[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7060 Engrossed in House (EH)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
110th CONGRESS
  2d Session
                                H. R. 7060

_______________________________________________________________________

                                 AN ACT


 
 To amend the Internal Revenue Code of 1986 to provide incentives for 
    energy production and conservation, to extend certain expiring 
  provisions, to provide individual income tax relief, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE, ETC.

    (a) Short Title.--This Act may be cited as the ``Renewable Energy 
and Job Creation Tax Act of 2008''.
    (b) Reference.--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) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title, etc.
                     TITLE I--ENERGY TAX INCENTIVES

                Subtitle A--Energy Production Incentives

                  Part 1--Renewable Energy Incentives

Sec. 101. Renewable energy credit.
Sec. 102. Production credit for electricity produced from marine 
                            renewables.
Sec. 103. Energy credit.
Sec. 104. Credit for residential energy efficient property.
Sec. 105. Special rule to implement FERC and State electric 
                            restructuring policy.
                  Part 2--Carbon Mitigation Provisions

Sec. 111. Expansion and modification of advanced coal project 
                            investment credit.
Sec. 112. Expansion and modification of coal gasification investment 
                            credit.
Sec. 113. Temporary increase in coal excise tax.
Sec. 114. Special rules for refund of the coal excise tax to certain 
                            coal producers and exporters.
Sec. 115. Carbon audit of the tax code.
    Subtitle B--Transportation and Domestic Fuel Security Provisions

Sec. 121. Inclusion of cellulosic biofuel in bonus depreciation for 
                            biomass ethanol plant property.
Sec. 122. Credits for biodiesel and renewable diesel.
Sec. 123. Clarification that credits for fuel are designed to provide 
                            an incentive for United States production.
Sec. 124. Credit for new qualified plug-in electric drive motor 
                            vehicles.
Sec. 125. Exclusion from heavy truck tax for idling reduction units and 
                            advanced insulation.
Sec. 126. Transportation fringe benefit to bicycle commuters.
Sec. 127. Alternative fuel vehicle refueling property credit.
Sec. 128. Certain income and gains relating to alcohol fuels and 
                            mixtures, biodiesel fuels and mixtures, and 
                            alternative fuels and mixtures treated as 
                            qualifying income for publicly traded 
                            partnerships.
       Subtitle C--Energy Conservation and Efficiency Provisions

Sec. 131. Credit for nonbusiness energy property.
Sec. 132. Energy efficient commercial buildings deduction.
Sec. 133. Modifications of energy efficient appliance credit for 
                            appliances produced after 2007.
Sec. 134. Accelerated recovery period for depreciation of smart meters 
                            and smart grid systems.
Sec. 135. Qualified green building and sustainable design projects.
              TITLE II--EXTENSION OF TEMPORARY PROVISIONS

         Subtitle A--Extensions Primarily Affecting Individuals

Sec. 201. Deduction for State and local sales taxes.
Sec. 202. Deduction of qualified tuition and related expenses.
Sec. 203. Treatment of certain dividends of regulated investment 
                            companies.
Sec. 204. Tax-free distributions from individual retirement plans for 
                            charitable purposes.
Sec. 205. Deduction for certain expenses of elementary and secondary 
                            school teachers.
Sec. 206. Stock in RIC for purposes of determining estates of 
                            nonresidents not citizens.
Sec. 207. Qualified investment entities.
Sec. 208. Real property tax standard deduction.
         Subtitle B--Extensions Primarily Affecting Businesses

Sec. 221. Research credit.
Sec. 222. Indian employment credit.
Sec. 223. New markets tax credit.
Sec. 224. Railroad track maintenance.
Sec. 225. Fifteen-year straight-line cost recovery for qualified 
                            leasehold improvements and qualified 
                            restaurant property.
Sec. 226. Seven-year cost recovery period for motorsports racing track 
                            facility.
Sec. 227. Accelerated depreciation for business property on Indian 
                            reservation.
Sec. 228. Expensing of environmental remediation costs.
Sec. 229. Deduction allowable with respect to income attributable to 
                            domestic production activities in Puerto 
                            Rico.
Sec. 230. Modification of tax treatment of certain payments to 
                            controlling exempt organizations.
Sec. 231. Qualified zone academy bonds.
Sec. 232. Tax incentives for investment in the District of Columbia.
Sec. 233. Economic development credit for American Samoa.
Sec. 234. Enhanced charitable deduction for contributions of food 
                            inventory.
Sec. 235. Enhanced charitable deduction for contributions of book 
                            inventory to public schools.
Sec. 236. Enhanced deduction for qualified computer contributions.
Sec. 237. Basis adjustment to stock of S corporations making charitable 
                            contributions of property.
Sec. 238. Work opportunity tax credit for Hurricane Katrina employees.
Sec. 239. Subpart F exception for active financing income.
Sec. 240. Look-thru rule for related controlled foreign corporations.
Sec. 241. Expensing for certain qualified film and television 
                            productions.
                      Subtitle C--Other Extensions

Sec. 251. Authority to disclose information related to terrorist 
                            activities made permanent.
Sec. 252. Authority for undercover operations made permanent.
Sec. 253. Increase in limit on cover over of rum excise tax to Puerto 
                            Rico and the Virgin Islands.
         TITLE III--ADDITIONAL TAX RELIEF AND OTHER PROVISIONS

Sec. 301. Refundable child credit.
Sec. 302. Provisions related to film and television productions.
Sec. 303. Exemption from excise tax for certain arrows designed for use 
                            by children.
Sec. 304. Modification of penalty on understatement of taxpayer's 
                            liability by tax return preparer.
                      TITLE IV--REVENUE PROVISIONS

Sec. 401. Limitation of deduction for income attributable to domestic 
                            production of oil, gas, or primary products 
                            thereof.
Sec. 402. Elimination of the different treatment of foreign oil and gas 
                            extraction income and foreign oil related 
                            income for purposes of the foreign tax 
                            credit.
Sec. 403. Broker reporting of customer's basis in securities 
                            transactions.
Sec. 404. 0.2 percent FUTA surtax.
Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax.
Sec. 406. Nonqualified deferred compensation from certain tax 
                            indifferent parties.
Sec. 407. Delay in application of worldwide allocation of interest.
Sec. 408. Time for payment of corporate estimated taxes.

                     TITLE I--ENERGY TAX INCENTIVES

                Subtitle A--Energy Production Incentives

                  PART 1--RENEWABLE ENERGY INCENTIVES

SEC. 101. RENEWABLE ENERGY CREDIT.

    (a) Extension of Credit.--
            (1) Wind facilities.--Paragraph (1) of section 45(d) is 
        amended by striking ``January 1, 2009'' and inserting ``January 
        1, 2010''.
            (2) Other facilities.--Each of the following provisions of 
        section 45(d) is amended by striking ``January 1, 2009'' and 
        inserting ``October 1, 2011'':
                    (A) Clauses (i) and (ii) of paragraph (2)(A).
                    (B) Clauses (i)(I) and (ii) of paragraph (3)(A).
                    (C) Paragraph (4).
                    (D) Paragraph (5).
                    (E) Paragraph (6).
                    (F) Paragraph (7).
                    (G) Subparagraphs (A) and (B) of paragraph (9).
    (b) Modification of Credit Phaseout.--
            (1) Repeal of phaseout.--Subsection (b) of section 45 is 
        amended--
                    (A) by striking paragraph (1), and
                    (B) by striking ``the 8 cent amount in paragraph 
                (1),'' in paragraph (2) thereof.
            (2) Limitation based on investment in facility.--Subsection 
        (b) of section 45 is amended by inserting before paragraph (2) 
        the following new paragraph:
            ``(1) Limitation based on investment in facility.--
                    ``(A) In general.--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--
                            ``(i) the applicable percentage with 
                        respect to such facility, multiplied by
                            ``(ii) the eligible basis of such facility.
                    ``(B) Carryforward of unused limitation and excess 
                credit.--
                            ``(i) Unused limitation.--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.
                            ``(ii) Excess credit.--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.
                            ``(iii) Prelimitation credit.--The term 
                        `prelimitation credit' 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).
                    ``(C) Applicable percentage.--For purposes of this 
                paragraph--
                            ``(i) In general.--The term `applicable 
                        percentage' 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.
                            ``(ii) Method of prescribing applicable 
                        percentage.--The applicable percentage 
                        prescribed by the Secretary for any month under 
                        clause (i) shall be the percentage which yields 
                        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.
                            ``(iii) Method of discounting.--The present 
                        value under clause (ii) shall be determined--
                                    ``(I) as of the last day of the 1st 
                                year of the 10-year period referred to 
                                in clause (ii),
                                    ``(II) 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
                                    ``(III) by taking into account the 
                                limitation under subparagraph (A) for 
                                any year on the last day of such year.
                    ``(D) Eligible basis.--For purposes of this 
                paragraph--
                            ``(i) In general.--The term `eligible 
                        basis' means, with respect to any facility, the 
                        sum of--
                                    ``(I) the basis of such facility 
                                determined as of the time that such 
                                facility is originally placed in 
                                service, and
                                    ``(II) the portion of the basis of 
                                any shared qualified property which is 
                                properly allocable to such facility 
                                under clause (ii).
                            ``(ii) Rules for allocation.--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.
                            ``(iii) Shared qualified property.--For 
                        purposes of this paragraph, the term `shared 
                        qualified property' means, with respect to any 
                        facility, any property described in section 
                        168(e)(3)(B)(vi)--
                                    ``(I) which a qualified facility 
                                will require for utilization of such 
                                facility, and
                                    ``(II) which is not a qualified 
                                facility.
                            ``(iv) Special rule relating to geothermal 
                        facilities.--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.
                    ``(E) Special rule for first and last year of 
                credit period.--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.
                    ``(F) Election to treat all facilities placed in 
                service in a year as 1 facility.--At the election of 
                the taxpayer, all qualified facilities which are part 
                of the same project and which are originally placed in 
                service during the same calendar year shall be treated 
                for purposes of this section as 1 facility which is 
                originally placed in service at the mid-point of such 
                year or the first day of the following calendar 
                year.''.
    (c) Trash Facility Clarification.--Paragraph (7) of section 45(d) 
is amended--
            (1) by striking ``facility which burns'' and inserting 
        ``facility (other than a facility described in paragraph (6)) 
        which uses'', and
            (2) by striking ``combustion''.
    (d) Expansion of Biomass Facilities.--
            (1) Open-loop biomass facilities.--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:
                    ``(B) Expansion of facility.--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.''.
            (2) Closed-loop biomass facilities.--Paragraph (2) of 
        section 45(d) is amended by redesignating subparagraph (B) as 
        subparagraph (C) and inserting after subparagraph (A) the 
        following new subparagraph:
                    ``(B) Expansion of facility.--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.''.
    (e) Modification of Rules for Hydropower Production.--Subparagraph 
(C) of section 45(c)(8) is amended to read as follows:
                    ``(C) Nonhydroelectric dam.--For purposes of 
                subparagraph (A), a facility is described in this 
                subparagraph if--
                            ``(i) the hydroelectric project installed 
                        on the nonhydroelectric dam is licensed by the 
                        Federal Energy Regulatory Commission and meets 
                        all other applicable environmental, licensing, 
                        and regulatory requirements,
                            ``(ii) the nonhydroelectric dam was placed 
                        in service before the date of the enactment of 
                        this paragraph and operated for flood control, 
                        navigation, or water supply purposes and did 
                        not produce hydroelectric power on the date of 
                        the enactment of this paragraph, and
                            ``(iii) the hydroelectric project is 
                        operated so that the water surface elevation at 
                        any given location and time that would have 
                        occurred in the absence of the hydroelectric 
                        project is maintained, subject to any license 
                        requirements imposed under applicable law that 
                        change the water surface elevation for the 
                        purpose of improving environmental quality of 
                        the affected waterway.
                The Secretary, in consultation with the Federal Energy 
                Regulatory Commission, shall certify if a hydroelectric 
                project licensed at a nonhydroelectric dam meets the 
                criteria in clause (iii). Nothing in this section shall 
                affect the standards under which the Federal Energy 
                Regulatory Commission issues licenses for and regulates 
                hydropower projects under part I of the Federal Power 
                Act.''.
    (f) Effective Date.--
            (1) In general.--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.
            (2) Repeal of credit phaseout.--The amendments made by 
        subsection (b)(1) shall apply to taxable years ending after 
        December 31, 2008.
            (3) Limitation based on investment in facility.--The 
        amendment made by subsection (b)(2) shall apply to property 
        originally placed in service after December 31, 2009.
            (4) Trash facility clarification.--The amendments made by 
        subsection (c) shall apply to electricity produced and sold 
        after the date of the enactment of this Act.
            (5) Expansion of biomass facilities.--The amendments made 
        by subsection (d) shall apply to property placed in service 
        after the date of the enactment of this Act.

SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM MARINE 
              RENEWABLES.

    (a) In General.--Paragraph (1) of section 45(c) is amended by 
striking ``and'' at the end of subparagraph (G), by striking the period 
at the end of subparagraph (H) and inserting ``, and'', and by adding 
at the end the following new subparagraph:
                    ``(I) marine and hydrokinetic renewable energy.''.
    (b) Marine Renewables.--Subsection (c) of section 45 is amended by 
adding at the end the following new paragraph:
            ``(10) Marine and hydrokinetic renewable energy.--
                    ``(A) In general.--The term `marine and 
                hydrokinetic renewable energy' means energy derived 
                from--
                            ``(i) waves, tides, and currents in oceans, 
                        estuaries, and tidal areas,
                            ``(ii) free flowing water in rivers, lakes, 
                        and streams,
                            ``(iii) 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
                            ``(iv) differentials in ocean temperature 
                        (ocean thermal energy conversion).
                    ``(B) Exceptions.--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.''.
    (c) Definition of Facility.--Subsection (d) of section 45 is 
amended by adding at the end the following new paragraph:
            ``(11) Marine and hydrokinetic renewable energy 
        facilities.--In the case of a facility producing electricity 
        from marine and hydrokinetic renewable energy, the term 
        `qualified facility' means any facility owned by the taxpayer--
                    ``(A) which has a nameplate capacity rating of at 
                least 150 kilowatts, and
                    ``(B) which is originally placed in service on or 
                after the date of the enactment of this paragraph and 
                before October 1, 2011.''.
    (d) Credit Rate.--Subparagraph (A) of section 45(b)(4) is amended 
by striking ``or (9)'' and inserting ``(9), or (11)''.
    (e) Coordination With Small Irrigation Power.--Paragraph (5) of 
section 45(d), as amended by section 101, is amended by striking 
``October 1, 2011'' and inserting ``the date of the enactment of 
paragraph (11)''.
    (f) Effective Date.--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.

SEC. 103. ENERGY CREDIT.

    (a) Extension of Credit.--
            (1) Solar energy property.--Paragraphs (2)(A)(i)(II) and 
        (3)(A)(ii) of section 48(a) are each amended by striking 
        ``January 1, 2009'' and inserting ``January 1, 2017''.
            (2) Fuel cell property.--Subparagraph (E) of section 
        48(c)(1) is amended by striking ``December 31, 2008'' and 
        inserting ``December 31, 2016''.
            (3) Microturbine property.--Subparagraph (E) of section 
        48(c)(2) is amended by striking ``December 31, 2008'' and 
        inserting ``December 31, 2016''.
    (b) Allowance of Energy Credit Against Alternative Minimum Tax.--
            (1) In general.--Subparagraph (B) of section 38(c)(4) is 
        amended by redesignating clause (vi) as clause (vii), by 
        striking ``and'' at the end of clause (v), and by inserting 
        after clause (v) the following new clause:
                            ``(vi) the credit determined under section 
                        46 to the extent that such credit is 
                        attributable to the energy credit determined 
                        under section 48, and''.
            (2) Technical amendment.--Clause (v) of section 38(c)(4)(B) 
        is amended by striking ``section 47 to the extent attributable 
        to'' and inserting ``section 46 to the extent that such credit 
        is attributable to the rehabilitation credit under section 47, 
        but only with respect to''.
    (c) Energy Credit for Combined Heat and Power System Property.--
            (1) In general.--Section 48(a)(3)(A) is amended by striking 
        ``or'' at the end of clause (iii), by inserting ``or'' at the 
        end of clause (iv), and by adding at the end the following new 
        clause:
                            ``(v) combined heat and power system 
                        property,''.
            (2) Combined heat and power system property.--Subsection 
        (c) of section 48 is amended--
                    (A) by striking ``Qualified Fuel Cell Property; 
                Qualified Microturbine Property'' in the heading and 
                inserting ``Definitions'', and
                    (B) by adding at the end the following new 
                paragraph:
            ``(3) Combined heat and power system property.--
                    ``(A) Combined heat and power system property.--The 
                term `combined heat and power system property' means 
                property comprising a system--
                            ``(i) which uses the same energy source for 
                        the simultaneous or sequential generation of 
                        electrical power, mechanical shaft power, or 
                        both, in combination with the generation of 
                        steam or other forms of useful thermal energy 
                        (including heating and cooling applications),
                            ``(ii) which produces--
                                    ``(I) at least 20 percent of its 
                                total useful energy in the form of 
                                thermal energy which is not used to 
                                produce electrical or mechanical power 
                                (or combination thereof), and
                                    ``(II) at least 20 percent of its 
                                total useful energy in the form of 
                                electrical or mechanical power (or 
                                combination thereof),
                            ``(iii) the energy efficiency percentage of 
                        which exceeds 60 percent, and
                            ``(iv) which is placed in service before 
                        January 1, 2017.
                    ``(B) Limitation.--
                            ``(i) In general.--In the case of combined 
                        heat and power system property with an 
                        electrical capacity in excess of the applicable 
                        capacity placed in service during the taxable 
                        year, the credit under subsection (a)(1) 
                        (determined without regard to this paragraph) 
                        for such year shall be equal to the amount 
                        which bears the same ratio to such credit as 
                        the applicable capacity bears to the capacity 
                        of such property.
                            ``(ii) Applicable capacity.--For purposes 
                        of clause (i), the term `applicable capacity' 
                        means 15 megawatts or a mechanical energy 
                        capacity of more than 20,000 horsepower or an 
                        equivalent combination of electrical and 
                        mechanical energy capacities.
                            ``(iii) Maximum capacity.--The term 
                        `combined heat and power system property' shall 
                        not include any property comprising a system if 
                        such system has a capacity in excess of 50 
                        megawatts or a mechanical energy capacity in 
                        excess of 67,000 horsepower or an equivalent 
                        combination of electrical and mechanical energy 
                        capacities.
                    ``(C) Special rules.--
                            ``(i) Energy efficiency percentage.--For 
                        purposes of this paragraph, the energy 
                        efficiency percentage of a system is the 
                        fraction--
                                    ``(I) the numerator of which is the 
                                total useful electrical, thermal, and 
                                mechanical power produced by the system 
                                at normal operating rates, and expected 
                                to be consumed in its normal 
                                application, and
                                    ``(II) the denominator of which is 
                                the lower heating value of the fuel 
                                sources for the system.
                            ``(ii) Determinations made on btu basis.--
                        The energy efficiency percentage and the 
                        percentages under subparagraph (A)(ii) shall be 
                        determined on a Btu basis.
                            ``(iii) Input and output property not 
                        included.--The term `combined heat and power 
                        system property' does not include property used 
                        to transport the energy source to the facility 
                        or to distribute energy produced by the 
                        facility.
                    ``(D) Systems using biomass.--If a system is 
                designed to use biomass (within the meaning of 
                paragraphs (2) and (3) of section 45(c) without regard 
                to the last sentence of paragraph (3)(A)) for at least 
                90 percent of the energy source--
                            ``(i) subparagraph (A)(iii) shall not 
                        apply, but
                            ``(ii) the amount of credit determined 
                        under subsection (a) with respect to such 
                        system shall not exceed the amount which bears 
                        the same ratio to such amount of credit 
                        (determined without regard to this 
                        subparagraph) as the energy efficiency 
                        percentage of such system bears to 60 
                        percent.''.
            (3) Conforming amendment.--Section 48(a)(1) is amended by 
        striking ``paragraphs (1)(B) and (2)(B)'' and inserting 
        ``paragraphs (1)(B), (2)(B), and (3)(B)''.
    (d) Increase of Credit Limitation for Fuel Cell Property.--
Subparagraph (B) of section 48(c)(1) is amended by striking ``$500'' 
and inserting ``$1,500''.
    (e) Public Utility Property Taken Into Account.--
            (1) In general.--Paragraph (3) of section 48(a) is amended 
        by striking the second sentence thereof.
            (2) Conforming amendments.--
                    (A) Paragraph (1) of section 48(c) is amended by 
                striking subparagraph (D) and redesignating 
                subparagraph (E) as subparagraph (D).
                    (B) Paragraph (2) of section 48(c) is amended by 
                striking subparagraph (D) and redesignating 
                subparagraph (E) as subparagraph (D).
    (f) Effective Date.--
            (1) In general.--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.
            (2) Allowance against alternative minimum tax.--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.
            (3) Combined heat and power and fuel cell property.--The 
        amendments made by subsections (c) and (d) 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 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).
            (4)  Public utility property.--The amendments made by 
        subsection (e) 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).

SEC. 104. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

    (a) Extension.--Section 25D(g) is amended by striking ``December 
31, 2008'' and inserting ``December 31, 2016''.
    (b) Removal of Limitation for Solar Electric Property.--
            (1) In general.--Section 25D(b)(1), as amended by 
        subsections (c) and (d), is amended--
                    (A) by striking subparagraph (A), and
                    (B) by redesignating subparagraphs (B) through (E) 
                as subparagraphs (A) through and (D), respectively.
            (2) Conforming amendment.--Section 25D(e)(4)(A), as amended 
        by subsections (c) and (d), is amended--
                    (A) by striking clause (i), and
                    (B) by redesignating clauses (ii) through (v) as 
                clauses (i) and (iv), respectively.
    (c) Credit for Residential Wind Property.--
            (1) In general.--Section 25D(a) is amended by striking 
        ``and'' at the end of paragraph (2), by striking the period at 
        the end of paragraph (3) and inserting ``, and'', and by adding 
        at the end the following new paragraph:
            ``(4) 30 percent of the qualified small wind energy 
        property expenditures made by the taxpayer during such year.''.
            (2) Limitation.--Section 25D(b)(1) is amended by striking 
        ``and'' at the end of subparagraph (B), by striking the period 
        at the end of subparagraph (C) and inserting ``, and'', and by 
        adding at the end the following new subparagraph:
                    ``(D) $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.''.
            (3) Qualified small wind energy property expenditures.--
                    (A) In general.--Section 25D(d) is amended by 
                adding at the end the following new paragraph:
            ``(4) Qualified small wind energy property expenditure.--
        The term `qualified small wind energy property expenditure' 
        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.''.
                    (B) No double benefit.--Section 45(d)(1) is amended 
                by adding at the end the following new sentence: ``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.''.
            (4) Maximum expenditures in case of joint occupancy.--
        Section 25D(e)(4)(A) is amended by striking ``and'' at the end 
        of clause (ii), by striking the period at the end of clause 
        (iii) and inserting ``, and'', and by adding at the end the 
        following new clause:
                            ``(iv) $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.''.
    (d) Credit for Geothermal Heat pump Systems.--
            (1) In general.--Section 25D(a), as amended by subsection 
        (c), is amended by striking ``and'' at the end of paragraph 
        (3), by striking the period at the end of paragraph (4) and 
        inserting ``, and'', and by adding at the end the following new 
        paragraph:
            ``(5) 30 percent of the qualified geothermal heat pump 
        property expenditures made by the taxpayer during such year.''.
            (2) Limitation.--Section 25D(b)(1), as amended by 
        subsection (c), is amended by striking ``and'' at the end of 
        subparagraph (C), by striking the period at the end of 
        subparagraph (D) and inserting ``, and'', and by adding at the 
        end the following new subparagraph:
                    ``(E) $2,000 with respect to any qualified 
                geothermal heat pump property expenditures.''.
            (3) Qualified geothermal heat pump property expenditure.--
        Section 25D(d), as amended by subsection (c), is amended by 
        adding at the end the following new paragraph:
            ``(5) Qualified geothermal heat pump property 
        expenditure.--
                    ``(A) In general.--The term `qualified geothermal 
                heat pump property expenditure' 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.
                    ``(B) Qualified geothermal heat pump property.--The 
                term `qualified geothermal heat pump property' means 
                any equipment which--
                            ``(i) 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
                            ``(ii) meets the requirements of the Energy 
                        Star program which are in effect at the time 
                        that the expenditure for such equipment is 
                        made.''.
            (4) Maximum expenditures in case of joint occupancy.--
        Section 25D(e)(4)(A), as amended by subsection (c), is amended 
        by striking ``and'' at the end of clause (iii), by striking the 
        period at the end of clause (iv) and inserting ``, and'', and 
        by adding at the end the following new clause:
                            ``(v) $6,667 in the case of any qualified 
                        geothermal heat pump property expenditures.''.
    (e) Credit Allowed Against Alternative Minimum Tax.--
            (1) In general.--Subsection (c) of section 25D is amended 
        to read as follows:
    ``(c) Limitation Based on Amount of Tax; Carryforward of Unused 
Credit.--
            ``(1) Limitation based on amount of tax.--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--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under this 
                subpart (other than this section) and section 27 for 
                the taxable year.
            ``(2) Carryforward of unused credit.--
                    ``(A) Rule for years in which all personal credits 
                allowed against regular and alternative minimum tax.--
                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.
                    ``(B) Rule for other years.--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.''.
            (2) Conforming amendments.--
                    (A) Section 23(b)(4)(B) is amended by inserting 
                ``and section 25D'' after ``this section''.
                    (B) Section 24(b)(3)(B) is amended by striking 
                ``and 25B'' and inserting ``, 25B, and 25D''.
                    (C) Section 25B(g)(2) is amended by striking 
                ``section 23'' and inserting ``sections 23 and 25D''.
                    (D) Section 26(a)(1) is amended by striking ``and 
                25B'' and inserting ``25B, and 25D''.
    (f) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after December 31, 2007.
            (2) Solar electric property limitation.--The amendments 
        made by subsection (b) shall apply to property placed in 
        service after the date of the enactment of this Act, in taxable 
        years ending after such date.
            (3) Application of egtrra sunset.--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.

SEC. 105. SPECIAL RULE TO IMPLEMENT FERC AND STATE ELECTRIC 
              RESTRUCTURING POLICY.

    (a) Extension for Qualified Electric Utilities.--
            (1) In general.--Paragraph (3) of section 451(i) is amended 
        by inserting ``(before January 1, 2010, in the case of a 
        qualified electric utility)'' after ``January 1, 2008''.
            (2) Qualified electric utility.--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:
            ``(6) Qualified electric utility.--For purposes of this 
        subsection, the term `qualified electric utility' means a 
        person that, as of the date of the qualifying electric 
        transmission transaction, is vertically integrated, in that it 
        is both--
                    ``(A) 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
                    ``(B) an electric utility (as defined in section 
                3(22) of the Federal Power Act (16 U.S.C. 796(22))).''.
    (b) Extension of Period for Transfer of Operational Control 
Authorized by FERC.--Clause (ii) of section 451(i)(4)(B) is amended by 
striking ``December 31, 2007'' and inserting ``the date which is 4 
years after the close of the taxable year in which the transaction 
occurs''.
    (c) Property Located Outside the United States Not Treated as 
Exempt Utility Property.--Paragraph (5) of section 451(i) is amended by 
adding at the end the following new subparagraph:
                    ``(C) Exception for property located outside the 
                united states.--The term `exempt utility property' 
                shall not include any property which is located outside 
                the United States.''.
    (d) Effective Dates.--
            (1) Extension.--The amendments made by subsection (a) shall 
        apply to transactions after December 31, 2007.
            (2) Transfers of operational control.--The amendment made 
        by subsection (b) shall take effect as if included in section 
        909 of the American Jobs Creation Act of 2004.
            (3) Exception for property located outside the united 
        states.--The amendment made by subsection (c) shall apply to 
        transactions after the date of the enactment of this Act.

                  PART 2--CARBON MITIGATION PROVISIONS

SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT 
              INVESTMENT CREDIT.

    (a) Modification of Credit Amount.--Section 48A(a) is amended by 
striking ``and'' at the end of paragraph (1), by striking the period at 
the end of paragraph (2) and inserting ``, and'', and by adding at the 
end the following new paragraph:
            ``(3) 30 percent of the qualified investment for such 
        taxable year in the case of projects described in clause (iii) 
        of subsection (d)(3)(B).''.
    (b) Expansion of Aggregate Credits.--Section 48A(d)(3)(A) is 
amended by striking ``$1,300,000,000'' and inserting 
``$2,250,000,000''.
    (c) Authorization of Additional Projects.--
            (1) In general.--Subparagraph (B) of section 48A(d)(3) is 
        amended to read as follows:
                    ``(B) Particular projects.--Of the dollar amount in 
                subparagraph (A), the Secretary is authorized to 
                certify--
                            ``(i) $800,000,000 for integrated 
                        gasification combined cycle projects the 
                        application for which is submitted during the 
                        period described in paragraph (2)(A)(i),
                            ``(ii) $500,000,000 for projects which use 
                        other advanced coal-based generation 
                        technologies the application for which is 
                        submitted during the period described in 
                        paragraph (2)(A)(i), and
                            ``(iii) $950,000,000 for advanced coal-
                        based generation technology projects the 
                        application for which is submitted during the 
                        period described in paragraph (2)(A)(ii).''.
            (2) Application period for additional projects.--
        Subparagraph (A) of section 48A(d)(2) is amended to read as 
        follows:
                    ``(A) Application period.--Each applicant for 
                certification under this paragraph shall submit an 
                application meeting the requirements of subparagraph 
                (B). An applicant may only submit an application--
                            ``(i) for an allocation from the dollar 
                        amount specified in clause (i) or (ii) of 
                        paragraph (3)(B) during the 3-year period 
                        beginning on the date the Secretary establishes 
                        the program under paragraph (1), and
                            ``(ii) for an allocation from the dollar 
                        amount specified in paragraph (3)(B)(iii) 
                        during the 3-year period beginning at the 
                        earlier of the termination of the period 
                        described in clause (i) or the date prescribed 
                        by the Secretary.''.
            (3) Capture and sequestration of carbon dioxide emissions 
        requirement.--
                    (A) In general.--Section 48A(e)(1) is amended by 
                striking ``and'' at the end of subparagraph (E), by 
                striking the period at the end of subparagraph (F) and 
                inserting ``; and'', and by adding at the end the 
                following new subparagraph:
                    ``(G) in the case of any project the application 
                for which is submitted during the period described in 
                subsection (d)(2)(A)(ii), the project includes 
                equipment which separates and sequesters at least 65 
                percent (70 percent in the case of an application for 
                reallocated credits under subsection (d)(4)) of such 
                project's total carbon dioxide emissions.''.
                    (B) Highest priority for projects which sequester 
                carbon dioxide emissions.--Section 48A(e)(3) is amended 
                by striking ``and'' at the end of subparagraph 
                (A)(iii), by striking the period at the end of 
                subparagraph (B)(iii) and inserting ``, and'', and by 
                adding at the end the following new subparagraph:
                    ``(C) give highest priority to projects with the 
                greatest separation and sequestration percentage of 
                total carbon dioxide emissions.''.
                    (C) Recapture of credit for failure to sequester.--
                Section 48A is amended by adding at the end the 
                following new subsection:
    ``(i) Recapture of Credit for Failure To Sequester.--The Secretary 
shall provide for recapturing the benefit of any credit allowable under 
subsection (a) with respect to any project which fails to attain or 
maintain the separation and sequestration requirements of subsection 
(e)(1)(G).''.
            (4) Additional priority for research partnerships.--Section 
        48A(e)(3)(B), as amended by paragraph (3)(B), is amended--
                    (A) by striking ``and'' at the end of clause (ii),
                    (B) by redesignating clause (iii) as clause (iv), 
                and
                    (C) by inserting after clause (ii) the following 
                new clause:
                            ``(iii) applicant participants who have a 
                        research partnership with an eligible 
                        educational institution (as defined in section 
                        529(e)(5)), and''.
            (5) Clerical amendment.--Section 48A(e)(3) is amended by 
        striking ``integrated gasification combined cycle'' in the 
        heading and inserting ``certain''.
    (d) Disclosure of Allocations.--Section 48A(d) is amended by adding 
at the end the following new paragraph:
            ``(5) Disclosure of allocations.--The Secretary shall, upon 
        making a certification under this subsection or section 48B(d), 
        publicly disclose the identity of the applicant and the amount 
        of the credit certified with respect to such applicant.''.
    (e) Effective Dates.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        credits the application for which is submitted during the 
        period described in section 48A(d)(2)(A)(ii) of the Internal 
        Revenue Code of 1986 and which are allocated or reallocated 
        after the date of the enactment of this Act.
            (2) Disclosure of allocations.--The amendment made by 
        subsection (d) shall apply to certifications made after the 
        date of the enactment of this Act.
            (3) Clerical amendment.--The amendment made by subsection 
        (c)(5) shall take effect as if included in the amendment made 
        by section 1307(b) of the Energy Tax Incentives Act of 2005.

SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFICATION INVESTMENT 
              CREDIT.

    (a) Modification of Credit Amount.--Section 48B(a) is amended by 
inserting ``(30 percent in the case of credits allocated under 
subsection (d)(1)(B))'' after ``20 percent''.
    (b) Expansion of Aggregate Credits.--Section 48B(d)(1) is amended 
by striking ``shall not exceed $350,000,000'' and all that follows and 
inserting ``shall not exceed--
                    ``(A) $350,000,000, plus
                    ``(B) $150,000,000 for qualifying gasification 
                projects that include equipment which separates and 
                sequesters at least 75 percent of such project's total 
                carbon dioxide emissions.''.
    (c) Recapture of Credit for Failure To Sequester.--Section 48B is 
amended by adding at the end the following new subsection:
    ``(f) Recapture of Credit for Failure to Sequester.--The Secretary 
shall provide for recapturing the benefit of any credit allowable under 
subsection (a) with respect to any project which fails to attain or 
maintain the separation and sequestration requirements for such project 
under subsection (d)(1).''.
    (d) Selection Priorities.--Section 48B(d) is amended by adding at 
the end the following new paragraph:
            ``(4) Selection priorities.--In determining which 
        qualifying gasification projects to certify under this section, 
        the Secretary shall--
                    ``(A) give highest priority to projects with the 
                greatest separation and sequestration percentage of 
                total carbon dioxide emissions, and
                    ``(B) give high priority to applicant participants 
                who have a research partnership with an eligible 
                educational institution (as defined in section 
                529(e)(5)).''.
    (e) Effective Date.--The amendments made by this section shall 
apply to credits described in section 48B(d)(1)(B) of the Internal 
Revenue Code of 1986 which are allocated or reallocated after the date 
of the enactment of this Act.

SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX.

    Paragraph (2) of section 4121(e) is amended--
            (1) by striking ``January 1, 2014'' in subparagraph (A) and 
        inserting ``December 31, 2018'', and
            (2) by striking ``January 1 after 1981'' in subparagraph 
        (B) and inserting ``December 31 after 2007''.

SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EXCISE TAX TO CERTAIN 
              COAL PRODUCERS AND EXPORTERS.

    (a) Refund.--
            (1) Coal producers.--
                    (A) In general.--Notwithstanding subsections (a)(1) 
                and (c) of section 6416 and section 6511 of the 
                Internal Revenue Code of 1986, if--
                            (i) a coal producer establishes that such 
                        coal producer, or a party related to such coal 
                        producer, exported coal produced by such coal 
                        producer to a foreign country or shipped coal 
                        produced by such coal producer to a possession 
                        of the United States, or caused such coal to be 
                        exported or shipped, the export or shipment of 
                        which was other than through an exporter who 
                        meets the requirements of paragraph (2),
                            (ii) such coal producer filed an excise tax 
                        return on or after October 1, 1990, and on or 
                        before the date of the enactment of this Act, 
                        and
                            (iii) such coal producer files a claim for 
                        refund with the Secretary not later than the 
                        close of the 30-day period beginning on the 
                        date of the enactment of this Act,
                then the Secretary shall pay to such coal producer an 
                amount equal to the tax paid under section 4121 of such 
                Code on such coal exported or shipped by the coal 
                producer or a party related to such coal producer, or 
                caused by the coal producer or a party related to such 
                coal producer to be exported or shipped.
                    (B) Special rules for certain taxpayers.--For 
                purposes of this section--
                            (i) In general.--If a coal producer or a 
                        party related to a coal producer has received a 
                        judgment described in clause (iii), such coal 
                        producer shall be deemed to have established 
                        the export of coal to a foreign country or 
                        shipment of coal to a possession of the United 
                        States under subparagraph (A)(i).
                            (ii) Amount of payment.--If a taxpayer 
                        described in clause (i) is entitled to a 
                        payment under subparagraph (A), the amount of 
                        such payment shall be reduced by any amount 
                        paid pursuant to the judgment described in 
                        clause (iii).
                            (iii) Judgment described.--A judgment is 
                        described in this subparagraph if such 
                        judgment--
                                    (I) is made by a court of competent 
                                jurisdiction within the United States,
                                    (II) relates to the 
                                constitutionality of any tax paid on 
                                exported coal under section 4121 of the 
                                Internal Revenue Code of 1986, and
                                    (III) is in favor of the coal 
                                producer or the party related to the 
                                coal producer.
            (2) Exporters.--Notwithstanding subsections (a)(1) and (c) 
        of section 6416 and section 6511 of the Internal Revenue Code 
        of 1986, and a judgment described in paragraph (1)(B)(iii) of 
        this subsection, if--
                    (A) an exporter establishes that such exporter 
                exported coal to a foreign country or shipped coal to a 
                possession of the United States, or caused such coal to 
                be so exported or shipped,
                    (B) such exporter filed a tax return on or after 
                October 1, 1990, and on or before the date of the 
                enactment of this Act, and
                    (C) such exporter files a claim for refund with the 
                Secretary not later than the close of the 30-day period 
                beginning on the date of the enactment of this Act,
        then the Secretary shall pay to such exporter an amount equal 
        to $0.825 per ton of such coal exported by the exporter or 
        caused to be exported or shipped, or caused to be exported or 
        shipped, by the exporter.
    (b) Limitations.--Subsection (a) shall not apply with respect to 
exported coal if a settlement with the Federal Government has been made 
with and accepted by, the coal producer, a party related to such coal 
producer, or the exporter, of such coal, as of the date that the claim 
is filed under this section with respect to such exported coal. For 
purposes of this subsection, the term ``settlement with the Federal 
Government'' shall not include any settlement or stipulation entered 
into as of the date of the enactment of this Act, the terms of which 
contemplate a judgment concerning which any party has reserved the 
right to file an appeal, or has filed an appeal.
    (c) Subsequent Refund Prohibited.--No refund shall be made under 
this section to the extent that a credit or refund of such tax on such 
exported or shipped coal has been paid to any person.
    (d) Definitions.--For purposes of this section--
            (1) Coal producer.--The term ``coal producer'' means the 
        person in whom is vested ownership of the coal immediately 
        after the coal is severed from the ground, without regard to 
        the existence of any contractual arrangement for the sale or 
        other disposition of the coal or the payment of any royalties 
        between the producer and third parties. The term includes any 
        person who extracts coal from coal waste refuse piles or from 
        the silt waste product which results from the wet washing (or 
        similar processing) of coal.
            (2) Exporter.--The term ``exporter'' means a person, other 
        than a coal producer, who does not have a contract, fee 
        arrangement, or any other agreement with a producer or seller 
        of such coal to export or ship such coal to a third party on 
        behalf of the producer or seller of such coal and--
                    (A) is indicated in the shipper's export 
                declaration or other documentation as the exporter of 
                record, or
                    (B) actually exported such coal to a foreign 
                country or shipped such coal to a possession of the 
                United States, or caused such coal to be so exported or 
                shipped.
            (3) Related party.--The term ``a party related to such coal 
        producer'' means a person who--
                    (A) is related to such coal producer through any 
                degree of common management, stock ownership, or voting 
                control,
                    (B) is related (within the meaning of section 
                144(a)(3) of the Internal Revenue Code of 1986) to such 
                coal producer, or
                    (C) has a contract, fee arrangement, or any other 
                agreement with such coal producer to sell such coal to 
                a third party on behalf of such coal producer.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Treasury or the Secretary's designee.
    (e) Timing of Refund.--With respect to any claim for refund filed 
pursuant to this section, the Secretary shall determine whether the 
requirements of this section are met not later than 180 days after such 
claim is filed. If the Secretary determines that the requirements of 
this section are met, the claim for refund shall be paid not later than 
180 days after the Secretary makes such determination.
    (f) Interest.--Any refund paid pursuant to this section shall be 
paid by the Secretary with interest from the date of overpayment 
determined by using the overpayment rate and method under section 6621 
of the Internal Revenue Code of 1986.
    (g) Denial of Double Benefit.--The payment under subsection (a) 
with respect to any coal shall not exceed--
            (1) in the case of a payment to a coal producer, the amount 
        of tax paid under section 4121 of the Internal Revenue Code of 
        1986 with respect to such coal by such coal producer or a party 
        related to such coal producer, and
            (2) in the case of a payment to an exporter, an amount 
        equal to $0.825 per ton with respect to such coal exported by 
        the exporter or caused to be exported by the exporter.
    (h) Application of Section.--This section applies only to claims on 
coal exported or shipped on or after October 1, 1990, through the date 
of the enactment of this Act.

SEC. 115. CARBON AUDIT OF THE TAX CODE.

    (a) Study.--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.
    (b) Report.--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.
    (c) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $1,500,000 for the period of 
fiscal years 2009 and 2010.

    Subtitle B--Transportation and Domestic Fuel Security Provisions

SEC. 121. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS DEPRECIATION FOR 
              BIOMASS ETHANOL PLANT PROPERTY.

    (a) In General.--Paragraph (3) of section 168(l) is amended to read 
as follows:
            ``(3) Cellulosic biofuel.--The term `cellulosic biofuel' 
        means any liquid fuel which is produced from any 
        lignocellulosic or hemicellulosic matter that is available on a 
        renewable or recurring basis.''.
    (b) Conforming Amendments.--Subsection (l) of section 168 is 
amended--
            (1) by striking ``cellulosic biomass ethanol'' each place 
        it appears and inserting ``cellulosic biofuel'',
            (2) by striking ``Cellulosic Biomass Ethanol'' in the 
        heading of such subsection and inserting ``Cellulosic 
        Biofuel'', and
            (3) by striking ``cellulosic biomass ethanol'' in the 
        heading of paragraph (2) thereof and inserting ``cellulosic 
        biofuel''.
    (c) Effective Date.--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.

SEC. 122. CREDITS FOR BIODIESEL AND RENEWABLE DIESEL.

    (a) In General.--Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) are 
each amended by striking ``December 31, 2008'' and inserting ``December 
31, 2009''.
    (b) Increase in Rate of Credit.--
            (1) Income tax credit.--Paragraphs (1)(A) and (2)(A) of 
        section 40A(b) are each amended by striking ``50 cents'' and 
        inserting ``$1.00''.
            (2) Excise tax credit.--Paragraph (2) of section 6426(c) is 
        amended to read as follows:
            ``(2) Applicable amount.--For purposes of this subsection, 
        the applicable amount is $1.00.''.
            (3) Conforming amendments.--
                    (A) Subsection (b) of section 40A is amended by 
                striking paragraph (3) and by redesignating paragraphs 
                (4) and (5) as paragraphs (3) and (4), respectively.
                    (B) Paragraph (2) of section 40A(f) is amended to 
                read as follows:
            ``(2) Exception.--Subsection (b)(4) shall not apply with 
        respect to renewable diesel.''.
                    (C) Paragraphs (2) and (3) of section 40A(e) are 
                each amended by striking ``subsection (b)(5)(C)'' and 
                inserting ``subsection (b)(4)(C)''.
                    (D) Clause (ii) of section 40A(d)(3)(C) is amended 
                by striking ``subsection (b)(5)(B)'' and inserting 
                ``subsection (b)(4)(B)''.
    (c) Uniform Treatment of Diesel Produced From Biomass.--Paragraph 
(3) of section 40A(f) is amended--
            (1) by striking ``diesel fuel'' and inserting ``liquid 
        fuel'',
            (2) by striking ``using a thermal depolymerization 
        process'', and
            (3) by striking ``or D396'' in subparagraph (B) and 
        inserting ``, D396, or other equivalent standard approved by 
        the Secretary''.
    (d) Coproduction of Renewable Diesel With Petroleum Feedstock.--
            (1) In general.--Paragraph (3) of section 40A(f) (defining 
        renewable diesel) is amended by adding at the end the following 
        flush sentence:
        ``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 `biomass' has the meaning given such 
        term by section 45K(c)(3).''.
            (2) Conforming amendment.--Paragraph (3) of section 40A(f) 
        is amended by striking ``(as defined in section 45K(c)(3))''.
    (e) Eligibility of Certain Aviation Fuel.--Subsection (f) of 
section 40A (relating to renewable diesel) is amended by adding at the 
end the following new paragraph:
            ``(4) Certain aviation fuel.--
                    ``(A) In general.--Except as provided in the last 
                three sentences of paragraph (3), the term `renewable 
                diesel' shall include fuel derived from biomass which 
                meets the requirements of a Department of Defense 
                specification for military jet fuel or an American 
                Society of Testing and Materials specification for 
                aviation turbine fuel.
                    ``(B) Application of mixture credits.--In the case 
                of fuel which is treated as renewable diesel solely by 
                reason of subparagraph (A), subsection (b)(1) and 
                section 6426(c) shall be applied with respect to such 
                fuel by treating kerosene as though it were diesel 
                fuel.''.
    (f) Effective Date.--
            (1) In general.--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.
            (2) Coproduction of renewable diesel with petroleum 
        feedstock.--The amendments made by subsection (c) shall apply 
        to fuel produced, and sold or used, after February 13, 2008.

SEC. 123. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO PROVIDE 
              AN INCENTIVE FOR UNITED STATES PRODUCTION.

    (a) Alcohol Fuels Credit.--Subsection (d) of section 40 is amended 
by adding at the end the following new paragraph:
            ``(7) Limitation to alcohol with connection to the united 
        states.--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 `United States' includes 
        any possession of the United States.''.
    (b) Biodiesel Fuels Credit.--Subsection (d) of section 40A is 
amended by adding at the end the following new paragraph:
            ``(5) Limitation to biodiesel with connection to the united 
        states.--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 `United States' includes 
        any possession of the United States.''.
    (c) Excise Tax Credit.--
            (1) In general.--Section 6426 is amended by adding at the 
        end the following new subsection:
    ``(i) Limitation to Fuels With Connection to the United States.--
            ``(1) Alcohol.--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.
            ``(2) Biodiesel and alternative fuels.--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.
For purposes of this subsection, the term `United States' includes any 
possession of the United States.''.
            (2) Conforming amendment.--Subsection (e) of section 6427 
        is amended by redesignating paragraph (5) as paragraph (6) and 
        by inserting after paragraph (4) the following new paragraph:
            ``(5) Limitation to fuels with connection to the united 
        states.--No amount shall be payable under paragraph (1) or (2) 
        with respect to any mixture or alternative fuel if credit is 
        not allowed with respect to such mixture or alternative fuel by 
        reason of section 6426(i).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to claims for credit or payment made on or after May 15, 2008.

SEC. 124. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR 
              VEHICLES.

    (a) In General.--Section 30 is amended to read as follows:

``SEC. 30. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES.

    ``(a) Allowance of Credit.--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 new qualified plug-in electric drive motor vehicle 
placed in service by the taxpayer during the taxable year.
    ``(b) Per Vehicle Dollar Limitation.--
            ``(1) In general.--The amount determined under this 
        subsection with respect to any new qualified plug-in electric 
        drive motor vehicle is the sum of the amounts determined under 
        paragraphs (2) and (3) with respect to such vehicle.
            ``(2) Base amount.--The amount determined under this 
        paragraph is $3,000.
            ``(3) Battery capacity.--In the case of a 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.
    ``(c) Application With Other Credits.--
            ``(1) Business credit treated as part of general business 
        credit.--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)).
            ``(2) Personal credit.--
                    ``(A) In general.--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.
                    ``(B) Limitation based on amount of tax.--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--
                            ``(i) the sum of the regular tax liability 
                        (as defined in section 26(b)) plus the tax 
                        imposed by section 55, over
                            ``(ii) 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.
    ``(d) New Qualified Plug-In Electric Drive Motor Vehicle.--For 
purposes of this section--
            ``(1) In general.--The term `new qualified plug-in electric 
        drive motor vehicle' means a motor vehicle--
                    ``(A) the original use of which commences with the 
                taxpayer,
                    ``(B) which is acquired for use or lease by the 
                taxpayer and not for resale,
                    ``(C) which is made by a manufacturer,
                    ``(D) which has a gross vehicle weight rating of 
                less than 14,000 pounds,
                    ``(E) 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, 
                and
                    ``(F) which is propelled to a significant extent by 
                an electric motor which draws electricity from a 
                battery which--
                            ``(i) has a capacity of not less than 4 
                        kilowatt hours, and
                            ``(ii) is capable of being recharged from 
                        an external source of electricity.
            ``(2) Exception.--The term `new qualified plug-in electric 
        drive motor vehicle' 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.
            ``(3) Motor vehicle.--The term `motor vehicle' means any 
        vehicle which is manufactured primarily for use on public 
        streets, roads, and highways (not including a vehicle operated 
        exclusively on a rail or rails) and which has at least 4 
        wheels.
            ``(4) Other terms.--The terms `passenger automobile', 
        `light truck', and `manufacturer' 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.).
            ``(5) Battery capacity.--The term `capacity' 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.
    ``(e) Limitation on Number of New Qualified Plug-In Electric Drive 
Motor Vehicles Eligible for Credit.--
            ``(1) In general.--In the case of a new qualified plug-in 
        electric drive motor vehicle sold during the phaseout period, 
        only the applicable percentage of the credit otherwise 
        allowable under subsection (a) shall be allowed.
            ``(2) Phaseout period.--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 new qualified plug-in 
        electric drive motor 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.
            ``(3) Applicable percentage.--For purposes of paragraph 
        (1), the applicable percentage is--
                    ``(A) 50 percent for the first 2 calendar quarters 
                of the phaseout period,
                    ``(B) 25 percent for the 3d and 4th calendar 
                quarters of the phaseout period, and
                    ``(C) 0 percent for each calendar quarter 
                thereafter.
            ``(4) Controlled groups.--Rules similar to the rules of 
        section 30B(f)(4) shall apply for purposes of this subsection.
    ``(f) Special Rules.--
            ``(1) Basis reduction.--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)).
            ``(2) Recapture.--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.
            ``(3) Property used outside united states, etc., not 
        qualified.--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.
            ``(4) Election not to take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects to not have this section apply to such vehicle.
            ``(5) Property used by tax-exempt entity; interaction with 
        air quality and motor vehicle safety standards.--Rules similar 
        to the rules of paragraphs (6) and (10) of section 30B(h) shall 
        apply for purposes of this section.''.
    (b) Coordination With Alternative Motor Vehicle Credit.--Section 
30B(d)(3) is amended by adding at the end the following new 
subparagraph:
                    ``(D) Exclusion of plug-in vehicles.--Any vehicle 
                with respect to which a credit is allowable under 
                section 30 (determined without regard to subsection (c) 
                thereof) shall not be taken into account under this 
                section.''.
    (c) Credit Made Part of General Business Credit.--Section 38(b) is 
amended by striking ``plus'' at the end of paragraph (32), by striking 
the period at the end of paragraph (33) and inserting ``, plus'', and 
by adding at the end the following new paragraph:
            ``(34) the portion of the new qualified plug-in electric 
        drive motor vehicle credit to which section 30(c)(1) 
        applies.''.
    (d) Conforming Amendments.--
            (1)(A) Section 24(b)(3)(B), as amended by section 104, is 
        amended by striking ``and 25D'' and inserting ``25D, and 30''.
            (B) Section 25(e)(1)(C)(ii) is amended by inserting ``30,'' 
        after ``25D,''.
            (C) Section 25B(g)(2), as amended by section 104, is 
        amended by striking ``and 25D'' and inserting ``, 25D, and 
        30''.
            (D) Section 26(a)(1), as amended by section 104, is amended 
        by striking ``and 25D'' and inserting ``25D, and 30''.
            (E) Section 1400C(d)(2) is amended by striking ``and 25D'' 
        and inserting ``25D, and 30''.
            (2) Section 30B(h)(1) is amended by striking ``section 
        30(c)(2)'' and inserting ``section 30(d)(3)''.
            (3)(A) Section 53(d)(1)(B) is amended by striking clause 
        (iii) and redesignating clause (iv) as clause (iii).
            (B) Subclause (II) of section 53(d)(1)(B)(iii), as so 
        redesignated, is amended by striking ``increased in the manner 
        provided in clause (iii)''.
            (4) Section 55(c)(3) is amended by striking ``30(b)(3),''.
            (5) Section 1016(a)(25) is amended by striking ``section 
        30(d)(1)'' and inserting ``section 30(f)(1)''.
            (6) Section 6501(m) is amended by striking ``section 
        30(d)(4)'' and inserting ``section 30(f)(4)''.
            (7) The item in the table of sections for subpart B of part 
        IV of subchapter A of chapter 1 is amended to read as follows:

``Sec. 30. New qualified plug-in electric drive motor vehicles.''.
    (e) Treatment of Alternative Motor Vehicle Credit as a Personal 
Credit.--
            (1) In general.--Paragraph (2) of section 30B(g) is amended 
        to read as follows:
            ``(2) Personal credit.--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.''.
            (2) Conforming amendments.--
                    (A) Subparagraph (A) of section 30C(d)(2) is 
                amended by striking ``sections 27, 30, and 30B'' and 
                inserting ``section 27''.
                    (B) Paragraph (3) of section 55(c) is amended by 
                striking ``30B(g)(2),''.
    (f) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        taxable years beginning after December 31, 2008.
            (2) Treatment of alternative motor vehicle credit as 
        personal credit.--The amendments made by subsection (e) shall 
        apply to taxable years beginning after December 31, 2007.
    (g) Application of EGTRRA Sunset.--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.

SEC. 125. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING REDUCTION UNITS AND 
              ADVANCED INSULATION.

    (a) In General.--Section 4053 is amended by adding at the end the 
following new paragraphs:
            ``(9) Idling reduction device.--Any device or system of 
        devices which--
                    ``(A) is designed to provide to a vehicle those 
                services (such as heat, air conditioning, or 
                electricity) that would otherwise require the operation 
                of the main drive engine while the vehicle is 
                temporarily parked or remains stationary using one or 
                more devices affixed to a tractor or truck, and
                    ``(B) is determined by the Administrator of the 
                Environmental Protection Agency, in consultation with 
                the Secretary of Energy and the Secretary of 
                Transportation, to reduce idling of such vehicle at a 
                motor vehicle rest stop or other location where such 
                vehicles are temporarily parked or remain stationary.
            ``(10) Advanced insulation.--Any insulation that has an R 
        value of not less than R35 per inch.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to sales or installations after the date of the enactment of this Act.

SEC. 126. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS.

    (a) In General.--Paragraph (1) of section 132(f) is amended by 
adding at the end the following:
                    ``(D) Any qualified bicycle commuting 
                reimbursement.''.
    (b) Limitation on Exclusion.--Paragraph (2) of section 132(f) is 
amended by striking ``and'' at the end of subparagraph (A), by striking 
the period at the end of subparagraph (B) and inserting ``, and'', and 
by adding at the end the following new subparagraph:
                    ``(C) the applicable annual limitation in the case 
                of any qualified bicycle commuting reimbursement.''.
    (c) Definitions.--Paragraph (5) of section 132(f) is amended by 
adding at the end the following:
                    ``(F) Definitions related to bicycle commuting 
                reimbursement.--
                            ``(i) Qualified bicycle commuting 
                        reimbursement.--The term `qualified bicycle 
                        commuting reimbursement' 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.
                            ``(ii) Applicable annual limitation.--The 
                        term `applicable annual limitation' 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.
                            ``(iii) Qualified bicycle commuting 
                        month.--The term `qualified bicycle commuting 
                        month' means, with respect to any employee, any 
                        month during which such employee--
                                    ``(I) regularly uses the bicycle 
                                for a substantial portion of the travel 
                                between the employee's residence and 
                                place of employment, and
                                    ``(II) does not receive any benefit 
                                described in subparagraph (A), (B), or 
                                (C) of paragraph (1).''.
    (d) Constructive Receipt of Benefit.--Paragraph (4) of section 
132(f) is amended by inserting ``(other than a qualified bicycle 
commuting reimbursement)'' after ``qualified transportation fringe''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.

SEC. 127. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

    (a) Increase in Credit Amount.--Section 30C is amended--
            (1) by striking ``30 percent'' in subsection (a) and 
        inserting ``50 percent'',
            (2) by striking ``$30,000'' in subsection (b)(1) and 
        inserting ``$50,000'', and
            (3) by striking ``$1,000'' in subsection (b)(2) and 
        inserting ``$2,000''.
    (b) Extension of Credit.--Subsection (g) of section 30C is amended 
to read as follows:
    ``(g) Termination.--This section shall not apply to any property 
placed in service after--
            ``(1) December 31 2017, in the case of property relating to 
        natural gas, compressed natural gas, or liquified natural gas, 
        and which is not of a character subject to an allowance for 
        depreciation,
            ``(2) December 31, 2014, in the case of--
                    ``(A) property relating to hydrogen, and
                    ``(B) property relating to natural gas, compressed 
                natural gas, or liquified natural gas, and which is of 
                a character subject to an allowance for depreciation, 
                and
            ``(3) December 31, 2010, in any other case.''.
    (c) Effective Date.--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.

SEC. 128. CERTAIN INCOME AND GAINS RELATING TO ALCOHOL FUELS AND 
              MIXTURES, BIODIESEL FUELS AND MIXTURES, AND ALTERNATIVE 
              FUELS AND MIXTURES TREATED AS QUALIFYING INCOME FOR 
              PUBLICLY TRADED PARTNERSHIPS.

    (a) In General.--Subparagraph (E) of section 7704(d)(1) is amended 
by inserting ``, or the transportation or storage of any fuel described 
in subsection (b), (c), (d), or (e) of section 6426, or any alcohol 
fuel defined in section 6426(b)(4)(A) or any biodiesel fuel as defined 
in section 40A(d)(1)'' after ``timber)''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

       Subtitle C--Energy Conservation and Efficiency Provisions

SEC. 131. CREDIT FOR NONBUSINESS ENERGY PROPERTY.

    (a) Extension of Credit.--Section 25C(g) is amended by striking 
``placed in service after December 31, 2007'' and inserting ``placed in 
service--
            ``(1) after December 31, 2007, and before January 1, 2009, 
        or
            ``(2) after December 31, 2009.''.
    (b) Qualified Biomass Fuel Property.--
            (1) In general.--Section 25C(d)(3) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (D),
                    (B) by striking the period at the end of 
                subparagraph (E) and inserting ``, and'', and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(F) 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.''.
            (2) Biomass fuel.--Section 25C(d) is amended by adding at 
        the end the following new paragraph:
            ``(6) Biomass fuel.--The term `biomass fuel' 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.''.
    (c) Coordination With Credit for Qualified Geothermal Heat pump 
Property Expenditures.--
            (1) In general.--Paragraph (3) of section 25C(d), as 
        amended by subsection (b), is amended by striking subparagraph 
        (C) and by redesignating subparagraphs (D), (E), and (F) as 
        subparagraphs (C), (D), and (E), respectively.
            (2) Conforming amendment.--Subparagraph (C) of section 
        25C(d)(2) is amended to read as follows:
                    ``(C) Requirements and standards for air 
                conditioners and heat pumps.--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--
                            ``(i) shall require measurements to be 
                        based on published data which is tested by 
                        manufacturers at 95 degrees Fahrenheit, and
                            ``(ii) 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.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to expenditures made after December 31, 2008.

SEC. 132. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

    Subsection (h) of section 179D is amended by striking ``December 
31, 2008'' and inserting ``December 31, 2013''.

SEC. 133. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT FOR 
              APPLIANCES PRODUCED AFTER 2007.

    (a) In General.--Subsection (b) of section 45M is amended to read 
as follows:
    ``(b) Applicable Amount.--For purposes of subsection (a)--
            ``(1) Dishwashers.--The applicable amount is--
                    ``(A) $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
                    ``(B) $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).
            ``(2) Clothes washers.--The applicable amount is--
                    ``(A) $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,
                    ``(B) $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,
                    ``(C) $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
                    ``(D) $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.
            ``(3) Refrigerators.--The applicable amount is--
                    ``(A) $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,
                    ``(B) $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,
                    ``(C) $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
                    ``(D) $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.''.
    (b) Eligible Production.--
            (1) Similar treatment for all appliances.--Subsection (c) 
        of section 45M is amended--
                    (A) by striking paragraph (2),
                    (B) by striking ``(1) In general'' and all that 
                follows through ``the eligible'' and inserting ``The 
                eligible'',
                    (C) by moving the text of such subsection in line 
                with the subsection heading, and
                    (D) by redesignating subparagraphs (A) and (B) as 
                paragraphs (1) and (2), respectively, and by moving 
                such paragraphs 2 ems to the left.
            (2) Modification of base period.--Paragraph (2) of section 
        45M(c), as amended by paragraph (1), is amended by striking 
        ``3-calendar year'' and inserting ``2-calendar year''.
    (c) Types of Energy Efficient Appliances.--Subsection (d) of 
section 45M (defining types of energy efficient appliances) is amended 
to read as follows:
    ``(d) Types of Energy Efficient Appliance.--For purposes of this 
section, the types of energy efficient appliances are--
            ``(1) dishwashers described in subsection (b)(1),
            ``(2) clothes washers described in subsection (b)(2), and
            ``(3) refrigerators described in subsection (b)(3).''.
    (d) Aggregate Credit Amount Allowed.--
            (1) Increase in limit.--Paragraph (1) of section 45M(e) is 
        amended to read as follows:
            ``(1) Aggregate credit amount allowed.--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.''.
            (2) Exception for certain refrigerator and clothes 
        washers.--Paragraph (2) of section 45M(e) is amended to read as 
        follows:
            ``(2) Amount allowed for certain refrigerators and clothes 
        washers.--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).''.
    (e) Qualified Energy Efficient Appliances.--
            (1) In general.--Paragraph (1) of section 45M(f) (defining 
        qualified energy efficient appliance) is amended to read as 
        follows:
            ``(1) Qualified energy efficient appliance.--The term 
        `qualified energy efficient appliance' means--
                    ``(A) any dishwasher described in subsection 
                (b)(1),
                    ``(B) any clothes washer described in subsection 
                (b)(2), and
                    ``(C) any refrigerator described in subsection 
                (b)(3).''.
            (2) Clothes washer.--Section 45M(f)(3) is amended by 
        inserting ``commercial'' before ``residential'' the second 
        place it appears.
            (3) Top-loading clothes washer.--Subsection (f) of section 
        45M 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:
            ``(4) Top-loading clothes washer.--The term `top-loading 
        clothes washer' 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.''.
            (4) Replacement of energy factor.--Section 45M(f)(6), as 
        redesignated by paragraph (3), is amended to read as follows:
            ``(6) Modified energy factor.--The term `modified energy 
        factor' means the modified energy factor established by the 
        Department of Energy for compliance with the Federal energy 
        conservation standard.''.
            (5) Gallons per cycle; water consumption factor.--Section 
        45M(f), as amended by paragraph (3), is amended by adding at 
        the end the following:
            ``(9) Gallons per cycle.--The term `gallons per cycle' 
        means, with respect to a dishwasher, the amount of water, 
        expressed in gallons, required to complete a normal cycle of a 
        dishwasher.
            ``(10) Water consumption factor.--The term `water 
        consumption factor' 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.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to appliances produced after December 31, 2007.

SEC. 134. ACCELERATED RECOVERY PERIOD FOR DEPRECIATION OF SMART METERS 
              AND SMART GRID SYSTEMS.

    (a) In General.--Section 168(e)(3)(D) is amended by striking 
``and'' at the end of clause (i), by striking the period at the end of 
clause (ii) and inserting a comma, and by inserting after clause (ii) 
the following new clauses:
                            ``(iii) any qualified smart electric meter, 
                        and
                            ``(iv) any qualified smart electric grid 
                        system.''.
    (b) Definitions.--Section 168(i) is amended by inserting at the end 
the following new paragraph:
            ``(18) Qualified smart electric meters.--
                    ``(A) In general.--The term `qualified smart 
                electric meter' means any smart electric meter which is 
                placed in service by a taxpayer who is a supplier of 
                electric energy or a provider of electric energy 
                services.
                    ``(B) Smart electric meter.--For purposes of 
                subparagraph (A), the term `smart electric meter' means 
                any time-based meter and related communication 
                equipment which is capable of being used by the 
                taxpayer as part of a system that--
                            ``(i) measures and records electricity 
                        usage data on a time-differentiated basis in at 
                        least 24 separate time segments per day,
                            ``(ii) provides for the exchange of 
                        information between supplier or provider and 
                        the customer's electric meter in support of 
                        time-based rates or other forms of demand 
                        response,
                            ``(iii) provides data to such supplier or 
                        provider so that the supplier or provider can 
                        provide energy usage information to customers 
                        electronically, and
                            ``(iv) provides net metering.
            ``(19) Qualified smart electric grid systems.--
                    ``(A) In general.--The term `qualified smart 
                electric grid system' means any smart grid property 
                used as part of a system for electric distribution grid 
                communications, monitoring, and management placed in 
                service by a taxpayer who is a supplier of electric 
                energy or a provider of electric energy services.
                    ``(B) Smart grid property.--For the purposes of 
                subparagraph (A), the term `smart grid property' means 
                electronics and related equipment that is capable of--
                            ``(i) sensing, collecting, and monitoring 
                        data of or from all portions of a utility's 
                        electric distribution grid,
                            ``(ii) providing real-time, two-way 
                        communications to monitor or manage such grid, 
                        and
                            ``(iii) providing real time analysis of and 
                        event prediction based upon collected data that 
                        can be used to improve electric distribution 
                        system reliability, quality, and 
                        performance.''.
    (c) Continued Application of 150 Percent Declining Balance 
Method.--Paragraph (2) of section 168(b) is amended by striking ``or'' 
at the end of subparagraph (B), by redesignating subparagraph (C) as 
subparagraph (D), and by inserting after subparagraph (B) the following 
new subparagraph:
                    ``(C) any property (other than property described 
                in paragraph (3)) which is a qualified smart electric 
                meter or qualified smart electric grid system, or''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

SEC. 135. QUALIFIED GREEN BUILDING AND SUSTAINABLE DESIGN PROJECTS.

    (a) In General.--Paragraph (8) of section 142(l) is amended by 
striking ``September 30, 2009'' and inserting ``September 30, 2012''.
    (b) Treatment of Current Refunding Bonds.--Paragraph (9) of section 
142(l) is amended by striking ``October 1, 2009'' and inserting 
``October 1, 2012''.
    (c) Accountability.--The second sentence of section 701(d) of the 
American Jobs Creation Act of 2004 is amended by striking ``issuance,'' 
and inserting ``issuance of the last issue with respect to such 
project,''.

              TITLE II--EXTENSION OF TEMPORARY PROVISIONS

         Subtitle A--Extensions Primarily Affecting Individuals

SEC. 201. DEDUCTION FOR STATE AND LOCAL SALES TAXES.

    (a) In General.--Subparagraph (I) of section 164(b)(5) is amended 
by striking ``January 1, 2008'' and inserting ``January 1, 2010''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2007.

SEC. 202. DEDUCTION OF QUALIFIED TUITION AND RELATED EXPENSES.

    (a) In General.--Subsection (e) of section 222 is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2007.
    (c) Temporary Coordination With Hope and Lifetime Learning 
Credit.--In the case of any taxpayer for any taxable year beginning in 
2008 or 2009, no deduction shall be allowed under section 222 of the 
Internal Revenue Code of 1986 if--
            (1) the taxpayer's net Federal income tax reduction which 
        would be attributable to such deduction for such taxable year, 
        is less than
            (2) the credit which would be allowed to the taxpayer for 
        such taxable year under section 25A of such Code (determined 
        without regard to sections 25A(e) and 26 of such Code).

SEC. 203. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED INVESTMENT 
              COMPANIES.

    (a) Interest-Related Dividends.--Subparagraph (C) of section 
871(k)(1) (defining interest-related dividend) is amended by striking 
``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Short-Term Capital Gain Dividends.--Subparagraph (C) of section 
871(k)(2) (defining short-term capital gain dividend) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (c) Effective Date.--The amendments made by this section shall 
apply to dividends with respect to taxable years of regulated 
investment companies beginning after December 31, 2007.

SEC. 204. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT PLANS FOR 
              CHARITABLE PURPOSES.

    (a) In General.--Subparagraph (F) of section 408(d)(8) is amended 
by striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions made in taxable years beginning after December 31, 
2007.

SEC. 205. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND SECONDARY 
              SCHOOL TEACHERS.

    (a) In General.--Subparagraph (D) of section 62(a)(2) is amended by 
striking ``or 2007'' and inserting ``2007, 2008, or 2009''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2007.

SEC. 206. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES OF 
              NONRESIDENTS NOT CITIZENS.

    (a) In General.--Paragraph (3) of section 2105(d) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to decedents dying after December 31, 2007.

SEC. 207. QUALIFIED INVESTMENT ENTITIES.

    (a) In General.--Clause (ii) of section 897(h)(4)(A) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 2008, except that such amendment shall not 
apply to the application of withholding requirements with respect to 
any payment made on or before the date of the enactment of this Act.

SEC. 208. REAL PROPERTY TAX STANDARD DEDUCTION.

    (a) In General.--Subparagraph (C) of section 63(c)(1) is amended by 
inserting ``or 2009'' after ``2008''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2008.

         Subtitle B--Extensions Primarily Affecting Businesses

SEC. 221. RESEARCH CREDIT.

    (a) In General.--Subparagraph (B) of section 41(h)(1) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Computation of Credit for Taxable Year in Which Credit 
Terminates.--Paragraph (2) of section 41(h) is amended to read as 
follows:
            ``(2) Computation of credit for taxable year in which 
        credit terminates.--
                    ``(A) In general.--In the case of any taxable year 
                with respect to which this section applies to a number 
                of days which is less than the total number of days in 
                such taxable year, the applicable base amount with 
                respect to such taxable year shall be the amount which 
                bears the same ratio to such applicable amount 
                (determined without regard to this paragraph) as the 
                number of days in such taxable year to which this 
                section applies bears to the total number of days in 
                such taxable year.
                    ``(B) Applicable base amount.--For purposes of 
                subparagraph (A), the term `applicable base amount' 
                means, with respect to any taxable year--
                            ``(i) except as otherwise provided in this 
                        subparagraph, the base amount for the taxable 
                        year,
                            ``(ii) in the case of a taxable year with 
                        respect to which an election under subsection 
                        (c)(4) (relating to election of alternative 
                        incremental credit) is in effect, the average 
                        described in subsection (c)(1)(B) for the 
                        taxable year, and
                            ``(iii) in the case of a taxable year with 
                        respect to which an election under subsection 
                        (c)(5) (relating to election of alternative 
                        simplified credit) is in effect, the average 
                        qualified research expenses for the 3 taxable 
                        years preceding the taxable year.''.
    (c) Conforming Amendment.--Subparagraph (D) of section 45C(b)(1) is 
amended by striking ``December 31, 2007'' and inserting ``December 31, 
2009''.
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to amounts paid or 
        incurred after December 31, 2007.
            (2) Computation of credit for taxable year in which credit 
        begins.--The amendment made by subsection (b) shall apply to 
        taxable years beginning after December 31, 2007.

SEC. 222. INDIAN EMPLOYMENT CREDIT.

    (a) In General.--Subsection (f) of section 45A is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2007.

SEC. 223. NEW MARKETS TAX CREDIT.

    Subparagraph (D) of section 45D(f)(1) is amended by striking ``and 
2008'' and inserting ``2008, and 2009''.

SEC. 224. RAILROAD TRACK MAINTENANCE.

    (a) In General.--Subsection (f) of section 45G is amended by 
striking ``January 1, 2008'' and inserting ``January 1, 2010''.
    (b) Effective Date.--The amendment made by this section shall apply 
to expenditures paid or incurred during taxable years beginning after 
December 31, 2007.

SEC. 225. FIFTEEN-YEAR STRAIGHT-LINE COST RECOVERY FOR QUALIFIED 
              LEASEHOLD IMPROVEMENTS AND QUALIFIED RESTAURANT PROPERTY.

    (a) In General.--Clauses (iv) and (v) of section 168(e)(3)(E) are 
each amended by striking ``January 1, 2008'' and inserting ``January 1, 
2010''.
    (b) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2007.

SEC. 226. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS RACING TRACK 
              FACILITY.

    (a) In General.--Subparagraph (D) of section 168(i)(15) is amended 
by striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2007.

SEC. 227. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON INDIAN 
              RESERVATION.

    (a) In General.--Paragraph (8) of section 168(j) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2007.

SEC. 228. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.

    (a) In General.--Subsection (h) of section 198 is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to expenditures paid or incurred after December 31, 2007.

SEC. 229. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME ATTRIBUTABLE TO 
              DOMESTIC PRODUCTION ACTIVITIES IN PUERTO RICO.

    (a) In General.--Subparagraph (C) of section 199(d)(8) is amended--
            (1) by striking ``first 2 taxable years'' and inserting 
        ``first 4 taxable years'', and
            (2) by striking ``January 1, 2008'' and inserting ``January 
        1, 2010''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.

SEC. 230. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS TO 
              CONTROLLING EXEMPT ORGANIZATIONS.

    (a) In General.--Clause (iv) of section 512(b)(13)(E) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to payments received or accrued after December 31, 2007.

SEC. 231. QUALIFIED ZONE ACADEMY BONDS.

    (a) In General.--Subpart I of part IV of subchapter A of chapter 1 
is amended by adding at the end the following new section:

``SEC. 54C. QUALIFIED ZONE ACADEMY BONDS.

    ``(a) Qualified Zone Academy Bonds.--For purposes of this 
subchapter, the term `qualified zone academy bond' means any bond 
issued as part of an issue if--
            ``(1) 100 percent of the available project proceeds of such 
        issue are to be used for a qualified purpose with respect to a 
        qualified zone academy established by an eligible local 
        education agency,
            ``(2) the bond is issued by a State or local government 
        within the jurisdiction of which such academy is located, and
            ``(3) the issuer--
                    ``(A) designates such bond for purposes of this 
                section,
                    ``(B) certifies that it has written assurances that 
                the private business contribution requirement of 
                subsection (b) will be met with respect to such 
                academy, and
                    ``(C) certifies that it has the written approval of 
                the eligible local education agency for such bond 
                issuance.
    ``(b)  Private Business Contribution Requirement.--For purposes of 
subsection (a), the private business contribution requirement of this 
subsection is met with respect to any issue if the eligible local 
education agency that established the qualified zone academy has 
written commitments from private entities to make qualified 
contributions having a present value (as of the date of issuance of the 
issue) of not less than 10 percent of the proceeds of the issue.
    ``(c) Limitation on Amount of Bonds Designated.--
            ``(1) National limitation.--There is a national zone 
        academy bond limitation for each calendar year. Such limitation 
        is $400,000,000 for 2008 and 2009, and, except as provided in 
        paragraph (4), zero thereafter.
            ``(2) Allocation of limitation.--The national zone academy 
        bond limitation for a calendar year shall be allocated by the 
        Secretary among the States on the basis of their respective 
        populations of individuals below the poverty line (as defined 
        by the Office of Management and Budget). The limitation amount 
        allocated to a State under the preceding sentence shall be 
        allocated by the State education agency to qualified zone 
        academies within such State.
            ``(3) Designation subject to limitation amount.--The 
        maximum aggregate face amount of bonds issued during any 
        calendar year which may be designated under subsection (a) with 
        respect to any qualified zone academy shall not exceed the 
        limitation amount allocated to such academy under paragraph (2) 
        for such calendar year.
            ``(4) Carryover of unused limitation.--
                    ``(A) In general.--If for any calendar year--
                            ``(i) the limitation amount for any State, 
                        exceeds
                            ``(ii) the amount of bonds issued during 
                        such year which are designated under subsection 
                        (a) with respect to qualified zone academies 
                        within such State,
                the limitation amount for such State for the following 
                calendar year shall be increased by the amount of such 
                excess.
                    ``(B) Limitation on carryover.--Any carryforward of 
                a limitation amount may be carried only to the first 2 
                years following the unused limitation year. For 
                purposes of the preceding sentence, a limitation amount 
                shall be treated as used on a first-in first-out basis.
                    ``(C) Coordination with section 1397e.--Any 
                carryover determined under section 1397E(e)(4) 
                (relating to carryover of unused limitation) with 
                respect to any State to calendar year 2008 shall be 
                treated for purposes of this section as a carryover 
                with respect to such State for such calendar year under 
                subparagraph (A), and the limitation of subparagraph 
                (B) shall apply to such carryover taking into account 
                the calendar years to which such carryover relates.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Qualified zone academy.--The term `qualified zone 
        academy' means any public school (or academic program within a 
        public school) which is established by and operated under the 
        supervision of an eligible local education agency to provide 
        education or training below the postsecondary level if--
                    ``(A) such public school or program (as the case 
                may be) is designed in cooperation with business to 
                enhance the academic curriculum, increase graduation 
                and employment rates, and better prepare students for 
                the rigors of college and the increasingly complex 
                workforce,
                    ``(B) students in such public school or program (as 
                the case may be) will be subject to the same academic 
                standards and assessments as other students educated by 
                the eligible local education agency,
                    ``(C) the comprehensive education plan of such 
                public school or program is approved by the eligible 
                local education agency, and
                    ``(D)(i) such public school is located in an 
                empowerment zone or enterprise community (including any 
                such zone or community designated after the date of the 
                enactment of this section), or
                    ``(ii) there is a reasonable expectation (as of the 
                date of issuance of the bonds) that at least 35 percent 
                of the students attending such school or participating 
                in such program (as the case may be) will be eligible 
                for free or reduced-cost lunches under the school lunch 
                program established under the National School Lunch 
                Act.
            ``(2) Eligible local education agency.--For purposes of 
        this section, the term `eligible local education agency' means 
        any local educational agency as defined in section 9101 of the 
        Elementary and Secondary Education Act of 1965.
            ``(3) Qualified purpose.--The term `qualified purpose' 
        means, with respect to any qualified zone academy--
                    ``(A) rehabilitating or repairing the public school 
                facility in which the academy is established,
                    ``(B) providing equipment for use at such academy,
                    ``(C) developing course materials for education to 
                be provided at such academy, and
                    ``(D) training teachers and other school personnel 
                in such academy.
            ``(4) Qualified contributions.--The term `qualified 
        contribution' means any contribution (of a type and quality 
        acceptable to the eligible local education agency) of--
                    ``(A) equipment for use in the qualified zone 
                academy (including state-of-the-art technology and 
                vocational equipment),
                    ``(B) technical assistance in developing curriculum 
                or in training teachers in order to promote appropriate 
                market driven technology in the classroom,
                    ``(C) services of employees as volunteer mentors,
                    ``(D) internships, field trips, or other 
                educational opportunities outside the academy for 
                students, or
                    ``(E) any other property or service specified by 
                the eligible local education agency.''.
    (b) Conforming Amendments.--
            (1) Paragraph (1) of section 54A(d) is amended to read as 
        follows:
            ``(1) Qualified tax credit bond.--The term `qualified tax 
        credit bond' means--
                    ``(A) a qualified forestry conservation bond, or
                    ``(B) a qualified zone academy bond,
        which is part of an issue that meets the requirements of 
        paragraphs (2), (3), (4), (5), and (6).''.
            (2) Subparagraph (C) of section 54A(d)(2) is amended to 
        read as follows:
                    ``(C) Qualified purpose.--For purposes of this 
                paragraph, the term `qualified purpose' means--
                            ``(i) in the case of a qualified forestry 
                        conservation bond, a purpose specified in 
                        section 54B(e), and
                            ``(ii) in the case of a qualified zone 
                        academy bond, a purpose specified in section 
                        54C(a)(1).''.
            (3) Section 1397E is amended by adding at the end the 
        following new subsection:
    ``(m) Termination.--This section shall not apply to any obligation 
issued after the date of the enactment of this subsection.''.
            (4) 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:

``Sec. 54C. Qualified zone academy bonds.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.

SEC. 232. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF COLUMBIA.

    (a) Designation of Zone.--
            (1) In general.--Subsection (f) of section 1400 is amended 
        by striking ``2007'' both places it appears and inserting 
        ``2009''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to periods beginning after December 31, 2007.
    (b) Tax-Exempt Economic Development Bonds.--
            (1) In general.--Subsection (b) of section 1400A is amended 
        by striking ``2007'' and inserting ``2009''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to bonds issued after December 31, 2007.
    (c) Zero Percent Capital Gains Rate.--
            (1) In general.--Subsection (b) of section 1400B is amended 
        by striking ``2008'' each place it appears and inserting 
        ``2010''.
            (2) Conforming amendments.--
                    (A) Section 1400B(e)(2) is amended--
                            (i) by striking ``2012'' and inserting 
                        ``2014'', and
                            (ii) by striking ``2012'' in the heading 
                        thereof and inserting ``2014''.
                    (B) Section 1400B(g)(2) is amended by striking 
                ``2012'' and inserting ``2014''.
                    (C) Section 1400F(d) is amended by striking 
                ``2012'' and inserting ``2014''.
            (3) Effective dates.--
                    (A) Extension.--The amendments made by paragraph 
                (1) shall apply to acquisitions after December 31, 
                2007.
                    (B) Conforming amendments.--The amendments made by 
                paragraph (2) shall take effect on the date of the 
                enactment of this Act.
    (d) First-Time Homebuyer Credit.--
            (1) In general.--Subsection (i) of section 1400C is amended 
        by striking ``2008'' and inserting ``2010''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to property purchased after December 31, 2007.

SEC. 233. ECONOMIC DEVELOPMENT CREDIT FOR AMERICAN SAMOA.

    (a) In General.--Subsection (d) of section 119 of division A of the 
Tax Relief and Health Care Act of 2006 is amended--
            (1) by striking ``first two taxable years'' and inserting 
        ``first 4 taxable years'', and
            (2) by striking ``January 1, 2008'' and inserting ``January 
        1, 2010''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2007.

SEC. 234. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD 
              INVENTORY.

    (a) In General.--Clause (iv) of section 170(e)(3)(C) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions made after December 31, 2007.

SEC. 235. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF BOOK 
              INVENTORY TO PUBLIC SCHOOLS.

    (a) In General.--Clause (iv) of section 170(e)(3)(D) is amended by 
striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions made after December 31, 2007.

SEC. 236. ENHANCED DEDUCTION FOR QUALIFIED COMPUTER CONTRIBUTIONS.

    (a) In General.--Subparagraph (G) of section 170(e)(6) is amended 
by striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions made during taxable years beginning after December 31, 
2007.

SEC. 237. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING CHARITABLE 
              CONTRIBUTIONS OF PROPERTY.

    (a) In General.--The last sentence of section 1367(a)(2) is amended 
by striking ``December 31, 2007'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions made in taxable years beginning after December 31, 
2007.

SEC. 238. WORK OPPORTUNITY TAX CREDIT FOR HURRICANE KATRINA EMPLOYEES.

    (a) In General.--Paragraph (1) of section 201(b) of the Katrina 
Emergency Tax Relief Act of 2005 is amended by striking ``2-year'' and 
inserting ``4-year''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to individuals hired after August 27, 2007.

SEC. 239. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME.

    (a) Exempt Insurance Income.--Paragraph (10) of section 953(e) 
(relating to application) is amended--
            (1) by striking ``January 1, 2009'' and inserting ``January 
        1, 2010'', and
            (2) by striking ``December 31, 2008'' and inserting 
        ``December 31, 2009''.
    (b) Exception to Treatment as Foreign Personal Holding Company 
Income.--Paragraph (9) of section 954(h) (relating to application) is 
amended by striking ``January 1, 2009'' and inserting ``January 1, 
2010''.

SEC. 240. LOOK-THRU RULE FOR RELATED CONTROLLED FOREIGN CORPORATIONS.

    (a) In General.--Subparagraph (C) of section 954(c)(6) (relating to 
application) is amended by striking ``January 1, 2009'' and inserting 
``January 1, 2010''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years of foreign corporations beginning after December 31, 
2008, and to taxable years of United States shareholders with or within 
which such taxable years of foreign corporations end.

SEC. 241. EXPENSING FOR CERTAIN QUALIFIED FILM AND TELEVISION 
              PRODUCTIONS.

    (a) In General.--Subsection (f) of section 181 is amended by 
striking ``December 31, 2008'' and inserting ``December 31, 2009''.
    (b) Effective Date.--The amendment made by this section shall apply 
to productions commencing after December 31, 2008.

                      Subtitle C--Other Extensions

SEC. 251. AUTHORITY TO DISCLOSE INFORMATION RELATED TO TERRORIST 
              ACTIVITIES MADE PERMANENT.

    (a) In General.--Subparagraph (C) of section 6103(i)(3) is amended 
by striking clause (iv).
    (b) Disclosure on Request.--Paragraph (7) of section 6103(i) is 
amended by striking subparagraph (E).
    (c) Effective Date.--The amendments made by this section shall 
apply to disclosures after the date of the enactment of this Act.

SEC. 252. AUTHORITY FOR UNDERCOVER OPERATIONS MADE PERMANENT.

    (a) In General.--Subsection (c) of section 7608 is amended by 
striking paragraph (6).
    (b) Effective Date.--The amendment made by this section shall take 
effect on January 1, 2008.

SEC. 253. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX TO PUERTO 
              RICO AND THE VIRGIN ISLANDS.

    (a) In General.--Paragraph (1) of section 7652(f) is amended by 
striking ``January 1, 2008'' and inserting ``January 1, 2010''.
    (b) Effective Date.--The amendment made by this section shall apply 
to distilled spirits brought into the United States after December 31, 
2007.

         TITLE III--ADDITIONAL TAX RELIEF AND OTHER PROVISIONS

SEC. 301. REFUNDABLE CHILD CREDIT.

    (a) Modification of Threshold Amount.--Clause (i) of section 
24(d)(1)(B) is amended by inserting ``($8,500 in the case of taxable 
years beginning in 2009)'' after ``$10,000''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2008.

SEC. 302. PROVISIONS RELATED TO FILM AND TELEVISION PRODUCTIONS.

    (a) Modification of Limitation on Expensing.--Subparagraph (A) of 
section 181(a)(2) is amended to read as follows:
                    ``(A) In general.--Paragraph (1) shall not apply to 
                so much of the aggregate cost of any qualified film or 
                television production as exceeds $15,000,000.''.
    (b) Modifications to Deduction for Domestic Activities.--
            (1) Determination of w-2 wages.--Paragraph (2) of section 
        199(b) is amended by adding at the end the following new 
        subparagraph:
                    ``(D) Special rule for qualified film.--In the case 
                of a qualified film, such term shall include 
                compensation for services performed in the United 
                States by actors, production personnel, directors, and 
                producers.''.
            (2) Definition of qualified film.--Paragraph (6) of section 
        199(c) is amended by adding at the end the following: ``A 
        qualified film shall include any copyrights, trademarks, or 
        other intangibles with respect to such film. The methods and 
        means of distributing a qualified film shall not affect the 
        availability of the deduction under this section.''.
            (3) Partnerships.--Subparagraph (A) of section 199(d)(1) is 
        amended by striking ``and'' at the end of clause (ii), by 
        striking the period at the end of clause (iii) and inserting 
        ``, and'', and by adding at the end the following new clause:
                            ``(iv) in the case of each partner of a 
                        partnership, or shareholder of an S 
                        corporation, who owns (directly or indirectly) 
                        at least 20 percent of the capital interests in 
                        such partnership or of the stock of such S 
                        corporation--
                                    ``(I) such partner or shareholder 
                                shall be treated as having engaged 
                                directly in any film produced by such 
                                partnership or S corporation, and
                                    ``(II) such partnership or S 
                                corporation shall be treated as having 
                                engaged directly in any film produced 
                                by such partner or shareholder.''.
    (c) Conforming Amendment.--Section 181(d)(3)(A) is amended by 
striking ``actors'' and all that follows and inserting ``actors, 
production personnel, directors, and producers.''.
    (d) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        taxable years beginning after December 31, 2007.
            (2) Expensing.--The amendments made by subsection (a) shall 
        apply to qualified film and television productions commencing 
        after December 31, 2007.

SEC. 303. EXEMPTION FROM EXCISE TAX FOR CERTAIN ARROWS DESIGNED FOR USE 
              BY CHILDREN.

    (a) In General.--Paragraph (2) of section 4161(b) (relating to 
arrows) is amended by redesignating subparagraph (B) as subparagraph 
(C) and by inserting after subparagraph (A) the following new 
subparagraph:
                    ``(B) Exemption for certain arrow shafts.--
                Subparagraph (A) shall not apply to any shaft measuring 
                5/16 of an inch or less in diameter and consisting of 
                either--
                            ``(i) all fiberglass and hollow, or
                            ``(ii) all natural wood,
                with no laminations or artificial means of enhancing 
                the spine of such shaft (whether sold separately or 
                incorporated as part of a finished or unfinished 
                product) of a type used in the manufacture of any arrow 
                which after its assembly is not suitable for use with a 
                bow described in paragraph (1)(A).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to shafts first sold after the date of enactment of this Act.

SEC. 304. MODIFICATION OF PENALTY ON UNDERSTATEMENT OF TAXPAYER'S 
              LIABILITY BY TAX RETURN PREPARER.

    (a) In General.--Subsection (a) of section 6694 (relating to 
understatement due to unreasonable positions) is amended to read as 
follows:
    ``(a) Understatement Due to Unreasonable Positions.--
            ``(1) In general.--If a tax return preparer--
                    ``(A) prepares any return or claim of refund with 
                respect to which any part of an understatement of 
                liability is due to a position described in paragraph 
                (2), and
                    ``(B) knew (or reasonably should have known) of the 
                position,
        such tax return preparer shall pay a penalty with respect to 
        each such return or claim in an amount equal to the greater of 
        $1,000 or 50 percent of the income derived (or to be derived) 
        by the tax return preparer with respect to the return or claim.
            ``(2) Unreasonable position.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, a position is described in this 
                paragraph unless there is or was substantial authority 
                for the position.
                    ``(B) Disclosed positions.--If the position was 
                disclosed as provided in section 6662(d)(2)(B)(ii)(I) 
                and is not a position to which subparagraph (C) 
                applies, the position is described in this paragraph 
                unless there is a reasonable basis for the position.
                    ``(C) Reportable transactions.--If the position is 
                with respect to a reportable transaction to which 
                section 6662A applies, the position is described in 
                this paragraph unless it is reasonable to believe that 
                the position would more likely than not be sustained on 
                its merits.
            ``(3) Reasonable cause exception.--No penalty shall be 
        imposed under this subsection if it is shown that there is 
        reasonable cause for the understatement and the tax return 
        preparer acted in good faith.''.
    (b) Effective Date.--The amendment made by this section shall 
apply--
            (1) in the case of a position other than a position 
        described in subparagraph (C) of section 6694(a)(2) of the 
        Internal Revenue Code of 1986 (as amended by this section), to 
        returns prepared after May 25, 2007, and
            (2) in the case of a position described in such 
        subparagraph (C), to returns prepared for taxable years 
        beginning after the date of the enactment of this Act.

                      TITLE IV--REVENUE PROVISIONS

SEC. 401. LIMITATION OF DEDUCTION FOR INCOME ATTRIBUTABLE TO DOMESTIC 
              PRODUCTION OF OIL, GAS, OR PRIMARY PRODUCTS THEREOF.

    (a) In General.--Section 199(d) is amended by redesignating 
paragraph (9) as paragraph (10) and by inserting after paragraph (8) 
the following new paragraph:
            ``(9) Special rule for taxpayers with oil related qualified 
        production activities income.--
                    ``(A) In general.--If a taxpayer has oil related 
                qualified production activities income for any taxable 
                year beginning after 2009, the amount otherwise 
                allowable as a deduction under subsection (a) shall be 
                reduced by 3 percent of the least of--
                            ``(i) the oil related qualified production 
                        activities income of the taxpayer for the 
                        taxable year,
                            ``(ii) the qualified production activities 
                        income of the taxpayer for the taxable year, or
                            ``(iii) taxable income (determined without 
                        regard to this section).
                    ``(B) Oil related qualified production activities 
                income.--For purposes of this paragraph, the term `oil 
                related qualified production activities income' 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.
                    ``(C) Primary product.--For purposes of this 
                paragraph, the term `primary product' has the same 
                meaning as when used in section 927(a)(2)(C), as in 
                effect before its repeal.''.
    (b) Conforming Amendment.--Section 199(d)(2) (relating to 
application to individuals) is amended by striking ``subsection 
(a)(1)(B)'' and inserting ``subsections (a)(1)(B) and (d)(9)(A)(iii)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.

SEC. 402. ELIMINATION OF THE DIFFERENT TREATMENT OF FOREIGN OIL AND GAS 
              EXTRACTION INCOME AND FOREIGN OIL RELATED INCOME FOR 
              PURPOSES OF THE FOREIGN TAX CREDIT.

    (a) In General.--Subsections (a) and (b) of section 907 (relating 
to special rules in case of foreign oil and gas income) are amended to 
read as follows:
    ``(a) Reduction in Amount Allowed as Foreign Tax Under Section 
901.--In applying section 901, the amount of any foreign oil and gas 
taxes paid or accrued (or deemed to have been paid) during the taxable 
year which would (but for this subsection) be taken into account for 
purposes of section 901 shall be reduced by the amount (if any) by 
which the amount of such taxes exceeds the product of--
            ``(1) the amount of the combined foreign oil and gas income 
        for the taxable year,
            ``(2) multiplied by--
                    ``(A) in the case of a corporation, the percentage 
                which is equal to the highest rate of tax specified 
                under section 11(b), or
                    ``(B) in the case of an individual, a fraction the 
                numerator of which is the tax against which the credit 
                under section 901(a) is taken and the denominator of 
                which is the taxpayer's entire taxable income.
    ``(b) Combined Foreign Oil and Gas Income; Foreign Oil and Gas 
Taxes.--For purposes of this section--
            ``(1) Combined foreign oil and gas income.--The term 
        `combined foreign oil and gas income' means, with respect to 
        any taxable year, the sum of--
                    ``(A) foreign oil and gas extraction income, and
                    ``(B) foreign oil related income.
            ``(2) Foreign oil and gas taxes.--The term `foreign oil and 
        gas taxes' means, with respect to any taxable year, the sum 
        of--
                    ``(A) oil and gas extraction taxes, and
                    ``(B) any income, war profits, and excess profits 
                taxes paid or accrued (or deemed to have been paid or 
                accrued under section 902 or 960) during the taxable 
                year with respect to foreign oil related income 
                (determined without regard to subsection (c)(4)) or 
                loss which would be taken into account for purposes of 
                section 901 without regard to this section.''.
    (b) Recapture of Foreign Oil and Gas Losses.--Paragraph (4) of 
section 907(c) (relating to recapture of foreign oil and gas extraction 
losses by recharacterizing later extraction income) is amended to read 
as follows:
            ``(4) Recapture of foreign oil and gas losses by 
        recharacterizing later combined foreign oil and gas income.--
                    ``(A) In general.--The combined foreign oil and gas 
                income of a taxpayer for a taxable year (determined 
                without regard to this paragraph) shall be reduced--
                            ``(i) first by the amount determined under 
                        subparagraph (B), and
                            ``(ii) then by the amount determined under 
                        subparagraph (C).
                The aggregate amount of such reductions shall be 
                treated as income (from sources without the United 
                States) which is not combined foreign oil and gas 
                income.
                    ``(B) Reduction for pre-2009 foreign oil extraction 
                losses.--The reduction under this paragraph shall be 
                equal to the lesser of--
                            ``(i) the foreign oil and gas extraction 
                        income of the taxpayer for the taxable year 
                        (determined without regard to this paragraph), 
                        or
                            ``(ii) the excess of--
                                    ``(I) the aggregate amount of 
                                foreign oil extraction losses for 
                                preceding taxable years beginning after 
                                December 31, 1982, and before January 
                                1, 2009, over
                                    ``(II) so much of such aggregate 
                                amount as was recharacterized under 
                                this paragraph (as in effect before and 
                                after the date of the enactment of the 
                                Renewable Energy and Job Creation Tax 
                                Act of 2008) for preceding taxable 
                                years beginning after December 31, 
                                1982.
                    ``(C) Reduction for post-2008 foreign oil and gas 
                losses.--The reduction under this paragraph shall be 
                equal to the lesser of--
                            ``(i) the combined foreign oil and gas 
                        income of the taxpayer for the taxable year 
                        (determined without regard to this paragraph), 
                        reduced by an amount equal to the reduction 
                        under subparagraph (A) for the taxable year, or
                            ``(ii) the excess of--
                                    ``(I) the aggregate amount of 
                                foreign oil and gas losses for 
                                preceding taxable years beginning after 
                                December 31, 2008, over
                                    ``(II) so much of such aggregate 
                                amount as was recharacterized under 
                                this paragraph for preceding taxable 
                                years beginning after December 31, 
                                2008.
                    ``(D) Foreign oil and gas loss defined.--
                            ``(i) In general.--For purposes of this 
                        paragraph, the term `foreign oil and gas loss' 
                        means the amount by which--
                                    ``(I) the gross income for the 
                                taxable year from sources without the 
                                United States and its possessions 
                                (whether or not the taxpayer chooses 
                                the benefits of this subpart for such 
                                taxable year) taken into account in 
                                determining the combined foreign oil 
                                and gas income for such year, is 
                                exceeded by
                                    ``(II) the sum of the deductions 
                                properly apportioned or allocated 
                                thereto.
                            ``(ii) Net operating loss deduction not 
                        taken into account.--For purposes of clause 
                        (i), the net operating loss deduction allowable 
                        for the taxable year under section 172(a) shall 
                        not be taken into account.
                            ``(iii) Expropriation and casualty losses 
                        not taken into account.--For purposes of clause 
                        (i), there shall not be taken into account--
                                    ``(I) any foreign expropriation 
                                loss (as defined in section 172(h) (as 
                                in effect on the day before the date of 
                                the enactment of the Revenue 
                                Reconciliation Act of 1990)) for the 
                                taxable year, or
                                    ``(II) any loss for the taxable 
                                year which arises from fire, storm, 
                                shipwreck, or other casualty, or from 
                                theft,
                        to the extent such loss is not compensated for 
                        by insurance or otherwise.
                            ``(iv) Foreign oil extraction loss.--For 
                        purposes of subparagraph (B)(ii)(I), foreign 
                        oil extraction losses shall be determined under 
                        this paragraph as in effect on the day before 
                        the date of the enactment of the Renewable 
                        Energy and Job Creation Tax Act of 2008.''.
    (c) Carryback and Carryover of Disallowed Credits.--Section 907(f) 
(relating to carryback and carryover of disallowed credits) is 
amended--
            (1) by striking ``oil and gas extraction taxes'' each place 
        it appears and inserting ``foreign oil and gas taxes'', and
            (2) by adding at the end the following new paragraph:
            ``(4) Transition rules for pre-2009 and 2009 disallowed 
        credits.--
                    ``(A) Pre-2009 credits.--In the case of any unused 
                credit year beginning before January 1, 2009, this 
                subsection shall be applied to any unused oil and gas 
                extraction taxes carried from such unused credit year 
                to a year beginning after December 31, 2008--
                            ``(i) by substituting `oil and gas 
                        extraction taxes' for `foreign oil and gas 
                        taxes' each place it appears in paragraphs (1), 
                        (2), and (3), and
                            ``(ii) by computing, for purposes of 
                        paragraph (2)(A), the limitation under 
                        subparagraph (A) for the year to which such 
                        taxes are carried by substituting `foreign oil 
                        and gas extraction income' for `foreign oil and 
                        gas income' in subsection (a).
                    ``(B) 2009 credits.--In the case of any unused 
                credit year beginning in 2009, the amendments made to 
                this subsection by the Renewable Energy and Job 
                Creation Tax Act of 2008 shall be treated as being in 
                effect for any preceding year beginning before January 
                1, 2009, solely for purposes of determining how much of 
                the unused foreign oil and gas taxes for such unused 
                credit year may be deemed paid or accrued in such 
                preceding year.''.
    (d) Conforming Amendment.--Section 6501(i) is amended by striking 
``oil and gas extraction taxes'' and inserting ``foreign oil and gas 
taxes''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.

SEC. 403. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES 
              TRANSACTIONS.

    (a) In General.--
            (1) Broker reporting for securities transactions.--Section 
        6045 is amended by adding at the end the following new 
        subsection:
    ``(g) Additional Information Required in the Case of Securities 
Transactions, etc.--
            ``(1) In general.--If a broker is otherwise required to 
        make a return under subsection (a) with respect to the gross 
        proceeds of the sale of a covered security, the broker shall 
        include in such return the information described in paragraph 
        (2).
            ``(2) Additional information required.--
                    ``(A) In general.--The information required under 
                paragraph (1) to be shown on a return with respect to a 
                covered security of a customer shall include the 
                customer's adjusted basis in such security and whether 
                any gain or loss with respect to such security is long-
                term or short-term (within the meaning of section 
                1222).
                    ``(B) Determination of adjusted basis.--For 
                purposes of subparagraph (A)--
                            ``(i) In general.--The customer's adjusted 
                        basis shall be determined--
                                    ``(I) in the case of any security 
                                (other than any stock for which an 
                                average basis method is permissible 
                                under section 1012), in accordance with 
                                the first-in first-out method unless 
                                the customer notifies the broker by 
                                means of making an adequate 
                                identification of the stock sold or 
                                transferred, and
                                    ``(II) in the case of any stock for 
                                which an average basis method is 
                                permissible under section 1012, in 
                                accordance with the broker's default 
                                method unless the customer notifies the 
                                broker that he elects another 
                                acceptable method under section 1012 
                                with respect to the account in which 
                                such stock is held.
                            ``(ii) Exception for wash sales.--Except as 
                        otherwise provided by the Secretary, the 
                        customer's adjusted basis shall be determined 
                        without regard to section 1091 (relating to 
                        loss from wash sales of stock or securities) 
                        unless the transactions occur in the same 
                        account with respect to identical securities.
            ``(3) Covered security.--For purposes of this subsection--
                    ``(A) In general.--The term `covered security' 
                means any specified security acquired on or after the 
                applicable date if such security--
                            ``(i) was acquired through a transaction in 
                        the account in which such security is held, or
                            ``(ii) was transferred to such account from 
                        an account in which such security was a covered 
                        security, but only if the broker received a 
                        statement under section 6045A with respect to 
                        the transfer.
                    ``(B) Specified security.--The term `specified 
                security' means--
                            ``(i) any share of stock in a corporation,
                            ``(ii) any note, bond, debenture, or other 
                        evidence of indebtedness,
                            ``(iii) any commodity, or contract or 
                        derivative with respect to such commodity, if 
                        the Secretary determines that adjusted basis 
                        reporting is appropriate for purposes of this 
                        subsection, and
                            ``(iv) any other financial instrument with 
                        respect to which the Secretary determines that 
                        adjusted basis reporting is appropriate for 
                        purposes of this subsection.
                    ``(C) Applicable date.--The term `applicable date' 
                means--
                            ``(i) January 1, 2011, in the case of any 
                        specified security which is stock in a 
                        corporation (other than any stock described in 
                        clause (ii)),
                            ``(ii) January 1, 2012, in the case of any 
                        stock for which an average basis method is 
                        permissible under section 1012, and
                            ``(iii) January 1, 2013, or such later date 
                        determined by the Secretary in the case of any 
                        other specified security.
            ``(4) Treatment of s corporations.--In the case of the sale 
        of a covered security acquired by an S corporation (other than 
        a financial institution) after December 31, 2011, such S 
        corporation shall be treated in the same manner as a 
        partnership for purposes of this section.
            ``(5) Special rules for short sales.--In the case of a 
        short sale, reporting under this section shall be made for the 
        year in which such sale is closed.''.
            (2) Broker information required with respect to options.--
        Section 6045, as amended by subsection (a), is amended by 
        adding at the end the following new subsection:
    ``(h) Application to Options on Securities.--
            ``(1) Exercise of option.--For purposes of this section, if 
        a covered security is acquired or disposed of pursuant to the 
        exercise of an option that was granted or acquired in the same 
        account as the covered security, the amount received with 
        respect to the grant or paid with respect to the acquisition of 
        such option shall be treated as an adjustment to gross proceeds 
        or as an adjustment to basis, as the case may be.
            ``(2) Lapse or closing transaction.--In the case of the 
        lapse (or closing transaction (as defined in section 
        1234(b)(2)(A))) of an option on a specified security or the 
        exercise of a cash-settled option on a specified security, 
        reporting under subsections (a) and (g) with respect to such 
        option shall be made for the calendar year which includes the 
        date of such lapse, closing transaction, or exercise.
            ``(3) Prospective application.--Paragraphs (1) and (2) 
        shall not apply to any option which is granted or acquired 
        before January 1, 2013.
            ``(4) Definitions.--For purposes of this subsection, the 
        terms `covered security' and `specified security' shall have 
        the meanings given such terms in subsection (g)(3).''.
            (3) Extension of period for statements sent to customers.--
                    (A) In general.--Subsection (b) of section 6045 is 
                amended by striking ``January 31'' and inserting 
                ``February 15''.
                    (B) Statements related to substitute payments.--
                Subsection (d) of section 6045 is amended--
                            (i) by striking ``at such time and'', and
                            (ii) by inserting after ``other item.'' the 
                        following new sentence: ``The written statement 
                        required under the preceding sentence shall be 
                        furnished on or before February 15 of the year 
                        following the calendar year in which the 
                        payment was made.''.
                    (C) Other statements.--Subsection (b) of section 
                6045 is amended by adding at the end the following: 
                ``In the case of a consolidated reporting statement (as 
                defined in regulations) with respect to any customer, 
                any statement which would otherwise be required to be 
                furnished on or before January 31 of a calendar year 
                with respect to any item reportable to the taxpayer 
                shall instead be required to be furnished on or before 
                February 15 of such calendar year if furnished with 
                such consolidated reporting statement.''.
    (b) Determination of Basis of Certain Securities on Account by 
Account or Average Basis Method.--Section 1012 is amended--
            (1) by striking ``The basis of property'' and inserting the 
        following:
    ``(a) In General.--The basis of property'',
            (2) by striking ``The cost of real property'' and inserting 
        the following:
    ``(b) Special Rule for Apportioned Real Estate Taxes.--The cost of 
real property'', and
            (3) by adding at the end the following new subsections:
    ``(c) Determinations by Account.--
            ``(1) In general.--In the case of the sale, exchange, or 
        other disposition of a specified security on or after the 
        applicable date, the conventions prescribed by regulations 
        under this section shall be applied on an account by account 
        basis.
            ``(2) Application to certain regulated investment 
        companies.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), any stock for which an average basis 
                method is permissible under section 1012 which is 
                acquired before January 1, 2012, shall be treated as a 
                separate account from any such stock acquired on or 
                after such date.
                    ``(B) Election for treatment as single account.--If 
                a regulated investment company elects to have this 
                subparagraph apply with respect to one or more of its 
                stockholders--
                            ``(i) subparagraph (A) shall not apply with 
                        respect to any stock in such company held by 
                        such stockholders, and
                            ``(ii) all stock in such company which is 
                        held by such stockholders shall be treated as 
                        covered securities described in section 
                        6045(g)(3) without regard to the date of the 
                        acquisition of such stock.
                A rule similar to the rule of the preceding sentence 
                shall apply with respect to a broker holding such stock 
                as a nominee.
            ``(3) Definitions.--For purposes of this section, the terms 
        `specified security' and `applicable date' shall have the 
        meaning given such terms in section 6045(g).
    ``(d) Average Basis for Stock Acquired Pursuant to a Periodic Stock 
Investment Plan.--
            ``(1) In general.--In the case of any stock acquired after 
        December 31, 2010, in connection with a periodic stock 
        investment plan, the basis of such stock while held as part of 
        such plan shall be determined using one of the methods which 
        may be used for determining the basis of stock in a regulated 
        investment company.
            ``(2) Treatment after transfer.--In the case of the 
        transfer to another account of stock to which paragraph (1) 
        applies, such stock shall have a cost basis in such other 
        account equal to its basis in the periodic stock investment 
        plan immediately before such transfer (properly adjusted for 
        any fees or other charges taken into account in connection with 
        such transfer).
            ``(3) Separate accounts; election for treatment as single 
        account.--Rules similar to the rules of subsection (c)(2) shall 
        apply for purposes of this subsection.
            ``(4) Periodic stock investment plan.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `periodic stock 
                investment plan' means--
                            ``(i) any stock purchase plan, and
                            ``(ii) any dividend reinvestment plan.
                    ``(B) Stock purchase plan.--The term `stock 
                purchase plan' means any arrangement under which 
                identical stock is periodically purchased pursuant to a 
                written plan.
                    ``(C) Dividend reinvestment plan.--
                            ``(i) In general.--The term `dividend 
                        reinvestment plan' means any arrangement under 
                        which dividends on any stock are reinvested in 
                        stock identical to the stock with respect to 
                        which the dividends are paid.
                            ``(ii) Initial stock acquisition treated as 
                        acquired in connection with plan.--Stock shall 
                        be treated as acquired in connection with a 
                        dividend reinvestment plan if such stock is 
                        acquired pursuant to such plan or if the 
                        dividends paid on such stock are subject to 
                        such plan.''.
    (c) Information by Transferors to Aid Brokers.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61 is amended by inserting after section 6045 the 
        following new section:

``SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH TRANSFERS OF 
              COVERED SECURITIES TO BROKERS.

    ``(a) Furnishing of Information.--Every applicable person which 
transfers to a broker (as defined in section 6045(c)(1)) a security 
which is a covered security (as defined in section 6045(g)(3)) in the 
hands of such applicable person shall furnish to such broker a written 
statement in such manner and setting forth such information as the 
Secretary may by regulations prescribe for purposes of enabling such 
broker to meet the requirements of section 6045(g).
    ``(b) Applicable Person.--For purposes of subsection (a), the term 
`applicable person' means--
            ``(1) any broker (as defined in section 6045(c)(1)), and
            ``(2) any other person as provided by the Secretary in 
        regulations.
    ``(c) Time for Furnishing Statement.--Except as otherwise provided 
by the Secretary, any statement required by subsection (a) shall be 
furnished not later than 15 days after the date of the transfer 
described in such subsection.''.
            (2) Assessable penalties.--Paragraph (2) of section 6724(d) 
        is amended by redesignating subparagraphs (I) through (DD) as 
        subparagraphs (J) through (EE), respectively, and by inserting 
        after subparagraph (H) the following new subparagraph:
                    ``(I) section 6045A (relating to information 
                required in connection with transfers of covered 
                securities to brokers),''.
            (3) Clerical amendment.--The table of sections for subpart 
        B of part III of subchapter A of chapter 61 is amended by 
        inserting after the item relating to section 6045 the following 
        new item:

``Sec. 6045A. Information required in connection with transfers of 
                            covered securities to brokers.''.
    (d) Additional Issuer Information To Aid Brokers.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61, as amended by subsection (b), is amended by 
        inserting after section 6045A the following new section:

``SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF SPECIFIED 
              SECURITIES.

    ``(a) In General.--According to the forms or regulations prescribed 
by the Secretary, any issuer of a specified security shall make a 
return setting forth--
            ``(1) a description of any organizational action which 
        affects the basis of such specified security of such issuer,
            ``(2) the quantitative effect on the basis of such 
        specified security resulting from such action, and
            ``(3) such other information as the Secretary may 
        prescribe.
    ``(b) Time for Filing Return.--Any return required by subsection 
(a) shall be filed not later than the earlier of--
            ``(1) 45 days after the date of the action described in 
        subsection (a), or
            ``(2) January 15 of the year following the calendar year 
        during which such action occurred.
    ``(c) Statements To Be Furnished to Holders of Specified Securities 
or Their Nominees.--According to the forms or regulations prescribed by 
the Secretary, every person required to make a return under subsection 
(a) with respect to a specified security shall furnish to the nominee 
with respect to the specified security (or certificate holder if there 
is no nominee) a written statement showing--
            ``(1) the name, address, and phone number of the 
        information contact of the person required to make such return,
            ``(2) the information required to be shown on such return 
        with respect to such security, and
            ``(3) such other information as the Secretary may 
        prescribe.
The written statement required under the preceding sentence shall be 
furnished to the holder on or before January 15 of the year following 
the calendar year during which the action described in subsection (a) 
occurred.
    ``(d) Specified Security.--For purposes of this section, the term 
`specified security' has the meaning given such term by section 
6045(g)(3)(B). No return shall be required under this section with 
respect to actions described in subsection (a) with respect to a 
specified security which occur before the applicable date (as defined 
in section 6045(g)(3)(C)) with respect to such security.
    ``(e) Public Reporting in Lieu of Return.--The Secretary may waive 
the requirements under subsections (a) and (c) with respect to a 
specified security, if the person required to make the return under 
subsection (a) makes publicly available, in such form and manner as the 
Secretary determines necessary to carry out the purposes of this 
section--
            ``(1) the name, address, phone number, and email address of 
        the information contact of such person, and
            ``(2) the information described in paragraphs (1), (2), and 
        (3) of subsection (a).''.
            (2) Assessable penalties.--
                    (A) Subparagraph (B) of section 6724(d)(1) is 
                amended by redesignating clause (iv) and each of the 
                clauses which follow as clauses (v) through (xxiii), 
                respectively, and by inserting after clause (iii) the 
                following new clause:
                            ``(iv) section 6045B(a) (relating to 
                        returns relating to actions affecting basis of 
                        specified securities),''.
                    (B) Paragraph (2) of section 6724(d), as amended by 
                subsection (c)(2), is amended by redesignating 
                subparagraphs (J) through (EE) as subparagraphs (K) 
                through (FF), respectively, and by inserting after 
                subparagraph (I) the following new subparagraph:
                    ``(J) subsections (c) and (e) of section 6045B 
                (relating to returns relating to actions affecting 
                basis of specified securities),''.
            (3) Clerical amendment.--The table of sections for subpart 
        B of part III of subchapter A of chapter 61, as amended by 
        subsection (b)(3), is amended by inserting after the item 
        relating to section 6045A the following new item:

``Sec. 6045B. Returns relating to actions affecting basis of specified 
                            securities.''.
    (e) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall take 
        effect on January 1, 2011.
            (2) Extension of period for statements sent to customers.--
        The amendments made by subsection (a)(3) shall apply to 
        statements required to be furnished after December 31, 2008.

SEC. 404. 0.2 PERCENT FUTA SURTAX.

    (a) In General.--Section 3301 (relating to rate of tax) is 
amended--
            (1) by striking ``through 2008'' in paragraph (1) and 
        inserting ``through 2009'', and
            (2) by striking ``calendar year 2009'' in paragraph (2) and 
        inserting ``calendar year 2010''.
    (b) Effective Date.--The amendments made by this section shall 
apply to wages paid after December 31, 2008.

SEC. 405. INCREASE AND EXTENSION OF OIL SPILL LIABILITY TRUST FUND TAX.

    (a) Increase in Rate.--
            (1) In general.--Section 4611(c)(2)(B) (relating to rates) 
        is amended by striking ``is 5 cents a barrel.'' and inserting 
        ``is--
                            ``(i) in the case of crude oil received or 
                        petroleum products entered before January 1, 
                        2017, 8 cents a barrel, and
                            ``(ii) in the case of crude oil received or 
                        petroleum products entered after December 31, 
                        2016, 9 cents a barrel.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply on and after the first day of the first calendar 
        quarter beginning more than 60 days after the date of the 
        enactment of this Act.
    (b) Extension.--
            (1) In general.--Section 4611(f) (relating to application 
        of Oil Spill Liability Trust Fund financing rate) is amended by 
        striking paragraphs (2) and (3) and inserting the following new 
        paragraph:
            ``(2) Termination.--The Oil Spill Liability Trust Fund 
        financing rate shall not apply after December 31, 2017.''.
            (2) Conforming amendment.--Section 4611(f)(1) is amended by 
        striking ``paragraphs (2) and (3)'' and inserting ``paragraph 
        (2)''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on the date of the enactment of this Act.

SEC. 406. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX 
              INDIFFERENT PARTIES.

    (a) In General.--Subpart B of part II of subchapter E of chapter 1 
is amended by inserting after section 457 the following new section:

``SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX 
              INDIFFERENT PARTIES.

    ``(a) In General.--Any compensation of a service provider which is 
deferred under a nonqualified deferred compensation plan of a 
nonqualified entity shall be includible in gross income when there is 
no substantial risk of forfeiture of the rights to such compensation.
    ``(b) Nonqualified Entity.--For purposes of this section, the term 
`nonqualified entity' means--
            ``(1) any foreign corporation unless substantially all of 
        its income is--
                    ``(A) effectively connected with the conduct of a 
                trade or business in the United States, or
                    ``(B) subject to a comprehensive foreign income 
                tax, and
            ``(2) any partnership unless substantially all of its 
        income is, directly or indirectly, allocated to--
                    ``(A) United States persons (other than persons 
                exempt from tax under this title),
                    ``(B) foreign persons with respect to whom such 
                income is subject to a comprehensive foreign income 
                tax,
                    ``(C) foreign persons with respect to whom--
                            ``(i) such income is effectively connected 
                        with the conduct of a trade or business within 
                        the United States, and
                            ``(ii) a withholding tax is paid under 
                        section 1446 with respect to such income, or
                    ``(D) organizations which are exempt from tax under 
                this title if such income is unrelated business taxable 
                income (as defined in section 512) with respect to such 
                organization.
    ``(c) Determinability of Amounts of Compensation.--
            ``(1) In general.--If the amount of any compensation is not 
        determinable at the time that such compensation is otherwise 
        includible in gross income under subsection (a)--
                    ``(A) such amount shall be so includible in gross 
                income when determinable, and
                    ``(B) the tax imposed under this chapter for the 
                taxable year in which such compensation is includible 
                in gross income shall be increased by the sum of--
                            ``(i) the amount of interest determined 
                        under paragraph (2), and
                            ``(ii) an amount equal to 20 percent of the 
                        amount of such compensation.
            ``(2) Interest.--For purposes of paragraph (1)(B)(i), the 
        interest determined under this paragraph for any taxable year 
        is the amount of interest at the underpayment rate under 
        section 6621 plus 1 percentage point on the underpayments that 
        would have occurred had the deferred compensation been 
        includible in gross income for the taxable year in which first 
        deferred or, if later, the first taxable year in which such 
        deferred compensation is not subject to a substantial risk of 
        forfeiture.
    ``(d) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Substantial risk of forfeiture.--
                    ``(A) In general.--The rights of a person to 
                compensation shall be treated as subject to a 
                substantial risk of forfeiture only if such person's 
                rights to such compensation are conditioned upon the 
                future performance of substantial services by any 
                individual.
                    ``(B) Exception for compensation based on gain 
                recognized on an investment asset.--
                            ``(i) In general.--To the extent provided 
                        in regulations prescribed by the Secretary, if 
                        compensation of a service provider is 
                        determined solely by reference to the amount of 
                        gain recognized on the disposition of an 
                        investment asset, such compensation shall be 
                        treated as subject to a substantial risk of 
                        forfeiture until the date of such disposition.
                            ``(ii) Investment asset.--For purposes of 
                        clause (i), the term `investment asset' means 
                        any single asset (other than an investment fund 
                        or similar entity)--
                                    ``(I) acquired directly by an 
                                investment fund or similar entity,
                                    ``(II) with respect to which such 
                                entity does not (nor does any person 
                                related to such entity) participate in 
                                the active management of such asset (or 
                                if such asset is an interest in an 
                                entity, in the active management of the 
                                activities of such entity), and
                                    ``(III) substantially all of any 
                                gain on the disposition of which (other 
                                than such deferred compensation) is 
                                allocated to investors in such entity.
                            ``(iii) Coordination with special rule.--
                        Paragraph (3)(B) shall not apply to any 
                        compensation to which clause (i) applies.
            ``(2) Comprehensive foreign income tax.--The term 
        `comprehensive foreign income tax' means, with respect to any 
        foreign person, the income tax of a foreign country if--
                    ``(A) such person is eligible for the benefits of a 
                comprehensive income tax treaty between such foreign 
                country and the United States, or
                    ``(B) such person demonstrates to the satisfaction 
                of the Secretary that such foreign country has a 
                comprehensive income tax.
            ``(3) Nonqualified deferred compensation plan.--
                    ``(A) In general.--The term `nonqualified deferred 
                compensation plan' has the meaning given such term 
                under section 409A(d), except that such term shall 
                include any plan that provides a right to compensation 
                based on the appreciation in value of a specified 
                number of equity units of the service recipient.
                    ``(B) Exception.--Compensation shall not be treated 
                as deferred for purposes of this section if the service 
                provider receives payment of such compensation not 
                later than 12 months after the end of the taxable year 
                of the service recipient during which the right to the 
                payment of such compensation is no longer subject to a 
                substantial risk of forfeiture.
            ``(4) Service provider.--The term `service provider' has 
        the meaning given such term in the regulations under section 
        409A, determined without regard to method of accounting.
            ``(5) Exception for certain compensation with respect to 
        effectively connected income.--In the case of a foreign 
        corporation with income which is taxable under section 882, 
        this section shall not apply to compensation payable by such 
        foreign corporation which, had such compensation been paid in 
        cash on the date that such compensation ceased to be subject to 
        a substantial risk of forfeiture, would have been deductible by 
        such foreign corporation against such income.
            ``(6) Exception with respect to employees of certain 
        subsidiaries.--This section shall not apply to compensation 
        deferred under a nonqualified deferred compensation plan of a 
        nonqualified entity if--
                    ``(A) such compensation is payable to an employee 
                of a domestic subsidiary of such entity, and
                    ``(B) such compensation is reasonably expected to 
                be deductible by such subsidiary under section 
                404(a)(5) when such compensation is includible in 
                income by such employee.
            ``(7) Application of rules.--Rules similar to the rules of 
        paragraphs (5) and (6) of section 409A(d) shall apply.
    ``(e) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
section, including regulations--
            ``(1) disregarding a substantial risk of forfeiture in 
        cases where necessary to carry out the purposes of this 
        section, and
            ``(2) providing appropriate treatment where an individual 
        who was employed by an employer which is not a nonqualified 
        entity is temporarily employed by a nonqualified entity which 
        is related to such employer.''.
    (b) Conforming Amendment.--Section 26(b)(2) is amended by striking 
``and'' at the end of subparagraph (V), by striking the period at the 
end of subparagraph (W) and inserting ``, and'', and by adding at the 
end the following new subparagraph:
                    ``(X) section 457A(c)(1)(B) (relating to 
                determinability of amounts of compensation).''.
    (c) Clerical Amendment.--The table of sections of subpart B of part 
II of subchapter E of chapter 1 is amended by inserting after the item 
relating to section 457 the following new item:

``Sec. 457A. Nonqualified deferred compensation from certain tax 
                            indifferent parties.''.
    (d) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        amounts deferred which are attributable to services performed 
        after December 31, 2008.
            (2) Application to existing deferrals.--In the case of any 
        amount deferred to which the amendments made by this section do 
        not apply solely by reason of the fact that the amount is 
        attributable to services performed before January 1, 2009, to 
        the extent such amount is not includible in gross income in a 
        taxable year beginning before 2018, such amounts shall be 
        includible in gross income in the later of--
                    (A) the last taxable year beginning before 2018, or
                    (B) the taxable year in which there is no 
                substantial risk of forfeiture of the rights to such 
                compensation (determined in the same manner as 
                determined for purposes of section 457A of the Internal 
                Revenue Code of 1986, as added by this section).
            (3) Accelerated payments.--No later than 120 days after the 
        date of the enactment of this Act, the Secretary shall issue 
        guidance providing a limited period of time during which a 
        nonqualified deferred compensation arrangement attributable to 
        services performed on or before December 31, 2008, may, without 
        violating the requirements of section 409A(a) of the Internal 
        Revenue Code of 1986, be amended to conform the date of 
        distribution to the date the amounts are required to be 
        included in income.
            (4) Certain back-to-back arrangements.--If the taxpayer is 
        also a service recipient and maintains one or more nonqualified 
        deferred compensation arrangements for its service providers 
        under which any amount is attributable to services performed on 
        or before December 31, 2008, the guidance issued under 
        paragraph (4) shall permit such arrangements to be amended to 
        conform the dates of distribution under such arrangement to the 
        date amounts are required to be included in the income of such 
        taxpayer under this subsection.
            (5) Accelerated payment not treated as material 
        modification.--Any amendment to a nonqualified deferred 
        compensation arrangement made pursuant to paragraph (4) or (5) 
        shall not be treated as a material modification of the 
        arrangement for purposes of section 409A of the Internal 
        Revenue Code of 1986.
            (6) Certain preexisting arrangements.--If, pursuant to a 
        written binding contract entered into on or before December 31, 
        2007, any portion of compensation payable under such contract 
        for a period is determined as a portion of the amount of gain 
        recognized on the disposition during such period of a specified 
        asset, the amendments made by this section shall not apply to 
        the portion of compensation attributable to such disposition 
        notwithstanding the fact that such portion of compensation may 
        be reduced by realized losses or depreciation in the value of 
        other assets during such period or a prior period or be 
        attributable in part to services performed after December 31, 
        2008, but only if--
                    (A) payment of such portion of compensation is 
                received by the service provider and included in its 
                gross income no later than the earlier of--
                            (i) 12 months after the end of the taxable 
                        year of the service recipient during which the 
                        disposition of the specified asset occurs, or
                            (ii) the last taxable year of the service 
                        provider beginning before January 1, 2018; and
                    (B) the specified asset is held by the service 
                recipient on the date of the enactment of this section.

SEC. 407. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.

    (a) In General.--Paragraphs (5)(D) and (6) of section 864(f) are 
each amended by striking ``December 31, 2010'' and inserting ``December 
31, 2016''.
    (b) Transition.--Paragraph (7) of section 864(f) is amended by 
striking ``30 percent'' and inserting ``55 percent''.
    (c) Coordination With Other Legislation.--If H.R. 6983 of the 110th 
Congress is enacted into law--
            (1) such law shall be treated, solely for purposes of 
        carrying out the amendments made by this section, as having 
        been enacted immediately before the enactment of this Act, and
            (2) in lieu of the amendments made by subsections (a) and 
        (b):
                    (A) Paragraphs (5)(D) and (6) of section 864(f), as 
                amended by such law, are each amended by striking 
                ``December 31, 2012'' and inserting ``December 31, 
                2018''.
                    (B) Subsection (f) of section 864, as amended by 
                such law, is amended by striking paragraph (7).

SEC. 408. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

    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 58 percentage points.

            Passed the House of Representatives September 26, 2008.

            Attest:

                                                                 Clerk.
110th CONGRESS

  2d Session

                               H. R. 7060

_______________________________________________________________________

                                 AN ACT

 To amend the Internal Revenue Code of 1986 to provide incentives for 
    energy production and conservation, to extend certain expiring 
  provisions, to provide individual income tax relief, and for other 
                               purposes.