[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3738 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 3738

 To amend the Internal Revenue Code of 1986 to provide incentives for 
 clean energy manufacturing, to reduce emissions, to produce renewable 
        energy, to promote conservation, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 5, 2010

   Mr. Kerry 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 
 clean energy manufacturing, to reduce emissions, to produce renewable 
        energy, to promote conservation, and for other purposes.

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

SECTION 1. SHORT TITLE, ETC.

    (a) Short Title.--This Act may be cited as the ``Clean Energy 
Technology Leadership Act of 2010''.
    (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 of this Act is as 
follows:

Sec. 1. Short title, etc.
                  TITLE I--CLEAN ENERGY MANUFACTURING

Sec. 101. Extension and modification of the qualifying advanced energy 
                            project credit.
Sec. 102. Extension and modification of energy efficient appliance 
                            credit.
Sec. 103. Enhanced deduction for production of advanced alternative 
                            energy technology.
                       TITLE II--RENEWABLE ENERGY

Sec. 201. Elective payment for specified energy property.
Sec. 202. Extension and expansion of new clean renewable energy bonds.
Sec. 203. Increased research credit for energy research.
                   TITLE III--PROMOTING CONSERVATION

Sec. 301. Extension of new energy efficient home credit.
Sec. 302. Extension and modification of nonbusiness energy credit.
Sec. 303. Energy efficient commercial buildings deduction.
                        TITLE IV--TRANSPORTATION

Sec. 401. Credit for qualified natural gas motor vehicles.
Sec. 402. Natural gas vehicle bonds.
Sec. 403. Incentives for manufacturing facilities producing vehicles 
                            fueled by compressed or liquified natural 
                            gas.
Sec. 404. Transportation fringe benefits.
Sec. 405. Alternative fuel vehicle refueling property.
                       TITLE V--ALTERNATIVE FUELS

Sec. 501. Extension of incentives for biodiesel and renewable diesel.
Sec. 502. Inclusion of algae-based biofuel in definition of cellulosic 
                            biofuel.
                       TITLE VI--OTHER PROVISIONS

Sec. 601. Report on the utilization of tax incentives.

                  TITLE I--CLEAN ENERGY MANUFACTURING

SEC. 101. EXTENSION AND MODIFICATION OF THE QUALIFYING ADVANCED ENERGY 
              PROJECT CREDIT.

    (a) Certain Projects Eligible for Credit Without Limitation.--
            (1) In general.--Subsection (a) of section 48C is amended 
        by striking ``an amount equal to'' and all that follows and 
        inserting ``an amount equal to the sum of--
            ``(1) 30 percent of the basis of the statutory advanced 
        energy property placed in service by the taxpayer during such 
        taxable year, plus
            ``(2) 30 percent of the qualified investment for such 
        taxable year with respect to any qualifying advanced energy 
        project of the taxpayer.''.
            (2) Statutory advanced energy property.--Subsection (c) of 
        section 48C is amended by adding at the end the following new 
        paragraph:
            ``(3) Statutory advanced energy property.--
                    ``(A) In general.--The term `statutory advanced 
                energy property' means any eligible property used 
                exclusively to manufacture or fabricate--
                            ``(i) equipment which uses solar energy to 
                        generate electricity,
                            ``(ii) fuel cell power plants (as defined 
                        in section 48(c)(1)(C)), or
                            ``(iii) systems for the electro-chemical 
                        storage of electricity (other than lead-acid 
                        batteries) for use--
                                    ``(I) in electric or hybrid-
                                electric motor vehicles, or
                                    ``(II) in connection with electric 
                                grids.
                    ``(B) Termination.--Such term shall not include any 
                property for any period after December 31, 2014.''.
            (3) Denial of double benefit.--Subsection (e) of section 
        48C is amended by adding at the end the following: ``Statutory 
        advanced energy property shall not be taken into account in 
        determining the qualified investment in any qualifying advanced 
        energy project.''.
    (b) Extension and Modification of the Qualifying Advanced Energy 
Project Program.--
            (1) Additional limitation amount to be competitively 
        allocated by secretary.--Subparagraph (B) of section 48C(d)(1) 
        is amended to read as follows:
                    ``(B) Limitation.--The total amount of qualified 
                investments which may be designated under such program 
                shall not exceed the amount which will result in the 
                total amount of credits allowed under such program 
                being equal to the sum of the following amounts:
                            ``(i) 2009 limitation amount.--
                        $2,300,000,000.
                            ``(ii) 2010 limitation amount.--
                        $3,000,000,000.''.
            (2) Manufacturing of property used to produce composite 
        utility poles.--Clause (i) of section 48C(c)(1)(A) is amended 
        by striking ``or'' at the end of subclause (VI), by 
        redesignating subclause (VII) as subclause (VIII), and by 
        inserting after subclause (VI) the following new subclause:
                                    ``(VII) utility poles or supports 
                                made from composite materials which are 
                                comprised of at least 15 percent 
                                recycled materials and are fully 
                                recyclable,''.
            (3) Preference in selection criteria for manufacturing.--
        Paragraph (3) of section 48C(d) is amended by striking ``and'' 
        at the end of subparagraph (A), by striking the period at the 
        end of subparagraph (B) and inserting ``, and'', and by adding 
        at the end the following new subparagraph:
                    ``(C) shall give the lowest priority to projects 
                which merely assemble components.''.
    (c) Elective Direct Payment of Credit.--Chapter 65 is amended by 
adding at the end the following new subchapter:

               ``Subchapter C--Direct Payment Provisions

``Sec. 6451. Elective payment for qualifying advanced energy project 
                            credit.

``SEC. 6451. ELECTIVE PAYMENT FOR QUALIFYING ADVANCED ENERGY PROJECT 
              CREDIT.

    ``(a) In General.--Any person electing the application of this 
section with respect to any qualifying advanced energy property placed 
in service by such person during the taxable year shall be treated as 
making a payment against the tax imposed by subtitle A for the taxable 
year equal to 85 percent of the credit which would (but for subsection 
(d)) be determined under section 48C with respect to such property for 
such taxable year. Such payment shall be treated as made on the later 
of the due date of the return of such tax or the date on which such 
return is filed.
    ``(b) Qualifying Advanced Energy Property.--For purposes of this 
section, the term `qualifying advanced energy property' means--
            ``(1) statutory advanced energy property (as defined in 
        section 48C(c)(3)), and
            ``(2) eligible property (as defined in section 48C(c)(2)) 
        which is part of a qualifying advanced energy project (as 
        defined in section 48C(c)(1)).
    ``(c) Special Rules for Certain Non-Taxpayers.--
            ``(1) Denial of payment.--Subsection (a) shall not apply 
        with respect to any property originally placed in service by--
                    ``(A) any governmental entity,
                    ``(B) any organization described in section 501(c) 
                or 401(a) and exempt from tax under section 501(a), or
                    ``(C) any entity referred to in paragraph (4) of 
                section 54(j).
            ``(2) Exception for property used in unrelated trade or 
        business.--Paragraph (1) shall not apply with respect to any 
        property originally placed in service by an entity described in 
        section 511(a)(2) if substantially all of the income derived 
        from such property by such entity is unrelated business taxable 
        income (as defined in section 512).
            ``(3) Special rules for partnerships and s corporations.--
        In the case of property originally placed in service by a 
        partnership or an S corporation--
                    ``(A) the election under subsection (a) may be made 
                only by such partnership or S corporation,
                    ``(B) such partnership or S corporation shall be 
                treated as making the payment referred to in subsection 
                (a) only to the extent of the proportionate share of 
                such partnership or S corporation as is owned by 
                persons who would be treated as making such payment if 
                the property were originally placed in service by such 
                persons, and
                    ``(C) the return required to be made by such 
                partnership or S corporation under section 6031 or 6037 
                (as the case may be) shall be treated as a return of 
                tax for purposes of subsection (a).
For purposes of subparagraph (B), rules similar to the rules of section 
168(h)(6) (other than subparagraph (F) thereof) shall apply.
    ``(d) Coordination With Qualifying Advanced Energy Project 
Credit.--
            ``(1) Denial of double benefit.--No credit shall be 
        determined under section 48C with respect to any property with 
        respect to which an election is made under this section for the 
        taxable year in which such property is placed in service or any 
        subsequent taxable year.
            ``(2) Full credit amount to count against program 
        limitation.--For purposes of administering the qualifying 
        advanced energy project program under subsection (d) of section 
        48C, the full amount of the credit with respect to which the 
        payment under subsection (a) is determined shall be treated as 
        allowed under such program.
    ``(e) Special Rules.--For purposes of this section--
            ``(1) Application of recapture rules, etc.--Except as 
        otherwise provided by the Secretary--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, rules similar to the rules of section 
                50, and section 1603 of the American Recovery and 
                Reinvestment Act of 2009, shall apply.
                    ``(B) Exception to limitation on real estate 
                investment trusts, etc.--Paragraph (1) of section 50(d) 
                shall not apply.
                    ``(C) Application of normalization rules.--
                Paragraph (2) of section 50(d) shall not apply with 
                respect to property placed in service by a person in 
                the trade or business of furnishing or selling 
                electrical energy if any law or regulation requires 
                that not less than a certain amount of the electrical 
                energy so furnished or sold by such person be derived 
                from one or more renewable resources.
            ``(2) Provision of information.--A person shall not be 
        treated as having elected the application of this section 
        unless the taxpayer provides such information as the Secretary 
        (in consultation with the Secretary of Energy) may require for 
        purposes of verifying the proper amount to be treated as a 
        payment under subsection (a) and evaluating the effectiveness 
        of this section.
            ``(3) Exclusion from gross income.--Any credit or refund 
        allowed or made by reason of this section shall not be 
        includible in gross income or alternative minimum taxable 
        income.''.
    (d) Conforming Amendments Related to Direct Payment.--
            (1) Subparagraph (A) of section 6211(b)(4)(A) is amended by 
        inserting ``and subchapter C of chapter 65 (including any 
        payment treated as made under such subchapter)'' after 
        ``6431''.
            (2) Subparagraph (B) of section 6425(c)(1) is amended--
                    (A) by striking ``the credits'' and inserting ``the 
                sum of--
                            ``(i) the credits'',
                    (B) by striking the period at the end of clause (i) 
                thereof (as amended by this paragraph) and inserting 
                ``, plus'', and
                    (C) by adding at the end the following new clause:
                            ``(ii) the payments treated as made under 
                        subchapter C of chapter 65.''.
            (3) Paragraph (3) of section 6654(f) is amended--
                    (A) by striking ``the credits'' and inserting ``the 
                sum of--
                    ``(A) the credits'',
                    (B) by striking the period at the end of 
                subparagraph (A) thereof (as amended by this paragraph) 
                and inserting ``, and'', and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(B) the payments treated as made under subchapter 
                C of chapter 65.''.
            (4) Subparagraph (B) of section 6655(g)(1) is amended--
                    (A) by striking ``the credits'' and inserting ``the 
                sum of--
                            ``(i) the credits'',
                    (B) by striking the period at the end of clause (i) 
                thereof (as amended by this paragraph) and inserting 
                ``, plus'', and
                    (C) by adding at the end the following new clause:
                            ``(ii) the payments treated as made under 
                        subchapter C of chapter 65.''.
            (5) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``, or from the provisions 
        of subchapter C of chapter 65 of such Code'' before the period 
        at the end.
            (6) The table of subchapters for chapter 65 is amended by 
        adding at the end the following new item:

              ``subchapter c. direct payment provisions''.

    (e) Other Conforming Amendments.--
            (1) Paragraph (3) of section 48C(b) is amended to read as 
        follows:
            ``(3) Limitation.--The amount which is treated as a 
        qualified investment for all taxable years with respect to any 
        qualifying advanced manufacturing project shall not exceed the 
        amount designated by the Secretary under subsection (d).''.
            (2) Subparagraph (A) of section 48C(c)(2) is amended by 
        inserting ``in the case of a qualifying advanced energy 
        project,'' before ``which is necessary''.
            (3) Subparagraph (A) of section 48C(d)(2) is amended--
                    (A) by striking ``during the 2-year period'' and 
                inserting ``during the--
                            ``(i) in the case of an allocation from the 
                        limitation described in paragraph (1)(B)(i), 
                        the 2-year period'',
                    (B) by striking the period at the end and inserting 
                ``, or'', and
                    (C) by adding at the end the following new clause:
                            ``(ii) in the case of an allocation from 
                        the limitation described in paragraph 
                        (1)(B)(ii), the 1-year period beginning on the 
                        date of the enactment of this clause.''.
            (4) Clause (v) of section 49(a)(1)(C) is amended by 
        inserting ``which is statutory advanced energy property (as 
        defined in section 48C(c)(3)) or'' after ``the basis of any 
        property''.
    (f) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to periods after 
        the date of the enactment of this Act, 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).
            (2) Direct payment provisions.--The amendments made by 
        subsections (c) and (d) shall apply to property placed in 
        service after the date of the enactment of this Act.

SEC. 102. EXTENSION AND MODIFICATION OF ENERGY EFFICIENT APPLIANCE 
              CREDIT.

    (a) Dishwashers.--Paragraph (1) of section 45M(b) is amended by 
striking ``and'' at the end of subparagraph (A), by striking the period 
at the end of subparagraph (B) and inserting a comma, and by adding at 
the end the following new subparagraphs:
                    ``(C) $25 in the case of a dishwasher which is 
                manufactured in calendar year 2011 and which uses no 
                more than 307 kilowatt hours per year and 5.0 gallons 
                per cycle (5.5 gallons per cycle for dishwashers 
                designed for greater than 12 place settings),
                    ``(D) $50 in the case of a dishwasher which is 
                manufactured in calendar year 2011, 2012, or 2013 and 
                which uses no more than 295 kilowatt hours per year and 
                4.25 gallons per cycle (4.75 gallons per cycle for 
                dishwashers designed for greater than 12 place 
                settings), and
                    ``(E) $75 in the case of a dishwasher which is 
                manufactured in calendar year 2011, 2012, or 2013 and 
                which uses no more than 280 kilowatt hours per year and 
                4 gallons per cycle (4.5 gallons per cycle for 
                dishwashers designed for greater than 12 place 
                settings).''.
    (b) Clothes Washers.--Paragraph (2) of section 45M(b) is amended by 
striking ``and'' at the end of subparagraph (C), by striking the period 
at the end of subparagraph (D) and inserting a comma, and by adding at 
the end the following new subparagraphs:
                    ``(E) $175 in the case of a top-loading clothes 
                washer manufactured in calendar year 2011 which meets 
                or exceeds a 2.2 modified energy factor and does not 
                exceed a 4.5 water consumption factor, and
                    ``(F) $225 in the case of a clothes washer 
                manufactured in calendar year 2011, 2012, or 2013--
                            ``(i) which is a top-loading clothes washer 
                        and which meets or exceeds a 2.4 modified 
                        energy factor and does not exceed a 4.2 water 
                        consumption factor, or
                            ``(ii) which is a front-loading clothes 
                        washer and which meets or exceeds a 2.8 
                        modified energy factor and does not exceed a 
                        3.5 water consumption factor.''.
    (c) Refrigerators.--Paragraph (3) of section 45M(b) is amended by 
striking ``and'' at the end of subparagraph (C), by striking the period 
at the end of subparagraph (D) and inserting a comma, and by adding at 
the end the following new subparagraphs:
                    ``(E) $150 in the case of a refrigerator 
                manufactured in calendar year 2011, 2012, or 2013 which 
                consumes at least 30 percent less energy than the 2001 
                energy conservation standards, and
                    ``(F) $200 in the case of a refrigerator 
                manufactured in calendar year 2011, 2012, or 2013 which 
                consumes at least 35 percent less energy than the 2001 
                energy conservation standards.''.
    (d) Rebasing of Limitations.--
            (1) In general.--Paragraph (1) of section 45M(e) is amended 
        by striking ``December 31, 2007'' and inserting ``December 31, 
        2010''.
            (2) Exception for certain refrigerators and clothes 
        washers.--Paragraph (2) of section 45M(e) is amended--
                    (A) by striking ``subsection (b)(3)(D)'' and 
                inserting ``subsection (b)(3)(F)'', and
                    (B) by striking ``subsection (b)(2)(D)'' and 
                inserting ``subsection (b)(2)(F)''.
            (3) Gross receipts limitation.--Paragraph (3) of section 
        45M(e) is amended by striking ``2 percent'' and inserting ``4 
        percent''.
    (e) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to appliances 
        produced after December 31, 2010.
            (2) Limitations.--The amendments made by subsection (d) 
        shall apply to taxable years beginning after December 31, 2010.

SEC. 103. ENHANCED DEDUCTION FOR PRODUCTION OF ADVANCED ALTERNATIVE 
              ENERGY TECHNOLOGY.

    (a) In General.--Section 199 is amended by adding at the end the 
following new subsection:
    ``(e) Enhanced Deduction for Manufacturers of Alternative Energy 
Products.--
            ``(1) In general.--In the case of a taxpayer with domestic 
        alternative energy production gross receipts with respect to 
        any taxable year beginning after December 31, 2010, and before 
        January 1, 2013--
                    ``(A) this section shall be applied separately with 
                respect to qualified production activities income 
                attributable to such domestic alternative energy 
                production gross receipts and qualified production 
                activities income attributable to other domestic 
                production gross receipts, and
                    ``(B) in applying this section to qualified 
                production activities income attributable to such 
                domestic alternative energy production gross receipts--
                            ``(i) subsection (a)(1) shall be applied by 
                        substituting `12 percent' for `9 percent', and
                            ``(ii) subsection (b)(2)(B) shall be 
                        applied by substituting `domestic alternative 
                        energy production gross receipts' for `domestic 
                        production gross receipts'.
            ``(2) Domestic alternative energy production gross 
        receipts.--For purposes of this subsection, the term `domestic 
        alternative energy production gross receipts' means the gross 
        receipts of the taxpayer derived from the manufacturing of 
        qualifying production property which is--
                    ``(A) described in clause (i) of section 
                48C(c)(1)(A),
                    ``(B) qualified high efficiency transmission 
                property, or
                    ``(C) qualified advanced electric transmission 
                property.
            ``(3) Qualified high efficiency transmission property.--For 
        purposes of this subsection, the term `qualified high 
        efficiency transmission property' means any high voltage 
        overhead electric transmission line, related substation, or 
        other integrated facility that--
                    ``(A) utilizes advanced conductor core technology 
                that has been determined by the Secretary of Energy 
                as--
                            ``(i) reasonably likely to become 
                        commercially viable not later than the date 
                        which is 10 years after the date of the 
                        enactment of this subsection,
                            ``(ii) is suitable for use on transmission 
                        lines up to 765 kV, and
                            ``(iii) exhibits power losses at least 30 
                        percent lower than that of transmission lines 
                        using conventional ACSR conductors,
                    ``(B) has been determined by an appropriate energy 
                regulatory body, upon application, to be in the public 
                interest and thereby eligible for inclusion in 
                regulated rates, and
                    ``(C) can be located safely and economically in a 
                right of way not to exceed that used by conventional 
                ACSR conductors.
            ``(4) Qualified advanced electric transmission property.--
        For purposes of this subsection, the term `qualified advanced 
        electric transmission property' means any high voltage electric 
        transmission cable, related substation, converter station, or 
        other integrated facility that--
                    ``(A) utilizes advanced ultra low resistance 
                superconductive material or other advanced technology 
                that has been determined by the Secretary of Energy 
                as--
                            ``(i) reasonably likely to become 
                        commercially viable not later than the date 
                        which is 10 years after the date of the 
                        enactment of this subsection,
                            ``(ii) capable of reliably transmitting at 
                        least 5 gigawatts of high-voltage electric 
                        energy for distances greater than 300 miles 
                        with energy losses not exceeding 3 percent of 
                        the total power transported, and
                            ``(iii) not creating an electromagnetic 
                        field,
                    ``(B) has been determined by an appropriate energy 
                regulatory body, upon application, to be in the public 
                interest and thereby eligible for inclusion in 
                regulated rates, and
                    ``(C) can be located safely and economically in a 
                permanent underground right of way not to exceed 25 
                feet in width.
            ``(5) Related persons.--Rules similar to the rules of 
        subsection (c)(7) shall apply for purposes of this 
        subsection.''.
    (b) Regulations.--Not later than 120 days after the date of the 
enactment of this Act, the Secretary of the Treasury (or the 
Secretary's delegate) shall issue regulations with respect to a process 
for determining whether property is described in section 199(e)(2) of 
the Internal Revenue Code of 1986 for purposes of the deduction under 
section 199 of such Code.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2010.

                       TITLE II--RENEWABLE ENERGY

SEC. 201. ELECTIVE PAYMENT FOR SPECIFIED ENERGY PROPERTY.

    (a) Elective Payments.--
            (1) In general.--Subchapter C of chapter 65, as added by 
        section 101, is amended by adding at the end the following new 
        section:

``SEC. 6452. ELECTIVE PAYMENT FOR SPECIFIED ENERGY PROPERTY.

    ``(a) In General.--Any person electing the application of this 
section with respect to any specified energy property originally placed 
in service by such person during the taxable year shall be treated as 
making a payment against the tax imposed by subtitle A for the taxable 
year equal to the applicable percentage of the basis of such property. 
Such payment shall be treated as made on the later of the due date of 
the return of such tax or the date on which such return is filed.
    ``(b) Applicable Percentage.--For purposes of this section, the 
term `applicable percentage' means--
            ``(1) 30 percent in the case of any property described in 
        paragraph (2)(A)(i) or (5) of section 48(a), and
            ``(2) 10 percent in the case of any other property.
    ``(c) Dollar Limitations.--In the case of property described in 
paragraph (1), (2), or (3) of section 48(c), the payment otherwise 
treated as made under subsection (a) with respect to such property 
shall not exceed the limitation applicable to such property under such 
paragraph.
    ``(d) Specified Energy Property.--For purposes of this section--
            ``(1) In general.--The term `specified energy property' 
        means energy property (within the meaning of section 48) 
        which--
                    ``(A) is originally placed in service before 
                January 1, 2013, or
                    ``(B) is originally placed in service on or after 
                such date and before the credit termination date with 
                respect to such property, but only if the construction 
                of such property began before January 1, 2013.
            ``(2) Credit termination date.--The term `credit 
        termination date' means--
                    ``(A) in the case of any energy property which is 
                part of a facility described in paragraph (1) of 
                section 45(d), January 1, 2013,
                    ``(B) in the case of any energy property which is 
                part of a facility described in paragraph (2), (3), 
                (4), (6), (7), (9), or (11) of section 45(d), January 
                1, 2014, and
                    ``(C) in the case of any energy property described 
                in section 48(a)(3), January 1, 2017.
        In the case of any property which is described in subparagraph 
        (C) and also in another subparagraph of this paragraph, 
        subparagraph (C) shall apply with respect to such property.
    ``(e) Coordination With Production and Investment Credits.--In the 
case of any property with respect to which an election is made under 
this section--
            ``(1) Denial of production and investment credits.--No 
        credit shall be determined under section 45 or 48 with respect 
        to such property for the taxable year in which such property is 
        originally placed in service or any subsequent taxable year.
            ``(2) Reduction of payment by progress expenditures already 
        taken into account.--The amount of the payment treated as made 
        under subsection (a) with respect to such property shall be 
        reduced by the aggregate amount of credits determined under 
        section 48 with respect to such property for all taxable years 
        preceding the taxable year in which such property is originally 
        placed in service.
    ``(f) Special Rules for Certain Non-Taxpayers.--
            ``(1) Denial of payment.--Subsection (a) shall not apply 
        with respect to any property originally placed in service by--
                    ``(A) any governmental entity other than a 
                governmental unit which is a State utility with a 
                service obligation (as such terms are defined in 
                section 217 of the Federal Power Act), or
                    ``(B) any organization described in section 501(c) 
                (other than a mutual or cooperative electric company 
                described in section 501(c)(12)) or 401(a) and exempt 
                from tax under section 501(a).
            ``(2) Exception for property used in unrelated trade or 
        business.--Paragraph (1) shall not apply with respect to any 
        property originally placed in service by an entity described in 
        section 511(a)(2) if substantially all of the income derived 
        from such property by such entity is unrelated business taxable 
        income (as defined in section 512).
            ``(3) Special rules for partnerships and s corporations.--
        In the case of property originally placed in service by a 
        partnership or an S corporation--
                    ``(A) the election under subsection (a) may be made 
                only by such partnership or S corporation,
                    ``(B) such partnership or S corporation shall be 
                treated as making the payment referred to in subsection 
                (a) only to the extent of the proportionate share of 
                such partnership or S corporation as is owned by 
                persons who would be treated as making such payment if 
                the property were originally placed in service by such 
                persons, and
                    ``(C) the return required to be made by such 
                partnership or S corporation under section 6031 or 6037 
                (as the case may be) shall be treated as a return of 
                tax for purposes of subsection (a).
For purposes of subparagraph (B), rules similar to the rules of section 
168(h)(6) (other than subparagraph (F) thereof) shall apply. For 
purposes of applying such rules, the term `tax-exempt entity' shall not 
include any entity which is a governmental unit which is a State 
utility with a service obligation (as such terms are defined in section 
217 of the Federal Power Act) or which is a mutual or cooperative 
electric company described in section 501(c)(12).
    ``(g) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Other definitions.--Terms used in this section which 
        are also used in section 45 or 48 shall have the same meanings 
        for purposes of this section as when used in such sections.
            ``(2) Application of certain rules.--Rules similar to the 
        rules of subsection (e) of section 6451 shall apply for 
        purposes of this section.
            ``(3) Exception for certain projects.--Subsection (a) shall 
        not apply to any governmental unit or cooperative electric 
        company (as defined in section 54(j)(1)) with respect to any 
        specified energy property which is described in section 
        48(a)(5)(D) if such entity has issued any bond--
                    ``(A) which is designated as a clean renewable 
                energy bond under section 54 of the Internal Revenue 
                Code of 1986 or as a new clean renewable energy bond 
                under section 54C of such Code, and
                    ``(B) the proceeds of which are used for 
                expenditures in connection with the same qualified 
                facility with respect to which such specified energy 
                property is a part.
            ``(4) Coordination with grant program.--If a grant under 
        section 1603 of the American Recovery and Reinvestment Tax Act 
        of 2009 is made with respect to any specified energy property--
                    ``(A) no election may be made under subsection (a) 
                with respect to such property on or after the date of 
                such grant, and
                    ``(B) if such grant is made after such election, 
                such property shall be treated as having ceased to be 
                specified energy property immediately after such 
                property was originally placed in service.''.
            (2) Clerical amendment.--The table of sections for 
        subchapter C of chapter 65, as added by section 101, is amended 
        by adding at the end the following new item:

``Sec. 6452. Elective payment for specified energy property.''.
    (b) Treatment of Grants for Cooperative Electric Companies.--
Section 501(c)(12) is amended by adding at the end the following new 
subparagraph:
                    ``(I) In the case of a mutual or cooperative 
                electric company described in this paragraph or an 
                organization described in section 1381(a)(2)(C), 
                subparagraph (A) shall be applied without taking into 
                account any payment made by reason of section 6452.''.
    (c) Technical Amendments.--
            (1) Paragraphs (1) and (2) of section 1603(a) of the 
        American Recovery and Reinvestment Tax Act of 2009 are each 
        amended by striking ``is placed in service'' and inserting ``is 
        originally placed in service by such person''.
            (2) Paragraph (1) of section 1603(d) of such Act is 
        amended--
                    (A) by striking ``(within the meaning of section 45 
                of such Code)'', and
                    (B) by inserting before the period at the end the 
                following: ``which would (but for section 48(d)(1) of 
                such Code) be eligible for credit under section 45 of 
                such Code (determined without regard to subsection 
                (a)(2)(B) thereof)''.
            (3) Subsection (f) of section 1603 of such Act is amended--
                    (A) by striking the second sentence and inserting 
                the following: ``In applying such rules, any increase 
                in tax under chapter 1 of such Code by reason of the 
                property being disposed of (or otherwise ceasing to be 
                specified energy property) shall be imposed on the 
                person to whom the grant was made.'',
                    (B) by striking ``In making grants under'' and 
                inserting the following:
            ``(1) In general.--In making grants under'', and
                    (C) by adding at the end following new paragraph:
            ``(2) Special rules.--
                    ``(A) Recapture of excessive grant amounts.--If the 
                amount of a grant made under this section exceeds the 
                amount allowable as a grant under this section, such 
                excess shall be recaptured under paragraph (1) as if 
                the property to which such grant relates were disposed 
                of immediately after such grant was made.
                    ``(B) Grant information not treated as return 
                information.--For purposes of section 6103 of the 
                Internal Revenue Code of 1986, in no event shall any of 
                the following be treated as return information:
                            ``(i) The amount of a grant made under 
                        subsection (a).
                            ``(ii) The identity of the person to whom 
                        the grant was made.
                            ``(iii) A description of the property with 
                        respect to which the grant was made.
                            ``(iv) The fact and amount of any 
                        recapture.
                            ``(v) The content of any report required by 
                        the Secretary of the Treasury to be filed in 
                        connection with the grant.''.
            (4) Subsection (g) of section 1603 of such Act is amended--
                    (A) by redesignating paragraphs (1) through (4) as 
                subparagraphs (A) through (D), respectively,
                    (B) by moving such subparagraphs (as so 
                redesignated) 2 ems to the right,
                    (C) by striking ``paragraph (1), (2), or (3)'' in 
                subparagraph (D) (as so redesignated) and inserting 
                ``subparagraphs (A), (B), or (C)'',
                    (D) by striking ``The Secretary'' and inserting the 
                following:
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary'', and
                    (E) by adding at the end the following new 
                paragraph:
            ``(2) Exception where property used in unrelated trade or 
        business.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                any person or entity described therein to the extent 
                the grant is with respect to unrelated trade or 
                business property.
                    ``(B) Unrelated trade or business property.--For 
                purposes of this paragraph, the term `unrelated trade 
                or business property' means any property with respect 
                to which substantially all of the income derived 
                therefrom by an organization described in section 
                511(a)(2) of the Internal Revenue Code of 1986 is 
                subject to tax under section 511 of such Code.
                    ``(C) Information with respect to pass-thrus.--In 
                the case of a partnership or other pass-thru entity, 
                partners or other holders of an equity or profits 
                interest must provide to such partnership or entity 
                such information as the Secretary may require to carry 
                out the purposes of this subsection.''.
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to property 
        originally placed in service after the date of the enactment of 
        this Act.
            (2) Technical amendments.--The amendments made by 
        subsection (c) shall take effect as if included in section 1603 
        of the American Recovery and Reinvestment Tax Act of 2009.

SEC. 202. EXTENSION AND EXPANSION OF NEW CLEAN RENEWABLE ENERGY BONDS.

    (a) Increased Limitation on Issuance of New Clean Renewable Energy 
Bonds.--
            (1) In general.--Subsection (c) of section 54C is amended 
        by adding at the end the following new paragraph:
            ``(5) 2010 additional limitation.--The national new clean 
        renewable bond limitation shall be increased by $3,500,000,000. 
        Such increase shall be allocated by the Secretary as provided 
        in paragraph (3), except that--
                    ``(A) 60 percent thereof shall be allocated to 
                qualified projects of public power providers, and
                    ``(B) 40 percent thereof shall be allocated to 
                qualified projects of cooperative electric 
                companies.''.
            (2) Conforming amendment.--Paragraph (4) of section 54C(c) 
        is amended by striking ``Additional'' in the heading thereof 
        and inserting ``2009 additional''.
    (b) Energy Storage Systems and Biogas Property Made Eligible for 
Financing.--Paragraph (1) of section 54C(d) is amended by inserting 
``or an energy storage system used in connection with electric grids to 
support the use of intermittent sources of renewable energy'' before 
``owned by''.
    (c) Effective Date.--The amendments made by this subsection shall 
apply to obligations issued after the date of the enactment of this 
Act.

SEC. 203. INCREASED RESEARCH CREDIT FOR ENERGY RESEARCH.

    (a) In General.--Section 41 is amended by redesignating subsection 
(h) as subsection (i) and by inserting after subsection (g) the 
following new subsection:
    ``(h) Energy Research Credit.--In the case of any taxable year 
beginning in 2011 or 2012--
            ``(1) In general.--The amounts determined under paragraphs 
        (1) and (3) of subsection (a) shall each be increased by 10 
        percent of the qualified energy research expenses for the 
        taxable year.
            ``(2) Qualified energy research expenses.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `qualified energy 
                research expenses' means so much of the taxpayer's 
                qualified research expenses as are related to the 
                fields of fuel cells and battery technology, renewable 
                energy and renewable fuels, energy conservation 
                technology, efficient transmission and distribution of 
                electricity, and carbon capture and sequestration.
                    ``(B) Coordination with qualifying advanced energy 
                project credit.--Such term shall not include 
                expenditures taken into account in determining the 
                amount of the credit under section 48 or 48C.
            ``(3) Coordination with other research credits.--
                    ``(A) In general.--The amount of qualified energy 
                research expenses taken into account under subsection 
                (a)(1)(A) shall not exceed the base amount.
                    ``(B) Alternative simplified credit.--For purposes 
                of subsection (c)(5), the amount of qualified energy 
                research expenses taken into account for the taxable 
                year for which the credit is being determined shall not 
                exceed--
                            ``(i) in the case of subsection (c)(5)(A), 
                        50 percent of the average qualified research 
                        expenses for the 3 taxable years preceding the 
                        taxable year for which the credit is being 
                        determined, and
                            ``(ii) in the case of subsection 
                        (c)(5)(B)(ii), zero.
                    ``(C) Basic research and energy research consortium 
                payments.--Any amount taken into account under 
                paragraph (1) shall not be taken into account under 
                paragraph (2) or (3) of subsection (a).''.
    (b) Extension of Credit.--
            (1) In general.--Subparagraph (B) of section 41(h)(1) is 
        amended by striking ``December 31, 2009'' and inserting 
        ``December 31, 2012''.
            (2) Conforming amendment.--Subparagraph (D) of section 
        45C(b)(1) is amended by striking ``December 31, 2009'' and 
        inserting ``December 31, 2012''.
    (c) Effective Dates.--
            (1) Increased research credit.--The amendments made by 
        subsection (a) shall apply to taxable years beginning after 
        December 31, 2010.
            (2) Extension.--The amendments made by subsection (b) shall 
        apply to amounts paid or incurred after December 31, 2009.

                   TITLE III--PROMOTING CONSERVATION

SEC. 301. EXTENSION OF NEW ENERGY EFFICIENT HOME CREDIT.

    (a) In General.--Section 45L(g) is amended by striking ``December 
31, 2009'' and inserting ``December 31, 2012''.
    (b) Effective Date.--The amendment made by this section shall apply 
to qualified new efficient energy homes acquired after December 31, 
2009, in taxable years ending after such date.

SEC. 302. EXTENSION AND MODIFICATION OF NONBUSINESS ENERGY CREDIT.

    (a) Extension.--
            (1) In general.--Section 25C(g)(2) is amended by striking 
        ``December 31, 2010'' and inserting ``December 31, 2012''.
            (2) Limitation.--Section 25C(b) is amended by striking 
        ``2009 and 2010'' and inserting ``2009, 2010, 2011, and 2012''.
    (b) Modification of Standards for Windows, Doors, and Skylights.--
Paragraph (4) of section 25C(c) is amended by striking ``unless'' and 
all that follows and inserting ``unless--
                    ``(A) in the case of any component placed in 
                service after the date which is 90 days after the date 
                of the enactment of the Clean Energy Technology 
                Leadership Act of 2010, such component meets the 
                criteria for such components established by the 2010 
                Energy Star Program Requirements for Residential 
                Windows, Doors, and Skylights, Version 5.0 (or any 
                subsequent version of such requirements which is in 
                effect after January 4, 2010),
                    ``(B) in the case of any component placed in 
                service after the date of the enactment of the Clean 
                Energy Technology Leadership Act of 2010 and on or 
                before the date which is 90 days after such date, such 
                component meets the criteria described in subparagraph 
                (A) or is equal to or below a U factor of 0.30 and SHGC 
                of 0.30, and
                    ``(C) in the case of any component which is a 
                garage door, such component is equal to or below a U 
                factor of 0.30 and SHGC of 0.30.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 303. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

    (a) Certified Historic Structures.--Section 179D is amended by 
redesignating subsection (g) as subsection (h) and by inserting after 
subsection (f) the following new subsection:
    ``(g) Special Rules for Certified Historic Structures.--In the case 
of energy efficient commercial building property installed on or in a 
certified historic structure (as defined in section 47(c)(3)) in 
connection with a certified rehabilitation (as defined in section 
47(c)(2)(C))--
            ``(1) subsection (c)(1)(D) shall be applied by substituting 
        `30 percent' for `50 percent',
            ``(2) subsection (b)(1)(A) shall be applied by substituting 
        `$3.00' for `$1.80',
            ``(3) subparagraphs (A) and (C)(i) of subsection (d)(1) 
        shall be applied by substituting `$1.00' for `$.60' and the 
        substitutions described in such subparagraphs shall be made 
        without regard to the substitution described in paragraph (2), 
        and
            ``(4) the amount of any credit under section 47 with 
        respect to such property shall be determined without regard to 
        any reduction in the basis of such property under subsection 
        (e).''.
    (b) Energy Efficient Roofs.--Paragraph (1) of section 179D(d) is 
amended by adding at the end the following new subparagraph:
                    ``(C) Special rule for energy efficient roofs.--
                            ``(i) In general.--If--
                                    ``(I) the building envelope is not 
                                treated as meeting the requirements of 
                                subsection (c)(1)(D) under subparagraph 
                                (A) of this paragraph, but
                                    ``(II) the roof exceeds the minimum 
                                requirements of Standard 90.1-2001 by 
                                50 percent or more,
                        then the requirement of subsection (c)(1)(D) 
                        shall be treated as met with respect to the 
                        roof, and the deduction under subsection (a) 
                        shall be allowed with respect to energy 
                        efficient commercial building property 
                        installed as part of such roof, except that 
                        subsection (b) shall be applied to such 
                        property by substituting `the applicable 
                        percentage of $.60' for `$1.80'.
                            ``(ii) Applicable percentage.--For purposes 
                        of this subparagraph, the term `applicable 
                        percentage' means the ratio (expressed as a 
                        percentage) of--
                                    ``(I) the square footage of the 
                                roof, over
                                    ``(II) the square footage of the 
                                building envelope.''.
    (c) Effective Date.--The amendment made by this section shall apply 
to property placed in service after the date of the enactment of this 
Act.

                        TITLE IV--TRANSPORTATION

SEC. 401. CREDIT FOR QUALIFIED NATURAL GAS MOTOR VEHICLES.

    (a) In General.--
            (1) In general.--Subsection (e) of section 30B (relating to 
        new qualified alternative fuel motor vehicle credit) is amended 
        by adding at the end the following new paragraphs:
            ``(6) Special rules for qualified natural gas motor 
        vehicles.--
                    ``(A) In general.--In the case of a qualified 
                natural gas motor vehicle--
                            ``(i) such motor vehicle shall be treated 
                        as a new qualified alternative fuel motor 
                        vehicle under this subsection,
                            ``(ii) paragraph (3) shall be applied by 
                        multiplying each of the dollar amounts 
                        contained in such paragraph by 2, and
                            ``(iii) the credit allowed under this 
                        subsection shall be transferrable as provided 
                        in subparagraph (B).
                    ``(B) Transferability of credit.--
                            ``(i) In general.--A taxpayer who places in 
                        service qualified natural gas motor vehicle may 
                        transfer the credit allowed under this 
                        subsection with respect to such vehicle through 
                        an assignment to the seller, the manufacturer, 
                        or the lessee of such vehicle. Such transfer 
                        may be revoked only with the consent of the 
                        Secretary.
                            ``(ii) Regulations.--The Secretary shall 
                        prescribe such regulations as necessary to 
                        ensure that any credit transferred under clause 
                        (i) is claimed once and not reassigned by such 
                        other person.
            ``(7) Qualified natural gas motor vehicle.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `qualified natural gas motor vehicle' means 
                any motor vehicle--
                            ``(i) which is described in subparagraph 
                        (B), (C), or (D),
                            ``(ii) the original use of which commences 
                        with the taxpayer, and
                            ``(iii) which is acquired by the taxpayer 
                        for use or lease, but not for resale.
                    ``(B) Heavy duty vehicles.--A motor vehicle is 
                described in this subparagraph if such motor vehicle--
                            ``(i) is made by a manufacturer,
                            ``(ii) has a gross vehicle weight rating of 
                        more than 8,500 pounds, and
                            ``(iii) is--
                                    ``(I) only capable of operating on 
                                compressed or liquified natural gas, or
                                    ``(II) capable of operating for 
                                more than 175 miles on 1 fueling of 
                                compressed or liquified natural gas and 
                                is capable of operating on gasoline or 
                                diesel fuel.
                    ``(C) Light and medium duty vehicles.--A motor 
                vehicle is described in this subparagraph if such motor 
                vehicle--
                            ``(i) is made by a manufacturer,
                            ``(ii) has a gross vehicle weight rating of 
                        not more 8,500 pounds,
                            ``(iii) is--
                                    ``(I) only capable of operating on 
                                compressed or liquified natural gas, or
                                    ``(II) capable of operating for 
                                more than 175 miles on 1 fueling of 
                                compressed or liquified natural gas and 
                                is capable of operating on gasoline or 
                                diesel fuel,
                            ``(iv) is of a character subject to 
                        depreciation, and
                            ``(v) is acquired by a taxpayer who--
                                    ``(I) owns and operates not less 
                                than 10 motor vehicles in the course of 
                                a trade or business at the time of the 
                                acquisition, and
                                    ``(II) has placed in service more 
                                than 2 motor vehicles described in 
                                clauses (i) through (iv) or described 
                                in subparagraph (D)(iii) after the date 
                                of the enactment of this paragraph.
                    ``(D) Converted or repowered vehicles.--
                            ``(i) In general.--A motor vehicle is 
                        described in this subparagraph if such motor 
                        vehicle is a motor vehicle described in clause 
                        (ii) or clause (iii) which is converted or 
                        repowered so that it--
                                    ``(I) is only capable of operating 
                                on compressed or liquified natural gas, 
                                or
                                    ``(II) is capable of operating for 
                                more than 175 miles on 1 fueling of 
                                compressed or liquified natural gas and 
                                is capable of operating on gasoline or 
                                diesel fuel, is capable of operating on 
                                compressed or liquefied natural gas.
                            ``(ii) Heavy duty vehicles.--A motor 
                        vehicle is described in this clause if such 
                        motor vehicle--
                                    ``(I) has a gross vehicle weight 
                                rating of more than 8,500 pounds, and
                                    ``(II) was not capable of operating 
                                on compressed or liquified natural gas 
                                before the date of such conversion or 
                                repower.
                            ``(iii) Light and medium duty vehicles.--A 
                        motor vehicle is described in this clause if 
                        such motor vehicle--
                                    ``(I) has a gross vehicle weight 
                                rating of not more 8,500 pounds,
                                    ``(II) was not capable of operating 
                                on compressed or liquified natural gas 
                                before the date of such conversion or 
                                repower,
                                    ``(III) is of a character subject 
                                to depreciation,
                                    ``(IV) is acquired by a taxpayer 
                                who owns and operates not less than 10 
                                motor vehicles in the course of a trade 
                                or business at the time of the 
                                acquisition, and
                                    ``(V) is acquired by a taxpayer who 
                                has placed in service more than 2 motor 
                                vehicles described in subclauses (I) 
                                through (III) or described in 
                                subparagraph (C) after the date of the 
                                enactment of this paragraph.
                            ``(iv) Special rules.--
                                    ``(I) Treatment as new.--For 
                                purposes of this subsection, the 
                                original use of any motor vehicle 
                                described in clause (i) shall be 
                                treated as beginning with the first use 
                                after the date of the conversion or 
                                repower.
                                    ``(II) Rule of construction.--In 
                                the case of a used vehicle which is 
                                converted or repowered, nothing in this 
                                section shall be construed to require 
                                that the motor vehicle be acquired in 
                                the year the credit is claimed under 
                                this section with respect to such 
                                vehicle.
                    ``(E) Special rule.--For purposes of this 
                subsection, in the case of a motor vehicle which--
                            ``(i) is described in subparagraph (C) or 
                        (D)(iii),
                            ``(ii) is placed in service after the date 
                        of the enactment of this paragraph, and
                            ``(iii) is placed in service by a taxpayer 
                        in a taxable year prior to the taxable year in 
                        which such taxpayer places in service the third 
                        such motor vehicle described in subparagraph 
                        (C) or (D)(iii) after such date of enactment.
                Such motor vehicle shall be treated as placed in 
                service in the taxable year in which such third motor 
                vehicle is placed in service.''.
            (2) Conforming amendment.--Subparagraph (B) of section 
        30B(e)(5) is amended by inserting ``(other than a qualified 
        natural gas motor vehicle)'' after ``paragraph (3)''.
    (b) Mixed-Fuel Vehicles.--Subparagraph (C) of section 30B(e)(5) is 
amended by striking ``a mixed-fuel vehicle which operates using'' and 
all that follows and inserting ``a mixed-fuel vehicle which--
                            ``(i) in the case of such a vehicle which 
                        is capable of operating on compressed or 
                        liquified natural gas, operates using at least 
                        65 percent compressed or liquified natural gas 
                        and not more than 35 percent petroleum-based 
                        fuel, and
                            ``(ii) in the case of any other such 
                        vehicle, operates using at least 75 percent 
                        alternative fuel and not more than 25 percent 
                        petroleum-based fuel.''.
    (c) Extension of Credit.--Paragraph (4) of section 30B(k) is 
amended to read as follows:
            ``(4) in the case of--
                    ``(A) a new qualified alternative fuel vehicle (as 
                described in subsection (e)) which is a qualified 
                natural gas motor vehicle (as described in subsection 
                (e)(7)), December 31, 2014, and
                    ``(B) in the case of any other new qualified 
                alternative fuel vehicle (as described in subsection 
                (e)), December 31, 2010.''.
    (d) Alternative Minimum Tax Treatment.--Subparagraph (B) of section 
38(c)(4) is amended by redesignating clauses (i) through (ix) as 
clauses (ii) through (x), respectively, and by inserting after before 
clause (ii) (as so redesignated) the following new clause:
                            ``(i) the amount of the credit determined 
                        under section 30B which is attributable to a 
                        qualified natural gas motor vehicle (as defined 
                        in section 30B(e)(7)).''.
    (e) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

SEC. 402. NATURAL GAS VEHICLE BONDS.

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

``SEC. 54G. NATURAL GAS VEHICLE BONDS.

    ``(a) Natural Gas Vehicle Bond.--For purposes of this subpart, the 
term `natural gas vehicle bond' means any bond issued as part of an 
issue if--
            ``(1) 100 percent of the available project proceeds of such 
        issue are to be used for capital expenditures incurred by a 
        governmental body for 1 or more qualified natural gas vehicle 
        projects placed in service by such governmental body primarily 
        for governmental or public use,
            ``(2) the bond is issued by a governmental body,
            ``(3) the issuer designates such bond for purposes of this 
        section, and
            ``(4) in lieu of the requirements of section 54A(d)(2), the 
        issue meets the requirements of subsection (c).
    ``(b) Limitation on Amount of Bonds Designated.--
            ``(1) In general.--The maximum aggregate face amount of 
        bonds which may be designated under subsection (a) by any 
        issuer shall not exceed the limitation amount allocated under 
        this subsection to such issuer.
            ``(2) National limitation on amount of bonds designated.--
        There is a national natural gas vehicle bond limitation of 
        $3,000,000,000.
            ``(3) Allocation by secretary.--The Secretary shall 
        allocate the amount described in paragraph (2) among qualified 
        natural gas vehicle projects in such manner as the Secretary 
        determines appropriate.
    ``(c) Special Rules Relating to Expenditures.--
            ``(1) In general.--An issue shall be treated as meeting the 
        requirements of this subsection if, as of the date of issuance, 
        the issuer reasonably expects--
                    ``(A) 100 percent or more of the available project 
                proceeds of such issue are to be spent for 1 or more 
                qualified natural gas vehicle projects within the 5-
                year period beginning on the date of issuance of the 
                natural gas vehicle bond,
                    ``(B) a binding commitment with a third party to 
                spend at least 10 percent of such available project 
                proceeds will be incurred within the 6-month period 
                beginning on the date of issuance of the natural gas 
                vehicle bond, and
                    ``(C) such projects will be completed with due 
                diligence and such available project proceeds will be 
                spent with due diligence.
            ``(2) Extension of period.--Upon submission of a request 
        prior to the expiration of the period described in paragraph 
        (1)(A), the Secretary may extend such period if the issuer 
        establishes that the failure to satisfy the 5-year requirement 
        is due to reasonable cause and the related projects will 
        continue to proceed with due diligence.
            ``(3) Failure to spend required amount of bond proceeds 
        within 5 years.--To the extent that less than 100 percent of 
        the available project proceeds of such issue are expended by 
        the close of the 5-year period beginning on the date of 
        issuance (or if an extension has been obtained under paragraph 
        (2), by the close of the extended period), the issuer shall 
        redeem all of the nonqualified bonds within 90 days after the 
        end of such period. For purposes of this paragraph, the amount 
        of the nonqualified bonds required to be redeemed shall be 
        determined in the same manner as under section 142.
    ``(d) Governmental Body.--For purposes of this section, the term 
`governmental body' means any State, territory, possession of the 
United States, the District of Columbia, Indian tribal government, and 
any political subdivision thereof.
    ``(e) Qualified Natural Gas Vehicle Project.--For purposes of this 
subpart, the term `qualified natural gas vehicle project' means--
            ``(1) 1 or more qualified natural gas vehicles (as defined 
        in section 30B(e)(7)), or
            ``(2) 1 or more qualified alternative fuel vehicle 
        refueling properties which are used to store and or dispense 
        compressed or liquefied natural gas (within the meaning of 
        section 30C(c)).
    ``(f) Termination.--This section shall not apply with respect to 
any bond issued after December 31, 2019.''.
    (b) Conforming Amendments.--
            (1) Paragraph (1) of section 54A(d) is amended by striking 
        ``or'' at the end of subparagraph (D), by inserting ``or'' at 
        the end of subparagraph (E), and by inserting after 
        subparagraph (E) the following new subparagraph:
                    ``(F) a natural gas vehicle bond,''.
            (2) Subparagraph (C) of section 54A(d)(2) is amended by 
        striking ``and'' at the end of clause (iv), by striking the 
        period at the end of clause (v) and inserting ``, and'', and by 
        adding at the end the following new clause:
                            ``(vi) in the case of a natural gas vehicle 
                        bond, a purpose specified in section 
                        54G(a)(1).''.
    (c) Clerical Amendment.--The table of sections for subpart I of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following new item:

``Sec. 54G. Natural gas vehicle bonds.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of the enactment of this Act.

SEC. 403. INCENTIVES FOR MANUFACTURING FACILITIES PRODUCING VEHICLES 
              FUELED BY COMPRESSED OR LIQUIFIED NATURAL GAS.

    (a) Deduction for Manufacturing Facilities.--Part VI of subchapter 
B of chapter 1 (relating to itemized deductions for individuals and 
corporations) is amended by inserting after section 179E the following 
new section:

``SEC. 179F. EXPENSING FOR MANUFACTURING FACILITIES PRODUCING VEHICLES 
              FUELED BY COMPRESSED NATURAL GAS OR LIQUIFIED NATURAL 
              GAS.

    ``(a) Treatment as Expenses.--A taxpayer may elect to treat the 
applicable percentage of the cost of any qualified natural gas vehicle 
manufacturing facility property as an expense which is not chargeable 
to a capital account. Any cost so treated shall be allowed as a 
deduction for the taxable year in which the qualified manufacturing 
facility property is placed in service.
    ``(b) Applicable Percentage.--For purposes of subsection (a), the 
applicable percentage is--
            ``(1) 100 percent, in the case of qualified natural gas 
        vehicle manufacturing facility property which is placed in 
        service before January 1, 2013, and
            ``(2) 50 percent, in the case of qualified natural gas 
        vehicle manufacturing facility property which is placed in 
        service after December 31, 2012, and before January 1, 2015.
    ``(c) Election.--
            ``(1) In general.--An election under this section for any 
        taxable year shall be made on the taxpayer's return of the tax 
        imposed by this chapter for the taxable year. Such election 
        shall be made in such manner as the Secretary may by 
        regulations prescribe.
            ``(2) Election irrevocable.--Any election made under this 
        section may not be revoked except with the consent of the 
        Secretary.
    ``(d) Qualified Natural Gas Vehicle Manufacturing Facility 
Property.--For purposes of this section--
            ``(1) In general.--The term `qualified natural gas vehicle 
        manufacturing facility property' means any qualified property--
                    ``(A) the original use of which commences with the 
                taxpayer,
                    ``(B) which is placed in service by the taxpayer 
                after the date of the enactment of this section and 
                before January 1, 2015, and
                    ``(C) no written binding contract for the 
                construction of which was in effect on or before the 
                date of the enactment of this section.
            ``(2) Qualified property.--
                    ``(A) In general.--The term `qualified property' 
                means any property which is a facility or a portion of 
                a facility used for the production of--
                            ``(i) any qualified natural gas vehicles 
                        (as defined in section 30B(e)(7)), or
                            ``(ii) any eligible component.
                    ``(B) Eligible component.--The term `eligible 
                component' means any component which is designed 
                specifically for use in such a qualified natural gas 
                vehicle.
    ``(e) Special Rule for Dual Use Property.--
            ``(1) In general.--In the case of any qualified natural gas 
        vehicle manufacturing facility property which is used to 
        produce both property described in clauses (i) and (ii) of 
        subsection (d)(2)(A) and property which is not so described, 
        the amount of costs taken into account under subsection (a) 
        shall be reduced by an amount equal to--
                    ``(A) the total amount of such costs (determined 
                before the application of this subsection), multiplied 
                by
                    ``(B) the percentage of property expected to be 
                produced which is not so described.
            ``(2) Regulations.--The Secretary shall prescribe such 
        regulations as are necessary to carry out the purpose of this 
        subsection.''.
    (b) Refund of Credit for Prior Year Minimum Tax Liability.--Section 
53 (relating to credit for prior year minimum tax liability) is amended 
by adding at the end the following new subsection:
    ``(g) Election To Treat Amounts Attributable to Qualified 
Manufacturing Facility.--
            ``(1) In general.--In the case of an eligible taxpayer, the 
        amount determined under subsection (c) for the taxable year 
        (after the application of subsection (e)) shall be increased by 
        an amount equal to the applicable percentage of any qualified 
        natural gas vehicle manufacturing facility property which is 
        placed in service during the taxable year.
            ``(2) Applicable percentage.--For purposes of paragraph 
        (1), the applicable percentage is--
                    ``(A) 35 percent, in the case of qualified natural 
                gas vehicle manufacturing facility property which is 
                placed in service before January 1, 2013, and
                    ``(B) 17.5 percent, in the case of qualified 
                natural gas vehicle manufacturing facility property 
                which is placed in service after December 31, 2012, and 
                before January 1, 2015.
            ``(3) Eligible taxpayer.--For purposes of this subsection, 
        the term `eligible taxpayer' means any taxpayer--
                    ``(A) who places in service qualified natural gas 
                vehicle manufacturing facility property during the 
                taxable year,
                    ``(B) who does not make an election under section 
                179F(c), and
                    ``(C) who makes an election under this subsection.
            ``(4) Other definitions and special rules.--
                    ``(A) Qualified natural gas vehicle manufacturing 
                facility property.--The term `qualified natural gas 
                vehicle manufacturing facility property' has the 
                meaning given such term under section 179F(d).
                    ``(B) Special rule for dual use property.--In the 
                case of any qualified natural gas vehicle manufacturing 
                facility property which is used to produce both 
                qualified property (as defined in section 179F(d)) and 
                other property which is not qualified property, the 
                amount of costs taken into account under paragraph (1) 
                shall be reduced by an amount equal to--
                            ``(i) the total amount of such costs 
                        (determined before the application of this 
                        subparagraph), multiplied by
                            ``(ii) the percentage of property expected 
                        to be produced which is not qualified property.
                    ``(C) Election.--
                            ``(i) In general.--An election under this 
                        subsection for any taxable year shall be made 
                        on the taxpayer's return of the tax imposed by 
                        this chapter for the taxable year. Such 
                        election shall be made in such manner as the 
                        Secretary may by regulations prescribe.
                            ``(ii) Election irrevocable.--Any election 
                        made under this subsection may not be revoked 
                        except with the consent of the Secretary.
            ``(5) Credit refundable.--For purposes of this title (other 
        than this section), the credit allowed by reason of this 
        subsection shall be treated as if it were allowed under subpart 
        C.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 404. TRANSPORTATION FRINGE BENEFITS.

    (a) Extension of Parity for Mass Transit Fringe Benefits.--
Paragraph (2) of section 132(f) is amended by striking ``January 1, 
2011'' in the last sentence and inserting ``January 1, 2013''.
    (b) Coordination of Qualified Bicycle Commuting Reimbursements With 
Other Transportation Fringe Benefits.--
            (1) In general.--Clause (ii) of section 132(f)(5)(F) is 
        amended to read as follows:
                            ``(ii) Applicable annual limitation.--The 
                        term `applicable annual limitation' means, with 
                        respect to any employee for any calendar year, 
                        the lesser of--
                                    ``(I) the product of $20 multiplied 
                                by the number of qualified bicycle 
                                commuting months during such year, or
                                    ``(II) the excess (if any) of the 
                                product of 12 multiplied by the dollar 
                                amount in effect under paragraph (2)(A) 
                                for the first month during such year, 
                                over the aggregate of the benefits 
                                described in subparagraphs (A) and (B) 
                                of paragraph (1) excluded from gross 
                                income under subsection (a) with 
                                respect to months during such year.''.
            (2) Conforming amendment.--Subclause (II) of section 
        132(f)(5)(F)(iii) is amended by striking ``subparagraph (A), 
        (B), or (C) of paragraph (1)'' and inserting ``paragraph 
        (1)(C)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to months beginning after December 31, 2010.

SEC. 405. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY.

    (a) Extension of Credit.--Subsection (g) of section 30C is amended 
by striking ``placed in service'' and all that follows and inserting 
``placed in service after December 31, 2014.''.
    (b) Extension of Increased Credit Limitations.--Paragraph (6) of 
section 30C(e) is amended--
            (1) by striking ``January 1, 2011'' and inserting ``January 
        1, 2014'', and
            (2) by striking ``and 2010'' in the heading and inserting 
        ``thru 2013''.
    (c) Extension of Credit to Refueling of Non-Highway Hydrogen Fuel 
Cell Vehicles.--Subsection (c) of section 30C is amended by striking 
``and'' at the end of paragraph (1), by redesignating paragraph (2) as 
paragraph (3), and by inserting after paragraph (1) the following new 
paragraph:
            ``(2) in the case of a vehicle propelled by a fuel cell 
        power plant (as defined in section 48(c)(1)(C)) which converts 
        hydrogen into electricity, the term `motor vehicle' includes 
        any vehicle which is not operated exclusively on rails and the 
        primary purpose of which is other than the transport of 
        passengers, and''.
    (d) Clarification of Definition of Electric Refueling Property.--
Subparagraph (B) of section 179A(d)(3) is amended to read as follows:
                    ``(B) exclusively used for the recharging of motor 
                vehicles propelled by electricity (other than property 
                used for the generation of electricity).''.
    (e) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

                       TITLE V--ALTERNATIVE FUELS

SEC. 501. EXTENSION OF INCENTIVES FOR BIODIESEL AND RENEWABLE DIESEL.

    (a) Credits for Biodiesel and Renewable Diesel Used as Fuel.--
Subsection (g) of section 40A is amended by striking ``December 31, 
2009'' and inserting ``December 31, 2012''.
    (b) Excise Tax Credits and Outlay Payments for Biodiesel and 
Renewable Diesel Fuel Mixtures.--
            (1) Paragraph (6) of section 6426(c) is amended by striking 
        ``December 31, 2009'' and inserting ``December 31, 2012''.
            (2) Subparagraph (B) of section 6427(e)(6) is amended by 
        striking ``December 31, 2009'' and inserting ``December 31, 
        2012''.
    (c) Effective Date.--The amendments made by this section shall 
apply to fuel sold or used after December 31, 2009.

SEC. 502. INCLUSION OF ALGAE-BASED BIOFUEL IN DEFINITION OF CELLULOSIC 
              BIOFUEL.

    (a) Cellulosic Biofuel Producer Credit.--
            (1) General rule.--Paragraph (4) of section 40(a) is 
        amended by inserting ``and algae-based'' after ``cellulosic''.
            (2) Definitions.--Paragraph (6) of section 40(b) is 
        amended--
                    (A) by inserting ``and algae-based'' after 
                ``Cellulosic'' in the heading,
                    (B) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) In general.--The cellulosic and algae-based 
                biofuel producer credit of any taxpayer is an amount 
                equal to the applicable amount for each gallon of--
                            ``(i) qualified cellulosic biofuel 
                        production, and
                            ``(ii) qualified algae-based biofuel 
                        production.'',
                    (C) by redesignating subparagraphs (F), (G), and 
                (H) as subparagraphs (I), (J), and (K), respectively,
                    (D) by inserting ``and algae-based'' after 
                ``cellulosic'' in the heading of subparagraph (I), as 
                so redesignated,
                    (E) by inserting ``or algae-based biofuel, 
                whichever is appropriate,'' after ``cellulosic 
                biofuel'' in subparagraph (J), as so redesignated,
                    (F) by inserting ``and qualified algae-based 
                biofuel production'' after ``qualified cellulosic 
                biofuel production'' in subparagraph (K), as so 
                redesignated, and
                    (G) by inserting after subparagraph (E) the 
                following new subparagraphs:
                    ``(F) Qualified algae-based biofuel production.--
                For purposes of this section, the term `qualified 
                algae-based biofuel production' means any algae-based 
                biofuel which is produced by the taxpayer, and which 
                during the taxable year--
                            ``(i) is sold by the taxpayer to another 
                        person--
                                    ``(I) for use by such other person 
                                in the production of a qualified algae-
                                based biofuel mixture in such other 
                                person's trade or business (other than 
                                casual off-farm production),
                                    ``(II) for use by such other person 
                                as a fuel in a trade or business, or
                                    ``(III) who sells such algae-based 
                                biofuel at retail to another person and 
                                places such algae-based biofuel in the 
                                fuel tank of such other person, or
                            ``(ii) is used or sold by the taxpayer for 
                        any purpose described in clause (i).
                The qualified algae-based biofuel 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.
                    ``(G) Qualified algae-based biofuel mixture.--For 
                purposes of this paragraph, the term `qualified algae-
                based biofuel mixture' means a mixture of algae-based 
                biofuel and gasoline or of algae-based biofuel and a 
                special fuel which--
                            ``(i) is sold by the person producing such 
                        mixture to any person for use as a fuel, or
                            ``(ii) is used as a fuel by the person 
                        producing such mixture.
                    ``(H) Algae-based biofuel.--For purposes of this 
                paragraph--
                            ``(i) In general.--The term `algae-based 
                        biofuel' means any liquid fuel, including 
                        gasoline, diesel, aviation fuel, and ethanol, 
                        which--
                                    ``(I) is produced from the biomass 
                                of, or is directly secreted by, algal 
                                organisms, and
                                    ``(II) meets the registration 
                                requirements for fuels and fuel 
                                additives established by the 
                                Environmental Protection Agency under 
                                section 211 of the Clean Air Act (42 
                                U.S.C. 7545).
                            ``(ii) Algal organism.--The term `algal 
                        organism' means a single- or multi-cellular 
                        organism which is primarily aquatic and 
                        classified as a non-vascular plant, including 
                        microalgae, blue-green algae (cyanobacteria), 
                        and macroalgae (seaweeds).
                            ``(iii) Exclusion of low-proof alcohol.--
                        Such term shall not include any alcohol with a 
                        proof of less than 150. The determination of 
                        the proof of any alcohol shall be made without 
                        regard to any added denaturants.''.
            (3) Conforming amendments.--
                    (A) Subparagraph (D) of section 40(d)(3) is 
                amended--
                            (i) by inserting ``and algae-based'' after 
                        ``cellulosic'' in the heading,
                            (ii) by inserting ``or (b)(6)(F)'' after 
                        ``(b)(6)(C)'' in clause (ii), and
                            (iii) by inserting ``or algae-based'' after 
                        ``such cellulosic''.
                    (B) Paragraph (6) of section 40(d) is amended--
                            (i) by inserting ``and algae-based'' after 
                        ``cellulosic'' in the heading, and
                            (ii) by striking the first sentence and 
                        inserting ``No cellulosic and algae-based 
                        biofuel producer credit shall be determined 
                        under subsection (a) with respect to any 
                        cellulosic or algae-based biofuel unless such 
                        cellulosic or algae-based biofuel is produced 
                        in the United States and used as a fuel in the 
                        United States.''
                    (C) Paragraph (3) of section 40(e) is amended by 
                inserting ``and algae-based'' after ``cellulosic'' in 
                the heading.
                    (D) Paragraph (1) of section 4101(a) is amended--
                            (i) by inserting ``or algae-based'' after 
                        ``cellulosic'', and
                            (ii) by inserting ``and 40(b)(6)(H), 
                        respectively'' after ``section 40(b)(6)(E)''.
    (b) Special Allowance for Cellulosic Biofuel Plant Property.--
Subsection (l) of section 168 is amended--
            (1) by inserting ``and Algae-Based'' after ``Cellulosic'' 
        in the heading,
            (2) by inserting ``and any qualified algae-based biofuel 
        plant property'' after ``qualified cellulosic biofuel plant 
        property'' in paragraph (1),
            (3) by redesignating paragraphs (4) through (8) as 
        paragraphs (6) through (10), respectively,
            (4) by inserting ``or qualified algae-based biofuel plant 
        property'' after ``cellulosic biofuel plant property'' in 
        paragraph (7)(C), as so redesignated,
            (5) by striking ``with respect to'' and all that follows in 
        paragraph (9), as so redesignated, and inserting ``with respect 
        to any qualified cellulosic biofuel plant property and any 
        qualified algae-based biofuel plant property which ceases to be 
        such qualified property.'',
            (6) by inserting ``or qualified algae-based biofuel plant 
        property'' after ``cellulosic biofuel plant property'' in 
        paragraph (10), as so redesignated, and
            (7) by inserting after paragraph (3) the following new 
        paragraphs:
            ``(4) Qualified algae-based biofuel plant property.--The 
        term `qualified algae-based biofuel plant property' means 
        property of a character subject to the allowance for 
        depreciation--
                    ``(A) which is used in the United States solely to 
                produce algae-based biofuel,
                    ``(B) the original use of which commences with the 
                taxpayer after the date of the enactment of this 
                paragraph,
                    ``(C) which is acquired by the taxpayer by purchase 
                (as defined in section 179(d)) after the date of the 
                enactment of this paragraph, but only if no written 
                binding contract for the acquisition was in effect on 
                or before such date, and
                    ``(D) which is placed in service by the taxpayer 
                before January 1, 2013.
            ``(5) Algae-based biofuel.--
                    ``(A) In general.--The term `algae-based biofuel' 
                means any liquid fuel which is produced from the 
                biomass of algal organisms.
                    ``(B) Algal organism.--The term `algal organism' 
                means a single- or multi-cellular organism which is 
                primarily aquatic and classified as a non-vascular 
                plant, including microalgae, blue-green algae 
                (cyanobacteria), and macroalgae (seaweeds).''.
    (c) Effective Dates.--
            (1) Cellulosic biofuel producer credit.--The amendments 
        made by subsection (a) shall apply to fuel produced after the 
        date of the enactment of this Act.
            (2) Special allowance for cellulosic biofuel plant 
        property.--The amendments made by subsection (b) shall apply to 
        property purchased and placed in service after the date of the 
        enactment of this Act.

                       TITLE VI--OTHER PROVISIONS

SEC. 601. REPORT ON THE UTILIZATION OF TAX INCENTIVES.

    (a) In General.--Not later than January 1, 2013, the Comptroller 
General of the United States shall submit a report to the Committee on 
Ways and Means of the House of Representatives and the Committee on 
Finance of the Senate evaluating all temporary and permanent energy tax 
incentives in effect on the date of the report.
    (b) Contents of Report.--The report shall--
            (1) assess whether and to what extent each such tax 
        incentive is being utilized, and
            (2) contain recommendations regarding each such tax 
        incentive and whether such tax incentive should be terminated, 
        extended, or modified to achieve the purposes of the this Act.
                                 <all>