[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3590 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 3590

    To amend the Internal Revenue Code of 1986 to provide financial 
incentives to facilitate the development and early deployment of carbon 
    capture and sequestration technologies, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 14, 2010

    Mr. Rockefeller (for himself and Mr. Voinovich) 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 financial 
incentives to facilitate the development and early deployment of carbon 
    capture and sequestration technologies, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Carbon Capture and Sequestration 
Deployment Revenue Act of 2010''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

       TITLE I--SEQUESTRATION TAX CREDIT AND CAPACITY INCENTIVES

Sec. 101. Carbon sequestration tax credit amendments.
Sec. 102. Federal financial incentives for additional 10 GW of 
                            capacity.
       TITLE II--62 GW EARLY ADOPTER PROGRAM; SEQUESTRATION BONDS

Sec. 201. Tax credit for early adoption of CCS.
Sec. 202. Carbon sequestration bonds.

         TITLE I--SEQUESTRATION TAX CREDIT; CAPACITY INCENTIVES

SEC. 101. CARBON SEQUESTRATION TAX CREDIT AMENDMENTS.

    (a) In General.--Section 45Q of the Internal Revenue Code of 1986 
is amended--
            (1) by inserting ``or converted to a stable form in which 
        it is securely and permanently sequestered'' after ``secure 
        geological storage'' in subparagraph (B) of section 45Q(a)(1);
            (2) by striking subsection (a)(2) an inserting the 
        following:
            ``(2) $10 per metric ton of qualified carbon dioxide which 
        is captured at a qualified facility and used as a tertiary 
        injectant in a qualified enhanced oil or natural gas recovery 
        project, and
                    ``(A) disposed of in secure geologic storage, or
                    ``(B) converted to a stable form to enable 
                permanent sequestration, including the beneficial use 
                of such converted carbon dioxide.'';
            (3) by striking the words ``by the taxpayer'' each place 
        they appear in subsection (a);
            (4) by striking ``would otherwise'' in subsection (b)(1)(A) 
        and inserting ``would, but for the capture and use or 
        sequestration,'';
            (5) by striking paragraph (1) of subsection (c) and 
        redesignating paragraphs (2) and (3) as paragraphs (1) and (2), 
        respectively;
            (6) by striking paragraph (5) of subsection (d) and 
        inserting the following:
            ``(5) Credit attributable to taxpayer.--Any credit under 
        this section shall be attributable to the person that captures 
        the qualified carbon dioxide, except to the extent provided in 
        regulations prescribed by the Secretary.'';
            (7) by adding at the end of subsection (d) the following:
            ``(8) Placed in service.--Carbon capture equipment is 
        placed in service on the date qualified carbon dioxide is first 
        captured at a qualified facility and either--
                    ``(A) injected in secure geologic storage or 
                converted to a stable form, or
                    ``(B) used as an injectant in a qualified enhanced 
                hydrocarbon recovery project or converted to a stable 
                form.
            ``(9) Transferability of credit.--The credit under this 
        section may be transferred to any other person by the person to 
        which the credit is attributable.'';
            (8) by striking subsection (e) and inserting the following:
    ``(e) Application of section.--The credit under this section shall 
apply with respect to qualified carbon dioxide captured at a qualified 
facility at which carbon capture equipment is placed in service prior 
to January 1, 2019. The taxpayer may claim the credit for a 10-year 
period commencing with the date the carbon capture equipment is placed 
in service.''; and
            (9) by inserting ``or conversion to a stable form'' after 
        ``geological storage'' in subsection (d)(2).
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to carbon dioxide captured after the date of enactment of this 
Act.

SEC. 102. FEDERAL FINANCIAL INCENTIVES FOR ADDITIONAL 10 GW OF 
              CAPACITY.

    (a) Additional Authorization.--Section 1704 of the Energy Policy 
Act of 2005 (42 U.S.C. 16514) is amended--
            (1) by adding the following at the end of subsection (a): 
        ``In addition to other amounts made available under this 
        section, there are authorized $20,000,000,000 to be used only 
        for guarantees under this title for--
            ``(1) the construction of new commercial scale electric 
        generation units, or industrial facility units, that are 
        eligible units utilizing carbon capture and sequestration 
        technology;
            ``(2) the retrofit of existing commercial scale electric 
        generation units, or industrial facility units, that are 
        eligible units providing for carbon capture and sequestration; 
        and
            ``(3) the construction of carbon dioxide transmission 
        pipelines to transport carbon dioxide to sequestration sites or 
        to sites where such carbon dioxide will be used for hydrocarbon 
        recovery.''; and
            (2) by adding at the end thereof the following:
    ``(c) Definitions.--In this section:
            ``(1) Commercial scale.--The term `commercial scale' means, 
        with respect to an electric generation unit, that the unit is 
        designed to generate and sell electric power directly to 
        consumers, or for resale, with a carbon dioxide capture system 
        having a useful life of at least 15 years.
            ``(2) Permanent geologic storage site.--The term `permanent 
        geologic storage site' means a site that the Secretary 
        determines is capable of storing carbon dioxide in saline or 
        other deep geologic storage structures.
            ``(3) Eligible unit.--The term `eligible unit' means an 
        electric generation unit or industrial facility unit located in 
        the United States that--
                    ``(A) uses coal or petroleum coke for at least 75 
                percent of the fuel used by the unit;
                    ``(B) uses carbon capture technology to treat at 
                least--
                            ``(i) 20 percent of the carbon dioxide 
                        emissions of the unit; or
                            ``(ii) an amount of carbon dioxide 
                        emissions that is attributable to 200 megawatts 
                        of the total nameplate generating capacity of 
                        the unit;
                    ``(C) captures at least 80 percent of the carbon 
                dioxide emissions from the treated emissions of the 
                unit;
                    ``(D) transports such captured carbon dioxide to a 
                permanent geologic storage site in the United States or 
                to a site on the North American continent for use for 
                hydrocarbon recovery;
                    ``(E) provides for the permanent storage of such 
                carbon dioxide in such site; and
                    ``(F) has been approved by the Secretary as 
                eligible under this subsection.
    ``(d) Eligible Units.--
            ``(1) Certification.--No unit shall be an eligible unit 
        under subsection (c) unless the Secretary has certified such 
        unit as meeting the requirements of such subsection (c) 
        pursuant to a certification process established by the 
        Secretary by rule.
            ``(2) Limitation.--The Secretary may certify eligible units 
        under this subsection which total in the aggregate no more than 
        10 gigawatts of treated generating capacity, of which not more 
        than the equivalent of 5 gigawatts of capacity may be for 
        industrial units. For purposes of determining equivalency under 
        this subsection, an industrial unit with uncontrolled carbon 
        dioxide emissions equal to the uncontrolled carbon dioxide 
        emissions of a 500 megawatt electric generation unit shall be 
        treated as having installed capacity equivalent to such 500 
        megawatt unit.''.
    (b) Tax Credits.--
            (1) In general.--Subpart E of part IV of subchapter A of 
        chapter 1 of the Internal Revenue Code of 1986 is amended by 
        adding at the end thereof the following:

``SEC. 48E. PIONEER CCS FACILITIES.

    ``(a) Additional Qualifying Advanced Coal Project Credit.--For 
purposes of section 46, the qualifying advanced coal project credit for 
any taxable year shall also include an additional amount equal to 30 
percent of the incremental cost for carbon capture and sequestration 
systems for eligible units, determined as follows:
            ``(1) For an eligible unit that is a new electric 
        generation unit, the incremental costs shall be the amount by 
        which the costs incurred by the taxpayer for the unit exceed 
        the costs of construction of a comparable supercritical 
        pulverized coal unit without carbon capture and sequestration 
        technology. To establish incremental costs, the taxpayer shall 
        obtain a certified report of a qualified independent engineer 
        estimating the differential construction cost between the 
        eligible unit and a comparably-sized supercritical pulverized 
        coal unit without carbon capture and sequestration. The 
        independent engineer shall utilize cost estimates for 
        supercritical pulverized coal units available from Federal 
        agencies, academia and/or the private sector, appropriately 
        adjusted for size, fuel source and location. An engineering 
        design of a hypothetical supercritical pulverized coal unit 
        shall not be required to establish the incremental costs.
            ``(2) For an eligible unit that is a new industrial unit, 
        the incremental costs shall be the amount by which the costs 
        incurred by the taxpayer for the unit exceed the costs of 
        construction of a comparable industrial unit without carbon 
        capture and sequestration.
            ``(3) For an eligible unit that retrofits a carbon capture, 
        transportation, and sequestration system on an existing 
        generation or industrial unit, the incremental cost shall be 
        the construction costs incurred by the taxpayer for the carbon 
        capture and sequestration system.
     ``(b) Definitions.--For purposes of this section, the term 
`eligible unit' means an electric generation unit or industrial 
facility unit located in the United States that--
            ``(A) uses coal or petroleum coke for at least 75 percent 
        of the fuel used by the unit;
            ``(B) uses carbon capture technology to treat at least--
                    ``(i) 20 percent of the carbon dioxide emissions of 
                the unit; or
                    ``(ii) an amount of carbon dioxide emissions that 
                is attributable to 200 megawatts of the total nameplate 
                generating capacity of the unit;
            ``(C) captures at least 80 percent of the carbon dioxide 
        emissions from the treated emissions of the unit;
            ``(D) transports such captured carbon dioxide to a 
        permanent geologic storage site in the United States or to a 
        site on the North American continent for use for hydrocarbon 
        recovery; and
            ``(E) provides for the permanent storage of such carbon 
        dioxide in such site.
    ``(c) Election.--No costs for which a credit has been provided 
under section 48A or section 48B shall be eligible for a credit under 
this section.''.
            (2) Clerical amendment.--The table of contents for such 
        subpart E is amended by adding at the end thereof the 
        following:

``48E. Pioneer CCS facilities.''.
            (3) Effective Date.--The amendments made by this subsection 
        shall apply with respect to--
                    (A) new facilities placed in service after December 
                31, 2010, and before January 1, 2025; and
                    (B) the retrofit of existing facilities that 
                commence operation with such retrofit after December 
                31, 2010, and before January 1, 2025.

       TITLE II--62 GW EARLY ADOPTER PROGRAM; SEQUESTRATION BONDS

SEC. 201. TAX CREDIT FOR EARLY ADOPTION OF CCS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
thereof the following:

``SEC. 45S. CREDIT FOR EARLY ADOPTION OF CCS.

    ``(a) Early Adoption Credit.--For purposes of section 38, the 
carbon dioxide sequestration credit for any taxable year shall be the 
amount set forth in subsection (b), in the case of certified new or 
retrofit electric utility units or certified new or retrofit industrial 
units in providing for carbon capture and sequestration in secure 
geologic storage, adjusted as provided in subsection (c).
    ``(b) Determination of Amount.--
            ``(1) 65 Percent capture rate.--Except as provided in 
        paragraph (2) and adjusted in subsection (c), the amount of the 
        credit under subsection (a) shall be $67 per ton of carbon 
        dioxide captured and sequestered in the case of a certified new 
        or retrofit electric utility unit or a certified new or 
        retrofit industrial unit that--
                    ``(A) is placed in service before January 1, 2025, 
                and
                    ``(B) captures and sequesters at least 65 percent 
                of the carbon dioxide emissions in the treated portion 
                of the flue gas or fuel gas stream.
            ``(2) Higher capture rate.--The amount of credit provided 
        under paragraph (1) shall be increased by $1.15 per ton for 
        each percent of additional carbon dioxide emissions captured 
        and sequestered above such 65 percent capture rate, up to a 
        maximum credit of $96 per ton for a capture and sequestration 
        rate of 90 percent or more.
    ``(c) Adjustment for Later Commencement.--The amount of the credit 
determined under subsection (b) shall be reduced by $1 per ton of 
carbon dioxide for each year after the calendar year 2024 in which the 
carbon capture and sequestration equipment is placed in service.
    ``(d) Placed in Service.--For purposes of this section, the term 
`placed in service' with respect to a certified new or retrofit 
electric utility unit or a certified new or retrofit industrial unit is 
the date on which such unit first captures and sequesters carbon 
dioxide in secure geologic storage.
    ``(e) Certification of 62 GW.--No credit shall be allowed under 
this section unless the electric utility unit or industrial unit with 
respect to which a credit is applied has been certified by the 
Secretary. Upon application of any taxpayer for certification under 
this section, the Secretary shall certify the unit in accordance with 
the certification program under subsection (g).
    ``(f) Limitation.--The Secretary shall certify eligible new or 
retrofit units under this subsection which total in the aggregate no 
more than 62 gigawatts of treated generating capacity, of which not 
more than 10 percent of this capacity may be for industrial units. For 
purposes of determining gigawatt equivalency under this subsection, 6 
million metric tonnes per year of captured and sequestered carbon 
dioxide emissions from industrial units shall be treated as having the 
capacity equivalent of 1 gigawatt of treated generating capacity.
    ``(g) Certification Program.--
            ``(1) The Secretary shall establish a program for the 
        certification of new or retrofit electric units and new or 
        retrofit industrial units utilizing carbon capture and 
        sequestration technology eligible to apply for a credit under 
        this section. A facility shall be certified only if the owner 
        or operator of the unit--
                    ``(A) specifies the capacity of the unit subject to 
                carbon capture and sequestration, and
                    ``(B) commits to place the unit, or equipment in 
                the case of a retrofit, in service within 7 years after 
                the date of the certification and to comply with such 
                interim development milestones (including the issuance 
                of all necessary Federal, State, and local permits) as 
                the Secretary shall, by rule, prescribe.
            ``(2) Failure to comply with the 7-year date set forth in 
        this subsection or with any significant milestone or other 
        requirement established by the Secretary under paragraph (1) 
        shall result in the termination of the certification. The 7-
        year date shall be extended by the period of any delay caused 
        by challenges or litigation related to permits required for the 
        facility. No unit for which a certification has been terminated 
        shall be eligible for a new certification under this section.
    ``(h) Application of Section.--The credit under this section shall 
apply to carbon dioxide captured and sequestered in secure geologic 
storage from a certified new or retrofit electric utility unit or from 
a certified new or retrofit industrial unit. The taxpayer may claim the 
credit for a 10-year period commencing on the date the unit is placed 
in service.
    ``(i) Other Credits.--Carbon dioxide from equipment for which 
carbon dioxide storage credit has been allowed under section 45Q or an 
investment credit has been allowed under section 48E shall not be 
eligible for a credit under this section.
    ``(j) Definitions.--In this section:
            ``(1) Retrofit.--The term `retrofit' means the application 
        of carbon capture and sequestration technology to an existing 
        unit, provided that such technology treats at least--
                    ``(A) 20 percent of the carbon dioxide emissions of 
                the unit; or
                    ``(B) an amount of carbon dioxide emissions that is 
                attributable to 200 megawatts of the total nameplate 
                generating capacity (or, in the case of an industrial 
                unit, an equivalent capacity).
            (2) Industrial unit.--The term `industrial unit' means a 
        unit that--
                    ``(A) is not a qualifying electric generating unit;
                    ``(B) uses coal or petroleum coke for at least 75 
                percent of the fuel used by the unit; and
                    ``(C) absent carbon capture and sequestration, 
                would emit greater than 500,000 tons per year of carbon 
                dioxide.
            ``(3) Treated generating capacity.--The term `treated 
        generating capacity' means the portion of the total generating 
        capacity of an electric generating unit (or, in the case of an 
        industrial unit, an equivalent capacity) for which the flue gas 
        or fuel gas is treated by carbon capture and sequestration 
        technology.''.
    (b) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end thereof the following:

``45S. Credit for early adoption of CCS.''.

SEC. 202. CARBON SEQUESTRATION BONDS.

    (a) In General.--Part IV of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new subpart:

                ``Subpart K--Carbon Sequestration Bonds

``Sec. 54BB. Carbon Sequestration bonds.

``SEC. 54BB. CARBON SEQUESTRATION BONDS.

    ``(a) In General.--If a taxpayer holds a carbon sequestration bond 
on one or more interest payment dates of the bond during any taxable 
year, there shall be allowed as a credit against the tax imposed by 
this chapter for the taxable year an amount equal to the sum of the 
credits determined under subsection (b) with respect to such dates.
    ``(b) Amount of Credit.--The amount of the credit determined under 
this subsection with respect to any interest payment date for a carbon 
sequestration bond is 70 percent of the amount of interest payable by 
the issuer with respect to such date.
    ``(c) Limitation Based on Amount of Tax.--
            ``(1) In general.--The credit allowed under subsection (a) 
        for any taxable year shall not exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under this 
                part (other than subpart C and this subpart).
            ``(2) Carryover of unused credit.--If the credit allowable 
        under subsection (a) exceeds the limitation imposed by 
        paragraph (1) for such taxable year, such excess shall be 
        carried to the succeeding taxable year and added to the credit 
        allowable under subsection (a) for such taxable year 
        (determined before the application of paragraph (1) for such 
        succeeding taxable year).
    ``(d) Carbon Sequestration Bond.--
            ``(1) In general.--For purposes of this section, the term 
        `carbon sequestration bond' means any obligation issued as part 
        of an issue if--
                    ``(A) 95 percent of the available project proceeds 
                (as defined in section 54A) of such issue, in excess of 
                the amounts in a reasonably required reserve (within 
                the meaning of section 150(a)(3)) for such issue, are 
                to be used for qualified carbon sequestration costs 
                incurred by public power providers or cooperative 
                electric companies,
                    ``(B) the obligation is issued by a qualified 
                issuer, and
                    ``(C) the issuer makes an irrevocable election to 
                have this section apply.
            ``(2) Applicable rules.--For purposes of applying paragraph 
        (1)--
                    ``(A) an issue shall not be treated as meeting the 
                requirements of paragraph (1) unless the issue 
                satisfies the requirements of section 148 with respect 
                to the proceeds of the issue,
                    ``(B) for purposes of applying section 148 to such 
                an issue, the yield on a carbon sequestration bond 
                shall be determined without regard to the credit 
                allowed under subsection (a),
                    ``(C) an issue shall not be treated as meeting the 
                requirements of this paragraph unless the issuer of the 
                carbon sequestration bonds submits reports similar to 
                the reports required under section 149(e), and
                    ``(D) a bond shall not be treated as a carbon 
                sequestration bond if the issue price has more than a 
                de minimis amount (determined under rules similar to 
                the rules of section 1273(a)(3)) of premium over the 
                stated principal amount of the bond.
    ``(e) Limitation on Amount of Bonds Designated.--
            ``(1) In general.--There is a national carbon sequestration 
        bond limitation of $5,000,000,000.
            ``(2) Allocation by secretary.--The Secretary shall make 
        allocations of the amount of the national carbon sequestration 
        bond limitation in such manner as the Secretary determines 
        appropriate.
    ``(f) Interest Payment Date.--For purposes of this section, the 
term `interest payment date' means any date on which the holder of 
record of the carbon sequestration bond is entitled to a payment of 
interest under such bond.
    ``(g) Special Rules.--
            ``(1) Interest on carbon sequestration bonds includible in 
        gross income for federal income tax purposes.--For purposes of 
        this title, interest on any carbon sequestration bond shall be 
        includible in gross income.
            ``(2) Application of certain rules.--Rules similar to the 
        rules of subsections (f), (g), (h), and (i) of section 54A 
        shall apply for purposes of the credit allowed under subsection 
        (a).
    ``(h) Special Rule for Qualified Carbon Sequestration Bonds.--In 
the case of a qualified carbon sequestration bond--
            ``(1) Issuer allowed refundable credit.--In lieu of any 
        credit allowed under this section with respect to such bond, 
        the issuer of such bond shall be allowed a credit as provided 
        in section 6432.
            ``(2) Qualified carbon sequestration bond.--In this 
        subsection, the term `qualified carbon sequestration bond' 
        means any carbon sequestration bond issued as part of an issue 
        if the issuer makes an irrevocable election to have this 
        subsection apply.
    ``(i) Definitions.--In this section:
            ``(1) Qualified carbon sequestration costs.--The term 
        `qualified carbon sequestration costs' means the incremental 
        costs for carbon capture and sequestration systems as described 
        in section 48E (without regard to any placed in service date), 
        which systems are owned by a public power provider or a 
        cooperative electric company.
            ``(2) Public power provider.--The term `public power 
        provider' means a State utility with a service obligation, as 
        such terms are defined in section 217 of the Federal Power Act 
        (as in effect on the date of the enactment of the Carbon 
        Capture and Sequestration Deployment Revenue Act of 2010).
            ``(3) Cooperative electric company.--The term `cooperative 
        electric company' means a mutual or cooperative electric 
        company described in section 501(c)(12) or section 1381 
        (a)(2)(C).
            ``(4) Qualified issuer.--The term `qualified issuer' means 
        a public power provider, a cooperative electric company, a 
        clean renewable energy bond lender, or a not-for-profit 
        electric utility which has received a loan or loan guarantee 
        under the Rural Electrification Act.
    ``(j) Regulations.--The Secretary may prescribe such regulations 
and other guidance as may be necessary or appropriate to carry out this 
section and section 6431.''.
    (b) Credit for Qualified Carbon Sequestration Bonds.--Subchapter B 
of chapter 65 of such Code is amended by adding at the end the 
following new section:

``SEC. 6432. CREDIT FOR QUALIFIED CARBON SEQUESTRATION BONDS ALLOWED TO 
              ISSUER.

    ``(a) In General.--In the case of a qualified carbon sequestration 
bond, the issuer of such bond shall be allowed a credit with respect to 
each interest payment under such bond which shall be payable by the 
Secretary as provided in subsection (b).
    ``(b) Payment of Credit.--The Secretary shall pay 
(contemporaneously with each interest payment date under such bond) to 
the issuer of such bond (or to any person who makes such interest 
payments on behalf of the issuer) 65 percent of the interest payable 
under such bond on such date.
    ``(c) Definitions.--In this section:
            ``(1) Interest payment date.--The term `interest payment 
        date' means each date on which interest is payable by the 
        issuer under the terms of the bond.
            ``(2) Qualified carbon sequestration bond.--The term 
        `qualified carbon sequestration bond' has the meaning given 
        such term in section 54BB(h)(2).
    ``(d) Application of Arbitrage Rules.--For purposes of section 148, 
the yield on a qualified bond shall be reduced by the credit allowed 
under this section.''.
    (c) Conforming Amendments.--
            (1) Section 1324(b)(2) of title 31, United States Code, is 
        amended by striking ``or 6431'' and inserting ``6431, or 
        6432,''.
            (2) Section 54A(c)(1)(B) of the Internal Revenue Code of 
        1986 is amended by striking ``subparts C and J'' and inserting 
        ``subparts C, J, and K''.
            (3) Sections 54(c)(2), 1397E(c)(2), and 1400N(l)(3)(B) of 
        such Code are each amended by striking ``and J'' and inserting 
        ``J, and K''.
            (4) Section 6211(b)(4)(A) of such Code is amended by 
        striking ``and 6431'' and inserting ``6431, and 6432''.
            (5) Section 6401(b)(1) of such Code is amended by striking 
        ``and J'' and inserting ``J, and K''.
            (6) The table of subparts for part IV of subchapter A of 
        chapter 1 of such Code is amended by adding at the end the 
        following new item:

              ``subpart k. carbon sequestration bonds.''.

            (7) The table of sections for subchapter B of chapter 65 of 
        such Code is amended by adding at the end the following new 
        item:

``Sec. 6432. Credit for qualified carbon sequestration bonds allowed to 
                            issuer.''.
    (d) Transitional Coordination With State Law.--Except as otherwise 
provided by a State after the date of the enactment of this Act, the 
interest on any carbon sequestration bond (as defined in section 54BB 
of the Internal Revenue Code of 1986, as added by this section) and the 
amount of any credit determined under such section with respect to such 
bond shall be treated for purposes of the income tax laws of such State 
as being exempt from Federal income tax.
    (e) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.
                                 <all>