1.Short
title; table of contents
(a)This Act may be cited
as the American Renewable Energy Act
of 2008
.
(b)The table of contents of this Act is as follows:
Sec. 1. Short title; table of
contents.
TITLE I—Renewable energy standard
Sec. 101. Renewable portfolio standard.
TITLE II—Energy tax provisions
Sec. 200. Short title; etc.
Subtitle A—Energy advancement and investment
Part I—Advanced electricity infrastructure
Sec. 201. Extension and modification of renewable electricity,
refined coal, and Indian coal production credit.
Sec. 202. Extension and modification of credit for clean
renewable energy bonds.
Sec. 203. Extension and modification of energy
credit.
Sec. 204. Energy credit for combined heat and power system
property.
Sec. 205. Special depreciation allowance for certain electric
transmission property.
Sec. 206. Extension of special rule to implement FERC
restructuring policy.
Sec. 207. Extension and modification of credit for residential
energy efficient property.
Sec. 208. Credit for residential wind property.
Sec. 209. Seven-year applicable recovery period for
depreciation of qualified energy management devices.
Sec. 210. Landowner incentive to encourage electric
transmission build-out.
Sec. 211. Partial exemption from passive activity limitations
for qualified wind facilities.
Sec. 212. Credit for electricity produced from qualified wind
facilities allowed against alternative minimum tax.
Part II—Domestic fuel security
Sec. 221. Credit for production of cellulosic biomass
alcohol.
Sec. 222. Expansion of special allowance to cellulosic biomass
alcohol fuel plant property.
Sec. 223. Extension of small ethanol producer
credit.
Sec. 224. Credit for producers of fossil free
alcohol.
Sec. 225. Modification of alcohol credit.
Sec. 226. Extension and modification of credit for biodiesel
used as fuel.
Sec. 227. Extension and modification of alternative fuel
credit.
Sec. 228. Extension of alternative fuel vehicle refueling
property credit.
Sec. 229. Extension of suspension of taxable income limit on
percentage depletion for oil and natural gas produced from marginal
properties.
Sec. 230. Extension and modification of election to expense
certain refineries.
Sec. 231. Ethanol tariff extension.
Sec. 232. Elimination and reductions of duty drawback on
certain imported ethanol.
Sec. 233. Certain income and gains relating to alcohol fuel
mixtures, biodiesel fuel mixtures, and alternative fuel treated as qualifying
income for publicly traded partnerships.
Sec. 234. Technical amendments.
Part III—Advanced technology vehicles
Sec. 241. Expansion and modification of credit for alternative
fuel motor vehicles.
Sec. 242. Credit for plug-in electric drive motor
vehicles.
Sec. 243. Exclusion from heavy truck tax for idling reduction
units and advanced insulation added after purchase.
Part IV—Conservation and energy efficiency
Sec. 251. Extension and modification of nonbusiness energy
property credit.
Sec. 252. Extension and modification of new energy efficient
home credit.
Sec. 253. Extension and modification of energy efficient
commercial buildings deduction.
Sec. 254. Modifications of energy efficient appliance credit
for appliances produced after 2007.
Sec. 255. Special depreciation allowance for certain reuse and
recycling property.
Subtitle B—Revenue raising provisions
Sec. 261. Denial of deduction for major integrated oil
companies for income attributable to domestic production of oil, natural gas,
or primary products thereof.
Sec. 262. 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. 263. Increase and extension of Oil Spill Liability Trust
Fund tax.
Sec. 264. Limitation on drawback claimed for amounts deposited
into the Oil Spill Liability Trust Fund.
Sec. 265. Tax on crude oil and natural gas produced from the
outer Continental Shelf in the Gulf of Mexico.
Sec. 266. Taxation of taxable fuels in foreign trade
zones.
Sec. 267. Clarification of penalty for sale of fuel failing to
meet EPA regulations.
Sec. 268. Clarification of eligibility for certain fuels
credits for fuel with insufficient nexus to the United States.
Sec. 269. Treatment of qualified alcohol fuel mixtures and
qualified biodiesel fuel mixtures as taxable fuels.
Sec. 270. Calculation of volume of alcohol for fuel
credits.
Sec. 271. Bulk transfer exception not to apply to finished
gasoline.
Sec. 272. Application of rules treating inverted corporations
as domestic corporations to certain transactions occurring after March 20,
2002.
Sec. 273. Modification of effective date of leasing provisions
of the American Jobs Creation Act of 2004.
Sec. 274. Revision of tax rules on expatriation of
individuals.
<enum>I</enum><header>Renewable energy
standard</header>
<section id="IDdb7a54b4f9bf4dfab774a093edbd318e"><enum>101.</enum><header>Renewable
portfolio standard</header>
<subsection id="ID0babbca907fd47cab8992f0a2993b2b2"><enum>(a)</enum><header>In
general</header><text>Title VI of the Public Utility Regulatory Policies Act of
1978 (16 U.S.C. 2601 et seq.) is amended by adding at the end the
following:</text>
<quoted-block display-inline="no-display-inline" id="id1166B70BC64E44A5AD8BBAC80F07EE1E" style="OLC">
<section id="ID547ab502a7f94d1aacd7eb9453f34a01"><enum>610.</enum><header>Federal
renewable portfolio standard</header>
<subsection id="ID814fbcb2972243508a8d5f2699380865"><enum>(a)</enum><header>Definitions</header><text>In
this section:</text>
<paragraph id="ID73b9006ce8e140c48b0c5abe54646726"><enum>(1)</enum><header>Base amount of
electricity</header><text>The term <term>base amount of electricity</term>
means the total amount of electricity sold by an electric utility to electric
consumers in a calendar year, excluding municipal waste and electricity
generated by a hydroelectric facility (including a pumped storage facility, but
excluding incremental hydropower).</text>
</paragraph><paragraph id="ID055be2538d154055bdf747927e053b98"><enum>(2)</enum><header>Distributed
generation facility</header><text>The term <term>distributed generation
facility</term> means a facility at a customer site.</text>
</paragraph><paragraph id="ID452f203c6a464c2e98bdcb79f2251efd"><enum>(3)</enum><header>Existing
renewable energy</header><text>The term <term>existing renewable energy</term>
means, except as provided in paragraph (7)(B), electric energy generated at a
facility (including a distributed generation facility) placed in service prior
to January 1, 2001, from solar, wind, or geothermal energy, ocean energy,
biomass (as defined in section 203(b) of the Energy Policy Act of 2005 (42
U.S.C. 15852(b)), or landfill gas.</text>
</paragraph><paragraph id="ID8cdae72186b04fc8980074bc03aa6d1b"><enum>(4)</enum><header>Geothermal
energy</header><text>The term <term>geothermal energy</term> means energy
derived from a geothermal deposit (within the meaning of section 613(e)(2) of
the Internal Revenue Code of 1986).</text>
</paragraph><paragraph id="IDa68600d5293942338daea75f8f8c9c83"><enum>(5)</enum><header>Incremental
geothermal production</header>
<subparagraph id="ID8d545f3d09614f498af7aa96df245612"><enum>(A)</enum><header>In
general</header><text>The term <term>incremental geothermal production</term>
means for any year the excess of—</text>
<clause id="IDee4abf3c389e495b941274bb6cf46d83"><enum>(i)</enum><text>the total
kilowatt hours of electricity produced from a facility (including a distributed
generation facility) using geothermal energy; over</text>
</clause><clause id="ID9582be10f52e4704908260978e571e20"><enum>(ii)</enum><text>the average
annual kilowatt hours produced at such facility for 5 of the previous 7
calendar years before the date of enactment of this section after eliminating
the highest and the lowest kilowatt hour production years in such 7-year
period.</text>
</clause></subparagraph><subparagraph id="IDe956fa3fae594631a97ef63c186b819a"><enum>(B)</enum><header>Special
rule</header><text>A facility described in subparagraph (A) that was placed in
service at least 7 years before the date of enactment of this section shall,
commencing with the year in which such date of enactment occurs, reduce the
amount calculated under subparagraph (A)(ii) each year, on a cumulative basis,
by the average percentage decrease in the annual kilowatt hour production for
the 7-year period described in subparagraph (A)(ii) with such cumulative sum
not to exceed 30 percent.</text>
</subparagraph></paragraph><paragraph id="IDff3bad3543b24398bea8a2385113bc18"><enum>(6)</enum><header>Incremental
hydropower</header>
<subparagraph id="id0B613A34A3EC43108DF511E5F4827D60"><enum>(A)</enum><header>In
general</header><text>The term <term>incremental hydropower</term> means
additional energy generated as a result of efficiency improvements or capacity
additions made on or after January 1, 2001, or the effective date of an
existing applicable State renewable portfolio standard program at a
hydroelectric facility that was placed in service before that date.</text>
</subparagraph><subparagraph id="id74D4580F8A6E433C80BBB7A2C04F5501"><enum>(B)</enum><header>Exclusion</header><text>The
term <term>incremental hydropower</term> does not include additional energy
generated as a result of operational changes not directly associated with
efficiency improvements or capacity additions.</text>
</subparagraph><subparagraph id="id3ADE283BC7A74CD1BDC13601F007ACE6"><enum>(C)</enum><header>Measurement</header><text>Efficiency
improvements and capacity additions shall be measured on the basis of the same
water flow information used to determine a historic average annual generation
baseline for the hydroelectric facility and certified by the Secretary or the
Federal Energy Regulatory Commission.</text>
</subparagraph></paragraph><paragraph id="IDaaa450258129401f9cafd4688ed54241"><enum>(7)</enum><header>New renewable
energy</header><text>The term <term>new renewable energy</term> means—</text>
<subparagraph id="ID0dc4bcc6e6b34f088202dbed0eedf7a2"><enum>(A)</enum><text>electric energy
generated at a facility (including a distributed generation facility) placed in
service on or after January 1, 2001, from—</text>
<clause id="ID2b9f2369458142e5825fe4747ba290e8"><enum>(i)</enum><text>solar, wind, or
geothermal energy or ocean energy;</text>
</clause><clause id="IDa877915be80a4e3f9340436ce067cb97"><enum>(ii)</enum><text>biomass (as
defined in section 203(b) of the Energy Policy Act of 2005 (42 U.S.C.
15852(b));</text>
</clause><clause id="ID19a703f7354843928f41028b019ee152"><enum>(iii)</enum><text>landfill gas;
or</text>
</clause><clause id="IDafe3425710904f9195f4daf3a1db766a"><enum>(iv)</enum><text>incremental
hydropower; and</text>
</clause></subparagraph><subparagraph id="IDa05f0128749343e09757ad2a6295e527"><enum>(B)</enum><text>for electric
energy generated at a facility (including a distributed generation facility)
placed in service prior to the date of enactment of this section—</text>
<clause id="IDb7d4bf7ba5a24ae1b32a208f25a8c65e"><enum>(i)</enum><text>the additional
energy above the average generation during the 3-year period ending on the date
of enactment of this section at the facility from—</text>
<subclause id="ID79404edf0e4445c0a6b86c83c5708ca4"><enum>(I)</enum><text>solar or wind
energy or ocean energy;</text>
</subclause><subclause id="ID579bab37596e43a19ad6b68cf244a596"><enum>(II)</enum><text>biomass (as
defined in section 203(b) of the Energy Policy Act of 2005 (42 U.S.C.
15852(b));</text>
</subclause><subclause id="ID0e2ba64ae8484c3ab7dca28b5e58d1f0"><enum>(III)</enum><text>landfill gas;
or</text>
</subclause><subclause id="ID5c8735300480499991c814bcb9389c14"><enum>(IV)</enum><text>incremental
hydropower; and</text>
</subclause></clause><clause id="ID8a15b5e56ae34350a3c80d80e66c99d9"><enum>(ii)</enum><text>incremental
geothermal production.</text>
</clause></subparagraph></paragraph><paragraph id="ID6be3a8bcd0354554b98ded0ddce7a5b1"><enum>(8)</enum><header>Ocean
energy</header><text>The term <term>ocean energy</term> includes current, wave,
tidal, and thermal energy.</text>
</paragraph></subsection><subsection id="IDc875580beb32467b9a947b457ddd00a8"><enum>(b)</enum><header>Renewable
energy requirement</header>
<paragraph id="ID646a7fcf7c414c99b4ec9cfd6bd49b7b"><enum>(1)</enum><header>In
general</header><text>Each electric utility that sells electricity to electric
consumers shall obtain a percentage of the base amount of electricity the
electric utility sells to electric consumers in any calendar year from new
renewable energy or existing renewable energy.</text>
</paragraph><paragraph id="id8223ADB145704B25B2BCFB5B6596E15B"><enum>(2)</enum><header>Minimum annual
percentage</header><text>The percentage obtained in a calendar year shall not
be less than the amount specified in the following table:</text>
<table align-to-level="section" blank-lines-before="1" colsep="0" frame="none" line-rules="no-gen" rowsep="0" rule-weights="0.0.0.0.0.0" subformat="S6211" table-template-name="Flush/hang, 1 text, 1 num, bold hds" table-type="subformat">
<tgroup cols="2" rowsep="0"><colspec coldef="txt" colname="column1" colwidth="195.00pt" min-data-value="55"></colspec><colspec align="justify" coldef="fig" colname="column2" colsep="0" colwidth="223.50pt" min-data-value="9"></colspec>
<thead>
<row><entry align="left" colname="column1" morerows="0" namest="column1" rowsep="0"><bold></bold></entry><entry align="right" colname="column2" morerows="0" namest="column2" rowsep="0"><bold>Minimum
annual</bold></entry>
</row>
<row><entry align="left" colname="column1" morerows="0" namest="column1" rowsep="0"><bold>Calendar year:</bold></entry><entry align="right" colname="column2" morerows="0" namest="column2" rowsep="0"><bold>percentage:</bold></entry>
</row>
</thead>
<tbody>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">2010</entry><entry align="right" colname="column2" rowsep="0">2</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">2011</entry><entry align="right" colname="column2" rowsep="0">4</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">2012</entry><entry align="right" colname="column2" rowsep="0">6</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">2013</entry><entry align="right" colname="column2" rowsep="0">8</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">2014</entry><entry align="right" colname="column2" rowsep="0">10</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">2015</entry><entry align="right" colname="column2" rowsep="0">11</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">2016</entry><entry align="right" colname="column2" rowsep="0">12</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">2017</entry><entry align="right" colname="column2" rowsep="0">13</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">2018</entry><entry align="right" colname="column2" rowsep="0">14</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">2019</entry><entry align="right" colname="column2" rowsep="0">15</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">2020</entry><entry align="right" colname="column2" rowsep="0">16</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">2021</entry><entry align="right" colname="column2" rowsep="0">17</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">2022</entry><entry align="right" colname="column2" rowsep="0">18</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">2023</entry><entry align="right" colname="column2" rowsep="0">19</entry>
</row>
<row><entry align="left" colname="column1" rowsep="0" stub-definition="txt-ldr">2024</entry><entry align="right" colname="column2" rowsep="0">20.</entry>
</row>
</tbody>
</tgroup>
</table>
</paragraph><paragraph id="ID21ce2b5e23c54be9ab5c1693957185e5"><enum>(3)</enum><header>Means of
compliance</header><text>An electric utility shall meet the requirements of
this subsection by—</text>
<subparagraph id="IDa51a40a37cb9489cbfad98144ba8b734"><enum>(A)</enum><text>submitting to the
Secretary renewable energy credits issued under subsection (c);</text>
</subparagraph><subparagraph id="IDc3b5b5d03fc544d89c6117a8e01d54c8"><enum>(B)</enum><text>making
alternative compliance payments to the Secretary at the rate of 2 cents per
kilowatt hour (as adjusted for inflation under subsection (h)); or</text>
</subparagraph><subparagraph id="ID2b02316401624d468c4f67064395476d"><enum>(C)</enum><text>conducting a
combination of activities described in subparagraphs (A) and (B).</text>
</subparagraph></paragraph></subsection><subsection id="ID547a04d61c084a5b83bfa2540ee4990a"><enum>(c)</enum><header>Renewable
energy credit trading program</header>
<paragraph id="IDb38c7e1c5995410390539876d0dcc430"><enum>(1)</enum><header>In
general</header><text>Not later than July 1, 2009, the Secretary shall
establish a renewable energy credit trading program under which each electric
utility shall submit to the Secretary renewable energy credits to certify the
compliance of the electric utility with respect to obligations under subsection
(b).</text>
</paragraph><paragraph id="IDab48c5bbe41b45ddba87923716553104"><enum>(2)</enum><header>Administration</header><text>As
part of the program, the Secretary shall—</text>
<subparagraph id="IDae0def18085a4d5e99e98211f1fbaebf"><enum>(A)</enum><text>issue tradeable
renewable energy credits to generators of electric energy from new renewable
energy;</text>
</subparagraph><subparagraph id="IDce2207ba276c44cbb4e12936a1009f5c"><enum>(B)</enum><text>issue
nontradeable renewable energy credits to generators of electric energy from
existing renewable energy;</text>
</subparagraph><subparagraph id="ID67289865849842ef849eb789612c40ce"><enum>(C)</enum><text>issue renewable
energy credits to electric utilities associated with State renewable portfolio
standard compliance mechanisms pursuant to subsection (i);</text>
</subparagraph><subparagraph id="IDc38fef09b1ee4851a5dd3259afe375ac"><enum>(D)</enum><text>ensure that a
kilowatt hour, including the associated renewable energy credit, shall be used
only once for purposes of compliance with this section;</text>
</subparagraph><subparagraph id="IDd8f05538a37f42bb89968faeda9688fd"><enum>(E)</enum><text>allow double
credits for generation from facilities on Indian land, and triple credits for
generation from small renewable distributed generators (meaning those no larger
than 1 megawatt); and</text>
</subparagraph><subparagraph id="ID473974ba443840969cd3d75e9c458cff"><enum>(F)</enum><text>ensure that, with
respect to a purchaser that as of the date of enactment of this section has a
purchase agreement from a renewable energy facility placed in service before
that date, the credit associated with the generation of renewable energy under
the contract is issued to the purchaser of the electric energy.</text>
</subparagraph></paragraph><paragraph id="IDf6011ba0666a4fe7a22323a45a8b325b"><enum>(3)</enum><header>Duration</header><text>A
credit described in subparagraph (A) or (B) of paragraph (2) may only be used
for compliance with this section during the 3-year period beginning on the date
of issuance of the credit.</text>
</paragraph><paragraph id="ID3a548a7ed4c74e94bb53e593e1ac44b9"><enum>(4)</enum><header>Transfers</header><text>An
electric utility that holds credits in excess of the quantity of credits needed
to comply with subsection (b) may transfer the credits to another electric
utility in the same utility holding company system.</text>
</paragraph><paragraph id="ID9712940e385e475d9d09c8013031ad37"><enum>(5)</enum><header>Delegation of
market function</header><text>The Secretary may delegate to an appropriate
entity that establishes markets the administration of a national tradeable
renewable energy credit market for purposes of creating a transparent national
market for the sale or trade of renewable energy credits.</text>
</paragraph></subsection><subsection id="IDbbd4ff5771834c218c0a03bb107bb552"><enum>(d)</enum><header>Enforcement</header>
<paragraph id="ID9a4b9af5091c4330a617d5a06194a631"><enum>(1)</enum><header>Civil
penalties</header><text>Any electric utility that fails to meet the compliance
requirements of subsection (b) shall be subject to a civil penalty.</text>
</paragraph><paragraph id="IDcc039bfa6e3346e08bd0ed7442283f45"><enum>(2)</enum><header>Amount of
penalty</header><text>Subject to paragraph (3), the amount of the civil penalty
shall be equal to the product obtained by multiplying—</text>
<subparagraph id="id54CB6FF6C93A4C7CAD29B9103D2D9BB7"><enum>(A)</enum><text>the number of
kilowatt-hours of electric energy sold to electric consumers in violation of
subsection (b); by</text>
</subparagraph><subparagraph id="id7A36B6A73CC54F84862078017D8B8991"><enum>(B)</enum><text>the greater
of—</text>
<clause id="id24386B32F6D647D3B24826FCD53F174C"><enum>(i)</enum><text>2
cents (adjusted for inflation under subsection (h)); or</text>
</clause><clause id="id6DD5B744F3A14FBAA256F406F45F352C"><enum>(ii)</enum><text>200 percent of
the average market value of renewable energy credits during the year in which
the violation occurred.</text>
</clause></subparagraph></paragraph><paragraph id="ID7a5d83b44c62477f8479d7a318a946dc"><enum>(3)</enum><header>Mitigation or
waiver</header>
<subparagraph id="id1295FAF1B97441C3BC46236011DE1EA4"><enum>(A)</enum><header>In
general</header><text>The Secretary may mitigate or waive a civil penalty under
this subsection if the electric utility is unable to comply with subsection (b)
for reasons outside of the reasonable control of the utility.</text>
</subparagraph><subparagraph id="id3A430CF6A8414784B4D82A0DAC9A05B4"><enum>(B)</enum><header>Reduction</header><text>The
Secretary shall reduce the amount of any penalty determined under paragraph (2)
by an amount paid by the electric utility to a State for failure to comply with
the requirement of a State renewable energy program if the State requirement is
greater than the applicable requirement of subsection (b).</text>
</subparagraph></paragraph><paragraph id="ID290a7806d6ea4e368d81333518040cb5"><enum>(4)</enum><header>Procedure for
assessing penalty</header><text>The Secretary shall assess a civil penalty
under this subsection in accordance with the procedures prescribed by section
333(d) of the Energy Policy and Conservation Act of 1954 (42 U.S.C.
6303).</text>
</paragraph></subsection><subsection id="ID6e8e89323b3547e68cdb7378e329d560"><enum>(e)</enum><header>State renewable
energy account program</header>
<paragraph id="IDe98a0e72fcce46ad93c5b8d45e795f13"><enum>(1)</enum><header>In
general</header><text>Not later than December 31, 2008, the Secretary of the
Treasury shall establish a State renewable energy account in the
Treasury.</text>
</paragraph><paragraph id="ID0f71d852388e42f983da38e2276c3733"><enum>(2)</enum><header>Deposits</header>
<subparagraph id="idC3D939CE870246A6BB0EE5143DA2EEE1"><enum>(A)</enum><header>In
general</header><text>All money collected by the Secretary from alternative
compliance payments and the assessment of civil penalties under this section
shall be deposited into the renewable energy account established under
paragraph (1).</text>
</subparagraph><subparagraph id="idEB17BEC31BC844A7AF80ABC75D43A088"><enum>(B)</enum><header>Separate
account</header><text>The State renewable energy account shall be maintained as
a separate account in the Treasury and shall not be transferred to the general
fund of the Treasury.</text>
</subparagraph></paragraph><paragraph id="ID5862989a90f74acea5f75927d6801fa8"><enum>(3)</enum><header>Use</header><text>Proceeds
deposited in the State renewable energy account shall be used by the Secretary,
subject to appropriations, for a program to provide grants to the State agency
responsible for developing State energy conservation plans under section 362 of
the Energy Policy and Conservation Act (42 U.S.C. 6322) for the purposes of
promoting renewable energy production, including programs that promote
technologies that reduce the use of electricity at customer sites such as solar
water heating.</text>
</paragraph><paragraph id="ID1bb77bdb46a3410e91f6cf26a917a30e"><enum>(4)</enum><header>Administration</header><text>The
Secretary may issue guidelines and criteria for grants awarded under this
subsection. State energy offices receiving grants under this section shall
maintain such records and evidence of compliance as the Secretary may
require.</text>
</paragraph><paragraph id="IDe80acc4585474899997651eaef3562b0"><enum>(5)</enum><header>Preference</header><text>In
allocating funds under this program, the Secretary shall give
preference—</text>
<subparagraph id="IDc95ecc8d7cf04bd480bd4e343812a4bf"><enum>(A)</enum><text>to States in
regions which have a disproportionately small share of economically sustainable
renewable energy generation capacity; and</text>
</subparagraph><subparagraph id="ID06c33d111dad4a73971c7af338661b97"><enum>(B)</enum><text>to State programs
to stimulate or enhance innovative renewable energy technologies.</text>
</subparagraph></paragraph></subsection><subsection id="IDada259e858814b17ae8a826ae45aa9f5"><enum>(f)</enum><header>Rules</header><text>The
Secretary shall issue rules implementing this section not later than 1 year
after the date of enactment of this section.</text>
</subsection><subsection id="ID54101b084df54dfa94099f2870917edf"><enum>(g)</enum><header>Exemptions</header><text>This
section shall not apply in any calendar year to an electric utility—</text>
<paragraph id="IDc6d1f38f93cc469989f1115885750f4a"><enum>(1)</enum><text>that sold less
than 4,000,000 megawatt-hours of electric energy to electric consumers during
the preceding calendar year; or</text>
</paragraph><paragraph id="ID0d34436b422d41bb88ec11d0e281dde4"><enum>(2)</enum><text>in Hawaii.</text>
</paragraph></subsection><subsection id="ID2c37ebdaa9ca4c1aaac50367328a3d9e"><enum>(h)</enum><header>Inflation
adjustment</header><text>Not later than December 31, 2008, and December 31 of
each year thereafter, the Secretary shall adjust for United States dollar
inflation (as measured by the Consumer Price Index)—</text>
<paragraph id="id3C0E4FCBCF0E497ABEAEF4047F7B52AE"><enum>(1)</enum><text>the price of a
renewable energy credit under subsection (c)(2); and</text>
</paragraph><paragraph id="idCEA7F40DE5CC4994A8838101FCC00041"><enum>(2)</enum><text>the amount of the
civil penalty per kilowatt-hour under subsection (d)(2).</text>
</paragraph></subsection><subsection id="IDc284860d38b74fe0a6c08c93be00396f"><enum>(i)</enum><header>State
programs</header>
<paragraph id="ID8bea11ee48544bd8839cfac722217572"><enum>(1)</enum><header>In
general</header><text>Nothing in this section diminishes any authority of a
State or political subdivision of a State to adopt or enforce any law or
regulation respecting renewable energy, but, except as provided in subsection
(d)(3), no such law or regulation shall relieve any person of any requirement
otherwise applicable under this section.</text>
</paragraph><paragraph id="idB3CA8E2B5D7C4E23829A6A2F917B0A8D"><enum>(2)</enum><header>Coordination</header><text>The
Secretary, in consultation with States having such renewable energy programs,
shall, to the maximum extent practicable, facilitate coordination between the
Federal program and State programs.</text>
</paragraph><paragraph id="IDbcc5fd53a54844b4b95e4011c680dd07"><enum>(3)</enum><header>Regulations</header>
<subparagraph id="ID4f43d65b14ef49d7b327e7ea4a89f607"><enum>(A)</enum><header>In
general</header><text>The Secretary, in consultation with States, shall
promulgate regulations to ensure that an electric utility subject to the
requirements of this section that is also subject to a State renewable energy
standard receives renewable energy credits in relation to equivalent quantities
of renewable energy associated with compliance mechanisms, other than the
generation or purchase of renewable energy by the electric utility, including
the acquisition of certificates or credits and the payment of taxes, fees,
surcharges, or other financial compliance mechanisms by the electric utility or
a customer of the electric utility, directly associated with the generation or
purchase of renewable energy.</text>
</subparagraph><subparagraph id="IDcbf7508fd12340d49a8f7beccd608bf7"><enum>(B)</enum><header>Prohibition on
double counting</header><text>The regulations promulgated under this paragraph
shall ensure that a kilowatt hour associated with a renewable energy credit
issued pursuant to this subsection shall not be used for compliance with this
section more than once.</text>
</subparagraph></paragraph></subsection><subsection id="IDf4999c00752f49f7816f9dcd6146111e"><enum>(j)</enum><header>Recovery of
costs</header>
<paragraph id="IDf8e1abd8cc5a481a813acc5f97684cab"><enum>(1)</enum><header>In
general</header><text>The Commission shall issue and enforce such regulations
as are necessary to ensure that an electric utility recovers all prudently
incurred costs associated with compliance with this section.</text>
</paragraph><paragraph id="ID36eba23063ee406a886e537eb997bafa"><enum>(2)</enum><header>Applicable
law</header><text>A regulation under paragraph (1) shall be enforceable in
accordance with the provisions of law applicable to enforcement of regulations
under the Federal Power Act (16 U.S.C. 791a et seq.).</text>
</paragraph></subsection><subsection id="ID43ce93dfd74b445e947a3eaf66febb1c"><enum>(k)</enum><header>Wind energy
development study</header><text>The Secretary, in consultation with appropriate
Federal and State agencies, shall conduct, and submit to Congress a report
describing the results of, a study on methods to increase transmission line
capacity for wind energy development.</text>
</subsection><subsection id="ID49d2e9cc4fd54a679a7fa5c20e146f7d"><enum>(l)</enum><header>Sunset</header><text>This
section expires on December 31,
2040.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID12893634b2d047b7a02c53972e7c7fd6"><enum>(b)</enum><header>Table of
contents amendment</header><text>The table of contents of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. prec. 2601) is amended by adding at
the end of the items relating to title VI the following:</text>
<quoted-block display-inline="no-display-inline" id="idA66E47E524C84507BB8DC074EEBC680C" style="OLC">
<toc>
<toc-entry bold="off" level="section">Sec. 609. Rural and remote
communities electrification grants.</toc-entry>
<toc-entry bold="off" level="section">Sec. 610. Federal renewable
portfolio
standard.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><enum>II</enum><header>Energy tax
provisions</header>
<section display-inline="no-display-inline" id="H0D36DC57478A4976B9A89B1C79BB6787" section-type="subsequent-section"><enum>200.</enum><header>Short title;
etc</header>
<subsection id="HD10FA205CD2F4B099389FDC0A62E2BE7"><enum>(a)</enum><header>Short
title</header><text display-inline="yes-display-inline">This title may be cited
as the <quote><short-title>Renewable Energy Tax Incentives
Act</short-title></quote>.</text>
</subsection><subsection display-inline="no-display-inline" id="H7BEED08352F642939C1460E9C5B6E5A6"><enum>(b)</enum><header>Amendment of
1986 Code</header><text>Except as otherwise expressly provided, whenever in
this title an amendment or repeal is expressed in terms of an amendment to, or
repeal of, a section or other provision, the reference shall be considered to
be made to a section or other provision of the Internal Revenue Code of
1986.</text>
</subsection></section><subtitle id="id015E6E25C1094567B254C874144DBEFE"><enum>A</enum><header>Energy
advancement and investment</header>
<part id="id3DE9F38A0A644150A8432EF598F0E6ED"><enum>I</enum><header>Advanced
electricity infrastructure</header>
<section id="id9C507A13E0A845D8BEF51953DA1F96A3"><enum>201.</enum><header>Extension and
modification of renewable electricity, refined coal, and Indian coal production
credit</header>
<subsection id="id46DAE456A95440328801A79E024544D7"><enum>(a)</enum><header>Extension</header>
<paragraph id="idB7CFACF5D928420884C633DEA0BEE2E1"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 45(d)
(relating to qualified facilities) is amended—</text>
<subparagraph id="idD79233C7A01D45E690CD6CBA16890A30"><enum>(A)</enum><text display-inline="yes-display-inline">by striking <quote>January 1, 2009</quote>
each place it appears in paragraphs (1), (2), (3), (4), (5), (6), (7), (8), and
(9) and inserting <quote>January 1, 2014</quote>, and</text>
</subparagraph><subparagraph id="idD4E4A776F5384855AB37BFF6553DAF37"><enum>(B)</enum><text display-inline="yes-display-inline">by striking <quote>7-year period</quote>
both places it appears in paragraph (10)(A) and inserting <quote>8-year
period</quote>.</text>
</subparagraph></paragraph><paragraph id="idD8B4513220E4480C8E16EB570127ACE0"><enum>(2)</enum><header>Effective
date</header><text>The amendments made by this subsection shall take effect on
the date of the enactment of this Act.</text>
</paragraph></subsection><subsection id="idF3F2FD5F2FB64100B4EF80DB49FBAC6A"><enum>(b)</enum><header>Credit rate for
electricity maintained at 2007 level</header>
<paragraph id="idF9C4F948EEDD4C94B15E136ED82545D3"><enum>(1)</enum><header>In
general</header><text>Section 45(a)(1) (relating to general rule) is amended by
striking <quote>1.5 cents</quote> and inserting <quote>2 cents</quote>.</text>
</paragraph><paragraph id="id4BDAD5724E994BA4BE2994ED7B945ED8"><enum>(2)</enum><header>No inflation
adjustment</header><text>Section 45(b)(2) (relating to credit and phaseout
adjustment based on inflation) is amended by striking <quote>1.5 cent amount in
subsection (a), the</quote>.</text>
</paragraph><paragraph id="id4720688924D3474EAE120321DBDAA7CB"><enum>(3)</enum><header>Conforming
amendments</header><text>Section 45(b)(4)(A) is amended—</text>
<subparagraph id="id4453D918AF3241A3829E935385B38CCB"><enum>(A)</enum><text>by striking
<quote>2003</quote> and inserting <quote>2006</quote>, and</text>
</subparagraph><subparagraph id="id694C62DFB35548D7B5CC9C0B96358127"><enum>(B)</enum><text>by striking
<quote>the amount in effect</quote> and all that follows and inserting
<quote>subsection (a)(1) shall be applied by substituting <quote>0.9
cent</quote> for <quote>2 cents</quote>.</quote>.</text>
</subparagraph></paragraph><paragraph id="idF72576FC76434F32909BBEB60E39DD26"><enum>(4)</enum><header>Effective
date</header><text>The amendments made by this subsection shall apply to
electricity produced and sold after December 31, 2006.</text>
</paragraph></subsection><subsection id="idD1F334F7E11849A6B2ACDF0BD71A54B3"><enum>(c)</enum><header>Modification of
refined coal as a qualified energy resource</header>
<paragraph id="id10FD0195267D42F0B9317DD4C2669387"><enum>(1)</enum><header>Elimination of
increased market value test</header><text>Section 45(c)(7)(A) (defining refined
coal) is amended—</text>
<subparagraph id="id221F572CC4FD437C8C93224FA4205A53"><enum>(A)</enum><text>by striking
clause (iv),</text>
</subparagraph><subparagraph id="id82A7F5641F874B11ADD202852C9A57E2"><enum>(B)</enum><text>by adding
<quote>and</quote> at the end of clause (ii), and</text>
</subparagraph><subparagraph id="id050372CD4D8B4659A74BA23F93152A53"><enum>(C)</enum><text>by striking
<quote>, and</quote> at the end of clause (iii) and inserting a period.</text>
</subparagraph></paragraph><paragraph id="id3493B4DDB1CC4B399A3EFB141916897F"><enum>(2)</enum><header>Increase in
required emission reduction</header><text>Section 45(c)(7)(B) (defining
qualified emission reduction) is amended by inserting <quote>at least 40
percent of the emissions of</quote> after <quote>nitrogen oxide
and</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id359436EDFDC94B36B48335AE04BE2DFF"><enum>(3)</enum><header>Effective
date</header><text>The amendments made by this subsection shall apply to coal
produced and sold after December 31, 2007.</text>
</paragraph></subsection><subsection id="id9313BE1E268A4B2DA15C6F855BE4DF23"><enum>(d)</enum><header>Credit allowed
for on-site use of electricity produced from biomass</header>
<paragraph id="id38B8FE4F28D74CE090208B375C20F176"><enum>(1)</enum><header>On-site
use</header><text>Section 45(e) (relating to definitions and special rules) is
amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idCB8E23897C3F447F987230AA29E4AECA" style="OLC">
<paragraph id="id579A006F5B344DFCB0E07DED21A53825"><enum>(12)</enum><header>Credit allowed
for on-site use of electricity produced from biomass</header><text>In the case
of electricity produced after December 31, 2007, at any facility described in
paragraph (2) or (3) which is equipped with net metering to determine
electricity consumption or sale (such consumption or sale to be verified by a
third party as determined by the Secretary), subsection (a)(2) shall be applied
without regard to subparagraph (B)
thereof.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="idF026EA079701448D8E4BF236A96ED9AE"><enum>(2)</enum><header>Effective
date</header><text>The amendment made by this subsection shall take effect on
the date of the enactment of this Act.</text>
</paragraph></subsection><subsection id="id0F516F80874C4ADFB08F892337D60200"><enum>(e)</enum><header>Expansion of
resources to wave, current, tidal, and ocean thermal energy</header>
<paragraph id="ID0517764789B44C06AA65971FF7E1D68A"><enum>(1)</enum><header>In
general</header><text>Section 45(c)(1) (defining qualified energy resources) is
amended by striking <quote>and</quote> at the end of subparagraph (G), by
striking the period at the end of subparagraph (H) and inserting <quote>,
and</quote>, and by adding at the end the following new subparagraph:</text>
<quoted-block id="IDB1A9F7D02F3A4180A1F5E892A2145E8A">
<subparagraph id="IDFB33D7CF222B44648FA7002D78B195FB"><enum>(I)</enum><text>wave, current,
tidal, and ocean thermal
energy.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="IDCA024BA3B1C148208399BCC041ABCFD8"><enum>(2)</enum><header>Definition of
resources</header><text>Section 45(c) is amended by adding at the end the
following new paragraph:</text>
<quoted-block id="IDEC0525A3D4FB4D0AA807665FBCE11AE8">
<paragraph id="IDCDABFE3FBC9E44648BF7E4799F3A3F66"><enum>(10)</enum><header>Wave, current,
tidal, and ocean thermal energy</header><text>The term <term>wave, current,
tidal, and ocean thermal energy</term> means electricity produced from any of
the following:</text>
<subparagraph id="ID171E903964E14C1198E0A814A011F1F2"><enum>(A)</enum><text>Free flowing
ocean water derived from tidal currents, ocean currents, waves, or estuary
currents.</text>
</subparagraph><subparagraph id="ID9D58961AC6F94E64BEA126AE610C391F"><enum>(B)</enum><text>Ocean thermal
energy.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="ID72EBA8606AE043AAB09263B38F631796"><enum>(3)</enum><header>Facilities</header><text>Section
45(d) is amended by adding at the end the following new paragraph:</text>
<quoted-block id="IDEAF3C82197C247BC8047EE4405216FFB">
<paragraph id="ID5C6204EE3D7B4C2DB0541D0219FB975E"><enum>(11)</enum><header>Wave, current,
tidal, and ocean thermal facility</header><text>In the case of a facility using
resources described in subparagraph (A), (B), or (C) of subsection (c)(10) to
produce electricity, the term <term>qualified facility</term> means any
facility owned by the taxpayer which is originally placed in service after the
date of the enactment of this paragraph and before January 1, 2014, but such
term shall not include a facility which includes impoundment structures or a
small irrigation power
facility.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="idC67B31A15F844F42899B8ECE3C63773F"><enum>(4)</enum><header>Credit
rate</header><text>Section 45(b)(4)(A) (relating to credit rate), as amended by
this section, is amended by striking <quote>or (9)</quote> and inserting
<quote>(9), or (11)</quote>.</text>
</paragraph><paragraph id="id33CF9094A97141E59702E26891E428F2"><enum>(5)</enum><header>Effective
date</header><text>The amendments made by this subsection shall take effect on
the date of the enactment of this Act.</text>
</paragraph></subsection><subsection id="id9F1D1DBD54EE431080B7F0839B685A0F"><enum>(f)</enum><header>Trash facility
clarification</header>
<paragraph id="idDCA61ED0F54B48A0BB7E09DA67D4864C"><enum>(1)</enum><header>In
general</header><text>Paragraph (7) of section 45(d) is amended—</text>
<subparagraph id="idAD0F1641F3364981A858B1DC391273C0"><enum>(A)</enum><text>by striking
<quote>facility which burns</quote> and inserting <quote>facility (other than a
facility described in paragraph (6)) which uses</quote>, and</text>
</subparagraph><subparagraph id="idA07CDF07C332418799FCCCDCAAA36A79"><enum>(B)</enum><text>by striking
<quote><header-in-text level="paragraph" style="OLC">combustion</header-in-text></quote>.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idE35CCBE0B4BB4B82A3F8F90CDB5CE358"><enum>(2)</enum><header>Effective
date</header><text>The amendments made by this subsection shall apply to
electricity produced and sold before, on, or after December 31, 2007.</text>
</paragraph></subsection></section><section id="id897E40DD26E34F419809BC91D602E513"><enum>202.</enum><header>Extension and
modification of credit for clean renewable energy bonds</header>
<subsection id="HB4AF562B5DC54D568EFCB26A3302236"><enum>(a)</enum><header>Increase in
amount of bonds designated; 4-year extension</header>
<paragraph id="HB975A6247B424B0E005115A786250044"><enum>(1)</enum><header>In
general</header><text>Section 54(f) (relating to limitation on amount of bonds
designated) is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HA3B0A497DC8E4267984FF0D109412B1" style="OLC">
<paragraph id="H856FF6E250A34E9A82D76E12F08C5BA2"><enum>(3)</enum><header>National annual
limitation</header>
<subparagraph id="id83876B3DA9A94E9D8FF4C3DC3B5576AD"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">There is a national
clean renewable energy bond annual limitation for each calendar year. Such
limitation is $900,000,000 for 2008, 2009, 2010, and 2011, and, except as
provided in subparagraph (C), zero thereafter.</text>
</subparagraph><subparagraph id="HD96CFB9CF7984E3CA094BCA9F590011"><enum>(B)</enum><header>Allocation by
secretary</header><text display-inline="yes-display-inline">The national clean
renewable energy bond limitation for a calendar year shall be allocated by the
Secretary among qualified projects in such manner as the Secretary determines
appropriate, except that the Secretary may not allocate more than $563,000,000
of such limitation for each calendar year to finance qualified projects of
qualified borrowers which are governmental bodies, of which not less than
one-half of such amount shall be allocated with respect to qualified projects
equaling or exceeding $10,000,000 in capital expenditures per project.</text>
</subparagraph><subparagraph id="id2EDAC968DC574F37A6B1D9F855DAFDB6"><enum>(C)</enum><header>Carryover of
unused limitation</header><text display-inline="yes-display-inline">If for any
calendar year, the national clean renewable energy bond annual limitation for
such year exceeds the amount of bonds allocated during such year, such
limitation for the following calendar year shall be increased by the amount of
such excess. Any carryforward of a limitation may be carried only to the first
year following the unused limitation year. For purposes of the preceding
sentence, a limitation shall be treated as used on a first-in first-out
basis.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H10A41EE22C1C4F219B5497E155BD6B81"><enum>(2)</enum><header>Conforming
amendment</header><text>Section 54 is amended by striking subsection
(m).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idF2A1D097247F4BB8BCE8A3B9652B220A"><enum>(b)</enum><header>Limitation on
time for issuance</header><text>Section 54(d)(1)(A) (defining clean renewable
energy bond) is amended by inserting <quote>, or is issued by the qualified
issuer pursuant to an allocation by the Secretary to such issuer of a portion
of the national clean renewable energy bond annual limitation under subsection
(f)(3) by not later than the end of the calendar year following the year of
such allocation</quote> after <quote>subsection (f)(2)</quote>.</text>
</subsection><subsection id="H87FE09FA83A4450D8CC5EDFEAAD1A100"><enum>(c)</enum><header>Modification of
ratable principal amortization requirement</header>
<paragraph id="idB48B1D2991D74DEF891713729C0958C9"><enum>(1)</enum><header>In
general</header><text>Paragraph (5) of section 54(l) is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="H855E091CE295477E9B3689E66B12E3E6" style="OLC">
<paragraph id="HF9F22B9BAF32435AB4F65DB479E335B9"><enum>(5)</enum><header>Ratable
principal amortization required</header><text display-inline="yes-display-inline">A bond shall not be treated as a clean
renewable energy bond unless it is part of an issue which provides for an equal
amount of principal to be paid by the qualified issuer during each 12-month
period that the issue is outstanding (other than the first 12-month period in
the case of bonds issued pursuant to an allocation under subsection
(f)(3)).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="idE819398EB23D4316912EB47071E66AAD"><enum>(2)</enum><header>Conforming
amendment</header><text>The third sentence of section 54(e)(2) is amended by
striking <quote>subsection (l)(6)</quote> and inserting <quote>subsection
(l)(5)</quote>.</text>
</paragraph></subsection><subsection id="id1E925D87674C4EA1ACE83D61CD80960D"><enum>(d)</enum><header>Qualified
project includes certain transmission lines</header><text>Section 54(d)(2)(A)
(defining qualified project) is amended by inserting <quote>and any electric
transmission property capital expenditures (as defined in section
172(b)(1)(I)(v)(I)) related to such facility</quote> after <quote>qualified
borrower</quote>.</text>
</subsection><subsection id="H6F2905CBA8914D2BB78F5B6CADB2FE6"><enum>(e)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect on the
date of the enactment of this Act.</text>
</subsection></section><section id="idFD8A49A136F94B8BAF7036090D1B46FD"><enum>203.</enum><header>Extension and
modification of energy credit</header>
<subsection id="idF524ABE2AA1F49159AD2266B06616F91"><enum>(a)</enum><header>Extension</header>
<paragraph id="id9CBC8FD2D429445CB4B1BE3FB3187D98"><enum>(1)</enum><header>Qualified fuel
cell property</header><text>Subparagraph (E) of section 48(c)(1) is amended by
striking <quote>December 31, 2008</quote> and inserting <quote>December 31,
2016</quote>.</text>
</paragraph><paragraph id="id9FD741F7B6C04104BB85BAF5005CA1DA"><enum>(2)</enum><header>Qualified
microturbine property</header><text>Subparagraph (E) of section 48(c)(2) is
amended by striking <quote>December 31, 2008</quote> and inserting
<quote>December 31, 2016</quote>.</text>
</paragraph><paragraph id="id78FE7BAA149646B0BEC474CB45379446"><enum>(3)</enum><header>Solar
property</header><text>Paragraphs (2)(i)(II) and (3)(A)(ii) of section 48(a)
are each amended by striking <quote>January 1, 2009</quote> and inserting
<quote>January 1, 2017</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id12CD20B7ED584BF282C11FB1F249C728"><enum>(b)</enum><header>Repeal of
public utility property exclusion</header>
<paragraph commented="no" display-inline="no-display-inline" id="id5FC7BC48237E469196A3623C2FAC4ED4"><enum>(1)</enum><header>In
general</header><text>Paragraph (3) of section 48(a), as amended by subsection
(a)(3), is amended by striking the first sentence which follows subparagraph
(D).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idADA932D4130E46ACAB484ED5EDA602F0"><enum>(2)</enum><header>Conforming
amendments</header>
<subparagraph commented="no" display-inline="no-display-inline" id="idB0D9DF3EEFDF4DE8B1CA639D749DE5FD"><enum>(A)</enum><text>Section 48(c)(1),
as amended by subsection (a)(1), is amended by striking subparagraph (D) and by
redesignating subparagraph (E) as subparagraph (D).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idC3ECDD5D6669460C97DBEB632DB5B3F2"><enum>(B)</enum><text>Section 48(c)(2),
as amended by subsection (a)(2), is amended by striking subparagraph (D) and by
redesignating subparagraph (E) as subparagraph (D).</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id22128F02BA2F4152B0F05F6F255F2689"><enum>(c)</enum><header>Repeal of
dollar per kilowatt limitation for fuel cell property</header>
<paragraph commented="no" display-inline="no-display-inline" id="id9BA819B28A4F479397FFB3A8F22D8F52"><enum>(1)</enum><header>In
general</header><text>Section 48(c)(1), as amended by subsection (b)(2)(A), is
amended by striking subparagraph (B) and by redesignating subparagraphs (C) and
(D) as subparagraphs (B) and (C), respectively.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id29C917EF3A854176AE38E7464FFC0466"><enum>(2)</enum><header>Conforming
amendment</header><text>Section 48(a)(1) is amended by striking
<quote>paragraphs (1)(B) and (2)(B) of subsection (c)</quote> and inserting
<quote>subsection (c)(2)(B)</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDBAB0079ED72F42D9B1A8D76661246921"><enum>(d)</enum><header>Effective
Dates</header>
<paragraph commented="no" display-inline="no-display-inline" id="id92A08617B1DD4C4384B212305CA00723"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the amendments made
by section 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).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id5F8C1B01FA714766B1C35155F077E036"><enum>(2)</enum><header>Extensions</header><text>The
amendments made by subsection (a) shall take effect on the date of the
enactment of this Act.</text>
</paragraph></subsection></section><section id="IDDBFB7E4F92AC45209E3BF874C1099289"><enum>204.</enum><header>Energy credit
for combined heat and power system property</header>
<subsection id="ID5AAD00DC25C849C6942314A5072D62F7"><enum>(a)</enum><header>In
General</header><text>Section 48(a)(3)(A) (defining energy property) is amended
by striking <quote>or</quote> at the end of clause (iii), by inserting
<quote>or</quote> at the end of clause (iv), and by adding at the end the
following new clause:</text>
<quoted-block id="IDF18D6359DDF446ABB32872A6DE3A141A" style="OLC">
<clause id="ID7E1E1421C79F41D486A1B6FE3C5A6A77"><enum>(v)</enum><text>combined heat and
power system
property,</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID5801F2CABF6648A489B6486AD492FAC4"><enum>(b)</enum><header>Combined Heat
and Power System Property</header><text>Section 48 (relating to energy credit;
reforestation credit) is amended by adding at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="IDEAC4837269054F218DCA449898A86673" style="OLC">
<subsection id="IDCCAD3D943CF24CF98C090D24D78DB684"><enum>(d)</enum><header>Combined Heat
and Power System Property</header><text>For purposes of subsection
(a)(3)(A)(v)—</text>
<paragraph id="IDE0C5A524EB8E4CDBBDC95C15E1E295ED"><enum>(1)</enum><header>Combined heat
and power system property</header><text>The term <term>combined heat and power
system property</term> means property comprising a system—</text>
<subparagraph id="ID4A940C4E22014AFDA1F560F816F23913"><enum>(A)</enum><text>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),</text>
</subparagraph><subparagraph id="IDC0A5D9A46A224560B4E9E37F31B4AC86"><enum>(B)</enum><text>which has an
electrical capacity of not more than 15 megawatts or a mechanical energy
capacity of not more than 2,000 horsepower or an equivalent combination of
electrical and mechanical energy capacities,</text>
</subparagraph><subparagraph id="IDBC931F6196EA4381B462CEF9DD84390B"><enum>(C)</enum><text>which
produces—</text>
<clause id="IDA584B674797A46C78E5D692267327EDE"><enum>(i)</enum><text>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</text>
</clause><clause id="ID516B4548E896476A9B037EC88086C54C"><enum>(ii)</enum><text>at least 20
percent of its total useful energy in the form of electrical or mechanical
power (or combination thereof),</text>
</clause></subparagraph><subparagraph id="ID55E94A06B07A4665832B6C129B69EF4E"><enum>(D)</enum><text>the energy
efficiency percentage of which exceeds 60 percent, and</text>
</subparagraph><subparagraph id="ID17D873DF56FD46E7A8FDE4630D11499E"><enum>(E)</enum><text>which is placed
in service before January 1, 2017.</text>
</subparagraph></paragraph><paragraph id="ID9E2DB27CDED247DF94508EF1659F0EF5"><enum>(2)</enum><header>Special
rules</header>
<subparagraph id="IDC8289B10CE7E4DFEACDE56872CD22E63"><enum>(A)</enum><header>Energy
efficiency percentage</header><text>For purposes of this subsection, the energy
efficiency percentage of a system is the fraction—</text>
<clause id="IDB3102C75D7B043448FF790BE67F07CCF"><enum>(i)</enum><text>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</text>
</clause><clause id="ID8937A44A959548369EA54E382FFAC5F8"><enum>(ii)</enum><text>the denominator
of which is the lower heating value of the fuel sources for the system.</text>
</clause></subparagraph><subparagraph id="IDF356AA1458EB45089C2F51AE4A660361"><enum>(B)</enum><header>Determinations
made on btu basis</header><text>The energy efficiency percentage and the
percentages under paragraph (1)(C) shall be determined on a Btu basis.</text>
</subparagraph><subparagraph id="ID4B18160C64214D2283F4F70A125E2B26"><enum>(C)</enum><header>Input and
output property not included</header><text>The term <term>combined heat and
power system property</term> does not include property used to transport the
energy source to the facility or to distribute energy produced by the
facility.</text>
</subparagraph></paragraph><paragraph id="IDB617614DE88647558FC309403579D37D"><enum>(3)</enum><header>Systems using
biomass</header><text>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—</text>
<subparagraph id="IDEE6CF296844E4D5FA20C447C0BDEDDEC"><enum>(A)</enum><text>paragraph (1)(D)
shall not apply, but</text>
</subparagraph><subparagraph id="ID0691241D3A074D8CAC8260035D2A2695"><enum>(B)</enum><text>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 paragraph) as the energy efficiency
percentage of such system bears to 60
percent.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="IDB3855B18230D4692A13FCA5B2471BBA9"><enum>(c)</enum><header>Effective
Date</header><text>The amendments made by this section 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).</text>
</subsection></section><section display-inline="no-display-inline" id="id4F708BACF28649C7BF1F248ECD133623" section-type="subsequent-section"><enum>205.</enum><header>Special depreciation
allowance for certain electric transmission property</header>
<subsection id="id34D52D299A3845F9815F5A1BC8498E52"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 168 (relating
to accelerated cost recovery system) is amended by adding at the end the
following:</text>
<quoted-block display-inline="no-display-inline" id="idB5341E281C634149BF102237993CD3A3" style="OLC">
<subsection id="idABF449C2F9CE4B228B245EDD794AD0CD"><enum>(m)</enum><header>Special
allowance for certain electric transmission property</header>
<paragraph id="idFC238B17071146649D7CD3EEE61F4C75"><enum>(1)</enum><header>Additional
allowance</header><text display-inline="yes-display-inline">In the case of any
specified electric transmission property—</text>
<subparagraph id="id65080FE669734479A2615864E576764F"><enum>(A)</enum><text>the depreciation
deduction provided by section 167(a) for the taxable year in which such
property is placed in service shall include an allowance equal to 50 percent of
the adjusted basis of such property, and</text>
</subparagraph><subparagraph id="id3FB565A4E10C4C438CFC5D2E2759662D"><enum>(B)</enum><text>the adjusted
basis of such property shall be reduced by the amount of such deduction before
computing the amount otherwise allowable as a depreciation deduction under this
chapter for such taxable year and any subsequent taxable year.</text>
</subparagraph></paragraph><paragraph id="id6CBE7889D7434E079BC1903FA5F4650A"><enum>(2)</enum><header>Specified
electric transmission property</header><text>The term <term>specified electric
transmission property</term> means property of a character subject to the
allowance for depreciation—</text>
<subparagraph id="idCBE608E9C2954BA5A8362644F0ADA1C7"><enum>(A)</enum><text>which is used in
the United States as a generator tie to solely transmit electricity from any
qualified facility described in section 45(d) (without regard to any placed in
service date or the last sentence of paragraph (4) thereof) to the grid,</text>
</subparagraph><subparagraph id="id67400EA7BDB1466E9AB21E86ED0E31F9"><enum>(B)</enum><text>the original use
of which commences with the taxpayer after the date of the enactment of this
subsection,</text>
</subparagraph><subparagraph id="idBE82BE724D9D4B0BAAF0A41159E29409"><enum>(C)</enum><text display-inline="yes-display-inline">which is acquired by the taxpayer by
purchase (as defined in section 179(d)) after the date of the enactment of this
subsection, but only if no written binding contract for the acquisition was in
effect on or before the date of the enactment of this subsection, and</text>
</subparagraph><subparagraph id="idA49DDAD689FA43ED826FDADCA1663332"><enum>(D)</enum><text>which is placed
in service by the taxpayer before January 1, 2014.</text>
</subparagraph></paragraph><paragraph id="id5D40052435734DCDA960301C6D4EA88B"><enum>(3)</enum><header>Exceptions</header>
<subparagraph id="id099BEC9897F84C65AA6D6631E73CDD16"><enum>(A)</enum><header>Alternative
depreciation property</header><text>Such term shall not include any property
described in section 168(k)(2)(D)(i).</text>
</subparagraph><subparagraph id="id4761D6ECF4D046ECB433E7529172E102"><enum>(B)</enum><header>Election
Out</header><text>If a taxpayer makes an election under this subparagraph with
respect to any class of property for any taxable year, this subsection shall
not apply to all property in such class placed in service during such taxable
year.</text>
</subparagraph></paragraph><paragraph id="idBA33DA430A2546908505300E23888AF1"><enum>(4)</enum><header>Special
Rules</header><text>For purposes of this subsection, rules similar to the rules
of subparagraph (E) of section 168(k)(2) shall apply, except that such
subparagraph shall be applied—</text>
<subparagraph id="id764442B869E1475CA5122F65CD8AC018"><enum>(A)</enum><text>by substituting
<quote>the date of the enactment of subsection (l)</quote> for <quote>September
10, 2001</quote> each place it appears therein,</text>
</subparagraph><subparagraph id="idAE61BBE4733147E3A429A0F6A84C75F4"><enum>(B)</enum><text>by substituting
<quote>January 1, 2014</quote> for <quote>January 1, 2005</quote> in clause (i)
thereof, and</text>
</subparagraph><subparagraph id="idFF892C027F374B90873D29BDF1DE0A52"><enum>(C)</enum><text display-inline="yes-display-inline">by substituting <quote>specified electric
transmission property</quote> for <quote>qualified property</quote> in clause
(iv) thereof.</text>
</subparagraph></paragraph><paragraph id="idF8C6C484ECA34A29BECC120FE901022A"><enum>(5)</enum><header>Recapture</header><text display-inline="yes-display-inline">For purposes of this subsection, rules
similar to the rules under section 179(d)(10) shall apply with respect to any
specified electric transmission property which ceases to be specified electric
transmission
property.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idD705764DAB9B4E6A994353BA0F683D0D"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to property
placed in service after the date of the enactment of this Act in taxable years
ending after such date.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id844FC0C189CF4BCC8FF889F6384D0951"><enum>206.</enum><header>Extension of
special rule to implement FERC restructuring policy</header>
<subsection commented="no" display-inline="no-display-inline" id="idC32C64822FBD42478E623B8FB58474C6"><enum>(a)</enum><header>Qualifying
electric transmission transaction</header>
<paragraph commented="no" display-inline="no-display-inline" id="id9D371D9F8FFD472BA93528A8A4B8CC0D"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 451(i)(3)
(defining qualifying electric transmission transaction) is amended by striking
<quote>January 1, 2008</quote> and inserting <quote>January 1,
2010</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id30F012BCE448459E97B47AC0DB7714A6"><enum>(2)</enum><header>Effective
date</header><text>The amendment made by this subsection shall apply to
transactions after December 31, 2007.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idC74A4F48430641829076307CD7DA1990"><enum>(b)</enum><header>Independent
transmission company</header>
<paragraph commented="no" display-inline="no-display-inline" id="id29B694C420CB481D90E7CC5E331BF19E"><enum>(1)</enum><header>In
general</header><text>Section 451(i)(4)(B)(ii) (defining independent
transmission company) is amended by striking <quote>December 31, 2007</quote>
and inserting <quote>the date which is 2 years after the date of such
transaction</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id64D214742E0F49A3A7D90A130F1685FE"><enum>(2)</enum><header>Effective
date</header><text>The amendment made by this subsection shall take effect as
if included in the amendments made by section 909 of the American Jobs Creation
Act of 2004.</text>
</paragraph></subsection></section><section id="idF088C591B2EB46E199C038DA6F0C5AE0"><enum>207.</enum><header>Extension and
modification of credit for residential energy efficient property</header>
<subsection id="ID8adf70f4d90747e59702eb66d5a5bdfe"><enum>(a)</enum><header>Extension</header><text>Section
25D(g) (relating to termination) is amended by striking <quote>December 31,
2008</quote> and inserting <quote>December 31, 2014</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID8c58237864a4449f9862cc8dd4d1a997"><enum>(b)</enum><header>Maximum credit
for solar electric property</header>
<paragraph commented="no" display-inline="no-display-inline" id="id538ACC3A9DD44F9EBB53584AC5B30873"><enum>(1)</enum><header>In
general</header><text>Section 25D(b)(1)(A) (relating to maximum credit) is
amended by striking <quote>$2,000</quote> and inserting
<quote>$4,000</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idD1677076800D4918A3B667E327609109"><enum>(2)</enum><header>Conforming
amendment</header><text>Section 25D(e)(4)(A)(i) is amended by striking
<quote>$6,667</quote> and inserting <quote>$13,334</quote>.</text>
</paragraph></subsection><subsection id="ID69fbb116d3214c9398adb044312d933b"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
expenditures made after December 31, 2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="idDFBD29B607CB4B3181746BCE7769E49E"><enum>208.</enum><header>Credit for
residential wind property</header>
<subsection commented="no" id="id21450E937AA14015AA25668D089AF303"><enum>(a)</enum><header>In
general</header><text>Section 25D(a) (relating to allowance of credit) is
amended by striking <quote>and</quote> at the end of paragraph (2), by striking
the period at the end of paragraph (3) and inserting <quote>, and</quote>, and
by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id3ADC5E227FF64F4AA0A2872FA55001DF" style="OLC">
<paragraph id="ID8DBD7D39F8A748CEA7CA80002FE00227"><enum>(4)</enum><text>30 percent of the
qualified small wind energy property expenditures made by the taxpayer during
such
year.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" id="id3242E10E655644D5B375F5EDBBD17845"><enum>(b)</enum><header>Limitation</header><text>Section
25D(b)(1) (relating to maximum credit) is amended by striking
<quote>and</quote> at the end of subparagraph (B), by striking the period at
the end of subparagraph (A) and inserting <quote>, and</quote>, and by adding
at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="idA25E0768FB4340E0985B99ABDBF4E40F" style="OLC">
<subparagraph id="IDBC92D61F1E094A329F91D4A7FD405514"><enum>(D)</enum><text>$500 with respect
to each half kilowatt of capacity (not to exceed $4,000) of wind turbines for
which qualified small wind energy property expenditures are
made.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" id="id9AC700099CE547C9972F594BC4AD80E3"><enum>(c)</enum><header>Qualified small
wind energy property expenditures</header>
<paragraph commented="no" id="id7B503930DDD34C34874F22CEDD4F01F7"><enum>(1)</enum><header>In
general</header><text>Section 25D(d) (relating to definitions) is amended by
adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id069C29611C234F19B03ADCB1A319446B" style="OLC">
<paragraph id="ID2FF5E9F734AF414AA5A1D4F2C0C042B9"><enum>(4)</enum><header>Qualified small
wind energy property expenditure</header><text>The term <term>qualified small
wind energy property expenditure</term> means an expenditure for property which
uses a wind turbine to generate electricity for use in connection with a
dwelling unit located in the United States and used as a residence by the
taxpayer.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="id657A4A0804D645F2945E78C51E5D0AC4"><enum>(2)</enum><header>No double
benefit</header><text>Section 45(d)(1) (relating to wind facility) is amended
by adding at the end the following new sentence: <quote>Such term shall not
include any facility with respect to which any qualified small wind energy
property expenditure (as defined in subsection (d)(4) of section 25D) is taken
into account in determining the credit under such section.</quote>.</text>
</paragraph></subsection><subsection commented="no" id="id8791716A81BD45AE861B1DF5986C9F6A"><enum>(d)</enum><header>Maximum
expenditures in case of joint occupancy</header><text>Section 25D(e)(4)(A)
(relating to maximum expenditures) is amended by striking <quote>and</quote> at
the end of clause (iii), by striking the period at the end of clause (iv) and
inserting <quote>, and</quote>, and by adding at the end the following new
clause:</text>
<quoted-block display-inline="no-display-inline" id="id2664A07B144E4497B801CAD9D5B2F837" style="OLC">
<clause commented="no" id="id01DFA23BDE7E444BBAFE72B0FF0AB86E"><enum>(v)</enum><text>$1,667 in the
case of each half kilowatt of capacity of wind turbines for which qualified
small wind energy property expenditures are
made.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID6667780435C94DAE88DAB258012B90C9"><enum>(e)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
expenditures after December 31, 2007.</text>
</subsection></section><section id="id0B52B026883B4B23B37C3FDF2E3BF230" section-type="subsequent-section"><enum>209.</enum><header>Seven-year
applicable recovery period for depreciation of qualified energy management
devices</header>
<subsection id="id29B76FD2BE86414EB09681051DF90EDA"><enum>(a)</enum><header>In
general</header><text>Section 168(e)(3)(C) (defining 7-year property) is
amended by striking <quote>and</quote> at the end of clause (iv), by
redesignating clause (v) as clause (vi), and by inserting after clause (iv) the
following new clause:</text>
<quoted-block display-inline="no-display-inline" id="id5CE3CE7CD9D5422ABA387D437F69A2E6" style="OLC">
<clause id="id4EB3B28AC5734DC6B4058ADC5BA87EDE"><enum>(v)</enum><text>any qualified
energy management device,
and</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id463C36A2435A41148A3719E9D509AA1B"><enum>(b)</enum><header>Definition of
qualified energy management device</header><text>Section 168(i) (relating to
definitions and special rules) is amended by inserting at the end the following
new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idC4C915015FC54F1B94206617CDA515F1" style="OLC">
<paragraph id="id1526C358E7E947119DD77CB175F89BEA"><enum>(18)</enum><header>Qualified
energy management device</header>
<subparagraph id="id3C933912A9904FE6B54B98C8CB2C3730"><enum>(A)</enum><header>In
general</header><text>The term <term>qualified energy management device</term>
means any energy management device which is placed in service before January 1,
2011, by a taxpayer who is a supplier of electric energy or a provider of
electric energy services.</text>
</subparagraph><subparagraph id="id93F03FA8B8FF46A6B4E7F676D333DEB0"><enum>(B)</enum><header>Energy
management device</header><text>For purposes of subparagraph (A), the term
<term>energy management device</term> means any two-way communications network
and associated equipment, including equipment installed on the premises of a
consumer, which is used by the taxpayer—</text>
<clause id="id794B6067C9B7406D9A6F93DC3AFACEEF"><enum>(i)</enum><text>to measure and
record electricity usage data on a time-differentiated basis of at least 60
minutes, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id43245F4CBE554295A45698584FC71585"><enum>(ii)</enum><text>to provide such
data on demand to both consumers and the
taxpayer.</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id2F6740B9A8DD442AB7BF452115F0717C"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to property
placed in service after the date of the enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id411723BBF36D4B0B88A0FB4E5AFA5ED6"><enum>210.</enum><header>Landowner
incentive to encourage electric transmission build-out</header>
<subsection commented="no" display-inline="no-display-inline" id="id8B2BC9AF38D14A6D8838D5AD277F2C2B"><enum>(a)</enum><header>In
general</header><text>Part III of subchapter B of chapter 1 (relating to items
specifically excluded from gross income) is amended by inserting after section
139A the following new section:</text>
<quoted-block display-inline="no-display-inline" id="id2FD8790C65004FD6BBD2CB8A06C7DB76" style="OLC">
<section commented="no" display-inline="no-display-inline" id="id9C464A951F994AAD9E0172B2BB0870EB"><enum>139B.</enum><header> Electric
transmission easement payments</header>
<subsection commented="no" display-inline="no-display-inline" id="id9BB861037B8B4D09B5C83A0D0AF108AD"><enum>(a)</enum><header>In
general</header><text>Gross income shall not include any qualified electric
transmission easement payment.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id2F39C4B91614423785F64B79163922B0"><enum>(b)</enum><header>Qualified
electric transmission easement payment</header><text>For purposes of this
section, the term <term>qualified electric transmission payment</term> means
any payment by an electric utility or electric transmission entity pursuant to
an easement or other agreement granted by the payee (or any predecessor of such
payee) for the right of such entity (or any successors of such entity) to
locate on such payee's property transmission lines and equipment used to
transmit electricity at 230 or more kilovolts primarily from qualified
facilities described in section 45(d) (without regard to any placed in service
date or the last sentence of paragraph (4) thereof) or energy property (as
defined in section 48(a)(3)) placed in service after the date of the enactment
of this section.</text>
</subsection><subsection id="ID2cf37a6a3ec645fa8aa775f659394c6e"><enum>(c)</enum><header>No increase in
basis</header><text>Notwithstanding any other provision of this subtitle, no
increase in the basis or adjusted basis of any property shall result from any
amount excluded under this subsection with respect to such property.</text>
</subsection><subsection id="ID00283ed226a54ad9bbfa3dfe1d41d445"><enum>(d)</enum><header>Denial of
double benefit</header><text>Notwithstanding any other provision of this
subtitle, no deduction or credit shall be allowed (to the person for whose
benefit a qualified electric transmission easement payment is made) for, or by
reason of, any expenditure to the extent of the amount excluded under this
section with respect to such
expenditure.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id92CEE6296CC5454DB084419652B3B194"><enum>(b)</enum><header>Clerical
amendment</header><text>The table of sections for such part III is amended by
inserting after the item relating to section 139A the following new
item:</text>
<quoted-block display-inline="no-display-inline" id="idDB21E169D3524F2CA6FAEE635864CC30" style="OLC">
<toc>
<toc-entry bold="off" level="section">Sec. 139B. Electric
transmission easement
payments.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id6DC5BCA7560F402AA3F7CADBCEF63C82"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to payments
received after the date of the enactment of this Act.</text>
</subsection></section><section id="HDFE636A191BD4448BCC336C525C165B" section-type="subsequent-section"><enum>211.</enum><header>Partial exemption
from passive activity limitations for qualified wind facilities</header>
<subsection id="H7BF35AD3FE9E4D3BB6FBD1A404C39F4"><enum>(a)</enum><header>In
general</header><text>Section 469 (relating to passive activity losses and
credits limited) is amended by redesignating subsections (l) and (m) as
subsections (m) and (n), respectively, and by inserting after subsection (k)
the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H7588C7E57C6A49FE854DCC9B0F5F927" style="OLC">
<subsection id="H3B3DD721CF124E6CAB516E88302E02BA"><enum>(l)</enum><header>$40,000 offset
for qualified wind facilities</header>
<paragraph id="H749FF09EB28F4CD5AAFF85B48597F7EF"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">In the case of any
natural person, subsection (a) shall not apply to that portion of the passive
activity loss or the deduction equivalent (within the meaning of subsection
(j)(5)) of the passive activity credit for any taxable year which is
attributable to any interest of such person in a facility described in section
45(d)(1) (relating to wind facility).</text>
</paragraph><paragraph id="H1D2AE5E694A94DD8AFD7BFCC08DB7C92"><enum>(2)</enum><header>Dollar
limitation</header><text>The aggregate amount to which paragraph (1) applies
for any taxable year shall not exceed $40,000.</text>
</paragraph><paragraph id="H1EEF2D3B06464F6D9CB196E263458BCC"><enum>(3)</enum><header>Special rule for
estates</header>
<subparagraph id="H209B58ECD19245608777F71D56FCC6D"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">In the case of
taxable years of an estate ending less than 2 years after the date of the death
of the decedent, this subsection shall apply to any interest in a facility
described in section 45(d)(1) (relating to wind facility) held by the decedent
on the date of his death.</text>
</subparagraph><subparagraph id="HBD6CE2633B9E40C3A4A834B7531B9582"><enum>(B)</enum><header>Reduction for
surviving spouse's exemption</header><text>For purposes of subparagraph (A),
the $40,000 amount under paragraph (2) shall be reduced by the amount of the
exemption under paragraph (1) allowable to the surviving spouse of the decedent
for the taxable year ending with or within the taxable year of the
estate.</text>
</subparagraph></paragraph><paragraph id="H5EB956D48558495CA19C00288C9E3539"><enum>(4)</enum><header>Married
individuals filing separately</header>
<subparagraph id="H665C4F43E27C4B17A990592664E67203"><enum>(A)</enum><header>In
general</header><text>Except as provided in subparagraph (B), in the case of
any married individual filing a separate return, this subsection shall be
applied by substituting <quote>$20,000</quote> for <quote>$40,000</quote> each
place it appears.</text>
</subparagraph><subparagraph id="H0B7E66737B6A49B3AED948EBC14FC077"><enum>(B)</enum><header>Taxpayers not
living apart</header><text>This subsection shall not apply to a taxpayer
who—</text>
<clause id="H08936B11FD2543B18ED558DBC01B0633"><enum>(i)</enum><text>is
a married individual filing a separate return for any taxable year, and</text>
</clause><clause id="HE9B44A1B73634DFDA938000017FE2813"><enum>(ii)</enum><text>does not live
apart from his spouse at all times during such taxable
year.</text>
</clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HEA544FCFF76942DF9EFEB73FEB1AC9E"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to losses
and credits taken into account in taxable years beginning after the date of the
enactment of this Act.</text>
</subsection></section><section id="H3EA9B5C9C33242BD931879FFFD498BA6"><enum>212.</enum><header>Credit for
electricity produced from qualified wind facilities allowed against alternative
minimum tax</header>
<subsection id="H3DC9BC7AD4B44F8BA293C59D944742C"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subparagraph (B) of
section 38(c)(4) (relating to specified credits) is amended—</text>
<paragraph id="H386AA8BCDE744478813602676EE1F705"><enum>(1)</enum><text>by striking
<quote>and</quote> at the end of clause (i),</text>
</paragraph><paragraph id="HA0ADFEA5F0594B32003EE3C903866D50"><enum>(2)</enum><text>by inserting
<quote>(other than a facility described in clause (iii))</quote> after
<quote>facility</quote> in clause (ii)(I),</text>
</paragraph><paragraph id="HF5AA6B14EF4B4FB3BBC8877DBA42707"><enum>(3)</enum><text>by
striking the period at the end of clause (ii) and inserting <quote>,
and</quote>, and</text>
</paragraph><paragraph id="HB64C205F5ECD46449161239F659FF9A2"><enum>(4)</enum><text>by adding at the
end the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="HBBFDAE7B468F4506B071006411008BD8" style="OLC">
<clause id="HBAB9A72D8C3A44BAA12D54EC90E6673D"><enum>(iii)</enum><text>the credit
determined under section 45 to the extent that such credit is attributable to
electricity produced at a facility described in section 45(d)(1) (relating to
wind
facility).</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="H737561B175BB40288CEBC647656EAF74"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text>
</subsection></section></part><part id="idEC1F8C1287174BE686EE79B91B305BBE"><enum>II</enum><header>Domestic fuel
security</header>
<section id="idCB4818DC4EBA415CAB755674EEAB1BEF" section-type="subsequent-section"><enum>221.</enum><header>Credit for
production of cellulosic biomass alcohol</header>
<subsection id="idEF837A4BFCD845F29C5E77E170130030"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subsection (a) of
section 40 (relating to alcohol used as fuel) is amended by striking
<quote>plus</quote> at the end of paragraph (2), by striking the period at the
end of paragraph (3) and inserting <quote>, plus</quote>, and by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idCA0B94D135884D559080D8B0FE4602CB" style="OLC">
<paragraph id="id6A17C6C962004049889DBEB77C44E753"><enum>(4)</enum><text display-inline="yes-display-inline">the small cellulosic alcohol producer
credit.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id22197FFEEB53414A9429C52A73790EA9"><enum>(b)</enum><header>Small
cellulosic alcohol producer credit</header>
<paragraph id="id14477F46EBF244E18AC1FFE90A664847"><enum>(1)</enum><header>In
general</header><text>Subsection (b) of section 40 is amended by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idB4EEC846636B40D186816D7A5620133C" style="OLC">
<paragraph id="idF7204EB434284212B1294A668948021F"><enum>(6)</enum><header>Small
cellulosic alcohol producer credit</header>
<subparagraph id="id498780788921484C9CD597DF6924D9B7"><enum>(A)</enum><header>In
general</header><text>In addition to any other credit allowed under this
section, there shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the applicable amount for each
gallon of qualified cellulosic alcohol production.</text>
</subparagraph><subparagraph id="id4247EF41C25144E0978BEA0A1263836C"><enum>(B)</enum><header>Applicable
amount</header><text>For purposes of subparagraph (A), the applicable amount
means the excess of—</text>
<clause id="id493C7E81A8754E35AC75AD211483B47B"><enum>(i)</enum><text>$1.11,
over</text>
</clause><clause id="idE8F40A94A8E14A87886DC7AAE2ECB3E0"><enum>(ii)</enum><text>the sum
of—</text>
<subclause id="id6E9B344FD8174CE98CDD30BD0A171113"><enum>(I)</enum><text>the amount of the
credit allowable for alcohol which is ethanol under subsection (b)(1) (without
regard to subsection (b)(3)) at the time of the qualified cellulosic alcohol
production, plus</text>
</subclause><subclause id="id2960EE3C0A2B4653B4ADA16759BEAAC6"><enum>(II)</enum><text>the amount of
the credit allowable under subsection (b)(4) at the time of such
production.</text>
</subclause></clause></subparagraph><subparagraph id="idBE7227B03E6642CCA2FE46351DC660BD"><enum>(C)</enum><header>Qualified
cellulosic alcohol production</header><text>For purposes of this section, the
term <term>qualified cellulosic alcohol production</term> means any cellulosic
biomass alcohol which is produced by an eligible small cellulosic alcohol
producer and which during the taxable year—</text>
<clause id="id53315357ED5B417790FFA63F2BA2EDDA"><enum>(i)</enum><text>is sold by the
taxpayer to another person—</text>
<subclause id="idD6D9A98211074BB9BA1443BE5526306C"><enum>(I)</enum><text>for use by such
other person in the production of a qualified alcohol mixture in such other
person's trade or business (other than casual off-farm production),</text>
</subclause><subclause id="id6DC6518A3BF14E67858D151E85FBA2D8"><enum>(II)</enum><text>for use by such
other person as a fuel in a trade or business, or</text>
</subclause><subclause id="id24F8FACFA137434683943FC13FF98E36"><enum>(III)</enum><text>who sells such
cellulosic biomass alcohol at retail to another person and places such
cellulosic biomass alcohol in the fuel tank of such other person, or</text>
</subclause></clause><clause id="idD28B7F3D0E0E4314A854927210F24410"><enum>(ii)</enum><text>is used or sold
by the taxpayer for any purpose described in clause (i).</text>
</clause></subparagraph><subparagraph id="idEDF24E6DD9314FF1ADF61F64F91280B0"><enum>(D)</enum><header>Additional
distillation excluded</header><text>The qualified cellulosic alcohol production
of any taxpayer for any taxable year shall not include any alcohol which is
purchased by the taxpayer and with respect to which such producer increases the
proof of the alcohol by additional distillation.</text>
</subparagraph><subparagraph id="id2357068C2E3C47C0ACD5410B68E999A3"><enum>(E)</enum><header>Application of
paragraph</header><text>This paragraph shall apply with respect to qualified
cellulosic alcohol production—</text>
<clause id="idAD3DA9D6EFF04945B47F7149D7E0F1C5"><enum>(i)</enum><text>after December
31, 2007, and</text>
</clause><clause id="idC005960E326D4368B9A1CB86D25ACCF9"><enum>(ii)</enum><text>before the end
of the later of—</text>
<subclause id="id5473FF5675544400BEA9E3E007153407"><enum>(I)</enum><text>December 31,
2012, or</text>
</subclause><subclause id="id278AFBE28C6B4CDCA9D676A4575908B9"><enum>(II)</enum><text>the calendar
year in which the Secretary, in consultation with the Administrator of the
Environmental Protection Agency, certifies that 1,000,000,000 gallons of
cellulosic biomass alcohol (as so defined) have been produced in or imported
into the United States after such
date.</text>
</subclause></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id260A0D1494094EC09807854DF152ECE8"><enum>(2)</enum><header>Termination
date not to apply</header><text>Subsection (e) of section 40 (relating to
termination) is amended by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id3B09B24EBE74452195DBE7882C679324" style="OLC">
<paragraph id="idF9C2BFF437A641D8A81B2FF5DDD5FF8E"><enum>(3)</enum><header>Exception for
small cellulosic alcohol producer credit</header><text>Paragraph (1) shall not
apply to the portion of the credit allowed under this section by reason of
subsection
(a)(4).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="id44A9872C74B3446789ACB2577BB4CF63"><enum>(c)</enum><header>Eligible small
cellulosic alcohol producer</header><text>Section 40 is amended by adding at
the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="idCAC6F051ADA344A7A4BFF60C972C37CC" style="OLC">
<subsection id="idA9E7F2F8D57648C6A9061564AE9190EC"><enum>(i)</enum><header>Definitions and
special rules for small cellulosic alcohol producer</header><text>For purposes
of this section—</text>
<paragraph id="id157D509A85FE43989B04E6FEB0024451"><enum>(1)</enum><header>In
general</header><text>The term <term>eligible small cellulosic alcohol
producer</term> means a person, who at all times during the taxable year, has a
productive capacity for cellulosic biomass alcohol not in excess of 60,000,000
gallons.</text>
</paragraph><paragraph id="id6069EEC64B2247908F7ED55BA149B2B2"><enum>(2)</enum><header>Cellulosic
biomass alcohol</header>
<subparagraph id="idDEB540FDC62942BF88BE55F9E4706868"><enum>(A)</enum><header>In
general</header><text>The term <term>cellulosic biomass alcohol</term> has the
meaning given such term under section 168(l)(3), but does not include any
alcohol with a proof of less than 150.</text>
</subparagraph><subparagraph id="idA9827A43DE66460C9505CECFF3DCEC58"><enum>(B)</enum><header>Determination
of proof</header><text>The determination of the proof of any alcohol shall be
made without regard to any added denaturants.</text>
</subparagraph></paragraph><paragraph id="id19890B747AE641E1A240875BFB493DB1"><enum>(3)</enum><header>Aggregation
rule</header><text>For purposes of the 60,000,000 gallon limitation under
paragraph (1), all members of the same controlled group of corporations (within
the meaning of section 267(f)) and all persons under common control (within the
meaning of section 52(b) but determined by treating an interest of more than 50
percent as a controlling interest) shall be treated as 1 person.</text>
</paragraph><paragraph id="idFEDFE3B9229944219A14FDAE2F708E82"><enum>(4)</enum><header>Partnership, S
corporations, and other pass-thru entities</header><text>In the case of a
partnership, trust, S corporation, or other pass-thru entity, the limitation
contained in paragraph (1) shall be applied at the entity level and at the
partner or similar level.</text>
</paragraph><paragraph id="id805731B4AC534E7E88DF491096DFC2A2"><enum>(5)</enum><header>
Allocation</header><text>For purposes of this subsection, in the case of a
facility in which more than 1 person has an interest, productive capacity shall
be allocated among such persons in such manner as the Secretary may
prescribe.</text>
</paragraph><paragraph id="id90FB1E0476B64D32B8864FED578D2417"><enum>(6)</enum><header>Regulations</header><text>The
Secretary may prescribe such regulations as may be necessary to prevent the
credit provided for in subsection (a)(4) from directly or indirectly
benefitting any person with a direct or indirect productive capacity of more
than 60,000,000 gallons of cellulosic biomass alcohol during the taxable
year.</text>
</paragraph><paragraph id="id9731B8036958400CBC9721E815EA18CF"><enum>(7)</enum><header>Allocation of
small cellulosic producer credit to patrons of cooperative</header><text>Rules
similar to the rules under subsection (g)(6) shall apply for purposes of this
subsection.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id4AF23552620141AA9EDAEDC30F1EFA05"><enum>(d)</enum><header>Alcohol not
used as a fuel, etc</header>
<paragraph id="idB0CA61AAE4D749CEB44D0DE39279C4CA"><enum>(1)</enum><header>In
general</header><text>Paragraph (3) of section 40(d) is amended by
redesignating subparagraph (D) as subparagraph (E) and by inserting after
subparagraph (C) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="idE2DFDA4DFC3343C89DACE4EF3AB51E3F" style="OLC">
<subparagraph id="id1AAF9ECD583D4CC6B86A35E414A924C2"><enum>(D)</enum><header>Small
cellulosic alcohol producer credit</header><text>If—</text>
<clause id="idD0F4F9E52E9D45FBBEDDDE5F5CBFD02A"><enum>(i)</enum><text>any credit is
allowed under subsection (a)(4), and</text>
</clause><clause id="idF5A45BAB3C3F4900B516F3507CECD3EE"><enum>(ii)</enum><text>any person does
not use such fuel for a purpose described in subsection (b)(6)(C),</text>
</clause><continuation-text continuation-text-level="subparagraph">then
there is hereby imposed on such person a tax equal to the applicable amount for
each gallon of such cellulosic biomass
alcohol.</continuation-text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id33F95C58A0C2416B8DE095F7B18E6A6B"><enum>(2)</enum><header>Conforming
amendments</header>
<subparagraph id="idD9272155E7A649FAA716235710D98506"><enum>(A)</enum><text>Subparagraph (C)
of section 40(d)(3) is amended by striking <quote><header-in-text level="subparagraph" style="OLC">producer</header-in-text></quote> in the
heading and inserting <quote><header-in-text level="subparagraph" style="OLC">small ethanol producer</header-in-text></quote>.</text>
</subparagraph><subparagraph id="id4670038E3D44485991C67E9E6E1E9559"><enum>(B)</enum><text>Subparagraph (E)
of section 40(d)(3), as redesignated by paragraph (1), is amended by striking
<quote>or (C)</quote> and inserting <quote>(C), or (D)</quote>.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id69EB398988444576B3F57920962D9B62"><enum>(e)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to fuel
produced after December 31, 2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="idCFEF21A48EE7445B89051207B974345C"><enum>222.</enum><header>Expansion of
special allowance to cellulosic biomass alcohol fuel plant property</header>
<subsection commented="no" display-inline="no-display-inline" id="id4EBB0EE7396F472EBF12D260E9D2EC05"><enum>(a)</enum><header>In
general</header><text>Paragraph (3) of section 168(l) (relating to special
allowance for cellulosic biomass ethanol plant property) is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="id9F45844C76F5445EB18A07B4EA2F5569" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="id9ADDEE9EC751458D8292CDD4418DD95C"><enum>(3)</enum><header>Cellulosic
biomass alcohol</header><text>For purposes of this subsection, the term
<term>cellulosic biomass alcohol</term> means any alcohol produced from any
lignocellulosic or hemicellulosic matter that is available on a renewable or
recurring
basis.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id25A81AF0F0F342FE9BB058FC9EB349BA"><enum>(b)</enum><header>Conforming
amendments</header>
<paragraph commented="no" display-inline="no-display-inline" id="id802765ACD19347F385E2AB2FD5D892A6"><enum>(1)</enum><text>Subsection (l) of
section 168 is amended by striking <quote>cellulosic biomass ethanol</quote>
each place it appears and inserting <quote>cellulosic biomass
alcohol</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id2922AF61857C41079F187F2FE0014F01"><enum>(2)</enum><text>The heading of
section 168(l) is amended by striking <quote><header-in-text level="subsection" style="OLC">cellulosic biomass ethanol</header-in-text></quote> and inserting
<quote><header-in-text level="subsection" style="OLC">cellulosic biomass
alcohol</header-in-text></quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idCDC14F199B914696BA7AFD1A43584E95"><enum>(3)</enum><text>The heading of
paragraph (2) of section 168(l) is amended by striking <quote><header-in-text level="paragraph" style="OLC">cellulosic biomass
ethanol</header-in-text></quote> and inserting <quote><header-in-text level="paragraph" style="OLC">cellulosic biomass
alcohol</header-in-text></quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id0E47A3833DE943858C6864E2B0A8AFB9"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to property
placed in service after the date of the enactment of this Act, in taxable years
ending after such date.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id3BC7675E378F43719596798B1B9BD543"><enum>223.</enum><header>Extension of
small ethanol producer credit</header><text display-inline="no-display-inline">Paragraph (1) of section 40(e) (relating to
termination) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="id8A9F969E24D540AD84ED8352147BBE7B"><enum>(1)</enum><text>in subparagraph
(A), by inserting <quote>(December 31, 2012, in the case of the credit allowed
by reason of subsection (a)(3))</quote> after <quote>December 31, 2010</quote>,
and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id81AB80FA311545C2B6632CD4285443B0"><enum>(2)</enum><text>in subparagraph
(B), by inserting <quote>(January 1, 2013, in the case of the credit allowed by
reason of subsection (a)(3))</quote> after <quote>January 1,
2011</quote>.</text>
</paragraph></section><section commented="no" display-inline="no-display-inline" id="id1D3938BCEAB0419D81D682A6682EA9E8"><enum>224.</enum><header>Credit for
producers of fossil free alcohol</header>
<subsection id="id566A761383BD44BB9E839234B803ABDB"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subsection (a) of
section 40 (relating to alcohol used as fuel), as amended by this Act, is
amended by striking <quote>plus</quote> at the end of paragraph (3), by
striking the period at the end of paragraph (4) and inserting <quote>,
plus</quote>, and by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id9AB6409841B846EFAD46BF9CB49F861B" style="OLC">
<paragraph id="idF2A764CF68F644C8B09BCB87F29D72D2"><enum>(5)</enum><text display-inline="yes-display-inline">the small fossil free alcohol producer
credit.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idC14D9C839D9B442CB7F14CCA60ADE5C1"><enum>(b)</enum><header>Small fossil
free alcohol producer credit</header><text>Subsection (b) of section 40, as
amended by this Act, is amended by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id0266054791284F358C164967EB35E995" style="OLC">
<paragraph id="id3DCEE3DD799545ED903BB9C28170438D"><enum>(7)</enum><header>Small fossil
free alcohol producer credit</header>
<subparagraph id="id90438A8F8B834E40B36AFBE3F95EC02C"><enum>(A)</enum><header>In
general</header><text>In addition to any other credit allowed under this
section, there shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to 25 cents for each gallon of
qualified fossil free alcohol production.</text>
</subparagraph><subparagraph id="idB57D101B78ED4384BCABFF50B39A7D9D"><enum>(B)</enum><header>Qualified
fossil free alcohol production</header><text>For purposes of this section, the
term <term>qualified fossil free alcohol production</term> means alcohol which
is produced by an eligible small fossil free alcohol producer at a fossil free
alcohol production facility and which during the taxable year—</text>
<clause id="id93D9D92756B14628B47590AD152A87D4"><enum>(i)</enum><text>is sold by the
taxpayer to another person—</text>
<subclause id="id9DC3D567EB354BFB8566F3AE791BAE2B"><enum>(I)</enum><text>for use by such
other person in the production of a qualified alcohol mixture in such other
person's trade or business (other than casual off-farm production),</text>
</subclause><subclause id="idC8A75D354C614B0DBBFC1BD72E8F19F5"><enum>(II)</enum><text>for use by such
other person as a fuel in a trade or business, or</text>
</subclause><subclause id="idE92E1205FC0A43F49C177E5305FA3934"><enum>(III)</enum><text>who sells such
alcohol at retail to another person and places such alcohol in the fuel tank of
such other person, or</text>
</subclause></clause><clause id="id1C26C34C78894E4DA270B6B37F2D064F"><enum>(ii)</enum><text>is used or sold
by the taxpayer for any purpose described in clause (i).</text>
</clause></subparagraph><subparagraph id="id2F5CC47040B1454CAC2D5DB827E5674D"><enum>(C)</enum><header>Additional
distillation excluded</header><text>The qualified fossil free alcohol
production of any taxpayer for any taxable year shall not include any alcohol
which is purchased by the taxpayer and with respect to which such producer
increases the proof of the alcohol by additional
distillation.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id0692BC203B474B8DA241557E079E1E7A"><enum>(c)</enum><header>Eligible small
fossil free alcohol producer</header><text>Section 40, as amended by this Act,
is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="idD1A2866F8E3F4DA8915F00272F5D7073" style="OLC">
<subsection id="id45FBD1C7A33A4372B76A3A6D474C45AB"><enum>(j)</enum><header>Definitions and
special rules for small fossil free alcohol producer</header><text>For purposes
of this section—</text>
<paragraph id="id4DD4F58185EE4E5082ABA8A5BAC0663A"><enum>(1)</enum><header>In
general</header><text>The term <term>eligible small fossil free alcohol
producer</term> means a person, who at all times during the taxable year, has a
productive capacity for alcohol from all fossil free alcohol production
facilities of the taxpayer which is not in excess of 60,000,000 gallons.</text>
</paragraph><paragraph id="id8E301F50F75840EEA97EE179CFC6CB13"><enum>(2)</enum><header>Fossil free
alcohol production facility</header><text>The term <term>fossil free alcohol
production facility</term> means any facility at which 90 percent of the fuel
used in the production of alcohol is from biomass (as defined in section
45K(c)(3)).</text>
</paragraph><paragraph id="id558836A08E6349C086CB52F9DF043066"><enum>(3)</enum><header>Aggregation
rule</header><text>For purposes of the 60,000,000 gallon limitation under
paragraph (1), all members of the same controlled group of corporations (within
the meaning of section 267(f)) and all persons under common control (within the
meaning of section 52(b) but determined by treating an interest of more than 50
percent as a controlling interest) shall be treated as 1 person.</text>
</paragraph><paragraph id="idEA63A86B60FF4CEE9CB812E19D31B595"><enum>(4)</enum><header>Partnership, S
corporations, and other pass-thru entities</header><text>In the case of a
partnership, trust, S corporation, or other pass-thru entity, the limitation
contained in paragraph (1) shall be applied at the entity level and at the
partner or similar level.</text>
</paragraph><paragraph id="id286DE520AD1D4DB19C0E90E70FAFF1A3"><enum>(5)</enum><header>
Allocation</header><text>For purposes of this subsection, in the case of a
facility in which more than 1 person has an interest, productive capacity shall
be allocated among such persons in such manner as the Secretary may
prescribe.</text>
</paragraph><paragraph id="idA84353B97672405F96A0ADB06F16495B"><enum>(6)</enum><header>Regulations</header><text>The
Secretary may prescribe such regulations as may be necessary to prevent the
credit provided for in subsection (a)(5) from directly or indirectly
benefitting any person with a direct or indirect productive capacity of more
than 60,000,000 gallons of alcohol from fossil free alcohol production
facilities during the taxable year.</text>
</paragraph><paragraph id="id78FA9ACFFD1D40DE85BA7A03EFF77F70"><enum>(7)</enum><header>Allocation of
small fossil free alcohol producer credit to patrons of
cooperative</header><text>Rules similar to the rules under subsection (g)(6)
shall apply for purposes of this
subsection.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id599E3F5B1860421D8577445E4CBF9C58"><enum>(d)</enum><header>Alcohol not
used as a fuel, etc</header>
<paragraph id="id7E14C3E2624E4E658BAC93EE7B914F5E"><enum>(1)</enum><header>In
general</header><text>Paragraph (3) of section 40(d), as amended by this Act,
is amended by redesignating subparagraph (E) as subparagraph (F) and by
inserting after subparagraph (D) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="idC2DC845EB9D743EE97B93AD9A310100F" style="OLC">
<subparagraph id="id1BD6162C603C4EF18D6F259771C723A1"><enum>(E)</enum><header>Small fossil
free alcohol producer credit</header><text>If—</text>
<clause id="id14A582C3D1924CD192A04FC1539F6EBB"><enum>(i)</enum><text>any credit is
allowed under subsection (a)(5), and</text>
</clause><clause id="id3DCF63FCB18D43C49E38BC18DCA4BB07"><enum>(ii)</enum><text>any person does
not use such fuel for a purpose described in subsection (b)(7)(B),</text>
</clause><continuation-text continuation-text-level="subparagraph">then
there is hereby imposed on such person a tax equal to 25 cents for each gallon
of such
alcohol.</continuation-text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="idA61A7D3266624974BA79C2B810E34CFA"><enum>(2)</enum><header>Conforming
amendment</header><text>Subparagraph (E) of section 40(d)(3), as redesignated
by paragraph (1) and amended by this Act, is amended by striking <quote>or
(D)</quote> and inserting <quote>(C), or (E)</quote>.</text>
</paragraph></subsection><subsection id="idEC69ED4F122D44FEBF214221BDF950A9"><enum>(e)</enum><header>Termination</header><text>Paragraph
(1) of section 40(e), as amended by this Act, is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="id63091438B4BD4FA1837A16008DC4248A"><enum>(1)</enum><text>in subparagraph
(A), by striking <quote>(December 31, 2012, in the case of the credit allowed
by reason of subsection (a)(3))</quote> and inserting <quote>(December 31,
2012, in the case of the credits allowed by reason of paragraphs (3) and (5) of
subsection (a))</quote>, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id11F6E2A76FBC4F0D9D1243B7FA3B14A9"><enum>(2)</enum><text>in subparagraph
(B), by striking <quote>(January 1, 2013, in the case of the credit allowed by
reason of subsection (a)(3))</quote> and inserting <quote>(January 1, 2013, in
the case of the credits allowed by reason of paragraphs (3) and (5) of
subsection (a))</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id792E8C47FDCA4938A5921381C76B250C"><enum>(f)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to fuel
produced after December 31, 2007.</text>
</subsection></section><section id="idCE2E02B4174D49E78DED8DE54700E009"><enum>225.</enum><header>Modification
of alcohol credit</header>
<subsection id="id5E99A43EECA94746A8F2FC5A0EA2F07C"><enum>(a)</enum><header>Income tax
credit</header><text>Subsection (h) of section 40 (relating to reduced credit
for ethanol blenders) is amended by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id87FD71BA61544B62835D1979B363FD90" style="OLC">
<paragraph id="idD7B6A8DB963A4C7AAE9C5E504D19E82A"><enum>(3)</enum><header>Reduced amount
after sale of 7,500,000,000 gallons</header>
<subparagraph id="id8C3A84CDF73D4DBEBD5C774FEAFECC5E"><enum>(A)</enum><header>In
general</header><text>In the case of any calendar year beginning after the date
described in subparagraph (B), the last row in the table in paragraph (2) shall
be applied by substituting <quote>46 cents</quote> for <quote>51
cents</quote>.</text>
</subparagraph><subparagraph id="idB95CD33CA2154E28AC56632062AF48FC"><enum>(B)</enum><header>Date
described</header><text>The date described in this subparagraph is the first
date on which 7,500,000,000 gallons of ethanol (including cellulosic ethanol)
have been produced in or imported into the United States after the date of the
enactment of this paragraph, as certified by the Secretary, in consultation
with the Administrator of the Environmental Protection
Agency.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idE3A2DBAAAA8F40CBB8DF8CBB47F3DC4C"><enum>(b)</enum><header>Excise tax
credit</header>
<paragraph id="id6B89718612D941D2ABD9BAA45B968388"><enum>(1)</enum><header>In
general</header><text>Paragraph (2) of section 6426(b) (relating to alcohol
fuel mixture credit) is amended by adding at the end the following new
subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id2B97D3C88A054B4D9875FE7A2CF73515" style="OLC">
<subparagraph id="idC3C612B5E9344922A2A310E24E72C3D2"><enum>(C)</enum><header>Reduced amount
after sale of 7,500,000,000 gallons</header><text>In the case of any alcohol
fuel mixture produced in a calendar year beginning after the date described in
section 40(h)(3)(B), subparagraph (A) shall be applied by substituting
<quote>46 cents</quote> for <quote>51
cents</quote>.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id496BEC26795048F6886878359668D309"><enum>(2)</enum><header>Conforming
amendment</header><text>Subparagraph (A) of section 6426(b)(2) is amended by
striking <quote>subparagraph (B)</quote> and inserting <quote>subparagraphs (B)
and (C)</quote>.</text>
</paragraph></subsection><subsection id="idE3D29E3B97474FA8B2B9B1AA9EDA4E6F"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect on the
date of the enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id852FECE157234C989C38BF01D9695624"><enum>226.</enum><header>Extension and
modification of credit for biodiesel used as fuel</header>
<subsection commented="no" display-inline="no-display-inline" id="idB9A8390C7A9D41DDA093EC167E956139"><enum>(a)</enum><header>Extension</header>
<paragraph commented="no" display-inline="no-display-inline" id="id446150BCE1264EF2B0A7A7F75841F7FB"><enum>(1)</enum><header>Income tax
credits for biodiesel and renewable diesel and small agri-biodiesel producer
credit</header><text>Section 40A(g) (relating to termination) is amended by
striking <quote>December 31, 2008</quote> and inserting <quote>December 31,
2010 (December 31, 2012, in the case of the credit allowed by reason of
subsection (a)(3))</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id211B23EAF6C345808E478DE3DA63F4EC"><enum>(2)</enum><header>Excise tax
credit</header><text>Section 6426(c)(6) (relating to termination) is amended by
striking <quote>2008</quote> and inserting <quote>2010</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id69260D0F5EE9498DA091EF4F7E401190"><enum>(3)</enum><header>Fuels not used
for taxable purposes</header><text>Section 6427(e)(5)(B) (relating to
termination) is amended by striking <quote>2008</quote> and inserting
<quote>2010</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id7C872331D6184B0EB05410090463490A"><enum>(b)</enum><header>Modification of
credit for renewable diesel</header>
<paragraph commented="no" display-inline="no-display-inline" id="id2812D9D8D3764E2D8C65814717543F49"><enum>(1)</enum><header>In
general</header><text>Section 40A(f) (relating to renewable diesel) is amended
by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id7E4BAB13156143B88A740D0EDA736C9C" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="id1B703790CBE046D19129C95BBDAFB801"><enum>(4)</enum><header>Special rule
for co-processed renewable diesel</header><text>In the case of a taxpayer which
produces renewable diesel through the co-processing of biomass and petroleum at
any facility, this subsection shall not apply to so much of the renewable
diesel produced at such facility and sold or used during the taxable year in a
qualified biodiesel mixture as exceeds 60,000,000
gallons.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idD93C260C57924888A34DC0446E201FB3"><enum>(c)</enum><header>Modification
relating to definition of agri-biodiesel</header><text>Paragraph (2) of section
40A(d) (relating to agri-biodiesel) is amended by striking <quote>and mustard
seeds</quote> and inserting <quote>mustard seeds, and camelina</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id11312539BDFD4990B52E030B21056DD5"><enum>(d)</enum><header>Effective
dates</header><text>The amendments made by this section shall apply to fuel
sold or used after the date of the enactment of this Act.</text>
</subsection></section><section id="id684D8F188BDB44E7A4497DA8E9339F0B"><enum>227.</enum><header>Extension and
modification of alternative fuel credit</header>
<subsection id="id86303A6D85694AAE9BC275FCE9DC7663"><enum>(a)</enum><header>Extension</header>
<paragraph id="id8A71FA406C114D139714A33CB1F63EFF"><enum>(1)</enum><header>Alternative
fuel credit</header><text>Paragraph (4) of section 6426(d) (relating to
alternative fuel credit) is amended by striking <quote>September 30,
2009</quote> and inserting <quote>December 31, 2012</quote>.</text>
</paragraph><paragraph id="id3CA99BBBECE048CCAA1886E43DD19D71"><enum>(2)</enum><header>Alternative
fuel mixture credit</header><text>Paragraph (3) of section 6426(e) (relating to
alternative fuel mixture credit) is amended by striking <quote>September 30,
2009</quote> and inserting <quote>December 31, 2012</quote>.</text>
</paragraph><paragraph id="idE3F6B374A6E24BB79D7E2623B2252FB7"><enum>(3)</enum><header>Payments</header><text>Subparagraph
(C) of section 6427(e)(5) (relating to termination) is amended by striking
<quote>September 30, 2009</quote> and inserting <quote>December 31,
2012</quote>.</text>
</paragraph></subsection><subsection id="idA783423AEFF04C089407266DEDAC8006"><enum>(b)</enum><header>Modifications</header>
<paragraph id="id57ABC68E00444030AEC3C7105CFDEF77"><enum>(1)</enum><header>Alternative
fuel to include compressed or liquified biomass gas</header><text>Paragraph (2)
of section 6426(d) (relating to alternative fuel credit) is amended by striking
<quote>and</quote> at the end of subparagraph (E), by redesignating
subparagraph (F) as subparagraph (G), and by inserting after subparagraph (E)
the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id1788E2C43D444BD1B8CA34FCF6DEA31C" style="OLC">
<subparagraph id="idB1D4B2759981416FBAF98BDB910C68FE"><enum>(F)</enum><text>compressed or
liquified biomass gas,
and</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="idA59F7F6ABC8D47B6B4AB9A0B94780624"><enum>(2)</enum><header>Credit allowed
for aviation use of fuel</header><text>Paragraph (1) of section 6426(d) is
amended by inserting <quote>sold by the taxpayer for use as a fuel in
aviation,</quote> after <quote>motorboat,</quote>.</text>
</paragraph></subsection><subsection id="id00FBE43B9806491299B03A30955B05AE"><enum>(c)</enum><header>Carbon capture
requirement for certain fuels</header>
<paragraph id="idB8BC1138780147E19CD00BEEA90E2AA5"><enum>(1)</enum><header>In
general</header><text>Subsection (d) of section 6426, as amended by subsection
(a), is amended by redesignating paragraph (4) as paragraph (5) and by
inserting after paragraph (3) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id952F7E5EAF33498AA5A6549A5432EF4C" style="OLC">
<paragraph id="idDCA83DD036434F1999A85FC0B34FFECD"><enum>(4)</enum><header>Carbon capture
requirement</header><text>The requirements of this paragraph are met if the
fuel is certified, under such procedures as required by the Secretary, as
having been produced at a facility which separates and sequesters not less than
75 percent of such facility's total carbon dioxide
emissions.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id550659311C4E47DF8A9E504386E40233"><enum>(2)</enum><header>Conforming
amendment</header><text>Subparagraph (E) of section 6426(d)(2) is amended by
inserting <quote>which meets the requirements of paragraph (4) and which
is</quote> after <quote>any liquid fuel</quote>.</text>
</paragraph></subsection><subsection id="idC367692EEDC84E5587388CEAD1552F7B"><enum>(d)</enum><header>Effective
dates</header>
<paragraph id="id94F75188FDA0432884D569CC8419ADF1"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the amendments made
by this section shall apply to fuel sold or used after the date of the
enactment of this Act.</text>
</paragraph><paragraph id="id12FE5711D5CB441B8E79429000A58367"><enum>(2)</enum><header>Carbon capture
requirements</header><text>The amendments made by subsection (c) shall apply to
fuel sold or used after December 31, 2007.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="id28E50D9387A743828626B1BEBA53D28C"><enum>228.</enum><header>Extension of
alternative fuel vehicle refueling property credit</header><text display-inline="no-display-inline">Paragraph
(2) of section 30C(g) (relating to termination) is amended by striking
<quote>December 31, 2009</quote> and inserting <quote>December 31,
2012</quote>.</text>
</section><section id="idCBC9DAA86B164EA8A7125071527297F2"><enum>229.</enum><header>Extension of
suspension of taxable income limit on percentage depletion for oil and natural
gas produced from marginal properties</header><text display-inline="no-display-inline">Subparagraph (H) of section 613A(c)(6)
(relating to oil and gas produced from marginal properties) is amended by
striking <quote>January 1, 2008</quote> and inserting <quote>January 1,
2010</quote>.</text>
</section><section id="id4B56FDAA8A8E473194A471E49BC90066"><enum>230.</enum><header>Extension and
modification of election to expense certain refineries</header>
<subsection id="id21FDDE38302141CDAE126EF74C4F8BBF"><enum>(a)</enum><header>Extension</header><text>Paragraph
(1) of section 179C(c) (relating to qualified refinery property) is
amended—</text>
<paragraph id="idCE8407EC5913404E91351EF84EE1C9D4"><enum>(1)</enum><text>by striking
<quote>January 1, 2012</quote> in subparagraph (B) and inserting <quote>January
1, 2014</quote>, and</text>
</paragraph><paragraph id="id933E81D4A1D24F0B8DA2189911248F64"><enum>(2)</enum><text>by striking
<quote>January 1, 2008</quote> each place it appears in subparagraph (F) and
inserting <quote>January 1, 2010</quote>.</text>
</paragraph></subsection><subsection id="idC417BA8652914734BFFB789237B36664"><enum>(b)</enum><header>Inclusion of
fuel derived from shale and tar sands</header>
<paragraph id="id372F388815DB4BD0AF3AA0B087CCBE68"><enum>(1)</enum><header>In
general</header><text>Subsection (d) of section 179C is amended by inserting
<quote>, or directly from shale or tar sands</quote> after <quote>(as defined
in section 45K(c))</quote>.</text>
</paragraph><paragraph id="id92624CE8C45648B9A12DD02402B6257D"><enum>(2)</enum><header>Conforming
amendment</header><text>Paragraph (2) of section 179C(e) is amended by
inserting <quote>shale, tar sands, or</quote> before <quote>qualified
fuels</quote>.</text>
</paragraph></subsection><subsection id="id6E38CF3F86E74FF897987F07C7C8F978"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to property
placed in service after the date of the enactment of this Act.</text>
</subsection></section><section id="id92597FD84FF541F79B7582CCA69FCCF8"><enum>231.</enum><header>Ethanol tariff
extension</header><text display-inline="no-display-inline">Headings 9901.00.50
and 9901.00.52 of the Harmonized Tariff Schedule of the United States are each
amended in the effective period column by striking <quote>1/1/2009</quote> and
inserting <quote>1/1/2011</quote>.</text>
</section><section id="id78EF0BE603F54F83A555D532569BB331"><enum>232.</enum><header>Elimination
and reductions of duty drawback on certain imported ethanol</header>
<subsection id="idC3CC96242F3C4DB68610F3182B202B32"><enum>(a)</enum><header>In
general</header><text>Section 313(p)(3)(A)(i)(I) of the Tariff Act of 1930 (19
U.S.C. 1313(p)(3)(A)(i)(I)) is amended by striking <quote>or</quote> and
inserting the following: “other than an article that contains either—</text>
<quoted-block display-inline="no-display-inline" id="idC225DD3BA5E44F2B8B2EB094A9C2D4A9" style="OLC">
<item id="idB9C11EF74B4245F99B064297A5308595"><enum>(aa)</enum><text>imported ethyl
alcohol (provided for in subheading 2207.10.60 or 2207.20.00 of such Schedule),
or</text>
</item><item id="id32E7BB135E2B4CBC8E213373C815A627"><enum>(bb)</enum><text>any imported
mixture (provided for in heading 2710 or 3824 of such Schedule) that contains
ethyl alcohol,
or</text>
</item><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id7165C2D7ECD045F2ABCF268E5517ECAC"><enum>(b)</enum><header>Limitations on,
and Reductions of, Drawbacks</header><text display-inline="yes-display-inline">Section 313 of the Tariff Act of 1930 (19
U.S.C. 1313) is amended by adding at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="id7980369027BE4AE58EC80DC9A00F0108" style="OLC">
<subsection id="idD4E1D13CA6B641BC9719E4E9E0794619"><enum>(z)</enum><header>Limitations on,
and reductions of, drawbacks</header>
<paragraph id="id906228C988BA402B8A635746DBACF800"><enum>(1)</enum><header>Limitations</header>
<subparagraph id="id35CE81CBBF2B49789912737BD5875389"><enum>(A)</enum><header>In
general</header><text>Ethyl alcohol or mixture containing ethyl alcohol
described in subparagraph (B) may be treated as being of the same kind and
quality under subsection (b) of this section or may be treated as being
commercially interchangeable with any other ethyl alcohol or mixture containing
ethyl alcohol under subsection (j)(2) of this section, only if the other ethyl
alcohol or mixture—</text>
<clause id="idB98D9829D47042C89EFD2596158F3283"><enum>(i)</enum><text>if imported, is
subject to the additional duty under subheading 9901.00.50 of the Harmonized
Tariff Schedule of the United States; or</text>
</clause><clause id="id4258BC72DBB24AB3BBB71D6D81C50BEE"><enum>(ii)</enum><text>if domestic, is
subject to Federal excise tax under section 4041 or 4081 of the Internal
Revenue Code of 1986 in an amount equal to or greater than the amount of
drawback claimed.</text>
</clause></subparagraph><subparagraph id="id6BF4654E64564670AEF069AC4A18A54A"><enum>(B)</enum><header>Ethyl alcohol
or mixture containing ethyl alcohol described</header><text>Ethyl alcohol or
mixture containing ethyl alcohol described in this subparagraph means—</text>
<clause id="id3F11DEDAA221498AA03C9F06F8AFEE79"><enum>(i)</enum><text>ethyl alcohol
classifiable under subheading 2207.10.60 or 2207.20.00 of the Harmonized Tariff
Schedule of the United States, or</text>
</clause><clause id="idE5F84259734C4E09BD51C80620B27470"><enum>(ii)</enum><text>a mixture
containing ethyl alcohol classifiable under heading 2710 or 3824 of the
Harmonized Tariff Schedule of the United States,</text>
</clause><continuation-text continuation-text-level="subparagraph">which,
if imported would be subject to additional duty under subheading 9901.00.50 of
such Schedule.</continuation-text></subparagraph></paragraph><paragraph id="IDe6f33c928cdb49249cf5c04520facb15"><enum>(2)</enum><header>Reduction of
drawback</header><text>For purposes of subsections (b), (j)(2), and (p) of this
section, the amount of the refund as drawback under this section shall be
reduced by an amount equal to any Federal tax credit or refund of any Federal
tax paid on the merchandise with respect to which the drawback is
claimed.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id342F1B82B5754C86BFA9C42651204E65"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section apply to articles
exported on or after the date that is 15 days after the date of the enactment
of this Act.</text>
</subsection></section><section id="idC0D38B721D56402596D6E60B784A7DD8"><enum>233.</enum><header>Certain income
and gains relating to alcohol fuel mixtures, biodiesel fuel mixtures, and
alternative fuel treated as qualifying income for publicly traded
partnerships</header>
<subsection id="idF62FAAB8B0604F01B4555BE6504EF80C"><enum>(a)</enum><header>In
general</header><text>Subparagraph (E) of section 7704(d)(1) (defining
qualifying income)is amended by inserting <quote>, or the transportation or
storage of any fuel described in subsection (b), (c), or (d) of section
6426</quote> after <quote>timber)</quote>.</text>
</subsection><subsection id="idD14A4776E3134C9B923FCFA7BAEFAF4C"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall take effect on the
date of the enactment of this Act, in taxable years ending after such
date.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="idCA208F2B5BF34B768D999243CEE8B2D8"><enum>234.</enum><header>Technical
amendments</header>
<subsection display-inline="no-display-inline" id="idDDA4C6AA4AD7411AB2013A823A496D89"><enum>(a)</enum><header>Amendments
related to section 11113 of the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users</header>
<paragraph display-inline="no-display-inline" id="idE0AE7162A8C848739DB0C37729684A68"><enum>(1)</enum><text>Paragraph (3) of
section 6427(i) is amended—</text>
<subparagraph id="idFFCD8045542240218F4AA9BB83F13413"><enum>(A)</enum><text>by inserting
<quote>or under subsection (e)(2) by any person with respect to an alternative
fuel (as defined in section 6426(d)(2))</quote> after <quote>section
6426</quote> in subparagraph (A),</text>
</subparagraph><subparagraph id="id8C5B94DF7B2D49C48153A34A40FBA22B"><enum>(B)</enum><text>by inserting
<quote>or (e)(2)</quote> after <quote>subsection (e)(1)</quote> in
subparagraphs (A)(i) and (B), and</text>
</subparagraph><subparagraph id="id088E719121334A42AB4B80EB9D46D2E0"><enum>(C)</enum><text>by inserting
<quote><header-in-text level="paragraph" style="OLC">and alternative fuel
credit</header-in-text></quote> after <quote><header-in-text level="paragraph" style="OLC">mixture credit</header-in-text></quote> in the heading
thereof.</text>
</subparagraph></paragraph><paragraph id="id56BF8E3379304E3D83CB0B52062F1CCF"><enum>(2)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="id2ECD38CE67004DF7A06EC8C41C89D214"><enum>(A)</enum><text>Subparagraph (G) of
section 6426(d)(2), as redesignated by section 227, is amended by striking
<quote>hydrocarbons</quote> and inserting <quote>fuel</quote>.</text>
</subparagraph><subparagraph commented="no" id="id24E73ADCA05849CA9E039B2A40115F46" indent="up1"><enum>(B)</enum><text>Section 6426 is amended by adding at
the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="idECC3456C8EE147CFBDE5B490C4621DF2" style="OLC">
<subsection commented="no" id="id280AF2C2622B42239D4FFA160A3A55B2"><enum>(h)</enum><header>Denial of
double benefit</header><text>No credit shall be determined under subsection (d)
or (e) with respect to any fuel which is described in subsection (b) or (c) or
section 40 or
40A.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id79206B5E53A048E9938A4CB653933030"><enum>(3)</enum><text>The amendments
made by this subsection shall take effect as if included in section 11113 of
the SAFETEA–LU.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idFA4B6BE3FB3441268CBDA17A677EADB2"><enum>(b)</enum><header>Amendments
related to the Energy Policy Act of 2005</header>
<paragraph commented="no" id="idCBC069D2890C42C593D98A536C71AD5C"><enum>(1)</enum><header>Amendment
related to section 1342 of the Act</header>
<subparagraph commented="no" id="idE29782291F794D8181F91975043342F9"><enum>(A)</enum><text>So much of
subsection (b) of section 30C as precedes paragraph (1) thereof is amended to
read as follows:</text>
<quoted-block display-inline="no-display-inline" id="idD25F1ACC4D5E4EA595213B0A62AE6CA8" style="OLC">
<subsection commented="no" id="id010E3F7198E94698897E53AF3F11AD1E"><enum>(b)</enum><header>Limitation</header><text>The
credit allowed under subsection (a) with respect to all alternative fuel
vehicle refueling property placed in service by the taxpayer during the taxable
year at a location shall not
exceed—</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id5AB3F89B1BAF4EA9A0537DBAAE9F42F8"><enum>(B)</enum><text>Subsection (c) of
section 30C is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id237E8AA97069443CAC142B93BCE3421F" style="OLC">
<subsection id="idE1B68D7A16F64D63BEC686AFDFB805A7"><enum>(c)</enum><header>Qualified
alternative fuel vehicle refueling property</header><text>For purposes of this
section, the term <term>qualified alternative fuel vehicle refueling
property</term> has the same meaning as the term <term>qualified clean-fuel
vehicle refueling property</term> would have under section 179A if—</text>
<paragraph id="id6A8F49F45D154FD68B00EED2A4505287"><enum>(1)</enum><text>paragraph (1) of
section 179A(d) did not apply to property installed on property which is used
as the principal residence (within the meaning of section 121) of the taxpayer,
and</text>
</paragraph><paragraph id="idD35CE39E49E64D77BF96D82E08867357"><enum>(2)</enum><text>only the
following were treated as clean burning fuels for purposes of section
179A(d):</text>
<subparagraph id="id90BD72AE2DAF4D17ADC12281C24F3B0A"><enum>(A)</enum><text>Any fuel at least
85 percent of the volume of which consists of one or more of the following:
ethanol, natural gas, compressed natural gas, liquified natural gas, liquefied
petroleum gas, or hydrogen.</text>
</subparagraph><subparagraph id="id42486E49EC254D22839AFE081A47EE3E"><enum>(B)</enum><text>Biodiesel (as
defined in section 40A(d)(1)).</text>
</subparagraph><subparagraph id="idD005646D34E940BAA57023C5851BFFB6"><enum>(C)</enum><text>Any
mixture—</text>
<clause id="id79E5E7B930484EBF9839B5A6E30FA4CC"><enum>(i)</enum><text>which consists of
two or more of the following: biodiesel (as so defined), diesel fuel (as
defined in section 4083(a)(3)), or kerosene, and</text>
</clause><clause id="idFD848DD9FFD145F09D841FE02B547A4D"><enum>(ii)</enum><text>at least 20
percent of the volume of which consists of biodiesel (as so defined) determined
without regard to any kerosene in such
mixture.</text>
</clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph display-inline="no-display-inline" id="id8FFCB852EE1B4099AAE53E20A5CE49DB"><enum>(2)</enum><header>Amendments
related to section 1362 of the Act</header>
<subparagraph id="idE8B975B191744A7295F3D2DBD5C0B834"><enum>(A)</enum><clause commented="no" display-inline="yes-display-inline" id="id8CA5CF63F20B417BBD25A2B56EEB568A"><enum>(i)</enum><text>Paragraph (1) of
section 4041(d) is amended by adding at the end the following new sentence:
<quote>No tax shall be imposed under the preceding sentence on the sale or use
of any liquid if tax was imposed with respect to such liquid under section 4081
at the Leaking Underground Storage Tank Trust Fund financing
rate.</quote>.</text>
</clause><clause id="id259CC1D2178C4EA4AB1757617FC9C161" indent="up1"><enum>(ii)</enum><text>Paragraph (3) of section 4042(b)
is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="idB92FCBF05C9145E8B6B0E5C4F4E1DC32" style="OLC">
<paragraph id="id8B229F1F93DD406BAD3C04C20F770D6B"><enum>(3)</enum><header>Exception for
fuel on which Leaking Underground Storage Tank Trust Fund financing rate
separately imposed</header><text>The Leaking Underground Storage Tank Trust
Fund financing rate under paragraph (2)(B) shall not apply to the use of any
fuel if tax was imposed with respect to such fuel under section 4041(d) or 4081
at the Leaking Underground Storage Tank Trust Fund financing
rate.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</clause><clause id="idD48E9DDC288B44C1B52E0A7DB18F09C1" indent="up1"><enum>(iii)</enum><text display-inline="yes-display-inline">Notwithstanding section 6430 of the
Internal Revenue Code of 1986, a refund, credit, or payment may be made under
subchapter B of chapter 65 of such Code for taxes imposed with respect to any
liquid after September 30, 2005, and before the date of the enactment of this
Act under section 4041(d)(1) or 4042 of such Code at the Leaking Underground
Storage Tank Trust Fund financing rate to the extent that tax was imposed with
respect to such liquid under section 4081 at the Leaking Underground Storage
Tank Trust Fund financing rate.</text>
</clause></subparagraph><subparagraph id="id39D536217EF44A908ECBE9F999644593"><enum>(B)</enum><clause commented="no" display-inline="yes-display-inline" id="idAB0B0520AA884740B927247557F4B46A"><enum>(i)</enum><text>Paragraph (5) of
section 4041(d) is amended—</text>
<subclause id="id4A60543C894944679F2CEEEA6857385F" indent="up1"><enum>(I)</enum><text>by striking <quote>(other than with
respect to any sale for export under paragraph (3) thereof)</quote>, and</text>
</subclause><subclause id="id72815428B3A54E888E85EF322E62C987" indent="up1"><enum>(II)</enum><text>by adding at the end the following new
sentence: <quote>The preceding sentence shall not apply with respect to
subsection (g)(3) and so much of subsection (g)(1) as relates to vessels
(within the meaning of section 4221(d)(3)) employed in foreign trade or trade
between the United States and any of its possessions.</quote></text>
</subclause></clause><clause id="idCD7CA123FD554B7D949570990F75169E" indent="up1"><enum>(ii)</enum><text>Section 4082 is amended—</text>
<subclause id="id8D98175BAC564FA3B5DD032129DA4751"><enum>(I)</enum><text>by striking <quote>(other than such tax
at the Leaking Underground Storage Tank Trust Fund financing rate imposed in
all cases other than for export)</quote> in subsection (a), and</text>
</subclause><subclause id="id03C3F306EC604683B2A4F194CFD00E9D"><enum>(II)</enum><text>by redesignating subsections (f) and (g)
as subsections (g) and (h) and by inserting after subsection (e) the following
new subsection:</text>
<quoted-block display-inline="no-display-inline" id="idBA02DB8B091C4C5898A05F939615C472" style="OLC">
<subsection id="id76367C80CC7E40578DC28F3C9AFDE8C1"><enum>(f)</enum><header>Exception for
Leaking Underground Storage Tank Trust Fund financing rate</header>
<paragraph id="id419336A039724D34AFA6C1DABB7E3CC9"><enum>(1)</enum><header>In
general</header><text>Subsection (a) shall not apply to the tax imposed under
section 4081 at the Leaking Underground Storage Tank Trust Fund financing
rate.</text>
</paragraph><paragraph id="idCD86B030B3B244DCBDE2C3ACA9F0CB8D"><enum>(2)</enum><header>Exception for
export, etc</header><text>Paragraph (1) shall not apply with respect to any
fuel if the Secretary determines that such fuel is destined for export or for
use by the purchaser as supplies for vessels (within the meaning of section
4221(d)(3)) employed in foreign trade or trade between the United States and
any of its
possessions.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subclause></clause><clause id="id12B3742C25A74270B5CABAF58DD882A6" indent="up1"><enum>(iii)</enum><text>Subsection (e) of section 4082 is
amended—</text>
<subclause id="idD2362BF22D1E4F3F99CA2C3B6F8DA755"><enum>(I)</enum><text>by striking <quote>an aircraft, the rate
of tax under section 4081(a)(2)(A)(iii) shall be zero.</quote> and
inserting</text>
<quoted-block display-inline="yes-display-inline" id="id209E3240CF1C4F4392116B60F4C3542A" style="OLC">
<text>an
aircraft—</text><paragraph id="id74BBD2EB59F4444BA465DC360792BC13"><enum>(1)</enum><text>the rate of tax
under section 4081(a)(2)(A)(iii) shall be zero, and</text>
</paragraph><paragraph id="id49A2652BEF6343FFB051EF00310AEBCD"><enum>(2)</enum><text display-inline="yes-display-inline">if such aircraft is employed in foreign
trade or trade between the United States and any of its possessions, the
increase in such rate under section 4081(a)(2)(B) shall be
zero.</text>
</paragraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</subclause><subclause id="id085E2EFE108A4C7492626541DD200907"><enum>(II)</enum><text>by moving the last sentence flush with
the margin of such subsection (following the paragraph (2) added by clause
(i)).</text>
</subclause></clause><clause id="idEEF3377BD4B24B42A0F98C050D18FB7E" indent="up1"><enum>(iv)</enum><text>Section 6430 is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="id1101BF2DE0EF4BE0B94AF859F3A76ED6" style="OLC">
<section id="idF66E5E61259B4F0E9D72D7CE551E0252"><enum>6430.</enum><header>Treatment of
tax imposed at Leaking Underground Storage Tank Trust Fund financing
rate</header><text display-inline="no-display-inline">No refunds, credits, or
payments shall be made under this subchapter for any tax imposed at the Leaking
Underground Storage Tank Trust Fund financing rate, except in the case of
fuels—</text>
<paragraph id="idD1949798376C4477A365502022D5010A"><enum>(1)</enum><text>which are exempt
from tax under section 4081(a) by reason of section 4081(f)(2),</text>
</paragraph><paragraph id="id029F5A4B8F5A493E8E12EE3DEC7235BD"><enum>(2)</enum><text>which are exempt
from tax under section 4041(d) by reason of the last sentence of paragraph (5)
thereof, or</text>
</paragraph><paragraph id="id58DDDD39B43A4DCCA700B3C0B2A8F0EB"><enum>(3)</enum><text display-inline="yes-display-inline">with respect to which the rate increase
under section 4081(a)(2)(B) is zero by reason of section
4082(e)(2).</text>
</paragraph></section><after-quoted-block>.</after-quoted-block></quoted-block>
</clause></subparagraph><subparagraph id="idFD91E9C10EA74CDA8420E065155A8E34"><enum>(C)</enum><text>Paragraph (5) of
section 4041(d) is amended by inserting <quote>(b)(1)(A)</quote> after
<quote>subsections</quote>.</text>
</subparagraph></paragraph><paragraph id="id2DCF9D5A76284777BF73FE135531A27B"><enum>(3)</enum><header>Effective
date</header>
<subparagraph id="id199CE37403A249F38ABE50C9B4FA339D"><enum>(A)</enum><header>In
general</header><text>Except as otherwise provided in this paragraph, the
amendments made by this subsection shall take effect as if included in the
provisions of the Energy Policy Act of 2005 to which they relate.</text>
</subparagraph><subparagraph id="id87D1B75B487F4E89B538D8940D976BAB"><enum>(B)</enum><header>Nonapplication
of exemption for off-highway business use</header><text>The amendment made by
paragraph (2)(C) shall apply to fuel sold for use or used after the date of the
enactment of this Act.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idE2841B30E54B4C1E9E1A100BC7C4582E"><enum>(C)</enum><header>Amendment made
by the SAFETEA–LU</header><text>The amendment made by paragraph (2)(B)(iii)(II)
shall take effect as if included in section 11161 of the SAFETEA–LU.</text>
</subparagraph></paragraph></subsection><subsection id="id5940715D4ECE4D34A73FDEEE858294FA"><enum>(c)</enum><header>Amendments
related to section 339 of the American Jobs Creation Act of 2004</header>
<paragraph id="id73A5605BA8FF4BC49C930BD8DA7BBA9F"><enum>(1)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="id675173CB587443B98B812D8F3517474B"><enum>(A)</enum><text>Section 45H is amended
by striking subsection (d) and by redesignating subsections (e), (f), and (g)
as subsections (d), (e), and (f), respectively.</text>
</subparagraph><subparagraph id="idDEDF5DFCF5234AF6821183002A95B79C" indent="up1"><enum>(B)</enum><text>Subsection (d) of section 280C is
amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id1B6B40269E4740B9A76D531A1D175520" style="OLC">
<subsection id="id18D757CFB0EE4373A039301E3A80BBD3"><enum>(d)</enum><header>Credit for low
sulfur diesel fuel production</header><text>The deductions otherwise allowed
under this chapter for the taxable year shall be reduced by the amount of the
credit determined for the taxable year under section
45H(a).</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id584D276188D840279DC29670EED0D04E" indent="up1"><enum>(C)</enum><text>Subsection (a) of section 1016 is
amended by striking paragraph (31) and by redesignating paragraphs (32) through
(37) as paragraphs (31) through (36), respectively.</text>
</subparagraph></paragraph><paragraph id="idD265B7844A724B5AA85A7EDBB146EB5D"><enum>(2)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="id5BC9489CCED14E688F5BF1EB3E3C7AB8"><enum>(A)</enum><text>Section 45H, as amended
by paragraph (1), is amended by adding at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="id6829DDDDB4744D8A9EF1ADCDF637C141" style="OLC">
<subsection id="id14AF554B4BDF4144B7F08725B7375AF1"><enum>(g)</enum><header>Election To not
take credit</header><text>No credit shall be determined under subsection (a)
for the taxable year if the taxpayer elects not to have subsection (a) apply to
such taxable
year.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id25A5447DA4574D87B1DB3B42A4044FF3" indent="up1"><enum>(B)</enum><text>Subsection (m) of section 6501 is
amended by inserting <quote>45H(g),</quote> after
<quote>45C(d)(4),</quote>.</text>
</subparagraph></paragraph><paragraph id="id0E53D4E9690C43DAA8AFD3696ACD0F83"><enum>(3)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="id2DF488596020453B9A9CF6561FC31D02"><enum>(A)</enum><text>Subsections (b)(1)(A),
(c)(2), (e)(1), and (e)(2) of section 45H (as amended by paragraph (1)) and
section 179B(a) are each amended by striking <quote>qualified capital
costs</quote> and inserting <quote>qualified costs</quote>.</text>
</subparagraph><subparagraph id="idD8DC8C28D93C41F4B1B39E1A1521BF8B" indent="up1"><enum>(B)</enum><text>The heading of paragraph (2) of
section 45H(c) is amended by striking <quote><header-in-text level="paragraph" style="OLC">capital</header-in-text></quote>.</text>
</subparagraph><subparagraph id="idE78898A366A447FF95DB85B483C37A32" indent="up1"><enum>(C)</enum><text>Subsection (a) of section 179B is
amended by inserting <quote>and which are properly chargeable to capital
account</quote> before the period at the end.</text>
</subparagraph></paragraph><paragraph id="id2FDBB46DC4A64C84A3D3FDB64DC56F4D"><enum>(4)</enum><text>The amendments
made by this subsection shall take effect as if included in section 339 of the
American Jobs Creation Act of 2004.</text>
</paragraph></subsection></section></part><part id="idF230BACE2D6544D6918F9C7A9A3C74B9"><enum>III</enum><header>Advanced
technology vehicles</header>
<section commented="no" display-inline="no-display-inline" id="id1272BF5FD386407C9350F3E89EEA7E3A"><enum>241.</enum><header>Expansion and
modification of credit for alternative fuel motor vehicles</header>
<subsection commented="no" display-inline="no-display-inline" id="idA4AC3E00404649ABB1BFDCB7478B59EB"><enum>(a)</enum><header>Extension</header><text>Section
30B(j) (relating to termination) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="idA5549593622C452C8E06AABD7912EDB4"><enum>(1)</enum><text>by striking
<quote>December 31, 2014</quote> in paragraph (1) and inserting <quote>December
31, 2016</quote>,</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id8CD848D8FD31477896C41AC02A30CB0D"><enum>(2)</enum><text>by striking
<quote>December 31, 2010</quote> in paragraph (2) and inserting <quote>December
31, 2012</quote>,</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id073B99EAEFB54B48B10A314947D0BB2D"><enum>(3)</enum><text>by striking
<quote>December 31, 2009</quote> in paragraph (3) and inserting <quote>December
31, 2012</quote>, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idE5295C65A80B4BDE9E3B39B285BC1DDB"><enum>(4)</enum><text>by striking
<quote>December 31, 2010</quote> in paragraph (4) and inserting <quote>December
31, 2012</quote>.</text>
</paragraph></subsection><subsection id="id7ECD81C63DFD45D1B1DC66EEA0B5D4BF"><enum>(b)</enum><header>Modification
relating to new qualified alternative fuel motor vehicle
credit</header><text>The last sentence of section 30B(e)(2) is amended to read
as follows: <quote>A new qualified alternative fuel motor vehicle which weighs
more than 14,000 pounds gross vehicle weight rating shall be deemed to satisfy
the preceding sentence if it is certified as exceeding the most stringent
standard applicable to the model year in which such motor vehicle was
produced.</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id3776C7B89E914152918DFCE15DC2E720"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect on the
date of the enactment of this Act.</text>
</subsection></section><section id="id28E82AC4F03540D4B7192D47AF6C089B"><enum>242.</enum><header>Credit for
plug-in electric drive motor vehicles</header>
<subsection id="idFF6572DDB9FE41BD943FE79B97ED3142"><enum>(a)</enum><header>Plug-In
electric drive motor vehicle credit</header>
<paragraph id="idC5E494F22F0B4B6FAD4360CC6DB17CC5"><enum>(1)</enum><header>In
general</header><text>Subpart B of part IV of subchapter A of chapter 1
(relating to other credits) is amended by adding at the end the following new
section:</text>
<quoted-block display-inline="no-display-inline" id="idD9F4B5C3C5874F40AC404FE4040AC135" style="OLC">
<section id="id32D20DF41413482BA82CBF58B351C395"><enum>30D.</enum><header>Plug-in
electric drive motor vehicle credit</header>
<subsection id="idBF98C8C37B514801BDE831A7A2CE3134"><enum>(a)</enum><header>Allowance of
credit</header>
<paragraph id="id2D498035F0F54F798186EB69AB2B1F4B"><enum>(1)</enum><header>In
general</header><text>There shall be allowed as a credit against the tax
imposed by this chapter for the taxable year an amount equal to the applicable
amount with respect to each new qualified plug-in electric drive motor vehicle
placed in service by the taxpayer during the taxable year.</text>
</paragraph><paragraph id="idF1D83508C65B4DA49845DF9E6149CEE6"><enum>(2)</enum><header>Applicable
amount</header><text>For purposes of paragraph (1), the applicable amount is
sum of—</text>
<subparagraph id="id9CAB2FFEB6154DBD916C49590C79D191"><enum>(A)</enum><text>$2,500,
plus</text>
</subparagraph><subparagraph id="id7DB6328D15AE4DFDBA060A7A6A47AAE4"><enum>(B)</enum><text>$400 for each
kilowatt hour of traction battery capacity of at least 5 kilowatt hours,
plus</text>
</subparagraph><subparagraph id="id5798561F45AF433C8EAA4642EF93262E"><enum>(C)</enum><text>$400 for each
kilowatt hour of traction battery capacity in excess of 5 kilowatt
hours.</text>
</subparagraph></paragraph></subsection><subsection id="id6CAD849BBA8D4B04AA6B33960735FFDC"><enum>(b)</enum><header>Limitations</header>
<paragraph id="idE57627C7609A428FB08086FC63E0A6F4"><enum>(1)</enum><header>Limitation
based on weight</header><text>The amount of the credit allowed under subsection
(a) by reason of subsection (a)(2)(A) shall not exceed—</text>
<subparagraph id="idE9A125710D4746898CDB6951E178C992"><enum>(A)</enum><text>$7,500, in the
case of any new qualified plug-in electric drive motor vehicle with a gross
vehicle weight rating of not more than 10,000 pounds,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idF3E254D62EDB4DCBB7B020FE714DDFE9"><enum>(B)</enum><text display-inline="yes-display-inline">$10,000, in the case of any new qualified
plug-in electric drive motor vehicle with a gross vehicle weight rating of more
than 10,000 pounds but not more than 14,000 pounds,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idE31886A373254242804217B38956C144"><enum>(C)</enum><text display-inline="yes-display-inline">$12,500, in the case of any new qualified
plug-in electric drive motor vehicle with a gross vehicle weight rating of more
than 14,000 pounds but not more than 26,000 pounds, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id57EDD327897E4582BA6D0C041A016F82"><enum>(D)</enum><text display-inline="yes-display-inline">$15,000, in the case of any new qualified
plug-in electric drive motor vehicle with a gross vehicle weight rating of more
than 26,000 pounds.</text>
</subparagraph></paragraph><paragraph id="idD71343B3E9CB40AD9A1CB26FDF9DB689"><enum>(2)</enum><header>Limitation on
number of passenger vehicles and light trucks eligible for
credit</header><text>No credit shall be allowed under subsection (a) for any
new qualified plug-in electric drive motor vehicle which is a passenger vehicle
or light truck in any calendar year following the calendar year which includes
the first date on which the total number of such new qualified plug-in electric
drive motor vehicles sold for use in the United States after December 31, 2007,
is at least 250,000.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idD014B4CB584049E7848593151B3CD406"><enum>(c)</enum><header>New qualified
plug-In electric drive motor vehicle</header><text display-inline="yes-display-inline">For purposes of this section, the term
<term>new qualified plug-in electric drive motor vehicle</term> means a motor
vehicle—</text>
<paragraph commented="no" display-inline="no-display-inline" id="id934819BCCDA2491891F549AA4062F0BA"><enum>(1)</enum><text display-inline="yes-display-inline">which draws propulsion using a traction
battery with at least 4 kilowatt hours of capacity,</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idD0E8E2ED193242F48DE19BF91B73DC00"><enum>(2)</enum><text display-inline="yes-display-inline">which uses an offboard source of energy to
recharge such battery,</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id6F401980FAEC4E709324C032FED838AC"><enum>(3)</enum><text display-inline="yes-display-inline">which, in the case of a passenger vehicle
or light truck which has a gross vehicle weight rating of not more than 8,500
pounds, has received a certificate of conformity under the Clean Air Act and
meets or exceeds the equivalent qualifying California low emission vehicle
standard under section 243(e)(2) of the Clean Air Act for that make and model
year, and</text>
<subparagraph id="ID29a32d0fb8ce44d286946ad13071151d"><enum>(A)</enum><text>in the case of a
vehicle having a gross vehicle weight rating of 6,000 pounds or less, 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</text>
</subparagraph><subparagraph id="IDfeb5bdae62b8419a8b98185356aad1bc"><enum>(B)</enum><text>in the case of a
vehicle having a gross vehicle weight rating of more than 6,000 pounds but not
more than 8,500 pounds, the Bin 8 Tier II emission standard which is so
established,</text>
</subparagraph></paragraph><paragraph id="id4FDE46F77EC54FD1A8436823D0D3B6FB"><enum>(4)</enum><text>the original use
of which commences with the taxpayer,</text>
</paragraph><paragraph id="idB478F1FDB3544EA3B14A07E9D90C5C80"><enum>(5)</enum><text>which is acquired
for use or lease by the taxpayer and not for resale, and</text>
</paragraph><paragraph id="idBBD1E76847964C3BAA686CFF9992B6DE"><enum>(6)</enum><text>which is made by
a manufacturer.</text>
</paragraph></subsection><subsection id="idC0629616EE784B618F0A4CA219A0429C"><enum>(d)</enum><header>Application
with other credits</header>
<paragraph id="id164B5A4B5BF148EC847FDA70D4C7DC3F"><enum>(1)</enum><header>Business credit
treated as part of general business credit</header><text display-inline="yes-display-inline">So much of the credit which would be
allowed under subsection (a) for any taxable year (determined without regard to
this subsection) that is attributable to property of a character subject to an
allowance for depreciation shall be treated as a credit listed in section 38(b)
for such taxable year (and not allowed under subsection (a)).</text>
</paragraph><paragraph id="idB663C962D27846A68BC38680D38DA56D"><enum>(2)</enum><header>Personal
credit</header><text>The credit allowed under subsection (a) (after the
application of paragraph (1)) for any taxable year shall not exceed the excess
(if any) of—</text>
<subparagraph id="id5D3E0EA7CE5E4FD59256D5FB9250A0FE"><enum>(A)</enum><text>the regular tax
liability (as defined in section 26(b)) reduced by the sum of the credits
allowable under subpart A and sections 27, 30, 30B, and 30C, over</text>
</subparagraph><subparagraph id="id288914C0E53348EBBE296D2D090D0380"><enum>(B)</enum><text>the tentative
minimum tax for the taxable year.</text>
</subparagraph></paragraph></subsection><subsection id="id2BB8D4E00ABD41A7A7914DC2BCD33222"><enum>(e)</enum><header>Other
definitions and special rules</header><text>For purposes of this
section—</text>
<paragraph id="id9A48CB296BCD47E1A78AF32EC8020929"><enum>(1)</enum><header>Motor
vehicle</header><text>The term <term>motor vehicle</term> has the meaning given
such term by section 30(c)(2).</text>
</paragraph><paragraph id="idE00134AF25FA42B4BF86AE79D90CA800"><enum>(2)</enum><header>Other
terms</header><text>The terms <term>passenger automobile</term>, <term>light
truck</term>, and <term>manufacturer</term> have the meanings given such terms
in regulations prescribed by the Administrator of the Environmental Protection
Agency for purposes of the administration of title II of the Clean Air Act (42
U.S.C. 7521 et seq.).</text>
</paragraph><paragraph id="id4B873C2CF00A40ADA516C7A97A4AC049"><enum>(3)</enum><header>Traction
battery capacity</header><text>Traction battery capacity shall be measured in
kilowatt hours from a 100 percent state of charge to a zero percent state of
charge.</text>
</paragraph><paragraph id="idC4C444B3C4234912A7231F9421EA648D"><enum>(4)</enum><header>Reduction in
basis</header><text>For purposes of this subtitle, the basis of any property
for which a credit is allowable under subsection (a) shall be reduced by the
amount of such credit so allowed.</text>
</paragraph><paragraph id="id1E950DF0B1D84F3AA1CAF7BA51ABBB81"><enum>(5)</enum><header>No double
benefit</header><text>The amount of any deduction or other credit allowable
under this chapter for a new qualified plug-in electric drive motor vehicle
shall be reduced by the amount of credit allowed under subsection (a) for such
vehicle for the taxable year.</text>
</paragraph><paragraph id="idE34FBC2E678C401A8C4716FB1AD69E30"><enum>(6)</enum><header>Property used
by tax-exempt entity</header><text>In the case of a vehicle the use of which is
described in paragraph (3) or (4) of section 50(b) and which is not subject to
a lease, the person who sold such vehicle to the person or entity using such
vehicle shall be treated as the taxpayer that placed such vehicle in service,
but only if such person clearly discloses to such person or entity in a
document the amount of any credit allowable under subsection (a) with respect
to such vehicle (determined without regard to subsection (b)(2)).</text>
</paragraph><paragraph id="id14FF46EE74AD4235AA2D2A20878DDBEA"><enum>(7)</enum><header>Property used
outside United States, etc., not qualified</header><text>No credit shall be
allowable under subsection (a) with respect to any property referred to in
section 50(b)(1) or with respect to the portion of the cost of any property
taken into account under section 179.</text>
</paragraph><paragraph id="id98D6CD688C874630866289F90F1646AB"><enum>(8)</enum><header>Recapture</header><text>The
Secretary shall, by regulations, provide for recapturing the benefit of any
credit allowable under subsection (a) with respect to any property which ceases
to be property eligible for such credit (including recapture in the case of a
lease period of less than the economic life of a vehicle).</text>
</paragraph><paragraph id="idC61608DAF9624C09A474B1C2EF093727"><enum>(9)</enum><header>Election to not
take credit</header><text>No credit shall be allowed under subsection (a) for
any vehicle if the taxpayer elects not to have this section apply to such
vehicle.</text>
</paragraph><paragraph id="id7D754B00412649D0A6ADEAE0EF1141E5"><enum>(10)</enum><header>Interaction
with air quality and motor vehicle safety standards</header><text>Unless
otherwise provided in this section, a motor vehicle shall not be considered
eligible for a credit under this section unless such vehicle is in compliance
with—</text>
<subparagraph id="id43E005F394D1413EB42BA0D76E5CFDBC"><enum>(A)</enum><text>the applicable
provisions of the Clean Air Act for the applicable make and model year of the
vehicle (or applicable air quality provisions of State law in the case of a
State which has adopted such provision under a waiver under section 209(b) of
the Clean Air Act), and</text>
</subparagraph><subparagraph id="id7070A278D7244AB79D9202D4FF616872"><enum>(B)</enum><text>the motor vehicle
safety provisions of sections 30101 through 30169 of title 49, United States
Code.</text>
</subparagraph></paragraph></subsection><subsection id="id77079655EDCF493AB44DE5325EE4ECAA"><enum>(f)</enum><header>Regulations</header>
<paragraph id="id6955E0A31D0A486F9E67B8BEC834E64F"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the Secretary shall
promulgate such regulations as necessary to carry out the provisions of this
section.</text>
</paragraph><paragraph id="id90F9CACC709F4B8EB27E7E2CF1080E15"><enum>(2)</enum><header>Coordination in
prescription of certain regulations</header><text>The Secretary of the
Treasury, in coordination with the Secretary of Transportation and the
Administrator of the Environmental Protection Agency, shall prescribe such
regulations as necessary to determine whether a motor vehicle meets the
requirements to be eligible for a credit under this section.</text>
</paragraph></subsection><subsection id="idA88EBC5034A74C24B2238B5640062601"><enum>(g)</enum><header>Termination</header><text>This
section shall not apply to property purchased after December 31,
2014.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="idB8FB57E99F12404596AB118A4809B913"><enum>(2)</enum><header>Coordination
with other motor vehicle credits</header>
<subparagraph id="id82963E3977A7447A9C7CE48104952A0A"><enum>(A)</enum><header>New qualified
fuel cell motor vehicles</header><text>Paragraph (3) of section 30B(b) is
amended by adding at the end the following new flush sentence:</text>
<quoted-block display-inline="no-display-inline" id="id89535382AACD41879FA379569E8F69D2" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="paragraph">Such term
shall not include any motor vehicle which is a new qualified plug-in electric
drive motor vehicle (as defined by section
30D(c)).</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id3A7640F22D7C496EBE0C2879957A5FFF"><enum>(B)</enum><header>New qualified
hybrid motor vehicles</header><text>Paragraph (3) of section 30B(d) is amended
by adding at the end the following new flush sentence:</text>
<quoted-block display-inline="no-display-inline" id="idE93027CB923247A6B02EE6D218A03B77" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="paragraph">Such term
shall not include any motor vehicle which is a new qualified plug-in electric
drive motor vehicle (as defined by section
30D(c)).</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="id315899B2D03B4B5084C36D1404F97B14"><enum>(3)</enum><header>Conforming
amendments</header>
<subparagraph id="id0DFE030431644F859049778E25F70529"><enum>(A)</enum><text>Section 38(b) is
amended by striking <quote>plus</quote> at the end of paragraph (30), by
striking the period at the end of paragraph (31) and inserting
<quote>plus</quote>, and by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idBE29080998F845199CB8484D0DEC3B08" style="OLC">
<paragraph id="id23A3C0F5DC4E4B668DD5FFA281C3F105"><enum>(32)</enum><text>the portion of
the new qualified plug-in electric drive motor vehicle credit to which section
30D(d)(1)
applies.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="idE4036DC61FFF4030B071A7BF59FD5C6F"><enum>(B)</enum><text>Section 55(c)(3)
is amended by inserting <quote>30D(d)(2),</quote> after
<quote>30C(d)(2),</quote>.</text>
</subparagraph><subparagraph id="idAB2AD21FA8E241B08D6E59ACB1B40426"><enum>(C)</enum><text>Section 1016(a),
as amended by this Act, is amended by striking <quote>and</quote> at the end of
paragraph (35), by striking the period at the end of paragraph (36) and
inserting <quote>, and</quote>, and by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idEA228FE2B02F4161B33A18BEF88997CC" style="OLC">
<paragraph id="id9F1E453D59B4462AAB89A80D833A0EA9"><enum>(37)</enum><text>to the extent
provided in section
30D(e)(4).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id0EA8F1322EC14B59AF655CB809610CA9"><enum>(D)</enum><text>Section 6501(m)
is amended by inserting <quote>30D(e)(9)</quote> after
<quote>30C(e)(5)</quote>.</text>
</subparagraph><subparagraph id="idB0930A1BEDF14F6B8CF334899C5537CC"><enum>(E)</enum><text>The table of
sections for subpart B of part IV of subchapter A of chapter 1 is amended by
adding at the end the following new item:</text>
<quoted-block id="id8fd3b441-1ac2-4faa-85c5-a1c4e8563c89" style="OLC">
<toc>
<toc-entry level="section">Sec. 30D. Plug-in electric drive motor
vehicle
credit.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="id45599487BF15456AAEA09F59A5F0968C"><enum>(b)</enum><header>Conversion
kits</header>
<paragraph id="id430AD269CE01487090FAABDE30186439"><enum>(1)</enum><header>In
general</header><text>Section 30B (relating to alternative motor vehicle
credit) is amended by redesignating subsections (i) and (j) as subsections (j)
and (k), respectively, and by inserting after subsection (h) the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="idDEBA8F496B0F4B0293D973662366FF23" style="OLC">
<subsection id="id4A83D82CA4DA491EACC91753CB7924A0"><enum>(i)</enum><header>Plug-In
conversion credit</header>
<paragraph id="id7C50B31483B14ACEAE78B318B0A72995"><enum>(1)</enum><header>In
general</header><text>For purposes of subsection (a), the plug-in conversion
credit determined under this subsection with respect to any motor vehicle which
is converted to a qualified plug-in electric drive motor vehicle is an amount
equal to 10 percent of the cost of the plug-in traction battery module
installed in such vehicle as part of such conversion.</text>
</paragraph><paragraph id="id0043506E53E04F259ACE72F97A6CC294"><enum>(2)</enum><header>Limitations</header><text>The
amount of the credit allowed under this subsection shall not exceed $2,500 with
respect to the conversion of any motor vehicle.</text>
</paragraph><paragraph id="idE74813014EF14AD891403C3443D6A407"><enum>(3)</enum><header>Definitions and
special rules</header><text>For purposes of this subsection—</text>
<subparagraph id="id983E88E762614880976D8A02B75E65EC"><enum>(A)</enum><header>Qualified
plug-in electric drive motor vehicle</header><text>The term <term>qualified
plug-in electric drive motor vehicle</term> means any new qualified plug-in
electric drive motor vehicle (as defined in section 30D(c), determined without
regard to paragraphs (4) and (6) thereof).</text>
</subparagraph><subparagraph id="idF1D6FE16DBEF41B2B5099EFC84F4021D"><enum>(B)</enum><header>Plug-in
traction battery module</header><text>The term <term>plug-in traction battery
module</term> means an electro-chemical energy storage device which—</text>
<clause id="id71C4D005C37040CE899FA6E302E89F53"><enum>(i)</enum><text>has a traction
battery capacity of not less than 2.5 kilowatt hours,</text>
</clause><clause id="idEDF88373BD54451AB02D52DD6593B2BC"><enum>(ii)</enum><text>is equipped with
an electrical plug by means of which it can be energized and recharged when
plugged into an external source of electric power,</text>
</clause><clause id="idD9267B08F57D447F902494D1242C4565"><enum>(iii)</enum><text>consists of a
standardized configuration and is mass produced,</text>
</clause><clause id="idD965F8C5DB9149A6B9C4430DB2A3F8D1"><enum>(iv)</enum><text>has been tested
and approved by the National Highway Transportation Safety Administration as
compliant with applicable motor vehicle and motor vehicle equipment safety
standards when installed by a mechanic with standardized training in protocols
established by the battery manufacturer as part of a nationwide distribution
program, and</text>
</clause><clause id="idF581089A1C864DDA88DA23C11AC6390D"><enum>(v)</enum><text>is certified by a
battery manufacturer as meeting the requirements of clauses (i) through
(iv).</text>
</clause></subparagraph><subparagraph id="id174658494FEC433CB5446BF8968E0335"><enum>(C)</enum><header>Credit allowed
to lessor of battery module</header><text>In the case of a plug-in traction
battery module which is leased to the taxpayer, the credit allowed under this
subsection shall be allowed to the lessor of the plug-in traction battery
module.</text>
</subparagraph><subparagraph commented="no" id="id2D875F4F88E74F5EA1960710E75E229F"><enum>(D)</enum><header>Credit allowed
in addition to other credits</header><text>The credit allowed under this
subsection shall be allowed with respect to a motor vehicle notwithstanding
whether a credit has been allowed with respect to such motor vehicle under this
section (other than this subsection) in any preceding taxable year.</text>
</subparagraph></paragraph><paragraph id="idB46AC691443C43FC8C5EE3BD1E305222"><enum>(4)</enum><header>Termination</header><text>This
subsection shall not apply to conversions made after December 31,
2009.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id37F0928FC9F94F4BA6E3E3AA32C02BD0"><enum>(2)</enum><header>Credit treated
as part of alternative motor vehicle credit</header><text>Section 30B(a) is
amended by striking <quote>and</quote> at the end of paragraph (3), by striking
the period at the end of paragraph (4) and inserting <quote>, and</quote>, and
by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id6E106E01B44244848AB542BE16F73F60" style="OLC">
<paragraph id="id70D9E9743F884776A85A41880698B785"><enum>(5)</enum><text>the plug-in
conversion credit determined under subsection
(i).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id8FE09304BC574BB49CA928CCC4D7D527"><enum>(3)</enum><header>No recapture
for vehicles converted to qualified plug-in electric drive motor
vehicles</header><text>Paragraph (8) of section 30B(h) is amended by adding at
the end the following: <quote>, except that no benefit shall be recaptured if
such property ceases to be eligible for such credit by reason of conversion to
a qualified plug-in electric drive motor vehicle.</quote></text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idB2044D2187374DDABF56220D3BE5E78B"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to property
placed in service after December 31, 2007, in taxable years beginning after
such date.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id4DADEA8F58DA43939FCD5A4D9243BA0D"><enum>243.</enum><header>Exclusion from
heavy truck tax for idling reduction units and advanced insulation added after
purchase</header>
<subsection commented="no" display-inline="no-display-inline" id="idDEFE23BF4F2248E880EDA0E467B81680"><enum>(a)</enum><header>In
general</header><text>Section 4053 (relating to exemptions) is amended by
adding at the end the following new paragraphs:</text>
<quoted-block display-inline="no-display-inline" id="id409424F589304F42B2BBFDD2826B237C" style="OLC">
<paragraph id="IDB243C97D5A6941FAA544BC6CA4F0A903"><enum>(7)</enum><header>Idling
reduction device</header><text>Any device or system of devices which—</text>
<subparagraph id="ID58654E5D9C064D8C8F62C1AABC620A4A"><enum>(A)</enum><text>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
either—</text>
<clause id="id7A5B579A894E4663A9F7257164C589F6"><enum>(i)</enum><text>an all electric
unit, such as a battery powered unit or from grid-supplied electricity,
or</text>
</clause><clause id="id9D52235B76D64DE0A9A9FC8885F453D6"><enum>(ii)</enum><text>a dual fuel unit
powered by diesel or other fuels, and capable of providing such services from
grid-supplied electricity or on-truck batteries alone, and</text>
</clause></subparagraph><subparagraph id="ID84FC165CBE4245A08D1E2C13F526AC64"><enum>(B)</enum><text>is certified by
the Secretary of Energy, in consultation with the Administrator of the
Environmental Protection Agency and the Secretary of Transportation, to reduce
long-duration idling of such vehicle at a motor vehicle rest stop or other
location where such vehicles are temporarily parked or remain
stationary.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">For
purposes of subparagraph (B), the term <term>long-duration idling</term> means
the operation of a main drive engine, for a period greater than 15 consecutive
minutes, where the main drive engine is not engaged in gear. Such term does not
apply to routine stoppages associated with traffic movement or
congestion.</continuation-text></paragraph><paragraph id="idD52177E965D84194BEA3CA37CE48A277"><enum>(8)</enum><header>Advanced
insulation</header><text>Any insulation that has an R value of not less than
R35 per
inch.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id55475BCD612C4012BB37C11A1C7371AE"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to sales or
installations after December 31, 2007.</text>
</subsection></section></part><part id="id5FB79D7A78F042B78D304A04A8FDC5E0"><enum>IV</enum><header>Conservation and
energy efficiency</header>
<section commented="no" id="idA5E02222B88D46E2B0813D3362E1E20C"><enum>251.</enum><header>Extension and
modification of nonbusiness energy property credit</header>
<subsection commented="no" id="id80FA32A3046E443ABA5EF9958D4A4193"><enum>(a)</enum><header>Extension of
credit</header><text display-inline="yes-display-inline">Section 25C(g)
(relating to termination) is amended by striking <quote>December 31,
2007</quote> and inserting <quote>December 31, 2009</quote>.</text>
</subsection><subsection commented="no" id="idEA094A9E9F32439D807488525479F725"><enum>(b)</enum><header>Natural gas
fired heat pumps</header><text>Section 25C(d)(3) (relating to energy-efficient
building property) is amended—</text>
<paragraph commented="no" id="id5572F20CEFF44A6DA8D00A8DCEA69F48"><enum>(1)</enum><text>by striking
<quote>and</quote> at the end of subparagraph (D),</text>
</paragraph><paragraph commented="no" id="id7EFCFD02F75F454A97F36FD57E7C3525"><enum>(2)</enum><text>by striking the
period at the end of subparagraph (E) and inserting <quote>, and</quote>,
and</text>
</paragraph><paragraph commented="no" id="id3394B23E085E42B1A5089281882C3B9B"><enum>(3)</enum><text>by adding at the
end the following new subparagraph:</text>
<quoted-block act-name="" id="id4FD4676D87954512AB5DBBF991E0CFDA" style="OLC">
<subparagraph id="id9079D6122ADA4178BA243191AA36A36E"><enum>(F)</enum><text>a natural gas
fired heat pump with a heating coefficient of performance (COP) of at least
1.1.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" id="idE969341CB3AE43F6A6516BA3822D8AB2"><enum>(c)</enum><header>Modifications
of standards for energy-efficient building property</header>
<paragraph id="id2215C563ADD2457FB2EE8046DB421DE0"><enum>(1)</enum><header>Increased
limitation for oil furnaces and natural gas, propane, and oil hot water
boilers</header>
<subparagraph id="id4C8327814DA14B98ADE0B94849C326F0"><enum>(A)</enum><header>In
general</header><text>Subparagraphs (B) and (C) of section 25C(b)(3) are
amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id5A0208C8F7254C34BB0E6B4148556B01" style="OLC">
<subparagraph id="idAAA01986D0FD4E3D85AB02B63E75E5C0"><enum>(B)</enum><text>$150 for any
qualified natural gas furnace or qualified propane furnace, and</text>
</subparagraph><subparagraph id="id4B90A2633DDC4450B1A473EF0D2B1581"><enum>(C)</enum><text>$300 for—</text>
<clause id="idFAA56ACA84AA490A9BF5C3C1B187D131"><enum>(i)</enum><text>any item of
energy-efficient building property, and</text>
</clause><clause id="idD7FFDE2F8EED41D8A27C7D79172F6E8D"><enum>(ii)</enum><text>any qualified
oil furnace, qualified natural gas hot water boiler, qualified propane hot
water boiler, or qualified oil hot water
boiler.</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="id8CC23F69F3C5444087BB559AE4B52B5A"><enum>(B)</enum><header>Conforming
amendment</header><text>Clause (ii) of section 25C(d)(2)(A) is amended to read
as follows:</text>
<quoted-block display-inline="no-display-inline" id="idD15F91CABC0542C3AACDAB8D3E859758" style="OLC">
<clause id="id423F9471813A49AA9E6E4705BAB67EEF"><enum>(ii)</enum><text>any qualified
natural gas furnace, qualified propane furnace, qualified oil furnace,
qualified natural gas hot water boiler, qualified propane hot water boiler, or
qualified oil hot water boiler,
or</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="id3CF67781F45E466696CD8791EAABC708"><enum>(2)</enum><header>Electric heat
pumps</header><text>Subparagraph (B) of section 25C(d)(3) is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="idF1749C7ECF564A708CDC2E78163BEC33" style="OLC">
<subparagraph id="id4AEB48041EA74379B22D25269A92E821"><enum>(B)</enum><text>an electric heat
pump which achieves the highest efficiency tier established by the Consortium
for Energy Efficiency, as in effect on January 1,
2008.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id419B8023596443CD92C546B2625CB479"><enum>(3)</enum><header>Water
Heaters</header><text>Subparagraph (E) of section 25C(d)(3) is amended to read
as follows:</text>
<quoted-block display-inline="no-display-inline" id="id3031FEBBF4554854BA0495A87156B21A" style="OLC">
<subparagraph id="id359F5E9028E645359A6069AF9FF25B7A"><enum>(E)</enum><text>a natural gas,
propane, or oil water heater which has either an energy factor of at least 0.80
or a thermal efficiency of at least 90
percent.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id8C681779E9A747FBACC757C2DB9FC0B1"><enum>(4)</enum><header>Oil furnaces
and hot water boilers</header><text>Paragraph (4) of section 25C(d) is amended
to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id333D2CD3608A481C9A3553904E579912" style="OLC">
<paragraph id="idE3A33C08A01147AEAC80008DFE408412"><enum>(4)</enum><header>Qualified
natural gas, propane, and oil furnaces and hot water boilers</header>
<subparagraph id="id9230245D29A84BC69F779488D9F149AE"><enum>(A)</enum><header>Qualified
natural gas furnace</header><text>The term <term>qualified natural gas
furnace</term> means any natural gas furnace which achieves an annual fuel
utilization efficiency rate of not less than 95.</text>
</subparagraph><subparagraph id="id2AE840056B5E49D492C3CD9A6835044D"><enum>(B)</enum><header>Qualified
natural gas hot water boiler</header><text>The term <term>qualified natural gas
hot water boiler</term> means any natural gas hot water boiler which achieves
an annual fuel utilization efficiency rate of not less than 90.</text>
</subparagraph><subparagraph id="id3F295AF99E6F42E68C8EE580D45648BB"><enum>(C)</enum><header>Qualified
propane furnace</header><text>The term <term>qualified propane furnace</term>
means any propane furnace which achieves an annual fuel utilization efficiency
rate of not less than 95.</text>
</subparagraph><subparagraph id="idEAAD8206BEFA4EFAABEE5704DF67C354"><enum>(D)</enum><header>Qualified
propane hot water boiler</header><text>The term <term>qualified propane hot
water boiler</term> means any propane hot water boiler which achieves an annual
fuel utilization efficiency rate of not less than 90.</text>
</subparagraph><subparagraph id="idDD29AA71A87742AFAAF81E22D0402601"><enum>(E)</enum><header>Qualified oil
furnaces</header><text>The term <term>qualified oil furnace</term> means any
oil furnace which achieves an annual fuel utilization efficiency rate of not
less than 90.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id27FB518F90264856884D7233D84044C1"><enum>(F)</enum><header>Qualified oil
hot water boiler</header><text>The term <term>qualified oil hot water
boiler</term> means any oil hot water boiler which achieves an annual fuel
utilization efficiency rate of not less than
90.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="idB9363BA0DD9D4914A0C06D577ED42981"><enum>(d)</enum><header>Effective
date</header><text>The amendments made this section shall apply to expenditures
made after December 31, 2007.</text>
</subsection></section><section commented="no" id="id939B5E3353194403A0AB36F1B2B5950B"><enum>252.</enum><header>Extension and
modification of new energy efficient home credit</header>
<subsection commented="no" id="id00001A7EA14A4399B3D865B1B2C03851"><enum>(a)</enum><header>Extension of
credit</header><text display-inline="yes-display-inline">Subsection (g) of
section 45L (relating to termination) is amended by striking <quote>December
31, 2008</quote> and inserting <quote>December 31, 2011</quote>.</text>
</subsection><subsection id="id54723ACF06DE4FA689B8EC8117EA5F5F"><enum>(b)</enum><header>Modification</header>
<paragraph id="id18ECA3E99F6F4579B2003B41F9789055"><enum>(1)</enum><header>In
general</header><text>Subparagraph (B) of section 45L(a)(1) is amended to read
as follows:</text>
<quoted-block display-inline="no-display-inline" id="idF3A856C58ED047C189F92545542D73F2" style="OLC">
<subparagraph id="id73613528F4224F87B3D30BAD28D205DA"><enum>(B)</enum><clause commented="no" display-inline="yes-display-inline" id="idE938313191744063816592E2EE4D7297"><enum>(i)</enum><text>acquired by a person
from such eligible contractor and used by any person as a residence during the
taxable year, or</text>
</clause><clause id="id38270ACD2F3A4E0784ABA6AD36995CE3" indent="up1"><enum>(ii)</enum><text>used by such eligible contractor
as a residence during the taxable
year.</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id4F4D815D24DC413D880CF69E85C64E2A"><enum>(2)</enum><header>Effective
date</header><text>The amendments made by this subsection shall apply to homes
purchased after December 31, 2008.</text>
</paragraph></subsection></section><section commented="no" id="idAA7E21529A594F4081043DA43D502A11"><enum>253.</enum><header>Extension and
modification of energy efficient commercial buildings deduction</header>
<subsection commented="no" id="id481CB54D3F294E028352C3BE95ECA684"><enum>(a)</enum><header>Extension</header><text>Section
179D(h) (relating to termination) is amended by striking <quote>December 31,
2008</quote> and inserting <quote>December 31, 2013</quote>.</text>
</subsection><subsection commented="no" id="id68F59D01A735403EA2E7FB824F5756E0"><enum>(b)</enum><header>Adjustment of
maximum deduction amount</header>
<paragraph commented="no" id="idD754A8F09DC04C189C3A277FB5EF938D"><enum>(1)</enum><header>In
general</header><text>Subparagraph (A) of section 179D(b)(1) (relating to
maximum amount of deduction) is amended by striking <quote>$1.80</quote> and
inserting <quote>$2.25</quote>.</text>
</paragraph><paragraph id="id80A95924C98F4813B0FFB7A55746155D"><enum>(2)</enum><header>Partial
allowance</header><text>Paragraph (1) of section 179D(d) is amended—</text>
<subparagraph id="id9378B974A80E40F8A948DFB8DB9AEA00"><enum>(A)</enum><text>by striking
<quote>$.60</quote> and inserting <quote>$0.75</quote>, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id7E00A6AB838F450297F5E4DFF760EB81"><enum>(B)</enum><text>by striking
<quote>$1.80</quote> and inserting <quote>$2.25</quote>.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id69C6E19A1CA34425A3B1DBAAEBA3E1DA"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to property
placed in service after the date of the enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="idA5A01A872481483A8AB5A41807C37956"><enum>254.</enum><header>Modifications
of energy efficient appliance credit for appliances produced after
2007</header>
<subsection id="idA46986072864463E9548F4D9A4463C81"><enum>(a)</enum><header>In
general</header><text>Section 45M of the Internal Revenue Code of 1986 is
amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id463F8667D25F4CD1BECAA515AACA32D3" style="OLC">
<section id="idF25D0434D14D448D96CAF41A58CC399A"><enum>45M.</enum><header>Energy
efficient appliance credit</header>
<subsection id="idDCE8050FD7B649BF91FEFD1FFF731B82"><enum>(a)</enum><header>General
rule</header>
<paragraph id="id5B268FA7653C49AFAE2090D6A0952E32"><enum>(1)</enum><header>In
general</header><text>For purposes of section 38, the energy efficient
appliance credit determined under this section for any taxable year is an
amount equal to the sum of the credit amounts determined under paragraph (2)
for each type of qualified energy efficient appliance produced by the taxpayer
during the calendar year ending with or within the taxable year.</text>
</paragraph><paragraph id="idFD004913CE734312B05B07C2D654B4C7"><enum>(2)</enum><header>Credit
amounts</header><text>The credit amount determined for any type of qualified
energy efficient appliance is—</text>
<subparagraph id="id2A28D07B58C449918239E28D51A4590D"><enum>(A)</enum><text>the applicable
amount determined under subsection (b) with respect to such type, multiplied
by</text>
</subparagraph><subparagraph id="id9D8CEF9785544F72843DFBBA322FCA6A"><enum>(B)</enum><text>the eligible
production for such type.</text>
</subparagraph></paragraph></subsection><subsection id="idAD78B98D41FD40439A59AFE9F6A3CF48"><enum>(b)</enum><header>Applicable
amount</header><text>For purposes of subsection (a)—</text>
<paragraph id="idCA13E95E155B407881F624CBC778B3A3"><enum>(1)</enum><header>Dishwashers</header><text>The
applicable amount is $75 in the case of a residential model dishwasher
which—</text>
<subparagraph id="id4D377E6431E84355A8E01E5FF086FF27"><enum>(A)</enum><text>is manufactured
in calendar year 2008, 2009, or 2010, and</text>
</subparagraph><subparagraph id="idDC833D8263884608B96F869F4468E0E1"><enum>(B)</enum><text>uses not more
than 307 kilowatt hours per year and 5.0 gallons per cycle (5.5 gallons for
dishwashers designed for greater than 12 place settings).</text>
</subparagraph></paragraph><paragraph id="id2B0A137FFE64442A9C72E3EBD039DFB1"><enum>(2)</enum><header>Clothes
washers</header><text>The applicable amount is—</text>
<subparagraph id="idBB1C4EFCC9924FB1B49F8F8D9372D01C"><enum>(A)</enum><text>$125 in the case
of a residential model top-loading clothes washer which—</text>
<clause id="id9A98008778AD4B8DABC9757ED3D5061F"><enum>(i)</enum><text>is manufactured
in calendar year 2008 or 2009, and</text>
</clause><clause id="id3D351084DD5B4A7A87F8F9542C09EE3E"><enum>(ii)</enum><text>meets or exceeds
a 1.8 MEF and does not exceed a 7.5 water consumption factor,</text>
</clause></subparagraph><subparagraph id="id27A9E580A6934B11899660DDD3FA518E"><enum>(B)</enum><text>$150 in the case
of a residential or commercial model clothes washer which—</text>
<clause id="idE0F41BF2F0464A8586DAE9A8AE19B8C3"><enum>(i)</enum><text>is manufactured
in calendar year 2008, 2009, or 2010, and</text>
</clause><clause id="id44B67592029744A9A42C7ACB96D2FF82"><enum>(ii)</enum><text>meets or exceeds
a 2.0 MEF and does not exceed a 6.0 water consumption factor, and</text>
</clause></subparagraph><subparagraph id="id71DA8BCCD82C450A987F248A2FF78B20"><enum>(C)</enum><text>$250 in the case
of a residential or commercial model clothes washer which—</text>
<clause id="idE6541802D8AD44289872D436F2B63B82"><enum>(i)</enum><text>is manufactured
in calendar year 2008, 2009, or 2010, and</text>
</clause><clause id="idB68A98129B634A81AFD0067A88062764"><enum>(ii)</enum><text>meets or exceeds
a 2.2 MEF and does not exceed a 4.5 water consumption factor.</text>
</clause></subparagraph></paragraph><paragraph id="idEB4701C8A5204731A984F39557641164"><enum>(3)</enum><header>Refrigerators</header><text>The
applicable amount is—</text>
<subparagraph id="id1636B0AF9CB144FF8DCCD00070502CD6"><enum>(A)</enum><text>$75 in the case
of a residential model refrigerator which—</text>
<clause id="idF1D858B8D6CA45E7B4D08CB9F7FD02CF"><enum>(i)</enum><text>is manufactured
in calendar year 2008 or 2009, and</text>
</clause><clause id="idFF412262260F4CE0ADAF561D375F0119"><enum>(ii)</enum><text>consumes at
least 23 percent, but not more than 24.9 percent, fewer kilowatt hours per year
than the 2001 energy conservation standards,</text>
</clause></subparagraph><subparagraph id="id6CFEA0FAB12345D4A94C8CFF76618140"><enum>(B)</enum><text>$100 in the case
of a residential model refrigerator which—</text>
<clause id="id8FB47BBE1FA1494B9F0787665974231F"><enum>(i)</enum><text>is manufactured
in calendar year 2008, 2009, or 2010, and</text>
</clause><clause id="id3C6E898A0D094099817878FEFB7262CD"><enum>(ii)</enum><text>consumes at
least 25 percent, but not more than 29.9 percent, fewer kilowatt hours per year
than the 2001 energy conservation standards, and</text>
</clause></subparagraph><subparagraph id="id0D2E1E76CD4C454789B14AF0F765D21F"><enum>(C)</enum><text>$200 in the case
of a residential model refrigerator which—</text>
<clause id="id5D1096C97E3B4362B4C3B67565AFBB24"><enum>(i)</enum><text>is manufactured
in calendar year 2008, 2009, or 2010, and</text>
</clause><clause id="idC0271BBDF8C3456EAD1ED35595A26C8F"><enum>(ii)</enum><text>consumes at
least 30 percent fewer kilowatt hours per year than the 2001 energy
conservation standards.</text>
</clause></subparagraph></paragraph></subsection><subsection id="id14746AE4B4D74472995D585E66B88ED0"><enum>(c)</enum><header>Eligible
production</header><text>The eligible production in a calendar year with
respect to each type of qualified energy efficient appliance is the excess
of—</text>
<paragraph id="id1B2DAE7E537947EF99BA459BC263BFBF"><enum>(1)</enum><text>the number of
appliances of such type which are produced in the United States by the taxpayer
during such calendar year, over</text>
</paragraph><paragraph id="idAF6BD2A579D1448BA6D16B0ADF70CA4F"><enum>(2)</enum><text>the average
number of appliances of such type which were produced in the United States by
the taxpayer (or any predecessor) during the preceding 2-calendar year
period.</text>
</paragraph></subsection><subsection id="id5715259AD0CB4AC9B9FD8B54CD602E11"><enum>(d)</enum><header>Types of
qualified energy efficient appliances</header><text>For purposes of this
section, the types of qualified energy efficient appliances are—</text>
<paragraph id="id45F72DF1046343558818B3FE68788DA1"><enum>(1)</enum><text>dishwashers
described in subsection (b)(1),</text>
</paragraph><paragraph id="idB0368F160E9640BEA16CC9F471095B97"><enum>(2)</enum><text>clothes washers
described in subsection (b)(2), and</text>
</paragraph><paragraph id="idD90187FEE7D94410B59496AFDCD8E845"><enum>(3)</enum><text>refrigerators
described in subsection (b)(3).</text>
</paragraph></subsection><subsection id="idBDB5930000A548C28DFE298C96B3AEFE"><enum>(e)</enum><header>Limitations</header>
<paragraph id="id46E78A2AEE534B3394FC3CF73B153375"><enum>(1)</enum><header>Aggregate
credit amount allowed</header><text>Except as provided in paragraph (2), the
aggregate amount of credit allowed under subsection (a) with respect to a
taxpayer for any taxable year shall not exceed $75,000,000 reduced by the
amount of the credit allowed under subsection (a) to the taxpayer (or any
predecessor) for all prior taxable years beginning after December 31,
2007.</text>
</paragraph><paragraph id="id522F6A2871064E16B94573EB2FEAFFF1"><enum>(2)</enum><header>Limitation
based on gross receipts</header><text>The credit allowed under subsection (a)
with respect to a taxpayer for the taxable year shall not exceed an amount
equal to 2 percent of the average annual gross receipts of the taxpayer for the
3 taxable years preceding the taxable year in which the credit is determined
beginning after December 31, 2007.</text>
</paragraph><paragraph id="id0C04C6131D084C38B8FC068F9BE2D68D"><enum>(3)</enum><header>Gross
receipts</header><text>For purposes of this subsection, the rules of paragraphs
(2) and (3) of section 448(c) shall apply.</text>
</paragraph></subsection><subsection id="id4EADA9AED2704AF088089A5EE233FE50"><enum>(f)</enum><header>Definitions</header><text>For
purposes of this section:</text>
<paragraph id="idC7442BC51F8143ABB66342A83756F3E7"><enum>(1)</enum><header>Dishwasher</header><text>The
term <term>dishwasher</term> means a dishwasher subject to the energy
conservation standards established by the Department of Energy.</text>
</paragraph><paragraph id="idA66972B41CC3425EBEE777BCD721C12F"><enum>(2)</enum><header>Clothes
washer</header><text>The term <term>clothes washer</term> includes a clothes
washer subject to the energy conservation standards established by the
Department of Energy.</text>
</paragraph><paragraph id="idDDAD4F9C0AC64B18AD285CC11C6E70BB"><enum>(3)</enum><header>Top-loading
clothes washer</header><text>The term <term>top-loading clothes washer</term>
means a clothes washer with the clothes container compartment access located on
the top of the machine.</text>
</paragraph><paragraph id="id07E4FABF58F745FABD02D7AFC5A73444"><enum>(4)</enum><header>Refrigerator</header><text>The
term <term>refrigerator</term> means an automatic defrost refrigerator-freezer
which has an internal volume of at least 16.5 cubic feet.</text>
</paragraph><paragraph id="idE479881851ED4D948FB347545034E193"><enum>(5)</enum><header>Gallons per
cycle</header><text>The term <term>gallons per cycle</term> means the amount of
water, expressed in gallons, required to complete a normal cycle of a
dishwasher.</text>
</paragraph><paragraph id="id8A6046EDA911426F9F345886672B1A67"><enum>(6)</enum><header>MEF</header><text>The
term <term>MEF</term> means the modified energy factor established by the
Department of Energy for compliance with the Federal energy conservation
standard.</text>
</paragraph><paragraph id="idD5921018E1AC40C7A1B57BA2F55A20C5"><enum>(7)</enum><header>Water
consumption factor</header><text>The term <term>water consumption factor</term>
means the quotient of the total weighted per-cycle water consumption divided by
the cubic foot capacity of the clothes washer.</text>
</paragraph><paragraph id="id967B68CFCED045598D8B6C5E27334A5A"><enum>(8)</enum><header>2001 energy
conservation standard</header><text>The term <term>2001 energy conservation
standard</term> means the energy conservation standards promulgated by the
Department of Energy and effective July 1, 2001.</text>
</paragraph></subsection><subsection id="id9EDC59E638514D888101A5B29EB672B0"><enum>(g)</enum><header>Special
rules</header><text>For purposes of this section:</text>
<paragraph id="id1FE2B9A2968A4CDE8A2BEAB2010726BC"><enum>(1)</enum><header>In
general</header><text>Rules similar to the rules of subsections (c), (d), and
(e) of section 52 shall apply.</text>
</paragraph><paragraph id="id482963DC77274ED29D6527DABAA15EA9"><enum>(2)</enum><header>Controlled
group</header>
<subparagraph id="idAF4925AAE1F4409980C4220EEBB72331"><enum>(A)</enum><header>In
general</header><text>All persons treated as a single employer under subsection
(a) or (b) of section 52 or subsection (m) or (o) of section 414 shall be
treated as a single producer.</text>
</subparagraph><subparagraph id="idA9CE113C7A0F4248BF879E874631607B"><enum>(B)</enum><header>Inclusion of
foreign corporations</header><text>For purposes of subparagraph (A), in
applying subsections (a) and (b) of section 52 to this section, section 1563
shall be applied without regard to subsection (b)(2)(C) thereof.</text>
</subparagraph></paragraph><paragraph id="idE24B95CCED15415681DB05D49C70CB6C"><enum>(3)</enum><header>Verification</header><text>No
amount shall be allowed as a credit under subsection (a) with respect to which
the taxpayer has not submitted such information or certification as the
Secretary, in consultation with the Secretary of Energy, determines
necessary.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idE03744B5AE6E4086AC4EE162305DE405"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
appliances produced after December 31, 2007.</text>
</subsection></section><section id="idF3479AB6EA3E44BD8E7151EB34A140CC"><enum>255.</enum><header>Special
depreciation allowance for certain reuse and recycling property</header>
<subsection id="idF7D6D5B951074AE08DB8831B3D742E32"><enum>(a)</enum><header>In
general</header><text>Section 168 of the Internal Revenue Code of 1986
(relating to accelerated cost recovery system) (as amended by section 205) is
amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id8C575933D8EB40348946A3CC824F673E" style="OLC">
<subsection id="id7A62B63F438749A2BA895562BF4B49E3"><enum>(n)</enum><header>Special
allowance for certain reuse and recycling property</header>
<paragraph id="id6818494AB5B543E5866BFF95400C48B1"><enum>(1)</enum><header>In
general</header><text>In the case of any qualified reuse and recycling
property—</text>
<subparagraph id="IDebfeb1f3013a41c28b2b11cd73da9b5a"><enum>(A)</enum><text>the depreciation
deduction provided by section 167(a) for the taxable year in which such
property is placed in service shall include an allowance equal to 50 percent of
the adjusted basis of the qualified reuse and recycling property, and</text>
</subparagraph><subparagraph id="ID56f60bc55b2a4660adc365c2febf7496"><enum>(B)</enum><text>the adjusted
basis of the qualified reuse and recycling property shall be reduced by the
amount of such deduction before computing the amount otherwise allowable as a
depreciation deduction under this chapter for such taxable year and any
subsequent taxable year.</text>
</subparagraph></paragraph><paragraph id="idDF6797A28F6C4FA8A843456EDEC9D211"><enum>(2)</enum><header>Qualified reuse
and recycling property</header><text>For purposes of this subsection—</text>
<subparagraph id="id4EADE30E83814EE7BA322D20AD69ABB0"><enum>(A)</enum><header>In
general</header><text>The term <term>qualified reuse and recycling
property</term> means any reuse and recycling property—</text>
<clause id="idF93E0650370A4BD9BF875C5B58CD247B"><enum>(i)</enum><text>to which this
section applies,</text>
</clause><clause id="ID5391779aaae243b4acf2ae687b82fbda"><enum>(ii)</enum><text>which has a
useful life of at least 5 years,</text>
</clause><clause id="IDda0eaef30a284765b089190ac458a070"><enum>(iii)</enum><text>the original
use of which commences with the taxpayer after December 31, 2006, and</text>
</clause><clause id="ID40ebd392cc814dd08dabdfdc8bc3ed45"><enum>(iv)</enum><text>which is—</text>
<subclause id="ID0ef93fa1478c4637b4dcef16dc2634b1"><enum>(I)</enum><text>acquired by
purchase (as defined in section 179(d)(2)) by the taxpayer after December 31,
2006, but only if no written binding contract for the acquisition was in effect
before January 1, 2007, or</text>
</subclause><subclause id="id7595E89602FA411C802635C02EEDB9AE"><enum>(II)</enum><text>acquired by the
taxpayer pursuant to a written binding contract which was entered into after
December 31, 2006.</text>
</subclause></clause></subparagraph><subparagraph id="ID1173a87bc1ed42b6a66279c68f303b2b"><enum>(B)</enum><header>Exceptions</header>
<clause id="ID0221bdddcd4b455b9a9f7071ff73b68c"><enum>(i)</enum><header>Alternative
depreciation property</header><text>The term <term>qualified reuse and
recycling property</term> shall not include any property to which the
alternative depreciation system under subsection (g) applies, determined
without regard to paragraph (7) of subsection (g) (relating to election to have
system apply).</text>
</clause><clause id="IDce6463c92f144356866513a8a67cd5f1"><enum>(ii)</enum><header>Election
out</header><text>If a taxpayer makes an election under this clause with
respect to any class of property for any taxable year, this subsection shall
not apply to all property in such class placed in service during such taxable
year.</text>
</clause></subparagraph><subparagraph id="ID1bcb667b9e8d49a3a19f3528891eaf6e"><enum>(C)</enum><header>Special rule
for self-constructed property</header><text>In the case of a taxpayer
manufacturing, constructing, or producing property for the taxpayer's own use,
the requirements of clause (iv) of subparagraph (A) shall be treated as met if
the taxpayer begins manufacturing, constructing, or producing the property
after December 31, 2006.</text>
</subparagraph><subparagraph id="id1D6EDE6AC4054DEFB691B92B8B1F6BEF"><enum>(D)</enum><header>Deduction
allowed in computing minimum tax</header><text>For purposes of determining
alternative minimum taxable income under section 55, the deduction under
subsection (a) for qualified reuse and recycling property shall be determined
under this section without regard to any adjustment under section 56.</text>
</subparagraph></paragraph><paragraph id="IDBF93567CEACA4EAD9DEDE6FC3F249C1A"><enum>(3)</enum><header>Definitions</header><text>For
purposes of this subsection—</text>
<subparagraph id="IDF531F8FC3BA240F58A5FF87130619B3D"><enum>(A)</enum><header>Reuse and
recycling property</header>
<clause id="IDE89D7D768F7447BEBBA00CFAE5885E68"><enum>(i)</enum><header>In
general</header><text>The term <term>reuse and recycling property</term> means
any machinery and equipment (not including buildings or real estate), along
with all appurtenances thereto, including software necessary to operate such
equipment, which is used exclusively to recycle qualified materials.</text>
</clause><clause id="ID4C68A858EA8B4D8DAB9A75AA2432FA9D"><enum>(ii)</enum><header>Exclusion</header><text>Such
term does not include—</text>
<subclause id="idD53D05DFDD434D0AB4232A5302A18D8A"><enum>(I)</enum><text>rolling stock or
other equipment used to transport qualified materials, and</text>
</subclause><subclause id="id5D350EB4F62D4A9DA9112FB7F6F3AAB2"><enum>(II)</enum><text>equipment used
to produce new products or commodities from recycled products.</text>
</subclause></clause></subparagraph><subparagraph id="ID0ED524305ECE4C82B0166986836F1E9A"><enum>(B)</enum><header>Qualified
materials</header>
<clause id="idF597491B2988489C87F700DF72AC48AE"><enum>(i)</enum><header>In
general</header><text>The term <term>qualified materials</term> means scrap
plastic, scrap glass, scrap textiles, scrap rubber (including used tires),
scrap packaging, recovered fiber, scrap ferrous and nonferrous metals, or
electronic scrap generated by an individual or business.</text>
</clause><clause id="idC421DB55E81C409CAF9B61A92E290A7C"><enum>(ii)</enum><header>Electronic
scrap</header><text>For purposes of clause (i), the term <term>electronic
scrap</term> means—</text>
<subclause id="id33259264CE494543831A1D51AF774FAB"><enum>(I)</enum><text>any cathode ray
tube, flat panel screen, or similar video display device with a screen size
greater than 4 inches measured diagonally, or</text>
</subclause><subclause id="id1D22FD9E44ED4DC68818AD9E21E9D0A1"><enum>(II)</enum><text>any central
processing unit.</text>
</subclause></clause></subparagraph><subparagraph id="IDB6629853E9544648A5FE069E1FCA196E"><enum>(C)</enum><header>Recycling or
recycle</header><text>The term <term>recycling</term> or <term>recycle</term>
means that process (including sorting and collecting) by which worn or
superfluous materials are manufactured or processed into specification grade
commodities that are suitable for use as a replacement or substitute for virgin
materials in manufacturing tangible consumer and commercial products, including
packaging.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id748A60323C5F446D8BF3F972FE34E35B"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to property
placed in service after December 31, 2007.</text>
</subsection></section></part></subtitle><subtitle id="id13C5CC50629C4B109B90D53186D0C2F8"><enum>B</enum><header>Revenue raising
provisions</header>
<section display-inline="no-display-inline" id="H1408FCD59CBC429B9487CE07F5D0A2C6"><enum>261.</enum><header>Denial of
deduction for major integrated oil companies for income attributable to
domestic production of oil, natural gas, or primary products thereof</header>
<subsection id="HE7720DBCCA0740F6A83E6025EBAAE0E3"><enum>(a)</enum><header>In
general</header><text>Subparagraph (B) of section 199(c)(4) of the Internal
Revenue Code of 1986 (relating to exceptions) is amended by striking
<quote>or</quote> at the end of clause (ii), by striking the period at the end
of clause (iii) and inserting <quote>, or</quote>, and by inserting after
clause (iii) the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="H9881E060A8764FF4A83EFFDAC45D2915" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="HC39AABDAAF044DE5AA8FC475364241D4"><enum>(iv)</enum><text display-inline="yes-display-inline">in the case of any major integrated oil
company (as defined in section 167(h)(5)(B)), the production, refining,
processing, transportation, or distribution of oil, natural gas, or any primary
product thereof during any taxable year described in section
167(h)(5)(B).</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H337BAC6856294E21A82615CDC3B69E4"><enum>(b)</enum><header>Primary
product</header><text>Section 199(c)(4)(B) of such Code is amended by adding at
the end the following flush sentence:</text>
<quoted-block display-inline="no-display-inline" id="HF251D31B3E3F423BABFDA5605DA3E265" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="subparagraph">For
purposes of clause (iv), the term <term>primary product</term> has the same
meaning as when used in section 927(a)(2)(C), as in effect before its
repeal.</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H7E14ACDB516F4972B382F5464EE62D01"><enum>(c)</enum><header>Conforming
amendments</header><text>Section 199(c)(4) of such Code is amended—</text>
<paragraph id="HCDDD50DD22C84C4293651FB31B147869"><enum>(1)</enum><text display-inline="yes-display-inline">in subparagraph (A)(i)(III) by striking
<quote>electricity, natural gas,</quote> and inserting
<quote>electricity</quote>, and</text>
</paragraph><paragraph id="HF9DBBA48960F4316A8088C5C555EF545"><enum>(2)</enum><text display-inline="yes-display-inline">in subparagraph (B)(ii) by striking
<quote>electricity, natural gas,</quote> and inserting
<quote>electricity</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="H77F281E899EA4B77AC11916212D1BDEC"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section><section id="id302617B3734947D287A55D5D157845A4"><enum>262.</enum><header>Elimination of
the different treatment of foreign oil and gas extraction income and foreign
oil related income for purposes of the foreign tax credit</header>
<subsection id="id2D47AC437BEA462A826E8DD948F7E236"><enum>(a)</enum><header>In
general</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="id26EDA2C30D434C75BB022D56DAA033B4" style="OLC">
<subsection id="id13E8D4FD593A49B7BCF1F270C79B1057"><enum>(a)</enum><header>Reduction in
amount allowed as foreign tax under section 901</header><text>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—</text>
<paragraph id="id1DD4E3A98223495BBF22F63D090DEFC0"><enum>(1)</enum><text>the amount of the
combined foreign oil and gas income for the taxable year,</text>
</paragraph><paragraph id="idB676C08B5B5748459147E704A48F91E1"><enum>(2)</enum><text>multiplied
by—</text>
<subparagraph id="idF37FB48262A64B4C917248BE7E85FCE2"><enum>(A)</enum><text>in the case of a
corporation, the percentage which is equal to the highest rate of tax specified
under section 11(b), or</text>
</subparagraph><subparagraph id="id52936FE776924451B473A24BCA44E4C5"><enum>(B)</enum><text>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.</text>
</subparagraph></paragraph></subsection><subsection id="id8264C579D15441D29F14AA82DDFA751C"><enum>(b)</enum><header>Combined
foreign oil and gas income; foreign oil and gas taxes</header><text>For
purposes of this section—</text>
<paragraph id="id1C179501D680401D9D52B0243998889C"><enum>(1)</enum><header>Combined
foreign oil and gas income</header><text>The term <term>combined foreign oil
and gas income</term> means, with respect to any taxable year, the sum
of—</text>
<subparagraph id="id48B256E24E6C4A64A943C8EEB3931B8F"><enum>(A)</enum><text>foreign oil and
gas extraction income, and</text>
</subparagraph><subparagraph id="id0A78B6ADD210461E92CC4EBA915245BB"><enum>(B)</enum><text>foreign oil
related income.</text>
</subparagraph></paragraph><paragraph id="id837EAA44A2334B9A94383017FA632CAE"><enum>(2)</enum><header>Foreign oil and
gas taxes</header><text>The term <term>foreign oil and gas taxes</term> means,
with respect to any taxable year, the sum of—</text>
<subparagraph id="idD99C42F916764917A0067D90B64DA8C9"><enum>(A)</enum><text>oil and gas
extraction taxes, and</text>
</subparagraph><subparagraph id="idA4D1A1136D56407081AA8A63AC348DB2"><enum>(B)</enum><text>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.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id73693604090B4C28AE49B21568013CDD"><enum>(b)</enum><header>Recapture of
foreign oil and gas losses</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="idFC3CB33593AF4B61B0E72F1E155D6D09" style="OLC">
<paragraph id="id571AB78F88E048F2A65D0BF9E1341159"><enum>(4)</enum><header>Recapture of
foreign oil and gas losses by recharacterizing later combined foreign oil and
gas income</header>
<subparagraph id="id5C2F95DAD38A47788A90E27134CC5B40"><enum>(A)</enum><header>In
general</header><text>The combined foreign oil and gas income of a taxpayer for
a taxable year (determined without regard to this paragraph) shall be
reduced—</text>
<clause id="id93B0F4E9FD92407FBD617CFD6474FBD1"><enum>(i)</enum><text>first by the
amount determined under subparagraph (B), and</text>
</clause><clause id="idCADD7F5A83734019B041DF545CD7C08E"><enum>(ii)</enum><text>then by the
amount determined under subparagraph (C).</text>
</clause><continuation-text continuation-text-level="subparagraph">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.</continuation-text></subparagraph><subparagraph id="id4EFEF4E6641E4CA498782254234C6521"><enum>(B)</enum><header>Reduction for
pre-2008 foreign oil extraction losses</header><text>The reduction under this
paragraph shall be equal to the lesser of—</text>
<clause id="id5514ADEB4356461698757016203345DA"><enum>(i)</enum><text>the foreign oil
and gas extraction income of the taxpayer for the taxable year (determined
without regard to this paragraph), or</text>
</clause><clause id="idA964F0B8A33244068F72F2C99FD76C02"><enum>(ii)</enum><text>the excess
of—</text>
<subclause id="idE7E5BD62CA96452D9E92BDEEB1AC8AA7"><enum>(I)</enum><text>the aggregate
amount of foreign oil extraction losses for preceding taxable years beginning
after December 31, 1982, and before January 1, 2008, over</text>
</subclause><subclause id="id90C401AD165D4E068FCE11F4CF1CAC23"><enum>(II)</enum><text>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 Energy Advancement and
Investment Act of 2007) for preceding taxable years beginning after December
31, 1982.</text>
</subclause></clause></subparagraph><subparagraph id="id5721D069D3194CA2B0A3A31564DE5C6C"><enum>(C)</enum><header>Reduction for
post-2007 foreign oil and gas losses</header><text>The reduction under this
paragraph shall be equal to the lesser of—</text>
<clause id="idCFAA7FAC76934E49A20DEE7DD744FCF4"><enum>(i)</enum><text>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</text>
</clause><clause id="id7CEA24749226435A9ACA88E80BEA01FD"><enum>(ii)</enum><text>the excess
of—</text>
<subclause id="idA09D790E0CB54F4D8D621E34A2655DEB"><enum>(I)</enum><text>the aggregate
amount of foreign oil and gas losses for preceding taxable years beginning
after December 31, 2007, over</text>
</subclause><subclause id="id5F8798227C7B448A914E9B4045DE1EDC"><enum>(II)</enum><text>so much of such
aggregate amount as was recharacterized under this paragraph for preceding
taxable years beginning after December 31, 2007.</text>
</subclause></clause></subparagraph><subparagraph id="id1B28CB638CAC4589A31FC1DF70605CD1"><enum>(D)</enum><header>Foreign oil and
gas loss defined</header>
<clause id="idECCA0979E3E048AB9F09A38AF330A4B3"><enum>(i)</enum><header>In
general</header><text>For purposes of this paragraph, the term <term>foreign
oil and gas loss</term> means the amount by which—</text>
<subclause id="id61DD04CD843F4B9AA811D687E947FF71"><enum>(I)</enum><text>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</text>
</subclause><subclause id="id157F87BAD40D4092BB030479AC579861"><enum>(II)</enum><text>the sum of the
deductions properly apportioned or allocated thereto.</text>
</subclause></clause><clause id="id92424400B1644A6D8C8EE0D623CD81FD"><enum>(ii)</enum><header>Net operating
loss deduction not taken into account</header><text>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.</text>
</clause><clause id="idB94228F297264438AA956A52CB0C207C"><enum>(iii)</enum><header>Expropriation
and casualty losses not taken into account</header><text>For purposes of clause
(i), there shall not be taken into account—</text>
<subclause id="id8660D0CEC79F4FC281FC32EFF1B00726"><enum>(I)</enum><text>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</text>
</subclause><subclause id="idCBD99E76CDED4C2A9D4C80754D55325A"><enum>(II)</enum><text>any loss for the
taxable year which arises from fire, storm, shipwreck, or other casualty, or
from theft,</text>
</subclause><continuation-text continuation-text-level="clause">to the extent
such loss is not compensated for by insurance or otherwise.</continuation-text></clause><clause id="id8089A710A81D43BD8667FF5DEEC4F53D"><enum>(iv)</enum><header>Foreign oil
extraction loss</header><text>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 Energy Advancement and
Investment Act of
2007.</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id9DDFCB9882B4480C94494BDE102704B5"><enum>(c)</enum><header>Carryback and
carryover of disallowed credits</header><text>Section 907(f) (relating to
carryback and carryover of disallowed credits) is amended—</text>
<paragraph id="idDAE9164F6AC94092BE3D2D8922B78EB7"><enum>(1)</enum><text>by striking
<quote>oil and gas extraction taxes</quote> each place it appears and inserting
<quote>foreign oil and gas taxes</quote>, and</text>
</paragraph><paragraph id="idB749AFE886AD410786F877EB447F2D49"><enum>(2)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id477246DA29C6412C81F3AA2E16178358" style="OLC">
<paragraph id="id8358214C6849487DA3DB2228A52B8042"><enum>(4)</enum><header>Transition
rules for pre-2008 and 2008 disallowed credits</header>
<subparagraph id="id79048D6051C146A2A7E3FAB60B5D1897"><enum>(A)</enum><header>Pre-2008
credits</header><text>In the case of any unused credit year beginning before
January 1, 2008, 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, 2007—</text>
<clause id="id0DE23FD341C848FD8078213A783D69EF"><enum>(i)</enum><text>by substituting
<quote>oil and gas extraction taxes</quote> for <quote>foreign oil and gas
taxes</quote> each place it appears in paragraphs (1), (2), and (3), and</text>
</clause><clause id="id54DA9BA491E846E389EEA55F36FDE464"><enum>(ii)</enum><text>by computing,
for purposes of paragraph (2)(A), the limitation under subparagraph (A) for the
year to which such taxes are carried by substituting <quote>foreign oil and gas
extraction income</quote> for <quote>foreign oil and gas income</quote> in
subsection (a).</text>
</clause></subparagraph><subparagraph id="id7ED7539FB1FA4D55B3D9E489B9EB5E10"><enum>(B)</enum><header>2008
credits</header><text>In the case of any unused credit year beginning in 2008,
the amendments made to this subsection by the Energy Advancement and Investment
Act of 2007 shall be treated as being in effect for any preceding year
beginning before January 1, 2008, 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.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="id078E7E9A792741EF9D33617813C2748D"><enum>(d)</enum><header>Conforming
amendment</header><text>Section 6501(i) is amended by striking <quote>oil and
gas extraction taxes</quote> and inserting <quote>foreign oil and gas
taxes</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDE9D8F37FECF54DEBA293D79320A74CF3"><enum>(e)</enum><header display-inline="yes-display-inline">Effective date</header><text>The amendments
made by this section shall apply to taxable years beginning after December 31,
2007.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id17038F2BC56B469EB4B28F2470119A73"><enum>263.</enum><header>Increase and
extension of Oil Spill Liability Trust Fund tax</header>
<subsection commented="no" display-inline="no-display-inline" id="idC66C4EE020134C848AE9CE151754F7CB"><enum>(a)</enum><header>Increase in
rate</header>
<paragraph commented="no" display-inline="no-display-inline" id="idD68EBFFC94B348299AA49A3DDBAE73B1"><enum>(1)</enum><header>In
general</header><text>Section 4611(c)(2)(B) (relating to rates) is amended by
striking <quote>5 cents</quote> and inserting <quote>10 cents</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id82129EEE1408407C946F1805F763C4AF"><enum>(2)</enum><header>Effective
date</header><text>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.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id3C7BDC25D6CE44008215960FB39D2DF7"><enum>(b)</enum><header>Extension</header>
<paragraph commented="no" display-inline="no-display-inline" id="idC028B5A6457A4E469643F7DD032ACBD0"><enum>(1)</enum><header>In
general</header><text>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:</text>
<quoted-block display-inline="no-display-inline" id="id6691D90F8CA0436FA49A7C1DD7590479" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="idE0E222046207489286D475C5C0765521"><enum>(2)</enum><header>Termination</header><text>The
Oil Spill Liability Trust Fund financing rate shall not apply after December
31,
2017.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idBBDE02E418264B1FB8E5BC2E36099680"><enum>(2)</enum><header>Conforming
amendment</header><text>Section 4611(f)(1) is amended by striking
<quote>paragraphs (2) and (3)</quote> and inserting <quote>paragraph
(2)</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="idF750E6D570754A01A1EC180F1C26D0A3"><enum>(3)</enum><header>Effective
date</header><text>The amendments made by this subsection shall take effect on
the date of the enactment of this Act.</text>
</paragraph></subsection></section><section id="id45B3BC3929BA4093983763CE4968538D"><enum>264.</enum><header>Limitation on
drawback claimed for amounts deposited into the Oil Spill Liability Trust
Fund</header><text display-inline="no-display-inline">Section 313(j) of the
Tariff Act of 1930 (19 U.S. C. 1313(j)) is amended by adding at the end the
following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id4EC0D7D261B146ED8DD4F8A779832F2C" style="OLC">
<paragraph id="id5DC209A06E1149F08B1D47710AA4425B"><enum>(5)</enum><header>Limitation on
certain drawbacks</header><text>Any tax or fee imposed under section 4611 of
the Internal Revenue Code of 1986 for deposit in the Oil Spill Liability Trust
Fund pursuant to section 9509 of such Code shall not be eligible for refund as
drawback under this
section.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="id7DCCDA8FB8724F198E84C5B5AB752C05" section-type="subsequent-section"><enum>265.</enum><header>Tax on crude oil and
natural gas produced from the outer Continental Shelf in the Gulf of
Mexico</header>
<subsection id="id761C2ADC2F5844DB8E40A06D4CF2311E"><enum>(a)</enum><header>In
general</header><text>Subtitle E (relating to alcohol, tobacco, and certain
other excise taxes) is amended by adding at the end the following new
chapter:</text>
<quoted-block display-inline="no-display-inline" id="id2F96117F0F294EAC8C6F1BA00E1DCB5D" style="OLC">
<chapter id="id14D22A95B3114B5CB24D62F150F360A8"><enum>56</enum><header>Tax on severance
of crude oil and natural gas from the outer Continental Shelf in the Gulf of
Mexico</header>
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 5896. Imposition of
tax.</toc-entry>
<toc-entry level="section">Sec. 5897. Taxable crude oil or natural
gas and removal price.</toc-entry>
<toc-entry level="section">Sec. 5898. Special rules and
definitions.</toc-entry>
</toc>
<section id="id1F6CABB4526C482887AB2CEDBBE0A63A"><enum>5896.</enum><header>Imposition of
tax</header>
<subsection id="id29FA3E0B4D1248E8AB3E0886FD693EC9"><enum>(a)</enum><header>In
general</header><text>In addition to any other tax imposed under this title,
there is hereby imposed a tax equal to 13 percent of the removal price of any
taxable crude oil or natural gas removed from the premises during any taxable
period.</text>
</subsection><subsection id="id80F66C369C024972AC5B966053583EC3"><enum>(b)</enum><header>Credit for
Federal royalties paid</header>
<paragraph id="id4AF8D7698B71448B89D889D176F55CC5"><enum>(1)</enum><header>In
general</header><text>There shall be allowed as a credit against the tax
imposed by subsection (a) with respect to the production of any taxable crude
oil or natural gas an amount equal to the aggregate amount of royalties paid
under Federal law with respect to such production.</text>
</paragraph><paragraph id="id5601E188F66F41209B2F31AD58571DF0"><enum>(2)</enum><header>Limitation</header><text>The
aggregate amount of credits allowed under paragraph (1) to any taxpayer for any
taxable period shall not exceed the amount of tax imposed by subsection (a) for
such taxable period.</text>
</paragraph></subsection><subsection id="id96DC35B2C47E48D0852F545A80C6AD2A"><enum>(c)</enum><header>Tax paid by
producer</header><text>The tax imposed by this section shall be paid by the
producer of the taxable crude oil or natural gas.</text>
</subsection></section><section id="id1DB9BC5E9CD147E38DC16CA38AA3B966"><enum>5897.</enum><header>Taxable crude
oil or natural gas and removal price</header>
<subsection id="id9C6349F8189148F897D7775694EE0F57"><enum>(a)</enum><header>Taxable crude
oil or natural gas</header><text>For purposes of this chapter, the term
<term>taxable crude oil or natural gas</term> means crude oil or natural gas
which is produced from Federal submerged lands on the outer Continental Shelf
in the Gulf of Mexico pursuant to a lease entered into with the United States
which authorizes the production.</text>
</subsection><subsection id="idBC1C28CB12F3412CACEF164754EF7086"><enum>(b)</enum><header>Removal
price</header><text>For purposes of this chapter—</text>
<paragraph id="id1653C1A842F54588B5446CD8FCC6C222"><enum>(1)</enum><header>In
general</header><text>Except as otherwise provided in this subsection, the term
<term>removal price</term> means—</text>
<subparagraph id="id00874073EBD64D2DB6E9BFC4673CF722"><enum>(A)</enum><text>in the case of
taxable crude oil, the amount for which a barrel of such crude oil is sold,
and</text>
</subparagraph><subparagraph id="id441A53B235A24B1288C51E52692B069F"><enum>(B)</enum><text>in the case of
taxable natural gas, the amount per 1,000 cubic feet for which such natural gas
is sold.</text>
</subparagraph></paragraph><paragraph id="id78E61E6A08D149F5BEF9116EC76CD76C"><enum>(2)</enum><header>Sales between
related persons</header><text>In the case of a sale between related persons,
the removal price shall not be less than the constructive sales price for
purposes of determining gross income from the property under section
613.</text>
</paragraph><paragraph id="idE20CF1A47F174B04AB8E36731DB93AC6"><enum>(3)</enum><header>Oil or gas
removed from property before sale</header><text>If crude oil or natural gas is
removed from the property before it is sold, the removal price shall be the
constructive sales price for purposes of determining gross income from the
property under section 613.</text>
</paragraph><paragraph id="idB52760C036C0489FB7B6DFC32FFB4E64"><enum>(4)</enum><header>Refining begun
on property</header><text>If the manufacture or conversion of crude oil into
refined products begins before such oil is removed from the property—</text>
<subparagraph id="id352698933C534D598FF61A43B5DAB0CA"><enum>(A)</enum><text>such oil shall be
treated as removed on the day such manufacture or conversion begins, and</text>
</subparagraph><subparagraph id="id6FB7AF5108464B2998FB2347521EF8E9"><enum>(B)</enum><text>the removal price
shall be the constructive sales price for purposes of determining gross income
from the property under section 613.</text>
</subparagraph></paragraph><paragraph id="id2D13A119DE4842D987F504589718B305"><enum>(5)</enum><header>Property</header><text>The
term <term>property</term> has the meaning given such term by section
614.</text>
</paragraph></subsection></section><section id="idAFA32486493E4BE2973FB078C7166A39"><enum>5898.</enum><header>Special rules
and definitions</header>
<subsection id="idBD8B4ECF768F4966B77E38B770B66BFF"><enum>(a)</enum><header>Administrative
requirements</header>
<paragraph id="id5B421A90931346AE9710382EB4B5C93D"><enum>(1)</enum><header>Withholding and
deposit of tax</header><text>The Secretary shall provide for the withholding
and deposit of the tax imposed under section 5896 on a quarterly basis.</text>
</paragraph><paragraph id="id12BD94527E6545B29C08E03E3325C136"><enum>(2)</enum><header>Records and
information</header><text>Each taxpayer liable for tax under section 5896 shall
keep such records, make such returns, and furnish such information (to the
Secretary and to other persons having an interest in the taxable crude oil or
natural gas) with respect to such oil as the Secretary may by regulations
prescribe.</text>
</paragraph><paragraph id="idB7BA4E4695F649E6A8E255C4036C05F9"><enum>(3)</enum><header>Taxable
periods; return of tax</header>
<subparagraph id="id929C614DF9C449D690F2DA53441E4A60"><enum>(A)</enum><header>Taxable
period</header><text>Except as provided by the Secretary, each calendar year
shall constitute a taxable period.</text>
</subparagraph><subparagraph id="id722024A6B9344F7C8CBB21FA783E462A"><enum>(B)</enum><header>Returns</header><text>The
Secretary shall provide for the filing, and the time for filing, of the return
of the tax imposed under section 5896.</text>
</subparagraph></paragraph></subsection><subsection id="id76B3DFCDE7FE455884D03CBCABB66BBC"><enum>(b)</enum><header>Definitions</header><text>For
purposes of this chapter—</text>
<paragraph id="id302B08C90DC64A949D2001AC16F8C63B"><enum>(1)</enum><header>Producer</header><text>The
term <term>producer</term> means the holder of the economic interest with
respect to the crude oil or natural gas.</text>
</paragraph><paragraph id="id2EB5A1DF05CD4BE5926FE1FC02C32BEA"><enum>(2)</enum><header>Crude
oil</header><text>The term <term>crude oil</term> includes crude oil
condensates and natural gasoline.</text>
</paragraph><paragraph id="idF4D554DA15CD4D73A15CB1855C65E377"><enum>(3)</enum><header>Premises and
crude oil product</header><text>The terms <term>premises</term> and <term>crude
oil product</term> have the same meanings as when used for purposes of
determining gross income from the property under section 613.</text>
</paragraph></subsection><subsection id="id51769BB8B1F2483BA21D1597DE8E06D8"><enum>(c)</enum><header>Adjustment of
removal price</header><text>In determining the removal price of oil or natural
gas from a property in the case of any transaction, the Secretary may adjust
the removal price to reflect clearly the fair market value of oil or natural
gas removed.</text>
</subsection><subsection id="id1E546EA950A44707806DA5C09F16B708"><enum>(d)</enum><header>Regulations</header><text>The
Secretary shall prescribe such regulations as may be necessary or appropriate
to carry out the purposes of this
chapter.</text>
</subsection></section></chapter><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idDC53CC5257C642328B89B303B627AC6F"><enum>(b)</enum><header>Deductibility
of tax</header><text>The first sentence of section 164(a) (relating to
deduction for taxes) is amended by inserting after paragraph (5) the following
new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idAD335B4DA1CE47FB857DCD7100B78732" style="OLC">
<paragraph id="id8631A986804A46F8852ABAC22ABD9A95"><enum>(6)</enum><text>The tax imposed
by section 5896(a) (after application of section 5896(b)) on the severance of
crude oil or natural gas from the outer Continental Shelf in the Gulf of
Mexico.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idC4792838E8744222941EF7E464972AF2"><enum>(c)</enum><header>Clerical
amendment</header><text>The table of chapters for subtitle E is amended by
adding at the end the following new item:</text>
<quoted-block display-inline="no-display-inline" id="idC705B4C72B124032984DFA546B211A57" style="tax">
<toc regeneration="no-regeneration">
<toc-entry level="chapter">Chapter 56. Tax on severance of crude oil
and natural gas from the outer Continental Shelf in the Gulf of
Mexico.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id3157A94398C9474EB35E3CED626D5E0A"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to crude oil
or natural gas removed after the date of the enactment of this Act.</text>
</subsection></section><section id="id46A5B6BAA09141CEAE650DE5D0673E71"><enum>266.</enum><header>Taxation of
taxable fuels in foreign trade zones</header>
<subsection id="id8F9A3C8FF0444102A4D85C3077FB35BD"><enum>(a)</enum><header>Tax imposed on
removals and entries in foreign trade zones</header>
<paragraph id="idC59F5207FB90493CB4CEC09BCA7D054C"><enum>(1)</enum><header>In
general</header><text>Subsection (a) of section 4083 (relating to definitions)
is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id797424A7EBB94943A4729AC32A48ED3D" style="OLC">
<paragraph id="idD15BC2E9C8884C59908C10FFF1F4483B"><enum>(4)</enum><header>United
States</header><text>The term <term>United States</term> includes any foreign
trade zone or bonded warehouse located in the United
States.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="idF76CE878F503471EBA474E5876F53096"><enum>(2)</enum><header>Conforming
amendment</header><text>Section 4081(a)(1)(A) (relating to imposition of tax)
is amended—</text>
<subparagraph id="id9791FA97EF574B409D337E8C5BD75979"><enum>(A)</enum><text>in clause (i), by
inserting <quote>in the United States</quote> after <quote>refinery</quote>;
and</text>
</subparagraph><subparagraph id="idCBA9426C88444A1C8C241E41A37BCB46"><enum>(B)</enum><text>in clause (ii),
by inserting <quote>in the United States</quote> after
<quote>terminal</quote>.</text>
</subparagraph></paragraph></subsection><subsection commented="no" id="id414EDC51260C43DB8F1F13FE2A58EF55"><enum>(b)</enum><header>Treatment of
taxable fuel in foreign trade zones</header><text>Paragraph (2) of section
81c(a) of title 19, United States Code, is amended by inserting <quote>(other
than the provisions relating to taxable fuel (as defined under section 4083(a)
of the Internal Revenue Code of 1986))</quote> after
<quote>thereunder</quote>.</text>
</subsection><subsection id="id6DCF1BE6286144BB8B700F0A548D955A"><enum>(c)</enum><header>Effective
dates</header>
<paragraph id="id769328FC18674E5FAD75D525054386E2"><enum>(1)</enum><header>Subsection
<enum-in-header>(a)</enum-in-header></header><text>The amendments made by
subsection (a) shall apply to removals and entries after December 31,
2007.</text>
</paragraph><paragraph id="idA0387336101F4CB4AE3C4C5C8BE708BE"><enum>(2)</enum><header>Subsection
<enum-in-header>(b)</enum-in-header></header><text>The amendment made by
subsection (b) shall take effect on January 1, 2008.</text>
</paragraph></subsection></section><section id="id5AE30E695C3144A6B37C0813753B2E62"><enum>267.</enum><header>Clarification
of penalty for sale of fuel failing to meet EPA regulations</header>
<subsection id="id5ACE48BE22EB409AACC17E49DCF06E8B"><enum>(a)</enum><header>In
general</header><text>Subsection (a) of section 6720A (relating to penalty with
respect to certain adulterated fuels) is amended by striking <quote>applicable
EPA regulations (as defined in section 45H(c)(3))</quote> and inserting
<quote>the requirements for diesel fuel under section 211 of the Clean Air Act,
as determined by the Secretary,</quote>.</text>
</subsection><subsection id="idDC314831FEB94FCEB3B7A028C13B8D93"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to any
transfer, sale, or holding out for sale or resale occurring after the date of
the enactment of this Act.</text>
</subsection></section><section id="idEF4C79110ABF43A1BDEC45A5B0DA42D6"><enum>268.</enum><header>Clarification
of eligibility for certain fuels credits for fuel with insufficient nexus to
the United States</header>
<subsection commented="no" display-inline="no-display-inline" id="H1F6F2A4A92A34999A833A3186F3303D7"><enum>(a)</enum><header>In
general</header>
<paragraph commented="no" id="H033DB5F53CAD4E1D908423DEB934A763"><enum>(1)</enum><header>Alcohol
credit</header><text>Subsection (d) of section 40 is amended by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HBF6D87CF4DDB4ED7896FC008C593D51" style="OLC">
<paragraph commented="no" id="H23B4B46704E343E090A877386FBC88C9"><enum>(6)</enum><header>Limitation to
alcohol with connection to the United States</header>
<subparagraph id="H7D015928E0334C79AF1900126B1665FC"><enum>(A)</enum><header>Alcohol
credit</header><text>No alcohol credit shall be determined under this section
with respect to any alcohol unless such alcohol is produced in the United
States for consumption in the United States or entered into the United States
for consumption in the United States.</text>
</subparagraph><subparagraph id="HCA387AE98ED241378D00AD53E513E7EC"><enum>(B)</enum><header>Alcohol mixture
credit</header><text display-inline="yes-display-inline">No alcohol mixture
credit shall be determined under this section with respect to any mixture
unless such mixture is produced in the United States for consumption in the
United States or entered into the United States for consumption in the United
States.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id95479B7882EB409C82F4243006A73D30"><enum>(C)</enum><header display-inline="yes-display-inline">No credits for alcohol destined for
export</header><text display-inline="yes-display-inline">No credit (other than
the small ethanol producer credit) shall be determined under this section with
respect to any mixture or alcohol if such mixture or alcohol is destined for
export from the United States (as determined by the Secretary).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H96BDE437F40048919CEE4BA9BDB75ECF"><enum>(D)</enum><header display-inline="yes-display-inline">Special rule for small producer
credits</header><text display-inline="yes-display-inline">No small ethanol
producer credit, small cellulosic alcohol producer credit, or small fossil free
alcohol producer credit shall be determined under this section with respect to
any alcohol unless such alcohol is produced in the United
States.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="HE351C7F29C3040AD8817E33900D1A821"><enum>(2)</enum><header>Biodiesel
credit</header><text>Subsection (d) of section 40A is amended by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H559ED22CBF6F4F6E86007F83DD6456B7" style="OLC">
<paragraph commented="no" id="H2A198559F5844BD3B71979F7F5335E92"><enum>(5)</enum><header>Limitation to
biodiesel with connection to the United States</header>
<subparagraph id="H171F9548181841C78DD8788421232564"><enum>(A)</enum><header>Biodiesel
credit</header><text display-inline="yes-display-inline">No biodiesel credit
shall be determined under this section with respect to any biodiesel unless
such biodiesel is produced in the United States for consumption in the United
States or is entered into the United States for consumption in the United
States.</text>
</subparagraph><subparagraph id="H0CE030F2C63F4BC49703F501003706F3"><enum>(B)</enum><header>Biodiesel
mixture credit</header><text>No biodiesel mixture credit shall be determined
under this section with respect to any mixture unless such mixture is produced
in the United States for consumption in the United States or is entered into
the United States for consumption in the United States.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idA3105E3D519644BC9166566E2EAA24BF"><enum>(C)</enum><header display-inline="yes-display-inline">No credits for biodiesel destined for
export</header><text display-inline="yes-display-inline">No credit (other than
the small agri-biodiesel producer credit) shall be determined under this
section with respect to any mixture or biodiesel if such mixture or biodiesel
is destined for export from the United States (as determined by the
Secretary).</text>
</subparagraph><subparagraph id="HD78E663A2BC042029C57F4D5C296B8AE"><enum>(D)</enum><header>Special rule for
small agri-biodiesel producer credit</header><text>No small agri-biodiesel
producer credit shall be determined under this section with respect to any
agri-biodiesel unless such agri-biodiesel is produced in the United
States.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H91685E694E0E4CD9A8D6A0584C652031"><enum>(3)</enum><header>Excise tax
credits</header><text>Section 6426, as amended by section 233, is amended by
adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H70610578B15C49228CA85BA8F3A64CAA" style="OLC">
<subsection commented="no" id="H61CA9FBF26BE4822BF6F84A100BD8FA9"><enum>(i)</enum><header>Limitation to
fuels with connection to the United States</header>
<paragraph id="HA0E8C0CF8922496298CC0F373FEDC65"><enum>(1)</enum><header>Mixture
credits</header><text display-inline="yes-display-inline">No credit shall be
determined under this section with respect to any mixture unless such mixture
is produced in the United States for consumption in the United States or is
entered into the United States for consumption in the United States.</text>
</paragraph><paragraph id="H7139FF6654024F4781C64E9E56D7DDE9"><enum>(2)</enum><header>Alternative fuel
credit</header><text display-inline="yes-display-inline">No alternative fuel
credit shall be determined under this section with respect to any alternative
fuel unless such alternative fuel is produced in the United States for
consumption in the United States or is entered into the United States for
consumption in the United States.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id7128AB880A1B4F76BD70E0AF382DA57F"><enum>(3)</enum><header display-inline="yes-display-inline">No credits for fuels destined for
export</header><text display-inline="yes-display-inline">No credit shall be
determined under this section with respect to any mixture or alternative fuel
if such mixture or alternative fuel is destined for export from the United
States (as determined by the
Secretary).</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="H16304FB905FA4B538D3B26D9F0C560CD"><enum>(4)</enum><header>Payments</header><text>Subsection
(e) of section 6427 is amended by redesignating paragraph (5), as amended by
this Act, as paragraph (6) and by inserting after paragraph (4) the following
new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H3262247B4A9943A3B9005C2EF2E654BF" style="OLC">
<paragraph commented="no" id="H65A8CA625F3E493BB2B3123EAD7B7674"><enum>(5)</enum><header>Limitation to
fuels with connection to the United States</header><text>No amount shall be
payable under paragraph (1) or (2) with respect to any mixture or alternative
fuel if credit is not allowed with respect to such mixture or alternative fuel
by reason of section
6426(i).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HD9149AF5E2A642E6A709655D95A4363D"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to fuel sold
or used after the date of the enactment of this Act.</text>
</subsection></section><section id="id43F46B875C0E431B9B78A28E121F54B9"><enum>269.</enum><header>Treatment of
qualified alcohol fuel mixtures and qualified biodiesel fuel mixtures as
taxable fuels</header>
<subsection id="id5AF51264B7FC4C6D8734B52F3021C163"><enum>(a)</enum><header>In
general</header><text>Subparagraph (A) of section 4083(a)(3) (relating to
diesel fuel) is amended by striking <quote>and</quote> at the end of clause
(ii), by redesignating clause (iii) as clause (v), and inserting after clause
(ii) the following new clauses:</text>
<quoted-block display-inline="no-display-inline" id="id1F304ED4C6AA4417A7D5B9F63072349C" style="OLC">
<clause id="id56D544DBBBE6424CB48D307EC6997E72"><enum>(iii)</enum><text>any qualified
mixture (as defined in section 40(b)(1)(B)) which is a mixture of alcohol and
special fuel,</text>
</clause><clause id="id17897189925B475F95440991B5E68EB3"><enum>(iv)</enum><text>any qualified
biodiesel mixture (as defined in section 40A(b)(1)(B)),
and</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idB644EE0E384F4A3AA69EB849BD4EF54E"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to fuels
removed, entered, or sold after December 31, 2007.</text>
</subsection></section><section id="id6B9B826F252B4ADF81FFE5871525CA0D"><enum>270.</enum><header>Calculation of
volume of alcohol for fuel credits</header>
<subsection id="id7173D11982ED46E48A2B6942E18EF1FD"><enum>(a)</enum><header>In
general</header><text>Paragraph (4) of section 40(d) (relating to volume of
alcohol) is amended by striking <quote>the volume of alcohol</quote> and all
that follows and inserting <quote>the volume of alcohol shall not include any
denaturant added to such alcohol.</quote>.</text>
</subsection><subsection id="idFCC7DC2C7F4A4DCBBCD72B87A260E51A"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to fuel sold
or used after December 31, 2007.</text>
</subsection></section><section id="id57A2D7A2E48C435C832A8DCA35D02F85"><enum>271.</enum><header>Bulk transfer
exception not to apply to finished gasoline</header>
<subsection id="idBD9196F190EA4E4D99A87D8F020AB4AC"><enum>(a)</enum><header>In
general</header><text>Subparagraph (B) of section 4081(a)(1) (relating to tax
on removal, entry, or sale) is amended by adding at the end the following new
clause:</text>
<quoted-block display-inline="no-display-inline" id="id1AFA70826E0043A8AEC31CD5C17EC9A7" style="OLC">
<clause id="idEF74347CD1F14D71B9BD7CA2BBC61741"><enum>(iii)</enum><header>Exception for
finished gasoline</header><text>Clause (i) shall not apply to any gasoline
which meets the requirements for gasoline under section 211 of the Clean Air
Act.</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id533B677948B0486F82C63F11DFAE70D3"><enum>(b)</enum><header>Exception to
tax on finished gasoline for prior taxable removals</header><text>Paragraph (1)
of section 4081(a) is amended by adding at the end the following new
subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id48FB11086A8548B7857B04F63E9BD19E" style="OLC">
<subparagraph id="idB5A5E8F9A19C4D1AB8611E76700A89F1"><enum>(C)</enum><header>Exemption for
previously taxed finished gasoline</header><text>The tax imposed by this
paragraph shall not apply to the removal of gasoline described in subparagraph
(B)(iii) from any terminal if there was a prior taxable removal or entry of
such fuel under clause (i), (ii), or (iii) of subparagraph (A). The preceding
sentence shall not apply to the volume of any product added to such gasoline at
the terminal unless there was a prior taxable removal or entry of such product
under clause (i), (ii), or (iii) of subparagraph
(A).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idE420DBCB504D4FA392946B839101790A"><enum>(c)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to fuel
removed, entered, or sold after December 31, 2007.</text>
</subsection></section><section id="id20B1129B37E64FFA9A840502F1AA6EFA"><enum>272.</enum><header>Application of
rules treating inverted corporations as domestic corporations to certain
transactions occurring after March 20, 2002</header>
<subsection id="id15CBA640847E432BB0A5D6958A7AF17E"><enum>(a)</enum><header>In
general</header><text>Section 7874(b) (relating to inverted corporations
treated as domestic corporations) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="idB32C13F8A9A44725B0505BA0047A3314" style="OLC">
<subsection id="id7859869A231140ADBC207C7EAA12E5A5"><enum>(b)</enum><header>Inverted
corporations treated as domestic corporations</header>
<paragraph id="idF3CFDA32A4214083B05C64A338283DF0"><enum>(1)</enum><header>In
general</header><text>Notwithstanding section 7701(a)(4), a foreign corporation
shall be treated for purposes of this title as a domestic corporation if such
corporation would be a surrogate foreign corporation if subsection (a)(2) were
applied by substituting <quote>80 percent</quote> for <quote>60
percent</quote>.</text>
</paragraph><paragraph id="idE7852872DC1D42A9966FEDC469FC8372"><enum>(2)</enum><header>Special rule
for certain transactions occurring after March 20, 2002</header>
<subparagraph id="id3C3946EC1AB7400F90D30F4C1954A016"><enum>(A)</enum><header>In
general</header><text>If—</text>
<clause id="id5396046EBF684D40874C6CA37E382912"><enum>(i)</enum><text>paragraph (1)
does not apply to a foreign corporation, but</text>
</clause><clause id="idEE3553A0578D46A586D1269160D80723"><enum>(ii)</enum><text>paragraph (1)
would apply to such corporation if, in addition to the substitution under
paragraph (1), subsection (a)(2) were applied by substituting <quote>March 20,
2002</quote> for <quote>March 4, 2003</quote> each place it appears,</text>
</clause><continuation-text continuation-text-level="subparagraph">then
paragraph (1) shall apply to such corporation but only with respect to taxable
years of such corporation beginning after December 31, 2006.</continuation-text></subparagraph><subparagraph id="id250B62A8C5B442769D557CF59D712E5A"><enum>(B)</enum><header>Special
rules</header><text>Subject to such rules as the Secretary may prescribe, in
the case of a corporation to which paragraph (1) applies by reason of this
paragraph—</text>
<clause id="idA848A178A0844056819ADE076217F577"><enum>(i)</enum><text>the corporation
shall be treated, as of the close of its last taxable year beginning before
January 1, 2007, as having transferred all of its assets, liabilities, and
earnings and profits to a domestic corporation in a transaction with respect to
which no tax is imposed under this title,</text>
</clause><clause id="idAFD04A9658A34031BD65EC5FBF87FF77"><enum>(ii)</enum><text>the bases of the
assets transferred in the transaction to the domestic corporation shall be the
same as the bases of the assets in the hands of the foreign corporation,
subject to any adjustments under this title for built-in losses,</text>
</clause><clause id="id3CD0D255E8DD4098BA543BD22760DF47"><enum>(iii)</enum><text>the basis of
the stock of any shareholder in the domestic corporation shall be the same as
the basis of the stock of the shareholder in the foreign corporation for which
it is treated as exchanged, and</text>
</clause><clause id="idDC3156FD8905485B9B16205D7C26DA67"><enum>(iv)</enum><text>the transfer of
any earnings and profits by reason of clause (i) shall be disregarded in
determining any deemed dividend or foreign tax creditable to the domestic
corporation with respect to such transfer.</text>
</clause></subparagraph><subparagraph id="id7D637F10CF5F484F853D4CC4B0CE1727"><enum>(C)</enum><header>Regulations</header><text>The
Secretary may prescribe such regulations as may be necessary or appropriate to
carry out this paragraph, including regulations to prevent the avoidance of the
purposes of this
paragraph.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id3FD612093A8745CDA6B94D9BBA96562C"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after December 31, 2006.</text>
</subsection></section><section id="ID7A0F9762D7BB4E3DADF8C40E34EB0944"><enum>273.</enum><header>Modification
of effective date of leasing provisions of the American Jobs Creation Act of
2004</header>
<subsection id="ID009B37610F52456AAD03F9E909AA753E"><enum>(a)</enum><header>Leases to
Foreign Entities</header><text>Section 849(b) of the American Jobs Creation Act
of 2004 is amended by adding at the end the following new paragraph:</text>
<quoted-block id="ID4EF01EDE45E540EDB24C9AF5D911EFD1" style="OLC">
<paragraph id="ID7B8B5F1D27834AB2AFDE303805453E73"><enum>(5)</enum><header>Leases to
foreign entities</header><text>In the case of tax-exempt use property leased to
a tax-exempt entity which is a foreign person or entity, the amendments made by
this part shall apply to taxable years beginning after December 31, 2006, with
respect to leases entered into on or before March 12,
2004.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDEA6D9B9FA577493CBF4E692960E55978"><enum>(b)</enum><header>Effective
Date</header><text>The amendment made by this section shall take effect as if
included in the enactment of the American Jobs Creation Act of 2004.</text>
</subsection></section><section id="IDE4EE56265390443B81F00263EF7B717F"><enum>274.</enum><header>Revision of
tax rules on expatriation of individuals</header>
<subsection id="ID64DC7976D90144DB87190673502DFF9F"><enum>(a)</enum><header>In
General</header><text>Subpart A of part II of subchapter N of chapter 1 is
amended by inserting after section 877 the following new section:</text>
<quoted-block id="IDC81677561FC24FB6B4CA42D0F125BEE4" style="OLC">
<section id="ID7615AB58C5E84673AA5768436EB1DD42"><enum>877A.</enum><header>Tax
responsibilities of expatriation</header>
<subsection id="IDAE337DE531E649489DBD7DBFF8A6E98D"><enum>(a)</enum><header>General
Rules</header><text>For purposes of this subtitle—</text>
<paragraph id="ID64F022AD77C44AC49810A6B84C67DCE2"><enum>(1)</enum><header>Mark to
market</header><text>Except as provided in subsections (d) and (f), all
property of a covered expatriate to whom this section applies shall be treated
as sold on the day before the expatriation date for its fair market
value.</text>
</paragraph><paragraph id="IDF1BE7AC651FF4A5F9E872610D86AE63C"><enum>(2)</enum><header>Recognition of
gain or loss</header><text>In the case of any sale under paragraph (1)—</text>
<subparagraph id="IDCD2151A44CC24F8787F815CD51413F7B"><enum>(A)</enum><text>notwithstanding
any other provision of this title, any gain arising from such sale shall be
taken into account for the taxable year of the sale, and</text>
</subparagraph><subparagraph id="IDE54D47BD355A434D80AAAE32091DCCDB"><enum>(B)</enum><text>any loss arising
from such sale shall be taken into account for the taxable year of the sale to
the extent otherwise provided by this title, except that section 1091 shall not
apply to any such loss.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">Proper
adjustment shall be made in the amount of any gain or loss subsequently
realized for gain or loss taken into account under the preceding
sentence.</continuation-text></paragraph><paragraph id="IDD571F79886BC49E19EA1D066ACF733C0"><enum>(3)</enum><header>Exclusion for
certain gain</header>
<subparagraph id="ID5311F8830CE948E1A2283CCF2B90B978"><enum>(A)</enum><header>In
general</header><text>The amount which, but for this paragraph, would be
includible in the gross income of any individual by reason of this section
shall be reduced (but not below zero) by $600,000. For purposes of this
paragraph, allocable expatriation gain taken into account under subsection
(f)(2) shall be treated in the same manner as an amount required to be
includible in gross income.</text>
</subparagraph><subparagraph id="IDDDF2D80F36334C32BDF6A84CACF0381D"><enum>(B)</enum><header>Cost-of-living
adjustment</header>
<clause id="ID3C8CF1CE6A6745B59510288DAE13178C"><enum>(i)</enum><header>In
general</header><text>In the case of an expatriation date occurring in any
calendar year after 2007, the $600,000 amount under subparagraph (A) shall be
increased by an amount equal to—</text>
<subclause id="IDFB6ED3AA44954B24BFF8075D6180424E"><enum>(I)</enum><text>such dollar
amount, multiplied by</text>
</subclause><subclause id="IDFA7D2F6BD3884E67883A483814F47872"><enum>(II)</enum><text>the
cost-of-living adjustment determined under section 1(f)(3) for such calendar
year, determined by substituting <quote>calendar year 2006</quote> for
<quote>calendar year 1992</quote> in subparagraph (B) thereof.</text>
</subclause></clause><clause id="IDF9A0545D0E60459D8CFD66385154965A"><enum>(ii)</enum><header>Rounding
rules</header><text>If any amount after adjustment under clause (i) is not a
multiple of $1,000, such amount shall be rounded to the next lower multiple of
$1,000.</text>
</clause></subparagraph></paragraph><paragraph id="ID3AA07D043A3E46C3A2BE9CD87CFE9B6A"><enum>(4)</enum><header>Election to
continue to be taxed as united states citizen</header>
<subparagraph id="IDB53A39FED26D4FAE98177E5CF9A385D9"><enum>(A)</enum><header>In
general</header><text>If a covered expatriate elects the application of this
paragraph—</text>
<clause id="IDF6417E6FB05745E3A2216E539B01E47A"><enum>(i)</enum><text>this section
(other than this paragraph and subsection (i)) shall not apply to the
expatriate, but</text>
</clause><clause id="ID731B4757D256401E99E17BA77DBB8B08"><enum>(ii)</enum><text>in the case of
property to which this section would apply but for such election, the
expatriate shall be subject to tax under this title in the same manner as if
the individual were a United States citizen.</text>
</clause></subparagraph><subparagraph id="ID6F383CA853204ECAB3FF5E6014262035"><enum>(B)</enum><header>Requirements</header><text>Subparagraph
(A) shall not apply to an individual unless the individual—</text>
<clause id="ID3EDED55DD5194D9089DAC43CD94B0B1B"><enum>(i)</enum><text>provides security
for payment of tax in such form and manner, and in such amount, as the
Secretary may require,</text>
</clause><clause id="IDAAA9A86202E8479284AC2A01C2E5E64B"><enum>(ii)</enum><text>consents to the
waiver of any right of the individual under any treaty of the United States
which would preclude assessment or collection of any tax which may be imposed
by reason of this paragraph, and</text>
</clause><clause id="IDD5DDFFC4F4DC498ABB59AD48A7341197"><enum>(iii)</enum><text>complies with
such other requirements as the Secretary may prescribe.</text>
</clause></subparagraph><subparagraph id="IDB0FEDF4984E64BB0B5CC371742D09A9B"><enum>(C)</enum><header>Election</header><text>An
election under subparagraph (A) shall apply to all property to which this
section would apply but for the election and, once made, shall be irrevocable.
Such election shall also apply to property the basis of which is determined in
whole or in part by reference to the property with respect to which the
election was made.</text>
</subparagraph></paragraph></subsection><subsection id="ID500DA8D6511D4BAFAD5DD52FE9FAB5E7"><enum>(b)</enum><header>Election To
Defer Tax</header>
<paragraph id="IDC2C7FB44013E49BD8E95D987A634B4DB"><enum>(1)</enum><header>In
general</header><text>If the taxpayer elects the application of this subsection
with respect to any property treated as sold by reason of subsection (a), the
payment of the additional tax attributable to such property shall be postponed
until the due date of the return for the taxable year in which such property is
disposed of (or, in the case of property disposed of in a transaction in which
gain is not recognized in whole or in part, until such other date as the
Secretary may prescribe).</text>
</paragraph><paragraph id="ID755BD6B020DD44F38FA3F48DC39FB6C0"><enum>(2)</enum><header>Determination
of tax with respect to property</header><text>For purposes of paragraph (1),
the additional tax attributable to any property is an amount which bears the
same ratio to the additional tax imposed by this chapter for the taxable year
solely by reason of subsection (a) as the gain taken into account under
subsection (a) with respect to such property bears to the total gain taken into
account under subsection (a) with respect to all property to which subsection
(a) applies.</text>
</paragraph><paragraph id="ID92A489959723469BA0899CBEDF27335C"><enum>(3)</enum><header>Termination of
postponement</header><text>No tax may be postponed under this subsection later
than the due date for the return of tax imposed by this chapter for the taxable
year which includes the date of death of the expatriate (or, if earlier, the
time that the security provided with respect to the property fails to meet the
requirements of paragraph (4), unless the taxpayer corrects such failure within
the time specified by the Secretary).</text>
</paragraph><paragraph id="IDA9BB5BC20CCE4B93A69406D95200CB60"><enum>(4)</enum><header>Security</header>
<subparagraph id="ID277629A6FE44486BB6895B17B73DFBD0"><enum>(A)</enum><header>In
general</header><text>No election may be made under paragraph (1) with respect
to any property unless adequate security is provided to the Secretary with
respect to such property.</text>
</subparagraph><subparagraph id="IDB1E0D65C809244D48C784B6B1E80344C"><enum>(B)</enum><header>Adequate
security</header><text>For purposes of subparagraph (A), security with respect
to any property shall be treated as adequate security if—</text>
<clause id="ID2FE76FB3FB624318AA1FD7BDDB71D130"><enum>(i)</enum><text>it is a bond in
an amount equal to the deferred tax amount under paragraph (2) for the
property, or</text>
</clause><clause id="ID0B2F8E8BF2AD4AD79C0D78EFADA3C9ED"><enum>(ii)</enum><text>the taxpayer
otherwise establishes to the satisfaction of the Secretary that the security is
adequate.</text>
</clause></subparagraph></paragraph><paragraph id="ID9C55A76A287B4FEEA2E019733636E549"><enum>(5)</enum><header>Waiver of
certain rights</header><text>No election may be made under paragraph (1) unless
the taxpayer consents to the waiver of any right under any treaty of the United
States which would preclude assessment or collection of any tax imposed by
reason of this section.</text>
</paragraph><paragraph id="ID42BD5A6E9B4E4471BA50EE8ED4AD9FFF"><enum>(6)</enum><header>Elections</header><text>An
election under paragraph (1) shall only apply to property described in the
election and, once made, is irrevocable. An election may be made under
paragraph (1) with respect to an interest in a trust with respect to which gain
is required to be recognized under subsection (f)(1).</text>
</paragraph><paragraph id="ID3360DB692551413F93BEEA4CEC3A9CD9"><enum>(7)</enum><header>Interest</header><text>For
purposes of section 6601—</text>
<subparagraph id="IDD6FE6DF2B49B4BF3927B305F77CD5CB0"><enum>(A)</enum><text>the last date for
the payment of tax shall be determined without regard to the election under
this subsection, and</text>
</subparagraph><subparagraph id="ID02EF8E98991F4FDAA03AFE444B292F4E"><enum>(B)</enum><text>section
6621(a)(2) shall be applied by substituting <quote>5 percentage points</quote>
for <quote>3 percentage points</quote> in subparagraph (B) thereof.</text>
</subparagraph></paragraph></subsection><subsection id="IDE991FB76C30F44F18808616C0ECAA366"><enum>(c)</enum><header>Covered
Expatriate</header><text>For purposes of this section—</text>
<paragraph id="ID0D281C7B381C4FB8B485EAFBDA95C748"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the term
<term>covered expatriate</term> means an expatriate.</text>
</paragraph><paragraph id="ID2028FC2B232A4454B51EE427E5F7B6EE"><enum>(2)</enum><header>Exceptions</header><text>An
individual shall not be treated as a covered expatriate if—</text>
<subparagraph id="IDEB47EDBECE05487F9FA51B13EE0BDFB1"><enum>(A)</enum><text>the
individual—</text>
<clause id="IDD90F8D674C2843E081EC588323AED89A"><enum>(i)</enum><text>became at birth a
citizen of the United States and a citizen of another country and, as of the
expatriation date, continues to be a citizen of, and is taxed as a resident of,
such other country, and</text>
</clause><clause id="ID759C01C7E3DC463E94B20C33FC360A32"><enum>(ii)</enum><text>has not been a
resident of the United States (as defined in section 7701(b)(1)(A)(ii)) during
the 5 taxable years ending with the taxable year during which the expatriation
date occurs, or</text>
</clause></subparagraph><subparagraph id="ID87B6BB40B62D455ABA42C27755468DE6"><enum>(B)</enum><clause commented="no" display-inline="yes-display-inline" id="ID9F83A54C5F134EFF8207ECA1EE6E4188"><enum>(i)</enum><text>the individual’s
relinquishment of United States citizenship occurs before such individual
attains age 18<fraction>1/2</fraction>, and</text>
</clause><clause id="ID9BC47D38CCC04F089797884AE5ED882E" indent="up1"><enum>(ii)</enum><text>the individual has been a resident
of the United States (as so defined) for not more than 5 taxable years before
the date of relinquishment.</text>
</clause></subparagraph></paragraph></subsection><subsection id="IDEE99C8CA6D484173AE09D67FF33F3A1F"><enum>(d)</enum><header>Exempt
Property; Special Rules for Pension Plans</header>
<paragraph id="IDB20C0B934DC14F669821516A0C57BBD6"><enum>(1)</enum><header>Exempt
property</header><text>This section shall not apply to the following:</text>
<subparagraph id="ID2EEE0F9DD44946AD8930F1CD9D6E19BE"><enum>(A)</enum><header>United states
real property interests</header><text>Any United States real property interest
(as defined in section 897(c)(1)), other than stock of a United States real
property holding corporation which does not, on the day before the expatriation
date, meet the requirements of section 897(c)(2).</text>
</subparagraph><subparagraph id="IDB795B20E13C143BCAE13F242660ADDAD"><enum>(B)</enum><header>Specified
property</header><text>Any property or interest in property not described in
subparagraph (A) which the Secretary specifies in regulations.</text>
</subparagraph></paragraph><paragraph id="ID6B9036A5A3F84D74A188C3CE723C1620"><enum>(2)</enum><header>Special rules
for certain retirement plans</header>
<subparagraph id="IDBA48719A649A483A89ED845BDB2B45D2"><enum>(A)</enum><header>In
general</header><text>If a covered expatriate holds on the day before the
expatriation date any interest in a retirement plan to which this paragraph
applies—</text>
<clause id="ID3989ED782EDF4C0B99B07E7DEA4AC68B"><enum>(i)</enum><text>such interest
shall not be treated as sold for purposes of subsection (a)(1), but</text>
</clause><clause id="IDB6B12765897A4A1B91604436DE12082D"><enum>(ii)</enum><text>an amount equal
to the present value of the expatriate’s nonforfeitable accrued benefit shall
be treated as having been received by such individual on such date as a
distribution under the plan.</text>
</clause></subparagraph><subparagraph id="ID896AB584834748A39C4619021D02D90E"><enum>(B)</enum><header>Treatment of
subsequent distributions</header><text>In the case of any distribution on or
after the expatriation date to or on behalf of the covered expatriate from a
plan from which the expatriate was treated as receiving a distribution under
subparagraph (A), the amount otherwise includible in gross income by reason of
the subsequent distribution shall be reduced by the excess of the amount
includible in gross income under subparagraph (A) over any portion of such
amount to which this subparagraph previously applied.</text>
</subparagraph><subparagraph id="IDC2D500E700AC4FD293E5E2817AC16E7D"><enum>(C)</enum><header>Treatment of
subsequent distributions by plan</header><text>For purposes of this title, a
retirement plan to which this paragraph applies, and any person acting on the
plan’s behalf, shall treat any subsequent distribution described in
subparagraph (B) in the same manner as such distribution would be treated
without regard to this paragraph.</text>
</subparagraph><subparagraph id="ID66296A91872B4DE29736E59D44FA1BC0"><enum>(D)</enum><header>Applicable
plans</header><text>This paragraph shall apply to—</text>
<clause id="IDC692D38FC62744ECB4F00A848C5565E8"><enum>(i)</enum><text>any qualified
retirement plan (as defined in section 4974(c)),</text>
</clause><clause id="ID4B5E0D31788947B9B9609B1A289B4D3C"><enum>(ii)</enum><text>an eligible
deferred compensation plan (as defined in section 457(b)) of an eligible
employer described in section 457(e)(1)(A), and</text>
</clause><clause id="ID714D39B680634748B71A4C5E845DE9E5"><enum>(iii)</enum><text>to the extent
provided in regulations, any foreign pension plan or similar retirement
arrangements or programs.</text>
</clause></subparagraph></paragraph></subsection><subsection id="ID7647F5DC9F074414BFE0991923C2AFEE"><enum>(e)</enum><header>Definitions</header><text>For
purposes of this section—</text>
<paragraph id="IDF0D75810030A4BE6B3AA32C39C1D867B"><enum>(1)</enum><header>Expatriate</header><text>The
term <term>expatriate</term> means—</text>
<subparagraph id="IDDF59530161EB477F9C8BCC3336A4FE20"><enum>(A)</enum><text>any United States
citizen who relinquishes citizenship, and</text>
</subparagraph><subparagraph id="ID9EAECF66C7EC453396A85F5ABA73E382"><enum>(B)</enum><text>any long-term
resident of the United States who—</text>
<clause id="IDACC00E2A28154283AD535C76777F3B64"><enum>(i)</enum><text>ceases to be a
lawful permanent resident of the United States (within the meaning of section
7701(b)(6)), or</text>
</clause><clause id="IDD953E89C37494EABB08EED295E7ED205"><enum>(ii)</enum><text>commences to be
treated as a resident of a foreign country under the provisions of a tax treaty
between the United States and the foreign country and who does not waive the
benefits of such treaty applicable to residents of the foreign country.</text>
</clause></subparagraph></paragraph><paragraph id="ID29035A61E29B41599EAD83C096A9B160"><enum>(2)</enum><header>Expatriation
date</header><text>The term <term>expatriation date</term> means—</text>
<subparagraph id="ID5F347152D35F48C7BAD4BBA41197CD65"><enum>(A)</enum><text>the date an
individual relinquishes United States citizenship, or</text>
</subparagraph><subparagraph id="ID4BCE88CE4EAE472ABE50BE98541FC824"><enum>(B)</enum><text>in the case of a
long-term resident of the United States, the date of the event described in
clause (i) or (ii) of paragraph (1)(B).</text>
</subparagraph></paragraph><paragraph id="ID0EFCCBB233974E47AEFCB5DFFCD1F048"><enum>(3)</enum><header>Relinquishment
of citizenship</header><text>A citizen shall be treated as relinquishing United
States citizenship on the earliest of—</text>
<subparagraph id="IDB34D651D4ECA4212840C7A23D5A093F5"><enum>(A)</enum><text>the date the
individual renounces such individual’s United States nationality before a
diplomatic or consular officer of the United States pursuant to paragraph (5)
of section 349(a) of the <act-name parsable-cite="INA">Immigration and
Nationality Act</act-name> (8 U.S.C. 1481(a)(5)),</text>
</subparagraph><subparagraph id="IDCBCF87DFA40E4A08BB8A9EB9E357AB0C"><enum>(B)</enum><text>the date the
individual furnishes to the United States Department of State a signed
statement of voluntary relinquishment of United States nationality confirming
the performance of an act of expatriation specified in paragraph (1), (2), (3),
or (4) of section 349(a) of the <act-name parsable-cite="INA">Immigration and
Nationality Act</act-name> (8 U.S.C. 1481(a)(1)–(4)),</text>
</subparagraph><subparagraph id="ID2114C503B55D4A5795F2D133D8EE101E"><enum>(C)</enum><text>the date the
United States Department of State issues to the individual a certificate of
loss of nationality, or</text>
</subparagraph><subparagraph id="ID37EDDB3929AE4742A4B28F29A7E384DC"><enum>(D)</enum><text>the date a court
of the United States cancels a naturalized citizen’s certificate of
naturalization.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">Subparagraph (A) or (B) shall not
apply to any individual unless the renunciation or voluntary relinquishment is
subsequently approved by the issuance to the individual of a certificate of
loss of nationality by the United States Department of State.</continuation-text></paragraph><paragraph id="IDBB6AC2D6F50A428D9866C6815EAC5B70"><enum>(4)</enum><header>Long-term
resident</header><text>The term <term>long-term resident</term> has the meaning
given to such term by section 877(e)(2).</text>
</paragraph></subsection><subsection id="ID3B2448CA24EB4E8E818E825EAF962B3E"><enum>(f)</enum><header>Special Rules
Applicable to Beneficiaries’ Interests in Trust</header>
<paragraph id="ID183116C9809C48D388B9EF2628563DCD"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), if an individual is
determined under paragraph (3) to hold an interest in a trust on the day before
the expatriation date—</text>
<subparagraph id="ID29A6DA59B44848949C72E643321DE477"><enum>(A)</enum><text>the individual
shall not be treated as having sold such interest,</text>
</subparagraph><subparagraph id="IDD7B6564889144F53AF5B6838CDEC3D8E"><enum>(B)</enum><text>such interest
shall be treated as a separate share in the trust, and</text>
</subparagraph><subparagraph id="IDD374103E80FB46CCBA64B646244CED61"><enum>(C)</enum><clause commented="no" display-inline="yes-display-inline" id="ID7193A621936B45BFAD21CA13FC093B72"><enum>(i)</enum><text>such separate share
shall be treated as a separate trust consisting of the assets allocable to such
share,</text>
</clause><clause id="ID69A4E6A6EF404F14825B6D013CA69887" indent="up1"><enum>(ii)</enum><text>the separate trust shall be
treated as having sold its assets on the day before the expatriation date for
their fair market value and as having distributed all of its assets to the
individual as of such time, and</text>
</clause><clause id="ID13B922FC57D84B779A0B714B3AFBB438" indent="up1"><enum>(iii)</enum><text>the individual shall be treated
as having recontributed the assets to the separate trust.</text>
</clause></subparagraph><continuation-text continuation-text-level="paragraph">Subsection
(a)(2) shall apply to any income, gain, or loss of the individual arising from
a distribution described in subparagraph (C)(ii). In determining the amount of
such distribution, proper adjustments shall be made for liabilities of the
trust allocable to an individual’s share in the trust.</continuation-text></paragraph><paragraph id="IDE3DE2B7B591F405BB74E8216877D0F28"><enum>(2)</enum><header>Special rules
for interests in qualified trusts</header>
<subparagraph id="IDD52CC9CEC419445ABC2A1A181ED81815"><enum>(A)</enum><header>In
general</header><text>If the trust interest described in paragraph (1) is an
interest in a qualified trust—</text>
<clause id="ID737642F0F7674C6AABEDAC4023E03D7B"><enum>(i)</enum><text>paragraph (1) and
subsection (a) shall not apply, and</text>
</clause><clause id="ID7E4A57086F754112B2863E129A574250"><enum>(ii)</enum><text>in addition to
any other tax imposed by this title, there is hereby imposed on each
distribution with respect to such interest a tax in the amount determined under
subparagraph (B).</text>
</clause></subparagraph><subparagraph id="ID4398CC5F38374B9494D29F94739608C9"><enum>(B)</enum><header>Amount of
tax</header><text>The amount of tax under subparagraph (A)(ii) shall be equal
to the lesser of—</text>
<clause id="IDCAE17718CB004A5593F7A45B4313CFEB"><enum>(i)</enum><text>the highest rate
of tax imposed by section 1(e) for the taxable year which includes the day
before the expatriation date, multiplied by the amount of the distribution,
or</text>
</clause><clause id="IDBB6867D102424827A5D008D852C4527E"><enum>(ii)</enum><text>the balance in
the deferred tax account immediately before the distribution determined without
regard to any increases under subparagraph (C)(ii) after the 30th day preceding
the distribution.</text>
</clause></subparagraph><subparagraph id="ID9E3CA1EBEED5472AA028291EBAD883A0"><enum>(C)</enum><header>Deferred tax
account</header><text>For purposes of subparagraph (B)(ii)—</text>
<clause id="ID7025CB7A2C87400BAAB4D495B12BA2C1"><enum>(i)</enum><header>Opening
balance</header><text>The opening balance in a deferred tax account with
respect to any trust interest is an amount equal to the tax which would have
been imposed on the allocable expatriation gain with respect to the trust
interest if such gain had been included in gross income under subsection
(a).</text>
</clause><clause id="ID5390989B298A4BDB93174E51CF6945D6"><enum>(ii)</enum><header>Increase for
interest</header><text>The balance in the deferred tax account shall be
increased by the amount of interest determined (on the balance in the account
at the time the interest accrues), for periods after the 90th day after the
expatriation date, by using the rates and method applicable under section 6621
for underpayments of tax for such periods, except that section 6621(a)(2) shall
be applied by substituting <quote>5 percentage points</quote> for <quote>3
percentage points</quote> in subparagraph (B) thereof.</text>
</clause><clause id="IDDCA5761CAF1F46EEB81AC4399E73AE65"><enum>(iii)</enum><header>Decrease for
taxes previously paid</header><text>The balance in the tax deferred account
shall be reduced—</text>
<subclause id="ID41A30BE329064492A0437BFA97BBF3C0"><enum>(I)</enum><text>by the amount of
taxes imposed by subparagraph (A) on any distribution to the person holding the
trust interest, and</text>
</subclause><subclause id="ID54BC15D876EE460E886ACFC97AE0324F"><enum>(II)</enum><text>in the case of a
person holding a nonvested interest, to the extent provided in regulations, by
the amount of taxes imposed by subparagraph (A) on distributions from the trust
with respect to nonvested interests not held by such person.</text>
</subclause></clause></subparagraph><subparagraph id="IDB34E2CC34FE84AAEBE7631643043453F"><enum>(D)</enum><header>Allocable
expatriation gain</header><text>For purposes of this paragraph, the allocable
expatriation gain with respect to any beneficiary’s interest in a trust is the
amount of gain which would be allocable to such beneficiary’s vested and
nonvested interests in the trust if the beneficiary held directly all assets
allocable to such interests.</text>
</subparagraph><subparagraph id="IDCD7A143B35E74FB5969EE5C92BDD228F"><enum>(E)</enum><header>Tax deducted
and withheld</header>
<clause id="IDF7FB1B3A3D664EEB812FBA8CCC2A57F3"><enum>(i)</enum><header>In
general</header><text>The tax imposed by subparagraph (A)(ii) shall be deducted
and withheld by the trustees from the distribution to which it relates.</text>
</clause><clause id="ID9F424CC68F0C46DEB4F1F21CA1C622FC"><enum>(ii)</enum><header>Exception
where failure to waive treaty rights</header><text>If an amount may not be
deducted and withheld under clause (i) by reason of the distributee failing to
waive any treaty right with respect to such distribution—</text>
<subclause id="ID16E766A7FE824447ACD50A7292AFEE58"><enum>(I)</enum><text>the tax imposed
by subparagraph (A)(ii) shall be imposed on the trust and each trustee shall be
personally liable for the amount of such tax, and</text>
</subclause><subclause id="IDBB9693ADA79644CCA1FB9616FBE4BA6A"><enum>(II)</enum><text>any other
beneficiary of the trust shall be entitled to recover from the distributee the
amount of such tax imposed on the other beneficiary.</text>
</subclause></clause></subparagraph><subparagraph id="ID92D2676424DB46A0AE665D75906B572A"><enum>(F)</enum><header>Disposition</header><text>If
a trust ceases to be a qualified trust at any time, a covered expatriate
disposes of an interest in a qualified trust, or a covered expatriate holding
an interest in a qualified trust dies, then, in lieu of the tax imposed by
subparagraph (A)(ii), there is hereby imposed a tax equal to the lesser
of—</text>
<clause id="IDCA16267C88C441FDAC9534B33F9AB496"><enum>(i)</enum><text>the tax
determined under paragraph (1) as if the day before the expatriation date were
the date of such cessation, disposition, or death, whichever is applicable,
or</text>
</clause><clause id="ID9DC437CBA6B142AD9322A69CEC2D9E64"><enum>(ii)</enum><text>the balance in
the tax deferred account immediately before such date.</text>
</clause><continuation-text continuation-text-level="subparagraph">Such
tax shall be imposed on the trust and each trustee shall be personally liable
for the amount of such tax and any other beneficiary of the trust shall be
entitled to recover from the covered expatriate or the estate the amount of
such tax imposed on the other beneficiary.</continuation-text></subparagraph><subparagraph id="ID36675FE6DD2E4717B36C833DCC8A553E"><enum>(G)</enum><header>Definitions and
special rules</header><text>For purposes of this paragraph—</text>
<clause id="ID5363EA3CC1BE48F0BF1B4785AB5E6591"><enum>(i)</enum><header>Qualified
trust</header><text>The term <term>qualified trust</term> means a trust which
is described in section 7701(a)(30)(E).</text>
</clause><clause id="IDF0627E2519194424A5644A5D34C4773C"><enum>(ii)</enum><header>Vested
interest</header><text>The term <term>vested interest</term> means any interest
which, as of the day before the expatriation date, is vested in the
beneficiary.</text>
</clause><clause id="ID6942893FEFCC4423AB01BECD069D49AF"><enum>(iii)</enum><header>Nonvested
interest</header><text>The term <term>nonvested interest</term> means, with
respect to any beneficiary, any interest in a trust which is not a vested
interest. Such interest shall be determined by assuming the maximum exercise of
discretion in favor of the beneficiary and the occurrence of all contingencies
in favor of the beneficiary.</text>
</clause><clause id="ID1E1FF3A3BBA14D76BA6DCA634F17CFCA"><enum>(iv)</enum><header>Adjustments</header><text>The
Secretary may provide for such adjustments to the bases of assets in a trust or
a deferred tax account, and the timing of such adjustments, in order to ensure
that gain is taxed only once.</text>
</clause><clause id="ID29DDBDF349CC4DA5B9FED514E1B7D06D"><enum>(v)</enum><header>Coordination
with retirement plan rules</header><text>This subsection shall not apply to an
interest in a trust which is part of a retirement plan to which subsection
(d)(2) applies.</text>
</clause></subparagraph></paragraph><paragraph id="IDD10FF2A57F1F450E91DABB1A0B26E1AA"><enum>(3)</enum><header>Determination
of beneficiaries’ interest in trust</header>
<subparagraph id="ID21D74C48E5374009AC4F89259A9689E7"><enum>(A)</enum><header>Determinations
under paragraph <enum-in-header>(1)</enum-in-header></header><text>For purposes
of paragraph (1), a beneficiary’s interest in a trust shall be based upon all
relevant facts and circumstances, including the terms of the trust instrument
and any letter of wishes or similar document, historical patterns of trust
distributions, and the existence of and functions performed by a trust
protector or any similar adviser.</text>
</subparagraph><subparagraph id="IDA4704AF4424F4994A18039DC9ED02854"><enum>(B)</enum><header>Other
determinations</header><text>For purposes of this section—</text>
<clause id="ID21A038BEF3924ED2B8BA212C3B2582F5"><enum>(i)</enum><header>Constructive
ownership</header><text>If a beneficiary of a trust is a corporation,
partnership, trust, or estate, the shareholders, partners, or beneficiaries
shall be deemed to be the trust beneficiaries for purposes of this
section.</text>
</clause><clause id="IDB6B0F313E38C4A639FDC263FA0A3696E"><enum>(ii)</enum><header>Taxpayer
return position</header><text>A taxpayer shall clearly indicate on its income
tax return—</text>
<subclause id="IDF218CA233106444393AA7D56AB9E6F4A"><enum>(I)</enum><text>the methodology
used to determine that taxpayer’s trust interest under this section, and</text>
</subclause><subclause id="ID531C258C956544178A8E34101AD354FE"><enum>(II)</enum><text>if the taxpayer
knows (or has reason to know) that any other beneficiary of such trust is using
a different methodology to determine such beneficiary’s trust interest under
this section.</text>
</subclause></clause></subparagraph></paragraph></subsection><subsection id="ID7D620D96D34E4335990CDC020C7D7DB5"><enum>(g)</enum><header>Termination of
Deferrals, etc</header><text>In the case of any covered expatriate,
notwithstanding any other provision of this title—</text>
<paragraph id="ID5E32BA32A6534488BD2694AE27AF610B"><enum>(1)</enum><text>any period during
which recognition of income or gain is deferred shall terminate on the day
before the expatriation date, and</text>
</paragraph><paragraph id="ID2A8E710B008A483CBEF91786AED854CF"><enum>(2)</enum><text>any extension of
time for payment of tax shall cease to apply on the day before the expatriation
date and the unpaid portion of such tax shall be due and payable at the time
and in the manner prescribed by the Secretary.</text>
</paragraph></subsection><subsection id="IDC733CC40602F4A6C944798CA20C47B49"><enum>(h)</enum><header>Imposition of
Tentative Tax</header>
<paragraph id="ID0458001303684F839F620AA064AA4B9D"><enum>(1)</enum><header>In
general</header><text>If an individual is required to include any amount in
gross income under subsection (a) for any taxable year, there is hereby
imposed, immediately before the expatriation date, a tax in an amount equal to
the amount of tax which would be imposed if the taxable year were a short
taxable year ending on the expatriation date.</text>
</paragraph><paragraph id="ID263F32508C7146259AE64DDDF4E8F41C"><enum>(2)</enum><header>Due
date</header><text>The due date for any tax imposed by paragraph (1) shall be
the 90th day after the expatriation date.</text>
</paragraph><paragraph id="IDD446F5CEFC194948A26E2CD0099D8029"><enum>(3)</enum><header>Treatment of
tax</header><text>Any tax paid under paragraph (1) shall be treated as a
payment of the tax imposed by this chapter for the taxable year to which
subsection (a) applies.</text>
</paragraph><paragraph id="ID5ADA83790E18426EA00EAF1093994B37"><enum>(4)</enum><header>Deferral of
tax</header><text>The provisions of subsection (b) shall apply to the tax
imposed by this subsection to the extent attributable to gain includible in
gross income by reason of this section.</text>
</paragraph></subsection><subsection id="IDAF6DF0A5E8394CB8BAFD0EAC5C0B9FC4"><enum>(i)</enum><header>Special Liens
for Deferred Tax Amounts</header>
<paragraph id="IDF5547D337D5C4179ABEC35275526A056"><enum>(1)</enum><header>Imposition of
lien</header>
<subparagraph id="IDB62138ACA53D463181BBA30B71DB75E6"><enum>(A)</enum><header>In
general</header><text>If a covered expatriate makes an election under
subsection (a)(4) or (b) which results in the deferral of any tax imposed by
reason of subsection (a), the deferred amount (including any interest,
additional amount, addition to tax, assessable penalty, and costs attributable
to the deferred amount) shall be a lien in favor of the United States on all
property of the expatriate located in the United States (without regard to
whether this section applies to the property).</text>
</subparagraph><subparagraph id="ID7751B7D743034B518C56018F51D19F39"><enum>(B)</enum><header>Deferred
amount</header><text>For purposes of this subsection, the deferred amount is
the amount of the increase in the covered expatriate’s income tax which, but
for the election under subsection (a)(4) or (b), would have occurred by reason
of this section for the taxable year including the expatriation date.</text>
</subparagraph></paragraph><paragraph id="IDB07F03B549FB453E9970562F19897828"><enum>(2)</enum><header>Period of
lien</header><text>The lien imposed by this subsection shall arise on the
expatriation date and continue until—</text>
<subparagraph id="ID2E7341AD7DC242979BFDED4D58D850F4"><enum>(A)</enum><text>the liability for
tax by reason of this section is satisfied or has become unenforceable by
reason of lapse of time, or</text>
</subparagraph><subparagraph id="ID43A6A9E9D339439CB1EE04B80E816EE0"><enum>(B)</enum><text>it is established
to the satisfaction of the Secretary that no further tax liability may arise by
reason of this section.</text>
</subparagraph></paragraph><paragraph id="ID7A2D021FB58C4D1891A53A380FFD9412"><enum>(3)</enum><header>Certain rules
apply</header><text>The rules set forth in paragraphs (1), (3), and (4) of
section 6324A(d) shall apply with respect to the lien imposed by this
subsection as if it were a lien imposed by section 6324A.</text>
</paragraph></subsection><subsection id="ID2BECB23D09DD46BDB7A3EBC310F3E6F7"><enum>(j)</enum><header>Regulations</header><text>The
Secretary shall prescribe such regulations as may be necessary or appropriate
to carry out the purposes of this
section.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="IDB5D9E49EF5224E5792B46673B9D02B88"><enum>(b)</enum><header>Inclusion in
Income of Gifts and Bequests Received by United States Citizens and Residents
From Expatriates</header><text>Section 102 (relating to gifts, etc. not
included in gross income) is amended by adding at the end the following new
subsection:</text>
<quoted-block id="ID5D73F46B22B04C7FB9AF639F162B80DC" style="OLC">
<subsection id="ID302E73A4150646ECB530B98828E65501"><enum>(d)</enum><header>Gifts and
Inheritances From Covered Expatriates</header>
<paragraph id="IDBD495546AF7649848514F5AB99E181CD"><enum>(1)</enum><header>Treatment of
gifts and inheritances</header>
<subparagraph id="id02E61B478FE34B0ABD79DB713BAF48DA"><enum>(A)</enum><header>In
general</header><text>Subsection (a) shall not exclude from gross income the
value of any property acquired by gift, bequest, devise, or inheritance from a
covered expatriate after the expatriation date.</text>
</subparagraph><subparagraph id="id3AF2EDBD31B345E495230ACF5664F55B"><enum>(B)</enum><header>Determination
of basis</header><text>Notwithstanding sections 1015 or 1022, the basis of any
property described in subparagraph (A) in the hands of the donee or the person
acquiring such property from the decedent shall be equal to the fair market
value of the property at the time of the gift, bequest, devise, or
inheritance.</text>
</subparagraph></paragraph><paragraph id="ID5E325CB50B4C43A094B360DBE10B25FD"><enum>(2)</enum><header>Exceptions for
transfers otherwise subject to estate or gift tax</header><text>Paragraph (1)
shall not apply to any property if either—</text>
<subparagraph id="ID3C300C78F80B44CCAE240C275DBA0726"><enum>(A)</enum><text>the gift,
bequest, devise, or inheritance is—</text>
<clause id="ID3C64608609DA426B894AAFC4DAD6AF58"><enum>(i)</enum><text>shown on a timely
filed return of tax imposed by chapter 12 as a taxable gift by the covered
expatriate, or</text>
</clause><clause id="IDA40CD82C1D084771B319145F1255ACD9"><enum>(ii)</enum><text>included in the
gross estate of the covered expatriate for purposes of chapter 11 and shown on
a timely filed return of tax imposed by chapter 11 of the estate of the covered
expatriate, or</text>
</clause></subparagraph><subparagraph id="ID1FD80FAA92F24667B6360BBAA4D70B46"><enum>(B)</enum><text>no such return
was timely filed but no such return would have been required to be filed even
if the covered expatriate were a citizen or long-term resident of the United
States.</text>
</subparagraph></paragraph><paragraph id="id5E6CF5EA321C45C3B16E543CE9C0D588"><enum>(3)</enum><header>Definitions</header><text>For
purposes of this subsection, any term used in this subsection which is also
used in section 877A shall have the same meaning as when used in section
877A.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID2FCB0D7EAA844A5F82390CB168BCA5B7"><enum>(c)</enum><header>Definition of
Termination of United States Citizenship</header><text>Section 7701(a) is
amended by adding at the end the following new paragraph:</text>
<quoted-block id="ID74F4C7A2A3DE4CECB5EFEE58E9A2D7F2" style="OLC">
<paragraph id="ID7F6DB58FA3854AE3A3A42E29D4961131"><enum>(50)</enum><header>Termination of
united states citizenship</header>
<subparagraph id="IDA360C2CEC3744BFABBFE727EAA046D79"><enum>(A)</enum><header>In
general</header><text>An individual shall not cease to be treated as a United
States citizen before the date on which the individual’s citizenship is treated
as relinquished under section 877A(e)(3).</text>
</subparagraph><subparagraph id="ID4991828E53104407AB2D4C83657316A6"><enum>(B)</enum><header>Dual
citizens</header><text>Under regulations prescribed by the Secretary,
subparagraph (A) shall not apply to an individual who became at birth a citizen
of the United States and a citizen of another
country.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID1BAE7A6561CA4412943996157BC00D12"><enum>(d)</enum><header>Ineligibility
for Visa or Admission to United States</header>
<paragraph commented="no" id="IDAD66654C1741441AA23A40F59C7936C8"><enum>(1)</enum><header>In
general</header><text>Section 212(a)(10)(E) of the
<act-name parsable-cite="INA">Immigration and Nationality Act</act-name> (8
U.S.C. 1182(a)(10)(E)) is amended to read as follows:</text>
<quoted-block act-name="Immigration and Nationality Act" id="ID0FCD6426B2804FBFAB248FF2FBC0C709" style="OLC">
<subparagraph commented="no" id="IDFC1A84D66CBB4B9082A031C40627663E"><enum>(E)</enum><header>Former citizens
not in compliance with expatriation revenue provisions</header><text>Any alien
who is a former citizen of the United States who relinquishes United States
citizenship (within the meaning of section 877A(e)(3) of the Internal Revenue
Code of 1986) and who is not in compliance with section 877A of such Code
(relating to expatriation) is
inadmissible.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="ID246020DA119C45F992EB20E6106F9C86"><enum>(2)</enum><header>Availability of
information</header>
<subparagraph id="ID01AA67FDA44F4909A99DF188BD2D4340"><enum>(A)</enum><header>In
general</header><text>Section 6103(l) (relating to disclosure of returns and
return information for purposes other than tax administration) is amended by
adding at the end the following new paragraph:</text>
<quoted-block id="ID7BD79FFB3E3D4C9D86829B04AD332B1D" style="OLC">
<paragraph id="IDB70274CE2471457D97CD66F920F90555"><enum>(21)</enum><header>Disclosure to
deny visa or admission to certain expatriates</header><text>Upon written
request of the Attorney General or the Attorney General’s delegate, the
Secretary shall disclose whether an individual is in compliance with section
877A (and if not in compliance, any items of noncompliance) to officers and
employees of the Federal agency responsible for administering section
212(a)(10)(E) of the <act-name parsable-cite="INA">Immigration and Nationality
Act</act-name> solely for the purpose of, and to the extent necessary in,
administering such section
212(a)(10)(E).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="IDE7C7DA20B3ED43AF8B2F8F8AC4F64E84"><enum>(B)</enum><header>Safeguards</header><text>Section
6103(p)(4) (relating to safeguards) is amended by striking <quote>or
(20)</quote> each place it appears and inserting <quote>(20), or
(21)</quote>.</text>
</subparagraph></paragraph><paragraph id="IDFAB4A1209F204C9D99B1DE4FC0BAC446"><enum>(3)</enum><header>Effective
dates</header><text>The amendments made by this subsection shall apply to
individuals who relinquish United States citizenship on or after the date of
the enactment of this Act.</text>
</paragraph></subsection><subsection id="ID4EE84177804E45E8AA03FECD76AB40BE"><enum>(e)</enum><header>Conforming
Amendments</header>
<paragraph id="IDC4DC89DD63764F739B3A948C1F2680E0"><enum>(1)</enum><text>Section 877 is
amended by adding at the end the following new subsection:</text>
<quoted-block id="ID2BE12C67B021494EAD0B4C823122DB55" style="OLC">
<subsection id="ID63873327ABB74BBA9898D18030B8254C"><enum>(h)</enum><header>Application</header><text>This
section shall not apply to an expatriate (as defined in section 877A(e)) whose
expatriation date (as so defined) occurs on or after the date of the enactment
of this
subsection.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="ID0CA87737239F425F91B793019DA8846A"><enum>(2)</enum><text>Section 2107 is
amended by adding at the end the following new subsection:</text>
<quoted-block id="ID75B7207B856E4043A79AA43A5C2347B6" style="OLC">
<subsection id="ID0760C2E06283427A979A4424C519B4BA"><enum>(f)</enum><header>Application</header><text>This
section shall not apply to any expatriate subject to section
877A.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="IDD2F8403C434B48D9BEB16F79E893B6D8"><enum>(3)</enum><text>Section
2501(a)(3) is amended by adding at the end the following new
subparagraph:</text>
<quoted-block id="ID6D36ACEF90CD4A94B75EEA585BC298D1" style="OLC">
<subparagraph id="ID3E620D2A522F4814BE9828601F4143B2"><enum>(C)</enum><header>Application</header><text>This
paragraph shall not apply to any expatriate subject to section
877A.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="IDB2E94B02DC2F476E82604EB0DD723490"><enum>(4)</enum><text>Section 6039G(a)
is amended by inserting <quote>or 877A</quote> after <quote>section
877(b)</quote>.</text>
</paragraph><paragraph id="ID8005D6BB2355403CB127DEAF5FBBEE9D"><enum>(5)</enum><text>The second
sentence of section 6039G(d) is amended by inserting <quote>or who relinquishes
United States citizenship (within the meaning of section 877A(e)(3))</quote>
after <quote>section 877(a))</quote>.</text>
</paragraph><paragraph id="id9C0A6AEC8B974B358308DC556BA9D0C8"><enum>(6)</enum><text>Section 7701(n)
is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idFD565243B1C041AE937F2200A517A865" style="OLC">
<paragraph id="idEBF7CA257ACC49CABEE856BAED863301"><enum>(3)</enum><header>Application</header><text>This
subsection shall not apply to any expatriate subject to section
877A.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="IDC75B42F9A812491DB59DA6DA2E0DD33A"><enum>(f)</enum><header>Clerical
Amendment</header><text>The table of sections for subpart A of part II of
subchapter N of chapter 1 is amended by inserting after the item relating to
section 877 the following new item:</text>
<quoted-block id="IDFD73A0D79C664809843A9635CAB7EF4A" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 877A. Tax responsibilities of
expatriation.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID2125A4D25D594BAC9B0318F1441ADE7E"><enum>(g)</enum><header>Effective
Date</header>
<paragraph id="IDA6FAC928F8CD4E17847B20DEFF1E933A"><enum>(1)</enum><header>In
general</header><text>Except as provided in this subsection, the amendments
made by this section shall apply to expatriates (within the meaning of section
877A(e) of the Internal Revenue Code of 1986, as added by this section) whose
expatriation date (as so defined) occurs on or after the date of the enactment
of this Act.</text>
</paragraph><paragraph id="IDA7E7388B56BC4081BE6733BA9DE760F4"><enum>(2)</enum><header>Gifts and
bequests</header><text>Section 102(d) of the Internal Revenue Code of 1986 (as
added by subsection (b)) shall apply to gifts and bequests received on or after
the date of the enactment of this Act, from an individual or the estate of an
individual whose expatriation date (as so defined) occurs after such
date.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6FDCA7DB4B50479E8C3D762BDC074238"><enum>(3)</enum><header>Due date for
tentative tax</header><text>The due date under section 877A(h)(2) of the
Internal Revenue Code of 1986, as added by this section, shall in no event
occur before the 90th day after the date of the enactment of this Act.</text>
</paragraph></subsection></section></subtitle>