBF28EDD685"><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="H2A4AC12FFDDE41F4A048443C30C3C700"><enum>(b)</enum><header>Conforming
amendment</header><text>Section 179(b) (relating to limitations) is amended by
striking paragraph (6).</text>
</subsection><subsection id="HA59034BEB7844A5398C1553214FC8F00"><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></part><part id="H30792EFADF734EBDB368938400F4983"><enum>2</enum><header>Fuels</header>
<section display-inline="no-display-inline" id="H574C195D929A4C8BBCED7F3846F4FC56" section-type="subsequent-section"><enum>211.</enum><header>Extension and
modification of credits for biodiesel and renewable diesel</header>
<subsection id="HF69CFB112CCB4439824ED40057FF4E06"><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="H3AB9817D3D7F423BBDEA04AEF80043E0"><enum>(b)</enum><header>Uniform
treatment of diesel produced from biomass</header><text>Paragraph (3) of
section 40A(f) is amended—</text>
<paragraph id="H2B4B93B63F844C48B71239F960E53C58"><enum>(1)</enum><text>by striking
<quote>diesel fuel</quote> and inserting <quote>liquid fuel</quote>,</text>
</paragraph><paragraph id="HBCDF1404AE8C4BC79621B9D597A75089"><enum>(2)</enum><text>by striking
<quote>using a thermal depolymerization process</quote>, and</text>
</paragraph><paragraph id="H7886F744ACAA46429E6FB2D4480091CF"><enum>(3)</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 display-inline="no-display-inline" id="HD42F73DBA7834E3988A084DE8198DBAC"><enum>(c)</enum><header>Coproduction of
renewable diesel with petroleum feedstock</header>
<paragraph id="HCE5D1929C3FD4AE8ACF0060ABF01F9"><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="HCF1AAAF9273A4660B3A4E0F4D080E374" 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="H4BC88CB6EA5B4AA0A4B0B53DB0AA277F"><enum>(2)</enum><header>Conforming
amendment</header><text>Paragraph (3) of section 40A(f) is amended by striking
<quote>(as defined in section 45K(c)(3))</quote>.</text>
</paragraph></subsection><subsection id="HBC151D77A9444DE497431D7303C94C29"><enum>(d)</enum><header>Effective
date</header>
<paragraph id="H868EB9AEFC4F4787943000F173D55FFD"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Except as otherwise
provided in this subsection, the amendments made by this section shall apply to
fuel produced, and sold or used, after December 31, 2008.</text>
</paragraph><paragraph id="HE9D27ED33F814F72A69C15BDEFCB745"><enum>(2)</enum><header>Coproduction of
renewable diesel with petroleum feedstock</header><text>The amendments made by
subsection (c) shall apply to fuel produced, and sold or used, after February
13, 2008.</text>
</paragraph></subsection></section><section display-inline="no-display-inline" id="H1BCE4785D4C64C028E255BD523FBC36" section-type="subsequent-section"><enum>212.</enum><header>Clarification that
credits for fuel are designed to provide an incentive for United States
production</header>
<subsection commented="no" id="H24A7B35F979740CFA8F322E4319E8BFF"><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 display-inline="no-display-inline" id="H7AD06B1C3061452D86AE8816A8D262EA" style="OLC">
<paragraph commented="no" id="HF9C55FAD96524BFE8E2F29EB32E8FA63"><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="H58F4F591010D44D5BE1E64BCADD2C7E"><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="HA9926E5CA60A400E890191899BCE647C"><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 commented="no" display-inline="no-display-inline" id="H9A31D3D0CCE843F5B39D70007EF013C6"><enum>(b)</enum><header>Excise tax
credit</header><text>Paragraph (2) of section 6426(h), as added by subsection
(c), is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H62E931A2C2CE45718746994168A9FB39" style="OLC">
<paragraph commented="no" id="H9189A3CA84E840B091D3C0DD97857D00"><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 commented="no" id="HB59FBC6E7F064E5BA5664DB58BF47CC9"><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 commented="no" id="HB1645CE9EFC64E75BF40A481BEDB2B35"><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="HD2253CFB9C5043C6B535B2C679BB064B"><enum>(c)</enum><header>Provisions
clarifying treatment of fuels with no nexus to the United States</header>
<paragraph commented="no" display-inline="no-display-inline" id="H591A0F543DCE4579A3AE48BF07C1D13"><enum>(1)</enum><header>Alcohol fuels
credit</header><text>Subsection (d) of section 40 is amended by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H4B068C15BE05459B9DC895659475EEFC" style="OLC">
<paragraph commented="no" id="H90BB612D6C1D4F309900C2F9D5DAE806"><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="HD4A1319A11AA4AE19C34773EB38D4398"><enum>(2)</enum><header>Biodiesel fuels
credit</header><text>Subsection (d) of section 40A is amended by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HA1A5862AA02A450889CC32399EF12E6" style="OLC">
<paragraph commented="no" id="H7E50C686D13A4C78AE69E147BE21D7D7"><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 commented="no" display-inline="no-display-inline" id="H45BF37339FD947AB9D2659B100962504"><enum>(3)</enum><header>Excise tax
credit</header>
<subparagraph id="HCAC839FF0A69489C8B2E05686CDFA014"><enum>(A)</enum><header>In
general</header><text>Section 6426 is amended by adding at the end the
following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H2181CA012E174B73975958E700F4EA28" style="OLC">
<subsection commented="no" id="H93F5BB58FA224516A5D27208F25B1BB9"><enum>(h)</enum><header>Limitation to
fuels with connection to the United States</header>
<paragraph id="HA7C98787F4AA4ACE92E7E9BC00C7F09E"><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="HDCC0923A9AD14EDC8F1C89EDDA64D3F9"><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 commented="no" id="HE31DAF1165D24D8FA6FE9D1EB26C8EA2"><enum>(B)</enum><header>Conforming
amendment</header><text>Subsection (e) of section 6427 is amended by
redesignating paragraph (5) as paragraph (6) and by inserting after paragraph
(4) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H9017EE4F3405412AB364932F6844B728" style="OLC">
<paragraph commented="no" id="HD967DF91F4D64B68971229E4758C28A5"><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(h).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection commented="no" id="H2953FD50369D4EC98B388500D3791482"><enum>(d)</enum><header>Effective
date</header>
<paragraph id="H87AA247A104D44968163B72F0486FCFA"><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 December
31, 2008.</text>
</paragraph><paragraph id="H4218AAED32EA40F3BC87616B51915D72"><enum>(2)</enum><header>Provisions
clarifying treatment of fuels with no nexus to the United States</header>
<subparagraph id="HB4E9F76F52884278AB39C48E33742930"><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 commented="no" display-inline="no-display-inline" id="HF069F7C99C0344ACA075EFF8109BD4D"><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="HCD416437F1CB4FD187BFC52C8B766EE5"><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><section display-inline="no-display-inline" id="H89A4571052E44ED5B1646B3536D65A4" section-type="subsequent-section"><enum>213.</enum><header>Credit for
production of cellulosic alcohol</header>
<subsection id="HB9481851963D4C8F82D194C6BC05E524"><enum>(a)</enum><header>In
general</header><text>Subsection (b) of section 40 is amended by redesignating
paragraph (5) as paragraph (6) and by inserting after paragraph (4) the
following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HF1D79A3005C946DB92A970D1090D7BD" style="OLC">
<paragraph id="H883E3B7CE2494AFB89ADB1C300C04FBD"><enum>(5)</enum><header>Cellulosic
alcohol fuel producer credit</header>
<subparagraph id="H7A962E8C7C29420AA0CEFA9D6100E185"><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="H80BB21B695B0491EBDD3FDFA00E69600"><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="HC3134211D10B4096BA2FC128ECB5216"><enum>(i)</enum><text>is
sold by such producer to another person—</text>
<subclause id="H53B157F1E27B4600A9E3008B002D0035"><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="H3FCA3DAE9D9C47C8B34683C8BF90911E"><enum>(II)</enum><text>for use by such
other person as a fuel in a trade or business, or</text>
</subclause><subclause id="HBB28E4DBC1EC48468105A09017AB0055"><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="HD53ACF64961D4EFC8E8B5B00B099EC00"><enum>(ii)</enum><text>is used or sold
by such producer for any purpose described in clause (i).</text>
</clause></subparagraph><subparagraph display-inline="no-display-inline" id="H560353606B1D406FB43D01FE995654E7"><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="HAACAC9E8EDC546A69F91045CD8832457"><enum>(i)</enum><text>is
produced in the United States for use as a fuel in the United States,
and</text>
</clause><clause id="H16C4DF1901C44C92AA14CAFD01D2F300"><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="H4C01173690204D4FBD2EBE14F8ABA7E5"><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="HF0419CC648364794A1D2BB00DB940000"><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="H41E2CF3F71BE4EA482C4F66E624BE9BB"><enum>(b)</enum><header>Conforming
amendments</header>
<paragraph id="HD18E965F67804B5DB331945E76C2DC2D"><enum>(1)</enum><text>Subsection (a) of
section 40 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 display-inline="no-display-inline" id="H5DDCA324E2B947678C67A94C42001F86" style="OLC">
<paragraph id="HB6F7780456484017A794F57D29D3742F"><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="HA045FED5C1A64094AF4CB66EEDD3D6F3"><enum>(2)</enum><text>Clause (ii) of
section 40(d)(3)(C) 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="H49D04C52B5B14DBFBF11D1C9FC1215D"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to alcohol
produced after December 31, 2008.</text>
</subsection></section></part><part id="H243E2C6ADDE448A8B27E00BEA9616B91"><enum>3</enum><header>Other
transportation incentives</header>
<section display-inline="no-display-inline" id="H52938584C75C4625B0EE62585E05F7C0" section-type="subsequent-section"><enum>221.</enum><header>Extension of
transportation fringe benefit to bicycle commuters</header>
<subsection id="H002619272FD347488ED26F00F4842696"><enum>(a)</enum><header>In
general</header><text>Paragraph (1) of section 132(f) (relating to general rule
for qualified transportation fringe) is amended by adding at the end the
following:</text>
<quoted-block id="H0DD0F346DC7346448082A785FB366323">
<subparagraph id="H1A83320665EB478F8075C31634B9322C"><enum>(D)</enum><text>Any qualified
bicycle commuting
reimbursement.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H3AC6CD6770E74D5F8838DB40B69303B7"><enum>(b)</enum><header>Limitation on
exclusion</header><text>Paragraph (2) of section 132(f) 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 display-inline="no-display-inline" id="H3283F1B1678B42A3A973B36D1D537527" style="OLC">
<subparagraph id="HDC2608BA56C3450A85FE321460E5F427"><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="H5DF00A5A0FEC417E9EEFA16BB87FE2B"><enum>(c)</enum><header>Definitions</header><text>Paragraph
(5) of section 132(f) (relating to definitions) is amended by adding at the end
the following:</text>
<quoted-block id="H817888C20B9A40E485BF8C42096F9625">
<subparagraph id="HC8FF708787E14FAF00323C51BC431278"><enum>(F)</enum><header>Definitions
related to bicycle commuting reimbursement</header>
<clause id="H5B466BC0842243B5B4F4BD2E008B39FD"><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="HAC360ABBE88849B9872BFB1E400409C7"><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="HE29589F86961430BB2CDBDA46798E455"><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="HAE606479A09B406FA85061FC08001B71"><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="H9AE6C640C7514F23B99820873D177948"><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="H977D2941293946C5917C6CD7D590D059"><enum>(d)</enum><header>Constructive
receipt of benefit</header><text>Paragraph (4) of section 132(f) is amended by
inserting <quote>(other than a qualified bicycle commuting
reimbursement)</quote> after <quote>qualified transportation
fringe</quote>.</text>
</subsection><subsection id="H7A6FFB538A3F4416B3E900967B362BC6"><enum>(e)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2008.</text>
</subsection></section><section display-inline="no-display-inline" id="HDAE5587C10BF4543A6FCF3717B82CBE1" section-type="subsequent-section"><enum>222.</enum><header>Restructuring of New
York Liberty Zone tax credits</header>
<subsection id="HFF42ED8ADFA7478CACB82960D7DBD6E9"><enum>(a)</enum><header>In
general</header><text>Part I of subchapter Y of chapter 1 is amended by
redesignating section 1400L as section 1400K and by adding at the end the
following new section:</text>
<quoted-block id="HFBD3261D9A0547E290DB529CA3F900CC" style="OLC">
<section id="H487DAE3AA00E41B68E002F7800F4DC3E"><enum>1400L.</enum><header>New York
Liberty Zone tax credits</header>
<subsection id="H39D2612535594AC2A2AB59C3419374E0"><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="H1E9F683F9EA944E4BAC654CF59C6E5C6"><enum>(b)</enum><header>Qualifying
project expenditure amount</header><text>For purposes of this section—</text>
<paragraph id="H679A112C345B4FDFBC855D8526D485A"><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="HCD299BE11E924F139BD107B9593C2CE5"><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="HDD2947EF500F40C1B14CBF6540B4EAF1"><enum>(B)</enum><text>any such
expenditures—</text>
<clause id="HB8661F4E7DB24406ADCA757240DCAB3B"><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="H0EBB4DACB7B64404AC36E31162DF596B"><enum>(ii)</enum><text>not previously
allocated under paragraph (3).</text>
</clause></subparagraph></paragraph><paragraph id="HA6347D713A1042F097867C07CBC8B200"><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="H769A7E16A8BC446FAB10BC29002B2639"><enum>(3)</enum><header>General
allocation</header>
<subparagraph id="H0E6598FEC96444A9A29479302127CC97"><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="H3693ECD6B7384126A65F54D79F47A400"><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 commented="no" id="H16C5E40CD3784667AC4DF0BB4DF0ABBA"><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 commented="no" id="HA96F22D302274B97A29E2FDABDD7BC6E"><enum>(i)</enum><text>$169,000,000,
plus</text>
</clause><clause commented="no" id="HE48687C69FD2421EA6C6B29581FD1D29"><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="H6688DD3E1E2549F2AFA190D63618DE00"><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="HDD65EDC7D18B4B4A9FB8B6EAC5BA50CE"><enum>(i)</enum><text>the lesser
of—</text>
<subclause id="H0E668308312C4D23B81B659CE18914FF"><enum>(I)</enum><text>such excess,
or</text>
</subclause><subclause id="HA7C8C685DE48474A97D27B9D7F97488E"><enum>(II)</enum><text>the qualifying
project expenditure amount for such calendar year, reduced by</text>
</subclause></clause><clause id="HABB414C7A95A49E700CDFDFCC4F00BB"><enum>(ii)</enum><text>the aggregate
amount allocated under this subparagraph for all preceding calendar
years.</text>
</clause></subparagraph></paragraph><paragraph id="H4CE2D1DB4D7D48448FCCC2A7EAF5B"><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="H526C70CB8677418EBE869EB31C9668D8"><enum>(c)</enum><header>Carryover of
unused allocations</header>
<paragraph id="HC203BFC8AE7B4AF894D00825623732B"><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="HC45A7CE819044552B5762E23863D7FD5"><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="H83B5D9A189C14E7099A700A1D1F442D8"><enum>(d)</enum><header>Definitions and
special rules</header><text>For purposes of this section—</text>
<paragraph id="H2FDA2B60D16745BAB219C263DB87FAF"><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="HB6EEE93AF7CA49178FF0B64F58ABC586"><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="H444CD0A226254C329DF93196D6F041EA"><enum>(A)</enum><text>the State of New
York,</text>
</subparagraph><subparagraph id="H3A9E99D916D04986A437FC13237E66C3"><enum>(B)</enum><text>the City of New
York, New York, and</text>
</subparagraph><subparagraph id="H43C8D4D58FA2460A857DBADE57DE5CE"><enum>(C)</enum><text>any agency or
instrumentality of such State or City.</text>
</subparagraph></paragraph><paragraph id="HAF54F07179A14C188FED4C6101B37900"><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="HCBE3643EC7B7401DB334980098D000F4"><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="H70FD8CC0E3CF4544951D00BDBDF9703F"><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="HE7E0B4D718DE454CBFC071FA00F1006D"><enum>(1)</enum><text>which
certifies—</text>
<subparagraph id="H0608B7AE8B6B4C8AB2B6756221C75321"><enum>(A)</enum><text>the qualifying
project expenditure amount for the calendar year, and</text>
</subparagraph><subparagraph id="H287203A4451748FABD75934DEC3F4EF1"><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="H1CEB948BE686448C8CF67D00F017E1A4"><enum>(2)</enum><text>includes such
other information as the Secretary may require to carry out this
section.</text>
</paragraph></subsection><subsection id="H6FC23342F5454F8AB16C415137F73772"><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 commented="no" id="H09D25DA783CD4B9BABAF91E57FAE5411"><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 in the flush language after clause (v) thereof 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
2008</short-title> or, if acquired pursuant to a binding contract in effect on
such enactment date, December 31, 2009)</quote>.</text>
</subsection><subsection id="HB781D336AAC44408AB6E18F2D88107B"><enum>(c)</enum><header>Conforming
amendments</header>
<paragraph id="H98F13FBFD46A44B8BDCBDDF33E4EADF9"><enum>(1)</enum><text>Section
38(c)(3)(B) is amended by striking <quote>section 1400L(a)</quote> and
inserting <quote>section 1400K(a)</quote>.</text>
</paragraph><paragraph id="H89349FC3A0CF4424B14E272E1B79B8C8"><enum>(2)</enum><text>Section
168(k)(2)(D)(ii) is amended by striking <quote>section 1400L(c)(2)</quote> and
inserting <quote>section 1400K(c)(2)</quote>.</text>
</paragraph><paragraph id="H0B168E2580074CB593433331474D8CD8"><enum>(3)</enum><text>The table of
sections for part I of subchapter Y of chapter 1 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 display-inline="no-display-inline" id="H9A7B7D774B884090989FBD61EC9D8500" style="OLC">
<toc container-level="quoted-block-container" idref="HFBD3261D9A0547E290DB529CA3F900CC" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="H487DAE3AA00E41B68E002F7800F4DC3E" level="section">Sec. 1400L. New York Liberty Zone tax
credits.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" id="H45DBED82C065454DBB7764E1783F612C"><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></part></subtitle><subtitle id="HEFB7F874F9BA478282B1A88B24CF498"><enum>B</enum><header>Other conservation
provisions</header>
<section id="HE20DC6F4032448D5A5502844D59AE33"><enum>231.</enum><header>Qualified energy
conservation bonds</header>
<subsection id="HF4F673B30DC2475498AE754CDA001EB4"><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 section 104, is amended by adding at
the end the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H82E8F70599A545D6B4E7F5750296DC00" style="OLC">
<section display-inline="no-display-inline" id="H3737838D10244305B62B21A0EACF6182" section-type="subsequent-section"><enum>54C.</enum><header>Qualified energy
conservation bonds</header>
<subsection id="H18987BDF82B5476184A2C02E4020632E"><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 display-inline="no-display-inline" id="H22029237A02549CEAF1B70A99788C026"><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="H146D34D8464042C79FDDC0F72E1764E8"><enum>(2)</enum><text>the bond is issued
by a State or local government, and</text>
</paragraph><paragraph id="H7EAD2712A0C84B0B00D87030281D3066"><enum>(3)</enum><text>the issuer
designates such bond for purposes of this section.</text>
</paragraph></subsection><subsection display-inline="no-display-inline" id="HA5973CE50E3840C3A99959E389724600"><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="HB1DB6B80A3DD4A0389B23939EDB80050"><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="HBB5C8FFC7C38449A8BBAE0AFC470828"><enum>(d)</enum><header>Allocations</header>
<paragraph id="H4FD05B21375541AE9475EC240170D220"><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="HB0127060A36F4935BEA3E1733344D3F2"><enum>(2)</enum><header>Allocations to
largest local governments</header>
<subparagraph id="H68002D068B464425BC1545E13EBE6155"><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="H591B9625937E4ED8827930268D411DDA"><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="H2AA7A1B37C7647F888C209D15FB38E21"><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="H67026BD324144638B76FA6A56BE7B515"><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="HB33275A473F94A21ADB4F9FE0E779CB"><enum>(e)</enum><header>Qualified
conservation purpose</header><text>For purposes of this section—</text>
<paragraph id="H1166E96314934B1783D16061A03DBD2E"><enum>(1)</enum><header>In
general</header><text>The term <term>qualified conservation purpose</term>
means any of the following:</text>
<subparagraph id="H11AED89CDDE443579EF39920145FB104"><enum>(A)</enum><text display-inline="yes-display-inline">Capital expenditures incurred for purposes
of—</text>
<clause id="H5673EA0AC4704B688D99A10F2E0A500"><enum>(i)</enum><text>reducing energy
consumption in publicly-owned buildings by at least 20 percent,</text>
</clause><clause id="H9CC98C5501B941738BC335495F5EEE7B"><enum>(ii)</enum><text>implementing
green community programs,</text>
</clause><clause id="HC5A73275CECA49B9B12025ACBAE818ED"><enum>(iii)</enum><text>rural
development involving the production of electricity from renewable energy
resources, or</text>
</clause><clause id="HE85037DF11FE43E3A1DFC7657197187"><enum>(iv)</enum><text>any qualified
facility (as determined under section 45(d) without regard to paragraphs (8)
and (10) thereof and without regard to any placed in service date).</text>
</clause></subparagraph><subparagraph id="H1BEB6BB77E68469FB09C2293942B4E41"><enum>(B)</enum><text>Expenditures with
respect to research facilities, and research grants, to support research
in—</text>
<clause id="HCD4DDDA668B54662876CDE2DBA4F6E40"><enum>(i)</enum><text>development of
cellulosic ethanol or other nonfossil fuels,</text>
</clause><clause id="HFB3034643C9E472EA7FAEF79E37A798"><enum>(ii)</enum><text>technologies for
the capture and sequestration of carbon dioxide produced through the use of
fossil fuels,</text>
</clause><clause id="H132D0437A1BA48A597E0036C05D54329"><enum>(iii)</enum><text>increasing the
efficiency of existing technologies for producing nonfossil fuels,</text>
</clause><clause id="H7D9948F53D8F4D00B7E8CFB66533DDC7"><enum>(iv)</enum><text>automobile
battery technologies and other technologies to reduce fossil fuel consumption
in transportation, or</text>
</clause><clause id="H39052E3D70FE4AB98B73C8ADF24C004F"><enum>(v)</enum><text>technologies to
reduce energy use in buildings.</text>
</clause></subparagraph><subparagraph id="H5B324C8DC136479E003F06AB00B7CF50"><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="H35921B2C27ED454A97A764938FB92C93"><enum>(D)</enum><text>Demonstration
projects designed to promote the commercialization of—</text>
<clause id="H26A30727DFAF41438CCEEA06FD7AEC3"><enum>(i)</enum><text>green building
technology,</text>
</clause><clause id="H69C7E2E0161B4F5D81191771BBC38E00"><enum>(ii)</enum><text>conversion of
agricultural waste for use in the production of fuel or otherwise,</text>
</clause><clause id="H098C2B22D2314D2496043C893214BB3D"><enum>(iii)</enum><text>advanced battery
manufacturing technologies,</text>
</clause><clause id="HB799FAE0B2E244D8AD7DA58E161FEAFA"><enum>(iv)</enum><text>technologies to
reduce peak use of electricity, or</text>
</clause><clause id="HF9E56B6A8FDC445B0065A45B587C9E96"><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="H9A64C9D8C1944AF2B37E5D0582B6F00"><enum>(E)</enum><text>Public education
campaigns to promote energy efficiency.</text>
</subparagraph></paragraph><paragraph id="HC588F93DB17A4418AEF283F615144C98"><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="H59BE298D366A4FE8B6A6FBCD12919F12"><enum>(f)</enum><header>Population</header>
<paragraph id="H4CF7C548D752427A9597B47561CA00A0"><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="H4FFFAD466A944D788BA006A4165CC886"><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 display-inline="no-display-inline" id="H957F112B17DA4D05AB00A00CE20DBC2"><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="HD8B592A43B674B0D8B19DC65A80373E9"><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="H2C279719F121470FA9095F43CE700F5"><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="H6FA6034C0AAA48309DF0A54B24A94D33"><enum>(b)</enum><header>Conforming
amendments</header>
<paragraph id="HC3FA397F95B64363BD64050295D0005D"><enum>(1)</enum><text>Paragraph (1) of
section 54A(d), as added by section 104, is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HA87DFEEA36154DD2A17191B739F6E2B0" style="OLC">
<paragraph commented="no" id="H9683CDA046634B11B12C812BA1166D89"><enum>(1)</enum><header>Qualified tax
credit bond</header><text>The term <term>qualified tax credit bond</term>
means—</text>
<subparagraph id="HA58E28333B764FE4A68C8EAA3D91B6D7"><enum>(A)</enum><text>a new clean
renewable energy bond, or</text>
</subparagraph><subparagraph id="HB6B51C43967F47649FEAC70140EF5900"><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), (5), and
(6).</continuation-text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H2E89D52F2C30491CBE796506C972D1B4"><enum>(2)</enum><text>Subparagraph (C)
of section 54A(d)(2), as added by section 104, is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="H07CFE6F65DD14450B5064B3E92005190" style="OLC">
<subparagraph commented="no" id="HAE3C551D3599411C8EE18C72E25D77E2"><enum>(C)</enum><header>Qualified
purpose</header><text>For purposes of this paragraph, the term <term>qualified
purpose</term> means—</text>
<clause id="HA9CC9A14D9A34E60B4ED4FDD93C7E9EB"><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="HBB0FE8E829C44CB788D3D34515E84BB6"><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="H202F2C0C94E043778034E76E286FB52"><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 is amended by adding at the end the following
new item:</text>
<quoted-block display-inline="no-display-inline" id="H8E2CAB28B2BE44F58B30FCE5DCFA578" style="OLC">
<toc container-level="quoted-block-container" idref="H82E8F70599A545D6B4E7F5750296DC00" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="H3737838D10244305B62B21A0EACF6182" level="section">Sec. 54C. Qualified energy conservation
bonds.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H684400AA43DF46519E9909835E6C8F1D"><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 display-inline="no-display-inline" id="H4E4E73F0AC694ACFB033902D6B2B9D00" section-type="subsequent-section"><enum>232.</enum><header>Extension and
modification of credit for nonbusiness energy property</header>
<subsection commented="no" id="HE1311AF729B443509923399000941F78"><enum>(a)</enum><header>Extension of
credit</header><text display-inline="yes-display-inline">Section 25C(g)
(relating to termination) is amended by striking <quote>December 31,
2007</quote> and inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection id="HCCD43C36D3924ACCB3C733A06316F351"><enum>(b)</enum><header>Qualified
biomass fuel property</header>
<paragraph id="H8411EFDEE2B64C13A622B4D6474B0205"><enum>(1)</enum><header>In
general</header><text>Section 25C(d)(3) is amended—</text>
<subparagraph id="H8A719566C3F24D3CB51C5E3C8875F1F0"><enum>(A)</enum><text>by striking
<quote>and</quote> at the end of subparagraph (D),</text>
</subparagraph><subparagraph id="H7E636F6DFDD443F3A4854FA3DD897470"><enum>(B)</enum><text>by striking the
period at the end of subparagraph (E) and inserting <quote>, and</quote>,
and</text>
</subparagraph><subparagraph id="H38D94E65D3FF485EA514EB6314520095"><enum>(C)</enum><text>by adding at the
end the following new subparagraph:</text>
<quoted-block act-name="" id="HD259A568896E47AEB6E031BAF3A20013" style="OLC">
<subparagraph id="HE89CE77FF7E24398A5D63955A772CCFC"><enum>(F)</enum><text>a stove which uses
the burning of biomass fuel to heat a dwelling unit located in the United
States and used as a residence by the taxpayer, or to heat water for use in
such a dwelling unit, and which has a thermal efficiency rating of at least 75
percent.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="HBCEA0C4751B94391A3C9E5B95CF2CE7"><enum>(2)</enum><header>Biomass
fuel</header><text>Section 25C(d) (relating to residential energy property
expenditures) is amended by adding at the end the following new
paragraph:</text>
<quoted-block act-name="" id="HCE430B59D2084920A3A900807B8CFDDF" style="OLC">
<paragraph id="HBB58614A2CE849DB917D9ED6C8AAA549"><enum>(6)</enum><header>Biomass
fuel</header><text>The term <term>biomass fuel</term> means any plant-derived
fuel available on a renewable or recurring basis, including agricultural crops
and trees, wood and wood waste and residues (including wood pellets), plants
(including aquatic plants), grasses, residues, and
fibers.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H87EC2969493B49E795B0816666DBD609"><enum>(c)</enum><header>Coordination
with credit for qualified geothermal heat pump property expenditures</header>
<paragraph id="HDBECA8DF1CC844668830008C17FF2062"><enum>(1)</enum><header>In
general</header><text>Paragraph (3) of section 25C(d) is amended by striking
subparagraph (C) and by redesignating subparagraphs (D) and (E) as
subparagraphs (C) and (D), respectively.</text>
</paragraph><paragraph id="H18601CDD24434ADFB519F8CE11C163AC"><enum>(2)</enum><header>Conforming
amendment</header><text>Subparagraph (C) of section 25C(d)(2) is amended to
read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H5E9CF3E2E7DB4F39BD4F8866020122B4" style="OLC">
<subparagraph id="HB023A99C3A694EE0B8437C506F9700F0"><enum>(C)</enum><header>Requirements and
standards for air conditioners and heat pumps</header><text display-inline="yes-display-inline">The standards and requirements prescribed
by the Secretary under subparagraph (B) with respect to the energy efficiency
ratio (EER) for central air conditioners and electric heat pumps—</text>
<clause id="H7166ED87A27144CD96EB26A0EB8996D3"><enum>(i)</enum><text>shall require
measurements to be based on published data which is tested by manufacturers at
95 degrees Fahrenheit, and</text>
</clause><clause id="H6E28E0D3084B4E30AECA23C7EB49EB2"><enum>(ii)</enum><text>may be based on
the certified data of the Air Conditioning and Refrigeration Institute that are
prepared in partnership with the Consortium for Energy
Efficiency.</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H5FCD82BD62324C6E9BB96F8F6F07F9E6"><enum>(d)</enum><header>Effective
date</header><text>The amendments made this section shall apply to expenditures
made after December 31, 2007.</text>
</subsection></section><section display-inline="no-display-inline" id="HD9EAF71702C64C939F989DF477CB783D" section-type="subsequent-section"><enum>233.</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 display-inline="no-display-inline" id="HDFE751ABDF994511B735159DD5AA70C0" section-type="subsequent-section"><enum>234.</enum><header>Modifications of
energy efficient appliance credit for appliances produced after 2007</header>
<subsection id="H8668A78BED85453C9BA5490008296380"><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="H6CAF20EB7489483DAD1C3D70FCE3E305" style="OLC">
<subsection id="H0D36D5BC4C1748649E832CF06CC15843"><enum>(b)</enum><header>Applicable
amount</header><text>For purposes of subsection (a)—</text>
<paragraph id="H71B773AD1FE14A9AA8E80887FB855EAF"><enum>(1)</enum><header>Dishwashers</header><text>The
applicable amount is—</text>
<subparagraph id="H1FA05AD3DA714EBDB9C76309E0F626B7"><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="H53B2F95E74184C939C462E05188443CB"><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="H3E6CB6C6BC8F4CACB45FC07B7F00407F"><enum>(2)</enum><header>Clothes
washers</header><text>The applicable amount is—</text>
<subparagraph id="H67C62CD8131141E9987984277B3FAA53"><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="HD9FCE4EEBB1E45D0AA028B09865D9BA7"><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="H45297A51D21C433F80E786BA7181B474"><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="H29C4114B024149AC991890D4B6821CAE"><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="H1A02980D41254D5698A61999ACFC9F2F"><enum>(3)</enum><header>Refrigerators</header><text>The
applicable amount is—</text>
<subparagraph id="H85E3F47F90544A4DB62BCF7B083E81F2"><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="H3137E5EBEE1C421E9038AF74F37662E"><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="HB6105C96A9C542D2896BBF1E9E7EA13F"><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="H8ACA1828E0AB423F8806E3A842907DB"><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></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H5542BADAAF054FD786C5F6791223822E"><enum>(b)</enum><header>Eligible
production</header>
<paragraph id="HD64B4341DF7242E4A9335357CA5921AC"><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="HFA9519AF9B3F4FD29B3EFFF7E01CEB44"><enum>(A)</enum><text>by striking
paragraph (2),</text>
</subparagraph><subparagraph id="H07FA5F82AE2348C49553DB6051F8BC8"><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="H12434A20BF9948CE9F9B7B5E50C9F84"><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="H50E4EC2730A14C7181AD52ADB59D6C03"><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="H130C7D2D1BD9446100AEBF00FB98E558"><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="H5EBFAB2EABEC4A8397CF9401AAF3C477" style="OLC">
<subsection id="H87BCB9A5931C4F34A486A84F5703B2A2"><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="H0638FB66088849E3897207CDFB21FD04"><enum>(1)</enum><text>dishwashers
described in subsection (b)(1),</text>
</paragraph><paragraph id="H95AEA4C87AD14158B88890651D246694"><enum>(2)</enum><text>clothes washers
described in subsection (b)(2), and</text>
</paragraph><paragraph id="H7795DEFFF5B74A38A0DBFBE000007D34"><enum>(3)</enum><text>refrigerators
described in subsection
(b)(3).</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H0CDCEDFF3B1B4199AD5BF3FF688F79C2"><enum>(d)</enum><header>Aggregate credit
amount allowed</header>
<paragraph id="H2D36C9367AD247DCA1F536D79F3C69ED"><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="H8D18A14B8FED4067009694C7D6B0097" style="OLC">
<paragraph id="HAB44B6ED41AE429BBF7EAA8B8F479423"><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="H7007A40913054256B434CEA3832CDD7B"><enum>(2)</enum><header>Exception for
certain refrigerator and clothes washers</header><text>Paragraph (2) of section
45M(e) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HC0F284CACDBE47F2A50006BB49B2D1A2" style="OLC">
<paragraph id="H6A3FD5CC2F7847509B46FFAC74A19CD7"><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="HF847F34654D14A1EAE4475D45091BA05"><enum>(e)</enum><header>Qualified energy
efficient appliances</header>
<paragraph id="HE604C091C15B4FD78587E483005F0203"><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="HF95585582BE847069427B8CD7F48C0F9" style="OLC">
<paragraph id="HBA6339B03E5D4E679DC38FB8A00019BC"><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="H3D5B8FC5768F481D8BCBCE00F98B009E"><enum>(A)</enum><text display-inline="yes-display-inline">any dishwasher described in subsection
(b)(1),</text>
</subparagraph><subparagraph id="H7CA629012AF74B7F91251D95007CE5B8"><enum>(B)</enum><text>any clothes washer
described in subsection (b)(2), and</text>
</subparagraph><subparagraph id="H2630530465BB427FA39655CE51454DB"><enum>(C)</enum><text>any refrigerator
described in subsection
(b)(3).</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HDDFCB52435574B7D97B5BD73CCD00F2"><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="H2698E84BAA4A4B24A0EC134701C94708"><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="H605D54813A77429EA6A273E03964B34" style="OLC">
<paragraph id="HE3A7675A57D646E1AFC4C6B0A4060700"><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="HAE7CCC35820A43D884513244F4B6A6BD"><enum>(4)</enum><header>Replacement of
energy factor</header><text>Section 45M(f)(6), as redesignated by paragraph
(3), is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HF41F7B8F5613499EB0AF4EC3EF007573" style="OLC">
<paragraph id="H77C55FAF2AFE40E28B16CA17D0B8254B"><enum>(6)</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="H15188DE32F914C158FA186D330727321"><enum>(5)</enum><header>Gallons per
cycle; water consumption factor</header><text>Section 45M(f) (relating to
definitions), as amended by paragraph (3), is amended by adding at the end the
following:</text>
<quoted-block display-inline="no-display-inline" id="HBE15AD7ACA8744BAB809CE66EF847670" style="OLC">
<paragraph id="H3BACA5DF23794C96BC1D76E883ABFBB2"><enum>(9)</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="H951E82F0A69649C694B95183D5C3555D"><enum>(10)</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="H34F0CDB6C6914FEFA8C6BE81006D99D9"><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="H1345342AEEDA4A73A73496A6CBA333AC" section-type="subsequent-section"><enum>235.</enum><header>Five-year applicable
recovery period for depreciation of qualified energy management
devices</header>
<subsection id="HCC9DAD6947A7482297577092086728F3"><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="HDBCA38D3BE444083BD4CA553CA302E25" style="OLC">
<clause id="H2DEB7B7B05BD4E329787DDFC0000CAA9"><enum>(vii)</enum><text>any qualified
energy management
device.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H16F95104FAFC44CD98133D449F594DA6"><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="HF0C75C7C673C4BA0A8659414932BC3E" style="OLC">
<paragraph id="HB08D45A47FF74202A9D1693300CB81A8"><enum>(18)</enum><header>Qualified
energy management device</header>
<subparagraph id="HCE4927741A0341B0826DA242A6F0007B"><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="HB82AFFB446E641C38BA31420A2E5F54C"><enum>(i)</enum><text>is
a supplier of electric energy or a provider of electric energy services,
and</text>
</clause><clause id="H92EF46FC906B4F6BB970C9DC35CD1443"><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="H5876026232FB40BFBA28E4B2D9B2A8F5"><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="H658F21C707914F1FBA2615FF04CCEDD"><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="H88095163914B403AB05116468DF275AD"><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="H8EACF9B76C9B4393A2B949EA80CC5DD2"><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="H8BD0E24D9743476A87D6F5CEC12E9A9"><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="HEB37FA967BA4436A96CD06CFE00B151"><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>
<section display-inline="no-display-inline" id="H56A4B50A0E2B4D9299D9E4C14C2755F6" section-type="subsequent-section"><enum>301.</enum><header>Limitation of
deduction for income attributable to domestic production of oil, gas, or
primary products thereof</header>
<subsection display-inline="no-display-inline" id="H6840E9F1B02247C7A110ED9326A7B191"><enum>(a)</enum><header>Denial of
deduction for major integrated oil companies for income attributable to
domestic production of oil, gas, or primary products thereof</header>
<paragraph id="HD2F5D954D6214C3F90138CA72BCE286"><enum>(1)</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="H64588236E7E848A890C4CC852F9910E8" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="H0581751A89F740FD9B8FFF00BA55E151"><enum>(iv)</enum><text display-inline="yes-display-inline">in the case of any major integrated oil
company (as defined in section 167(h)(5)(B)), the production, refining,
processing, transportation, or distribution of oil, gas, or any primary product
thereof during any taxable year described in section
167(h)(5)(B).</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HA0E3BA19557C422C881B8D007C49157E"><enum>(2)</enum><header>Primary
product</header><text>Section 199(c)(4)(B) is amended by adding at the end the
following flush sentence:</text>
<quoted-block display-inline="no-display-inline" id="H0AD1269885C64355B2008D57F3C9009B" 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>
</paragraph></subsection><subsection id="H14AA5B3011A24FAD8C55C2D4EDBC396C"><enum>(b)</enum><header>Limitation on
oil related qualified production activities income for taxpayers other than
major integrated oil companies</header>
<paragraph id="H541BE85B36A9439DB76860747DDBFC12"><enum>(1)</enum><header>In
general</header><text>Section 199(d) is amended by redesignating paragraph (9)
as paragraph (10) and by inserting after paragraph (8) the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H9C3E73EA5EEE4718B2C60416BD30E5E6" style="OLC">
<paragraph id="HB020ECE2CE1A429AB9953CDA1ED05115"><enum>(9)</enum><header>Special rule for
taxpayers with oil related qualified production activities income</header>
<subparagraph id="HC044B645256448B1AAC20505A5149ED8"><enum>(A)</enum><header>In
general</header><text>If a taxpayer (other than a major integrated oil company
(as defined in section 167(h)(5)(B))) has oil related qualified production
activities income for any taxable year beginning after 2009, the amount of the
deduction under subsection (a) shall be reduced by 3 percent of the least
of—</text>
<clause id="H06BEC32B518F456F808C1649972522CE"><enum>(i)</enum><text>the oil related
qualified production activities income of the taxpayer for the taxable
year,</text>
</clause><clause id="HA840067ACE7548D2988F86884047EF2B"><enum>(ii)</enum><text>the qualified
production activities income of the taxpayer for the taxable year, or</text>
</clause><clause id="H5671433B16E542D2B070068254A019AA"><enum>(iii)</enum><text>taxable income
(determined without regard to this section).</text>
</clause></subparagraph><subparagraph id="HC0276EA78F144E2097C32C2E79DA7E46"><enum>(B)</enum><header>Oil related
qualified production activities income</header><text>The term <term>oil related
qualified production activities income</term> means for any taxable year the
qualified production activities income which is attributable to the production,
refining, processing, transportation, or distribution of oil, gas, or any
primary product thereof during such taxable
year.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H6DBE1B41D6FF4CA59BC5F8F8007DCE79"><enum>(2)</enum><header>Conforming
amendment</header><text>Section 199(d)(2) (relating to application to
individuals) is amended by striking <quote>subsection (a)(1)(B)</quote> and
inserting <quote>subsections (a)(1)(B) and (d)(9)(A)(iii)</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="HDD70BE566DA344DCBE3D773481436FF5"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2008.</text>
</subsection></section><section display-inline="no-display-inline" id="H2783C58225C64652B76300A1EBBD44B6" section-type="subsequent-section"><enum>302.</enum><header>Clarification of
determination of foreign oil and gas extraction income</header>
<subsection id="H799A932F94CF4914B80017CF69C737CE"><enum>(a)</enum><header>In
general</header><text>Paragraph (1) of section 907(c) 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 display-inline="no-display-inline" id="HB8523E3A1B41453098CEE7189DDD966" style="OLC">
<subparagraph id="H0EAF2668FF404EE4A396B86034F5BAF4"><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="HD30C7392C2B746E5A6B3DEFCC803072"><enum>(b)</enum><header>Fair market value
event</header><text>Subsection (c) of section 907 is amended by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H0145DA8FB08D42F59237640089F374C8" style="OLC">
<paragraph id="H6259BC6FC5B94256ACDB67D8DBEDF735"><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="H10A2F1D41709447685FCDABAAF16FAB4"><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="H7B3A63CC95F34567BF7BBD2652D7366E"><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="H26A206D72B864629BC9F463E001CA7E5"><enum>(c)</enum><header>Special rule for
certain petroleum taxes</header><text>Subsection (c) of section 907, as amended
by subsection (b), is amended to by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H21F892FFDB494072AA6EED118BDC7672" style="OLC">
<paragraph id="H857886E79CAE4418B5D06954865800FA"><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="H60327AE4ABDB49C3AB133529B2408126"><enum>(A)</enum><text>the term <term>oil
and gas extraction taxes</term> shall include such tax,</text>
</subparagraph><subparagraph id="H191682DF9EA446049742E45567FC3CD4"><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="H7A1B657797F84EF191A13546E48BA0C4"><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="H80FF67FE5BBB4629A351FD8EEC6C4E21"><enum>(d)</enum><header>Conforming
amendments</header>
<paragraph id="H17820C83FDA44153B4FA004F4659A8BE"><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="H446643F3BAD94BA4AD551C204487B64"><enum>(2)</enum><text>Subparagraph (B) of
section 907(c)(2) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H9DBE988E1873475BB2BAD60397008907" style="OLC">
<subparagraph id="H89196904F9384C1F8D569E9C8DD17F57"><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 commented="no" id="H5D1EB8ABB222495BA382545EAF89CCE0"><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><section id="HD7E50A468D68475AB82F99E4D5001305"><enum>303.</enum><header>Time for
payment of corporate estimated taxes</header><text display-inline="no-display-inline">The percentage under subparagraph (C) of
section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 in
effect on the date of the enactment of this Act is increased by 3.00 percentage
points.</text>
</section><enum>IV</enum><header>Other
provisions</header>
<subtitle id="HB7767063E1694DD3909549701CD64319"><enum>A</enum><header>Studies</header>
<section id="H7FAA992124944D5FA3B087E008531EDD"><enum>401.</enum><header>Carbon audit of
the tax code</header>
<subsection id="HAA3028E959684394B84779A400002B7D"><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="HAD0E52BAFC364ED9B6B48FD48D00233C"><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="H5183344701934DFA98573814DFF91593"><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 display-inline="no-display-inline" id="H915291E544224DA78EED62DA50F654B1" section-type="subsequent-section"><enum>402.</enum><header>Comprehensive study
of biofuels</header>
<subsection id="HE8FBABD8B4AF4DDC8C669219B1FA633"><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="H25E5C265FD2048A386B871BD0065A905"><enum>(1)</enum><text>current biofuels
production, as well as projections for future production,</text>
</paragraph><paragraph id="HD6239BB2643E462DB1E2F1695D54AADD"><enum>(2)</enum><text>the maximum amount
of biofuels production capable on United States farmland,</text>
</paragraph><paragraph id="HAC20E53A1090491592EA5B6986C8D3D"><enum>(3)</enum><text>the domestic
effects of a dramatic increase in biofuels production on, for example—</text>
<subparagraph id="HD47BBC1AB4124F60ABF10095F8CE997E"><enum>(A)</enum><text>the price of
fuel,</text>
</subparagraph><subparagraph id="HF07FD729B6EB4E6CBEB6D65450A38CEE"><enum>(B)</enum><text>the price of land
in rural and suburban communities,</text>
</subparagraph><subparagraph id="H698BA2775DC24A21B3F451D89DE7041C"><enum>(C)</enum><text>crop acreage and
other land use,</text>
</subparagraph><subparagraph id="H6024700A43F9421AB7EF24E681FE96D6"><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="H548781CD751643689EC7C5AD0015194F"><enum>(E)</enum><text>the price of
feed,</text>
</subparagraph><subparagraph id="HB08D42B0DEA04BCCB61E8989CA369598"><enum>(F)</enum><text>the selling price
of grain crops,</text>
</subparagraph><subparagraph id="H4D8CC158ED9E43B0ABD4325B82754300"><enum>(G)</enum><text>exports and
imports of grains,</text>
</subparagraph><subparagraph id="HC0DEA05F5E494EE5A1925C97FA43008C"><enum>(H)</enum><text>taxpayers, through
cost or savings to commodity crop payments, and</text>
</subparagraph><subparagraph id="HC8F35A593E37489CAFFC4DF3DAA3D7F2"><enum>(I)</enum><text>the expansion of
refinery capacity,</text>
</subparagraph></paragraph><paragraph id="HD6C00A4081D14758A8C277539BBCFC05"><enum>(4)</enum><text>the ability to
convert corn ethanol plants for other uses, such as cellulosic ethanol or
biodiesel,</text>
</paragraph><paragraph id="H25DEE347417E420D9966C0A6004F62B2"><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="H6B0586073C254EB293D3A01EA6927B79"><enum>(6)</enum><text>the need for
additional scientific inquiry, and specific areas of interest for future
research.</text>
</paragraph></subsection><subsection id="HEF944A85697940AF95FB72A75231757F"><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="H3AFA3FEDE9074CE999D380A6D006E8B"><enum>B</enum><header>Application of
certain labor standards on projects financed under tax credit bonds</header>
<section display-inline="no-display-inline" id="HF8A9684D836048F8A75FDBDD5D32AC1B" 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 chapter
31 of title 40, United States Code, shall apply to projects financed with the
proceeds of any tax credit bond (as defined in section 54A of the Internal
Revenue Code of 1986).</text>
</section></subtitle>
Passed the House of
Representatives February 27, 2008.
Lorraine C. Miller,
Clerk.