II 110th CONGRESS 1st Session S. 425 IN THE SENATE OF THE UNITED STATES January 29, 2007 Mr. Smith (for himself and Mr. Wyden) 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 expand the resources eligible for the renewable energy credit to kinetic hydropower, and for other purposes.

1.

Expansion of resources eligible for renewable energy credit to kinetic hydropower

(a)

In general

Section 45(c)(1) of the Internal Revenue Code of 1986 (defining qualified energy resources) is amended by striking and at the end of subparagraph (G), by striking the period at the end of subparagraph (H) and inserting , and, and by adding at the end the following new subparagraph: (I)kinetic hydropower. . (b)

Definition of resources

Section 45(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (10)

Kinetic hydropower

The term kinetic hydropower means any of the following: (A)Ocean free flowing water derived from flows from tidal currents, ocean currents, waves, or estuary currents. (B)Ocean thermal energy. (C)Free flowing water in rivers, lakes, man made channels, or streams. . (c)

Facilities

Section 45(d) of the Internal Revenue Code of 1986 (relating to qualified facilities) is amended by adding at the end the following new paragraph: (11)

Kinetic hydropower facility

In the case of a facility using kinetic hydropower to produce electricity, the term qualified facility 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, 2011. Such term shall not include a facility which includes impoundment structures. . (d)

Effective date

The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.