II 110th CONGRESS 2d Session S. 3478 IN THE SENATE OF THE UNITED STATES September 11, 2008 Mr. Baucus (for himself and Mr. Grassley) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to provide incentives for the production of energy, to provide transportation and domestic fuel security, and to provide incentives for energy conservation and energy efficiency, and for other purposes.

1.

Short title, etc

(a)

Short title

This Act may be cited as the Energy Independence and Investment Act of 2008. (b)

Reference

Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. (c)

Table of contents

The table of contents for this Act is as follows: Sec. 1. Short title, etc. TITLE I—Energy production incentives Subtitle A—Renewable energy incentives Sec. 101. Renewable energy credit. Sec. 102. Production credit for electricity produced from marine renewables. Sec. 103. Energy credit. Sec. 104. Credit for residential energy efficient property. Sec. 105. New clean renewable energy bonds. Sec. 106. Energy credit for small wind property. Sec. 107. Energy credit for geothermal heat pump systems. Subtitle B—Carbon mitigation and coal provisions Sec. 111. Expansion and modification of advanced coal project investment credit. Sec. 112. Expansion and modification of coal gasification investment credit. Sec. 113. Temporary increase in coal excise tax; funding of Black Lung Disability Trust Fund. Sec. 114. Special rules for refund of the coal excise tax to certain coal producers and exporters. Sec. 115. Tax credit for carbon dioxide sequestration. Sec. 116. Carbon audit of the tax code. TITLE II—Transportation and domestic fuel security provisions Sec. 201. Inclusion of cellulosic biofuel in bonus depreciation for biomass ethanol plant property. Sec. 202. Credits for biodiesel and renewable diesel. Sec. 203. Clarification that credits for fuel are designed to provide an incentive for United States production. Sec. 204. Credit for new qualified plug-in electric drive motor vehicles. Sec. 205. Extension and modification of alternative motor vehicle credit. Sec. 206. Exclusion from heavy truck tax for idling reduction units and advanced insulation. Sec. 207. Extension and modification of alternative fuel credit. Sec. 208. Alternative fuel vehicle refueling property credit. Sec. 209. Certain income and gains relating to alcohol fuels and mixtures, biodiesel fuels and mixtures, and alternative fuels and mixtures treated as qualifying income for publicly traded partnerships. Sec. 210. Extension of ethanol production credit. Sec. 211. Credit for producers of fossil free alcohol. Sec. 212. Extension and modification of election to expense certain refineries. Sec. 213. Extension of suspension of taxable income limit on percentage depletion for oil and natural gas produced from marginal properties. TITLE III—Energy conservation and efficiency provisions Sec. 301. Qualified energy conservation bonds. Sec. 302. Credit for nonbusiness energy property. Sec. 303. Energy efficient commercial buildings deduction. Sec. 304. New energy efficient home credit. Sec. 305. Modifications of energy efficient appliance credit for appliances produced after 2007. Sec. 306. Accelerated recovery period for depreciation of smart meters and smart grid systems. Sec. 307. Qualified green building and sustainable design projects. Sec. 308. Special depreciation allowance for certain reuse and recycling property. TITLE IV—Miscellaneous energy provisions Sec. 401. Special rule to implement FERC and State electric restructuring policy. Sec. 402. Modification of credit for production from advanced nuclear power facilities. Sec. 403. Income averaging for amounts received in connection with the Exxon Valdez litigation. TITLE V—Revenue provisions Sec. 501. Limitation of deduction for income attributable to domestic production of oil, gas, or primary products thereof. Sec. 502. Tax on crude oil and natural gas produced from the outer Continental Shelf in the Gulf of Mexico. Sec. 503. 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. 504. Broker reporting of customer’s basis in securities transactions. Sec. 505. Increase and extension of Oil Spill Liability Trust Fund tax. TITLE VI—Other provisions Sec. 601. Secure rural schools and community self-determination program. Sec. 602. Clarification of uniform definition of child.

. (b)

Forest receipt payments to eligible states and counties

(1)

Act of May 23, 1908

The sixth paragraph under the heading FOREST SERVICE in the Act of May 23, 1908 (16 U.S.C. 500) is amended in the first sentence by striking twenty-five percentum and all that follows through shall be paid and inserting the following: an amount equal to the annual average of 25 percent of all amounts received for the applicable fiscal year and each of the preceding 6 fiscal years from each national forest shall be paid. (2)

Weeks law

Section 13 of the Act of March 1, 1911 (commonly known as the Weeks Law) (16 U.S.C. 500) is amended in the first sentence by striking twenty-five percentum and all that follows through shall be paid and inserting the following: an amount equal to the annual average of 25 percent of all amounts received for the applicable fiscal year and each of the preceding 6 fiscal years from each national forest shall be paid. (c)

Payments in lieu of taxes

(1)

In general

Section 6906 of title 31, United States Code, is amended to read as follows:

6906.

Funding

For each of fiscal years 2008 through 2012— (1)each county or other eligible unit of local government shall be entitled to payment under this chapter; and (2)sums shall be made available to the Secretary of the Interior for obligation or expenditure in accordance with this chapter.

. (2)

Conforming amendment

The table of sections for chapter 69 of title 31, United States Code, is amended by striking the item relating to section 6906 and inserting the following: 6906. Funding. . (3)

Budget scorekeeping

(A)

In general

Notwithstanding the Budget Scorekeeping Guidelines and the accompanying list of programs and accounts set forth in the joint explanatory statement of the committee of conference accompanying Conference Report 105–217, the section in this title regarding Payments in Lieu of Taxes shall be treated in the baseline for purposes of section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985 (as in effect prior to September 30, 2002), and by the Chairmen of the House and Senate Budget Committees, as appropriate, for purposes of budget enforcement in the House and Senate, and under the Congressional Budget Act of 1974 as if Payment in Lieu of Taxes (14–1114–0–1–806) were an account designated as Appropriated Entitlements and Mandatories for Fiscal Year 1997 in the joint explanatory statement of the committee of conference accompanying Conference Report 105–217. (B)

Effective date

This paragraph shall remain in effect for the fiscal years to which the entitlement in section 6906 of title 31, United States Code (as amended by paragraph (1)), applies.

602.

Clarification of uniform definition of child

(a)

Child must be younger than claimant

Section 152(c)(3)(A) is amended by inserting is younger than the taxpayer claiming such individual as a qualifying child and after such individual. (b)

Child must be unmarried

Section 152(c)(1) is amended by striking and at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting , and, and by adding at the end the following new subparagraph: (E)who has not filed a joint return (other than only for a claim of refund) with the individual's spouse under section 6013 for the taxable year beginning in the calendar year in which the taxable year of the taxpayer begins. . (c)

Restrict qualifying child tax benefits to child's parent

(1)

Child tax credit

Subsection (a) of section 24 is amended by inserting for which the taxpayer is allowed a deduction under section 151 after of the taxpayer. (2)

Persons other than parents claiming qualifying child

(A)

In general

Paragraph (4) of section 152(c) is amended by adding at the end the following new subparagraph: (C)

No parent claiming qualifying child

If the parents of an individual may claim such individual as a qualifying child but no parent so claims the individual, such individual may be claimed as the qualifying child of another taxpayer but only if the adjusted gross income of such taxpayer is higher than the highest adjusted gross income of any parent of the individual. . (B)

Conforming amendments

(i)Subparagraph (A) of section 152(c)(4) is amended by striking Except through 2 or more taxpayers and inserting Except as provided in subparagraphs (B) and (C), if (but for this paragraph) an individual may be claimed as a qualifying child by 2 or more taxpayers. (ii)The heading for paragraph (4) of section 152(c) is amended by striking claiming and inserting who can claim the same. (d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2008.