[Congressional Record Volume 154, Number 84 (Wednesday, May 21, 2008)]
[House]
[Pages H4349-H4401]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
RENEWABLE ENERGY AND JOB CREATION ACT OF 2008
Mr. RANGEL. Mr. Speaker, pursuant to House Resolution 1212, I call up
the bill (H.R. 6049) to amend the Internal Revenue Code of 1986 to
provide incentives for energy production and conservation, to extend
certain expiring provisions, to provide individual income tax relief,
and for other purposes, and ask for its immediate consideration.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 6049
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 ``Energy and
Tax Extenders Act of 2008''.
(b) Reference.--Except as otherwise expressly provided,
whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other
provision, the reference shall be considered to be made to a
section or other provision of the Internal Revenue Code of
1986.
(c) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title, etc.
TITLE I--ENERGY TAX INCENTIVES
Subtitle A--Energy Production Incentives
Part I--Renewable Energy Incentives
Sec. 101. Renewable energy credit.
[[Page H4350]]
Sec. 102. Production credit for electricity produced from marine
renewables.
Sec. 103. Energy credit.
Sec. 104. Credit for residential energy efficient property.
Sec. 105. Special rule to implement FERC and State electric
restructuring policy.
Sec. 106. New clean renewable energy bonds.
Part II--Carbon Mitigation Provisions
Sec. 111. Expansion and modification of advanced coal project
investment credit.
Sec. 112. Expansion and modification of coal gasification investment
credit.
Sec. 113. Temporary increase in coal excise tax.
Sec. 114. Special rules for refund of the coal excise tax to certain
coal producers and exporters.
Sec. 115. Carbon audit of the tax code.
Subtitle B--Transportation and Domestic Fuel Security Provisions
Sec. 121. Credit for production of cellulosic biofuel.
Sec. 122. Inclusion of cellulosic biofuel in bonus depreciation for
biomass ethanol plant property.
Sec. 123. Credits for biodiesel and renewable diesel.
Sec. 124. Modification of alcohol credit.
Sec. 125. Calculation of volume of alcohol for fuel credits.
Sec. 126. Clarification that credits for fuel are designed to provide
an incentive for United States production.
Sec. 127. Credit for new qualified plug-in electric drive motor
vehicles.
Sec. 128. Exclusion from heavy truck tax for idling reduction units and
advanced insulation.
Sec. 129. Restructuring of New York Liberty Zone tax credits.
Sec. 130. Transportation fringe benefit to bicycle commuters.
Sec. 131. Alternative fuel vehicle refueling property credit.
Sec. 132. Comprehensive study of biofuels.
Subtitle C--Energy Conservation and Efficiency Provisions
Sec. 141. Qualified energy conservation bonds.
Sec. 142. Credit for nonbusiness energy property.
Sec. 143. Energy efficient commercial buildings deduction.
Sec. 144. Modifications of energy efficient appliance credit for
appliances produced after 2007.
Sec. 145. Accelerated recovery period for depreciation of smart meters
and smart grid systems.
Sec. 146. Qualified green building and sustainable design projects.
TITLE II--ONE-YEAR EXTENSION OF TEMPORARY PROVISIONS
Subtitle A--Extensions Primarily Affecting Individuals
Sec. 201. Deduction for State and local sales taxes.
Sec. 202. Deduction of qualified tuition and related expenses.
Sec. 203. Treatment of certain dividends of regulated investment
companies.
Sec. 204. Qualified conservation contributions.
Sec. 205. Tax-free distributions from individual retirement plans for
charitable purposes.
Sec. 206. Deduction for certain expenses of elementary and secondary
school teachers.
Sec. 207. Election to include combat pay as earned income for purposes
of earned income tax credit.
Sec. 208. Modification of mortgage revenue bonds for veterans.
Sec. 209. Distributions from retirement plans to individuals called to
active duty.
Sec. 210. Stock in RIC for purposes of determining estates of
nonresidents not citizens.
Sec. 211. Qualified investment entities.
Sec. 212. Exclusion of amounts received under qualified group legal
services plans.
Subtitle B--Extensions Primarily Affecting Businesses
Sec. 221. Research credit.
Sec. 222. Indian employment credit.
Sec. 223. New markets tax credit.
Sec. 224. Railroad track maintenance.
Sec. 225. Fifteen-year straight-line cost recovery for qualified
leasehold improvements and qualified restaurant property.
Sec. 226. Seven-year cost recovery period for motorsports racing track
facility.
Sec. 227. Accelerated depreciation for business property on Indian
reservation.
Sec. 228. Expensing of environmental remediation costs.
Sec. 229. Deduction allowable with respect to income attributable to
domestic production activities in Puerto Rico.
Sec. 230. Modification of tax treatment of certain payments to
controlling exempt organizations.
Sec. 231. Qualified zone academy bonds.
Sec. 232. Tax incentives for investment in the District of Columbia.
Sec. 233. Economic development credit for American Samoa.
Sec. 234. Enhanced charitable deduction for contributions of food
inventory.
Sec. 235. Enhanced charitable deduction for contributions of book
inventory to public schools.
Sec. 236. Enhanced deduction for qualified computer contributions.
Sec. 237. Basis adjustment to stock of S corporations making charitable
contributions of property.
Sec. 238. Work opportunity tax credit for Hurricane Katrina employees.
Sec. 239. Subpart F exception for active financing income.
Sec. 240. Look-thru rule for related controlled foreign corporations.
Sec. 241. Expensing for certain qualified film and television
productions.
Subtitle C--Other Extensions
Sec. 251. Authority to disclose information related to terrorist
activities made permanent.
Sec. 252. Authority for undercover operations made permanent.
Sec. 253. Authority to disclose return information for certain veterans
programs made permanent.
Sec. 254. Increase in limit on cover over of rum excise tax to Puerto
Rico and the Virgin Islands.
TITLE III--ADDITIONAL TAX RELIEF
Subtitle A--Individual Tax Relief
Sec. 301. Additional standard deduction for real property taxes for
nonitemizers.
Sec. 302. Refundable child credit.
Sec. 303. Increase of AMT refundable credit amount for individuals with
long-term unused credits for prior year minimum tax
liability, etc.
Subtitle B--Business Related Provisions
Sec. 311. Uniform treatment of attorney-advanced expenses and court
costs in contingency fee cases.
Sec. 312. Provisions related to film and television productions.
Subtitle C--Modification of Penalty on Understatement of Taxpayer's
Liability by Tax Return Preparer
Sec. 321. Modification of penalty on understatement of taxpayer's
liability by tax return preparer.
Subtitle D--Extension and Expansion of Certain GO Zone Incentives
Sec. 331. Certain GO Zone incentives.
TITLE IV--REVENUE PROVISIONS
Sec. 401. Nonqualified deferred compensation from certain tax
indifferent parties.
Sec. 402. Delay in application of worldwide allocation of interest.
Sec. 403. Time for payment of corporate estimated taxes.
TITLE I--ENERGY TAX INCENTIVES
Subtitle A--Energy Production Incentives
PART I--RENEWABLE ENERGY INCENTIVES
SEC. 101. RENEWABLE ENERGY CREDIT.
(a) Extension of Credit.--
(1) 1-year extension for wind facilities.--Paragraph (1) of
section 45(d) is amended by striking ``January 1, 2009'' and
inserting ``January 1, 2010''.
(2) 3-year extension for certain other facilities.--Each of
the following provisions of section 45(d) is amended by
striking ``January 1, 2009'' and inserting ``January 1,
2012'':
(A) Clauses (i) and (ii) of paragraph (2)(A).
(B) Clauses (i)(I) and (ii) of paragraph (3)(A).
(C) Paragraph (4).
(D) Paragraph (5).
(E) Paragraph (6).
(F) Paragraph (7).
(G) Subparagraphs (A) and (B) of paragraph (9).
(b) Modification of Credit Phaseout.--
(1) Repeal of phaseout.--Subsection (b) of section 45 is
amended--
(A) by striking paragraph (1), and
(B) by striking ``the 8 cent amount in paragraph (1),'' in
paragraph (2) thereof.
(2) Limitation based on investment in facility.--Subsection
(b) of section 45 is amended by inserting before paragraph
(2) the following new paragraph:
``(1) Limitation based on investment in facility.--
``(A) In general.--In the case of any qualified facility
originally placed in service after December 31, 2009, the
amount of the credit determined under subsection (a) for any
taxable year with respect to electricity produced at such
facility shall not exceed the product of--
``(i) the applicable percentage with respect to such
facility, multiplied by
``(ii) the eligible basis of such facility.
``(B) Carryforward of unused limitation and excess
credit.--
``(i) Unused limitation.--If the limitation imposed under
subparagraph (A) with respect to any facility for any taxable
year exceeds the prelimitation credit for such facility for
such taxable year, the limitation imposed under subparagraph
(A) with respect to such facility for the succeeding taxable
year shall be increased by the amount of such excess.
``(ii) Excess credit.--If the prelimitation credit with
respect to any facility for any taxable year exceeds the
limitation imposed under subparagraph (A) with respect to
such facility for such taxable year, the credit determined
under subsection (a) with respect to such facility for the
succeeding taxable
[[Page H4351]]
year (determined before the application of subparagraph (A)
for such succeeding taxable year) shall be increased by the
amount of such excess. With respect to any facility, no
amount may be carried forward under this clause to any
taxable year beginning after the 10-year period described in
subsection (a)(2)(A)(ii) with respect to such facility.
``(iii) Prelimitation credit.--The term `prelimitation
credit' with respect to any facility for a taxable year means
the credit determined under subsection (a) with respect to
such facility for such taxable year, determined without
regard to subparagraph (A) and after taking into account any
increase for such taxable year under clause (ii).
``(C) Applicable percentage.--For purposes of this
paragraph--
``(i) In general.--The term `applicable percentage' means,
with respect to any facility, the appropriate percentage
prescribed by the Secretary for the month in which such
facility is originally placed in service.
``(ii) Method of prescribing applicable percentages.--The
applicable percentages prescribed by the Secretary for any
month under clause (i) shall be percentages which yield over
a 10-year period amounts of limitation under subparagraph (A)
which have a present value equal to 35 percent of the
eligible basis of the facility.
``(iii) Method of discounting.--The present value under
clause (ii) shall be determined--
``(I) as of the last day of the 1st year of the 10-year
period referred to in clause (ii),
``(II) by using a discount rate equal to the greater of 110
percent of the Federal long-term rate as in effect under
section 1274(d) for the month preceding the month for which
the applicable percentage is being prescribed, or 4.5
percent, and
``(III) by taking into account the limitation under
subparagraph (A) for any year on the last day of such year.
``(D) Eligible basis.--For purposes of this paragraph--
``(i) In general.--The term `eligible basis' means, with
respect to any facility, the sum of--
``(I) the basis of such facility determined as of the time
that such facility is originally placed in service, and
``(II) the portion of the basis of any shared qualified
property which is properly allocable to such facility under
clause (ii).
``(ii) Rules for allocation.--For purposes of subclause
(II) of clause (i), the basis of shared qualified property
shall be allocated among all qualified facilities which are
projected to be placed in service and which require
utilization of such property in proportion to projected
generation from such facilities.
``(iii) Shared qualified property.--For purposes of this
paragraph, the term `shared qualified property' means, with
respect to any facility, any property described in section
168(e)(3)(B)(vi)--
``(I) which a qualified facility will require for
utilization of such facility, and
``(II) which is not a qualified facility.
``(iv) Special rule relating to geothermal facilities.--In
the case of any qualified facility using geothermal energy to
produce electricity, the basis of such facility for purposes
of this paragraph shall be determined as though intangible
drilling and development costs described in section 263(c)
were capitalized rather than expensed.
``(E) Special rule for first and last year of credit
period.--In the case of any taxable year any portion of which
is not within the 10-year period described in subsection
(a)(2)(A)(ii) with respect to any facility, the amount of the
limitation under subparagraph (A) with respect to such
facility shall be reduced by an amount which bears the same
ratio to the amount of such limitation (determined without
regard to this subparagraph) as such portion of the taxable
year which is not within such period bears to the entire
taxable year.
``(F) Election to treat all facilities placed in service in
a year as 1 facility.--At the election of the taxpayer, all
qualified facilities which are part of the same project and
which are placed in service during the same calendar year
shall be treated for purposes of this section as 1 facility
which is placed in service at the mid-point of such year or
the first day of the following calendar year.''.
(c) Trash Facility Clarification.--Paragraph (7) of section
45(d) is amended--
(1) by striking ``facility which burns'' and inserting
``facility (other than a facility described in paragraph (6))
which uses'', and
(2) by striking ``combustion''.
(d) Expansion of Biomass Facilities.--
(1) Open-loop biomass facilities.--Paragraph (3) of section
45(d) is amended by redesignating subparagraph (B) as
subparagraph (C) and by inserting after subparagraph (A) the
following new subparagraph:
``(B) Expansion of facility.--Such term shall include a new
unit placed in service after the date of the enactment of
this subparagraph in connection with a facility described in
subparagraph (A), but only to the extent of the increased
amount of electricity produced at the facility by reason of
such new unit.''.
(2) Closed-loop biomass facilities.--Paragraph (2) of
section 45(d) is amended by redesignating subparagraph (B) as
subparagraph (C) and inserting after subparagraph (A) the
following new subparagraph:
``(B) Expansion of facility.--Such term shall include a new
unit placed in service after the date of the enactment of
this subparagraph in connection with a facility described in
subparagraph (A)(i), but only to the extent of the increased
amount of electricity produced at the facility by reason of
such new unit.''.
(e) Sales of Net Electricity to Regulated Public Utilities
Treated as Sales to Unrelated Persons.--Paragraph (4) of
section 45(e) is amended by adding at the end the following
new sentence: ``The net amount of electricity sold by any
taxpayer to a regulated public utility (as defined in section
7701(a)(33)) shall be treated as sold to an unrelated
person.''.
(f) Modification of Rules for Hydropower Production.--
Subparagraph (C) of section 45(c)(8) is amended to read as
follows:
``(C) Nonhydroelectric dam.--For purposes of subparagraph
(A), a facility is described in this subparagraph if--
``(i) the hydroelectric project installed on the
nonhydroelectric dam is licensed by the Federal Energy
Regulatory Commission and meets all other applicable
environmental, licensing, and regulatory requirements,
``(ii) the nonhydroelectric dam was placed in service
before the date of the enactment of this paragraph and
operated for flood control, navigation, or water supply
purposes and did not produce hydroelectric power on the date
of the enactment of this paragraph, and
``(iii) the hydroelectric project is operated so that the
water surface elevation at any given location and time that
would have occurred in the absence of the hydroelectric
project is maintained, subject to any license requirements
imposed under applicable law that change the water surface
elevation for the purpose of improving environmental quality
of the affected waterway.
The Secretary, in consultation with the Federal Energy
Regulatory Commission, shall certify if a hydroelectric
project licensed at a nonhydroelectric dam meets the criteria
in clause (iii). Nothing in this section shall affect the
standards under which the Federal Energy Regulatory
Commission issues licenses for and regulates hydropower
projects under part I of the Federal Power Act.''.
(g) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to property originally placed in service after December 31,
2008.
(2) Repeal of credit phaseout.--The amendments made by
subsection (b)(1) shall apply to taxable years ending after
December 31, 2008.
(3) Limitation based on investment in facility.--The
amendment made by subsection (b)(2) shall apply to property
originally placed in service after December 31, 2009.
(4) Trash facility clarification; sales to related
regulated public utilities.--The amendments made by
subsections (c) and (e) shall apply to electricity produced
and sold after the date of the enactment of this Act.
(5) Expansion of biomass facilities.--The amendments made
by subsection (d) shall apply to property placed in service
after the date of the enactment of this Act.
SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM
MARINE RENEWABLES.
(a) In General.--Paragraph (1) of section 45(c) is amended
by striking ``and'' at the end of subparagraph (G), by
striking the period at the end of subparagraph (H) and
inserting ``, and'', and by adding at the end the following
new subparagraph:
``(I) marine and hydrokinetic renewable energy.''.
(b) Marine Renewables.--Subsection (c) of section 45 is
amended by adding at the end the following new paragraph:
``(10) Marine and hydrokinetic renewable energy.--
``(A) In general.--The term `marine and hydrokinetic
renewable energy' means energy derived from--
``(i) waves, tides, and currents in oceans, estuaries, and
tidal areas,
``(ii) free flowing water in rivers, lakes, and streams,
``(iii) free flowing water in an irrigation system, canal,
or other man-made channel, including projects that utilize
nonmechanical structures to accelerate the flow of water for
electric power production purposes, or
``(iv) differentials in ocean temperature (ocean thermal
energy conversion).
``(B) Exceptions.--Such term shall not include any energy
which is derived from any source which utilizes a dam,
diversionary structure (except as provided in subparagraph
(A)(iii)), or impoundment for electric power production
purposes.''.
(c) Definition of Facility.--Subsection (d) of section 45
is amended by adding at the end the following new paragraph:
``(11) Marine and hydrokinetic renewable energy
facilities.--In the case of a facility producing electricity
from marine and hydrokinetic renewable energy, the term
`qualified facility' means any facility owned by the
taxpayer--
``(A) which has a nameplate capacity rating of at least 150
kilowatts, and
``(B) which is originally placed in service on or after the
date of the enactment of this paragraph and before January 1,
2012.''.
(d) Credit Rate.--Subparagraph (A) of section 45(b)(4) is
amended by striking ``or (9)'' and inserting ``(9), or
(11)''.
(e) Coordination With Small Irrigation Power.--Paragraph
(5) of section 45(d), as amended by section 101, is amended
by striking ``January 1, 2012'' and inserting ``the date of
the enactment of paragraph (11)''.
[[Page H4352]]
(f) Effective Date.--The amendments made by this section
shall apply to electricity produced and sold after the date
of the enactment of this Act, in taxable years ending after
such date.
SEC. 103. ENERGY CREDIT.
(a) Extension of Credit.--
(1) Solar energy property.--Paragraphs (2)(A)(i)(II) and
(3)(A)(ii) of section 48(a) are each amended by striking
``January 1, 2009'' and inserting ``January 1, 2015''.
(2) Fuel cell property.--Subparagraph (E) of section
48(c)(1) is amended by striking ``December 31, 2008'' and
inserting ``December 31, 2014''.
(3) Microturbine property.--Subparagraph (E) of section
48(c)(2) is amended by striking ``December 31, 2008'' and
inserting ``December 31, 2014''.
(b) Allowance of Energy Credit Against Alternative Minimum
Tax.--Subparagraph (B) of section 38(c)(4) is amended by
striking ``and'' at the end of clause (iii), by redesignating
clause (iv) as clause (v), and by inserting after clause
(iii) the following new clause:
``(iv) the credit determined under section 46 to the extent
that such credit is attributable to the energy credit
determined under section 48, and''.
(c) Energy Credit for Combined Heat and Power System
Property.--
(1) In general.--Section 48(a)(3)(A) (defining energy
property) is amended by striking ``or'' at the end of clause
(iii), by inserting ``or'' at the end of clause (iv), and by
adding at the end the following new clause:
``(v) combined heat and power system property,''.
(2) Combined heat and power system property.--Section 48 is
amended by adding at the end the following new subsection:
``(d) Combined Heat and Power System Property.--For
purposes of subsection (a)(3)(A)(v)--
``(1) Combined heat and power system property.--The term
`combined heat and power system property' means property
comprising a system--
``(A) which uses the same energy source for the
simultaneous or sequential generation of electrical power,
mechanical shaft power, or both, in combination with the
generation of steam or other forms of useful thermal energy
(including heating and cooling applications),
``(B) which produces--
``(i) at least 20 percent of its total useful energy in the
form of thermal energy which is not used to produce
electrical or mechanical power (or combination thereof), and
``(ii) at least 20 percent of its total useful energy in
the form of electrical or mechanical power (or combination
thereof),
``(C) the energy efficiency percentage of which exceeds 60
percent, and
``(D) which is placed in service before January 1, 2015.
``(2) Limitation.--
``(A) In general.--In the case of combined heat and power
system property with an electrical capacity in excess of the
applicable capacity placed in service during the taxable
year, the credit under subsection (a)(1) (determined without
regard to this paragraph) for such year shall be equal to the
amount which bears the same ratio to such credit as the
applicable capacity bears to the capacity of such property.
``(B) Applicable capacity.--For purposes of subparagraph
(A), the term `applicable capacity' means 15 megawatts or a
mechanical energy capacity of more than 20,000 horsepower or
an equivalent combination of electrical and mechanical energy
capacities.
``(C) Maximum capacity.--The term `combined heat and power
system property' shall not include any property comprising a
system if such system has a capacity in excess of 50
megawatts or a mechanical energy capacity in excess of 67,000
horsepower or an equivalent combination of electrical and
mechanical energy capacities.
``(3) Special rules.--
``(A) Energy efficiency percentage.--For purposes of this
subsection, the energy efficiency percentage of a system is
the fraction--
``(i) the numerator of which is the total useful
electrical, thermal, and mechanical power produced by the
system at normal operating rates, and expected to be consumed
in its normal application, and
``(ii) the denominator of which is the lower heating value
of the fuel sources for the system.
``(B) Determinations made on btu basis.--The energy
efficiency percentage and the percentages under paragraph
(1)(B) shall be determined on a Btu basis.
``(C) Input and output property not included.--The term
`combined heat and power system property' does not include
property used to transport the energy source to the facility
or to distribute energy produced by the facility.
``(4) Systems using biomass.--If a system is designed to
use biomass (within the meaning of paragraphs (2) and (3) of
section 45(c) without regard to the last sentence of
paragraph (3)(A)) for at least 90 percent of the energy
source--
``(A) paragraph (1)(C) shall not apply, but
``(B) the amount of credit determined under subsection (a)
with respect to such system shall not exceed the amount which
bears the same ratio to such amount of credit (determined
without regard to this paragraph) as the energy efficiency
percentage of such system bears to 60 percent.''.
(d) Increase of Credit Limitation for Fuel Cell Property.--
Subparagraph (B) of section 48(c)(1) is amended by striking
``$500'' and inserting ``$1,500''.
(e) Public Utility Property Taken Into Account.--
(1) In general.--Paragraph (3) of section 48(a) is amended
by striking the second sentence thereof.
(2) Conforming amendments.--
(A) Paragraph (1) of section 48(c) is amended by striking
subparagraph (D) and redesignating subparagraph (E) as
subparagraph (D).
(B) Paragraph (2) of section 48(c) is amended by striking
subparagraph (D) and redesignating subparagraph (E) as
subparagraph (D).
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect on the date of the enactment of this Act.
(2) Allowance against alternative minimum tax.--The
amendments made by subsection (b) shall apply to credits
determined under section 46 of the Internal Revenue Code of
1986 in taxable years beginning after the date of the
enactment of this Act and to carrybacks of such credits.
(3) Combined heat and power and fuel cell property.--The
amendments made by subsections (c) and (d) shall apply to
periods after the date of the enactment of this Act, in
taxable years ending after such date, under rules similar to
the rules of section 48(m) of the Internal Revenue Code of
1986 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990).
(4) Public utility property.--The amendments made by
subsection (e) shall apply to periods after February 13,
2008, in taxable years ending after such date, under rules
similar to the rules of section 48(m) of the Internal Revenue
Code of 1986 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990).
SEC. 104. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.
(a) Extension.--Section 25D(g) is amended by striking
``December 31, 2008'' and inserting ``December 31, 2014''.
(b) Maximum Credit for Solar Electric Property.--
(1) In general.--Section 25D(b)(1)(A) is amended by
striking ``$2,000'' and inserting ``$4,000''.
(2) Conforming amendment.--Section 25D(e)(4)(A)(i) is
amended by striking ``$6,667'' and inserting ``$13,333''.
(c) Credit for Residential Wind Property.--
(1) In general.--Section 25D(a) is amended by striking
``and'' at the end of paragraph (2), by striking the period
at the end of paragraph (3) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(4) 30 percent of the qualified small wind energy
property expenditures made by the taxpayer during such
year.''.
(2) Limitation.--Section 25D(b)(1) is amended by striking
``and'' at the end of subparagraph (B), by striking the
period at the end of subparagraph (C) and inserting ``,
and'', and by adding at the end the following new
subparagraph:
``(D) $500 with respect to each half kilowatt of capacity
(not to exceed $4,000) of wind turbines for which qualified
small wind energy property expenditures are made.''.
(3) Qualified small wind energy property expenditures.--
(A) In general.--Section 25D(d) is amended by adding at the
end the following new paragraph:
``(4) Qualified small wind energy property expenditure.--
The term `qualified small wind energy property expenditure'
means an expenditure for property which uses a wind turbine
to generate electricity for use in connection with a dwelling
unit located in the United States and used as a residence by
the taxpayer.''.
(B) No double benefit.--Section 45(d)(1) is amended by
adding at the end the following new sentence: ``Such term
shall not include any facility with respect to which any
qualified small wind energy property expenditure (as defined
in subsection (d)(4) of section 25D) is taken into account in
determining the credit under such section.''.
(4) Maximum expenditures in case of joint occupancy.--
Section 25D(e)(4)(A) is amended by striking ``and'' at the
end of clause (ii), by striking the period at the end of
clause (iii) and inserting ``, and'', and by adding at the
end the following new clause:
``(iv) $1,667 in the case of each half kilowatt of capacity
(not to exceed $13,333) of wind turbines for which qualified
small wind energy property expenditures are made.''.
(d) Credit for Geothermal Heat pump Systems.--
(1) In general.--Section 25D(a), as amended by subsection
(c), is amended by striking ``and'' at the end of paragraph
(3), by striking the period at the end of paragraph (4) and
inserting ``, and'', and by adding at the end the following
new paragraph:
``(5) 30 percent of the qualified geothermal heat pump
property expenditures made by the taxpayer during such
year.''.
(2) Limitation.--Section 25D(b)(1), as amended by
subsection (c), is amended by striking ``and'' at the end of
subparagraph (C), by striking the period at the end of
subparagraph (D) and inserting ``, and'', and by adding at
the end the following new subparagraph:
``(E) $2,000 with respect to any qualified geothermal heat
pump property expenditures.''.
[[Page H4353]]
(3) Qualified geothermal heat pump property expenditure.--
Section 25D(d), as amended by subsection (c), is amended by
adding at the end the following new paragraph:
``(5) Qualified geothermal heat pump property
expenditure.--
``(A) In general.--The term `qualified geothermal heat pump
property expenditure' means an expenditure for qualified
geothermal heat pump property installed on or in connection
with a dwelling unit located in the United States and used as
a residence by the taxpayer.
``(B) Qualified geothermal heat pump property.--The term
`qualified geothermal heat pump property' means any equipment
which--
``(i) uses the ground or ground water as a thermal energy
source to heat the dwelling unit referred to in subparagraph
(A) or as a thermal energy sink to cool such dwelling unit,
and
``(ii) meets the requirements of the Energy Star program
which are in effect at the time that the expenditure for such
equipment is made.''.
(4) Maximum expenditures in case of joint occupancy.--
Section 25D(e)(4)(A), as amended by subsection (c), is
amended by striking ``and'' at the end of clause (iii), by
striking the period at the end of clause (iv) and inserting
``, and'', and by adding at the end the following new clause:
``(v) $6,667 in the case of any qualified geothermal heat
pump property expenditures.''.
(e) Credit Allowed Against Alternative Minimum Tax.--
(1) In general.--Subsection (c) of section 25D is amended
to read as follows:
``(c) Limitation Based on Amount of Tax; Carryforward of
Unused Credit.--
``(1) Limitation based on amount of tax.--In the case of a
taxable year to which section 26(a)(2) does not apply, the
credit allowed under subsection (a) for the taxable year
shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under this subpart
(other than this section) and section 27 for the taxable
year.
``(2) Carryforward of unused credit.--
``(A) Rule for years in which all personal credits allowed
against regular and alternative minimum tax.--In the case of
a taxable year to which section 26(a)(2) applies, if the
credit allowable under subsection (a) exceeds the limitation
imposed by section 26(a)(2) for such taxable year reduced by
the sum of the credits allowable under this subpart (other
than this section), such excess shall be carried to the
succeeding taxable year and added to the credit allowable
under subsection (a) for such succeeding taxable year.
``(B) Rule for other years.--In the case of a taxable year
to which section 26(a)(2) does not apply, if the credit
allowable under subsection (a) exceeds the limitation imposed
by paragraph (1) for such taxable year, such excess shall be
carried to the succeeding taxable year and added to the
credit allowable under subsection (a) for such succeeding
taxable year.''.
(2) Conforming amendments.--
(A) Section 23(b)(4)(B) is amended by inserting ``and
section 25D'' after ``this section''.
(B) Section 24(b)(3)(B) is amended by striking ``and 25B''
and inserting ``, 25B, and 25D''.
(C) Section 25B(g)(2) is amended by striking ``section 23''
and inserting ``sections 23 and 25D''.
(D) Section 26(a)(1) is amended by striking ``and 25B'' and
inserting ``25B, and 25D''.
(f) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2007.
(2) Application of egtrra sunset.--The amendments made by
subparagraphs (A) and (B) of subsection (e)(2) shall be
subject to title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 in the same manner as the
provisions of such Act to which such amendments relate.
SEC. 105. SPECIAL RULE TO IMPLEMENT FERC AND STATE ELECTRIC
RESTRUCTURING POLICY.
(a) Extension for Qualified Electric Utilities.--
(1) In general.--Paragraph (3) of section 451(i) is amended
by inserting ``(before January 1, 2010, in the case of a
qualified electric utility)'' after ``January 1, 2008''.
(2) Qualified electric utility.--Subsection (i) of section
451 is amended by redesignating paragraphs (6) through (10)
as paragraphs (7) through (11), respectively, and by
inserting after paragraph (5) the following new paragraph:
``(6) Qualified electric utility.--For purposes of this
subsection, the term `qualified electric utility' means a
person that, as of the date of the qualifying electric
transmission transaction, is vertically integrated, in that
it is both--
``(A) a transmitting utility (as defined in section 3(23)
of the Federal Power Act (16 U.S.C. 796(23))) with respect to
the transmission facilities to which the election under this
subsection applies, and
``(B) an electric utility (as defined in section 3(22) of
the Federal Power Act (16 U.S.C. 796(22))).''.
(b) Extension of Period for Transfer of Operational Control
Authorized by FERC.--Clause (ii) of section 451(i)(4)(B) is
amended by striking ``December 31, 2007'' and inserting ``the
date which is 4 years after the close of the taxable year in
which the transaction occurs''.
(c) Property Located Outside the United States Not Treated
as Exempt Utility Property.--Paragraph (5) of section 451(i)
is amended by adding at the end the following new
subparagraph:
``(C) Exception for property located outside the united
states.--The term `exempt utility property' shall not include
any property which is located outside the United States.''.
(d) Effective Dates.--
(1) Extension.--The amendments made by subsection (a) shall
apply to transactions after December 31, 2007.
(2) Transfers of operational control.--The amendment made
by subsection (b) shall take effect as if included in section
909 of the American Jobs Creation Act of 2004.
(3) Exception for property located outside the united
states.--The amendment made by subsection (c) shall apply to
transactions after the date of the enactment of this Act.
SEC. 106. NEW CLEAN RENEWABLE ENERGY BONDS.
(a) In General.--Part IV of subchapter A of chapter 1 is
amended by adding at the end the following new subpart:
``Subpart I--Qualified Tax Credit Bonds
``Sec. 54A. Credit to holders of qualified tax credit bonds.
``Sec. 54B. New clean renewable energy bonds.
``SEC. 54A. CREDIT TO HOLDERS OF QUALIFIED TAX CREDIT BONDS.
``(a) Allowance of Credit.--If a taxpayer holds a qualified
tax credit bond on one or more credit allowance dates of the
bond during any taxable year, there shall be allowed as a
credit against the tax imposed by this chapter for the
taxable year an amount equal to the sum of the credits
determined under subsection (b) with respect to such dates.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined
under this subsection with respect to any credit allowance
date for a qualified tax credit bond is 25 percent of the
annual credit determined with respect to such bond.
``(2) Annual credit.--The annual credit determined with
respect to any qualified tax credit bond is the product of--
``(A) the applicable credit rate, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Applicable credit rate.--For purposes of paragraph
(2), the applicable credit rate is the rate which the
Secretary estimates will permit the issuance of qualified tax
credit bonds with a specified maturity or redemption date
without discount and without interest cost to the qualified
issuer. The applicable credit rate with respect to any
qualified tax credit bond shall be determined as of the first
day on which there is a binding, written contract for the
sale or exchange of the bond.
``(4) Special rule for issuance and redemption.--In the
case of a bond which is issued during the 3-month period
ending on a credit allowance date, the amount of the credit
determined under this subsection with respect to such credit
allowance date shall be a ratable portion of the credit
otherwise determined based on the portion of the 3-month
period during which the bond is outstanding. A similar rule
shall apply when the bond is redeemed or matures.
``(c) Limitation Based on Amount of Tax.--
``(1) In general.--The credit allowed under subsection (a)
for any taxable year shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under this part
(other than subpart C and this subpart).
``(2) Carryover of unused credit.--If the credit allowable
under subsection (a) exceeds the limitation imposed by
paragraph (1) for such taxable year, such excess shall be
carried to the succeeding taxable year and added to the
credit allowable under subsection (a) for such taxable year
(determined before the application of paragraph (1) for such
succeeding taxable year).
``(d) Qualified Tax Credit Bond.--For purposes of this
section--
``(1) Qualified tax credit bond.--The term `qualified tax
credit bond' means a new clean renewable energy bond which is
part of an issue that meets the requirements of paragraphs
(2), (3), (4), (5), and (6).
``(2) Special rules relating to expenditures.--
``(A) In general.--An issue shall be treated as meeting the
requirements of this paragraph if, as of the date of
issuance, the issuer reasonably expects--
``(i) 100 percent or more of the available project proceeds
to be spent for 1 or more qualified purposes within the 3-
year period beginning on such date of issuance, and
``(ii) 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 such date of
issuance.
``(B) Failure to spend required amount of bond proceeds
within 3 years.--
``(i) In general.--To the extent that less than 100 percent
of the available project proceeds of the issue are expended
by the close
[[Page H4354]]
of the expenditure period for 1 or more qualified purposes,
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.
``(ii) Expenditure period.--For purposes of this subpart,
the term `expenditure period' means, with respect to any
issue, the 3-year period beginning on the date of issuance.
Such term shall include any extension of such period under
clause (iii).
``(iii) Extension of period.--Upon submission of a request
prior to the expiration of the expenditure period (determined
without regard to any extension under this clause), the
Secretary may extend such period if the issuer establishes
that the failure to expend the proceeds within the original
expenditure period is due to reasonable cause and the
expenditures for qualified purposes will continue to proceed
with due diligence.
``(C) Qualified purpose.--For purposes of this paragraph,
the term `qualified purpose' means a purpose specified in
section 54B(a)(1).
``(D) Reimbursement.--For purposes of this subtitle,
available project proceeds of an issue shall be treated as
spent for a qualified purpose if such proceeds are used to
reimburse the issuer for amounts paid for a qualified purpose
after the date that the Secretary makes an allocation of bond
limitation with respect to such issue, but only if--
``(i) prior to the payment of the original expenditure, the
issuer declared its intent to reimburse such expenditure with
the proceeds of a qualified tax credit bond,
``(ii) not later than 60 days after payment of the original
expenditure, the issuer adopts an official intent to
reimburse the original expenditure with such proceeds, and
``(iii) the reimbursement is made not later than 18 months
after the date the original expenditure is paid.
``(3) Reporting.--An issue shall be treated as meeting the
requirements of this paragraph if the issuer of qualified tax
credit bonds submits reports similar to the reports required
under section 149(e).
``(4) Special rules relating to arbitrage.--
``(A) In general.--An issue shall be treated as meeting the
requirements of this paragraph if the issuer satisfies the
requirements of section 148 with respect to the proceeds of
the issue.
``(B) Special rule for investments during expenditure
period.--An issue shall not be treated as failing to meet the
requirements of subparagraph (A) by reason of any investment
of available project proceeds during the expenditure period.
``(C) Special rule for reserve funds.--An issue shall not
be treated as failing to meet the requirements of
subparagraph (A) by reason of any fund which is expected to
be used to repay such issue if--
``(i) such fund is funded at a rate not more rapid than
equal annual installments,
``(ii) such fund is funded in a manner reasonably expected
to result in an amount not greater than an amount necessary
to repay the issue, and
``(iii) the yield on such fund is not greater than the
discount rate determined under paragraph (5)(B) with respect
to the issue.
``(5) Maturity limitation.--
``(A) In general.--An issue shall not be treated as meeting
the requirements of this paragraph if the maturity of any
bond which is part of such issue exceeds the maximum term
determined by the Secretary under subparagraph (B).
``(B) Maximum term.--During each calendar month, the
Secretary shall determine the maximum term permitted under
this paragraph for bonds issued during the following calendar
month. Such maximum term shall be the term which the
Secretary estimates will result in the present value of the
obligation to repay the principal on the bond being equal to
50 percent of the face amount of such bond. Such present
value shall be determined using as a discount rate the
average annual interest rate of tax-exempt obligations having
a term of 10 years or more which are issued during the month.
If the term as so determined is not a multiple of a whole
year, such term shall be rounded to the next highest whole
year.
``(6) Prohibition on financial conflicts of interest.--An
issue shall be treated as meeting the requirements of this
paragraph if the issuer certifies that--
``(A) applicable State and local law requirements governing
conflicts of interest are satisfied with respect to such
issue, and
``(B) if the Secretary prescribes additional conflicts of
interest rules governing the appropriate Members of Congress,
Federal, State, and local officials, and their spouses, such
additional rules are satisfied with respect to such issue.
``(e) Other Definitions.--For purposes of this subchapter--
``(1) Credit allowance date.--The term `credit allowance
date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.
Such term includes the last day on which the bond is
outstanding.
``(2) Bond.--The term `bond' includes any obligation.
``(3) State.--The term `State' includes the District of
Columbia and any possession of the United States.
``(4) Available project proceeds.--The term `available
project proceeds' means--
``(A) the excess of--
``(i) the proceeds from the sale of an issue, over
``(ii) the issuance costs financed by the issue (to the
extent that such costs do not exceed 2 percent of such
proceeds), and
``(B) the proceeds from any investment of the excess
described in subparagraph (A).
``(f) Credit Treated as Interest.--For purposes of this
subtitle, the credit determined under subsection (a) shall be
treated as interest which is includible in gross income.
``(g) S Corporations and Partnerships.--In the case of a
tax credit bond held by an S corporation or partnership, the
allocation of the credit allowed by this section to the
shareholders of such corporation or partners of such
partnership shall be treated as a distribution.
``(h) Bonds Held by Regulated Investment Companies and Real
Estate Investment Trusts.--If any qualified tax credit bond
is held by a regulated investment company or a real estate
investment trust, the credit determined under subsection (a)
shall be allowed to shareholders of such company or
beneficiaries of such trust (and any gross income included
under subsection (f) with respect to such credit shall be
treated as distributed to such shareholders or beneficiaries)
under procedures prescribed by the Secretary.
``(i) Credits May Be Stripped.--Under regulations
prescribed by the Secretary--
``(1) In general.--There may be a separation (including at
issuance) of the ownership of a qualified tax credit bond and
the entitlement to the credit under this section with respect
to such bond. In case of any such separation, the credit
under this section shall be allowed to the person who on the
credit allowance date holds the instrument evidencing the
entitlement to the credit and not to the holder of the bond.
``(2) Certain rules to apply.--In the case of a separation
described in paragraph (1), the rules of section 1286 shall
apply to the qualified tax credit bond as if it were a
stripped bond and to the credit under this section as if it
were a stripped coupon.
``SEC. 54B. NEW CLEAN RENEWABLE ENERGY BONDS.
``(a) New Clean Renewable Energy Bond.--For purposes of
this subpart, the term `new clean renewable energy 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
public power providers or cooperative electric companies for
one or more qualified renewable energy facilities,
``(2) the bond is issued by a qualified issuer, and
``(3) the issuer designates such bond for purposes of this
section.
``(b) Reduced Credit Amount.--The annual credit determined
under section 54A(b) with respect to any new clean renewable
energy bond shall be 70 percent of the amount so determined
without regard to this subsection.
``(c) 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 new clean renewable energy bond
limitation of $2,000,000,000 which shall be allocated by the
Secretary as provided in paragraph (3), except that--
``(A) not more than 33\1/3\ percent thereof may be
allocated to qualified projects of public power providers,
``(B) not more than 33\1/3\ percent thereof may be
allocated to qualified projects of governmental bodies, and
``(C) not more than 33\1/3\ percent thereof may be
allocated to qualified projects of cooperative electric
companies.
``(3) Method of allocation.--
``(A) Allocation among public power providers.--After the
Secretary determines the qualified projects of public power
providers which are appropriate for receiving an allocation
of the national new clean renewable energy bond limitation,
the Secretary shall, to the maximum extent practicable, make
allocations among such projects in such manner that the
amount allocated to each such project bears the same ratio to
the cost of such project as the limitation under paragraph
(2)(A) bears to the cost of all such projects.
``(B) Allocation among governmental bodies and cooperative
electric companies.--The Secretary shall make allocations of
the amount of the national new clean renewable energy bond
limitation described in paragraphs (2)(B) and (2)(C) among
qualified projects of governmental bodies and cooperative
electric companies, respectively, in such manner as the
Secretary determines appropriate.
``(d) Definitions.--For purposes of this section--
``(1) Qualified renewable energy facility.--The term
`qualified renewable energy facility' means a qualified
facility (as determined under section 45(d) without regard to
paragraphs (8) and (10) thereof and to any placed in service
date) owned by a public power provider, a governmental body,
or a cooperative electric company.
``(2) Public power provider.--The term `public power
provider' means a State utility
[[Page H4355]]
with a service obligation, as such terms are defined in
section 217 of the Federal Power Act (as in effect on the
date of the enactment of this paragraph).
``(3) Governmental body.--The term `governmental body'
means any State or Indian tribal government, or any political
subdivision thereof.
``(4) Cooperative electric company.--The term `cooperative
electric company' means a mutual or cooperative electric
company described in section 501(c)(12) or section
1381(a)(2)(C).
``(5) Clean renewable energy bond lender.--The term `clean
renewable energy bond lender' means a lender which is a
cooperative which is owned by, or has outstanding loans to,
100 or more cooperative electric companies and is in
existence on February 1, 2002, and shall include any
affiliated entity which is controlled by such lender.
``(6) Qualified issuer.--The term `qualified issuer' means
a public power provider, a cooperative electric company, a
governmental body, a clean renewable energy bond lender, or a
not-for-profit electric utility which has received a loan or
loan guarantee under the Rural Electrification Act.''.
(b) Reporting.--Subsection (d) of section 6049 is amended
by adding at the end the following new paragraph:
``(9) Reporting of credit on qualified tax credit bonds.--
``(A) In general.--For purposes of subsection (a), the term
`interest' includes amounts includible in gross income under
section 54A and such amounts shall be treated as paid on the
credit allowance date (as defined in section 54A(e)(1)).
``(B) Reporting to corporations, etc.--Except as otherwise
provided in regulations, in the case of any interest
described in subparagraph (A) of this paragraph, subsection
(b)(4) of this section shall be applied without regard to
subparagraphs (A), (H), (I), (J), (K), and (L)(i).
``(C) Regulatory authority.--The Secretary may prescribe
such regulations as are necessary or appropriate to carry out
the purposes of this paragraph, including regulations which
require more frequent or more detailed reporting.''.
(c) Conforming Amendments.--
(1) Sections 54(c)(2) and 1400N(l)(3)(B) are each amended
by striking ``subpart C'' and inserting ``subparts C and I''.
(2) Section 1397E(c)(2) is amended by striking ``subpart
H'' and inserting ``subparts H and I''.
(3) Section 6401(b)(1) is amended by striking ``and H'' and
inserting ``H, and I''.
(4) The heading of subpart H of part IV of subchapter A of
chapter 1 is amended by striking ``Certain Bonds'' and
inserting ``Clean Renewable Energy Bonds''.
(5) The table of subparts for part IV of subchapter A of
chapter 1 is amended by striking the item relating to subpart
H and inserting the following new items:
``subpart h. nonrefundable credit to holders of clean renewable energy
bonds.
``subpart i. qualified tax credit bonds.''.
(d) Application of Certain Labor Standards on Projects
Financed Under Tax Credit Bonds.--Subchapter IV of chapter 31
of title 40, United States Code, shall apply to projects
financed with the proceeds of any tax credit bond (as defined
in section 54A of the Internal Revenue Code of 1986).
(e) Effective Dates.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.
PART II--CARBON MITIGATION PROVISIONS
SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT
INVESTMENT CREDIT.
(a) Modification of Credit Amount.--Section 48A(a) is
amended by striking ``and'' at the end of paragraph (1), by
striking the period at the end of paragraph (2) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(3) 30 percent of the qualified investment for such
taxable year in the case of projects described in clause
(iii) of subsection (d)(3)(B).''.
(b) Expansion of Aggregate Credits.--Section 48A(d)(3)(A)
is amended by striking ``$1,300,000,000'' and inserting
``$2,550,000,000''.
(c) Authorization of Additional Projects.--
(1) In general.--Subparagraph (B) of section 48A(d)(3) is
amended to read as follows:
``(B) Particular projects.--Of the dollar amount in
subparagraph (A), the Secretary is authorized to certify--
``(i) $800,000,000 for integrated gasification combined
cycle projects the application for which is submitted during
the period described in paragraph (2)(A)(i),
``(ii) $500,000,000 for projects which use other advanced
coal-based generation technologies the application for which
is submitted during the period described in paragraph
(2)(A)(i), and
``(iii) $1,250,000,000 for advanced coal-based generation
technology projects the application for which is submitted
during the period described in paragraph (2)(A)(ii).''.
(2) Application period for additional projects.--
Subparagraph (A) of section 48A(d)(2) is amended to read as
follows:
``(A) Application period.--Each applicant for certification
under this paragraph shall submit an application meeting the
requirements of subparagraph (B). An applicant may only
submit an application--
``(i) for an allocation from the dollar amount specified in
clause (i) or (ii) of paragraph (3)(B) during the 3-year
period beginning on the date the Secretary establishes the
program under paragraph (1), and
``(ii) for an allocation from the dollar amount specified
in paragraph (3)(B)(iii) during the 3-year period beginning
at the earlier of the termination of the period described in
clause (i) or the date prescribed by the Secretary.''.
(3) Capture and sequestration of carbon dioxide emissions
requirement.--
(A) In general.--Section 48A(e)(1) is amended by striking
``and'' at the end of subparagraph (E), by striking the
period at the end of subparagraph (F) and inserting ``;
and'', and by adding at the end the following new
subparagraph:
``(G) in the case of any project the application for which
is submitted during the period described in subsection
(d)(2)(A)(ii), the project includes equipment which separates
and sequesters at least 65 percent (70 percent in the case of
an application for reallocated credits under subsection
(d)(4)) of such project's total carbon dioxide emissions.''.
(B) Highest priority for projects which sequester carbon
dioxide emissions.--Section 48A(e)(3) is amended by striking
``and'' at the end of subparagraph (A)(iii), by striking the
period at the end of subparagraph (B)(iii) and inserting ``,
and'', and by adding at the end the following new
subparagraph:
``(C) give highest priority to projects with the greatest
separation and sequestration percentage of total carbon
dioxide emissions.''.
(C) Recapture of credit for failure to sequester.--Section
48A is amended by adding at the end the following new
subsection:
``(h) Recapture of Credit for Failure To Sequester.--The
Secretary shall provide for recapturing the benefit of any
credit allowable under subsection (a) with respect to any
project which fails to attain or maintain the separation and
sequestration requirements of subsection (e)(1)(G).''.
(4) Additional priority for research partnerships.--Section
48A(e)(3)(B), as amended by paragraph (3)(B), is amended--
(A) by striking ``and'' at the end of clause (ii),
(B) by redesignating clause (iii) as clause (iv), and
(C) by inserting after clause (ii) the following new
clause:
``(iii) applicant participants who have a research
partnership with an eligible educational institution (as
defined in section 529(e)(5)), and''.
(5) Clerical amendment.--Section 48A(e)(3) is amended by
striking ``integrated gasification combined cycle'' in the
heading and inserting ``certain''.
(d) Competitive Certification Awards Modification
Authority.--Section 48A, as amended by subsection (c)(3), is
amended by adding at the end the following new subsection:
``(i) Competitive Certification Awards Modification
Authority.--In implementing this section or section 48B, the
Secretary is directed to modify the terms of any competitive
certification award and any associated closing agreement
where such modification--
``(1) is consistent with the objectives of such section,
``(2) is requested by the recipient of the competitive
certification award, and
``(3) involves moving the project site to improve the
potential to capture and sequester carbon dioxide emissions,
reduce costs of transporting feedstock, and serve a broader
customer base,
unless the Secretary determines that the dollar amount of tax
credits available to the taxpayer under such section would
increase as a result of the modification or such modification
would result in such project not being originally certified.
In considering any such modification, the Secretary shall
consult with other relevant Federal agencies, including the
Department of Energy.''.
(e) Disclosure of Allocations.--Section 48A(d) is amended
by adding at the end the following new paragraph:
``(5) Disclosure of allocations.--The Secretary shall, upon
making a certification under this subsection or section
48B(d), publicly disclose the identity of the applicant and
the amount of the credit certified with respect to such
applicant.''.
(f) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to credits the application for which is submitted during the
period described in section 48A(d)(2)(A)(ii) of the Internal
Revenue Code of 1986 and which are allocated or reallocated
after the date of the enactment of this Act.
(2) Competitive certification awards modification
authority.--The amendment made by subsection (d) shall take
effect on the date of the enactment of this Act and is
applicable to all competitive certification awards entered
into under section 48A or 48B of the Internal Revenue Code of
1986, whether such awards were issued before, on, or after
such date of enactment.
(3) Disclosure of allocations.--The amendment made by
subsection (e) shall apply to certifications made after the
date of the enactment of this Act.
(4) Clerical amendment.--The amendment made by subsection
(c)(5) shall take effect as
[[Page H4356]]
if included in the amendment made by section 1307(b) of the
Energy Tax Incentives Act of 2005.
SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFICATION
INVESTMENT CREDIT.
(a) Modification of Credit Amount.--Section 48B(a) is
amended by inserting ``(30 percent in the case of credits
allocated under subsection (d)(1)(B))'' after ``20 percent''.
(b) Expansion of Aggregate Credits.--Section 48B(d)(1) is
amended by striking ``shall not exceed $350,000,000'' and all
that follows and inserting ``shall not exceed--
``(A) $350,000,000, plus
``(B) $250,000,000 for qualifying gasification projects
that include equipment which separates and sequesters at
least 75 percent of such project's total carbon dioxide
emissions.''.
(c) Recapture of Credit for Failure To Sequester.--Section
48B is amended by adding at the end the following new
subsection:
``(f) Recapture of Credit for Failure To Sequester.--The
Secretary shall provide for recapturing the benefit of any
credit allowable under subsection (a) with respect to any
project which fails to attain or maintain the separation and
sequestration requirements for such project under subsection
(d)(1).''.
(d) Selection Priorities.--Section 48B(d) is amended by
adding at the end the following new paragraph:
``(4) Selection priorities.--In determining which
qualifying gasification projects to certify under this
section, the Secretary shall--
``(A) give highest priority to projects with the greatest
separation and sequestration percentage of total carbon
dioxide emissions, and
``(B) give high priority to applicant participants who have
a research partnership with an eligible educational
institution (as defined in section 529(e)(5)).''.
(e) Effective Date.--The amendments made by this section
shall apply to credits described in section 48B(d)(1)(B) of
the Internal Revenue Code of 1986 which are allocated or
reallocated after the date of the enactment of this Act.
SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX.
Paragraph (2) of section 4121(e) is amended--
(1) by striking ``January 1, 2014'' in subparagraph (A) and
inserting ``December 31, 2018'', and
(2) by striking ``January 1 after 1981'' in subparagraph
(B) and inserting ``December 31 after 2007''.
SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EXCISE TAX TO
CERTAIN COAL PRODUCERS AND EXPORTERS.
(a) Refund.--
(1) Coal producers.--
(A) In general.--Notwithstanding subsections (a)(1) and (c)
of section 6416 and section 6511 of the Internal Revenue Code
of 1986, if--
(i) a coal producer establishes that such coal producer, or
a party related to such coal producer, exported coal produced
by such coal producer to a foreign country or shipped coal
produced by such coal producer to a possession of the United
States, or caused such coal to be exported or shipped, the
export or shipment of which was other than through an
exporter who meets the requirements of paragraph (2),
(ii) such coal producer filed an excise tax return on or
after October 1, 1990, and on or before the date of the
enactment of this Act, and
(iii) such coal producer files a claim for refund with the
Secretary not later than the close of the 30-day period
beginning on the date of the enactment of this Act,
then the Secretary shall pay to such coal producer an amount
equal to the tax paid under section 4121 of such Code on such
coal exported or shipped by the coal producer or a party
related to such coal producer, or caused by the coal producer
or a party related to such coal producer to be exported or
shipped.
(B) Special rules for certain taxpayers.--For purposes of
this section--
(i) In general.--If a coal producer or a party related to a
coal producer has received a judgment described in clause
(iii), such coal producer shall be deemed to have established
the export of coal to a foreign country or shipment of coal
to a possession of the United States under subparagraph
(A)(i).
(ii) Amount of payment.--If a taxpayer described in clause
(i) is entitled to a payment under subparagraph (A), the
amount of such payment shall be reduced by any amount paid
pursuant to the judgment described in clause (iii).
(iii) Judgment described.--A judgment is described in this
subparagraph if such judgment--
(I) is made by a court of competent jurisdiction within the
United States,
(II) relates to the constitutionality of any tax paid on
exported coal under section 4121 of the Internal Revenue Code
of 1986, and
(III) is in favor of the coal producer or the party related
to the coal producer.
(2) Exporters.--Notwithstanding subsections (a)(1) and (c)
of section 6416 and section 6511 of the Internal Revenue Code
of 1986, and a judgment described in paragraph (1)(B)(iii) of
this subsection, if--
(A) an exporter establishes that such exporter exported
coal to a foreign country or shipped coal to a possession of
the United States, or caused such coal to be so exported or
shipped,
(B) such exporter filed a tax return on or after October 1,
1990, and on or before the date of the enactment of this Act,
and
(C) such exporter files a claim for refund with the
Secretary not later than the close of the 30-day period
beginning on the date of the enactment of this Act,
then the Secretary shall pay to such exporter an amount equal
to $0.825 per ton of such coal exported by the exporter or
caused to be exported or shipped, or caused to be exported or
shipped, by the exporter.
(b) Limitations.--Subsection (a) shall not apply with
respect to exported coal if a settlement with the Federal
Government has been made with and accepted by, the coal
producer, a party related to such coal producer, or the
exporter, of such coal, as of the date that the claim is
filed under this section with respect to such exported coal.
For purposes of this subsection, the term ``settlement with
the Federal Government'' shall not include any settlement or
stipulation entered into as of the date of the enactment of
this Act, the terms of which contemplate a judgment
concerning which any party has reserved the right to file an
appeal, or has filed an appeal.
(c) Subsequent Refund Prohibited.--No refund shall be made
under this section to the extent that a credit or refund of
such tax on such exported or shipped coal has been paid to
any person.
(d) Definitions.--For purposes of this section--
(1) Coal producer.--The term ``coal producer'' means the
person in whom is vested ownership of the coal immediately
after the coal is severed from the ground, without regard to
the existence of any contractual arrangement for the sale or
other disposition of the coal or the payment of any royalties
between the producer and third parties. The term includes any
person who extracts coal from coal waste refuse piles or from
the silt waste product which results from the wet washing (or
similar processing) of coal.
(2) Exporter.--The term ``exporter'' means a person, other
than a coal producer, who does not have a contract, fee
arrangement, or any other agreement with a producer or seller
of such coal to export or ship such coal to a third party on
behalf of the producer or seller of such coal and--
(A) is indicated in the shipper's export declaration or
other documentation as the exporter of record, or
(B) actually exported such coal to a foreign country or
shipped such coal to a possession of the United States, or
caused such coal to be so exported or shipped.
(3) Related party.--The term ``a party related to such coal
producer'' means a person who--
(A) is related to such coal producer through any degree of
common management, stock ownership, or voting control,
(B) is related (within the meaning of section 144(a)(3) of
the Internal Revenue Code of 1986) to such coal producer, or
(C) has a contract, fee arrangement, or any other agreement
with such coal producer to sell such coal to a third party on
behalf of such coal producer.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Treasury or the Secretary's designee.
(e) Timing of Refund.--With respect to any claim for refund
filed pursuant to this section, the Secretary shall determine
whether the requirements of this section are met not later
than 180 days after such claim is filed. If the Secretary
determines that the requirements of this section are met, the
claim for refund shall be paid not later than 180 days after
the Secretary makes such determination.
(f) Interest.--Any refund paid pursuant to this section
shall be paid by the Secretary with interest from the date of
overpayment determined by using the overpayment rate and
method under section 6621 of the Internal Revenue Code of
1986.
(g) Denial of Double Benefit.--The payment under subsection
(a) with respect to any coal shall not exceed--
(1) in the case of a payment to a coal producer, the amount
of tax paid under section 4121 of the Internal Revenue Code
of 1986 with respect to such coal by such coal producer or a
party related to such coal producer, and
(2) in the case of a payment to an exporter, an amount
equal to $0.825 per ton with respect to such coal exported by
the exporter or caused to be exported by the exporter.
(h) Application of Section.--This section applies only to
claims on coal exported or shipped on or after October 1,
1990, through the date of the enactment of this Act.
(i) Standing Not Conferred.--
(1) Exporters.--With respect to exporters, this section
shall not confer standing upon an exporter to commence, or
intervene in, any judicial or administrative proceeding
concerning a claim for refund by a coal producer of any
Federal or State tax, fee, or royalty paid by the coal
producer.
(2) Coal producers.--With respect to coal producers, this
section shall not confer standing upon a coal producer to
commence, or intervene in, any judicial or administrative
proceeding concerning a claim for refund by an exporter of
any Federal or State tax, fee, or royalty paid by the
producer and alleged to have been passed on to an exporter.
SEC. 115. CARBON AUDIT OF THE TAX CODE.
(a) Study.--The Secretary of the Treasury shall enter into
an agreement with the National Academy of Sciences to
undertake a comprehensive review of the Internal Revenue Code
of 1986 to identify the types of and specific tax provisions
that have the largest
[[Page H4357]]
effects on carbon and other greenhouse gas emissions and to
estimate the magnitude of those effects.
(b) Report.--Not later than 2 years after the date of
enactment of this Act, the National Academy of Sciences shall
submit to Congress a report containing the results of study
authorized under this section.
(c) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $1,500,000 for
the period of fiscal years 2008 and 2009.
Subtitle B--Transportation and Domestic Fuel Security Provisions
SEC. 121. CREDIT FOR PRODUCTION OF CELLULOSIC BIOFUEL.
(a) In General.--Subsection (a) of section 40 is amended by
striking ``plus'' at the end of paragraph (1), by striking
``plus'' at the end of paragraph (2), by striking the period
at the end of paragraph (3) and inserting ``, plus'', and by
adding at the end the following new paragraph:
``(4) the cellulosic biofuel producer credit.''.
(b) Cellulosic Biofuel Producer Credit.--
(1) In general.--Subsection (b) of section 40 is amended by
adding at the end the following new paragraph:
``(6) Cellulosic biofuel producer credit.--
``(A) In general.--The cellulosic biofuel producer credit
of any taxpayer is an amount equal to the applicable amount
for each gallon of qualified cellulosic biofuel production.
``(B) Applicable amount.--For purposes of subparagraph (A),
the applicable amount means $1.01, except that such amount
shall, in the case of cellulosic biofuel which is alcohol, be
reduced by the sum of--
``(i) the amount of the credit in effect for such alcohol
under subsection (b)(1) (without regard to subsection (b)(3))
at the time of the qualified cellulosic biofuel production,
plus
``(ii) in the case of ethanol, the amount of the credit in
effect under subsection (b)(4) at the time of such
production.
``(C) Qualified cellulosic biofuel production.--For
purposes of this section, the term `qualified cellulosic
biofuel production' means any cellulosic 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 cellulosic 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 cellulosic biofuel at retail to
another person and places such cellulosic 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 cellulosic 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.
``(D) Qualified cellulosic biofuel mixture.--For purposes
of this paragraph, the term `qualified cellulosic biofuel
mixture' means a mixture of cellulosic biofuel and gasoline
or of cellulosic 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.
``(E) Cellulosic biofuel.--For purposes of this paragraph--
``(i) In general.--The term `cellulosic biofuel' means any
liquid fuel which--
``(I) is produced from any lignocellulosic or
hemicellulosic matter that is available on a renewable or
recurring basis, 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) 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.
``(F) Allocation of cellulosic biofuel producer credit to
patrons of cooperative.--Rules similar to the rules under
subsection (g)(6) shall apply for purposes of this paragraph.
``(G) Registration requirement.--No credit shall be
determined under this paragraph with respect to any taxpayer
unless such taxpayer is registered with the Secretary as a
producer of cellulosic biofuel under section 4101.
``(H) Application of paragraph.--This paragraph shall apply
with respect to qualified cellulosic biofuel production after
December 31, 2008, and before January 1, 2016.''.
(2) Termination date not to apply.--Subsection (e) of
section 40 is amended--
(A) by inserting ``or subsection (b)(6)(H)'' after ``by
reason of paragraph (1)'' in paragraph (2), and
(B) by adding at the end the following new paragraph:
``(3) Exception for cellulosic biofuel producer credit.--
Paragraph (1) shall not apply to the portion of the credit
allowed under this section by reason of subsection (a)(4).''.
(3) Conforming amendments.--
(A) Paragraph (1) of section 4101(a) is amended--
(i) by striking ``and every person'' and inserting ``,
every person'', and
(ii) by inserting ``, and every person producing cellulosic
biofuel (as defined in section 40(b)(6)(E))'' after ``section
6426(b)(4)(A))''.
(B) The heading of section 40, and the item relating to
such section in the table of sections for subpart D of part
IV of subchapter A of chapter 1, are each amended by
inserting ``, etc.,'' after ``Alcohol''.
(c) Biofuel Not Used as a Fuel, etc.--
(1) In general.--Paragraph (3) of section 40(d) is amended
by redesignating subparagraph (D) as subparagraph (E) and by
inserting after subparagraph (C) the following new
subparagraph:
``(D) Cellulosic biofuel producer credit.--If--
``(i) any credit is allowed under subsection (a)(4), and
``(ii) any person does not use such fuel for a purpose
described in subsection (b)(6)(C),
then there is hereby imposed on such person a tax equal to
the applicable amount (as defined in subsection (b)(6)(B))
for each gallon of such cellulosic biofuel.''.
(2) Conforming amendments.--
(A) Subparagraph (C) of section 40(d)(3) is amended by
striking ``Producer'' in the heading and inserting ``Small
ethanol producer''.
(B) Subparagraph (E) of section 40(d)(3), as redesignated
by paragraph (1), is amended by striking ``or (C)'' and
inserting ``(C), or (D)''.
(d) Biofuel Produced in the United States.--Section 40(d)
is amended by adding at the end the following new paragraph:
``(6) Special rule for cellulosic biofuel producer
credit.--No cellulosic biofuel producer credit shall be
determined under subsection (a) with respect to any
cellulosic biofuel unless such cellulosic biofuel is produced
in the United States and used as a fuel in the United States.
For purposes of this subsection, the term `United States'
includes any possession of the United States.''.
(e) Waiver of Credit Limit for Cellulosic Biofuel
Production by Small Ethanol Producers.--Section 40(b)(4)(C)
is amended by inserting ``(determined without regard to any
qualified cellulosic biofuel production)'' after ``15,000,000
gallons''.
(f) Denial of Double Benefit.--
(1) Biodiesel.--Paragraph (1) of section 40A(d) is amended
by adding at the end the following new flush sentence:
``Such term shall not include any liquid with respect to
which a credit may be determined under section 40.''.
(2) Renewable diesel.--Paragraph (3) of section 40A(f) is
amended by adding at the end the following new flush
sentence:
``Such term shall not include any liquid with respect to
which a credit may be determined under section 40.''.
(g) Effective Date.--The amendments made by this section
shall apply to fuel produced after December 31, 2008.
SEC. 122. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS
DEPRECIATION FOR BIOMASS ETHANOL PLANT
PROPERTY.
(a) In General.--Paragraph (3) of section 168(l) is amended
to read as follows:
``(3) Cellulosic biofuel.--The term `cellulosic biofuel'
means any liquid fuel which is produced from any
lignocellulosic or hemicellulosic matter that is available on
a renewable or recurring basis.''.
(b) Conforming Amendments.--Subsection (l) of section 168
is amended--
(1) by striking ``cellulosic biomass ethanol'' each place
it appears and inserting ``cellulosic biofuel'',
(2) by striking ``Cellulosic Biomass Ethanol'' in the
heading of such subsection and inserting ``Cellulosic
Biofuel'', and
(3) by striking ``cellulosic biomass ethanol'' in the
heading of paragraph (2) thereof and inserting ``cellulosic
biofuel''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act, in taxable years ending after such
date.
SEC. 123. CREDITS FOR BIODIESEL AND RENEWABLE DIESEL.
(a) In General.--Sections 40A(g), 6426(c)(6), and
6427(e)(5)(B) are each amended by striking ``December 31,
2008'' and inserting ``December 31, 2009''.
(b) Increase in Rate of Credit.--
(1) Income tax credit.--Paragraphs (1)(A) and (2)(A) of
section 40A(b) are each amended by striking ``50 cents'' and
inserting ``$1.00''.
(2) Excise tax credit.--Paragraph (2) of section 6426(c) is
amended to read as follows:
``(2) Applicable amount.--For purposes of this subsection,
the applicable amount is $1.00.''.
(3) Conforming amendments.--
(A) Subsection (b) of section 40A is amended by striking
paragraph (3) and by redesignating paragraphs (4) and (5) as
paragraphs (3) and (4), respectively.
(B) Paragraph (2) of section 40A(f) is amended to read as
follows:
``(2) Exception.--Subsection (b)(4) shall not apply with
respect to renewable diesel.''.
(C) Paragraphs (2) and (3) of section 40A(e) are each
amended by striking ``subsection (b)(5)(C)'' and inserting
``subsection (b)(4)(C)''.
(D) Clause (ii) of section 40A(d)(3)(C) is amended by
striking ``subsection (b)(5)(B)'' and inserting ``subsection
(b)(4)(B)''.
(c) Uniform Treatment of Diesel Produced From Biomass.--
Paragraph (3) of section 40A(f) is amended--
(1) by striking ``diesel fuel'' and inserting ``liquid
fuel'',
(2) by striking ``using a thermal depolymerization
process'', and
[[Page H4358]]
(3) by striking ``or D396'' in subparagraph (B) and
inserting ``, D396, or other equivalent standard approved by
the Secretary''.
(d) Coproduction of Renewable Diesel With Petroleum
Feedstock.--
(1) In general.--Paragraph (3) of section 40A(f) (defining
renewable diesel) is amended by adding at the end the
following flush sentence:
``Such term does not include any fuel derived from
coprocessing biomass with a feedstock which is not biomass.
For purposes of this paragraph, the term `biomass' has the
meaning given such term by section 45K(c)(3).''.
(2) Conforming amendment.--Paragraph (3) of section 40A(f)
is amended by striking ``(as defined in section 45K(c)(3))''.
(e) Eligibility of Certain Aviation Fuel.--Paragraph (3) of
section 40A(f) (defining renewable diesel) is amended by
adding at the end the following new flush sentence:
``The term `renewable diesel' also means fuel derived from
biomass which meets the requirements of a Department of
Defense specification for military jet fuel or an American
Society of Testing and Materials specification for aviation
turbine fuel.''.
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to fuel produced, and sold or used, after December 31, 2008.
(2) Coproduction of renewable diesel with petroleum
feedstock.--The amendments made by subsection (c) shall apply
to fuel produced, and sold or used, after February 13, 2008.
SEC. 124. MODIFICATION OF ALCOHOL CREDIT.
(a) Income Tax Credit.--
(1) In general.--The table in paragraph (2) of section
40(h) is amended--
(A) by striking ``through 2010'' in the first column and
inserting ``, 2006, 2007, or 2008'',
(B) by striking the period at the end of the third row, and
(C) by adding at the end the following new row:
``2009 through 2010............. 45 cents.......... 33.33 cents.''.
(2) Exception.--Section 40(h) is amended by adding at the
end the following new paragraph:
``(3) Reduction delayed until annual production or
importation of 7,500,000,000 gallons.--
``(A) In general.--In the case of any calendar year
beginning after 2008, if the Secretary makes a determination
described in subparagraph (B) with respect to all preceding
calendar years beginning after 2007, the last row in the
table in paragraph (2) shall be applied by substituting `51
cents' for `45 cents'.
``(B) Determination.--A determination described in this
subparagraph with respect to any calendar year is a
determination, in consultation with the Administrator of the
Environmental Protection Agency, that an amount less than
7,500,000,000 gallons of ethanol (including cellulosic
ethanol) has been produced in or imported into the United
States in such year.''.
(b) Excise Tax Credit.--
(1) In general.--Subparagraph (A) of section 6426(b)(2)
(relating to alcohol fuel mixture credit) is amended by
striking ``the applicable amount is 51 cents'' and inserting
``the applicable amount is--
``(i) in the case of calendar years beginning before 2009,
51 cents, and
``(ii) in the case of calendar years beginning after 2008,
45 cents.''.
(2) Exception.--Paragraph (2) of section 6426(b) is amended
by adding at the end the following new subparagraph:
``(C) Reduction delayed until annual production or
importation of 7,500,000,000 gallons.--In the case of any
calendar year beginning after 2008, if the Secretary makes a
determination described in section 40(h)(3)(B) with respect
to all preceding calendar years beginning after 2007,
subparagraph (A)(ii) shall be applied by substituting `51
cents' for `45 cents'.''
(3) Conforming amendment.--Subparagraph (A) of section
6426(b)(2) is amended by striking ``subparagraph (B)'' and
inserting ``subparagraphs (B) and (C)''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
SEC. 125. CALCULATION OF VOLUME OF ALCOHOL FOR FUEL CREDITS.
(a) In General.--Paragraph (4) of section 40(d) is amended
by striking ``5 percent'' and inserting ``2 percent''.
(b) Conforming Amendment for Excise Tax Credit.--Section
6426(b) is amended by redesignating paragraph (5) as
paragraph (6) and by inserting after paragraph (4) the
following new paragraph:
``(5) Volume of alcohol.--For purposes of determining under
subsection (a) the number of gallons of alcohol with respect
to which a credit is allowable under subsection (a), the
volume of alcohol shall include the volume of any denaturant
(including gasoline) which is added under any formulas
approved by the Secretary to the extent that such denaturants
do not exceed 2 percent of the volume of such alcohol
(including denaturants).''.
(c) Effective Date.--The amendments made by this section
shall apply to fuel sold or used after December 31, 2008.
SEC. 126. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO
PROVIDE AN INCENTIVE FOR UNITED STATES
PRODUCTION.
(a) Alcohol Fuels Credit.--Subsection (d) of section 40 is
amended by adding at the end the following new paragraph:
``(6) Limitation to alcohol with connection to the united
states.--No credit shall be determined under this section
with respect to any alcohol which is produced outside the
United States for use as a fuel outside the United States.
For purposes of this paragraph, the term `United States'
includes any possession of the United States.''.
(b) Biodiesel Fuels Credit.--Subsection (d) of section 40A
is amended by adding at the end the following new paragraph:
``(5) Limitation to biodiesel with connection to the united
states.--No credit shall be determined under this section
with respect to any biodiesel which is produced outside the
United States for use as a fuel outside the United States.
For purposes of this paragraph, the term `United States'
includes any possession of the United States.''.
(c) Excise Tax Credit.--
(1) In general.--Section 6426 is amended by adding at the
end the following new subsection:
``(i) Limitation to Fuels With Connection to the United
States.--
``(1) Alcohol.--No credit shall be determined under this
section with respect to any alcohol which is produced outside
the United States for use as a fuel outside the United
States.
``(2) Biodiesel and alternative fuels.--No credit shall be
determined under this section with respect to any biodiesel
or alternative fuel which is produced outside the United
States for use as a fuel outside the United States.
For purposes of this subsection, the term `United States'
includes any possession of the United States.''.
(2) Conforming amendment.--Subsection (e) of section 6427
is amended by redesignating paragraph (5) as paragraph (6)
and by inserting after paragraph (4) the following new
paragraph:
``(5) Limitation to fuels with connection to the united
states.--No amount shall be payable under paragraph (1) or
(2) with respect to any mixture or alternative fuel if credit
is not allowed with respect to such mixture or alternative
fuel by reason of section 6426(i).''.
(d) Effective Date.--The amendments made by this section
shall apply to claims for credit or payment made on or after
May 15, 2008.
SEC. 127. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE
MOTOR VEHICLES.
(a) In General.--Subpart B of part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
section:
``SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR
VEHICLES.
``(a) Allowance of Credit.--There shall be allowed as a
credit against the tax imposed by this chapter for the
taxable year an amount equal to the sum of the credit amounts
determined under subsection (b) with respect to each new
qualified plug-in electric drive motor vehicle placed in
service by the taxpayer during the taxable year.
``(b) Per Vehicle Dollar Limitation.--
``(1) In general.--The amount determined under this
subsection with respect to any new qualified plug-in electric
drive motor vehicle is the sum of the amounts determined
under paragraphs (2) and (3) with respect to such vehicle.
``(2) Base amount.--The amount determined under this
paragraph is $3,000.
``(3) Battery capacity.--In the case of a vehicle which
draws propulsion energy from a battery with not less than 5
kilowatt hours of capacity, the amount determined under this
paragraph is $200, plus $200 for each kilowatt hour of
capacity in excess of 5 kilowatt hours. The amount determined
under this paragraph shall not exceed $2,000.
``(c) Application With Other Credits.--
``(1) Business credit treated as part of general business
credit.--So much of the credit which would be allowed under
subsection (a) for any taxable year (determined without
regard to this subsection) that is attributable to property
of a character subject to an allowance for depreciation shall
be treated as a credit listed in section 38(b) for such
taxable year (and not allowed under subsection (a)).
``(2) Personal credit.--
``(A) In general.--For purposes of this title, the credit
allowed under subsection (a) for any taxable year (determined
after application of paragraph (1)) shall be treated as a
credit allowable under subpart A for such taxable year.
``(B) Limitation based on amount of tax.--In the case of a
taxable year to which section 26(a)(2) does not apply, the
credit allowed under subsection (a) for any taxable year
(determined after application of paragraph (1)) shall not
exceed the excess of--
``(i) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(ii) the sum of the credits allowable under subpart A
(other than this section and sections 23 and 25D) and section
27 for the taxable year.
``(d) New Qualified Plug-in Electric Drive Motor Vehicle.--
For purposes of this section--
``(1) In general.--The term `new qualified plug-in electric
drive motor vehicle' means a motor vehicle (as defined in
section 30(c)(2))--
``(A) the original use of which commences with the
taxpayer,
``(B) which is acquired for use or lease by the taxpayer
and not for resale,
[[Page H4359]]
``(C) which is made by a manufacturer,
``(D) which has a gross vehicle weight rating of less than
14,000 pounds,
``(E) which has received a certificate of conformity under
the Clean Air Act and meets or exceeds the Bin 5 Tier II
emission standard established in regulations prescribed by
the Administrator of the Environmental Protection Agency
under section 202(i) of the Clean Air Act for that make and
model year vehicle, and
``(F) which is propelled to a significant extent by an
electric motor which draws electricity from a battery which--
``(i) has a capacity of not less than 4 kilowatt hours, and
``(ii) is capable of being recharged from an external
source of electricity.
``(2) Exception.--The term `new qualified plug-in electric
drive motor vehicle' shall not include any vehicle which is
not a passenger automobile or light truck if such vehicle has
a gross vehicle weight rating of less than 8,500 pounds.
``(3) Other terms.--The terms `passenger automobile',
`light truck', and `manufacturer' have the meanings given
such terms in regulations prescribed by the Administrator of
the Environmental Protection Agency for purposes of the
administration of title II of the Clean Air Act (42 U.S.C.
7521 et seq.).
``(4) Battery capacity.--The term `capacity' means, with
respect to any battery, the quantity of electricity which the
battery is capable of storing, expressed in kilowatt hours,
as measured from a 100 percent state of charge to a 0 percent
state of charge.
``(e) Limitation on Number of New Qualified Plug-in
Electric Drive Motor Vehicles Eligible for Credit.--
``(1) In general.--In the case of a new qualified plug-in
electric drive motor vehicle sold during the phaseout period,
only the applicable percentage of the credit otherwise
allowable under subsection (a) shall be allowed.
``(2) Phaseout period.--For purposes of this subsection,
the phaseout period is the period beginning with the second
calendar quarter following the calendar quarter which
includes the first date on which the number of new qualified
plug-in electric drive motor vehicles manufactured by the
manufacturer of the vehicle referred to in paragraph (1) sold
for use in the United States after the date of the enactment
of this section, is at least 60,000.
``(3) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage is--
``(A) 50 percent for the first 2 calendar quarters of the
phaseout period,
``(B) 25 percent for the 3d and 4th calendar quarters of
the phaseout period, and
``(C) 0 percent for each calendar quarter thereafter.
``(4) Controlled groups.--Rules similar to the rules of
section 30B(f)(4) shall apply for purposes of this
subsection.
``(f) Special Rules.--
``(1) Basis reduction.--The basis of any property for which
a credit is allowable under sub- section (a) shall be reduced
by the amount of such credit (determined without regard to
subsection (c)).
``(2) Recapture.--The Secretary shall, by regulations,
provide for recapturing the benefit of any credit allowable
under subsection (a) with respect to any property which
ceases to be property eligible for such credit.
``(3) Property used outside united states, etc., not
qualified.--No credit shall be allowed under subsection (a)
with respect to any property referred to in section 50(b)(1)
or with respect to the portion of the cost of any property
taken into account under section 179.
``(4) Election not to take credit.--No credit shall be
allowed under subsection (a) for any vehicle if the taxpayer
elects to not have this section apply to such vehicle.
``(5) Property used by tax-exempt entity; interaction with
air quality and motor vehicle safety standards.--Rules
similar to the rules of paragraphs (6) and (10) of section
30B(h) shall apply for purposes of this section.''.
(b) Coordination With Alternative Motor Vehicle Credit.--
Section 30B(d)(3) is amended by adding at the end the
following new subparagraph:
``(D) Exclusion of plug-in vehicles.--Any vehicle with
respect to which a credit is allowable under section 30D
(determined without regard to subsection (c) thereof) shall
not be taken into account under this section.''.
(c) Credit Made Part of General Business Credit.--Section
38(b) is amended--
(1) by striking ``and'' each place it appears at the end of
any paragraph,
(2) by striking ``plus'' each place it appears at the end
of any paragraph,
(3) by striking the period at the end of paragraph (31) and
inserting ``, plus'', and
(4) by adding at the end the following new paragraph:
``(32) the portion of the new qualified plug-in electric
drive motor vehicle credit to which section 30D(c)(1)
applies.''.
(d) Conforming Amendments.--
(1)(A) Section 24(b)(3)(B), as amended by section 104, is
amended by striking ``and 25D'' and inserting ``25D, and
30D''.
(B) Section 25(e)(1)(C)(ii) is amended by inserting
``30D,'' after ``25D,''.
(C) Section 25B(g)(2), as amended by section 104, is
amended by striking ``and 25D'' and inserting ``, 25D, and
30D''.
(D) Section 26(a)(1), as amended by section 104, is amended
by striking ``and 25D'' and inserting ``25D, and 30D''.
(E) Section 1400C(d)(2) is amended by striking ``and 25D''
and inserting ``25D, and 30D''.
(2) Section 1016(a) is amended by striking ``and'' at the
end of paragraph (36), by striking the period at the end of
paragraph (37) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(38) to the extent provided in section 30D(f)(1).''.
(3) Section 6501(m) is amended by inserting ``30D(f)(4),''
after ``30C(e)(5),''.
(e) Treatment of Alternative Motor Vehicle Credit as a
Personal Credit.--
(1) In general.--Paragraph (2) of section 30B(g) is amended
to read as follows:
``(2) Personal credit.--The credit allowed under subsection
(a) for any taxable year (after application of paragraph (1))
shall be treated as a credit allowable under subpart A for
such taxable year.''.
(2) Conforming amendments.--
(A) Subparagraph (A) of section 30C(d)(2) is amended by
striking ``sections 27, 30, and 30B'' and inserting
``sections 27 and 30''.
(B) Paragraph (3) of section 55(c) is amended by striking
``30B(g)(2),''.
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to taxable years beginning after December 31, 2008.
(2) Treatment of alternative motor vehicle credit as
personal credit.--The amendments made by subsection (e) shall
apply to taxable years beginning after December 31, 2007.
(g) Application of EGTRRA Sunset.--The amendment made by
subsection (d)(1)(A) shall be subject to title IX of the
Economic Growth and Tax Relief Reconciliation Act of 2001 in
the same manner as the provision of such Act to which such
amendment relates.
SEC. 128. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING REDUCTION
UNITS AND ADVANCED INSULATION.
(a) In General.--Section 4053 is amended by adding at the
end the following new paragraphs:
``(9) Idling reduction device.--Any device or system of
devices which--
``(A) is designed to provide to a vehicle those services
(such as heat, air conditioning, or electricity) that would
otherwise require the operation of the main drive engine
while the vehicle is temporarily parked or remains stationary
using one or more devices affixed to a tractor, and
``(B) is certified by the Secretary of Energy, in
consultation with the Administrator of the Environmental
Protection Agency and the Secretary of Transportation, to
reduce idling of such vehicle at a motor vehicle rest stop or
other location where such vehicles are temporarily parked or
remain stationary.
``(10) Advanced insulation.--Any insulation that has an R
value of not less than R35 per inch.''.
(b) Effective Date.--The amendment made by this section
shall apply to sales or installations after the date of the
enactment of this Act.
SEC. 129. RESTRUCTURING OF NEW YORK LIBERTY ZONE TAX CREDITS.
(a) In General.--Part I of subchapter Y of chapter 1 is
amended by redesignating section 1400L as section 1400K and
by adding at the end the following new section:
``SEC. 1400L. NEW YORK LIBERTY ZONE TAX CREDITS.
``(a) In General.--In the case of a New York Liberty Zone
governmental unit, there shall be allowed as a credit against
any taxes imposed for any payroll period by section 3402 for
which such governmental unit is liable under section 3403 an
amount equal to so much of the portion of the qualifying
project expenditure amount allocated under subsection (b)(3)
to such governmental unit for the calendar year as is
allocated by such governmental unit to such period under
subsection (b)(4).
``(b) Qualifying Project Expenditure Amount.--For purposes
of this section--
``(1) In general.--The term `qualifying project expenditure
amount' means, with respect to any calendar year, the sum
of--
``(A) the total expenditures paid or incurred during such
calendar year by all New York Liberty Zone governmental units
and the Port Authority of New York and New Jersey for any
portion of qualifying projects located wholly within the City
of New York, New York, and
``(B) any such expenditures--
``(i) paid or incurred in any preceding calendar year which
begins after the date of enactment of this section, and
``(ii) not previously allocated under paragraph (3).
``(2) Qualifying project.--The term `qualifying project'
means any transportation infrastructure project, including
highways, mass transit systems, railroads, airports, ports,
and waterways, in or connecting with the New York Liberty
Zone (as defined in section 1400K(h)), which is designated as
a qualifying project under this section jointly by the
Governor of the State of New York and the Mayor of the City
of New York, New York.
``(3) General allocation.--
``(A) In general.--The Governor of the State of New York
and the Mayor of the City of New York, New York, shall
jointly allocate to each New York Liberty Zone governmental
unit the portion of the qualifying project expenditure amount
which may be taken into account by such governmental unit
under subsection (a) for any calendar year in the credit
period.
[[Page H4360]]
``(B) Aggregate limit.--The aggregate amount which may be
allocated under subparagraph (A) for all calendar years in
the credit period shall not exceed $2,000,000,000.
``(C) Annual limit.--The aggregate amount which may be
allocated under subparagraph (A) for any calendar year in the
credit period shall not exceed the sum of--
``(i) $115,000,000 ($425,000,000 in the case of the last 2
years in the credit period), plus
``(ii) the aggregate amount authorized to be allocated
under this paragraph for all preceding calendar years in the
credit period which was not so allocated.
``(D) Unallocated amounts at end of credit period.--If, as
of the close of the credit period, the amount under
subparagraph (B) exceeds the aggregate amount allocated under
subparagraph (A) for all calendar years in the credit period,
the Governor of the State of New York and the Mayor of the
City of New York, New York, may jointly allocate to New York
Liberty Zone governmental units for any calendar year in the
5-year period following the credit period an amount equal
to--
``(i) the lesser of--
``(I) such excess, or
``(II) the qualifying project expenditure amount for such
calendar year, reduced by
``(ii) the aggregate amount allocated under this
subparagraph for all preceding calendar years.
``(4) Allocation to payroll periods.--Each New York Liberty
Zone governmental unit which has been allocated a portion of
the qualifying project expenditure amount under paragraph (3)
for a calendar year may allocate such portion to payroll
periods beginning in such calendar year as such governmental
unit determines appropriate.
``(c) Carryover of Unused Allocations.--
``(1) In general.--Except as provided in paragraph (2), if
the amount allocated under subsection (b)(3) to a New York
Liberty Zone governmental unit for any calendar year exceeds
the aggregate taxes imposed by section 3402 for which such
governmental unit is liable under section 3403 for periods
beginning in such year, such excess shall be carried to the
succeeding calendar year and added to the allocation of such
governmental unit for such succeeding calendar year.
``(2) Reallocation.--If a New York Liberty Zone
governmental unit does not use an amount allocated to it
under subsection (b)(3) within the time prescribed by the
Governor of the State of New York and the Mayor of the City
of New York, New York, then such amount shall after such time
be treated for purposes of subsection (b)(3) in the same
manner as if it had never been allocated.
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) Credit period.--The term `credit period' means the
12-year period beginning on January 1, 2009.
``(2) New york liberty zone governmental unit.--The term
`New York Liberty Zone governmental unit' means--
``(A) the State of New York,
``(B) the City of New York, New York, and
``(C) any agency or instrumentality of such State or City.
``(3) Treatment of funds.--Any expenditure for a qualifying
project taken into account for purposes of the credit under
this section shall be considered State and local funds for
the purpose of any Federal program.
``(4) Treatment of credit amounts for purposes of
withholding taxes.--For purposes of this title, a New York
Liberty Zone governmental unit shall be treated as having
paid to the Secretary, on the day on which wages are paid to
employees, an amount equal to the amount of the credit
allowed to such entity under subsection (a) with respect to
such wages, but only if such governmental unit deducts and
withholds wages for such payroll period under section 3401
(relating to wage withholding).
``(e) Reporting.--The Governor of the State of New York and
the Mayor of the City of New York, New York, shall jointly
submit to the Secretary an annual report--
``(1) which certifies--
``(A) the qualifying project expenditure amount for the
calendar year, and
``(B) the amount allocated to each New York Liberty Zone
governmental unit under subsection (b)(3) for the calendar
year, and
``(2) includes such other information as the Secretary may
require to carry out this section.
``(f) Guidance.--The Secretary may prescribe such guidance
as may be necessary or appropriate to ensure compliance with
the purposes of this section.''.
(b) Termination of Special Allowance and Expensing.--
Subparagraph (A) of section 1400K(b)(2), as redesignated by
subsection (a), is amended by striking the parenthetical
therein and inserting ``(in the case of nonresidential real
property and residential rental property, the date of the
enactment of the Energy and Tax Extenders Act of 2008 or, if
acquired pursuant to a binding contract in effect on such
enactment date, December 31, 2009)''.
(c) Conforming Amendments.--
(1) Section 38(c)(3)(B) is amended by striking ``section
1400L(a)'' and inserting ``section 1400K(a)''.
(2) Section 168(k)(2)(D)(ii) is amended by striking
``section 1400L(c)(2)'' and inserting ``section
1400K(c)(2)''.
(3) The table of sections for part I of subchapter Y of
chapter 1 is amended by redesignating the item relating to
section 1400L as an item relating to section 1400K and by
inserting after such item the following new item:
``Sec. 1400L. New York Liberty Zone tax credits.''.
(d) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
SEC. 130. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS.
(a) In General.--Paragraph (1) of section 132(f) is amended
by adding at the end the following:
``(D) Any qualified bicycle commuting reimbursement.''.
(b) Limitation on Exclusion.--Paragraph (2) of section
132(f) 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) the applicable annual limitation in the case of any
qualified bicycle commuting reimbursement.''.
(c) Definitions.--Paragraph (5) of section 132(f) is
amended by adding at the end the following:
``(F) Definitions related to bicycle commuting
reimbursement.--
``(i) Qualified bicycle commuting reimbursement.--The term
`qualified bicycle commuting reimbursement' means, with
respect to any calendar year, any employer reimbursement
during the 15-month period beginning with the first day of
such calendar year for reasonable expenses incurred by the
employee during such calendar year for the purchase of a
bicycle and bicycle improvements, repair, and storage, if
such bicycle is regularly used for travel between the
employee's residence and place of employment.
``(ii) Applicable annual limitation.--The term `applicable
annual limitation' means, with respect to any employee for
any calendar year, the product of $20 multiplied by the
number of qualified bicycle commuting months during such
year.
``(iii) Qualified bicycle commuting month.--The term
`qualified bicycle commuting month' means, with respect to
any employee, any month during which such employee--
``(I) regularly uses the bicycle for a substantial portion
of the travel between the employee's residence and place of
employment, and
``(II) does not receive any benefit described in
subparagraph (A), (B), or (C) of paragraph (1).''.
(d) Constructive Receipt of Benefit.--Paragraph (4) of
section 132(f) is amended by inserting ``(other than a
qualified bicycle commuting reimbursement)'' after
``qualified transportation fringe''.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.
SEC. 131. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.
(a) Increase in Credit Amount.--Section 30C is amended--
(1) by striking ``30 percent'' in subsection (a) and
inserting ``50 percent'', and
(2) by striking ``$30,000'' in subsection (b)(1) and
inserting ``$50,000''.
(b) Extension of Credit.--Paragraph (2) of section 30C(g)
is amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act, in taxable years ending after such
date.
SEC. 132. COMPREHENSIVE STUDY OF BIOFUELS.
(a) Study.--The Secretary of the Treasury, in consultation
with the Secretary of Agriculture, the Secretary of Energy,
and the Administrator of the Environmental Protection Agency,
shall enter into an agreement with the National Academy of
Sciences to produce an analysis of current scientific
findings to determine--
(1) current biofuels production, as well as projections for
future production,
(2) the maximum amount of biofuels production capable in
United States forests and farmlands, including the current
quantities and character of the feedstocks and including such
information as regional forest inventories that are
commercially available, used in the production of biofuels,
(3) the domestic effects of an increase in biofuels
production levels, including the effects of such levels on--
(A) the price of fuel,
(B) the price of land in rural and suburban communities,
(C) crop acreage, forest acreage, and other land use,
(D) the environment, due to changes in crop acreage,
fertilizer use, runoff, water use, emissions from vehicles
utilizing biofuels, and other factors,
(E) the price of feed,
(F) the selling price of grain crops and unprocessed forest
products,
(G) exports and imports of grains and unprocessed forest
products,
(H) taxpayers, through cost or savings to commodity crop
payments, and
(I) the expansion of refinery capacity,
(4) the ability to convert corn ethanol plants for other
uses, such as cellulosic ethanol or biodiesel,
(5) a comparative analysis of corn ethanol versus other
biofuels and renewable energy sources, considering cost,
energy output, and ease of implementation,
[[Page H4361]]
(6) the impact of the tax credit established by section 121
of this Act on the regional agricultural and silvicultural
capabilities of commercially available forest inventories,
and
(7) the need for additional scientific inquiry, and
specific areas of interest for future research.
(b) Report.--The Secretary of the Treasury shall submit an
initial report of the findings of the study required under
subsection (a) to Congress not later than 6 months after the
date of the enactment of this Act (36 months after such date
in the case of the information required by subsection
(a)(6)), and a final report not later than 12 months after
such date (42 months after such date in the case of the
information required by subsection (a)(6)).
Subtitle C--Energy Conservation and Efficiency Provisions
SEC. 141. QUALIFIED ENERGY CONSERVATION BONDS.
(a) In General.--Subpart I of part IV of subchapter A of
chapter 1, as added by section 106, is amended by adding at
the end the following new section:
``SEC. 54C. QUALIFIED ENERGY CONSERVATION BONDS.
``(a) Qualified Energy Conservation Bond.--For purposes of
this subchapter, the term `qualified energy conservation
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 one or more qualified conservation
purposes,
``(2) the bond is issued by a State or local government,
and
``(3) the issuer designates such bond for purposes of this
section.
``(b) Reduced Credit Amount.--The annual credit determined
under section 54A(b) with respect to any qualified energy
conservation bond shall be 70 percent of the amount so
determined without regard to this subsection.
``(c) Limitation on Amount of Bonds Designated.--The
maximum aggregate face amount of bonds which may be
designated under subsection (a) by any issuer shall not
exceed the limitation amount allocated to such issuer under
subsection (e).
``(d) National Limitation on Amount of Bonds Designated.--
There is a national qualified energy conservation bond
limitation of $3,000,000,000.
``(e) Allocations.--
``(1) In general.--The limitation applicable under
subsection (d) shall be allocated by the Secretary among the
States in proportion to the population of the States.
``(2) Allocations to largest local governments.--
``(A) In general.--In the case of any State in which there
is a large local government, each such local government shall
be allocated a portion of such State's allocation which bears
the same ratio to the State's allocation (determined without
regard to this subparagraph) as the population of such large
local government bears to the population of such State.
``(B) Allocation of unused limitation to state.--The amount
allocated under this subsection to a large local government
may be reallocated by such local government to the State in
which such local government is located.
``(C) Large local government.--For purposes of this
section, the term `large local government' means any
municipality or county if such municipality or county has a
population of 100,000 or more.
``(3) Allocation to issuers; restriction on private
activity bonds.--Any allocation under this subsection to a
State or large local government shall be allocated by such
State or large local government to issuers within the State
in a manner that results in not less than 70 percent of the
allocation to such State or large local government being used
to designate bonds which are not private activity bonds.
``(f) Qualified Conservation Purpose.--For purposes of this
section--
``(1) In general.--The term `qualified conservation
purpose' means any of the following:
``(A) Capital expenditures incurred for purposes of--
``(i) reducing energy consumption in publicly-owned
buildings by at least 20 percent,
``(ii) implementing green community programs,
``(iii) rural development involving the production of
electricity from renewable energy resources, or
``(iv) any qualified facility (as determined under section
45(d) without regard to paragraphs (8) and (10) thereof and
without regard to any placed in service date).
``(B) Expenditures with respect to research facilities, and
research grants, to support research in--
``(i) development of cellulosic ethanol or other nonfossil
fuels,
``(ii) technologies for the capture and sequestration of
carbon dioxide produced through the use of fossil fuels,
``(iii) increasing the efficiency of existing technologies
for producing nonfossil fuels,
``(iv) automobile battery technologies and other
technologies to reduce fossil fuel consumption in
transportation, or
``(v) technologies to reduce energy use in buildings.
``(C) Mass commuting facilities and related facilities that
reduce the consumption of energy, including expenditures to
reduce pollution from vehicles used for mass commuting.
``(D) Demonstration projects designed to promote the
commercialization of--
``(i) green building technology,
``(ii) conversion of agricultural waste for use in the
production of fuel or otherwise,
``(iii) advanced battery manufacturing technologies,
``(iv) technologies to reduce peak use of electricity, or
``(v) technologies for the capture and sequestration of
carbon dioxide emitted from combusting fossil fuels in order
to produce electricity.
``(E) Public education campaigns to promote energy
efficiency.
``(2) Special rules for private activity bonds.--For
purposes of this section, in the case of any private activity
bond, the term `qualified conservation purposes' shall not
include any expenditure which is not a capital expenditure.
``(g) Population.--
``(1) In general.--The population of any State or local
government shall be determined for purposes of this section
as provided in section 146(j) for the calendar year which
includes the date of the enactment of this section.
``(2) Special rule for counties.--In determining the
population of any county for purposes of this section, any
population of such county which is taken into account in
determining the population of any municipality which is a
large local government shall not be taken into account in
determining the population of such county.
``(h) Application to Indian Tribal Governments.--An Indian
tribal government shall be treated for purposes of this
section in the same manner as a large local government,
except that--
``(1) an Indian tribal government shall be treated for
purposes of subsection (e) as located within a State to the
extent of so much of the population of such government as
resides within such State, and
``(2) any bond issued by an Indian tribal government shall
be treated as a qualified energy conservation bond only if
issued as part of an issue the available project proceeds of
which are used for purposes for which such Indian tribal
government could issue bonds to which section 103(a)
applies.''.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 54A(d), as added by section
106, is amended to read as follows:
``(1) Qualified tax credit bond.--The term `qualified tax
credit bond' means--
``(A) a new clean renewable energy bond, or
``(B) a qualified energy conservation bond,
which is part of an issue that meets requirements of
paragraphs (2), (3), (4), (5), and (6).''.
(2) Subparagraph (C) of section 54A(d)(2), as added by
section 106, is amended to read as follows:
``(C) Qualified purpose.--For purposes of this paragraph,
the term `qualified purpose' means--
``(i) in the case of a new clean renewable energy bond, a
purpose specified in section 54B(a)(1), and
``(ii) in the case of a qualified energy conservation bond,
a purpose specified in section 54C(a)(1).''.
(3) 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. 54C. Qualified energy conservation bonds.''.
(c) Effective Date.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.
SEC. 142. CREDIT FOR NONBUSINESS ENERGY PROPERTY.
(a) Extension of Credit.--Section 25C(g) is amended by
striking ``December 31, 2007'' and inserting ``December 31,
2008''.
(b) Qualified Biomass Fuel Property.--
(1) In general.--Section 25C(d)(3) is amended--
(A) by striking ``and'' at the end of subparagraph (D),
(B) by striking the period at the end of subparagraph (E)
and inserting ``, and'', and
(C) by adding at the end the following new subparagraph:
``(F) a stove which uses the burning of biomass fuel to
heat a dwelling unit located in the United States and used as
a residence by the taxpayer, or to heat water for use in such
a dwelling unit, and which has a thermal efficiency rating of
at least 75 percent.''.
(2) Biomass fuel.--Section 25C(d) is amended by adding at
the end the following new paragraph:
``(6) Biomass fuel.--The term `biomass fuel' means any
plant-derived fuel available on a renewable or recurring
basis, including agricultural crops and trees, wood and wood
waste and residues (including wood pellets), plants
(including aquatic plants), grasses, residues, and fibers.''.
(c) Coordination With Credit for Qualified Geothermal Heat
Pump Property Expenditures.--
(1) In general.--Paragraph (3) of section 25C(d) is amended
by striking subparagraph (C) and by redesignating
subparagraphs (D) and (E) as subparagraphs (C) and (D),
respectively.
(2) Conforming amendment.--Subparagraph (C) of section
25C(d)(2) is amended to read as follows:
``(C) Requirements and standards for air conditioners and
heat pumps.--The standards and requirements prescribed by the
Secretary under subparagraph (B) with respect to the energy
efficiency ratio (EER) for central air conditioners and
electric heat pumps--
[[Page H4362]]
``(i) shall require measurements to be based on published
data which is tested by manufacturers at 95 degrees
Fahrenheit, and
``(ii) may be based on the certified data of the Air
Conditioning and Refrigeration Institute that are prepared in
partnership with the Consortium for Energy Efficiency.''.
(d) Effective Date.--The amendments made this section shall
apply to expenditures made after December 31, 2007.
SEC. 143. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.
Subsection (h) of section 179D is amended by striking
``December 31, 2008'' and inserting ``December 31, 2013''.
SEC. 144. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT
FOR APPLIANCES PRODUCED AFTER 2007.
(a) In General.--Subsection (b) of section 45M is amended
to read as follows:
``(b) Applicable Amount.--For purposes of subsection (a)--
``(1) Dishwashers.--The applicable amount is--
``(A) $45 in the case of a dishwasher which is manufactured
in calendar year 2008 or 2009 and which uses no more than 324
kilowatt hours per year and 5.8 gallons per cycle, and
``(B) $75 in the case of a dishwasher which is manufactured
in calendar year 2008, 2009, or 2010 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).
``(2) Clothes washers.--The applicable amount is--
``(A) $75 in the case of a residential top-loading clothes
washer manufactured in calendar year 2008 which meets or
exceeds a 1.72 modified energy factor and does not exceed a
8.0 water consumption factor,
``(B) $125 in the case of a residential top-loading clothes
washer manufactured in calendar year 2008 or 2009 which meets
or exceeds a 1.8 modified energy factor and does not exceed a
7.5 water consumption factor,
``(C) $150 in the case of a residential or commercial
clothes washer manufactured in calendar year 2008, 2009, or
2010 which meets or exceeds 2.0 modified energy factor and
does not exceed a 6.0 water consumption factor, and
``(D) $250 in the case of a residential or commercial
clothes washer manufactured in calendar year 2008, 2009, or
2010 which meets or exceeds 2.2 modified energy factor and
does not exceed a 4.5 water consumption factor.
``(3) Refrigerators.--The applicable amount is--
``(A) $50 in the case of a refrigerator which is
manufactured in calendar year 2008, and consumes at least 20
percent but not more than 22.9 percent less kilowatt hours
per year than the 2001 energy conservation standards,
``(B) $75 in the case of a refrigerator which is
manufactured in calendar year 2008 or 2009, and consumes at
least 23 percent but no more than 24.9 percent less kilowatt
hours per year than the 2001 energy conservation standards,
``(C) $100 in the case of a refrigerator which is
manufactured in calendar year 2008, 2009, or 2010, and
consumes at least 25 percent but not more than 29.9 percent
less kilowatt hours per year than the 2001 energy
conservation standards, and
``(D) $200 in the case of a refrigerator manufactured in
calendar year 2008, 2009, or 2010 and which consumes at least
30 percent less energy than the 2001 energy conservation
standards.''.
(b) Eligible Production.--
(1) Similar treatment for all appliances.--Subsection (c)
of section 45M is amended--
(A) by striking paragraph (2),
(B) by striking ``(1) In general'' and all that follows
through ``the eligible'' and inserting ``The eligible'', and
(C) by moving the text of such subsection in line with the
subsection heading and redesignating subparagraphs (A) and
(B) as paragraphs (1) and (2), respectively.
(2) Modification of base period.--Paragraph (2) of section
45M(c), as amended by paragraph (1), is amended by striking
``3-calendar year'' and inserting ``2-calendar year''.
(c) Types of Energy Efficient Appliances.--Subsection (d)
of section 45M (defining types of energy efficient
appliances) is amended to read as follows:
``(d) Types of Energy Efficient Appliance.--For purposes of
this section, the types of energy efficient appliances are--
``(1) dishwashers described in subsection (b)(1),
``(2) clothes washers described in subsection (b)(2), and
``(3) refrigerators described in subsection (b)(3).''.
(d) Aggregate Credit Amount Allowed.--
(1) Increase in limit.--Paragraph (1) of section 45M(e) is
amended to read as follows:
``(1) Aggregate credit amount allowed.--The aggregate
amount of credit allowed under subsection (a) with respect to
a taxpayer for any taxable year shall not exceed $75,000,000
reduced by the amount of the credit allowed under subsection
(a) to the taxpayer (or any predecessor) for all prior
taxable years beginning after December 31, 2007.''.
(2) Exception for certain refrigerator and clothes
washers.--Paragraph (2) of section 45M(e) is amended to read
as follows:
``(2) Amount allowed for certain refrigerators and clothes
washers.--Refrigerators described in subsection (b)(3)(D) and
clothes washers described in subsection (b)(2)(D) shall not
be taken into account under paragraph (1).''.
(e) Qualified Energy Efficient Appliances.--
(1) In general.--Paragraph (1) of section 45M(f) (defining
qualified energy efficient appliance) is amended to read as
follows:
``(1) Qualified energy efficient appliance.--The term
`qualified energy efficient appliance' means--
``(A) any dishwasher described in subsection (b)(1),
``(B) any clothes washer described in subsection (b)(2),
and
``(C) any refrigerator described in subsection (b)(3).''.
(2) Clothes washer.--Section 45M(f)(3) is amended by
inserting ``commercial'' before ``residential'' the second
place it appears.
(3) Top-loading clothes washer.--Subsection (f) of section
45M is amended by redesignating paragraphs (4), (5), (6), and
(7) as paragraphs (5), (6), (7), and (8), respectively, and
by inserting after paragraph (3) the following new paragraph:
``(4) Top-loading clothes washer.--The term `top-loading
clothes washer' means a clothes washer which has the clothes
container compartment access located on the top of the
machine and which operates on a vertical axis.''.
(4) Replacement of energy factor.--Section 45M(f)(6), as
redesignated by paragraph (3), is amended to read as follows:
``(6) Modified energy factor.--The term `modified energy
factor' means the modified energy factor established by the
Department of Energy for compliance with the Federal energy
conservation standard.''.
(5) Gallons per cycle; water consumption factor.--Section
45M(f), as amended by paragraph (3), is amended by adding at
the end the following:
``(9) Gallons per cycle.--The term `gallons per cycle'
means, with respect to a dishwasher, the amount of water,
expressed in gallons, required to complete a normal cycle of
a dishwasher.
``(10) Water consumption factor.--The term `water
consumption factor' means, with respect to a clothes washer,
the quotient of the total weighted per-cycle water
consumption divided by the cubic foot (or liter) capacity of
the clothes washer.''.
(f) Effective Date.--The amendments made by this section
shall apply to appliances produced after December 31, 2007.
SEC. 145. ACCELERATED RECOVERY PERIOD FOR DEPRECIATION OF
SMART METERS AND SMART GRID SYSTEMS.
(a) In General.--Section 168(e)(3)(D) is amended by
striking ``and'' at the end of clause (i), by striking the
period at the end of clause (ii) and inserting ``, and'', and
by inserting after clause (ii) the following new clauses:
``(iii) any qualified smart electric meter, and
``(iv) any qualified smart electric grid system.''.
(b) Definitions.--Section 168(i) is amended by inserting at
the end the following new paragraph:
``(18) Qualified smart electric meters.--
``(A) In general.--The term `qualified smart electric
meter' means any smart electric meter which is placed in
service by a taxpayer who is a supplier of electric energy or
a provider of electric energy services.
``(B) Smart electric meter.--For purposes of subparagraph
(A), the term `smart electric meter' means any time-based
meter and related communication equipment which is capable of
being used by the taxpayer as part of a system that--
``(i) measures and records electricity usage data on a
time-differentiated basis in at least 24 separate time
segments per day,
``(ii) provides for the exchange of information between
supplier or provider and the customer's electric meter in
support of time-based rates or other forms of demand
response,
``(iii) provides data to such supplier or provider so that
the supplier or provider can provide energy usage information
to customers electronically, and
``(iv) provides net metering.
``(19) Qualified smart electric grid systems.--
``(A) In general.--The term `qualified smart electric grid
system' means any smart grid property used as part of a
system for electric distribution grid communications,
monitoring, and management placed in service by a taxpayer
who is a supplier of electric energy or a provider of
electric energy services.
``(B) Smart grid property.--For the purposes of
subparagraph (A), the term `smart grid property' means
electronics and related equipment that is capable of--
``(i) sensing, collecting, and monitoring data of or from
all portions of a utility's electric distribution grid,
``(ii) providing real-time, two-way communications to
monitor or manage such grid, and
``(iii) providing real time analysis of and event
prediction based upon collected data that can be used to
improve electric distribution system reliability, quality,
and performance.''.
(c) Continued Application of 150 Percent Declining Balance
Method.--Paragraph (2) of section 168(b) is amended by
striking ``or'' at the end of subparagraph (B), by
redesignating subparagraph (C) as subparagraph (D), and by
inserting after subparagraph (B) the following new
subparagraph:
``(C) any property (other than property described in
paragraph (3)) which is a qualified
[[Page H4363]]
smart electric meter or qualified smart electric grid system,
or''.
(d) 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. 146. QUALIFIED GREEN BUILDING AND SUSTAINABLE DESIGN
PROJECTS.
(a) In General.--Paragraph (8) of section 142(l) is amended
by striking ``September 30, 2009'' and inserting ``September
30, 2012''.
(b) Treatment of Current Refunding Bonds.--Paragraph (9) of
section 142(l) is amended by striking ``October 1, 2009'' and
inserting ``October 1, 2012''.
(c) Accountability.--The second sentence of section 701(d)
of the American Jobs Creation Act of 2004 is amended by
striking ``issuance,'' and inserting ``issuance of the last
issue with respect to such project,''.
TITLE II--ONE-YEAR EXTENSION OF TEMPORARY PROVISIONS
Subtitle A--Extensions Primarily Affecting Individuals
SEC. 201. DEDUCTION FOR STATE AND LOCAL SALES TAXES.
(a) In General.--Subparagraph (I) of section 164(b)(5) is
amended by striking ``January 1, 2008'' and inserting
``January 1, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 202. DEDUCTION OF QUALIFIED TUITION AND RELATED
EXPENSES.
(a) In General.--Subsection (e) of section 222 is amended
by striking ``December 31, 2007'' and inserting ``December
31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 203. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED
INVESTMENT COMPANIES.
(a) Interest-Related Dividends.--Subparagraph (C) of
section 871(k)(1) (defining interest-related dividend) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Short-Term Capital Gain Dividends.--Subparagraph (C) of
section 871(k)(2) (defining short-term capital gain dividend)
is amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(c) Effective Date.--The amendments made by this section
shall apply to dividends with respect to taxable years of
regulated investment companies beginning after December 31,
2007.
SEC. 204. QUALIFIED CONSERVATION CONTRIBUTIONS.
(a) In General.--Paragraphs (1)(E)(vi) and (2)(B)(iii) of
section 170(b) are each amended by striking ``December 31,
2007'' and inserting ``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made in taxable years beginning
after December 31, 2007.
SEC. 205. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT
PLANS FOR CHARITABLE PURPOSES.
(a) In General.--Subparagraph (F) of section 408(d)(8) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to distributions made in taxable years beginning
after December 31, 2007.
SEC. 206. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND
SECONDARY SCHOOL TEACHERS.
(a) In General.--Subparagraph (D) of section 62(a)(2) is
amended by striking ``or 2007'' and inserting ``2007, or
2008''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31,
2007.
SEC. 207. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR
PURPOSES OF EARNED INCOME TAX CREDIT.
(a) In General.--Subclause (II) of section 32(c)(2)(B)(vi)
(defining earned income) is amended by striking ``January 1,
2008'' and inserting ``January 1, 2009''.
(b) Conforming Amendment.--Paragraph (4) of section 6428(e)
is amended by striking ``except that'' and all that follows
through ``such term'' and inserting ``except that such
term''.
(c) Effective Date.--The amendment made by this section
shall apply to taxable years ending after December 31, 2007.
SEC. 208. MODIFICATION OF MORTGAGE REVENUE BONDS FOR
VETERANS.
(a) Qualified Mortgage Bonds Used To Finance Residences for
Veterans Without Regard to First-Time Homebuyer
Requirement.--Subparagraph (D) of section 143(d)(2) is
amended by striking ``January 1, 2008'' and inserting
``January 1, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to bonds issued after December 31, 2007.
SEC. 209. DISTRIBUTIONS FROM RETIREMENT PLANS TO INDIVIDUALS
CALLED TO ACTIVE DUTY.
(a) In General.--Clause (iv) of section 72(t)(2)(G) is
amended by striking ``December 31, 2007'' and inserting
``January 1, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to individuals ordered or called to active duty
on or after December 31, 2007.
SEC. 210. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES OF
NONRESIDENTS NOT CITIZENS.
(a) In General.--Paragraph (3) of section 2105(d) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to decedents dying after December 31, 2007.
SEC. 211. QUALIFIED INVESTMENT ENTITIES.
(a) In General.--Clause (ii) of section 897(h)(4)(A) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on January 1, 2008, except that such
amendment shall not apply to the application of withholding
requirements with respect to any payment made on or before
the date of the enactment of this Act.
SEC. 212. EXCLUSION OF AMOUNTS RECEIVED UNDER QUALIFIED GROUP
LEGAL SERVICES PLANS.
(a) In General.--Subsection (e) of section 120 is amended
by striking ``shall not apply to taxable years beginning
after June 30, 1992'' and inserting ``shall apply to taxable
years beginning after December 31, 2007, and before January
1, 2009''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
Subtitle B--Extensions Primarily Affecting Businesses
SEC. 221. RESEARCH CREDIT.
(a) In General.--Subparagraph (B) of section 41(h)(1) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Computation of Credit for Taxable Year in Which Credit
Terminates.--Paragraph (2) of section 41(h) is amended to
read as follows:
``(2) Computation of credit for taxable year in which
credit terminates.--
``(A) In general.--In the case of any taxable year with
respect to which this section applies to a number of days
which is less than the total number of days in such taxable
year, the applicable base amount with respect to such taxable
year shall be the amount which bears the same ratio to such
applicable amount (determined without regard to this
paragraph) as the number of days in such taxable year to
which this section applies bears to the total number of days
in such taxable year.
``(B) Applicable base amount.--For purposes of subparagraph
(A), the term `applicable base amount' means, with respect to
any taxable year--
``(i) except as otherwise provided in this subparagraph,
the base amount for the taxable year,
``(ii) in the case of a taxable year with respect to which
an election under subsection (c)(4) (relating to election of
alternative incremental credit) is in effect, the average
described in subsection (c)(1)(B) for the taxable year, and
``(iii) in the case of a taxable year with respect to which
an election under subsection (c)(5) (relating to election of
alternative simplified credit) is in effect, the average
qualified research expenses for the 3 taxable years preceding
the taxable year.''.
(c) Conforming Amendment.--Subparagraph (D) of section
45C(b)(1) is amended by striking ``December 31, 2007'' and
inserting ``December 31, 2008''.
(d) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred after December 31,
2007.
SEC. 222. INDIAN EMPLOYMENT CREDIT.
(a) In General.--Subsection (f) of section 45A is amended
by striking ``December 31, 2007'' and inserting ``December
31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 223. NEW MARKETS TAX CREDIT.
Subparagraph (D) of section 45D(f)(1) is amended by
striking ``and 2008'' and inserting ``2008, and 2009''.
SEC. 224. RAILROAD TRACK MAINTENANCE.
(a) In General.--Subsection (f) of section 45G is amended
by striking ``January 1, 2008'' and inserting ``January 1,
2009''.
(b) Effective Date.--The amendment made by this section
shall apply to expenditures paid or incurred during taxable
years beginning after December 31, 2007.
SEC. 225. FIFTEEN-YEAR STRAIGHT-LINE COST RECOVERY FOR
QUALIFIED LEASEHOLD IMPROVEMENTS AND QUALIFIED
RESTAURANT PROPERTY.
(a) In General.--Clauses (iv) and (v) of section
168(e)(3)(E) are each amended by striking ``January 1, 2008''
and inserting ``January 1, 2009''.
(b) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
2007.
SEC. 226. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS
RACING TRACK FACILITY.
(a) In General.--Subparagraph (D) of section 168(i)(15) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2007.
SEC. 227. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON
INDIAN RESERVATION.
(a) In General.--Paragraph (8) of section 168(j) is amended
by striking ``December 31, 2007'' and inserting ``December
31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2007.
SEC. 228. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.
(a) In General.--Subsection (h) of section 198 is amended
by striking ``December 31, 2007'' and inserting ``December
31, 2008''.
[[Page H4364]]
(b) Effective Date.--The amendment made by this section
shall apply to expenditures paid or incurred after December
31, 2007.
SEC. 229. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME
ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES
IN PUERTO RICO.
(a) In General.--Subparagraph (C) of section 199(d)(8) is
amended--
(1) by striking ``first 2 taxable years'' and inserting
``first 3 taxable years'', and
(2) by striking ``January 1, 2008'' and inserting ``January
1, 2009''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 230. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS
TO CONTROLLING EXEMPT ORGANIZATIONS.
(a) In General.--Clause (iv) of section 512(b)(13)(E) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to payments received or accrued after December
31, 2007.
SEC. 231. QUALIFIED ZONE ACADEMY BONDS.
(a) In General.--Subpart I of part IV of subchapter A of
chapter 1, as amended by sections 106 and 141, is amended by
adding at the end the following new section:
``SEC. 54D. QUALIFIED ZONE ACADEMY BONDS.
``(a) Qualified Zone Academy Bonds.--For purposes of this
subchapter, the term `qualified zone academy 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 a qualified purpose with respect to
a qualified zone academy established by an eligible local
education agency,
``(2) the bond is issued by a State or local government
within the jurisdiction of which such academy is located, and
``(3) the issuer--
``(A) designates such bond for purposes of this section,
``(B) certifies that it has written assurances that the
private business contribution requirement of subsection (b)
will be met with respect to such academy, and
``(C) certifies that it has the written approval of the
eligible local education agency for such bond issuance.
``(b) Private Business Contribution Requirement.--For
purposes of subsection (a), the private business contribution
requirement of this subsection is met with respect to any
issue if the eligible local education agency that established
the qualified zone academy has written commitments from
private entities to make qualified contributions having a
present value (as of the date of issuance of the issue) of
not less than 10 percent of the proceeds of the issue.
``(c) Limitation on Amount of Bonds Designated.--
``(1) National limitation.--There is a national zone
academy bond limitation for each calendar year. Such
limitation is $400,000,000 for 2008, and, except as provided
in paragraph (4), zero thereafter.
``(2) Allocation of limitation.--The national zone academy
bond limitation for a calendar year shall be allocated by the
Secretary among the States on the basis of their respective
populations of individuals below the poverty line (as defined
by the Office of Management and Budget). The limitation
amount allocated to a State under the preceding sentence
shall be allocated by the State education agency to qualified
zone academies within such State.
``(3) Designation subject to limitation amount.--The
maximum aggregate face amount of bonds issued during any
calendar year which may be designated under subsection (a)
with respect to any qualified zone academy shall not exceed
the limitation amount allocated to such academy under
paragraph (2) for such calendar year.
``(4) Carryover of unused limitation.--
``(A) In general.--If for any calendar year--
``(i) the limitation amount for any State, exceeds
``(ii) the amount of bonds issued during such year which
are designated under subsection (a) with respect to qualified
zone academies within such State,
the limitation amount for such State for the following
calendar year shall be increased by the amount of such
excess.
``(B) Limitation on carryover.--Any carryforward of a
limitation amount may be carried only to the first 2 years
following the unused limitation year. For purposes of the
preceding sentence, a limitation amount shall be treated as
used on a first-in first-out basis.
``(C) Coordination with section 1397e.--Any carryover
determined under section 1397E(e)(4) (relating to carryover
of unused limitation) with respect to any State to calendar
year 2008 shall be treated for purposes of this section as a
carryover with respect to such State for such calendar year
under subparagraph (A), and the limitation of subparagraph
(B) shall apply to such carryover taking into account the
calendar years to which such carryover relates.
``(d) Definitions.--For purposes of this section--
``(1) Qualified zone academy.--The term `qualified zone
academy' means any public school (or academic program within
a public school) which is established by and operated under
the supervision of an eligible local education agency to
provide education or training below the postsecondary level
if--
``(A) such public school or program (as the case may be) is
designed in cooperation with business to enhance the academic
curriculum, increase graduation and employment rates, and
better prepare students for the rigors of college and the
increasingly complex workforce,
``(B) students in such public school or program (as the
case may be) will be subject to the same academic standards
and assessments as other students educated by the eligible
local education agency,
``(C) the comprehensive education plan of such public
school or program is approved by the eligible local education
agency, and
``(D)(i) such public school is located in an empowerment
zone or enterprise community (including any such zone or
community designated after the date of the enactment of this
section), or
``(ii) there is a reasonable expectation (as of the date of
issuance of the bonds) that at least 35 percent of the
students attending such school or participating in such
program (as the case may be) will be eligible for free or
reduced-cost lunches under the school lunch program
established under the National School Lunch Act.
``(2) Eligible local education agency.--For purposes of
this section, the term `eligible local education agency'
means any local educational agency as defined in section 9101
of the Elementary and Secondary Education Act of 1965.
``(3) Qualified purpose.--The term `qualified purpose'
means, with respect to any qualified zone academy--
``(A) rehabilitating or repairing the public school
facility in which the academy is established,
``(B) providing equipment for use at such academy,
``(C) developing course materials for education to be
provided at such academy, and
``(D) training teachers and other school personnel in such
academy.
``(4) Qualified contributions.--The term `qualified
contribution' means any contribution (of a type and quality
acceptable to the eligible local education agency) of--
``(A) equipment for use in the qualified zone academy
(including state-of-the-art technology and vocational
equipment),
``(B) technical assistance in developing curriculum or in
training teachers in order to promote appropriate market
driven technology in the classroom,
``(C) services of employees as volunteer mentors,
``(D) internships, field trips, or other educational
opportunities outside the academy for students, or
``(E) any other property or service specified by the
eligible local education agency.''.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 54A(d), as amended by sections
106 and 141, is amended by striking ``or'' at the end of
subparagraph (A), by inserting ``or'' at the end of
subparagraph (B), and by inserting after subparagraph (B) the
following new subparagraph:
``(C) a qualified zone academy bond,''.
(2) Subparagraph (C) of section 54A(d)(2), as amended by
sections 106 and 141, is amended by striking ``and'' at the
end of clause (i), by striking the period at the end of
clause (ii) and inserting ``, and'', and by adding at the end
the following new clause:
``(iii) in the case of a qualified zone academy bond, a
purpose specified in section 54D(a)(1).''.
(3) Section 1397E is amended by adding at the end the
following new subsection:
``(m) Termination.--This section shall not apply to any
obligation issued after the date of the enactment of this
Act.''.
(4) 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. 54D. Qualified zone academy bonds.''.
(c) Effective Date.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.
SEC. 232. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF
COLUMBIA.
(a) Designation of Zone.--
(1) In general.--Subsection (f) of section 1400 is amended
by striking ``2007'' both places it appears and inserting
``2008''.
(2) Effective date.--The amendments made by this subsection
shall apply to periods beginning after December 31, 2007.
(b) Tax-Exempt Economic Development Bonds.--
(1) In general.--Subsection (b) of section 1400A is amended
by striking ``2007'' and inserting ``2008''.
(2) Effective date.--The amendment made by this subsection
shall apply to bonds issued after December 31, 2007.
(c) Zero Percent Capital Gains Rate.--
(1) In general.--Subsection (b) of section 1400B is amended
by striking ``2008'' each place it appears and inserting
``2009''.
(2) Conforming amendments.--
(A) Section 1400B(e)(2) is amended--
(i) by striking ``2012'' and inserting ``2013'', and
(ii) by striking ``2012'' in the heading thereof and
inserting ``2013''.
(B) Section 1400B(g)(2) is amended by striking ``2012'' and
inserting ``2013''.
(C) Section 1400F(d) is amended by striking ``2012'' and
inserting ``2013''.
(3) Effective dates.--
(A) Extension.--The amendments made by paragraph (1) shall
apply to acquisitions after December 31, 2007.
[[Page H4365]]
(B) Conforming amendments.--The amendments made by
paragraph (2) shall take effect on the date of the enactment
of this Act.
(d) First-Time Homebuyer Credit.--
(1) In general.--Subsection (i) of section 1400C is amended
by striking ``2008'' and inserting ``2009''.
(2) Effective date.--The amendment made by this subsection
shall apply to property purchased after December 31, 2007.
SEC. 233. ECONOMIC DEVELOPMENT CREDIT FOR AMERICAN SAMOA.
(a) In General.--Subsection (d) of section 119 of division
A of the Tax Relief and Health Care Act of 2006 is amended--
(1) by striking ``first two taxable years'' and inserting
``first 3 taxable years'', and
(2) by striking ``January 1, 2008'' and inserting ``January
1, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 234. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF
FOOD INVENTORY.
(a) In General.--Clause (iv) of section 170(e)(3)(C) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made after December 31, 2007.
SEC. 235. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF
BOOK INVENTORY TO PUBLIC SCHOOLS.
(a) In General.--Clause (iv) of section 170(e)(3)(D) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made after December 31, 2007.
SEC. 236. ENHANCED DEDUCTION FOR QUALIFIED COMPUTER
CONTRIBUTIONS.
(a) In General.--Subparagraph (G) of section 170(e)(6) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made during taxable years
beginning after December 31, 2007.
SEC. 237. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING
CHARITABLE CONTRIBUTIONS OF PROPERTY.
(a) In General.--The last sentence of section 1367(a)(2) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made in taxable years beginning
after December 31, 2007.
SEC. 238. WORK OPPORTUNITY TAX CREDIT FOR HURRICANE KATRINA
EMPLOYEES.
(a) In General.--Paragraph (1) of section 201(b) of the
Katrina Emergency Tax Relief Act of 2005 is amended by
striking ``2-year'' and inserting ``3-year''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to individuals hired after August 27, 2007.
SEC. 239. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME.
(a) Exempt Insurance Income.--Paragraph (10) of section
953(e) (relating to application) is amended--
(1) by striking ``January 1, 2009'' and inserting ``January
1, 2010'', and
(2) by striking ``December 31, 2008'' and inserting
``December 31, 2009''.
(b) Exception to Treatment as Foreign Personal Holding
Company Income.--Paragraph (9) of section 954(h) (relating to
application) is amended by striking ``January 1, 2009'' and
inserting ``January 1, 2010''.
SEC. 240. LOOK-THRU RULE FOR RELATED CONTROLLED FOREIGN
CORPORATIONS.
(a) In General.--Subparagraph (B) of section 954(c)(6)
(relating to application) is amended by striking ``January 1,
2009'' and inserting ``January 1, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years of foreign corporations
beginning after December 31, 2008, and to taxable years of
United States shareholders with or within which such taxable
years of foreign corporations end.
SEC. 241. EXPENSING FOR CERTAIN QUALIFIED FILM AND TELEVISION
PRODUCTIONS.
(a) In General.--Subsection (f) of section 181 is amended
by striking ``December 31, 2008'' and inserting ``December
31, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to productions commencing after December 31,
2008.
Subtitle C--Other Extensions
SEC. 251. AUTHORITY TO DISCLOSE INFORMATION RELATED TO
TERRORIST ACTIVITIES MADE PERMANENT.
(a) In General.--Subparagraph (C) of section 6103(i)(3) is
amended by striking clause (iv).
(b) Disclosure on Request.--Paragraph (7) of section
6103(i) is amended by striking subparagraph (E).
(c) Effective Date.--The amendments made by this section
shall apply to disclosures after the date of the enactment of
this Act.
SEC. 252. AUTHORITY FOR UNDERCOVER OPERATIONS MADE PERMANENT.
(a) In General.--Subsection (c) of section 7608 is amended
by striking paragraph (6).
(b) Effective Date.--The amendment made by this section
shall take effect on January 1, 2008.
SEC. 253. AUTHORITY TO DISCLOSE RETURN INFORMATION FOR
CERTAIN VETERANS PROGRAMS MADE PERMANENT.
(a) In General.--Paragraph (7) of section 6103(l) is
amended by striking the last sentence thereof.
(b) Conforming Amendment.--Section 6103(l)(7)(D)(viii)(III)
is amended by striking ``sections 1710(a)(1)(I), 1710(a)(2),
1710(b), and 1712(a)(2)(B)'' and inserting ``sections
1710(a)(2)(G), 1710(a)(3), and 1710(b)''.
(c) Effective Date.--The amendment made by subsection (a)
shall apply to requests made after September 30, 2008.
SEC. 254. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX
TO PUERTO RICO AND THE VIRGIN ISLANDS.
(a) In General.--Paragraph (1) of section 7652(f) is
amended by striking ``January 1, 2008'' and inserting
``January 1, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to distilled spirits brought into the United
States after December 31, 2007.
TITLE III--ADDITIONAL TAX RELIEF
Subtitle A--Individual Tax Relief
SEC. 301. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY
TAXES FOR NONITEMIZERS.
(a) In General.--Section 63(c)(1) (defining standard
deduction) 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) in the case of any taxable year beginning in 2008,
the real property tax deduction.''.
(b) Definition.--Section 63(c) is amended by adding at the
end the following new paragraph:
``(7) Real property tax deduction.--For purposes of
paragraph (1), the real property tax deduction is the lesser
of--
``(A) the amount allowable as a deduction under this
chapter for State and local taxes described in section
164(a)(1), or
``(B) $350 ($700 in the case of a joint return).
Any taxes taken into account under section 62(a) shall not be
taken into account under this paragraph.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 302. REFUNDABLE CHILD CREDIT.
(a) Modification of Threshold Amount.--Clause (i) of
section 24(d)(1)(B) is amended by inserting ``($8,500 in the
case of taxable years beginning in 2008)'' after ``$10,000''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31,
2007.
SEC. 303. INCREASE OF AMT REFUNDABLE CREDIT AMOUNT FOR
INDIVIDUALS WITH LONG-TERM UNUSED CREDITS FOR
PRIOR YEAR MINIMUM TAX LIABILITY, ETC.
(a) In General.--Paragraph (2) of section 53(e) is amended
to read as follows:
``(2) AMT refundable credit amount.--For purposes of
paragraph (1), the term `AMT refundable credit amount' means,
with respect to any taxable year, the amount (not in excess
of the long-term unused minimum tax credit for such taxable
year) equal to the greater of--
``(A) 50 percent of the long-term unused minimum tax credit
for such taxable year, or
``(B) the amount (if any) of the AMT refundable credit
amount for the taxpayer's preceding taxable year (determined
without regard to subsection (f)(2)).''.
(b) Treatment of Certain Underpayments, Interest, and
Penalties Attributable to the Treatment of Incentive Stock
Options.--Section 53 is amended by adding at the end the
following new subsection:
``(f) Treatment of Certain Underpayments, Interest, and
Penalties Attributable to the Treatment of Incentive Stock
Options.--
``(1) Abatement.--Any underpayment of tax outstanding on
the date of the enactment of this subsection which is
attributable to the application of section 56(b)(3) for any
taxable year ending before January 1, 2008 (and any interest
or penalty with respect to such underpayment which is
outstanding on such date of enactment), is hereby abated. The
amount determined under subsection (b)(1) shall not include
any tax abated under the preceding sentence.
``(2) Increase in credit for certain interest and penalties
already paid.--The AMT refundable credit amount for the
taxpayer's first 2 taxable years beginning after December 31,
2007, shall each be increased by 50 percent of the aggregate
amount of the interest and penalties which were paid by the
taxpayer before the date of the enactment of this subsection
and which would (but for such payment) have been abated under
paragraph (1).''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendment made by this section shall apply to taxable years
beginning after December 31, 2007.
(2) Abatement.--Section 53(f)(1) of the Internal Revenue
Code of 1986, as added by subsection (b), shall take effect
on the date of the enactment of this Act.
Subtitle B--Business Related Provisions
SEC. 311. UNIFORM TREATMENT OF ATTORNEY-ADVANCED EXPENSES AND
COURT COSTS IN CONTINGENCY FEE CASES.
(a) In General.--Section 162 is amended by redesignating
subsection (q) as subsection (r) and by inserting after
subsection (p) the following new subsection:
[[Page H4366]]
``(q) Attorney-Advanced Expenses and Court Costs in
Contingency Fee Cases.--In the case of any expense or court
cost which is paid or incurred in the course of the trade or
business of practicing law and the repayment of which is
contingent on a recovery by judgment or settlement in the
action to which such expense or cost relates, the deduction
under subsection (a) shall be determined as if such expense
or cost was not subject to repayment.''.
(b) Effective Date.--The amendment made by this section
shall apply to expenses and costs paid or incurred in taxable
years beginning after the date of the enactment of this Act.
SEC. 312. PROVISIONS RELATED TO FILM AND TELEVISION
PRODUCTIONS.
(a) Modification of Limitation on Expensing.--Subparagraph
(A) of section 181(a)(2) is amended to read as follows:
``(A) In general.--Paragraph (1) shall not apply to so much
of the aggregate cost of any qualified film or television
production as exceeds $15,000,000.''.
(b) Modifications to Deduction for Domestic Activities.--
(1) Determination of w-2 wages.--Paragraph (2) of section
199(b) is amended by adding at the end the following new
subparagraph:
``(D) Special rule for qualified film.--In the case of a
qualified film, such term shall include compensation for
services performed in the United States by actors, production
personnel, directors, and producers.''.
(2) Definition of qualified film.--Paragraph (6) of section
199(c) is amended by adding at the end the following: ``A
qualified film shall include any copyrights, trademarks, or
other intangibles with respect to such film. The methods and
means of distributing a qualified film shall not affect the
availability of the deduction under this section.''.
(3) Partnerships.--Subparagraph (A) of section 199(d)(1) is
amended by striking ``and'' at the end of clause (ii), by
striking the period at the end of clause (iii) and inserting
``, and'', and by adding at the end the following new clause:
``(iv) in the case of each partner of a partnership, or
shareholder of an S corporation, who owns (directly or
indirectly) at least 20 percent of the capital interests in
such partnership or of the stock of such S corporation--
``(I) such partner or shareholder shall be treated as
having engaged directly in any film produced by such
partnership or S corporation, and
``(II) such partnership or S corporation shall be treated
as having engaged directly in any film produced by such
partner or shareholder.''.
(c) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to taxable years beginning after December 31, 2007.
(2) Expensing.--The amendments made by subsection (a) shall
apply to qualified film and television productions commencing
after December 31, 2007.
Subtitle C--Modification of Penalty on Understatement of Taxpayer's
Liability by Tax Return Preparer
SEC. 321. MODIFICATION OF PENALTY ON UNDERSTATEMENT OF
TAXPAYER'S LIABILITY BY TAX RETURN PREPARER.
(a) In General.--Subsection (a) of section 6694 (relating
to understatement due to unreasonable positions) is amended
to read as follows:
``(a) Understatement Due to Unreasonable Positions.--
``(1) In general.--If a tax return preparer--
``(A) prepares any return or claim of refund with respect
to which any part of an understatement of liability is due to
a position described in paragraph (2), and
``(B) knew (or reasonably should have known) of the
position,
such tax return preparer shall pay a penalty with respect to
each such return or claim in an amount equal to the greater
of $1,000 or 50 percent of the income derived (or to be
derived) by the tax return preparer with respect to the
return or claim.
``(2) Unreasonable position.--
``(A) In general.--Except as otherwise provided in this
paragraph, a position is described in this paragraph unless
there is or was substantial authority for the position.
``(B) Disclosed positions.--If the position was disclosed
as provided in section 6662(d)(2)(B)(ii)(I) and is not a
position to which subparagraph (C) applies, the position is
described in this paragraph unless there is a reasonable
basis for the position.
``(C) Tax shelters and reportable transactions.--If the
position is with respect to a tax shelter (as defined in
section 6662(d)(2)(C)(ii)) or a reportable transaction to
which section 6662A applies, the position is described in
this paragraph unless it is reasonable to believe that the
position would more likely than not be sustained on its
merits.
``(3) Reasonable cause exception.--No penalty shall be
imposed under this subsection if it is shown that there is
reasonable cause for the understatement and the tax return
preparer acted in good faith.''.
(b) Effective Date.--The amendment made by this section
shall apply--
(1) in the case of a position other than a position
described in subparagraph (C) of section 6694(a)(2) of the
Internal Revenue Code of 1986 (as amended by this section),
to returns prepared after May 25, 2007, and
(2) in the case of a position described in such
subparagraph (C), to returns prepared for taxable years
ending after the date of the enactment of this Act.
Subtitle D--Extension and Expansion of Certain GO Zone Incentives
SEC. 331. CERTAIN GO ZONE INCENTIVES.
(a) Use of Amended Income Tax Returns To Take Into Account
Receipt of Certain Hurricane-Related Casualty Loss Grants by
Disallowing Previously Taken Casualty Loss Deductions.--
(1) In general.--Notwithstanding any other provision of the
Internal Revenue Code of 1986, if a taxpayer claims a
deduction for any taxable year with respect to a casualty
loss to a principal residence (within the meaning of section
121 of such Code) resulting from Hurricane Katrina, Hurricane
Rita, or Hurricane Wilma and in a subsequent taxable year
receives a grant under Public Law 109-148, 109-234, or 110-
116 as reimbursement for such loss, such taxpayer may elect
to file an amended income tax return for the taxable year in
which such deduction was allowed (and for any taxable year to
which such deduction is carried) and reduce (but not below
zero) the amount of such deduction by the amount of such
reimbursement.
(2) Time of filing amended return.--Paragraph (1) shall
apply with respect to any grant only if any amended income
tax returns with respect to such grant are filed not later
than the later of--
(A) the due date for filing the tax return for the taxable
year in which the taxpayer receives such grant, or
(B) the date which is 1 year after the date of the
enactment of this Act.
(3) Waiver of penalties and interest.--Any underpayment of
tax resulting from the reduction under paragraph (1) of the
amount otherwise allowable as a deduction shall not be
subject to any penalty or interest under such Code if such
tax is paid not later than 1 year after the filing of the
amended return to which such reduction relates.
(b) Waiver of Deadline on Construction of GO Zone Property
Eligible for Bonus Depreciation.--
(1) In general.--Subparagraph (B) of section 1400N(d)(3) is
amended to read as follows:
``(B) without regard to `and before January 1, 2009' in
clause (i) thereof,''.
(2) Effective date.--The amendment made by this subsection
shall apply to property placed in service after December 31,
2007.
(c) Inclusion of Certain Counties in Gulf Opportunity Zone
for Purposes of Tax-Exempt Bond Financing.--
(1) In general.--Subsection (a) of section 1400N is amended
by adding at the end the following new paragraph:
``(8) Inclusion of certain counties.--For purposes of this
subsection, the Gulf Opportunity Zone includes Colbert
County, Alabama and Dallas County, Alabama.''.
(2) Effective date.--The amendment made by this subsection
shall take effect as if included in the provisions of the
Gulf Opportunity Zone Act of 2005 to which it relates.
TITLE IV--REVENUE PROVISIONS
SEC. 401. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX
INDIFFERENT PARTIES.
(a) In General.--Subpart B of part II of subchapter E of
chapter 1 is amended by inserting after section 457 the
following new section:
``SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN
TAX INDIFFERENT PARTIES.
``(a) In General.--Any compensation which is deferred under
a nonqualified deferred compensation plan of a nonqualified
entity shall be includible in gross income when there is no
substantial risk of forfeiture of the rights to such
compensation.
``(b) Nonqualified Entity.--For purposes of this section,
the term `nonqualified entity' means--
``(1) any foreign corporation unless substantially all of
its income is--
``(A) effectively connected with the conduct of a trade or
business in the United States, or
``(B) subject to a comprehensive foreign income tax, and
``(2) any partnership unless substantially all of its
income is allocated to persons other than--
``(A) foreign persons with respect to whom such income is
not subject to a comprehensive foreign income tax, and
``(B) organizations which are exempt from tax under this
title.
``(c) Determinability of Amounts of Compensation.--
``(1) In general.--If the amount of any compensation is not
determinable at the time that such compensation is otherwise
includible in gross income under subsection (a)--
``(A) such amount shall be so includible in gross income
when determinable, and
``(B) the tax imposed under this chapter for the taxable
year in which such compensation is includible in gross income
shall be increased by the sum of--
``(i) the amount of interest determined under paragraph
(2), and
``(ii) an amount equal to 20 percent of the amount of such
compensation.
``(2) Interest.--For purposes of paragraph (1)(B)(i), the
interest determined under this paragraph for any taxable year
is the amount of interest at the underpayment rate
[[Page H4367]]
under section 6621 plus 1 percentage point on the
underpayments that would have occurred had the deferred
compensation been includible in gross income for the taxable
year in which first deferred or, if later, the first taxable
year in which such deferred compensation is not subject to a
substantial risk of forfeiture.
``(d) Other Definitions and Special Rules.--For purposes of
this section--
``(1) Substantial risk of forfeiture.--
``(A) In general.--The rights of a person to compensation
shall be treated as subject to a substantial risk of
forfeiture only if such person's rights to such compensation
are conditioned upon the future performance of substantial
services by any individual.
``(B) Exception for compensation based on gain recognized
on an investment asset.--
``(i) In general.--To the extent provided in regulations
prescribed by the Secretary, if compensation is determined
solely by reference to the amount of gain recognized on the
disposition of an investment asset, such compensation shall
be treated as subject to a substantial risk of forfeiture
until the date of such disposition.
``(ii) Investment asset.--For purposes of clause (i), the
term `investment asset' means any single asset (other than an
investment fund or similar entity)--
``(I) acquired directly by an investment fund or similar
entity,
``(II) with respect to which such entity does not (nor does
any person related to such entity) participate in the active
management of such asset (or if such asset is an interest in
an entity, in the active management of the activities of such
entity), and
``(III) substantially all of any gain on the disposition of
which (other than such deferred compensation) is allocated to
investors in such entity.
``(iii) Coordination with special rule.--Paragraph (3)(B)
shall not apply to any compensation to which clause (i)
applies.
``(2) Comprehensive foreign income tax.--The term
`comprehensive foreign income tax' means, with respect to any
foreign person, the income tax of a foreign country if--
``(A) such person is eligible for the benefits of a
comprehensive income tax treaty between such foreign country
and the United States, or
``(B) such person demonstrates to the satisfaction of the
Secretary that such foreign country has a comprehensive
income tax.
``(3) Nonqualified deferred compensation plan.--
``(A) In general.--The term `nonqualified deferred
compensation plan' has the meaning given such term under
section 409A(d), except that such term shall include any plan
that provides a right to compensation based on the
appreciation in value of a specified number of equity units
of the service recipient.
``(B) Exception.--Compensation shall not be treated as
deferred for purposes of this section if the service provider
receives payment of such compensation not later than 12
months after the end of the taxable year of the service
recipient during which the right to the payment of such
compensation is no longer subject to a substantial risk of
forfeiture.
``(4) Exception for certain compensation with respect to
effectively connected income.--In the case a foreign
corporation with income which is taxable under section 882,
this section shall not apply to compensation which, had such
compensation had been paid in cash on the date that such
compensation ceased to be subject to a substantial risk of
forfeiture, would have been deductible by such foreign
corporation against such income.
``(5) Application of rules.--Rules similar to the rules of
paragraphs (5) and (6) of section 409A(d) shall apply.
``(e) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
the purposes of this section, including regulations
disregarding a substantial risk of forfeiture in cases where
necessary to carry out the purposes of this section.''.
(b) Conforming Amendment.--Section 26(b)(2) is amended by
striking ``and'' at the end of subparagraph (U), by striking
the period at the end of subparagraph (V) and inserting ``,
and'', and by adding at the end the following new
subparagraph:
``(W) section 457A(c)(1)(B) (relating to determinability of
amounts of compensation).''.
(c) Clerical Amendment.--The table of sections of subpart B
of part II of subchapter E of chapter 1 is amended by
inserting after the item relating to section 457 the
following new item:
``Sec. 457A. Nonqualified deferred compensation from certain tax
indifferent parties.''.
(d) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to amounts deferred which are attributable to services
performed after December 31, 2008.
(2) Application to existing deferrals.--In the case of any
amount deferred to which the amendments made by this section
do not apply solely by reason of the fact that the amount is
attributable to services performed before January 1, 2009, to
the extent such amount is not includible in gross income in a
taxable year beginning before 2018, such amounts shall be
includible in gross income in the later of--
(A) the last taxable year beginning before 2018, or
(B) the taxable year in which there is no substantial risk
of forfeiture of the rights to such compensation (determined
in the same manner as determined for purposes of section 457A
of the Internal Revenue Code of 1986, as added by this
section).
(3) Charitable contributions of existing deferrals
permitted.--
(A) In general.--Notwithstanding section 170(b) of the
Internal Revenue Code of 1986, any qualified contribution
shall be allowed as a deduction under section 170 of such
Code for the taxpayer's last taxable year beginning before
2018 to the extent the aggregate of such contributions made
during such taxable year does not exceed the excess of the
qualified inclusion amount over the amount of the deduction
for all other charitable contributions allowable under
section 170 of such Code for such taxable year. Proper
adjustments shall be made under section 170(d) to take
account of the preceding sentence.
(B) Qualified contribution.--For purposes of this
paragraph, the term ``qualified contribution'' means any
charitable contribution (as defined in section 170(c) of such
Code) made during taxpayer's last taxable year beginning
before 2018 if such contribution is paid in cash to an
organization described in section 170(b)(1)(A) of such Code
(other than any organization described in section 509(a)(3)
of such Code or any fund or account described in section
4966(d)(2) of such Code).
(C) Qualified inclusion amount.--For purposes of this
paragraph, the term ``qualified inclusion amount'' means the
amount includible in the taxpayer's gross income for the last
taxable year beginning before 2018 by reason of paragraph
(2).
(4) Accelerated payments.--No later than 120 days after the
date of the enactment of this Act, the Secretary shall issue
guidance providing a limited period of time during which a
nonqualified deferred compensation arrangement attributable
to services performed on or before December 31, 2008, may,
without violating the requirements of section 409A(a) of the
Internal Revenue Code of 1986, be amended to conform the date
of distribution to the date the amounts are required to be
included in income.
(5) Certain back-to-back arrangements.--If the taxpayer is
also a service recipient and maintains one or more
nonqualified deferred compensation arrangements for its
service providers under which any amount is attributable to
services performed on or before December 31, 2008, the
guidance issued under paragraph (4) shall permit such
arrangements to be amended to conform the dates of
distribution under such arrangement to the date amounts are
required to be included in the income of such taxpayer under
this subsection.
(6) Accelerated payment not treated as material
modification.--Any amendment to a nonqualified deferred
compensation arrangement made pursuant to paragraph (4) or
(5) shall not be treated as a material modification of the
arrangement for purposes of section 409A of the Internal
Revenue Code of 1986.
SEC. 402. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF
INTEREST.
(a) In General.--Paragraphs (5)(D) and (6) of section
864(f) are each amended by striking ``December 31, 2008'' and
inserting ``December 31, 2018''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.
SEC. 403. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
(a) Repeal of Adjustment for 2012.--Subparagraph (B) of
section 401(1) of the Tax Increase Prevention and
Reconciliation Act of 2005 is amended by striking the
percentage contained therein and inserting ``100 percent''.
(b) Modification of Adjustment for 2013.--The percentage
under subparagraph (C) of section 401(1) of the Tax Increase
Prevention and Reconciliation Act of 2005 in effect on the
date of the enactment of this Act is increased by 36.75
percentage points.
The SPEAKER pro tempore. Pursuant to House Resolution 1212, the
amendment in the nature of a substitute printed in the bill is adopted
and the bill, as amended, is considered read.
The text of the bill, as amended, is as follows:
H.R. 6049
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 ``Renewable
Energy and Job Creation Act of 2008''.
(b) Reference.--Except as otherwise expressly provided,
whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other
provision, the reference shall be considered to be made to a
section or other provision of the Internal Revenue Code of
1986.
(c) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title, etc.
TITLE I--ENERGY TAX INCENTIVES
Subtitle A--Energy Production Incentives
Part I--Renewable Energy Incentives
Sec. 101. Renewable energy credit.
[[Page H4368]]
Sec. 102. Production credit for electricity produced from marine
renewables.
Sec. 103. Energy credit.
Sec. 104. Credit for residential energy efficient property.
Sec. 105. Special rule to implement FERC and State electric
restructuring policy.
Sec. 106. New clean renewable energy bonds.
Part II--Carbon Mitigation Provisions
Sec. 111. Expansion and modification of advanced coal project
investment credit.
Sec. 112. Expansion and modification of coal gasification investment
credit.
Sec. 113. Temporary increase in coal excise tax.
Sec. 114. Special rules for refund of the coal excise tax to certain
coal producers and exporters.
Sec. 115. Carbon audit of the tax code.
Subtitle B--Transportation and Domestic Fuel Security Provisions
Sec. 121. Inclusion of cellulosic biofuel in bonus depreciation for
biomass ethanol plant property.
Sec. 122. Credits for biodiesel and renewable diesel.
Sec. 123. Clarification that credits for fuel are designed to provide
an incentive for United States production.
Sec. 124. Credit for new qualified plug-in electric drive motor
vehicles.
Sec. 125. Exclusion from heavy truck tax for idling reduction units and
advanced insulation.
Sec. 126. Restructuring of New York Liberty Zone tax credits.
Sec. 127. Transportation fringe benefit to bicycle commuters.
Sec. 128. Alternative fuel vehicle refueling property credit.
Subtitle C--Energy Conservation and Efficiency Provisions
Sec. 141. Qualified energy conservation bonds.
Sec. 142. Credit for nonbusiness energy property.
Sec. 143. Energy efficient commercial buildings deduction.
Sec. 144. Modifications of energy efficient appliance credit for
appliances produced after 2007.
Sec. 145. Accelerated recovery period for depreciation of smart meters
and smart grid systems.
Sec. 146. Qualified green building and sustainable design projects.
TITLE II--ONE-YEAR EXTENSION OF TEMPORARY PROVISIONS
Subtitle A--Extensions Primarily Affecting Individuals
Sec. 201. Deduction for State and local sales taxes.
Sec. 202. Deduction of qualified tuition and related expenses.
Sec. 203. Treatment of certain dividends of regulated investment
companies.
Sec. 204. Tax-free distributions from individual retirement plans for
charitable purposes.
Sec. 205. Deduction for certain expenses of elementary and secondary
school teachers.
Sec. 206. Election to include combat pay as earned income for purposes
of earned income tax credit.
Sec. 207. Modification of mortgage revenue bonds for veterans.
Sec. 208. Distributions from retirement plans to individuals called to
active duty.
Sec. 209. Stock in RIC for purposes of determining estates of
nonresidents not citizens.
Sec. 210. Qualified investment entities.
Sec. 211. Exclusion of amounts received under qualified group legal
services plans.
Subtitle B--Extensions Primarily Affecting Businesses
Sec. 221. Research credit.
Sec. 222. Indian employment credit.
Sec. 223. New markets tax credit.
Sec. 224. Railroad track maintenance.
Sec. 225. Fifteen-year straight-line cost recovery for qualified
leasehold improvements and qualified restaurant property.
Sec. 226. Seven-year cost recovery period for motorsports racing track
facility.
Sec. 227. Accelerated depreciation for business property on Indian
reservation.
Sec. 228. Expensing of environmental remediation costs.
Sec. 229. Deduction allowable with respect to income attributable to
domestic production activities in Puerto Rico.
Sec. 230. Modification of tax treatment of certain payments to
controlling exempt organizations.
Sec. 231. Qualified zone academy bonds.
Sec. 232. Tax incentives for investment in the District of Columbia.
Sec. 233. Economic development credit for American Samoa.
Sec. 234. Enhanced charitable deduction for contributions of food
inventory.
Sec. 235. Enhanced charitable deduction for contributions of book
inventory to public schools.
Sec. 236. Enhanced deduction for qualified computer contributions.
Sec. 237. Basis adjustment to stock of S corporations making charitable
contributions of property.
Sec. 238. Work opportunity tax credit for Hurricane Katrina employees.
Sec. 239. Subpart F exception for active financing income.
Sec. 240. Look-thru rule for related controlled foreign corporations.
Sec. 241. Expensing for certain qualified film and television
productions.
Subtitle C--Other Extensions
Sec. 251. Authority to disclose information related to terrorist
activities made permanent.
Sec. 252. Authority for undercover operations made permanent.
Sec. 253. Authority to disclose return information for certain veterans
programs made permanent.
Sec. 254. Increase in limit on cover over of rum excise tax to Puerto
Rico and the Virgin Islands.
Sec. 255. Parity in the application of certain limits to mental health
benefits.
TITLE III--ADDITIONAL TAX RELIEF
Subtitle A--Individual Tax Relief
Sec. 301. Additional standard deduction for real property taxes for
nonitemizers.
Sec. 302. Refundable child credit.
Sec. 303. Increase of AMT refundable credit amount for individuals with
long-term unused credits for prior year minimum tax
liability, etc.
Subtitle B--Business Related Provisions
Sec. 311. Uniform treatment of attorney-advanced expenses and court
costs in contingency fee cases.
Sec. 312. Provisions related to film and television productions.
Subtitle C--Modification of Penalty on Understatement of Taxpayer's
Liability by Tax Return Preparer
Sec. 321. Modification of penalty on understatement of taxpayer's
liability by tax return preparer.
Subtitle D--Extension and Expansion of Certain GO Zone Incentives
Sec. 331. Certain GO Zone incentives.
TITLE IV--REVENUE PROVISIONS
Sec. 401. Nonqualified deferred compensation from certain tax
indifferent parties.
Sec. 402. Delay in application of worldwide allocation of interest.
Sec. 403. Time for payment of corporate estimated taxes.
TITLE I--ENERGY TAX INCENTIVES
Subtitle A--Energy Production Incentives
PART I--RENEWABLE ENERGY INCENTIVES
SEC. 101. RENEWABLE ENERGY CREDIT.
(a) Extension of Credit.--
(1) 1-year extension for wind facilities.--Paragraph (1) of
section 45(d) is amended by striking ``January 1, 2009'' and
inserting ``January 1, 2010''.
(2) 3-year extension for certain other facilities.--Each of
the following provisions of section 45(d) is amended by
striking ``January 1, 2009'' and inserting ``January 1,
2012'':
(A) Clauses (i) and (ii) of paragraph (2)(A).
(B) Clauses (i)(I) and (ii) of paragraph (3)(A).
(C) Paragraph (4).
(D) Paragraph (5).
(E) Paragraph (6).
(F) Paragraph (7).
(G) Subparagraphs (A) and (B) of paragraph (9).
(b) Modification of Credit Phaseout.--
(1) Repeal of phaseout.--Subsection (b) of section 45 is
amended--
(A) by striking paragraph (1), and
(B) by striking ``the 8 cent amount in paragraph (1),'' in
paragraph (2) thereof.
(2) Limitation based on investment in facility.--Subsection
(b) of section 45 is amended by inserting before paragraph
(2) the following new paragraph:
``(1) Limitation based on investment in facility.--
``(A) In general.--In the case of any qualified facility
originally placed in service after December 31, 2009, the
amount of the credit determined under subsection (a) for any
taxable year with respect to electricity produced at such
facility shall not exceed the product of--
``(i) the applicable percentage with respect to such
facility, multiplied by
``(ii) the eligible basis of such facility.
``(B) Carryforward of unused limitation and excess
credit.--
``(i) Unused limitation.--If the limitation imposed under
subparagraph (A) with respect to any facility for any taxable
year exceeds the prelimitation credit for such facility for
such taxable year, the limitation imposed under subparagraph
(A) with respect to such facility for the succeeding taxable
year shall be increased by the amount of such excess.
``(ii) Excess credit.--If the prelimitation credit with
respect to any facility for any taxable year exceeds the
limitation imposed under subparagraph (A) with respect to
such facility for such taxable year, the credit determined
under subsection (a) with respect to such facility for the
succeeding taxable year (determined before the application of
subparagraph (A) for such succeeding taxable year) shall be
increased by the amount of such excess. With respect to any
facility, no amount may be carried forward under this clause
to any taxable year beginning after the 10-year period
described in subsection (a)(2)(A)(ii) with respect to such
facility.
``(iii) Prelimitation credit.--The term `prelimitation
credit' with respect to any facility for a taxable year means
the credit determined under subsection (a) with respect to
such facility for such taxable year, determined without
regard to subparagraph (A) and after taking into account any
increase for such taxable year under clause (ii).
``(C) Applicable percentage.--For purposes of this
paragraph--
``(i) In general.--The term `applicable percentage' means,
with respect to any facility, the
[[Page H4369]]
appropriate percentage prescribed by the Secretary for the
month in which such facility is originally placed in service.
``(ii) Method of prescribing applicable percentages.--The
applicable percentages prescribed by the Secretary for any
month under clause (i) shall be percentages which yield over
a 10-year period amounts of limitation under subparagraph (A)
which have a present value equal to 35 percent of the
eligible basis of the facility.
``(iii) Method of discounting.--The present value under
clause (ii) shall be determined--
``(I) as of the last day of the 1st year of the 10-year
period referred to in clause (ii),
``(II) by using a discount rate equal to the greater of 110
percent of the Federal long-term rate as in effect under
section 1274(d) for the month preceding the month for which
the applicable percentage is being prescribed, or 4.5
percent, and
``(III) by taking into account the limitation under
subparagraph (A) for any year on the last day of such year.
``(D) Eligible basis.--For purposes of this paragraph--
``(i) In general.--The term `eligible basis' means, with
respect to any facility, the sum of--
``(I) the basis of such facility determined as of the time
that such facility is originally placed in service, and
``(II) the portion of the basis of any shared qualified
property which is properly allocable to such facility under
clause (ii).
``(ii) Rules for allocation.--For purposes of subclause
(II) of clause (i), the basis of shared qualified property
shall be allocated among all qualified facilities which are
projected to be placed in service and which require
utilization of such property in proportion to projected
generation from such facilities.
``(iii) Shared qualified property.--For purposes of this
paragraph, the term `shared qualified property' means, with
respect to any facility, any property described in section
168(e)(3)(B)(vi)--
``(I) which a qualified facility will require for
utilization of such facility, and
``(II) which is not a qualified facility.
``(iv) Special rule relating to geothermal facilities.--In
the case of any qualified facility using geothermal energy to
produce electricity, the basis of such facility for purposes
of this paragraph shall be determined as though intangible
drilling and development costs described in section 263(c)
were capitalized rather than expensed.
``(E) Special rule for first and last year of credit
period.--In the case of any taxable year any portion of which
is not within the 10-year period described in subsection
(a)(2)(A)(ii) with respect to any facility, the amount of the
limitation under subparagraph (A) with respect to such
facility shall be reduced by an amount which bears the same
ratio to the amount of such limitation (determined without
regard to this subparagraph) as such portion of the taxable
year which is not within such period bears to the entire
taxable year.
``(F) Election to treat all facilities placed in service in
a year as 1 facility.--At the election of the taxpayer, all
qualified facilities which are part of the same project and
which are placed in service during the same calendar year
shall be treated for purposes of this section as 1 facility
which is placed in service at the mid-point of such year or
the first day of the following calendar year.''.
(c) Trash Facility Clarification.--Paragraph (7) of section
45(d) is amended--
(1) by striking ``facility which burns'' and inserting
``facility (other than a facility described in paragraph (6))
which uses'', and
(2) by striking ``combustion''.
(d) Expansion of Biomass Facilities.--
(1) Open-loop biomass facilities.--Paragraph (3) of section
45(d) is amended by redesignating subparagraph (B) as
subparagraph (C) and by inserting after subparagraph (A) the
following new subparagraph:
``(B) Expansion of facility.--Such term shall include a new
unit placed in service after the date of the enactment of
this subparagraph in connection with a facility described in
subparagraph (A), but only to the extent of the increased
amount of electricity produced at the facility by reason of
such new unit.''.
(2) Closed-loop biomass facilities.--Paragraph (2) of
section 45(d) is amended by redesignating subparagraph (B) as
subparagraph (C) and inserting after subparagraph (A) the
following new subparagraph:
``(B) Expansion of facility.--Such term shall include a new
unit placed in service after the date of the enactment of
this subparagraph in connection with a facility described in
subparagraph (A)(i), but only to the extent of the increased
amount of electricity produced at the facility by reason of
such new unit.''.
(e) Sales of Net Electricity to Regulated Public Utilities
Treated as Sales to Unrelated Persons.--Paragraph (4) of
section 45(e) is amended by adding at the end the following
new sentence: ``The net amount of electricity sold by any
taxpayer to a regulated public utility (as defined in section
7701(a)(33)) shall be treated as sold to an unrelated
person.''.
(f) Modification of Rules for Hydropower Production.--
Subparagraph (C) of section 45(c)(8) is amended to read as
follows:
``(C) Nonhydroelectric dam.--For purposes of subparagraph
(A), a facility is described in this subparagraph if--
``(i) the hydroelectric project installed on the
nonhydroelectric dam is licensed by the Federal Energy
Regulatory Commission and meets all other applicable
environmental, licensing, and regulatory requirements,
``(ii) the nonhydroelectric dam was placed in service
before the date of the enactment of this paragraph and
operated for flood control, navigation, or water supply
purposes and did not produce hydroelectric power on the date
of the enactment of this paragraph, and
``(iii) the hydroelectric project is operated so that the
water surface elevation at any given location and time that
would have occurred in the absence of the hydroelectric
project is maintained, subject to any license requirements
imposed under applicable law that change the water surface
elevation for the purpose of improving environmental quality
of the affected waterway.
The Secretary, in consultation with the Federal Energy
Regulatory Commission, shall certify if a hydroelectric
project licensed at a nonhydroelectric dam meets the criteria
in clause (iii). Nothing in this section shall affect the
standards under which the Federal Energy Regulatory
Commission issues licenses for and regulates hydropower
projects under part I of the Federal Power Act.''.
(g) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to property originally placed in service after December 31,
2008.
(2) Repeal of credit phaseout.--The amendments made by
subsection (b)(1) shall apply to taxable years ending after
December 31, 2008.
(3) Limitation based on investment in facility.--The
amendment made by subsection (b)(2) shall apply to property
originally placed in service after December 31, 2009.
(4) Trash facility clarification; sales to related
regulated public utilities.--The amendments made by
subsections (c) and (e) shall apply to electricity produced
and sold after the date of the enactment of this Act.
(5) Expansion of biomass facilities.--The amendments made
by subsection (d) shall apply to property placed in service
after the date of the enactment of this Act.
SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM
MARINE RENEWABLES.
(a) In General.--Paragraph (1) of section 45(c) is amended
by striking ``and'' at the end of subparagraph (G), by
striking the period at the end of subparagraph (H) and
inserting ``, and'', and by adding at the end the following
new subparagraph:
``(I) marine and hydrokinetic renewable energy.''.
(b) Marine Renewables.--Subsection (c) of section 45 is
amended by adding at the end the following new paragraph:
``(10) Marine and hydrokinetic renewable energy.--
``(A) In general.--The term `marine and hydrokinetic
renewable energy' means energy derived from--
``(i) waves, tides, and currents in oceans, estuaries, and
tidal areas,
``(ii) free flowing water in rivers, lakes, and streams,
``(iii) free flowing water in an irrigation system, canal,
or other man-made channel, including projects that utilize
nonmechanical structures to accelerate the flow of water for
electric power production purposes, or
``(iv) differentials in ocean temperature (ocean thermal
energy conversion).
``(B) Exceptions.--Such term shall not include any energy
which is derived from any source which utilizes a dam,
diversionary structure (except as provided in subparagraph
(A)(iii)), or impoundment for electric power production
purposes.''.
(c) Definition of Facility.--Subsection (d) of section 45
is amended by adding at the end the following new paragraph:
``(11) Marine and hydrokinetic renewable energy
facilities.--In the case of a facility producing electricity
from marine and hydrokinetic renewable energy, the term
`qualified facility' means any facility owned by the
taxpayer--
``(A) which has a nameplate capacity rating of at least 150
kilowatts, and
``(B) which is originally placed in service on or after the
date of the enactment of this paragraph and before January 1,
2012.''.
(d) Credit Rate.--Subparagraph (A) of section 45(b)(4) is
amended by striking ``or (9)'' and inserting ``(9), or
(11)''.
(e) Coordination With Small Irrigation Power.--Paragraph
(5) of section 45(d), as amended by section 101, is amended
by striking ``January 1, 2012'' and inserting ``the date of
the enactment of paragraph (11)''.
(f) Effective Date.--The amendments made by this section
shall apply to electricity produced and sold after the date
of the enactment of this Act, in taxable years ending after
such date.
SEC. 103. ENERGY CREDIT.
(a) Extension of Credit.--
(1) Solar energy property.--Paragraphs (2)(A)(i)(II) and
(3)(A)(ii) of section 48(a) are each amended by striking
``January 1, 2009'' and inserting ``January 1, 2015''.
(2) Fuel cell property.--Subparagraph (E) of section
48(c)(1) is amended by striking ``December 31, 2008'' and
inserting ``December 31, 2014''.
(3) Microturbine property.--Subparagraph (E) of section
48(c)(2) is amended by striking ``December 31, 2008'' and
inserting ``December 31, 2014''.
(b) Allowance of Energy Credit Against Alternative Minimum
Tax.--Subparagraph (B) of section 38(c)(4) is amended by
striking ``and'' at the end of clause (iii), by redesignating
clause (iv) as clause (v), and by inserting after clause
(iii) the following new clause:
``(iv) the credit determined under section 46 to the extent
that such credit is attributable to the energy credit
determined under section 48, and''.
(c) Energy Credit for Combined Heat and Power System
Property.--
[[Page H4370]]
(1) In general.--Section 48(a)(3)(A) (defining energy
property) is amended by striking ``or'' at the end of clause
(iii), by inserting ``or'' at the end of clause (iv), and by
adding at the end the following new clause:
``(v) combined heat and power system property,''.
(2) Combined heat and power system property.--Section 48 is
amended by adding at the end the following new subsection:
``(d) Combined Heat and Power System Property.--For
purposes of subsection (a)(3)(A)(v)--
``(1) Combined heat and power system property.--The term
`combined heat and power system property' means property
comprising a system--
``(A) which uses the same energy source for the
simultaneous or sequential generation of electrical power,
mechanical shaft power, or both, in combination with the
generation of steam or other forms of useful thermal energy
(including heating and cooling applications),
``(B) which produces--
``(i) at least 20 percent of its total useful energy in the
form of thermal energy which is not used to produce
electrical or mechanical power (or combination thereof), and
``(ii) at least 20 percent of its total useful energy in
the form of electrical or mechanical power (or combination
thereof),
``(C) the energy efficiency percentage of which exceeds 60
percent, and
``(D) which is placed in service before January 1, 2015.
``(2) Limitation.--
``(A) In general.--In the case of combined heat and power
system property with an electrical capacity in excess of the
applicable capacity placed in service during the taxable
year, the credit under subsection (a)(1) (determined without
regard to this paragraph) for such year shall be equal to the
amount which bears the same ratio to such credit as the
applicable capacity bears to the capacity of such property.
``(B) Applicable capacity.--For purposes of subparagraph
(A), the term `applicable capacity' means 15 megawatts or a
mechanical energy capacity of more than 20,000 horsepower or
an equivalent combination of electrical and mechanical energy
capacities.
``(C) Maximum capacity.--The term `combined heat and power
system property' shall not include any property comprising a
system if such system has a capacity in excess of 50
megawatts or a mechanical energy capacity in excess of 67,000
horsepower or an equivalent combination of electrical and
mechanical energy capacities.
``(3) Special rules.--
``(A) Energy efficiency percentage.--For purposes of this
subsection, the energy efficiency percentage of a system is
the fraction--
``(i) the numerator of which is the total useful
electrical, thermal, and mechanical power produced by the
system at normal operating rates, and expected to be consumed
in its normal application, and
``(ii) the denominator of which is the lower heating value
of the fuel sources for the system.
``(B) Determinations made on btu basis.--The energy
efficiency percentage and the percentages under paragraph
(1)(B) shall be determined on a Btu basis.
``(C) Input and output property not included.--The term
`combined heat and power system property' does not include
property used to transport the energy source to the facility
or to distribute energy produced by the facility.
``(4) Systems using biomass.--If a system is designed to
use biomass (within the meaning of paragraphs (2) and (3) of
section 45(c) without regard to the last sentence of
paragraph (3)(A)) for at least 90 percent of the energy
source--
``(A) paragraph (1)(C) shall not apply, but
``(B) the amount of credit determined under subsection (a)
with respect to such system shall not exceed the amount which
bears the same ratio to such amount of credit (determined
without regard to this paragraph) as the energy efficiency
percentage of such system bears to 60 percent.''.
(d) Increase of Credit Limitation for Fuel Cell Property.--
Subparagraph (B) of section 48(c)(1) is amended by striking
``$500'' and inserting ``$1,500''.
(e) Public Utility Property Taken Into Account.--
(1) In general.--Paragraph (3) of section 48(a) is amended
by striking the second sentence thereof.
(2) Conforming amendments.--
(A) Paragraph (1) of section 48(c) is amended by striking
subparagraph (D) and redesignating subparagraph (E) as
subparagraph (D).
(B) Paragraph (2) of section 48(c) is amended by striking
subparagraph (D) and redesignating subparagraph (E) as
subparagraph (D).
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect on the date of the enactment of this Act.
(2) Allowance against alternative minimum tax.--The
amendments made by subsection (b) shall apply to credits
determined under section 46 of the Internal Revenue Code of
1986 in taxable years beginning after the date of the
enactment of this Act and to carrybacks of such credits.
(3) Combined heat and power and fuel cell property.--The
amendments made by subsections (c) and (d) shall apply to
periods after the date of the enactment of this Act, in
taxable years ending after such date, under rules similar to
the rules of section 48(m) of the Internal Revenue Code of
1986 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990).
(4) Public utility property.--The amendments made by
subsection (e) shall apply to periods after February 13,
2008, in taxable years ending after such date, under rules
similar to the rules of section 48(m) of the Internal Revenue
Code of 1986 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990).
SEC. 104. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.
(a) Extension.--Section 25D(g) is amended by striking
``December 31, 2008'' and inserting ``December 31, 2014''.
(b) Maximum Credit for Solar Electric Property.--
(1) In general.--Section 25D(b)(1)(A) is amended by
striking ``$2,000'' and inserting ``$4,000''.
(2) Conforming amendment.--Section 25D(e)(4)(A)(i) is
amended by striking ``$6,667'' and inserting ``$13,333''.
(c) Credit for Residential Wind Property.--
(1) In general.--Section 25D(a) is amended by striking
``and'' at the end of paragraph (2), by striking the period
at the end of paragraph (3) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(4) 30 percent of the qualified small wind energy
property expenditures made by the taxpayer during such
year.''.
(2) Limitation.--Section 25D(b)(1) is amended by striking
``and'' at the end of subparagraph (B), by striking the
period at the end of subparagraph (C) and inserting ``,
and'', and by adding at the end the following new
subparagraph:
``(D) $500 with respect to each half kilowatt of capacity
(not to exceed $4,000) of wind turbines for which qualified
small wind energy property expenditures are made.''.
(3) Qualified small wind energy property expenditures.--
(A) In general.--Section 25D(d) is amended by adding at the
end the following new paragraph:
``(4) Qualified small wind energy property expenditure.--
The term `qualified small wind energy property expenditure'
means an expenditure for property which uses a wind turbine
to generate electricity for use in connection with a dwelling
unit located in the United States and used as a residence by
the taxpayer.''.
(B) No double benefit.--Section 45(d)(1) is amended by
adding at the end the following new sentence: ``Such term
shall not include any facility with respect to which any
qualified small wind energy property expenditure (as defined
in subsection (d)(4) of section 25D) is taken into account in
determining the credit under such section.''.
(4) Maximum expenditures in case of joint occupancy.--
Section 25D(e)(4)(A) is amended by striking ``and'' at the
end of clause (ii), by striking the period at the end of
clause (iii) and inserting ``, and'', and by adding at the
end the following new clause:
``(iv) $1,667 in the case of each half kilowatt of capacity
(not to exceed $13,333) of wind turbines for which qualified
small wind energy property expenditures are made.''.
(d) Credit for Geothermal Heat pump Systems.--
(1) In general.--Section 25D(a), as amended by subsection
(c), is amended by striking ``and'' at the end of paragraph
(3), by striking the period at the end of paragraph (4) and
inserting ``, and'', and by adding at the end the following
new paragraph:
``(5) 30 percent of the qualified geothermal heat pump
property expenditures made by the taxpayer during such
year.''.
(2) Limitation.--Section 25D(b)(1), as amended by
subsection (c), is amended by striking ``and'' at the end of
subparagraph (C), by striking the period at the end of
subparagraph (D) and inserting ``, and'', and by adding at
the end the following new subparagraph:
``(E) $2,000 with respect to any qualified geothermal heat
pump property expenditures.''.
(3) Qualified geothermal heat pump property expenditure.--
Section 25D(d), as amended by subsection (c), is amended by
adding at the end the following new paragraph:
``(5) Qualified geothermal heat pump property
expenditure.--
``(A) In general.--The term `qualified geothermal heat pump
property expenditure' means an expenditure for qualified
geothermal heat pump property installed on or in connection
with a dwelling unit located in the United States and used as
a residence by the taxpayer.
``(B) Qualified geothermal heat pump property.--The term
`qualified geothermal heat pump property' means any equipment
which--
``(i) uses the ground or ground water as a thermal energy
source to heat the dwelling unit referred to in subparagraph
(A) or as a thermal energy sink to cool such dwelling unit,
and
``(ii) meets the requirements of the Energy Star program
which are in effect at the time that the expenditure for such
equipment is made.''.
(4) Maximum expenditures in case of joint occupancy.--
Section 25D(e)(4)(A), as amended by subsection (c), is
amended by striking ``and'' at the end of clause (iii), by
striking the period at the end of clause (iv) and inserting
``, and'', and by adding at the end the following new clause:
``(v) $6,667 in the case of any qualified geothermal heat
pump property expenditures.''.
(e) Credit Allowed Against Alternative Minimum Tax.--
(1) In general.--Subsection (c) of section 25D is amended
to read as follows:
``(c) Limitation Based on Amount of Tax; Carryforward of
Unused Credit.--
``(1) Limitation based on amount of tax.--In the case of a
taxable year to which section 26(a)(2) does not apply, the
credit allowed under subsection (a) for the taxable year
shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
[[Page H4371]]
``(B) the sum of the credits allowable under this subpart
(other than this section) and section 27 for the taxable
year.
``(2) Carryforward of unused credit.--
``(A) Rule for years in which all personal credits allowed
against regular and alternative minimum tax.--In the case of
a taxable year to which section 26(a)(2) applies, if the
credit allowable under subsection (a) exceeds the limitation
imposed by section 26(a)(2) for such taxable year reduced by
the sum of the credits allowable under this subpart (other
than this section), such excess shall be carried to the
succeeding taxable year and added to the credit allowable
under subsection (a) for such succeeding taxable year.
``(B) Rule for other years.--In the case of a taxable year
to which section 26(a)(2) does not apply, if the credit
allowable under subsection (a) exceeds the limitation imposed
by paragraph (1) for such taxable year, such excess shall be
carried to the succeeding taxable year and added to the
credit allowable under subsection (a) for such succeeding
taxable year.''.
(2) Conforming amendments.--
(A) Section 23(b)(4)(B) is amended by inserting ``and
section 25D'' after ``this section''.
(B) Section 24(b)(3)(B) is amended by striking ``and 25B''
and inserting ``, 25B, and 25D''.
(C) Section 25B(g)(2) is amended by striking ``section 23''
and inserting ``sections 23 and 25D''.
(D) Section 26(a)(1) is amended by striking ``and 25B'' and
inserting ``25B, and 25D''.
(f) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2007.
(2) Application of egtrra sunset.--The amendments made by
subparagraphs (A) and (B) of subsection (e)(2) shall be
subject to title IX of the Economic Growth and Tax Relief
Reconciliation Act of 2001 in the same manner as the
provisions of such Act to which such amendments relate.
SEC. 105. SPECIAL RULE TO IMPLEMENT FERC AND STATE ELECTRIC
RESTRUCTURING POLICY.
(a) Extension for Qualified Electric Utilities.--
(1) In general.--Paragraph (3) of section 451(i) is amended
by inserting ``(before January 1, 2010, in the case of a
qualified electric utility)'' after ``January 1, 2008''.
(2) Qualified electric utility.--Subsection (i) of section
451 is amended by redesignating paragraphs (6) through (10)
as paragraphs (7) through (11), respectively, and by
inserting after paragraph (5) the following new paragraph:
``(6) Qualified electric utility.--For purposes of this
subsection, the term `qualified electric utility' means a
person that, as of the date of the qualifying electric
transmission transaction, is vertically integrated, in that
it is both--
``(A) a transmitting utility (as defined in section 3(23)
of the Federal Power Act (16 U.S.C. 796(23))) with respect to
the transmission facilities to which the election under this
subsection applies, and
``(B) an electric utility (as defined in section 3(22) of
the Federal Power Act (16 U.S.C. 796(22))).''.
(b) Extension of Period for Transfer of Operational Control
Authorized by FERC.--Clause (ii) of section 451(i)(4)(B) is
amended by striking ``December 31, 2007'' and inserting ``the
date which is 4 years after the close of the taxable year in
which the transaction occurs''.
(c) Property Located Outside the United States Not Treated
as Exempt Utility Property.--Paragraph (5) of section 451(i)
is amended by adding at the end the following new
subparagraph:
``(C) Exception for property located outside the united
states.--The term `exempt utility property' shall not include
any property which is located outside the United States.''.
(d) Effective Dates.--
(1) Extension.--The amendments made by subsection (a) shall
apply to transactions after December 31, 2007.
(2) Transfers of operational control.--The amendment made
by subsection (b) shall take effect as if included in section
909 of the American Jobs Creation Act of 2004.
(3) Exception for property located outside the united
states.--The amendment made by subsection (c) shall apply to
transactions after the date of the enactment of this Act.
SEC. 106. NEW CLEAN RENEWABLE ENERGY BONDS.
(a) In General.--Part IV of subchapter A of chapter 1 is
amended by adding at the end the following new subpart:
``Subpart I--Qualified Tax Credit Bonds
``Sec. 54A. Credit to holders of qualified tax credit bonds.
``Sec. 54B. New clean renewable energy bonds.
``SEC. 54A. CREDIT TO HOLDERS OF QUALIFIED TAX CREDIT BONDS.
``(a) Allowance of Credit.--If a taxpayer holds a qualified
tax credit bond on one or more credit allowance dates of the
bond during any taxable year, there shall be allowed as a
credit against the tax imposed by this chapter for the
taxable year an amount equal to the sum of the credits
determined under subsection (b) with respect to such dates.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined
under this subsection with respect to any credit allowance
date for a qualified tax credit bond is 25 percent of the
annual credit determined with respect to such bond.
``(2) Annual credit.--The annual credit determined with
respect to any qualified tax credit bond is the product of--
``(A) the applicable credit rate, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Applicable credit rate.--For purposes of paragraph
(2), the applicable credit rate is the rate which the
Secretary estimates will permit the issuance of qualified tax
credit bonds with a specified maturity or redemption date
without discount and without interest cost to the qualified
issuer. The applicable credit rate with respect to any
qualified tax credit bond shall be determined as of the first
day on which there is a binding, written contract for the
sale or exchange of the bond.
``(4) Special rule for issuance and redemption.--In the
case of a bond which is issued during the 3-month period
ending on a credit allowance date, the amount of the credit
determined under this subsection with respect to such credit
allowance date shall be a ratable portion of the credit
otherwise determined based on the portion of the 3-month
period during which the bond is outstanding. A similar rule
shall apply when the bond is redeemed or matures.
``(c) Limitation Based on Amount of Tax.--
``(1) In general.--The credit allowed under subsection (a)
for any taxable year shall not exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under this part
(other than subpart C and this subpart).
``(2) Carryover of unused credit.--If the credit allowable
under subsection (a) exceeds the limitation imposed by
paragraph (1) for such taxable year, such excess shall be
carried to the succeeding taxable year and added to the
credit allowable under subsection (a) for such taxable year
(determined before the application of paragraph (1) for such
succeeding taxable year).
``(d) Qualified Tax Credit Bond.--For purposes of this
section--
``(1) Qualified tax credit bond.--The term `qualified tax
credit bond' means a new clean renewable energy bond which is
part of an issue that meets the requirements of paragraphs
(2), (3), (4), (5), and (6).
``(2) Special rules relating to expenditures.--
``(A) In general.--An issue shall be treated as meeting the
requirements of this paragraph if, as of the date of
issuance, the issuer reasonably expects--
``(i) 100 percent or more of the available project proceeds
to be spent for 1 or more qualified purposes within the 3-
year period beginning on such date of issuance, and
``(ii) 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 such date of
issuance.
``(B) Failure to spend required amount of bond proceeds
within 3 years.--
``(i) In general.--To the extent that less than 100 percent
of the available project proceeds of the issue are expended
by the close of the expenditure period for 1 or more
qualified purposes, 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.
``(ii) Expenditure period.--For purposes of this subpart,
the term `expenditure period' means, with respect to any
issue, the 3-year period beginning on the date of issuance.
Such term shall include any extension of such period under
clause (iii).
``(iii) Extension of period.--Upon submission of a request
prior to the expiration of the expenditure period (determined
without regard to any extension under this clause), the
Secretary may extend such period if the issuer establishes
that the failure to expend the proceeds within the original
expenditure period is due to reasonable cause and the
expenditures for qualified purposes will continue to proceed
with due diligence.
``(C) Qualified purpose.--For purposes of this paragraph,
the term `qualified purpose' means a purpose specified in
section 54B(a)(1).
``(D) Reimbursement.--For purposes of this subtitle,
available project proceeds of an issue shall be treated as
spent for a qualified purpose if such proceeds are used to
reimburse the issuer for amounts paid for a qualified purpose
after the date that the Secretary makes an allocation of bond
limitation with respect to such issue, but only if--
``(i) prior to the payment of the original expenditure, the
issuer declared its intent to reimburse such expenditure with
the proceeds of a qualified tax credit bond,
``(ii) not later than 60 days after payment of the original
expenditure, the issuer adopts an official intent to
reimburse the original expenditure with such proceeds, and
``(iii) the reimbursement is made not later than 18 months
after the date the original expenditure is paid.
``(3) Reporting.--An issue shall be treated as meeting the
requirements of this paragraph if the issuer of qualified tax
credit bonds submits reports similar to the reports required
under section 149(e).
``(4) Special rules relating to arbitrage.--
``(A) In general.--An issue shall be treated as meeting the
requirements of this paragraph if the issuer satisfies the
requirements of section 148 with respect to the proceeds of
the issue.
``(B) Special rule for investments during expenditure
period.--An issue shall not be treated as failing to meet the
requirements of subparagraph (A) by reason of any investment
of available project proceeds during the expenditure period.
``(C) Special rule for reserve funds.--An issue shall not
be treated as failing to meet the requirements of
subparagraph (A) by reason of any fund which is expected to
be used to repay such issue if--
[[Page H4372]]
``(i) such fund is funded at a rate not more rapid than
equal annual installments,
``(ii) such fund is funded in a manner reasonably expected
to result in an amount not greater than an amount necessary
to repay the issue, and
``(iii) the yield on such fund is not greater than the
discount rate determined under paragraph (5)(B) with respect
to the issue.
``(5) Maturity limitation.--
``(A) In general.--An issue shall not be treated as meeting
the requirements of this paragraph if the maturity of any
bond which is part of such issue exceeds the maximum term
determined by the Secretary under subparagraph (B).
``(B) Maximum term.--During each calendar month, the
Secretary shall determine the maximum term permitted under
this paragraph for bonds issued during the following calendar
month. Such maximum term shall be the term which the
Secretary estimates will result in the present value of the
obligation to repay the principal on the bond being equal to
50 percent of the face amount of such bond. Such present
value shall be determined using as a discount rate the
average annual interest rate of tax-exempt obligations having
a term of 10 years or more which are issued during the month.
If the term as so determined is not a multiple of a whole
year, such term shall be rounded to the next highest whole
year.
``(6) Prohibition on financial conflicts of interest.--An
issue shall be treated as meeting the requirements of this
paragraph if the issuer certifies that--
``(A) applicable State and local law requirements governing
conflicts of interest are satisfied with respect to such
issue, and
``(B) if the Secretary prescribes additional conflicts of
interest rules governing the appropriate Members of Congress,
Federal, State, and local officials, and their spouses, such
additional rules are satisfied with respect to such issue.
``(e) Other Definitions.--For purposes of this subchapter--
``(1) Credit allowance date.--The term `credit allowance
date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.
Such term includes the last day on which the bond is
outstanding.
``(2) Bond.--The term `bond' includes any obligation.
``(3) State.--The term `State' includes the District of
Columbia and any possession of the United States.
``(4) Available project proceeds.--The term `available
project proceeds' means--
``(A) the excess of--
``(i) the proceeds from the sale of an issue, over
``(ii) the issuance costs financed by the issue (to the
extent that such costs do not exceed 2 percent of such
proceeds), and
``(B) the proceeds from any investment of the excess
described in subparagraph (A).
``(f) Credit Treated as Interest.--For purposes of this
subtitle, the credit determined under subsection (a) shall be
treated as interest which is includible in gross income.
``(g) S Corporations and Partnerships.--In the case of a
tax credit bond held by an S corporation or partnership, the
allocation of the credit allowed by this section to the
shareholders of such corporation or partners of such
partnership shall be treated as a distribution.
``(h) Bonds Held by Regulated Investment Companies and Real
Estate Investment Trusts.--If any qualified tax credit bond
is held by a regulated investment company or a real estate
investment trust, the credit determined under subsection (a)
shall be allowed to shareholders of such company or
beneficiaries of such trust (and any gross income included
under subsection (f) with respect to such credit shall be
treated as distributed to such shareholders or beneficiaries)
under procedures prescribed by the Secretary.
``(i) Credits May Be Stripped.--Under regulations
prescribed by the Secretary--
``(1) In general.--There may be a separation (including at
issuance) of the ownership of a qualified tax credit bond and
the entitlement to the credit under this section with respect
to such bond. In case of any such separation, the credit
under this section shall be allowed to the person who on the
credit allowance date holds the instrument evidencing the
entitlement to the credit and not to the holder of the bond.
``(2) Certain rules to apply.--In the case of a separation
described in paragraph (1), the rules of section 1286 shall
apply to the qualified tax credit bond as if it were a
stripped bond and to the credit under this section as if it
were a stripped coupon.
``SEC. 54B. NEW CLEAN RENEWABLE ENERGY BONDS.
``(a) New Clean Renewable Energy Bond.--For purposes of
this subpart, the term `new clean renewable energy 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
public power providers or cooperative electric companies for
one or more qualified renewable energy facilities,
``(2) the bond is issued by a qualified issuer, and
``(3) the issuer designates such bond for purposes of this
section.
``(b) Reduced Credit Amount.--The annual credit determined
under section 54A(b) with respect to any new clean renewable
energy bond shall be 70 percent of the amount so determined
without regard to this subsection.
``(c) 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 new clean renewable energy bond
limitation of $2,000,000,000 which shall be allocated by the
Secretary as provided in paragraph (3), except that--
``(A) not more than 33\1/3\ percent thereof may be
allocated to qualified projects of public power providers,
``(B) not more than 33\1/3\ percent thereof may be
allocated to qualified projects of governmental bodies, and
``(C) not more than 33\1/3\ percent thereof may be
allocated to qualified projects of cooperative electric
companies.
``(3) Method of allocation.--
``(A) Allocation among public power providers.--After the
Secretary determines the qualified projects of public power
providers which are appropriate for receiving an allocation
of the national new clean renewable energy bond limitation,
the Secretary shall, to the maximum extent practicable, make
allocations among such projects in such manner that the
amount allocated to each such project bears the same ratio to
the cost of such project as the limitation under paragraph
(2)(A) bears to the cost of all such projects.
``(B) Allocation among governmental bodies and cooperative
electric companies.--The Secretary shall make allocations of
the amount of the national new clean renewable energy bond
limitation described in paragraphs (2)(B) and (2)(C) among
qualified projects of governmental bodies and cooperative
electric companies, respectively, in such manner as the
Secretary determines appropriate.
``(d) Definitions.--For purposes of this section--
``(1) Qualified renewable energy facility.--The term
`qualified renewable energy facility' means a qualified
facility (as determined under section 45(d) without regard to
paragraphs (8) and (10) thereof and to any placed in service
date) owned by a public power provider, a governmental body,
or a cooperative electric company.
``(2) Public power provider.--The term `public power
provider' means a State utility with a service obligation, as
such terms are defined in section 217 of the Federal Power
Act (as in effect on the date of the enactment of this
paragraph).
``(3) Governmental body.--The term `governmental body'
means any State or Indian tribal government, or any political
subdivision thereof.
``(4) Cooperative electric company.--The term `cooperative
electric company' means a mutual or cooperative electric
company described in section 501(c)(12) or section
1381(a)(2)(C).
``(5) Clean renewable energy bond lender.--The term `clean
renewable energy bond lender' means a lender which is a
cooperative which is owned by, or has outstanding loans to,
100 or more cooperative electric companies and is in
existence on February 1, 2002, and shall include any
affiliated entity which is controlled by such lender.
``(6) Qualified issuer.--The term `qualified issuer' means
a public power provider, a cooperative electric company, a
governmental body, a clean renewable energy bond lender, or a
not-for-profit electric utility which has received a loan or
loan guarantee under the Rural Electrification Act.''.
(b) Reporting.--Subsection (d) of section 6049 is amended
by adding at the end the following new paragraph:
``(9) Reporting of credit on qualified tax credit bonds.--
``(A) In general.--For purposes of subsection (a), the term
`interest' includes amounts includible in gross income under
section 54A and such amounts shall be treated as paid on the
credit allowance date (as defined in section 54A(e)(1)).
``(B) Reporting to corporations, etc.--Except as otherwise
provided in regulations, in the case of any interest
described in subparagraph (A) of this paragraph, subsection
(b)(4) of this section shall be applied without regard to
subparagraphs (A), (H), (I), (J), (K), and (L)(i).
``(C) Regulatory authority.--The Secretary may prescribe
such regulations as are necessary or appropriate to carry out
the purposes of this paragraph, including regulations which
require more frequent or more detailed reporting.''.
(c) Conforming Amendments.--
(1) Sections 54(c)(2) and 1400N(l)(3)(B) are each amended
by striking ``subpart C'' and inserting ``subparts C and I''.
(2) Section 1397E(c)(2) is amended by striking ``subpart
H'' and inserting ``subparts H and I''.
(3) Section 6401(b)(1) is amended by striking ``and H'' and
inserting ``H, and I''.
(4) The heading of subpart H of part IV of subchapter A of
chapter 1 is amended by striking ``Certain Bonds'' and
inserting ``Clean Renewable Energy Bonds''.
(5) The table of subparts for part IV of subchapter A of
chapter 1 is amended by striking the item relating to subpart
H and inserting the following new items:
``subpart h. nonrefundable credit to holders of clean renewable energy
bonds.
``subpart i. qualified tax credit bonds.''.
(d) Application of Certain Labor Standards on Projects
Financed Under Tax Credit Bonds.--Subchapter IV of chapter 31
of title 40, United States Code, shall apply to projects
financed with the proceeds of any tax credit bond (as defined
in section 54A of the Internal Revenue Code of 1986).
(e) Effective Dates.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.
[[Page H4373]]
PART II--CARBON MITIGATION PROVISIONS
SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT
INVESTMENT CREDIT.
(a) Modification of Credit Amount.--Section 48A(a) is
amended by striking ``and'' at the end of paragraph (1), by
striking the period at the end of paragraph (2) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(3) 30 percent of the qualified investment for such
taxable year in the case of projects described in clause
(iii) of subsection (d)(3)(B).''.
(b) Expansion of Aggregate Credits.--Section 48A(d)(3)(A)
is amended by striking ``$1,300,000,000'' and inserting
``$2,550,000,000''.
(c) Authorization of Additional Projects.--
(1) In general.--Subparagraph (B) of section 48A(d)(3) is
amended to read as follows:
``(B) Particular projects.--Of the dollar amount in
subparagraph (A), the Secretary is authorized to certify--
``(i) $800,000,000 for integrated gasification combined
cycle projects the application for which is submitted during
the period described in paragraph (2)(A)(i),
``(ii) $500,000,000 for projects which use other advanced
coal-based generation technologies the application for which
is submitted during the period described in paragraph
(2)(A)(i), and
``(iii) $1,250,000,000 for advanced coal-based generation
technology projects the application for which is submitted
during the period described in paragraph (2)(A)(ii).''.
(2) Application period for additional projects.--
Subparagraph (A) of section 48A(d)(2) is amended to read as
follows:
``(A) Application period.--Each applicant for certification
under this paragraph shall submit an application meeting the
requirements of subparagraph (B). An applicant may only
submit an application--
``(i) for an allocation from the dollar amount specified in
clause (i) or (ii) of paragraph (3)(B) during the 3-year
period beginning on the date the Secretary establishes the
program under paragraph (1), and
``(ii) for an allocation from the dollar amount specified
in paragraph (3)(B)(iii) during the 3-year period beginning
at the earlier of the termination of the period described in
clause (i) or the date prescribed by the Secretary.''.
(3) Capture and sequestration of carbon dioxide emissions
requirement.--
(A) In general.--Section 48A(e)(1) is amended by striking
``and'' at the end of subparagraph (E), by striking the
period at the end of subparagraph (F) and inserting ``;
and'', and by adding at the end the following new
subparagraph:
``(G) in the case of any project the application for which
is submitted during the period described in subsection
(d)(2)(A)(ii), the project includes equipment which separates
and sequesters at least 65 percent (70 percent in the case of
an application for reallocated credits under subsection
(d)(4)) of such project's total carbon dioxide emissions.''.
(B) Highest priority for projects which sequester carbon
dioxide emissions.--Section 48A(e)(3) is amended by striking
``and'' at the end of subparagraph (A)(iii), by striking the
period at the end of subparagraph (B)(iii) and inserting ``,
and'', and by adding at the end the following new
subparagraph:
``(C) give highest priority to projects with the greatest
separation and sequestration percentage of total carbon
dioxide emissions.''.
(C) Recapture of credit for failure to sequester.--Section
48A is amended by adding at the end the following new
subsection:
``(h) Recapture of Credit for Failure To Sequester.--The
Secretary shall provide for recapturing the benefit of any
credit allowable under subsection (a) with respect to any
project which fails to attain or maintain the separation and
sequestration requirements of subsection (e)(1)(G).''.
(4) Additional priority for research partnerships.--Section
48A(e)(3)(B), as amended by paragraph (3)(B), is amended--
(A) by striking ``and'' at the end of clause (ii),
(B) by redesignating clause (iii) as clause (iv), and
(C) by inserting after clause (ii) the following new
clause:
``(iii) applicant participants who have a research
partnership with an eligible educational institution (as
defined in section 529(e)(5)), and''.
(5) Clerical amendment.--Section 48A(e)(3) is amended by
striking ``integrated gasification combined cycle'' in the
heading and inserting ``certain''.
(d) Competitive Certification Awards Modification
Authority.--Section 48A, as amended by subsection (c)(3), is
amended by adding at the end the following new subsection:
``(i) Competitive Certification Awards Modification
Authority.--In implementing this section or section 48B, the
Secretary is directed to modify the terms of any competitive
certification award and any associated closing agreement
where such modification--
``(1) is consistent with the objectives of such section,
``(2) is requested by the recipient of the competitive
certification award, and
``(3) involves moving the project site to improve the
potential to capture and sequester carbon dioxide emissions,
reduce costs of transporting feedstock, and serve a broader
customer base,
unless the Secretary determines that the dollar amount of tax
credits available to the taxpayer under such section would
increase as a result of the modification or such modification
would result in such project not being originally certified.
In considering any such modification, the Secretary shall
consult with other relevant Federal agencies, including the
Department of Energy.''.
(e) Disclosure of Allocations.--Section 48A(d) is amended
by adding at the end the following new paragraph:
``(5) Disclosure of allocations.--The Secretary shall, upon
making a certification under this subsection or section
48B(d), publicly disclose the identity of the applicant and
the amount of the credit certified with respect to such
applicant.''.
(f) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to credits the application for which is submitted during the
period described in section 48A(d)(2)(A)(ii) of the Internal
Revenue Code of 1986 and which are allocated or reallocated
after the date of the enactment of this Act.
(2) Competitive certification awards modification
authority.--The amendment made by subsection (d) shall take
effect on the date of the enactment of this Act and is
applicable to all competitive certification awards entered
into under section 48A or 48B of the Internal Revenue Code of
1986, whether such awards were issued before, on, or after
such date of enactment.
(3) Disclosure of allocations.--The amendment made by
subsection (e) shall apply to certifications made after the
date of the enactment of this Act.
(4) Clerical amendment.--The amendment made by subsection
(c)(5) shall take effect as if included in the amendment made
by section 1307(b) of the Energy Tax Incentives Act of 2005.
SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFICATION
INVESTMENT CREDIT.
(a) Modification of Credit Amount.--Section 48B(a) is
amended by inserting ``(30 percent in the case of credits
allocated under subsection (d)(1)(B))'' after ``20 percent''.
(b) Expansion of Aggregate Credits.--Section 48B(d)(1) is
amended by striking ``shall not exceed $350,000,000'' and all
that follows and inserting ``shall not exceed--
``(A) $350,000,000, plus
``(B) $250,000,000 for qualifying gasification projects
that include equipment which separates and sequesters at
least 75 percent of such project's total carbon dioxide
emissions.''.
(c) Recapture of Credit for Failure To Sequester.--Section
48B is amended by adding at the end the following new
subsection:
``(f) Recapture of Credit for Failure To Sequester.--The
Secretary shall provide for recapturing the benefit of any
credit allowable under subsection (a) with respect to any
project which fails to attain or maintain the separation and
sequestration requirements for such project under subsection
(d)(1).''.
(d) Selection Priorities.--Section 48B(d) is amended by
adding at the end the following new paragraph:
``(4) Selection priorities.--In determining which
qualifying gasification projects to certify under this
section, the Secretary shall--
``(A) give highest priority to projects with the greatest
separation and sequestration percentage of total carbon
dioxide emissions, and
``(B) give high priority to applicant participants who have
a research partnership with an eligible educational
institution (as defined in section 529(e)(5)).''.
(e) Effective Date.--The amendments made by this section
shall apply to credits described in section 48B(d)(1)(B) of
the Internal Revenue Code of 1986 which are allocated or
reallocated after the date of the enactment of this Act.
SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX.
Paragraph (2) of section 4121(e) is amended--
(1) by striking ``January 1, 2014'' in subparagraph (A) and
inserting ``December 31, 2018'', and
(2) by striking ``January 1 after 1981'' in subparagraph
(B) and inserting ``December 31 after 2007''.
SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EXCISE TAX TO
CERTAIN COAL PRODUCERS AND EXPORTERS.
(a) Refund.--
(1) Coal producers.--
(A) In general.--Notwithstanding subsections (a)(1) and (c)
of section 6416 and section 6511 of the Internal Revenue Code
of 1986, if--
(i) a coal producer establishes that such coal producer, or
a party related to such coal producer, exported coal produced
by such coal producer to a foreign country or shipped coal
produced by such coal producer to a possession of the United
States, or caused such coal to be exported or shipped, the
export or shipment of which was other than through an
exporter who meets the requirements of paragraph (2),
(ii) such coal producer filed an excise tax return on or
after October 1, 1990, and on or before the date of the
enactment of this Act, and
(iii) such coal producer files a claim for refund with the
Secretary not later than the close of the 30-day period
beginning on the date of the enactment of this Act,
then the Secretary shall pay to such coal producer an amount
equal to the tax paid under section 4121 of such Code on such
coal exported or shipped by the coal producer or a party
related to such coal producer, or caused by the coal producer
or a party related to such coal producer to be exported or
shipped.
(B) Special rules for certain taxpayers.--For purposes of
this section--
(i) In general.--If a coal producer or a party related to a
coal producer has received a judgment described in clause
(iii), such coal producer shall be deemed to have established
the export of coal to a foreign country or shipment of coal
to a possession of the United States under subparagraph
(A)(i).
(ii) Amount of payment.--If a taxpayer described in clause
(i) is entitled to a payment
[[Page H4374]]
under subparagraph (A), the amount of such payment shall be
reduced by any amount paid pursuant to the judgment described
in clause (iii).
(iii) Judgment described.--A judgment is described in this
subparagraph if such judgment--
(I) is made by a court of competent jurisdiction within the
United States,
(II) relates to the constitutionality of any tax paid on
exported coal under section 4121 of the Internal Revenue Code
of 1986, and
(III) is in favor of the coal producer or the party related
to the coal producer.
(2) Exporters.--Notwithstanding subsections (a)(1) and (c)
of section 6416 and section 6511 of the Internal Revenue Code
of 1986, and a judgment described in paragraph (1)(B)(iii) of
this subsection, if--
(A) an exporter establishes that such exporter exported
coal to a foreign country or shipped coal to a possession of
the United States, or caused such coal to be so exported or
shipped,
(B) such exporter filed a tax return on or after October 1,
1990, and on or before the date of the enactment of this Act,
and
(C) such exporter files a claim for refund with the
Secretary not later than the close of the 30-day period
beginning on the date of the enactment of this Act,
then the Secretary shall pay to such exporter an amount equal
to $0.825 per ton of such coal exported by the exporter or
caused to be exported or shipped, or caused to be exported or
shipped, by the exporter.
(b) Limitations.--Subsection (a) shall not apply with
respect to exported coal if a settlement with the Federal
Government has been made with and accepted by, the coal
producer, a party related to such coal producer, or the
exporter, of such coal, as of the date that the claim is
filed under this section with respect to such exported coal.
For purposes of this subsection, the term ``settlement with
the Federal Government'' shall not include any settlement or
stipulation entered into as of the date of the enactment of
this Act, the terms of which contemplate a judgment
concerning which any party has reserved the right to file an
appeal, or has filed an appeal.
(c) Subsequent Refund Prohibited.--No refund shall be made
under this section to the extent that a credit or refund of
such tax on such exported or shipped coal has been paid to
any person.
(d) Definitions.--For purposes of this section--
(1) Coal producer.--The term ``coal producer'' means the
person in whom is vested ownership of the coal immediately
after the coal is severed from the ground, without regard to
the existence of any contractual arrangement for the sale or
other disposition of the coal or the payment of any royalties
between the producer and third parties. The term includes any
person who extracts coal from coal waste refuse piles or from
the silt waste product which results from the wet washing (or
similar processing) of coal.
(2) Exporter.--The term ``exporter'' means a person, other
than a coal producer, who does not have a contract, fee
arrangement, or any other agreement with a producer or seller
of such coal to export or ship such coal to a third party on
behalf of the producer or seller of such coal and--
(A) is indicated in the shipper's export declaration or
other documentation as the exporter of record, or
(B) actually exported such coal to a foreign country or
shipped such coal to a possession of the United States, or
caused such coal to be so exported or shipped.
(3) Related party.--The term ``a party related to such coal
producer'' means a person who--
(A) is related to such coal producer through any degree of
common management, stock ownership, or voting control,
(B) is related (within the meaning of section 144(a)(3) of
the Internal Revenue Code of 1986) to such coal producer, or
(C) has a contract, fee arrangement, or any other agreement
with such coal producer to sell such coal to a third party on
behalf of such coal producer.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Treasury or the Secretary's designee.
(e) Timing of Refund.--With respect to any claim for refund
filed pursuant to this section, the Secretary shall determine
whether the requirements of this section are met not later
than 180 days after such claim is filed. If the Secretary
determines that the requirements of this section are met, the
claim for refund shall be paid not later than 180 days after
the Secretary makes such determination.
(f) Interest.--Any refund paid pursuant to this section
shall be paid by the Secretary with interest from the date of
overpayment determined by using the overpayment rate and
method under section 6621 of the Internal Revenue Code of
1986.
(g) Denial of Double Benefit.--The payment under subsection
(a) with respect to any coal shall not exceed--
(1) in the case of a payment to a coal producer, the amount
of tax paid under section 4121 of the Internal Revenue Code
of 1986 with respect to such coal by such coal producer or a
party related to such coal producer, and
(2) in the case of a payment to an exporter, an amount
equal to $0.825 per ton with respect to such coal exported by
the exporter or caused to be exported by the exporter.
(h) Application of Section.--This section applies only to
claims on coal exported or shipped on or after October 1,
1990, through the date of the enactment of this Act.
(i) Standing Not Conferred.--
(1) Exporters.--With respect to exporters, this section
shall not confer standing upon an exporter to commence, or
intervene in, any judicial or administrative proceeding
concerning a claim for refund by a coal producer of any
Federal or State tax, fee, or royalty paid by the coal
producer.
(2) Coal producers.--With respect to coal producers, this
section shall not confer standing upon a coal producer to
commence, or intervene in, any judicial or administrative
proceeding concerning a claim for refund by an exporter of
any Federal or State tax, fee, or royalty paid by the
producer and alleged to have been passed on to an exporter.
SEC. 115. CARBON AUDIT OF THE TAX CODE.
(a) Study.--The Secretary of the Treasury shall enter into
an agreement with the National Academy of Sciences to
undertake a comprehensive review of the Internal Revenue Code
of 1986 to identify the types of and specific tax provisions
that have the largest effects on carbon and other greenhouse
gas emissions and to estimate the magnitude of those effects.
(b) Report.--Not later than 2 years after the date of
enactment of this Act, the National Academy of Sciences shall
submit to Congress a report containing the results of study
authorized under this section.
(c) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $1,500,000 for
the period of fiscal years 2008 and 2009.
Subtitle B--Transportation and Domestic Fuel Security Provisions
SEC. 121. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS
DEPRECIATION FOR BIOMASS ETHANOL PLANT
PROPERTY.
(a) In General.--Paragraph (3) of section 168(l) is amended
to read as follows:
``(3) Cellulosic biofuel.--The term `cellulosic biofuel'
means any liquid fuel which is produced from any
lignocellulosic or hemicellulosic matter that is available on
a renewable or recurring basis.''.
(b) Conforming Amendments.--Subsection (l) of section 168
is amended--
(1) by striking ``cellulosic biomass ethanol'' each place
it appears and inserting ``cellulosic biofuel'',
(2) by striking ``Cellulosic Biomass Ethanol'' in the
heading of such subsection and inserting ``Cellulosic
Biofuel'', and
(3) by striking ``cellulosic biomass ethanol'' in the
heading of paragraph (2) thereof and inserting ``cellulosic
biofuel''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act, in taxable years ending after such
date.
SEC. 122. CREDITS FOR BIODIESEL AND RENEWABLE DIESEL.
(a) In General.--Sections 40A(g), 6426(c)(6), and
6427(e)(5)(B) are each amended by striking ``December 31,
2008'' and inserting ``December 31, 2009''.
(b) Increase in Rate of Credit.--
(1) Income tax credit.--Paragraphs (1)(A) and (2)(A) of
section 40A(b) are each amended by striking ``50 cents'' and
inserting ``$1.00''.
(2) Excise tax credit.--Paragraph (2) of section 6426(c) is
amended to read as follows:
``(2) Applicable amount.--For purposes of this subsection,
the applicable amount is $1.00.''.
(3) Conforming amendments.--
(A) Subsection (b) of section 40A is amended by striking
paragraph (3) and by redesignating paragraphs (4) and (5) as
paragraphs (3) and (4), respectively.
(B) Paragraph (2) of section 40A(f) is amended to read as
follows:
``(2) Exception.--Subsection (b)(4) shall not apply with
respect to renewable diesel.''.
(C) Paragraphs (2) and (3) of section 40A(e) are each
amended by striking ``subsection (b)(5)(C)'' and inserting
``subsection (b)(4)(C)''.
(D) Clause (ii) of section 40A(d)(3)(C) is amended by
striking ``subsection (b)(5)(B)'' and inserting ``subsection
(b)(4)(B)''.
(c) Uniform Treatment of Diesel Produced From Biomass.--
Paragraph (3) of section 40A(f) is amended--
(1) by striking ``diesel fuel'' and inserting ``liquid
fuel'',
(2) by striking ``using a thermal depolymerization
process'', and
(3) by striking ``or D396'' in subparagraph (B) and
inserting ``, D396, or other equivalent standard approved by
the Secretary''.
(d) Coproduction of Renewable Diesel With Petroleum
Feedstock.--
(1) In general.--Paragraph (3) of section 40A(f) (defining
renewable diesel) is amended by adding at the end the
following flush sentence:
``Such term does not include any fuel derived from
coprocessing biomass with a feedstock which is not biomass.
For purposes of this paragraph, the term `biomass' has the
meaning given such term by section 45K(c)(3).''.
(2) Conforming amendment.--Paragraph (3) of section 40A(f)
is amended by striking ``(as defined in section 45K(c)(3))''.
(e) Eligibility of Certain Aviation Fuel.--Paragraph (3) of
section 40A(f) (defining renewable diesel) is amended by
adding at the end the following: ``The term `renewable
diesel' also means fuel derived from biomass which meets the
requirements of a Department of Defense specification for
military jet fuel or an American Society of Testing and
Materials specification for aviation turbine fuel.''
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to fuel produced, and sold or used, after December 31, 2008.
(2) Coproduction of renewable diesel with petroleum
feedstock.--The amendments made by subsection (c) shall apply
to fuel produced, and sold or used, after February 13, 2008.
[[Page H4375]]
SEC. 123. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO
PROVIDE AN INCENTIVE FOR UNITED STATES
PRODUCTION.
(a) Alcohol Fuels Credit.--Subsection (d) of section 40 is
amended by adding at the end the following new paragraph:
``(6) Limitation to alcohol with connection to the united
states.--No credit shall be determined under this section
with respect to any alcohol which is produced outside the
United States for use as a fuel outside the United States.
For purposes of this paragraph, the term `United States'
includes any possession of the United States.''.
(b) Biodiesel Fuels Credit.--Subsection (d) of section 40A
is amended by adding at the end the following new paragraph:
``(5) Limitation to biodiesel with connection to the united
states.--No credit shall be determined under this section
with respect to any biodiesel which is produced outside the
United States for use as a fuel outside the United States.
For purposes of this paragraph, the term `United States'
includes any possession of the United States.''.
(c) Excise Tax Credit.--
(1) In general.--Section 6426 is amended by adding at the
end the following new subsection:
``(i) Limitation to Fuels With Connection to the United
States.--
``(1) Alcohol.--No credit shall be determined under this
section with respect to any alcohol which is produced outside
the United States for use as a fuel outside the United
States.
``(2) Biodiesel and alternative fuels.--No credit shall be
determined under this section with respect to any biodiesel
or alternative fuel which is produced outside the United
States for use as a fuel outside the United States.
For purposes of this subsection, the term `United States'
includes any possession of the United States.''.
(2) Conforming amendment.--Subsection (e) of section 6427
is amended by redesignating paragraph (5) as paragraph (6)
and by inserting after paragraph (4) the following new
paragraph:
``(5) Limitation to fuels with connection to the united
states.--No amount shall be payable under paragraph (1) or
(2) with respect to any mixture or alternative fuel if credit
is not allowed with respect to such mixture or alternative
fuel by reason of section 6426(i).''.
(d) Effective Date.--The amendments made by this section
shall apply to claims for credit or payment made on or after
May 15, 2008.
SEC. 124. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE
MOTOR VEHICLES.
(a) In General.--Subpart B of part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
section:
``SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR
VEHICLES.
``(a) Allowance of Credit.--There shall be allowed as a
credit against the tax imposed by this chapter for the
taxable year an amount equal to the sum of the credit amounts
determined under subsection (b) with respect to each new
qualified plug-in electric drive motor vehicle placed in
service by the taxpayer during the taxable year.
``(b) Per Vehicle Dollar Limitation.--
``(1) In general.--The amount determined under this
subsection with respect to any new qualified plug-in electric
drive motor vehicle is the sum of the amounts determined
under paragraphs (2) and (3) with respect to such vehicle.
``(2) Base amount.--The amount determined under this
paragraph is $3,000.
``(3) Battery capacity.--In the case of a vehicle which
draws propulsion energy from a battery with not less than 5
kilowatt hours of capacity, the amount determined under this
paragraph is $200, plus $200 for each kilowatt hour of
capacity in excess of 5 kilowatt hours. The amount determined
under this paragraph shall not exceed $2,000.
``(c) Application With Other Credits.--
``(1) Business credit treated as part of general business
credit.--So much of the credit which would be allowed under
subsection (a) for any taxable year (determined without
regard to this subsection) that is attributable to property
of a character subject to an allowance for depreciation shall
be treated as a credit listed in section 38(b) for such
taxable year (and not allowed under subsection (a)).
``(2) Personal credit.--
``(A) In general.--For purposes of this title, the credit
allowed under subsection (a) for any taxable year (determined
after application of paragraph (1)) shall be treated as a
credit allowable under subpart A for such taxable year.
``(B) Limitation based on amount of tax.--In the case of a
taxable year to which section 26(a)(2) does not apply, the
credit allowed under subsection (a) for any taxable year
(determined after application of paragraph (1)) shall not
exceed the excess of--
``(i) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(ii) the sum of the credits allowable under subpart A
(other than this section and sections 23 and 25D) and section
27 for the taxable year.
``(d) New Qualified Plug-In Electric Drive Motor Vehicle.--
For purposes of this section--
``(1) In general.--The term `new qualified plug-in electric
drive motor vehicle' means a motor vehicle (as defined in
section 30(c)(2))--
``(A) the original use of which commences with the
taxpayer,
``(B) which is acquired for use or lease by the taxpayer
and not for resale,
``(C) which is made by a manufacturer,
``(D) which has a gross vehicle weight rating of less than
14,000 pounds,
``(E) which has received a certificate of conformity under
the Clean Air Act and meets or exceeds the Bin 5 Tier II
emission standard established in regulations prescribed by
the Administrator of the Environmental Protection Agency
under section 202(i) of the Clean Air Act for that make and
model year vehicle, and
``(F) which is propelled to a significant extent by an
electric motor which draws electricity from a battery which--
``(i) has a capacity of not less than 4 kilowatt hours, and
``(ii) is capable of being recharged from an external
source of electricity.
``(2) Exception.--The term `new qualified plug-in electric
drive motor vehicle' shall not include any vehicle which is
not a passenger automobile or light truck if such vehicle has
a gross vehicle weight rating of less than 8,500 pounds.
``(3) Other terms.--The terms `passenger automobile',
`light truck', and `manufacturer' have the meanings given
such terms in regulations prescribed by the Administrator of
the Environmental Protection Agency for purposes of the
administration of title II of the Clean Air Act (42 U.S.C.
7521 et seq.).
``(4) Battery capacity.--The term `capacity' means, with
respect to any battery, the quantity of electricity which the
battery is capable of storing, expressed in kilowatt hours,
as measured from a 100 percent state of charge to a 0 percent
state of charge.
``(e) Limitation on Number of New Qualified Plug-In
Electric Drive Motor Vehicles Eligible for Credit.--
``(1) In general.--In the case of a new qualified plug-in
electric drive motor vehicle sold during the phaseout period,
only the applicable percentage of the credit otherwise
allowable under subsection (a) shall be allowed.
``(2) Phaseout period.--For purposes of this subsection,
the phaseout period is the period beginning with the second
calendar quarter following the calendar quarter which
includes the first date on which the number of new qualified
plug-in electric drive motor vehicles manufactured by the
manufacturer of the vehicle referred to in paragraph (1) sold
for use in the United States after the date of the enactment
of this section, is at least 60,000.
``(3) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage is--
``(A) 50 percent for the first 2 calendar quarters of the
phaseout period,
``(B) 25 percent for the 3d and 4th calendar quarters of
the phaseout period, and
``(C) 0 percent for each calendar quarter thereafter.
``(4) Controlled groups.--Rules similar to the rules of
section 30B(f)(4) shall apply for purposes of this
subsection.
``(f) Special Rules.--
``(1) Basis reduction.--The basis of any property for which
a credit is allowable under subsection (a) shall be reduced
by the amount of such credit (determined without regard to
subsection (c)).
``(2) Recapture.--The Secretary shall, by regulations,
provide for recapturing the benefit of any credit allowable
under subsection (a) with respect to any property which
ceases to be property eligible for such credit.
``(3) Property used outside united states, etc., not
qualified.--No credit shall be allowed under subsection (a)
with respect to any property referred to in section 50(b)(1)
or with respect to the portion of the cost of any property
taken into account under section 179.
``(4) Election not to take credit.--No credit shall be
allowed under subsection (a) for any vehicle if the taxpayer
elects to not have this section apply to such vehicle.
``(5) Property used by tax-exempt entity; interaction with
air quality and motor vehicle safety standards.--Rules
similar to the rules of paragraphs (6) and (10) of section
30B(h) shall apply for purposes of this section.''.
(b) Coordination With Alternative Motor Vehicle Credit.--
Section 30B(d)(3) is amended by adding at the end the
following new subparagraph:
``(D) Exclusion of plug-in vehicles.--Any vehicle with
respect to which a credit is allowable under section 30D
(determined without regard to subsection (c) thereof) shall
not be taken into account under this section.''.
(c) Credit Made Part of General Business Credit.--Section
38(b) is amended--
(1) by striking ``and'' each place it appears at the end of
any paragraph,
(2) by striking ``plus'' each place it appears at the end
of any paragraph,
(3) by striking the period at the end of paragraph (31) and
inserting ``, plus'', and
(4) by adding at the end the following new paragraph:
``(32) the portion of the new qualified plug-in electric
drive motor vehicle credit to which section 30D(c)(1)
applies.''.
(d) Conforming Amendments.--
(1)(A) Section 24(b)(3)(B), as amended by section 104, is
amended by striking ``and 25D'' and inserting ``25D, and
30D''.
(B) Section 25(e)(1)(C)(ii) is amended by inserting
``30D,'' after ``25D,''.
(C) Section 25B(g)(2), as amended by section 104, is
amended by striking ``and 25D'' and inserting ``, 25D, and
30D''.
(D) Section 26(a)(1), as amended by section 104, is amended
by striking ``and 25D'' and inserting ``25D, and 30D''.
(E) Section 1400C(d)(2) is amended by striking ``and 25D''
and inserting ``25D, and 30D''.
(2) Section 1016(a) is amended by striking ``and'' at the
end of paragraph (35), by striking the period at the end of
paragraph (36) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(37) to the extent provided in section 30D(f)(1).''.
(3) Section 6501(m) is amended by inserting ``30D(f)(4),''
after ``30C(e)(5),''.
(4) The table of sections for subpart B of part IV of
subchapter A of chapter 1 is amended by adding at the end the
following new item:
[[Page H4376]]
``Sec. 30D. New qualified plug-in electric drive motor vehicles.''.
(e) Treatment of Alternative Motor Vehicle Credit as a
Personal Credit.--
(1) In general.--Paragraph (2) of section 30B(g) is amended
to read as follows:
``(2) Personal credit.--The credit allowed under subsection
(a) for any taxable year (after application of paragraph (1))
shall be treated as a credit allowable under subpart A for
such taxable year.''.
(2) Conforming amendments.--
(A) Subparagraph (A) of section 30C(d)(2) is amended by
striking ``sections 27, 30, and 30B'' and inserting
``sections 27 and 30''.
(B) Paragraph (3) of section 55(c) is amended by striking
``30B(g)(2),''.
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to taxable years beginning after December 31, 2008.
(2) Treatment of alternative motor vehicle credit as
personal credit.--The amendments made by subsection (e) shall
apply to taxable years beginning after December 31, 2007.
(g) Application of EGTRRA Sunset.--The amendment made by
subsection (d)(1)(A) shall be subject to title IX of the
Economic Growth and Tax Relief Reconciliation Act of 2001 in
the same manner as the provision of such Act to which such
amendment relates.
SEC. 125. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING REDUCTION
UNITS AND ADVANCED INSULATION.
(a) In General.--Section 4053 is amended by adding at the
end the following new paragraphs:
``(9) Idling reduction device.--Any device or system of
devices which--
``(A) is designed to provide to a vehicle those services
(such as heat, air conditioning, or electricity) that would
otherwise require the operation of the main drive engine
while the vehicle is temporarily parked or remains stationary
using one or more devices affixed to a tractor, and
``(B) is certified by the Secretary of Energy, in
consultation with the Administrator of the Environmental
Protection Agency and the Secretary of Transportation, to
reduce idling of such vehicle at a motor vehicle rest stop or
other location where such vehicles are temporarily parked or
remain stationary.
``(10) Advanced insulation.--Any insulation that has an R
value of not less than R35 per inch.''.
(b) Effective Date.--The amendment made by this section
shall apply to sales or installations after the date of the
enactment of this Act.
SEC. 126. RESTRUCTURING OF NEW YORK LIBERTY ZONE TAX CREDITS.
(a) In General.--Part I of subchapter Y of chapter 1 is
amended by redesignating section 1400L as section 1400K and
by adding at the end the following new section:
``SEC. 1400L. NEW YORK LIBERTY ZONE TAX CREDITS.
``(a) In General.--In the case of a New York Liberty Zone
governmental unit, there shall be allowed as a credit against
any taxes imposed for any payroll period by section 3402 for
which such governmental unit is liable under section 3403 an
amount equal to so much of the portion of the qualifying
project expenditure amount allocated under subsection (b)(3)
to such governmental unit for the calendar year as is
allocated by such governmental unit to such period under
subsection (b)(4).
``(b) Qualifying Project Expenditure Amount.--For purposes
of this section--
``(1) In general.--The term `qualifying project expenditure
amount' means, with respect to any calendar year, the sum
of--
``(A) the total expenditures paid or incurred during such
calendar year by all New York Liberty Zone governmental units
and the Port Authority of New York and New Jersey for any
portion of qualifying projects located wholly within the City
of New York, New York, and
``(B) any such expenditures--
``(i) paid or incurred in any preceding calendar year which
begins after the date of enactment of this section, and
``(ii) not previously allocated under paragraph (3).
``(2) Qualifying project.--The term `qualifying project'
means any transportation infrastructure project, including
highways, mass transit systems, railroads, airports, ports,
and waterways, in or connecting with the New York Liberty
Zone (as defined in section 1400K(h)), which is designated as
a qualifying project under this section jointly by the
Governor of the State of New York and the Mayor of the City
of New York, New York.
``(3) General allocation.--
``(A) In general.--The Governor of the State of New York
and the Mayor of the City of New York, New York, shall
jointly allocate to each New York Liberty Zone governmental
unit the portion of the qualifying project expenditure amount
which may be taken into account by such governmental unit
under subsection (a) for any calendar year in the credit
period.
``(B) Aggregate limit.--The aggregate amount which may be
allocated under subparagraph (A) for all calendar years in
the credit period shall not exceed $2,000,000,000.
``(C) Annual limit.--The aggregate amount which may be
allocated under subparagraph (A) for any calendar year in the
credit period shall not exceed the sum of--
``(i) $115,000,000 ($425,000,000 in the case of the last 2
years in the credit period), plus
``(ii) the aggregate amount authorized to be allocated
under this paragraph for all preceding calendar years in the
credit period which was not so allocated.
``(D) Unallocated amounts at end of credit period.--If, as
of the close of the credit period, the amount under
subparagraph (B) exceeds the aggregate amount allocated under
subparagraph (A) for all calendar years in the credit period,
the Governor of the State of New York and the Mayor of the
City of New York, New York, may jointly allocate to New York
Liberty Zone governmental units for any calendar year in the
5-year period following the credit period an amount equal
to--
``(i) the lesser of--
``(I) such excess, or
``(II) the qualifying project expenditure amount for such
calendar year, reduced by
``(ii) the aggregate amount allocated under this
subparagraph for all preceding calendar years.
``(4) Allocation to payroll periods.--Each New York Liberty
Zone governmental unit which has been allocated a portion of
the qualifying project expenditure amount under paragraph (3)
for a calendar year may allocate such portion to payroll
periods beginning in such calendar year as such governmental
unit determines appropriate.
``(c) Carryover of Unused Allocations.--
``(1) In general.--Except as provided in paragraph (2), if
the amount allocated under subsection (b)(3) to a New York
Liberty Zone governmental unit for any calendar year exceeds
the aggregate taxes imposed by section 3402 for which such
governmental unit is liable under section 3403 for periods
beginning in such year, such excess shall be carried to the
succeeding calendar year and added to the allocation of such
governmental unit for such succeeding calendar year.
``(2) Reallocation.--If a New York Liberty Zone
governmental unit does not use an amount allocated to it
under subsection (b)(3) within the time prescribed by the
Governor of the State of New York and the Mayor of the City
of New York, New York, then such amount shall after such time
be treated for purposes of subsection (b)(3) in the same
manner as if it had never been allocated.
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) Credit period.--The term `credit period' means the
12-year period beginning on January 1, 2009.
``(2) New york liberty zone governmental unit.--The term
`New York Liberty Zone governmental unit' means--
``(A) the State of New York,
``(B) the City of New York, New York, and
``(C) any agency or instrumentality of such State or City.
``(3) Treatment of funds.--Any expenditure for a qualifying
project taken into account for purposes of the credit under
this section shall be considered State and local funds for
the purpose of any Federal program.
``(4) Treatment of credit amounts for purposes of
withholding taxes.--For purposes of this title, a New York
Liberty Zone governmental unit shall be treated as having
paid to the Secretary, on the day on which wages are paid to
employees, an amount equal to the amount of the credit
allowed to such entity under subsection (a) with respect to
such wages, but only if such governmental unit deducts and
withholds wages for such payroll period under section 3401
(relating to wage withholding).
``(e) Reporting.--The Governor of the State of New York and
the Mayor of the City of New York, New York, shall jointly
submit to the Secretary an annual report--
``(1) which certifies--
``(A) the qualifying project expenditure amount for the
calendar year, and
``(B) the amount allocated to each New York Liberty Zone
governmental unit under subsection (b)(3) for the calendar
year, and
``(2) includes such other information as the Secretary may
require to carry out this section.
``(f) Guidance.--The Secretary may prescribe such guidance
as may be necessary or appropriate to ensure compliance with
the purposes of this section.''.
(b) Termination of Special Allowance and Expensing.--
Subparagraph (A) of section 1400K(b)(2), as redesignated by
subsection (a), is amended by striking the parenthetical
therein and inserting ``(in the case of nonresidential real
property and residential rental property, the date of the
enactment of the Renewable Energy and Job Creation Act of
2008 or, if acquired pursuant to a binding contract in effect
on such enactment date, December 31, 2009)''.
(c) Conforming Amendments.--
(1) Section 38(c)(3)(B) is amended by striking ``section
1400L(a)'' and inserting ``section 1400K(a)''.
(2) Section 168(k)(2)(D)(ii) is amended by striking
``section 1400L(c)(2)'' and inserting ``section
1400K(c)(2)''.
(3) The table of sections for part I of subchapter Y of
chapter 1 is amended by redesignating the item relating to
section 1400L as an item relating to section 1400K and by
inserting after such item the following new item:
``Sec. 1400L. New York Liberty Zone tax credits.''.
(d) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
SEC. 127. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS.
(a) In General.--Paragraph (1) of section 132(f) is amended
by adding at the end the following:
``(D) Any qualified bicycle commuting reimbursement.''.
(b) Limitation on Exclusion.--Paragraph (2) of section
132(f) 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) the applicable annual limitation in the case of any
qualified bicycle commuting reimbursement.''.
[[Page H4377]]
(c) Definitions.--Paragraph (5) of section 132(f) is
amended by adding at the end the following:
``(F) Definitions related to bicycle commuting
reimbursement.--
``(i) Qualified bicycle commuting reimbursement.--The term
`qualified bicycle commuting reimbursement' means, with
respect to any calendar year, any employer reimbursement
during the 15-month period beginning with the first day of
such calendar year for reasonable expenses incurred by the
employee during such calendar year for the purchase of a
bicycle and bicycle improvements, repair, and storage, if
such bicycle is regularly used for travel between the
employee's residence and place of employment.
``(ii) Applicable annual limitation.--The term `applicable
annual limitation' means, with respect to any employee for
any calendar year, the product of $20 multiplied by the
number of qualified bicycle commuting months during such
year.
``(iii) Qualified bicycle commuting month.--The term
`qualified bicycle commuting month' means, with respect to
any employee, any month during which such employee--
``(I) regularly uses the bicycle for a substantial portion
of the travel between the employee's residence and place of
employment, and
``(II) does not receive any benefit described in
subparagraph (A), (B), or (C) of paragraph (1).''.
(d) Constructive Receipt of Benefit.--Paragraph (4) of
section 132(f) is amended by inserting ``(other than a
qualified bicycle commuting reimbursement)'' after
``qualified transportation fringe''.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.
SEC. 128. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.
(a) Increase in Credit Amount.--Section 30C is amended--
(1) by striking ``30 percent'' in subsection (a) and
inserting ``50 percent'', and
(2) by striking ``$30,000'' in subsection (b)(1) and
inserting ``$50,000''.
(b) Extension of Credit.--Paragraph (2) of section 30C(g)
is amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act, in taxable years ending after such
date.
Subtitle C--Energy Conservation and Efficiency Provisions
SEC. 141. QUALIFIED ENERGY CONSERVATION BONDS.
(a) In General.--Subpart I of part IV of subchapter A of
chapter 1, as added by section 106, is amended by adding at
the end the following new section:
``SEC. 54C. QUALIFIED ENERGY CONSERVATION BONDS.
``(a) Qualified Energy Conservation Bond.--For purposes of
this subchapter, the term `qualified energy conservation
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 one or more qualified conservation
purposes,
``(2) the bond is issued by a State or local government,
and
``(3) the issuer designates such bond for purposes of this
section.
``(b) Reduced Credit Amount.--The annual credit determined
under section 54A(b) with respect to any qualified energy
conservation bond shall be 70 percent of the amount so
determined without regard to this subsection.
``(c) Limitation on Amount of Bonds Designated.--The
maximum aggregate face amount of bonds which may be
designated under subsection (a) by any issuer shall not
exceed the limitation amount allocated to such issuer under
subsection (e).
``(d) National Limitation on Amount of Bonds Designated.--
There is a national qualified energy conservation bond
limitation of $3,000,000,000.
``(e) Allocations.--
``(1) In general.--The limitation applicable under
subsection (d) shall be allocated by the Secretary among the
States in proportion to the population of the States.
``(2) Allocations to largest local governments.--
``(A) In general.--In the case of any State in which there
is a large local government, each such local government shall
be allocated a portion of such State's allocation which bears
the same ratio to the State's allocation (determined without
regard to this subparagraph) as the population of such large
local government bears to the population of such State.
``(B) Allocation of unused limitation to state.--The amount
allocated under this subsection to a large local government
may be reallocated by such local government to the State in
which such local government is located.
``(C) Large local government.--For purposes of this
section, the term `large local government' means any
municipality or county if such municipality or county has a
population of 100,000 or more.
``(3) Allocation to issuers; restriction on private
activity bonds.--Any allocation under this subsection to a
State or large local government shall be allocated by such
State or large local government to issuers within the State
in a manner that results in not less than 70 percent of the
allocation to such State or large local government being used
to designate bonds which are not private activity bonds.
``(f) Qualified Conservation Purpose.--For purposes of this
section--
``(1) In general.--The term `qualified conservation
purpose' means any of the following:
``(A) Capital expenditures incurred for purposes of--
``(i) reducing energy consumption in publicly-owned
buildings by at least 20 percent,
``(ii) implementing green community programs,
``(iii) rural development involving the production of
electricity from renewable energy resources, or
``(iv) any qualified facility (as determined under section
45(d) without regard to paragraphs (8) and (10) thereof and
without regard to any placed in service date).
``(B) Expenditures with respect to research facilities, and
research grants, to support research in--
``(i) development of cellulosic ethanol or other nonfossil
fuels,
``(ii) technologies for the capture and sequestration of
carbon dioxide produced through the use of fossil fuels,
``(iii) increasing the efficiency of existing technologies
for producing nonfossil fuels,
``(iv) automobile battery technologies and other
technologies to reduce fossil fuel consumption in
transportation, or
``(v) technologies to reduce energy use in buildings.
``(C) Mass commuting facilities and related facilities that
reduce the consumption of energy, including expenditures to
reduce pollution from vehicles used for mass commuting.
``(D) Demonstration projects designed to promote the
commercialization of--
``(i) green building technology,
``(ii) conversion of agricultural waste for use in the
production of fuel or otherwise,
``(iii) advanced battery manufacturing technologies,
``(iv) technologies to reduce peak use of electricity, or
``(v) technologies for the capture and sequestration of
carbon dioxide emitted from combusting fossil fuels in order
to produce electricity.
``(E) Public education campaigns to promote energy
efficiency.
``(2) Special rules for private activity bonds.--For
purposes of this section, in the case of any private activity
bond, the term `qualified conservation purposes' shall not
include any expenditure which is not a capital expenditure.
``(g) Population.--
``(1) In general.--The population of any State or local
government shall be determined for purposes of this section
as provided in section 146(j) for the calendar year which
includes the date of the enactment of this section.
``(2) Special rule for counties.--In determining the
population of any county for purposes of this section, any
population of such county which is taken into account in
determining the population of any municipality which is a
large local government shall not be taken into account in
determining the population of such county.
``(h) Application to Indian Tribal Governments.--An Indian
tribal government shall be treated for purposes of this
section in the same manner as a large local government,
except that--
``(1) an Indian tribal government shall be treated for
purposes of subsection (e) as located within a State to the
extent of so much of the population of such government as
resides within such State, and
``(2) any bond issued by an Indian tribal government shall
be treated as a qualified energy conservation bond only if
issued as part of an issue the available project proceeds of
which are used for purposes for which such Indian tribal
government could issue bonds to which section 103(a)
applies.''.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 54A(d), as added by section
106, is amended to read as follows:
``(1) Qualified tax credit bond.--The term `qualified tax
credit bond' means--
``(A) a new clean renewable energy bond, or
``(B) a qualified energy conservation bond,
which is part of an issue that meets requirements of
paragraphs (2), (3), (4), (5), and (6).''.
(2) Subparagraph (C) of section 54A(d)(2), as added by
section 106, is amended to read as follows:
``(C) Qualified purpose.--For purposes of this paragraph,
the term `qualified purpose' means--
``(i) in the case of a new clean renewable energy bond, a
purpose specified in section 54B(a)(1), and
``(ii) in the case of a qualified energy conservation bond,
a purpose specified in section 54C(a)(1).''.
(3) 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. 54C. Qualified energy conservation bonds.''.
(c) Effective Date.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.
SEC. 142. CREDIT FOR NONBUSINESS ENERGY PROPERTY.
(a) Extension of Credit.--Section 25C(g) is amended by
striking ``December 31, 2007'' and inserting ``December 31,
2008''.
(b) Qualified Biomass Fuel Property.--
(1) In general.--Section 25C(d)(3) is amended--
(A) by striking ``and'' at the end of subparagraph (D),
(B) by striking the period at the end of subparagraph (E)
and inserting ``, and'', and
(C) by adding at the end the following new subparagraph:
``(F) a stove which uses the burning of biomass fuel to
heat a dwelling unit located in the United States and used as
a residence by the taxpayer, or to heat water for use in such
a dwelling unit, and which has a thermal efficiency rating of
at least 75 percent.''.
(2) Biomass fuel.--Section 25C(d) is amended by adding at
the end the following new paragraph:
[[Page H4378]]
``(6) Biomass fuel.--The term `biomass fuel' means any
plant-derived fuel available on a renewable or recurring
basis, including agricultural crops and trees, wood and wood
waste and residues (including wood pellets), plants
(including aquatic plants), grasses, residues, and fibers.''.
(c) Coordination With Credit for Qualified Geothermal Heat
Pump Property Expenditures.--
(1) In general.--Paragraph (3) of section 25C(d), as
amended by subsection (b), is amended by striking
subparagraph (C) and by redesignating subparagraphs (D), (E),
and (F) as subparagraphs (C), (D), and (E), respectively.
(2) Conforming amendment.--Subparagraph (C) of section
25C(d)(2) is amended to read as follows:
``(C) Requirements and standards for air conditioners and
heat pumps.--The standards and requirements prescribed by the
Secretary under subparagraph (B) with respect to the energy
efficiency ratio (EER) for central air conditioners and
electric heat pumps--
``(i) shall require measurements to be based on published
data which is tested by manufacturers at 95 degrees
Fahrenheit, and
``(ii) may be based on the certified data of the Air
Conditioning and Refrigeration Institute that are prepared in
partnership with the Consortium for Energy Efficiency.''.
(d) Effective Date.--The amendments made this section shall
apply to expenditures made after December 31, 2007.
SEC. 143. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.
Subsection (h) of section 179D is amended by striking
``December 31, 2008'' and inserting ``December 31, 2013''.
SEC. 144. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT
FOR APPLIANCES PRODUCED AFTER 2007.
(a) In General.--Subsection (b) of section 45M is amended
to read as follows:
``(b) Applicable Amount.--For purposes of subsection (a)--
``(1) Dishwashers.--The applicable amount is--
``(A) $45 in the case of a dishwasher which is manufactured
in calendar year 2008 or 2009 and which uses no more than 324
kilowatt hours per year and 5.8 gallons per cycle, and
``(B) $75 in the case of a dishwasher which is manufactured
in calendar year 2008, 2009, or 2010 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).
``(2) Clothes washers.--The applicable amount is--
``(A) $75 in the case of a residential top-loading clothes
washer manufactured in calendar year 2008 which meets or
exceeds a 1.72 modified energy factor and does not exceed a
8.0 water consumption factor,
``(B) $125 in the case of a residential top-loading clothes
washer manufactured in calendar year 2008 or 2009 which meets
or exceeds a 1.8 modified energy factor and does not exceed a
7.5 water consumption factor,
``(C) $150 in the case of a residential or commercial
clothes washer manufactured in calendar year 2008, 2009, or
2010 which meets or exceeds 2.0 modified energy factor and
does not exceed a 6.0 water consumption factor, and
``(D) $250 in the case of a residential or commercial
clothes washer manufactured in calendar year 2008, 2009, or
2010 which meets or exceeds 2.2 modified energy factor and
does not exceed a 4.5 water consumption factor.
``(3) Refrigerators.--The applicable amount is--
``(A) $50 in the case of a refrigerator which is
manufactured in calendar year 2008, and consumes at least 20
percent but not more than 22.9 percent less kilowatt hours
per year than the 2001 energy conservation standards,
``(B) $75 in the case of a refrigerator which is
manufactured in calendar year 2008 or 2009, and consumes at
least 23 percent but no more than 24.9 percent less kilowatt
hours per year than the 2001 energy conservation standards,
``(C) $100 in the case of a refrigerator which is
manufactured in calendar year 2008, 2009, or 2010, and
consumes at least 25 percent but not more than 29.9 percent
less kilowatt hours per year than the 2001 energy
conservation standards, and
``(D) $200 in the case of a refrigerator manufactured in
calendar year 2008, 2009, or 2010 and which consumes at least
30 percent less energy than the 2001 energy conservation
standards.''.
(b) Eligible Production.--
(1) Similar treatment for all appliances.--Subsection (c)
of section 45M is amended--
(A) by striking paragraph (2),
(B) by striking ``(1) In general'' and all that follows
through ``the eligible'' and inserting ``The eligible'',
(C) by moving the text of such subsection in line with the
subsection heading, and
(D) by redesignating subparagraphs (A) and (B) as
paragraphs (1) and (2), respectively, and by moving such
paragraphs 2 ems to the left.
(2) Modification of base period.--Paragraph (2) of section
45M(c), as amended by paragraph (1), is amended by striking
``3-calendar year'' and inserting ``2-calendar year''.
(c) Types of Energy Efficient Appliances.--Subsection (d)
of section 45M (defining types of energy efficient
appliances) is amended to read as follows:
``(d) Types of Energy Efficient Appliance.--For purposes of
this section, the types of energy efficient appliances are--
``(1) dishwashers described in subsection (b)(1),
``(2) clothes washers described in subsection (b)(2), and
``(3) refrigerators described in subsection (b)(3).''.
(d) Aggregate Credit Amount Allowed.--
(1) Increase in limit.--Paragraph (1) of section 45M(e) is
amended to read as follows:
``(1) Aggregate credit amount allowed.--The aggregate
amount of credit allowed under subsection (a) with respect to
a taxpayer for any taxable year shall not exceed $75,000,000
reduced by the amount of the credit allowed under subsection
(a) to the taxpayer (or any predecessor) for all prior
taxable years beginning after December 31, 2007.''.
(2) Exception for certain refrigerator and clothes
washers.--Paragraph (2) of section 45M(e) is amended to read
as follows:
``(2) Amount allowed for certain refrigerators and clothes
washers.--Refrigerators described in subsection (b)(3)(D) and
clothes washers described in subsection (b)(2)(D) shall not
be taken into account under paragraph (1).''.
(e) Qualified Energy Efficient Appliances.--
(1) In general.--Paragraph (1) of section 45M(f) (defining
qualified energy efficient appliance) is amended to read as
follows:
``(1) Qualified energy efficient appliance.--The term
`qualified energy efficient appliance' means--
``(A) any dishwasher described in subsection (b)(1),
``(B) any clothes washer described in subsection (b)(2),
and
``(C) any refrigerator described in subsection (b)(3).''.
(2) Clothes washer.--Section 45M(f)(3) is amended by
inserting ``commercial'' before ``residential'' the second
place it appears.
(3) Top-loading clothes washer.--Subsection (f) of section
45M is amended by redesignating paragraphs (4), (5), (6), and
(7) as paragraphs (5), (6), (7), and (8), respectively, and
by inserting after paragraph (3) the following new paragraph:
``(4) Top-loading clothes washer.--The term `top-loading
clothes washer' means a clothes washer which has the clothes
container compartment access located on the top of the
machine and which operates on a vertical axis.''.
(4) Replacement of energy factor.--Section 45M(f)(6), as
redesignated by paragraph (3), is amended to read as follows:
``(6) Modified energy factor.--The term `modified energy
factor' means the modified energy factor established by the
Department of Energy for compliance with the Federal energy
conservation standard.''.
(5) Gallons per cycle; water consumption factor.--Section
45M(f), as amended by paragraph (3), is amended by adding at
the end the following:
``(9) Gallons per cycle.--The term `gallons per cycle'
means, with respect to a dishwasher, the amount of water,
expressed in gallons, required to complete a normal cycle of
a dishwasher.
``(10) Water consumption factor.--The term `water
consumption factor' means, with respect to a clothes washer,
the quotient of the total weighted per-cycle water
consumption divided by the cubic foot (or liter) capacity of
the clothes washer.''.
(f) Effective Date.--The amendments made by this section
shall apply to appliances produced after December 31, 2007.
SEC. 145. ACCELERATED RECOVERY PERIOD FOR DEPRECIATION OF
SMART METERS AND SMART GRID SYSTEMS.
(a) In General.--Section 168(e)(3)(D) is amended by
striking ``and'' at the end of clause (i), by striking the
period at the end of clause (ii) and inserting a comma, and
by inserting after clause (ii) the following new clauses:
``(iii) any qualified smart electric meter, and
``(iv) any qualified smart electric grid system.''.
(b) Definitions.--Section 168(i) is amended by inserting at
the end the following new paragraph:
``(18) Qualified smart electric meters.--
``(A) In general.--The term `qualified smart electric
meter' means any smart electric meter which is placed in
service by a taxpayer who is a supplier of electric energy or
a provider of electric energy services.
``(B) Smart electric meter.--For purposes of subparagraph
(A), the term `smart electric meter' means any time-based
meter and related communication equipment which is capable of
being used by the taxpayer as part of a system that--
``(i) measures and records electricity usage data on a
time-differentiated basis in at least 24 separate time
segments per day,
``(ii) provides for the exchange of information between
supplier or provider and the customer's electric meter in
support of time-based rates or other forms of demand
response,
``(iii) provides data to such supplier or provider so that
the supplier or provider can provide energy usage information
to customers electronically, and
``(iv) provides net metering.
``(19) Qualified smart electric grid systems.--
``(A) In general.--The term `qualified smart electric grid
system' means any smart grid property used as part of a
system for electric distribution grid communications,
monitoring, and management placed in service by a taxpayer
who is a supplier of electric energy or a provider of
electric energy services.
``(B) Smart grid property.--For the purposes of
subparagraph (A), the term `smart grid property' means
electronics and related equipment that is capable of--
``(i) sensing, collecting, and monitoring data of or from
all portions of a utility's electric distribution grid,
``(ii) providing real-time, two-way communications to
monitor or manage such grid, and
``(iii) providing real time analysis of and event
prediction based upon collected data that can be
[[Page H4379]]
used to improve electric distribution system reliability,
quality, and performance.''.
(c) Continued Application of 150 Percent Declining Balance
Method.--Paragraph (2) of section 168(b) is amended by
striking ``or'' at the end of subparagraph (B), by
redesignating subparagraph (C) as subparagraph (D), and by
inserting after subparagraph (B) the following new
subparagraph:
``(C) any property (other than property described in
paragraph (3)) which is a qualified smart electric meter or
qualified smart electric grid system, or''.
(d) 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. 146. QUALIFIED GREEN BUILDING AND SUSTAINABLE DESIGN
PROJECTS.
(a) In General.--Paragraph (8) of section 142(l) is amended
by striking ``September 30, 2009'' and inserting ``September
30, 2012''.
(b) Treatment of Current Refunding Bonds.--Paragraph (9) of
section 142(l) is amended by striking ``October 1, 2009'' and
inserting ``October 1, 2012''.
(c) Accountability.--The second sentence of section 701(d)
of the American Jobs Creation Act of 2004 is amended by
striking ``issuance,'' and inserting ``issuance of the last
issue with respect to such project,''.
TITLE II--ONE-YEAR EXTENSION OF TEMPORARY PROVISIONS
Subtitle A--Extensions Primarily Affecting Individuals
SEC. 201. DEDUCTION FOR STATE AND LOCAL SALES TAXES.
(a) In General.--Subparagraph (I) of section 164(b)(5) is
amended by striking ``January 1, 2008'' and inserting
``January 1, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 202. DEDUCTION OF QUALIFIED TUITION AND RELATED
EXPENSES.
(a) In General.--Subsection (e) of section 222 is amended
by striking ``December 31, 2007'' and inserting ``December
31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 203. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED
INVESTMENT COMPANIES.
(a) Interest-Related Dividends.--Subparagraph (C) of
section 871(k)(1) (defining interest-related dividend) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Short-Term Capital Gain Dividends.--Subparagraph (C) of
section 871(k)(2) (defining short-term capital gain dividend)
is amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(c) Effective Date.--The amendments made by this section
shall apply to dividends with respect to taxable years of
regulated investment companies beginning after December 31,
2007.
SEC. 204. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT
PLANS FOR CHARITABLE PURPOSES.
(a) In General.--Subparagraph (F) of section 408(d)(8) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to distributions made in taxable years beginning
after December 31, 2007.
SEC. 205. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND
SECONDARY SCHOOL TEACHERS.
(a) In General.--Subparagraph (D) of section 62(a)(2) is
amended by striking ``or 2007'' and inserting ``2007, or
2008''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31,
2007.
SEC. 206. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR
PURPOSES OF EARNED INCOME TAX CREDIT.
(a) In General.--Subclause (II) of section 32(c)(2)(B)(vi)
(defining earned income) is amended by striking ``January 1,
2008'' and inserting ``January 1, 2009''.
(b) Conforming Amendment.--Paragraph (4) of section 6428(e)
is amended by striking ``except that'' and all that follows
through ``such term'' and inserting ``except that such
term''.
(c) Effective Date.--The amendment made by this section
shall apply to taxable years ending after December 31, 2007.
SEC. 207. MODIFICATION OF MORTGAGE REVENUE BONDS FOR
VETERANS.
(a) Qualified Mortgage Bonds Used To Finance Residences for
Veterans Without Regard to First-Time Homebuyer
Requirement.--Subparagraph (D) of section 143(d)(2) is
amended by striking ``January 1, 2008'' and inserting
``January 1, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to bonds issued after December 31, 2007.
SEC. 208. DISTRIBUTIONS FROM RETIREMENT PLANS TO INDIVIDUALS
CALLED TO ACTIVE DUTY.
(a) In General.--Clause (iv) of section 72(t)(2)(G) is
amended by striking ``December 31, 2007'' and inserting
``January 1, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to individuals ordered or called to active duty
on or after December 31, 2007.
SEC. 209. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES OF
NONRESIDENTS NOT CITIZENS.
(a) In General.--Paragraph (3) of section 2105(d) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to decedents dying after December 31, 2007.
SEC. 210. QUALIFIED INVESTMENT ENTITIES.
(a) In General.--Clause (ii) of section 897(h)(4)(A) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on January 1, 2008, except that such
amendment shall not apply to the application of withholding
requirements with respect to any payment made on or before
the date of the enactment of this Act.
SEC. 211. EXCLUSION OF AMOUNTS RECEIVED UNDER QUALIFIED GROUP
LEGAL SERVICES PLANS.
(a) In General.--Subsection (e) of section 120 is amended
by striking ``shall not apply to taxable years beginning
after June 30, 1992'' and inserting ``shall apply to taxable
years beginning after December 31, 2007, and before January
1, 2009''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
Subtitle B--Extensions Primarily Affecting Businesses
SEC. 221. RESEARCH CREDIT.
(a) In General.--Subparagraph (B) of section 41(h)(1) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Computation of Credit for Taxable Year in Which Credit
Terminates.--Paragraph (2) of section 41(h) is amended to
read as follows:
``(2) Computation of credit for taxable year in which
credit terminates.--
``(A) In general.--In the case of any taxable year with
respect to which this section applies to a number of days
which is less than the total number of days in such taxable
year, the applicable base amount with respect to such taxable
year shall be the amount which bears the same ratio to such
applicable amount (determined without regard to this
paragraph) as the number of days in such taxable year to
which this section applies bears to the total number of days
in such taxable year.
``(B) Applicable base amount.--For purposes of subparagraph
(A), the term `applicable base amount' means, with respect to
any taxable year--
``(i) except as otherwise provided in this subparagraph,
the base amount for the taxable year,
``(ii) in the case of a taxable year with respect to which
an election under subsection (c)(4) (relating to election of
alternative incremental credit) is in effect, the average
described in subsection (c)(1)(B) for the taxable year, and
``(iii) in the case of a taxable year with respect to which
an election under subsection (c)(5) (relating to election of
alternative simplified credit) is in effect, the average
qualified research expenses for the 3 taxable years preceding
the taxable year.''.
(c) Conforming Amendment.--Subparagraph (D) of section
45C(b)(1) is amended by striking ``December 31, 2007'' and
inserting ``December 31, 2008''.
(d) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred after December 31,
2007.
SEC. 222. INDIAN EMPLOYMENT CREDIT.
(a) In General.--Subsection (f) of section 45A is amended
by striking ``December 31, 2007'' and inserting ``December
31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 223. NEW MARKETS TAX CREDIT.
Subparagraph (D) of section 45D(f)(1) is amended by
striking ``and 2008'' and inserting ``2008, and 2009''.
SEC. 224. RAILROAD TRACK MAINTENANCE.
(a) In General.--Subsection (f) of section 45G is amended
by striking ``January 1, 2008'' and inserting ``January 1,
2009''.
(b) Effective Date.--The amendment made by this section
shall apply to expenditures paid or incurred during taxable
years beginning after December 31, 2007.
SEC. 225. FIFTEEN-YEAR STRAIGHT-LINE COST RECOVERY FOR
QUALIFIED LEASEHOLD IMPROVEMENTS AND QUALIFIED
RESTAURANT PROPERTY.
(a) In General.--Clauses (iv) and (v) of section
168(e)(3)(E) are each amended by striking ``January 1, 2008''
and inserting ``January 1, 2009''.
(b) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
2007.
SEC. 226. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS
RACING TRACK FACILITY.
(a) In General.--Subparagraph (D) of section 168(i)(15) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2007.
SEC. 227. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON
INDIAN RESERVATION.
(a) In General.--Paragraph (8) of section 168(j) is amended
by striking ``December 31, 2007'' and inserting ``December
31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2007.
SEC. 228. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.
(a) In General.--Subsection (h) of section 198 is amended
by striking ``December 31, 2007'' and inserting ``December
31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to expenditures paid or incurred after December
31, 2007.
SEC. 229. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME
ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES
IN PUERTO RICO.
(a) In General.--Subparagraph (C) of section 199(d)(8) is
amended--
[[Page H4380]]
(1) by striking ``first 2 taxable years'' and inserting
``first 3 taxable years'', and
(2) by striking ``January 1, 2008'' and inserting ``January
1, 2009''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 230. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS
TO CONTROLLING EXEMPT ORGANIZATIONS.
(a) In General.--Clause (iv) of section 512(b)(13)(E) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to payments received or accrued after December
31, 2007.
SEC. 231. QUALIFIED ZONE ACADEMY BONDS.
(a) In General.--Subpart I of part IV of subchapter A of
chapter 1, as amended by sections 106 and 141, is amended by
adding at the end the following new section:
``SEC. 54D. QUALIFIED ZONE ACADEMY BONDS.
``(a) Qualified Zone Academy Bonds.--For purposes of this
subchapter, the term `qualified zone academy 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 a qualified purpose with respect to
a qualified zone academy established by an eligible local
education agency,
``(2) the bond is issued by a State or local government
within the jurisdiction of which such academy is located, and
``(3) the issuer--
``(A) designates such bond for purposes of this section,
``(B) certifies that it has written assurances that the
private business contribution requirement of subsection (b)
will be met with respect to such academy, and
``(C) certifies that it has the written approval of the
eligible local education agency for such bond issuance.
``(b) Private Business Contribution Requirement.--For
purposes of subsection (a), the private business contribution
requirement of this subsection is met with respect to any
issue if the eligible local education agency that established
the qualified zone academy has written commitments from
private entities to make qualified contributions having a
present value (as of the date of issuance of the issue) of
not less than 10 percent of the proceeds of the issue.
``(c) Limitation on Amount of Bonds Designated.--
``(1) National limitation.--There is a national zone
academy bond limitation for each calendar year. Such
limitation is $400,000,000 for 2008, and, except as provided
in paragraph (4), zero thereafter.
``(2) Allocation of limitation.--The national zone academy
bond limitation for a calendar year shall be allocated by the
Secretary among the States on the basis of their respective
populations of individuals below the poverty line (as defined
by the Office of Management and Budget). The limitation
amount allocated to a State under the preceding sentence
shall be allocated by the State education agency to qualified
zone academies within such State.
``(3) Designation subject to limitation amount.--The
maximum aggregate face amount of bonds issued during any
calendar year which may be designated under subsection (a)
with respect to any qualified zone academy shall not exceed
the limitation amount allocated to such academy under
paragraph (2) for such calendar year.
``(4) Carryover of unused limitation.--
``(A) In general.--If for any calendar year--
``(i) the limitation amount for any State, exceeds
``(ii) the amount of bonds issued during such year which
are designated under subsection (a) with respect to qualified
zone academies within such State,
the limitation amount for such State for the following
calendar year shall be increased by the amount of such
excess.
``(B) Limitation on carryover.--Any carryforward of a
limitation amount may be carried only to the first 2 years
following the unused limitation year. For purposes of the
preceding sentence, a limitation amount shall be treated as
used on a first-in first-out basis.
``(C) Coordination with section 1397e.--Any carryover
determined under section 1397E(e)(4) (relating to carryover
of unused limitation) with respect to any State to calendar
year 2008 shall be treated for purposes of this section as a
carryover with respect to such State for such calendar year
under subparagraph (A), and the limitation of subparagraph
(B) shall apply to such carryover taking into account the
calendar years to which such carryover relates.
``(d) Definitions.--For purposes of this section--
``(1) Qualified zone academy.--The term `qualified zone
academy' means any public school (or academic program within
a public school) which is established by and operated under
the supervision of an eligible local education agency to
provide education or training below the postsecondary level
if--
``(A) such public school or program (as the case may be) is
designed in cooperation with business to enhance the academic
curriculum, increase graduation and employment rates, and
better prepare students for the rigors of college and the
increasingly complex workforce,
``(B) students in such public school or program (as the
case may be) will be subject to the same academic standards
and assessments as other students educated by the eligible
local education agency,
``(C) the comprehensive education plan of such public
school or program is approved by the eligible local education
agency, and
``(D)(i) such public school is located in an empowerment
zone or enterprise community (including any such zone or
community designated after the date of the enactment of this
section), or
``(ii) there is a reasonable expectation (as of the date of
issuance of the bonds) that at least 35 percent of the
students attending such school or participating in such
program (as the case may be) will be eligible for free or
reduced-cost lunches under the school lunch program
established under the National School Lunch Act.
``(2) Eligible local education agency.--For purposes of
this section, the term `eligible local education agency'
means any local educational agency as defined in section 9101
of the Elementary and Secondary Education Act of 1965.
``(3) Qualified purpose.--The term `qualified purpose'
means, with respect to any qualified zone academy--
``(A) rehabilitating or repairing the public school
facility in which the academy is established,
``(B) providing equipment for use at such academy,
``(C) developing course materials for education to be
provided at such academy, and
``(D) training teachers and other school personnel in such
academy.
``(4) Qualified contributions.--The term `qualified
contribution' means any contribution (of a type and quality
acceptable to the eligible local education agency) of--
``(A) equipment for use in the qualified zone academy
(including state-of-the-art technology and vocational
equipment),
``(B) technical assistance in developing curriculum or in
training teachers in order to promote appropriate market
driven technology in the classroom,
``(C) services of employees as volunteer mentors,
``(D) internships, field trips, or other educational
opportunities outside the academy for students, or
``(E) any other property or service specified by the
eligible local education agency.''.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 54A(d), as amended by sections
106 and 141, is amended by striking ``or'' at the end of
subparagraph (A), by inserting ``or'' at the end of
subparagraph (B), and by inserting after subparagraph (B) the
following new subparagraph:
``(C) a qualified zone academy bond,''.
(2) Subparagraph (C) of section 54A(d)(2), as amended by
sections 106 and 141, is amended by striking ``and'' at the
end of clause (i), by striking the period at the end of
clause (ii) and inserting ``, and'', and by adding at the end
the following new clause:
``(iii) in the case of a qualified zone academy bond, a
purpose specified in section 54D(a)(1).''.
(3) Section 1397E is amended by adding at the end the
following new subsection:
``(m) Termination.--This section shall not apply to any
obligation issued after the date of the enactment of this
Act.''.
(4) 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. 54D. Qualified zone academy bonds.''.
(c) Effective Date.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.
SEC. 232. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF
COLUMBIA.
(a) Designation of Zone.--
(1) In general.--Subsection (f) of section 1400 is amended
by striking ``2007'' both places it appears and inserting
``2008''.
(2) Effective date.--The amendments made by this subsection
shall apply to periods beginning after December 31, 2007.
(b) Tax-Exempt Economic Development Bonds.--
(1) In general.--Subsection (b) of section 1400A is amended
by striking ``2007'' and inserting ``2008''.
(2) Effective date.--The amendment made by this subsection
shall apply to bonds issued after December 31, 2007.
(c) Zero Percent Capital Gains Rate.--
(1) In general.--Subsection (b) of section 1400B is amended
by striking ``2008'' each place it appears and inserting
``2009''.
(2) Conforming amendments.--
(A) Section 1400B(e)(2) is amended--
(i) by striking ``2012'' and inserting ``2013'', and
(ii) by striking ``2012'' in the heading thereof and
inserting ``2013''.
(B) Section 1400B(g)(2) is amended by striking ``2012'' and
inserting ``2013''.
(C) Section 1400F(d) is amended by striking ``2012'' and
inserting ``2013''.
(3) Effective dates.--
(A) Extension.--The amendments made by paragraph (1) shall
apply to acquisitions after December 31, 2007.
(B) Conforming amendments.--The amendments made by
paragraph (2) shall take effect on the date of the enactment
of this Act.
(d) First-Time Homebuyer Credit.--
(1) In general.--Subsection (i) of section 1400C is amended
by striking ``2008'' and inserting ``2009''.
(2) Effective date.--The amendment made by this subsection
shall apply to property purchased after December 31, 2007.
SEC. 233. ECONOMIC DEVELOPMENT CREDIT FOR AMERICAN SAMOA.
(a) In General.--Subsection (d) of section 119 of division
A of the Tax Relief and Health Care Act of 2006 is amended--
(1) by striking ``first two taxable years'' and inserting
``first 3 taxable years'', and
(2) by striking ``January 1, 2008'' and inserting ``January
1, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 234. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF
FOOD INVENTORY.
(a) In General.--Clause (iv) of section 170(e)(3)(C) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
[[Page H4381]]
(b) Effective Date.--The amendment made by this section
shall apply to contributions made after December 31, 2007.
SEC. 235. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF
BOOK INVENTORY TO PUBLIC SCHOOLS.
(a) In General.--Clause (iv) of section 170(e)(3)(D) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made after December 31, 2007.
SEC. 236. ENHANCED DEDUCTION FOR QUALIFIED COMPUTER
CONTRIBUTIONS.
(a) In General.--Subparagraph (G) of section 170(e)(6) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made during taxable years
beginning after December 31, 2007.
SEC. 237. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING
CHARITABLE CONTRIBUTIONS OF PROPERTY.
(a) In General.--The last sentence of section 1367(a)(2) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made in taxable years beginning
after December 31, 2007.
SEC. 238. WORK OPPORTUNITY TAX CREDIT FOR HURRICANE KATRINA
EMPLOYEES.
(a) In General.--Paragraph (1) of section 201(b) of the
Katrina Emergency Tax Relief Act of 2005 is amended by
striking ``2-year'' and inserting ``3-year''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to individuals hired after August 27, 2007.
SEC. 239. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME.
(a) Exempt Insurance Income.--Paragraph (10) of section
953(e) (relating to application) is amended--
(1) by striking ``January 1, 2009'' and inserting ``January
1, 2010'', and
(2) by striking ``December 31, 2008'' and inserting
``December 31, 2009''.
(b) Exception to Treatment as Foreign Personal Holding
Company Income.--Paragraph (9) of section 954(h) (relating to
application) is amended by striking ``January 1, 2009'' and
inserting ``January 1, 2010''.
SEC. 240. LOOK-THRU RULE FOR RELATED CONTROLLED FOREIGN
CORPORATIONS.
(a) In General.--Subparagraph (C) of section 954(c)(6)
(relating to application) is amended by striking ``January 1,
2009'' and inserting ``January 1, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years of foreign corporations
beginning after December 31, 2008, and to taxable years of
United States shareholders with or within which such taxable
years of foreign corporations end.
SEC. 241. EXPENSING FOR CERTAIN QUALIFIED FILM AND TELEVISION
PRODUCTIONS.
(a) In General.--Subsection (f) of section 181 is amended
by striking ``December 31, 2008'' and inserting ``December
31, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to productions commencing after December 31,
2008.
Subtitle C--Other Extensions
SEC. 251. AUTHORITY TO DISCLOSE INFORMATION RELATED TO
TERRORIST ACTIVITIES MADE PERMANENT.
(a) In General.--Subparagraph (C) of section 6103(i)(3) is
amended by striking clause (iv).
(b) Disclosure on Request.--Paragraph (7) of section
6103(i) is amended by striking subparagraph (E).
(c) Effective Date.--The amendments made by this section
shall apply to disclosures after the date of the enactment of
this Act.
SEC. 252. AUTHORITY FOR UNDERCOVER OPERATIONS MADE PERMANENT.
(a) In General.--Subsection (c) of section 7608 is amended
by striking paragraph (6).
(b) Effective Date.--The amendment made by this section
shall take effect on January 1, 2008.
SEC. 253. AUTHORITY TO DISCLOSE RETURN INFORMATION FOR
CERTAIN VETERANS PROGRAMS MADE PERMANENT.
(a) In General.--Paragraph (7) of section 6103(l) is
amended by striking the last sentence thereof.
(b) Conforming Amendment.--Section 6103(l)(7)(D)(viii)(III)
is amended by striking ``sections 1710(a)(1)(I), 1710(a)(2),
1710(b), and 1712(a)(2)(B)'' and inserting ``sections
1710(a)(2)(G), 1710(a)(3), and 1710(b)''.
(c) Effective Date.--The amendment made by subsection (a)
shall apply to requests made after September 30, 2008.
SEC. 254. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX
TO PUERTO RICO AND THE VIRGIN ISLANDS.
(a) In General.--Paragraph (1) of section 7652(f) is
amended by striking ``January 1, 2008'' and inserting
``January 1, 2009''.
(b) Effective Date.--The amendment made by this section
shall apply to distilled spirits brought into the United
States after December 31, 2007.
SEC. 255. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO
MENTAL HEALTH BENEFITS.
Subsection (f) of section 9812 is amended--
(1) by striking ``and'' at the end of paragraph (2), and
(2) by striking paragraph (3) and inserting the following
new paragraphs:
``(3) on or after January 1, 2008, and before the date of
the enactment of the Renewable Energy and Job Creation Act of
2008, and
``(4) after December 31, 2008.''.
TITLE III--ADDITIONAL TAX RELIEF
Subtitle A--Individual Tax Relief
SEC. 301. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY
TAXES FOR NONITEMIZERS.
(a) In General.--Section 63(c)(1) (defining standard
deduction) 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) in the case of any taxable year beginning in 2008,
the real property tax deduction.''.
(b) Definition.--Section 63(c) is amended by adding at the
end the following new paragraph:
``(7) Real property tax deduction.--For purposes of
paragraph (1), the real property tax deduction is the lesser
of--
``(A) the amount allowable as a deduction under this
chapter for State and local taxes described in section
164(a)(1), or
``(B) $350 ($700 in the case of a joint return).
Any taxes taken into account under section 62(a) shall not be
taken into account under this paragraph.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 302. REFUNDABLE CHILD CREDIT.
(a) Modification of Threshold Amount.--Clause (i) of
section 24(d)(1)(B) is amended by inserting ``($8,500 in the
case of taxable years beginning in 2008)'' after ``$10,000''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31,
2007.
SEC. 303. INCREASE OF AMT REFUNDABLE CREDIT AMOUNT FOR
INDIVIDUALS WITH LONG-TERM UNUSED CREDITS FOR
PRIOR YEAR MINIMUM TAX LIABILITY, ETC.
(a) In General.--Paragraph (2) of section 53(e) is amended
to read as follows:
``(2) AMT refundable credit amount.--For purposes of
paragraph (1), the term `AMT refundable credit amount' means,
with respect to any taxable year, the amount (not in excess
of the long-term unused minimum tax credit for such taxable
year) equal to the greater of--
``(A) 50 percent of the long-term unused minimum tax credit
for such taxable year, or
``(B) the amount (if any) of the AMT refundable credit
amount for the taxpayer's preceding taxable year (determined
without regard to subsection (f)(2)).''.
(b) Treatment of Certain Underpayments, Interest, and
Penalties Attributable to the Treatment of Incentive Stock
Options.--Section 53 is amended by adding at the end the
following new subsection:
``(f) Treatment of Certain Underpayments, Interest, and
Penalties Attributable to the Treatment of Incentive Stock
Options.--
``(1) Abatement.--Any underpayment of tax outstanding on
the date of the enactment of this subsection which is
attributable to the application of section 56(b)(3) for any
taxable year ending before January 1, 2008 (and any interest
or penalty with respect to such underpayment which is
outstanding on such date of enactment), is hereby abated. The
amount determined under subsection (b)(1) shall not include
any tax abated under the preceding sentence.
``(2) Increase in credit for certain interest and penalties
already paid.--The AMT refundable credit amount, and the
minimum tax credit determined under subsection (b), for the
taxpayer's first 2 taxable years beginning after December 31,
2007, shall each be increased by 50 percent of the aggregate
amount of the interest and penalties which were paid by the
taxpayer before the date of the enactment of this subsection
and which would (but for such payment) have been abated under
paragraph (1).''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendment made by this section shall apply to taxable years
beginning after December 31, 2007.
(2) Abatement.--Section 53(f)(1) of the Internal Revenue
Code of 1986, as added by subsection (b), shall take effect
on the date of the enactment of this Act.
Subtitle B--Business Related Provisions
SEC. 311. UNIFORM TREATMENT OF ATTORNEY-ADVANCED EXPENSES AND
COURT COSTS IN CONTINGENCY FEE CASES.
(a) In General.--Section 162 is amended by redesignating
subsection (q) as subsection (r) and by inserting after
subsection (p) the following new subsection:
``(q) Attorney-Advanced Expenses and Court Costs in
Contingency Fee Cases.--In the case of any expense or court
cost which is paid or incurred in the course of the trade or
business of practicing law and the repayment of which is
contingent on a recovery by judgment or settlement in the
action to which such expense or cost relates, the deduction
under subsection (a) shall be determined as if such expense
or cost was not subject to repayment.''.
(b) Effective Date.--The amendment made by this section
shall apply to expenses and costs paid or incurred in taxable
years beginning after the date of the enactment of this Act.
SEC. 312. PROVISIONS RELATED TO FILM AND TELEVISION
PRODUCTIONS.
(a) Modification of Limitation on Expensing.--Subparagraph
(A) of section 181(a)(2) is amended to read as follows:
``(A) In general.--Paragraph (1) shall not apply to so much
of the aggregate cost of any qualified film or television
production as exceeds $15,000,000.''.
(b) Modifications to Deduction for Domestic Activities.--
(1) Determination of w-2 wages.--Paragraph (2) of section
199(b) is amended by adding at the end the following new
subparagraph:
``(D) Special rule for qualified film.--In the case of a
qualified film, such term shall include compensation for
services performed in the
[[Page H4382]]
United States by actors, production personnel, directors, and
producers.''.
(2) Definition of qualified film.--Paragraph (6) of section
199(c) is amended by adding at the end the following: ``A
qualified film shall include any copyrights, trademarks, or
other intangibles with respect to such film. The methods and
means of distributing a qualified film shall not affect the
availability of the deduction under this section.''.
(3) Partnerships.--Subparagraph (A) of section 199(d)(1) is
amended by striking ``and'' at the end of clause (ii), by
striking the period at the end of clause (iii) and inserting
``, and'', and by adding at the end the following new clause:
``(iv) in the case of each partner of a partnership, or
shareholder of an S corporation, who owns (directly or
indirectly) at least 20 percent of the capital interests in
such partnership or of the stock of such S corporation--
``(I) such partner or shareholder shall be treated as
having engaged directly in any film produced by such
partnership or S corporation, and
``(II) such partnership or S corporation shall be treated
as having engaged directly in any film produced by such
partner or shareholder.''.
(c) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to taxable years beginning after December 31, 2007.
(2) Expensing.--The amendments made by subsection (a) shall
apply to qualified film and television productions commencing
after December 31, 2007.
Subtitle C--Modification of Penalty on Understatement of Taxpayer's
Liability by Tax Return Preparer
SEC. 321. MODIFICATION OF PENALTY ON UNDERSTATEMENT OF
TAXPAYER'S LIABILITY BY TAX RETURN PREPARER.
(a) In General.--Subsection (a) of section 6694 (relating
to understatement due to unreasonable positions) is amended
to read as follows:
``(a) Understatement Due to Unreasonable Positions.--
``(1) In general.--If a tax return preparer--
``(A) prepares any return or claim of refund with respect
to which any part of an understatement of liability is due to
a position described in paragraph (2), and
``(B) knew (or reasonably should have known) of the
position,
such tax return preparer shall pay a penalty with respect to
each such return or claim in an amount equal to the greater
of $1,000 or 50 percent of the income derived (or to be
derived) by the tax return preparer with respect to the
return or claim.
``(2) Unreasonable position.--
``(A) In general.--Except as otherwise provided in this
paragraph, a position is described in this paragraph unless
there is or was substantial authority for the position.
``(B) Disclosed positions.--If the position was disclosed
as provided in section 6662(d)(2)(B)(ii)(I) and is not a
position to which subparagraph (C) applies, the position is
described in this paragraph unless there is a reasonable
basis for the position.
``(C) Tax shelters and reportable transactions.--If the
position is with respect to a tax shelter (as defined in
section 6662(d)(2)(C)(ii)) or a reportable transaction to
which section 6662A applies, the position is described in
this paragraph unless it is reasonable to believe that the
position would more likely than not be sustained on its
merits.
``(3) Reasonable cause exception.--No penalty shall be
imposed under this subsection if it is shown that there is
reasonable cause for the understatement and the tax return
preparer acted in good faith.''.
(b) Effective Date.--The amendment made by this section
shall apply--
(1) in the case of a position other than a position
described in subparagraph (C) of section 6694(a)(2) of the
Internal Revenue Code of 1986 (as amended by this section),
to returns prepared after May 25, 2007, and
(2) in the case of a position described in such
subparagraph (C), to returns prepared for taxable years
ending after the date of the enactment of this Act.
Subtitle D--Extension and Expansion of Certain GO Zone Incentives
SEC. 331. CERTAIN GO ZONE INCENTIVES.
(a) Use of Amended Income Tax Returns To Take Into Account
Receipt of Certain Hurricane-Related Casualty Loss Grants by
Disallowing Previously Taken Casualty Loss Deductions.--
(1) In general.--Notwithstanding any other provision of the
Internal Revenue Code of 1986, if a taxpayer claims a
deduction for any taxable year with respect to a casualty
loss to a principal residence (within the meaning of section
121 of such Code) resulting from Hurricane Katrina, Hurricane
Rita, or Hurricane Wilma and in a subsequent taxable year
receives a grant under Public Law 109-148, 109-234, or 110-
116 as reimbursement for such loss, such taxpayer may elect
to file an amended income tax return for the taxable year in
which such deduction was allowed (and for any taxable year to
which such deduction is carried) and reduce (but not below
zero) the amount of such deduction by the amount of such
reimbursement.
(2) Time of filing amended return.--Paragraph (1) shall
apply with respect to any grant only if any amended income
tax returns with respect to such grant are filed not later
than the later of--
(A) the due date for filing the tax return for the taxable
year in which the taxpayer receives such grant, or
(B) the date which is 1 year after the date of the
enactment of this Act.
(3) Waiver of penalties and interest.--Any underpayment of
tax resulting from the reduction under paragraph (1) of the
amount otherwise allowable as a deduction shall not be
subject to any penalty or interest under such Code if such
tax is paid not later than 1 year after the filing of the
amended return to which such reduction relates.
(b) Waiver of Deadline on Construction of GO Zone Property
Eligible for Bonus Depreciation.--
(1) In general.--Subparagraph (B) of section 1400N(d)(3) is
amended to read as follows:
``(B) without regard to `and before January 1, 2009' in
clause (i) thereof, and''.
(2) Effective date.--The amendment made by this subsection
shall apply to property placed in service after December 31,
2007.
(c) Inclusion of Certain Counties in Gulf Opportunity Zone
for Purposes of Tax-Exempt Bond Financing.--
(1) In general.--Subsection (a) of section 1400N is amended
by adding at the end the following new paragraph:
``(8) Inclusion of certain counties.--For purposes of this
subsection, the Gulf Opportunity Zone includes Colbert
County, Alabama and Dallas County, Alabama.''.
(2) Effective date.--The amendment made by this subsection
shall take effect as if included in the provisions of the
Gulf Opportunity Zone Act of 2005 to which it relates.
TITLE IV--REVENUE PROVISIONS
SEC. 401. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX
INDIFFERENT PARTIES.
(a) In General.--Subpart B of part II of subchapter E of
chapter 1 is amended by inserting after section 457 the
following new section:
``SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN
TAX INDIFFERENT PARTIES.
``(a) In General.--Any compensation which is deferred under
a nonqualified deferred compensation plan of a nonqualified
entity shall be includible in gross income when there is no
substantial risk of forfeiture of the rights to such
compensation.
``(b) Nonqualified Entity.--For purposes of this section,
the term `nonqualified entity' means--
``(1) any foreign corporation unless substantially all of
its income is--
``(A) effectively connected with the conduct of a trade or
business in the United States, or
``(B) subject to a comprehensive foreign income tax, and
``(2) any partnership unless substantially all of its
income is allocated to persons other than--
``(A) foreign persons with respect to whom such income is
not subject to a comprehensive foreign income tax, and
``(B) organizations which are exempt from tax under this
title.
``(c) Determinability of Amounts of Compensation.--
``(1) In general.--If the amount of any compensation is not
determinable at the time that such compensation is otherwise
includible in gross income under subsection (a)--
``(A) such amount shall be so includible in gross income
when determinable, and
``(B) the tax imposed under this chapter for the taxable
year in which such compensation is includible in gross income
shall be increased by the sum of--
``(i) the amount of interest determined under paragraph
(2), and
``(ii) an amount equal to 20 percent of the amount of such
compensation.
``(2) Interest.--For purposes of paragraph (1)(B)(i), the
interest determined under this paragraph for any taxable year
is the amount of interest at the underpayment rate under
section 6621 plus 1 percentage point on the underpayments
that would have occurred had the deferred compensation been
includible in gross income for the taxable year in which
first deferred or, if later, the first taxable year in which
such deferred compensation is not subject to a substantial
risk of forfeiture.
``(d) Other Definitions and Special Rules.--For purposes of
this section--
``(1) Substantial risk of forfeiture.--
``(A) In general.--The rights of a person to compensation
shall be treated as subject to a substantial risk of
forfeiture only if such person's rights to such compensation
are conditioned upon the future performance of substantial
services by any individual.
``(B) Exception for compensation based on gain recognized
on an investment asset.--
``(i) In general.--To the extent provided in regulations
prescribed by the Secretary, if compensation is determined
solely by reference to the amount of gain recognized on the
disposition of an investment asset, such compensation shall
be treated as subject to a substantial risk of forfeiture
until the date of such disposition.
``(ii) Investment asset.--For purposes of clause (i), the
term `investment asset' means any single asset (other than an
investment fund or similar entity)--
``(I) acquired directly by an investment fund or similar
entity,
``(II) with respect to which such entity does not (nor does
any person related to such entity) participate in the active
management of such asset (or if such asset is an interest in
an entity, in the active management of the activities of such
entity), and
``(III) substantially all of any gain on the disposition of
which (other than such deferred compensation) is allocated to
investors in such entity.
``(iii) Coordination with special rule.--Paragraph (3)(B)
shall not apply to any compensation to which clause (i)
applies.
``(2) Comprehensive foreign income tax.--The term
`comprehensive foreign income tax' means, with respect to any
foreign person, the income tax of a foreign country if--
[[Page H4383]]
``(A) such person is eligible for the benefits of a
comprehensive income tax treaty between such foreign country
and the United States, or
``(B) such person demonstrates to the satisfaction of the
Secretary that such foreign country has a comprehensive
income tax.
``(3) Nonqualified deferred compensation plan.--
``(A) In general.--The term `nonqualified deferred
compensation plan' has the meaning given such term under
section 409A(d), except that such term shall include any plan
that provides a right to compensation based on the
appreciation in value of a specified number of equity units
of the service recipient.
``(B) Exception.--Compensation shall not be treated as
deferred for purposes of this section if the service provider
receives payment of such compensation not later than 12
months after the end of the taxable year of the service
recipient during which the right to the payment of such
compensation is no longer subject to a substantial risk of
forfeiture.
``(4) Exception for certain compensation with respect to
effectively connected income.--In the case a foreign
corporation with income which is taxable under section 882,
this section shall not apply to compensation which, had such
compensation had been paid in cash on the date that such
compensation ceased to be subject to a substantial risk of
forfeiture, would have been deductible by such foreign
corporation against such income.
``(5) Application of rules.--Rules similar to the rules of
paragraphs (5) and (6) of section 409A(d) shall apply.
``(e) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
the purposes of this section, including regulations
disregarding a substantial risk of forfeiture in cases where
necessary to carry out the purposes of this section.''.
(b) Conforming Amendment.--Section 26(b)(2) is amended by
striking ``and'' at the end of subparagraph (U), by striking
the period at the end of subparagraph (V) and inserting ``,
and'', and by adding at the end the following new
subparagraph:
``(W) section 457A(c)(1)(B) (relating to determinability of
amounts of compensation).''.
(c) Clerical Amendment.--The table of sections of subpart B
of part II of subchapter E of chapter 1 is amended by
inserting after the item relating to section 457 the
following new item:
``Sec. 457A. Nonqualified deferred compensation from certain tax
indifferent parties.''.
(d) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to amounts deferred which are attributable to services
performed after December 31, 2008.
(2) Application to existing deferrals.--In the case of any
amount deferred to which the amendments made by this section
do not apply solely by reason of the fact that the amount is
attributable to services performed before January 1, 2009, to
the extent such amount is not includible in gross income in a
taxable year beginning before 2018, such amounts shall be
includible in gross income in the later of--
(A) the last taxable year beginning before 2018, or
(B) the taxable year in which there is no substantial risk
of forfeiture of the rights to such compensation (determined
in the same manner as determined for purposes of section 457A
of the Internal Revenue Code of 1986, as added by this
section).
(3) Charitable contributions of existing deferrals
permitted.--
(A) In general.--Subsection (b) of section 170 of the
Internal Revenue Code of 1986 shall not apply to (and
subsections (b) and (d) of such section shall be applied
without regard to) so much of the taxpayer's qualified
contributions made during the taxpayer's last taxable year
beginning before 2018 as does not exceed the taxpayer's
qualified inclusion amount. For purposes of subsection (b) of
section 170 of such Code, the taxpayer's contribution base
for such last taxable year shall be reduced by the amount of
the taxpayer's qualified contributions to which such
subsection does not apply by reason the preceding sentence.
(B) Qualified contributions.--For purposes of this
paragraph, the term ``qualified contributions'' means the
aggregate charitable contributions (as defined in section
170(c) of such Code) paid in cash by the taxpayer to
organizations described in section 170(b)(1)(A) of such Code
(other than any organization described in section 509(a)(3)
of such Code or any fund or account described in section
4966(d)(2) of such Code).
(C) Qualified inclusion amount.--For purposes of this
paragraph, the term ``qualified inclusion amount'' means the
amount includible in the taxpayer's gross income for the last
taxable year beginning before 2018 by reason of paragraph
(2).
(4) Accelerated payments.--No later than 120 days after the
date of the enactment of this Act, the Secretary shall issue
guidance providing a limited period of time during which a
nonqualified deferred compensation arrangement attributable
to services performed on or before December 31, 2008, may,
without violating the requirements of section 409A(a) of the
Internal Revenue Code of 1986, be amended to conform the date
of distribution to the date the amounts are required to be
included in income.
(5) Certain back-to-back arrangements.--If the taxpayer is
also a service recipient and maintains one or more
nonqualified deferred compensation arrangements for its
service providers under which any amount is attributable to
services performed on or before December 31, 2008, the
guidance issued under paragraph (4) shall permit such
arrangements to be amended to conform the dates of
distribution under such arrangement to the date amounts are
required to be included in the income of such taxpayer under
this subsection.
(6) Accelerated payment not treated as material
modification.--Any amendment to a nonqualified deferred
compensation arrangement made pursuant to paragraph (4) or
(5) shall not be treated as a material modification of the
arrangement for purposes of section 409A of the Internal
Revenue Code of 1986.
SEC. 402. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF
INTEREST.
(a) In General.--Paragraphs (5)(D) and (6) of section
864(f) are each amended by striking ``December 31, 2008'' and
inserting ``December 31, 2018''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.
SEC. 403. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
(a) Repeal of Adjustment for 2012.--Subparagraph (B) of
section 401(1) of the Tax Increase Prevention and
Reconciliation Act of 2005 is amended by striking the
percentage contained therein and inserting ``100 percent''.
(b) Modification of Adjustment for 2013.--The percentage
under subparagraph (C) of section 401(1) of the Tax Increase
Prevention and Reconciliation Act of 2005 in effect on the
date of the enactment of this Act is increased by 37.75
percentage points.
The SPEAKER pro tempore. The gentleman from New York (Mr. Rangel) and
the gentleman from Louisiana (Mr. McCrery) each will control 30
minutes.
The Chair recognizes the gentleman from New York.
Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
My friends and colleagues, we now have an opportunity to reverse the
trend that this great Nation has bound itself to, and that is, the
addiction to oil as well as the lack of will to do something about it.
This great country has faced up to many crises, and the oil shortage
just happens to be one. The question is do we have the will to look and
to research and to find alternative means in which to meet the needs of
this great Nation.
Under the leadership of Speaker Pelosi, I think today is the day that
all of us are going to be proud of the initiatives that we have taken,
the opportunities that are going to be given, the jobs that are going
to be created, and the excitement in being able to say that the United
States need not look to any Nation because of their vast resources in
oil because we have the ingenuity and the ability to find alternatives.
It is endless the possibilities that this will pursue in encouraging
the production of electricity from renewable sources, using the wind,
solar, biomass, geothermal, hydropower, landfill gas and solid waste.
{time} 1400
We even go as far as to have coal electricity plants.
It is a great opportunity for us and the world to explore these new
areas that we just were too lazy or found no need to do, encouraging
energy efficient products such as plug-in hybrid cars and incentives
for conservation of energy in our buildings, whether they're
residential or whether they're commercial. And I find it very exciting
that we allow local government, that knows their communities better
than we ever could, to issue tax credit bonds to further explore how we
can conserve energy.
I think this is merely a beginning, but it is an historic beginning
that defies party lines. I do hope that we thank the Speaker and the
chairman of the committee, the staffs who came together after working
years on this project, to come together with a bill that's the
beginning of the one that could be a new day for America, a new day for
the world as we release our addiction and dependency on fossil fuel.
There is another part of this bill that I come to you with mixed
feelings and yet ask your support. It's called the extenders. What are
the extenders, for the new Members? It's when people want bills passed,
but they put expiration dates on them in order to hide the real cost of
the bill.
I think that the ranking member of the Committee on Ways and Means
and I agree that we have so much garbage in this bill that soon I hope
someone would have the courage to take a look at the tax bill that we
have and strip it of the preferential treatment and get down to making
the bills that we want permanent, and those that should not be
permanent, just to kick them out.
[[Page H4384]]
I think it's a disgrace that we have a stimulus package and we have
to target the middle class in order to be given handouts because they
don't have enough money under our tax system to put food on the table,
to provide tuition for their kids and put clothes on their back. We
target them as being people who cannot afford to save and plan for the
future. I think it is a disgrace for the Congress to have a tax system
that way.
But because we make commitments and because some of these laws are
good and efficient and because we don't have the money at this point in
time to make it permanent, we come to you and ask you to support the
extenders. These extenders include research and development, standard
deduction for property taxes for non-itemizers. We have provisions in
here to help Katrina. Expanded child credits. We make it more equitable
how attorneys can write off their investments before the end of a case.
We also make it equitable for the moving picture industry to get the
same benefits that other industries get as relates to job credit.
This is one heck of an opportunity, I think, for us to move this
forward in a short way. It's only a 1-year extension, which means that
the next administration hopefully will be more progressive in terms of
cleaning up the code and making permanent what should be made
permanent. It is not paid in controversial taxes. We remove preferences
for income that is made overseas and avoid tax liability, as well as
tax benefits yet to be received. So there is no pain there.
I ask unanimous consent at this time to yield the remainder of my
time to the gentleman from Washington, Dr. McDermott, for purposes of
managing the bill, and to thank him and so many others on the Ways and
Means Committee for their leadership, their patience, and being able to
bring this bill to the floor. I'm fairly confident that we will have
very little problem in the Senate and have this passed into law.
So remember the date. It's historic in nature. And remember the role
that you played in supporting this revolutionary approach to avoid the
dependency on fossil fuel for our great Nation.
The SPEAKER pro tempore. Without objection, the gentleman from
Washington will control the time.
There was no objection.
Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in opposition to the legislation before us today
and urge all of my colleagues to vote against it today.
Most critically, the bill claims to be a package of tax extenders,
but fails to deal with the biggest and most pressing extender in the
code, the AMT patch, the alternative minimum tax patch. This is a
missed opportunity. We should have included that in this bill of other
expiring provisions in the code.
The majority's failure to extend this patch for 2008 would mean an
additional 21 million--mostly middle class--individuals and families
would be ensnared by the alternative minimum tax. As a result, affected
families will pay an additional $61.5 billion in taxes for this year.
This oversight--this neglect, I think--is the single largest flaw in
the bill.
The majority, I'm sure, will claim during today's debate, just as
they did during committee markup, that they will address the AMT before
adjourning this year, just not now. Surely our experience from 2007,
when the AMT patch wasn't enacted until the day after Christmas,
suggests that maybe we ought to begin acting on this now and not just
run down the shot clock. Mr. Speaker, it simply does not make sense to
vote to extend dozens of tax provisions, some for several years,
without also dealing with the biggest and most far-reaching expiring
provision, the AMT patch.
The bill also clings to the mistaken view that the House's PAYGO
rules require us to raise taxes in order to prevent tax increases. I
was pleased last year that, when the House finally did pass the AMT
patch, we recognized the foolishness of applying PAYGO to expiring tax
provisions, and I'm disappointed that that bipartisan approach is not
being followed here today.
Simply put, we shouldn't have to pay to extend current law. This is
not paying for a new tax cut in the main. Most of this bill is
extending current law.
As we stare at the prospect of a more than $3.5 trillion tax increase
baked into the budget by the majority's misguided PAYGO rules, I think
it will become even more obvious in the years to come why Congress
should not have to raise taxes to prevent a tax increase.
If the majority was ever willing to offset tax provisions with
spending cuts, I might view this a little differently. But this bill
shows once again that the only tool the majority has to meet its PAYGO
requirements is the hammer of tax increases. It's little wonder, then,
that to them every problem looks like a nail.
As I documented many times last year and during our committee markup
last week, Washington doesn't have a revenue problem. We're getting
enough revenues. We're already collecting more in taxes as a percent of
our GDP than the historical average of revenues coming into Washington.
That's not the problem. The problem is spending. So how many times have
we had PAYGO rules be adopted and followed in this House using spending
cuts to pay for extending current tax law? Zero.
Mr. Speaker, the continued use of tax increases to pay for extending
current law is unacceptable to this ranking member of the Ways and
Means Committee, and I hope will be objectionable to a majority of the
Members of this House. In fact, this bill not only contains tax cuts,
it actually does increase spending. There are items in this bill that
score as spending--expanding refundable tax credits, the New York
Liberty Zone project. Those score as spending. So we're increasing
spending in this bill, and we're paying for that with tax increases.
In addition to those two provisions, the bill contains numerous other
new temporary and permanent provisions, undermining the claim that the
bill is merely extending current law. Some of the new provisions might
be meritorious, but a few of those I think deserve closer examination.
For example, some of my colleagues may be surprised to know that
there is a nearly $1.6 billion special tax break for trial lawyers in
this bill. The provision overrides developing case law and lets lawyers
using certain types of contingency fee arrangements to deduct sooner
their expenses. CBO's Joint Tax Committee scores this as costing the
taxpayers $1.6 billion over the next 10 years. Now, this provision was
not the subject, that I'm aware of, of any hearings or examination by
the committee, and yet it's in this bill today.
I would hope that before we make such a significant change in tax law
costing taxpayers $1.6 billion, all going to one very narrow set of
people in this country, trial lawyers, that we would want to have a
hearing on that and flesh it out to see if maybe it could be crafted
better, or whether, in fact, it's of any value at all to the country.
This bill also revisits the ``green pork'' tax credit bonds that were
much discussed during the energy debate in 2007. These are the same
bond proceeds, remember, that could be used for all sorts of dubious
projects, maybe hybrid snowmobiles in Aspen, or maybe a new Wal-Mart
with a couple of solar panels out front.
State and local governments using the bond proceeds don't even have
to certify that the projects will reduce fossil fuel consumption or
greenhouse gas emissions. Unfortunately, the majority rejected a
sensible fix for this oversight when this was offered last year.
We know how this is all going to end. It will end with the passage of
an AMT patch without offsets, like last year, and probably many
extenders being approved without tax increases. More than 40 Senators
have signed a letter pledging to oppose a package such as the one
before the House today. And even if it somehow squeaks by the Senate,
the President has indicated he would veto this bill.
Mr. Speaker, it's unfortunate that the majority has chosen against
moving a bill on expiring provisions that could have had bipartisan
support and instead have opted for the measure before us.
Given that its fate has already been sealed--it won't become law--I
am comforted to know that we will have another chance to consider this
legislation this year. I hope it's sooner rather than later so that
we're not here in December once again scrambling to deal with these
issues.
[[Page H4385]]
We can do better than what's before us today. Let's get rid of this,
start over, and bring a good bill back.
Mr. Speaker, I reserve the balance of my time.
General Leave
Mr. McDERMOTT. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days in which to revise and extend their remarks
and include extraneous material on H.R. 6049.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Washington?
There was no objection.
Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentleman from
New Jersey (Mr. Pascrell).
Mr. PASCRELL. Mr. Speaker, I have a great deal of affection and I
have a great deal of respect for the ranking member on the other side,
but you are dead wrong on this.
First of all, you talk about this side of the aisle not being able to
pass AMT. We did pass legislation, and your side sunk it. The
alternative minimum tax would be gone, it would be abolished, there
would be nada there, but you decided, for whatever reason, that you
didn't want to pay for it. That's the problem.
Now, my friends on the other side of the aisle are determined not to
support this legislation. It should be noted that entities such as
Goldman Sachs--I mean, these are not, most of the time, our friends--
Bank of America, Caterpillar, Ford, Deere, and Prudential disagree with
you, and they publicly support the legislation.
Connect the dots here. After all, a number of important provisions,
such as the critical research and development credit, the election to
deduct State and local general sales tax, the 15-year straight-line
cost recovery for qualified leasehold improvements, and the election to
expense brownfields environmental remediation costs have already
expired. These provisions are so important to American businesses and
consumers, and the time to renew them is now.
There are a wide array of important provisions here, from renewable
energy incentives to middle class tax cuts. I want to add how grateful
we should all be to Chairman Rangel for his decision to include a 1-
year extension on the active financing rules critical to global
competitiveness of U.S. financial services and companies. Those
companies in this country that export are at a tremendous disadvantage.
We are not playing on a level playing field. Active financing rules
provide American companies with the level playing field necessary to
compete in the global marketplace. Most other countries don't try to
extract any taxes on its companies' foreign-based operations.
The SPEAKER pro tempore (Mr. Ross). The time of the gentleman from
New Jersey has expired.
Mr. McDERMOTT. I yield the gentleman an additional 10 seconds.
Mr. PASCRELL. Subjecting our businesses to both foreign and American
corporate taxes puts them at a competitive disadvantage.
I would add this, in conclusion, these are the kind of actions that
will help create fair trade in America. You cannot be against that, in
all fairness.
Mr. McCRERY. Mr. Speaker, in fact, I agree with much of what the
gentleman just said. I'm happy to hear him endorse many provisions that
we, I think wisely, put into the Jobs bill several years ago when we
were in the majority. So it's not those provisions that I oppose, it's
the tax increases in the bill to pay for just extending current law
that I'm opposed to. And I want to make that clear. I like the
provisions the gentleman mentioned.
{time} 1415
At this time, Mr. Speaker, I would yield 2 minutes to the ranking
member of the Trade Subcommittee of the Ways and Means Committee, the
gentleman from California (Mr. Herger).
Mr. HERGER. Mr. Speaker, like many of my colleagues, I want to
express my support for the tax relief included in today's legislation,
provisions such as the research and development tax credit and the
active financing exception that help our employers stay competitive and
the extension of the renewable energy tax incentives.
However, I cannot support this bill as written. First, it continues
the negative trend the Democrat majority has followed by permanently
increasing taxes to pay for temporary extensions of existing tax law.
Given the wide-ranging tax relief that is set to expire in the coming
years, the Democrats' PAYGO logic would require us to raise taxes by
more than $3.5 trillion between now and 2018.
Secondly, the bill ``dodges'' extending the middle class alternative
minimum tax patch, without which 24 million taxpayers will pay an
average of $2,400 in AMT taxes in 2008 alone. We waited until the 11th
hour to extend this relief in 2007. We cannot do so again.
Tragically, the House Democrats refuse to work on these issues on a
bipartisan basis. Their tax increase approach has been tried and tried
again, and for what we have seen in the other body and from what the
White House has said, it will fail again. The longer we delay passing a
realistic extenders bill, the longer American employers and taxpayers
go without this critical tax relief.
Mr. Speaker, I urge a ``no'' vote on this legislation.
Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentleman from
Massachusetts (Mr. Neal).
Mr. NEAL of Massachusetts. I thank the gentleman for yielding the
time.
Mr. Speaker, this legislation is pro-environment, it's business
friendly, and it's paid for.
I don't know how anybody on the other side can mention the words
``alternative minimum tax'' with a straight face. They had sufficient
opportunity in the last session of the Congress to vote for a
responsible alternative minimum tax repeal. I know. I authored the
legislation. They all voted against it.
I want to thank Charlie Rangel today for his hard work. There are a
number of business and individual tax incentives that lapsed in January
of this year. There was urgency to getting it done, and we did
precisely that. In my home State of Massachusetts this means that
94,000 teachers will get a deduction for out-of-pocket expenses for
classroom supplies. It means that a thousand businesses in
Massachusetts will get some credit for the millions they spend on
research here in the United States. Without this bill 121,000 families
in Massachusetts cannot take deduction for college tuition expenses.
This bill provides significant and real tax relief to millions of
families nationwide and for some very low income families it will
provide a new benefit. There are 111,000 children in Massachusetts
whose families will get a higher tax credit because of this bill.
There are an additional 32,000 children and families in Massachusetts
who are currently shut out of the child tax credit because of the
threshold for earnings that must exceed rises each year for inflation.
They're simply too poor for the tax credit. This bill lowers the
threshold so that these working families can benefit from the child tax
credit just like other families.
These are well-crafted positions, and we don't have time to mention
them all. But I want to tell you in the 20 years I have been in this
House, this is one of the best pieces of legislation that I have been
associated with. It provides tax relief, but at the same time it's pro-
environment.
I hope that Members of this House on both sides will support this
legislation.
Mr. McCRERY. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from Michigan (Mr. Camp), the ranking member of the Health
Subcommittee on the Ways and Means Committee.
Mr. CAMP of Michigan. I thank the gentleman for yielding.
Mr. Speaker, it's surprising how well the Democrat majority can turn
good ideas like the extension of tax relief into bad legislation. Now,
we have seen it before and it usually ends in gridlock. And, frankly,
the American people are tired of the majority party's record of
stalemate and zero accomplishment. But here we go again with another
bill that is headed nowhere.
This bill could have easily passed the Ways and Means Committee and
passed on the floor with an overwhelming bipartisan majority of votes.
It failed to get a majority of Republican votes in committee and will
likely fail to get a Republican majority here today on the floor.
Interestingly, a lot of what is in this package was written when
Republicans were in the majority. The Republican bill was devoted to
tax incentives; the
[[Page H4386]]
Democrat bill focuses on tax increase. This is a fundamental difference
between our two parties.
It is a real missed opportunity not to deal with the alternative
minimum tax, which means higher taxes for more and more Americans.
That's why you're seeing key groups oppose this bill like the National
Taxpayers Union, Citizens Against Government Waste, Americans for Tax
Reform, Alliance for Worker Freedom, Americans for Prosperity, and Club
for Growth.
So what the Democrats give with one hand they take with the other.
They'll use words like ``PAYGO'' and ``revenue raisers,'' but the fact
of the matter is those innocent-sounding words really mean tax
increases. Permanently increasing taxes to pay for temporary tax
incentives is a losing deal for the American people.
Congress will be confronted with many more expiring tax provisions in
the coming years, and if the Democrats continue with this flawed logic,
taxpayers will be hit with more than $3.5 trillion in tax increases
between now and 2018 simply to maintain current law. With $3 and
possibly $4 of gas and higher grocery bills, a sluggish economy, and a
downturn in the housing market, the American public cannot afford
higher taxes.
We don't need a fortune teller to tell us that, just like many of the
other bills House Democrats have passed that included tax increases,
this bill again is dead on arrival in the United States Senate. So we
will be back here again at some point debating this bill again. So
after we get through with today's exercise, hopefully we can get down
to business and write a bill that will gain a majority of bipartisan
support.
I urge my colleagues to reject increasing taxes and vote ``no'' on
this legislation.
Mr. McDERMOTT. Mr. Speaker, I understand from my distinguished
colleague from Michigan that this bill is headed for nowhere.
Are you talking about the White House?
Mr. CAMP of Michigan. Will the gentleman yield?
Mr. McDERMOTT. No, I'm going to let the gentleman from Michigan (Mr.
Levin) have 2 minutes.
(Mr. LEVIN asked and was given permission to revise and extend his
remarks.)
Mr. LEVIN. Mr. Speaker, this legislation has vital energy provisions.
Vital. It has important tax provisions, including the R&D tax credit.
So here we hear the Republicans opposing it. They did not know how to
govern effectively when they were in the majority, and they're showing
today they don't know how to oppose effectively when they're in the
minority.
They criticize PAYGO. Their creed is ``pay-no.'' They don't want to
pay for anything. They oppose a tax provision to close a loophole, an
egregious one, and they call that a tax increase. They say this is
their principle: Don't pay for extending current tax law, even though
the reason it meets its end is because they didn't want to extend it a
few years ago and increase the deficit. What illogic.
They say do further with the extenders, but they don't want to pay
for it. They say do more right now on the AMT but don't pay for it.
We're going to keep working on the AMT. We're going to keep trying to
pay for it. The reason this may not succeed in the Senate is because of
the minority Republicans and in the White House.
I think the public is tired of this blockade. We will keep moving
ahead and I hope with success. It's time to act. I hope there will be
some minority support for this bill.
Mr. McCRERY. Mr. Speaker, I yield 2 minutes to the gentleman from
Texas (Mr. Brady), a distinguished member of the Ways and Means
Committee.
Mr. BRADY of Texas. Mr. Speaker, I don't know what's being sold
around here today, but there is nothing revolutionary about this bill.
There are some good things in it, no question. But it is dangerously
incomplete and it is tainted.
It includes a last-minute special interest provision that no one in
America has ever had a chance to look at or consider. It is not
revolutionary because it includes extensions of what's already law in
America today, the research and development tax credit, that's so
important to innovation America. The State and local sales tax
deduction, important for families to deduct what they pay in sales
taxes from what they owe Uncle Sam because sales taxes really add up
fast, especially for younger families. Energy provisions, which are
important for us to do renewable alternative fuels. All that is very
good. Everyone supports it.
This bill is dangerously incomplete because it does not address a
huge looming tax increase on most of middle class America. The
alternative minimum tax, the second tax, that families find when they
do their taxes or do their software for taxes, and they're okay, they
don't owe Uncle Sam anything. We catch them with a second tax. And we
said over the years that we'll do away with that. Republicans did do
away with that second tax. Unfortunately, President Clinton vetoed it,
and we live with it today.
This bill does nothing to stop the alternative minimum tax, the
second tax, on American families, and we need to act now, not later to
do that.
It is tainted because it includes a provision, $1.6 billion, a new
tax break, for one special interest group, plaintiffs' attorneys with
contingency fees. The wealthiest 1 percent of attorneys in America will
receive $1.5 billion more of your money.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. McCRERY. I yield the gentleman an additional 30 seconds.
Mr. BRADY of Texas. Mr. Speaker, the wealthiest 1 percent of
attorneys in America will receive a tax break courtesy of you, the
taxpayers. Yet we won't do more to help the refundable child tax
credit. Those are single parents who are usually raising one or two
kids and working several jobs. We offered the amendment. Instead of
helping a trial lawyer buy a second private jet, why don't we help a
waitress who's trying to raise her kids? Wouldn't that be a fair use of
help and dollars?
So I oppose this bill. I believe we ought to do these extensions, and
I believe this bill does not deserve support.
Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentleman from
North Dakota (Mr. Pomeroy).
Mr. POMEROY. I thank the gentleman for yielding.
Mr. Speaker, I'm surprised to hear my Republican friends talk about
their dismay that AMT is not in this package. AMT was not in the
President's budget, not one nickel, not one cent. I never heard one
word in the Ways and Means Committee, not a word that I can recall, of
dismay from my Republicans that the President didn't address AMT.
This bill before us is to address a number of expiring provisions
including energy. Good gosh, with oil approaching $130 a barrel, you
would think we could bust out an energy portion and make an immediate
response. The American people deserve no less.
Just take, for example, one provision: The wind production tax credit
expires at the end of the year. But to be effective, a wind power plant
has to be invested, constructed, and turning energy in order to qualify
under the 2008 provision for the production tax credit. What that means
in real terms is that already activity is being placed at risk.
Financing packages are being denied for growing wind power in this
country.
{time} 1430
Our upside potential on harnessing power for wind is immense. But
even the, I'd say paltry, 1-year extension under the bill, because this
industry deserves much more than 1 year, is placed at risk now by
Republican opposition.
Fundamentally, we believe if we are going to extend these tax
provisions, we need to find revenue offsets so that we don't drive the
deficit deeper. I think what this debate is really about is a very
different vision. They're happy to just run up the debt even deeper by
extending these provisions without the pay-fors. We refuse to do that.
As important as these provisions are, we are not going to let our kids
pay for them. We will pay for them right here and now by finding the
appropriate offsets.
So for the interest of the people in this country in getting
renewable energy sources, especially wind power, let's advance this
legislation.
Mr. McCRERY. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Indiana (Mr. Burton).
[[Page H4387]]
Mr. BURTON of Indiana. I thank the gentleman for yielding.
I listened to my good friend, Charlie Rangel, the Chairman of the
Ways and Means Committee, from New York, a while ago, and he was
talking about all these areas where we are going to get additional
energy. There were some great ideas there. The problem is many of them
are going to take a long, long time before we get the job done.
Right now, people in this country are paying close to $4 a gallon for
gasoline, and the issue is we have a supply of oil in this country that
will take care of most of the problem. We can drill in the ANWR and get
a million to 2 million barrels of oil a day. That is three-and-a-half
times the size of Texas, Alaska is, and we can't do it because they say
it's environmentally dangerous. We can drill off the Continental Shelf
and get a million to 2 million barrels of oil a day. They won't let us
drill off the Continental Shelf, and yet Cuba is going to drill within
50 miles of the United States and give the oil to China.
They are using all these environmentally questionable issues to keep
us from drilling for oil in this country to be energy independent. We
have been talking about energy independence for 30, 40 years, and we
haven't done a darn thing about it. The Speaker said here not long ago,
about 2 years ago, they were going to do something about skyrocketing
gas prices when it was $2.33 gallon. Now it's approaching $4 a gallon
and we can't even drill for oil that's in our country to reduce the
cost of gasoline.
The American people want solutions. They want Democrats and
Republicans to come together and do what is necessary to help them with
their energy problems. They want us to work together. We need to have
some balance between environmental concerns and the cost that we need
to deal with regarding this economy, and that means we need to lower
the price of energy, especially gasoline, so people can get to and from
work and deal with the problems they face on a daily basis. There's no
question about that. Gasoline should not be $4 a gallon, and we can
lower it if we drill for oil in our country.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. McCRERY. Mr. Speaker, I yield the gentleman an additional 30
seconds.
Mr. BURTON of Indiana. While we are talking about the long-term
problems of energy and dealing with new technologies, and we are all
for that, we have to deal with the immediate problem, and the immediate
problem is drill for oil in this country, build more refineries so we
can get that oil to market and lower the gas prices like the Americans
want it be to lowered back down to around $2 a gallon or less.
We can do it. But we will never do it unless we work together,
Democrats and Republicans. All I hear from the other side of the aisle
is, No; we have to worry about the environment. There has to be a
balance between environment and economic concerns, and we are not doing
it.
Mr. McDERMOTT. Mr. Speaker, I yield myself such time as I may
consume.
Today, we are going to approve a plan that will produce significant
new energy resources for the American people. We have passed this bill
four times. Mr. Brady is right. There is nothing new here. We keep
passing it and passing it and the oil companies keep killing it.
What you're hearing today, just the last speaker says, let's drill in
the Arctic National Wildlife Refuge or go hat in hand to OPEC and say,
Please produce more oil. Or let's have some more secret meetings down
in the White House with the Vice President and design a new tax policy
that will get our oil prices even higher. They met in the first months
in the White House and decided how to drive up the oil prices for the
oil companies.
We are going to implement a tax plan that uses the Tax Code to
produce renewable energy to put us on a path to providing our children
with an energy-independent future. The plan creates incentives for
America to apply technology and use practices to use energy more
efficiently than the way we are presently doing.
There was a time a long time ago when the United States led in
alternative energy. But now Denmark, Japan and Germany are far ahead of
us because of 8 years of this present administration and their
attitudes toward alternative energy.
With this legislation, we'll take a big step toward regaining our
leadership in the manufacture and deployment of renewable energy. This
legislation will not only create jobs in what may be the world's
largest emerging industry, but it will be a blueprint for the energy
policy for the 21st century.
We need to end our addiction to oil, and that's what this bill is
about. I urge my colleagues to support it this time.
I reserve the balance of my time.
Mr. McCRERY. Mr. Speaker, I yield 3 minutes to the distinguished
minority whip, the gentleman from Missouri (Mr. Blunt).
Mr. BLUNT. I thank the gentleman for yielding me the time.
We are for extending these good tax policies on research and
development, we are for extending these good tax policies on energy
research particularly. As Republicans, as conservatives, as people who
actually brought these tax policies to the table to start with, of
course we are for them.
Now a 1-year extension is not the right amount of time. We can debate
that. I hope we have time to because this is not the last day we are
going to see this bill. If you're really serious about energy research,
try to go to borrow money with a 1-year plan. You can't borrow money
with a 1-year plan. You can't take a chance with a 1-year plan. You
can't hire people with a 1-year plan. Surely, everybody here knows
that.
If we were really serious about extending these policies, we would be
sending signals that we are committed to these policies for a long
time. But we are for the policies that we are talking about in current
law. We are not nearly as excited about the new things that are added;
the tax breaks for lawyers who have taken a case on contingency and now
want taxpayers to subsidize their dealing with that case by these new
ideas in the Tax Code. But we are for the continuation of good
policies. But we are not for believing that to continue good tax
policies, you have to pay for those by taxing other people.
If these tax policies are good enough for now, they are good enough
to continue to be the policies of the future. This House decided last
year on the alternative minimum tax that, well, we don't want more
people to slip into that bad tax situation so we are going to move
forward without having taxes that replace what would happen if we
didn't try to maintain the current status of taxes.
That is what we are for, maintaining current policies, giving them as
much life as possible, and not assuming that other taxpayers have to
suffer in an economy that we need to be sending signs of growth and
productivity to, not signs of more ideas for the Federal Government to
increase taxes.
I hope we can come back to a bill that extends good policy, that does
it for a longer period of time, and doesn't seem to feel it's necessary
to tax other people to extend policies that are working in the Tax Code
today.
Mr. McDERMOTT. Mr. Speaker, I would remind the gentleman from
Missouri that during the 6 years that the Bush administration had a
rubber-stamp Congress up here, they put it out 1 year at a time. Now
you want us to make it long. We will see.
I yield 2 minutes to the gentleman from Illinois (Mr. Emanuel).
Mr. EMANUEL. The prior speaker said you can't have a plan for 1 year.
What he didn't mention is that the Bush administration and the
Republican Congress hadn't had a plan for 7 years, and look where it's
gotten us.
The fact is a lot of people want to talk about you have to have a
balanced approach. That's true. You do have to have some drilling.
There are 9,300 permits owned by the oil companies here in the United
States for drilling that they do not use. Close to 72 percent. They
don't use. They are not drilling. Could alleviate today. They are
waiting for the price to increase before they drill. Those permits have
been issued. So that is part of a plan.
What we are talking about today is seizing future energy sources, be
that wind, solar, biomass. In fact, today, the
[[Page H4388]]
Wall Street Journal, lead story, the Pentagon knows and it is
launching, according to the headline, an alternative fuels strategy.
The Pentagon knows that. Corporate America is investing in alternative
energy sources. They know that. The American consumer knows you have
got to have a different strategy than the one that depends only on oil.
The only people that don't know that you need to have a diverse energy
policy is the White House and sometimes I believe some of the
Republican Members of Congress here.
We need an energy policy so it begins to invest in 21st century
energy sources, like wind and solar, and stop subsidizing 20th century
energy sources, which is only oil. This gives us an agenda, a strategy
to look to the future, build new technologies, new industries that will
employ hundreds of thousands of people, and invest and give America its
energy independence.
Second, it does not cost the American taxpayer. This is a paid-for
piece of legislation by closing offshore deferrals where a lot of
people hide their income in offshore deferrals. In fact, Congressman
McCrery and Senator Grassley both acknowledge it is a decent way to pay
for something. Whether they agree for this, they do agree it's a
legitimate pay-for.
Third, there's a lot of talk about middle class and the suffering in
the middle class. This legislation provides property tax relief for
middle class families.
Remember that this is the first step toward energy independence and
making sure that we build on the progress we have made, such as CAFE
standards for cars.
Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
I assure the gentleman from Illinois that despite the fact there
might be 9,300 permits to drill out there that aren't being utilized, I
am sure there are good reasons for not utilizing those permits. I can
assure the gentleman that if we opened up ANWR, if we opened up the
Continental Shelf and more parts of the Gulf of Mexico, we would have
domestic oil companies taking advantage and drilling to produce.
Mr. EMANUEL. Will my colleague yield?
Mr. McCRERY. I would be happy to yield.
Mr. EMANUEL. We can have a legitimate debate about Alaska. We have
had 20 years of it. What I am suggesting, and you would agree that
Alaska is 10 years down the road.
Mr. McCRERY. I don't agree with that.
Mr. EMANUEL. Alaska is not today. There are 9,300 permits that have
been issued today for onshore drilling not being exercised by the oil
companies.
Mr. McCRERY. Reclaiming my time, I don't quarrel that that may be
correct. But it's beside the point. There may be legitimate reasons why
those particular permits are not being utilized. But the fact is, by
law our companies cannot drill in ANWR, they cannot drill in the Outer
Continental Shelf beyond a few areas in the Gulf of Mexico. And that is
wrong.
Look, my 14-year-old son this morning, I am driving him to school and
the radio report came on that oil hit $130 a barrel, and my son says,
Dad, why don't we just tell OPEC to produce more oil? Well, he's a
pretty smart kid. That would help. But I said, Son, if we told OPEC to
drill for more oil and then they turned it around and said, Well, why
doesn't the United States drill for more oil.
Mr. EMANUEL. Would the gentleman yield?
Mr. McCRERY. No, I've already given you some time.
The SPEAKER pro tempore. The gentleman from Louisiana controls the
time.
Mr. McCRERY. What if they told us, Why doesn't the United States
drill for more oil, what would our answer be? We don't know, because
Democrats for years have blocked every sensible environmentally sound
plan to explore and develop known resources here in this country, and
that is a shame. We ought to have a balanced energy policy. Yes,
alternative sources that we Republicans put in legislation several
years ago, passed the bill, I believe, in 2005, and began a lot of
these credits that we are extending today. We agree with that.
Mr. EMANUEL. Will you yield for a second?
Mr. McCRERY. Let us develop the resources we know we have, the proper
fuel resources that can help immediately.
Mr. EMANUEL. Just one second.
The SPEAKER pro tempore. The gentleman from Louisiana controls the
time.
Mr. McCRERY. Thank you, Mr. Speaker.
I yield 2 minutes to the gentleman from Nebraska (Mr. Terry).
{time} 1445
Mr. TERRY. Mr. Speaker, I really believe that we need to have our own
American-made energy, and we have the resources here. I have been a
leading advocate in Energy and Commerce on alternative energies, on
wind, solar, geothermal, closed-loop biomass and cellulosic ethanol,
and these tax credits, I think, are important in that process. We need
to have a complete portfolio that includes alternatives, these types of
alternatives. But I have to say that I am disappointed greatly in the
fact that we are extending these for 1 year.
I have sat down with the leading folks in especially wind energy.
And, by the way, let's not confuse these sources that generate
electricity with putting fuel in our cars. Most of these generate
electricity, like wind. We need it. But they can't take their business
plan to the bank on a 1-year tax credit. They said they need at least a
5-year, and prefer a 10-year.
If we are very serious about making alternatives part of our energy
portfolio, we need a 5- to 10-year plan to extend these tax credits.
Otherwise, we are just simply perpetrating a hoax upon the American
public that is looking towards Congress to find a way to alleviate the
pressures of high gas costs. It is about what they are paying when they
pull up to the pumps. So if we are serious about it, let's do a long-
term tax credit bill that is actually going to be usable by the folks
that want to invest in these alternatives.
Yes, we do a little bit better job on solar. I am surprised that they
pulled one out and treated that so specially, when all the others are
just so meritorious. And, by the way, I am not sure we have gotten to
the technology yet where we can have wind panels and solar panels
operating our cars for us. They can generate electricity if we want to
do a plug-in, but even that we are not doing a long-term plan for.
Mr. McDERMOTT. Mr. Speaker, could I inquire how much time remains on
both sides.
The SPEAKER pro tempore. The gentleman from Washington has 12\1/2\
minutes remaining. The gentleman from Louisiana has 4\1/2\ minutes
remaining.
Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentleman from
Connecticut (Mr. Larson).
Mr. LARSON of Connecticut. Mr. Speaker, I thank the gentleman from
Washington State.
I want to commend Mr. Rangel and Mr. Neal for an outstanding piece of
legislation that they have put before us. I am particularly pleased
with the extension of credits as it relates to fuel cell and geothermal
technology, but wind and solar as well. To extend these credits in a
manner that will allow us to become energy independent is something
that is long overdue for this Nation. Let us hope that our colleagues
on the other side are able to join us in making sure that we take a
positive step forward for the future of energy independence.
What seems apparently is the stumbling block on the other side is
that we are providing that we pay for this, and that we are doing so
by, well, taxing a group of people who otherwise go untaxed and yet
reap all the benefits of this great Nation. But those poor hedge fund
guys who sequester their funds offshore and are making millions of
dollars, to subjugate them to a tax, oh, just the thought of it sends a
shudder up the spines of our dear friends on the other side. Imagine
the people back home, the people that they talk about, that Mr. Burton
said need this relief immediately. But to do so by taxing offshore
hedge funds? Well, we can't have a part of that.
It is time for this country to get serious about energy independence.
It is time for us to step up to the plate and for Americans to
understand that people who are making funds offshore paying no taxes
ought to contribute to making sure that we are able to move
[[Page H4389]]
this Nation forward in the direction of energy independence.
I commend Chairman Rangel and Richard Neal for this fine proposal.
Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, if my good friend Mr. Larson's description of the tax
increase in the bill were correct, I wouldn't have any quarrel with it.
However, the provision affects more than just offshore hedge fund
managers. It affects any employee working for a company based offshore
in any business. So it is much broader than the gentleman described,
and that is the main reason that I oppose that provision in its current
form.
Mr. Speaker, I reserve the balance of my time.
Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Ohio (Mrs. Jones).
(Mrs. JONES of Ohio asked and was given permission to revise and
extend her remarks.)
Mrs. JONES of Ohio. Mr. Speaker, I would like to thank our Chair, Mr.
Rangel; Mr. Neal, our subcommittee Chair; Mr. McDermott; and all the
members of this committee for this great piece of legislation around
energy and tax extenders.
I know my colleagues have done a great job talking about the energy
portion of the bill, so I am going to move straight to a couple of
areas that are important specifically to people who reside in my
congressional district.
In my role as the Chair of the Congressional Philanthropic Caucus, I
am especially pleased to see the inclusion of the IRA rollover
provision, which has become an important fund-raising and development
tool in the philanthropic community. More and more today we are calling
upon the philanthropic organizations to do the job that others have
stepped away from.
In addition, the extension of the active finance exemption sends a
message to corporate America that this Congress has their interests at
heart because this provision, along with the subpart F look-through,
allows them to remain competitive and keep jobs here and not abroad.
The tenets of sound tax policy begin with the notion of equity,
efficiency and simplicity. Relying on the traditional framework, I am
certain that we are driving towards a rational consensus.
It is in this environment or within this context I am pleased to
support this piece of legislation, and encourage my colleagues
throughout the Congress to join us in passing this legislation that
will impact energy and other extenders in the Tax Code.
The Procter & Gamble Company,
Cincinnati, OH, May 20, 2008.
Hon. Stephanie Tubbs-Jones,
U.S. Representative, Longworth House Office Building,
Washington, DC.
Dear Representative Tubbs-Jones: I want to take this
opportunity to thank you for your leadership in the Ways &
Means Committee's consideration of H.R. 6049, the Renewable
Energy and Job Creation Act. House passage of H.R. 6049,
including the so-called CFC Look-through rule, is very
important for us to remain competitive in markets around the
world.
Your efforts to include the extension, the so-called CFC
Look-through rule in H.R. 6049, were critical to the ability
of P&G, and many other American companies, to serve our
customers and consumers around the world. We look forward to
working with you as this legislation moves through the House
of Representatives.
Sincerely,
Robert A. McDonald,
Chief Operating Officer.
Mr. McCRERY. Mr. Speaker, since the majority has so much more time
left than the minority, I would reserve the balance of my time.
Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentleman from
Oregon (Mr. Blumenauer).
Mr. BLUMENAUER. I appreciate the gentleman's courtesy.
There have been some stark differences in the debate here today, but
there is one thing that is clear: There is a clear record of failed
fiscal discipline on the part of our friends on the Republican side of
the aisle; 12 years of failure to deal with the alternative minimum
tax, including 6 years of that time when they controlled the entire
process, their failure to cut spending while they borrowed money on our
children's credit card to give tax benefits to those who need it the
least, and for 12 years they refused to fix the AMT.
There is going to be a new era in Washington in 242 days where we
will be able to deal comprehensively with tax reform, and I look
forward to it. But, in the meantime, it is critical to give Americans
more energy choices, and this legislation does precisely that.
In particular, it would extend the investment tax credit that deals
with renewable energy. When the PTC for wind energy expired at the end
of 2003, the installation of new wind capacity dropped 77 percent in
the next year. A recent analysis by our friends in the wind and solar
industries suggest that we are looking at $19 billion of lost
investment and 116,000 lost job opportunities if we fail to act on the
extension. This will set us back not just in terms of the challenge of
wind and solar energy today, but we are going to lose ground to our
competitors overseas.
I strongly urge that we focus on the need to provide more energy
choices for Americans today. Extending these credits is a way to make a
difference this year. Failure to do so is going to cause unnecessary
disruption, not just in terms of energy, but economically as well.
I would hope that this is one area where we ought to be able to work
together, agree with these responsible provisions, and enact it into
law.
Mr. McCRERY. Mr. Speaker, I reserve the balance of my time.
Mr. McDERMOTT. Mr. Speaker, I yield 1 minute to the Speaker, the
gentlewoman from California (Ms. Pelosi).
Ms. PELOSI. Mr. Speaker, I proudly rise in support of the Renewable
Energy and Job Creation Act. I am enthusiastic about it because it will
cut taxes for millions of middle-income families and grow the U.S.
economy, it will invest in renewable energy technologies to create
high-paying green jobs, it will make us more energy independent, and it
will remove incentives in the Tax Code that encourage shipping jobs and
investments overseas.
I would like to acknowledge the extraordinary leadership of the
chairman of the Ways and Means Committee, Mr. Charlie Rangel. He has
brought a bill to the floor that makes key investments in our families
and our future. And I thank the gentleman from Washington State, Mr.
McDermott, for his leadership and for yielding me time.
This is how the bill will cut taxes. Here are seven reasons why
everybody in this Congress should vote for this bill. Any one of them
should be enough.
First, it provides 30 million homeowners with property tax relief.
Secondly, it helps 13 million children by expanding the child tax
credit.
Third, it benefits 11 million families through the State and local
sales tax deduction.
Fourth, it helps 4.5 million families better afford college with
tuition deductions.
Next, it saves 3.4 million teachers money with a deduction for
classroom expenses. Imagine now when our teachers go into classrooms
that are not fully equipped. They have to pay for that equipment
themselves. This at least says if you do that, you will get a tax
deduction.
It provides more than 22,000 military families with tax relief under
the earned income tax credit.
And it ensures U.S. competitiveness by expanding the research and
development tax credit.
That is how it cuts taxes. There are seven reasons right there, any
one of which I think is sufficient to vote for this bill.
When it comes to gas prices, Mr. Speaker, as we debate this
legislation American families are paying record prices at the pump.
Yesterday the cost of a barrel of oil passed $129 for the first time in
history. Today I believe it went past $130. This legislation invests in
the future and the ingenuity of the American people to create and
deploy cutting-edge renewable technologies that will reduce our
dependence on foreign oil, and this is how it does that.
It strengthens and extends the production tax credit which will spur
the deployment of wind, biomass, geothermal, hydropower, tidal and
landfill gas.
Next, it transitions biofuel beyond corn by creating a new tax credit
to promote the production of cellulosic biofuels.
Next, it expands and extends the solar and fuel cell investment tax
credit and offers tax incentives for residential, solar, wind and
geothermal technologies. It provides tax incentives for coal
electricity plants that capture and
[[Page H4390]]
sequester carbon dioxide. It includes incentives to encourage energy
efficient products, such as plug-in hybrid cars and incentives for
energy conservation, both in commercial buildings and residential
structures. And it creates a new category of tax credit bonds to fund
local initiatives to promote the deployment of green technologies.
This is a comprehensive approach, the missing part of the energy bill
that we passed last year because it did not have the tax credits. Now
we do. This industry can take off. We can have private sector
initiatives to grow our economy, create good-paying jobs here at home,
green jobs, and have the green economic revolution that is so important
to our future.
And this is all being done in a fiscally sound way. No new deficit
spending. It is paid for. This forward-looking legislation invests in
renewable energy, creates hundreds of thousands of good-paying green
jobs, spurs American innovation, and cuts taxes, cuts taxes, for
millions of Americans. And it does so, as I mentioned, in a fiscally
responsible way.
To invest in our future, this bill closes loopholes allowing
corporations and executives to avoid paying certain taxes by shipping
jobs and investments overseas. The New Direction Congress thinks we
should focus tax benefits on creating jobs and encouraging investments
here at home.
Despite the strong case for rescinding taxpayer subsidies for big oil
companies making record profits, opposition by the Senate Republicans
to these offsets makes their inclusion untenable for the bill being
debated today. But we will come back to that.
{time} 1500
Today's bill represents a concerted effort to enact a bill into law
promptly, and thus relies on revenue offsets that enjoy strong
bipartisan support.
I urge my colleagues to join Mr. Rangel and members of the Ways and
Means Committee and Members of our House on both sides of the aisle who
care about an energy future for America that reduces our dependence on
foreign oil. It is a national security issue, it is an economic issue,
it is an environmental and health issue, it is an energy issue, it is a
moral issue for us to preserve God's beautiful creation, this planet,
and to pass it on to the next generation in a responsible way.
I urge my colleagues to support the Renewable Energy and Job Creation
Act.
Mr. McCRERY. May I inquire as to the remaining time.
The SPEAKER pro tempore. The gentleman from Louisiana has 4 minutes
remaining. The gentleman from Washington has 6 minutes remaining.
Mr. McDERMOTT. Mr. Speaker, I would like to enter into the Record a
letter from the managing director of Credit Suisse that says, ``I am
writing in support of H.R. 6049. We fully support your efforts to use
the revised deferred compensation measure as a revenue raiser.''
Credit Suisse Securities (USA) LLC,
New York, NY, May 15, 2008.
Chairman Charles Rangel,
Committee on Ways and Means, House of Representatives,
Washington, DC.
Dear Chairman Rangel: On behalf of Credit Suisse, I am
writing to express our support for H.R. 6049 the Energy and
Tax Extenders Act of 2008. The bill's deferred compensation
provision is of particular interest to us and we very much
appreciate the efforts of you and your staff to ensure that
this measure does not create any unintended consequences.
We are aware that issues have been raised regarding the
need to offset the bill and with the deferred compensation
provision specifically. As you are aware,'we are generally
cautious as it pertains to revenue raisers and always look to
work with the Committee to guard against unintended
consequences. However, in this instance we fully support your
efforts to use the revised deferred compensation measure as a
revenue raiser in H.R. 60491 Given the House rules on pay-go,
we recognize that without offsets the bill is not likely to
be enacted this year, thereby causing a series of tax
provisions to expire which in our opinion would not be a good
overall outcome.
I reiterate our support for the measure and thank you again
for your willingness to work with us on the deferred
compensation provision. I look forward to working with you
again in the future and please let us know if we can be of
any assistance.
Sincerely,
Thomas Prevost,
Managing Director.
____
I yield 1 minute to the gentlelady from Nevada (Ms. Berkley).
Ms. BERKLEY. Mr. Speaker, I would like to thank Chairman Rangel and
Congressman Neal for bringing forward this wonderful piece of
legislation, which I proudly support. And I support this bill to
provide incentives for clean domestic renewable energy production. It
will improve our energy security, extend vital tax provisions, and
provide tax relief to parents and teachers, college students,
homeowners, small businesses, and millions of other middle-income
Americans. Closer to home, this legislation is needed to ensure that
Nevada residents, who do not pay a State income tax, will be able to
deduct State and local sales taxes from their Federal income taxes.
Currently, some families who could benefit the most from the $1,000
refund and for a child tax credit actually make too little to qualify.
This bill ensures that more hardworking parents will be able to benefit
from this credit.
The bill extends the investment tax credit for solar energy property
for 6 years, while doubling the annual credit cap for residential
properties to $4,000.
The SPEAKER pro tempore. The time of the gentlewoman from Nevada has
expired.
Mr. McDERMOTT. I yield the gentlewoman 15 seconds.
Ms. BERKLEY. This important provision not only increases clean energy
production, but it will also create new green collar jobs in Nevada.
While I strongly believe the alternative minimum tax should be
eliminated and I remain committed to protecting the 130,000 Nevadans
who will be hit by this tax, this bill is paid for. I recommend
everyone support it.
Mr. McCRERY. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Texas (Mr. Hensarling).
Mr. HENSARLING. I thank the gentleman for yielding.
I listened to the Speaker of the House who spoke so eloquently about
the pain Americans are feeling at the gas pump. She and her party
should know a lot about it. They helped cause it.
Since the Democrats have been in control here for almost a year and a
half, we have seen prices at the pump go up about $1.50 a gallon. A
barrel of oil is at the highest price we have ever seen. They have
tried to sue their way into lower gas prices. Now they are trying to
tax their way into lower gas prices. Yet they never think about
producing American energy in America.
So now we have the so-called tax extender bills, Mr. Speaker. Well,
isn't that an interesting concept. Why is it that spending is forever
and grows exponentially, and yet tax relief to hardworking middle-
income families is somehow temporary? It just kind of disappears. But
the Speaker of the House tells us that this is somehow fiscally
responsible.
If you read the front page of USA Today 2 days ago, it tells you that
under the Democrats' watch we have an extra $2.7 trillion of unfunded
obligations that are put upon our children.
Apparently the majority leader thinks that is a laughing matter. As
the father of a 6-year-old and the father of a 4-year-old, I don't find
it too funny.
What we have here is we are going to preserve tax relief for some by
increasing taxes for others. Again, what an interesting concept. The
bottom line is the job creation mechanism of America is taxed, taxed
again when people's paychecks are shrinking. This isn't fair.
Now some people say, well, these particular provisions need reform. I
am happy to reform the Tax Code. I have cosponsored the Taxpayer Choice
Act of 2008. I invite my Democrat colleagues to cosponsor it so that we
can present a two-tier flat tax system to the American people. But the
bottom line is Washington is spending too much, and we don't need
another tax increase bill.
Mr. McDERMOTT. Mr. Speaker, I yield 1 minute to the gentleman from
Maryland (Mr. Van Hollen).
Mr. VAN HOLLEN. I thank the gentleman.
This bill continues the new Congress' steadfast commitment to driving
a clean energy revolution in our country and stimulating near-term
growth in our struggling economy.
Gas prices are up around $4 a gallon. Climate change is a clear and
present
[[Page H4391]]
danger. We need to wean ourselves off of largely imported foreign
sources of fossil fuel. This bill charts that new course, the right
course. It provides critical incentives for accelerated energy
production from wind, geothermal, and hydropower sources. It includes
investment tax credits for solar and fuel cell properties and a number
of other factors.
To give our economy a boost, the legislation extends pro-growth
policies like the R&D tax credit, and cuts taxes for millions of middle
class families through a host of provisions including the expanded
child tax credit. Mr. Speaker, this is a pro-growth, pro-environment,
forward-looking and fully paid for package that helps move our country
in a new direction.
Our colleagues on the other side of the aisle continue to resist
change. They had a monopoly on power in Washington for 6 years and did
nothing. Now they have become the party of ``no,'' veto, and the status
quo. Let's move in a new direction.
Mr. McCRERY. Mr. Speaker, I yield 1 minute to the distinguished
gentleman from Georgia, Dr. Price.
Mr. PRICE of Georgia. Mr. Speaker, I include at this point in the
Record excerpts of a memo written to Bill Dauster of the Senate Finance
Committee from Ed Kleinbard, Chief of Staff at the Senate Joint
Committee on Taxation.
Conclusion
While we recognize that colorable arguments can be made in
support of the contrary conclusion, we believe that Rule
XLIV's disclosure requirement for limited tax benefits is
applicable to Section 301.
Mr. Speaker, this new majority is all politics all the time.
Now, the Speaker gave seven reasons to vote for this bill. Funny, she
didn't include the tax boondoggle for trial lawyers. That is right, a
tax break for trial lawyers.
The bill allows plaintiffs' trial lawyers to take deductions for the
payment of contingency fees. I ask you, under current economic
conditions, should we be using the Tax Code to give the plaintiffs bar
possible financial incentives to bring more and costlier lawsuits
against American business?
Second, by definition, in the rules of this House this bill contains
earmarks and pork. The restructuring of the New York Liberty Zone tax
credits provide pork, a limited tax benefit of over $1 billion to New
York City.
Pork for powerful Members of Congress. Pork for trial lawyers. Mr.
Speaker, two good reasons to vote ``no'' on this bill.
Mr. McDERMOTT. Mr. Speaker, I yield 1 minute to the gentlewoman from
Pennsylvania (Ms. Schwartz).
Ms. SCHWARTZ. Mr. Speaker, as a member of the Ways and Means
Committee, I rise in strong support of this legislation.
This package encourages the innovation and entrepreneurship needed to
advance America's energy independence. It promotes economic growth,
enhances the ability of American businesses to compete internationally,
and provides much needed relief to American families. This proposal
extends the research and development credit that encourages innovation
and creates new green jobs; the higher education expense deduction that
enables Americans to afford to go to college and to be able to compete
in the new technology jobs. And the provisions that are included
encourage renewable energy development and conservation, including a
provision that I championed which incentivizes more energy efficient
commercial buildings.
This is not the first time that we have passed these energy
provisions in this House. Past efforts have been opposed by the
Republicans and by the President both on substance and on how it is
paid for. But this bill passed the committee with a bipartisan vote.
With a strong bipartisan vote today, we can send a strong message
that we are ready for a new energy policy in this country and should be
passed this afternoon with bipartisan effort.
Mr. McCRERY. Mr. Speaker, I have no further requests for time, and I
would reserve the balance of my time to close on our side.
Mr. McDERMOTT. Mr. Speaker, I yield 1 minute to the gentleman from
Alabama (Mr. Davis).
Mr. DAVIS of Alabama. Mr. Speaker, let me address the contingency fee
provision that has come up several times.
Mr. McCrery, I agree with you that contingency fee lawyers are a
very, very narrow class of people. They are the only major business in
America that gets paid solely based on how effective they are. If they
earn nothing for their client, they get nothing in the way of
compensation.
Another fact for my friends on the minority: Contingency fee lawyers
are small business owners who run up expenses, like every other small
business in America. Simple tax fairness says they ought to be able to
take the expenses when the expenses occur. That is how we grow
businesses in America, we give people a chance to use the Tax Code to
grow. And if every other business in America can take a deduction for
expenses in the year in which you incur the expense, how dare we single
out one class of small business owners and treat them differently.
This provision is a simple clear matter of tax equity.
Mr. McDERMOTT. Mr. Speaker, I would reserve the balance of my time to
close, using the majority leader.
Mr. McCRERY. Mr. Speaker, let me close today by simply saying that we
don't object to the main body of the bill, the extensions of the
expiring provisions of the Tax Code. After all, those were provisions
that we put in the Tax Code when we were in the majority. That is not
the point.
The point is that if we follow the PAYGO rules that require these
existing provisions of law to be paid for if they are extended just
amounts to a built-in tax increase. If we are already bringing in to
the Federal Government more money as a percent of GDP than we
historically have with all these provisions in place, what sense does
it make to raise taxes just to keep them in place? It doesn't make
sense, unless you simply want to raise more revenue for the central
government in this country, grow the government even more.
So, Mr. Speaker, with all due respect to those who have spoken so
eloquently on the merits of the expiring tax provisions, I agree with
that. But to hold to the PAYGO provisions that require the offsets in
this bill would lead us to a huge tax increase over the next 10 years.
Mr. McDERMOTT. Mr. Speaker, I yield the remainder of my time to the
gentleman from Maryland, the majority leader to close the debate.
Mr. HOYER. I thank the gentleman for yielding.
Again, I want to say how much respect I have for Mr. McCrery. I think
he is one of the most positive Members of this body. I think he has
worked productively with Chairman Rangel, and I have great respect for
my colleague. He will be leaving, and that will be a loss for the
Congress. I wanted to say that before I begin.
Let me say that we have disagreements. However, and on the overall
issue that he raised in closing about paying for this, he is accurate.
Now, some of these extenders even pre-date the time when the
Republicans were in the majority in 1995 and through 2006. But I think
there is consensus on extending them. The difference is, should we pay
for them? There are only a number of options, a few options available
to us. We can pay for them, or our children can pay for them. Somebody
will pay for them. There is not a free lunch.
My view is this supply side economics pretends there is somewhere out
there where the tooth fairy is going to deliver the money. There is not
a tooth fairy. It is the parent who delivers the money under the pillow
when the tooth is lost. But we are the parents, and we need to act as
adults. We need to pay for what we buy. And if what we buy is giving
somebody a tax incentive because we believe that they will do something
good that will advantage our community and our country, then that is
fine. I am supportive of that. But we ought to pay for it, because that
is our decision.
{time} 1515
One of the gentlemen spoke about his two children. I have three
children. I have three grandchildren, and I have one great-
granddaughter. I'm equally concerned. I'm concerned about the $4
trillion in debt that we've added over the last 6-plus years, and now
some $400 billion this year alone. But that is the general philosophy.
[[Page H4392]]
The specific philosophy here is we need to be energy independent. We
need to be sure that our policies that we pursue do not continue to
make us hostage to those who have petroleum products.
Mr. Speaker, I first want to commend Chairman Charlie Rangel and all
of the members of the Ways and Means Committee for their hard work on
this very important, farsighted legislation, the Renewable Energy and
Job Creation Act.
This week the American people are paying, on average, $3.79 per
gallon for gasoline. Mr. Hensarling observed that I was laughing when
he said the Democrats have been in charge and look what's happened to
gas prices. I was laughing because the absurdity is rejected by the
American public, that somehow policies that we've adopted over the last
year, when the President vetoes anything he doesn't want, has affected
those gasoline prices to me is patently absurd and clearly rejected by
the American people. It was, I thought then and think now, a laughable
proposition to make.
Motorists are paying $4 per gallon, more than $2.50 per gallon more
than they were paying when the current administration took office.
To show you the difference, when Bill Clinton was President from 1993
to 2001, gas prices rose from $1.06 to $1.46, 40 cents, or a nickel a
year, a nickel a year during those 8 years. During this President's
administration, prices are rising a nickel a week.
There is no doubt that this explosion in gasoline prices is squeezing
hardworking families who live in every one of our districts who also
are coping with the rising costs of food and groceries, health care and
education.
This legislation is not a panacea to those immediate concerns. Would
that we had one. But it does represent an important step in our
continuing effort to reduce our dependence on foreign oil.
Among other things, the bill will establish a new tax credit of $1.01
per gallon for cellulosic biofuel production from now through 2015, so
that we can rely on the Middle West and perhaps other parts of our
country, rather than the Middle East. It will extend this $1 per gallon
biodiesel tax credit, and makes it available to all potential sources
of diesel that can be made without petroleum. And it allows jet fuel
produced from biomass to qualify for the credit as well.
Furthermore, this legislation will reduce our dependence on imported
fuel for our electricity sector by extending and expanding tax
incentive for sources of renewable energy including wind, solar and
biomass.
It also will encourage the use of plug-in hybrid cars and provide
incentives for energy conservation in residential homes, commercial
buildings and appliances; all of which, I think, the American public
applauds.
Additionally, this bill will help create hundreds of thousands of
``green jobs.'' It will spur American innovation and business
investment, which will strengthen our economy today and in the future.
And it will provide tax relief for millions of Americans, expanding the
child tax credit for the families of 13 million children, helping 4.5
million families better afford college through a tuition deduction, and
saving 3.4 million teachers money with a deduction for classroom
expenses, so when they buy something for their classroom, like a
business expense, they'll be able to deduct it.
Now, many on the Republican side object to this bill because the
Democratic majority, in keeping with our commitment to fiscal
responsibility and pay as you go budget rules, insists that this
legislation be paid for and not add to the national debt.
That's a fundamental difference between our two sides. One believes
that tax cuts somehow pay for themselves. Mr. Bernanke doesn't believe
that, Mr. Greenspan doesn't believe that, but our Republican colleagues
clearly believe it, and they've pursued that policy, which has, as I
said, put us over $3 trillion in additional debt over the last 82
months.
To them I simply say: It is long past time that the Members here
insist that our Nation pay for the things it buys. To not do so takes
the discipline out of the democratic process, because if we can simply
charge that which we buy, there will be no discipline on the part of
the electorate to say no, we don't want to be taxed to buy that. And I
guarantee the system would stop buying it. But if there is no
discipline, if we're not paying, my grandchildren will not be able to
vote and exercise that discipline.
History, I suggest to my colleagues, is littered with the stories of
formerly great nations that began their demise through fiscal
profligacy. It is within our power to ensure that the United States of
America is never added to that list.
The method by which Chairman Rangel and the committee have paid for
the cost of this bill is laudable. Important. This legislation closes
loopholes that allow corporations and executives to avoid U.S. taxes by
shipping jobs and investments overseas. And because our obligations do
not stop, average working Americans, therefore, must pay more if the
wealthiest among us who can seek tax havens do not pay their fair
share.
This legislation is the right thing to do. Mr. Speaker, this is an
excellent bill that will help reduce our dependence on foreign oil and
protect our environment, create thousands of jobs and strengthen our
economy, and provide tax relief to millions of hardworking Americans.
I commend Mr. Rangel, Mr. McDermott, the members of the committee,
and I commend Mr. McCrery for his responsible stewardship as the
ranking member and his working to try to bring consensus. We have not
reached it in this instance, but I do commend him for his efforts.
And I urge my colleagues, support this important legislation which
moves us towards energy independence and a fair and equitable tax
system.
Mr. CARSON of Indiana. Mr. Speaker, I rise today in strong support of
H.R. 6049, The Renewable Energy and Job Creation Act of 2008. This is a
fiscally responsible and progressive piece of legislation. H.R. 6049
responds to the concerns we consistently hear from our constituents
about energy prices, property taxes and the needs of our brave men and
women in uniform.
H.R. 6049 recognizes that the need for renewable energy is greater
than ever. Oil companies reap higher and higher profits but consumers
are struggling to keep up the rising cost of gas. Our dependence on
foreign oil continues to pose a serious risk to our national security.
Further, we know our current energy sources are contributing heavily to
global climate change. I applaud H.R. 6049 for including a $20 billion
dollar investment in renewable energy research and production to find
environmentally sound alternate energy supplies.
In my home state of Indiana, families are struggling to keep up with
sky-high property taxes. My colleague Baron Hill has worked to bring
about relief for homeowners and introduced H.R. 3726 the Property Tax
Relief Act of 2007, a bill I am proud cosponsor. I was pleased to note
the bill we are discussing today provides an additional standard
deduction for State and local real property taxes paid for 2008, a
provision very similar to H.R. 3726.
This bill also provides assistance to our veterans and active duty
service men and women. H.R. 6049 includes provisions allowing members
of the armed services to include combat pay in order to qualify for the
earned income tax credit and rules to allow veterans to qualify for
mortgage revenue bonds. These programs offer critical assistance to
lower income individuals.
H.R. 6049 helps American families by extending the deduction for
qualified tuition and related education expenses and increasing the
eligibility for the refundable child tax credit for 2008. Further, it
rejects President Bush's attempts to cut down Medicare and Medicaid
benefits, the budget for the Centers for Disease Control and
Prevention, the Environmental Protection Agency and several key law
enforcement programs. Having spent my career in law enforcement, I was
especially concerned to hear that the President proposed eliminating
the Byrne Memorial Justice Assistance Grants and cops. I am pleased
this bill continues to support these important programs.
I commend Chairman Rangel for his leadership on this important bill.
Mr. UDALL of Colorado. Mr. Speaker, I strongly support this
legislation that will extend critical tax credits for renewable energy
and for American families while not adding to the federal deficit.
As co-chair of the Renewable Energy and Energy Efficiency Caucus, I
am especially pleased to see the House take action on needed tax
credits for renewable energy. The Production Tax Credit (PTC) in
particular has been instrumental in promoting the creation of a
renewable energy industry. An extended
[[Page H4393]]
PTC will provide more market certainty and we must have an extension of
this key tax credit before the current credit expires at the end of
2008.
I must add that, while I am pleased that the bill provides a 3-year
extension of the PTC for most renewable energy sources, I am concerned
that it only provides a 1-year extension for wind energy. Wind is a
very promising renewable energy source and a 1-year extension will not
be as helpful for the industry. I will continue to lead the fight to
extend the PTC for more than 1 year.
The bill also extends the Investment Tax Credit (ITC) for solar
energy, qualified fuel cells, and microturbines through the end of
2014. The ITC will help companies with initial investment costs in
expanding these renewable energy sources across the country.
The bill also authorizes $2 billion of new clean renewable energy
bonds (CREBS) for public power providers and electric cooperatives.
This is a critical tool, especially for Colorado's rural co-ops and
municipal utilities.
This bill would also benefit families who want to invest in renewable
energy. It would extend the credit for residential solar property for 6
years and increase the annual credit cap, currently capped at $2,000,
to $4,000. And it would expand the definition to include residential
small wind equipment and geothermal heat pumps so that consumers have
more options.
Rising gas prices are forcing many Coloradans to dip into their
savings just to make ends meet. This bill will help families reduce
their fuel bills by providing $3000 in tax credits toward the purchase
of fuel-efficient, plug-in hybrid vehicles. It will also help address
long-term fuel cost concerns by expanding production of homegrown
fuels, including creating a new production tax credit for cellulosic
biofuels besides ethanol, as well as an extension of the tax credits
for biodiesel and renewable diesel.
I supported the energy bill that the House passed last year which
included many of these important tax provisions, as well as the
Renewable Energy and Energy Conservation Tax Act of 2008 that the House
passed earlier this year. But, for the lack of support in the Senate,
these provisions have not yet made it to the President's desk to be
signed into law.
And this bill will also help Colorado businesses stay competitive by
extending the research and development tax credit for 1 year. While
again I would like to see this key tax credit extended for more than 1
year, this is a step in the right direction.
To help with the hard economic times that Coloradans are facing, this
bill includes several other key tax credits, including expanding the
child tax credit for some of our neediest families, allowing teachers
to take a deduction for purchasing classroom supplies out of their own
pockets, and providing additional support for families paying for
college education.
I hope today we can move this bill forward and promote positive
change that will benefit our families and rural communities, save
consumers money, reduce air pollution, and increase reliability and
energy security.
I strongly encourage my colleagues in the House to vote for this
needed legislation, and also encourage quick action in the Senate so
that we may move it to the President's desk.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise today in strong support
of H.R. 6049, Renewable Energy and Job Creation Act of 2008. I would
like to thank my colleague the Chairman of Ways and Means, Congressman
Charles Rangel for bringing this energy legislation forward .
The bill extends dozens of expired or expiring tax provisions, and
extends and creates new energy-related tax incentives for the
production of wind and other renewable energy and for homeowners'
investment in solar and fuel cell equipment.
Texas has invested in the production of wind and is looking to come
up with more ways to aid us in energy conservation and harnessing our
natural resources in a way that does not damage the environment.
There is an undeniable consensus on the importance of America
achieving energy independence in the 21st century. It is critical that
we terminate our dependence on foreign sources of oil, the majority of
which are located in regions of the world which are unstable and in
most circumstances, opposed to our interests. Accordingly, there is no
issue more essential to our economic and national security than energy
independence.
By investing in renewable energy and increasing access to potential
sources of energy, I believe we can be partners with responsible
members of America's energy producing community in our collective goal
of reaching energy independence.
Houston, Texas, is the energy capital of the world, for the past 12
years I have been the Chair of the Energy Braintrust of the
Congressional Black Caucus. During this time, I have hosted a variety
of Energy Braintrusts designed to bring in all of the relevant players
ranging from environmentalists to producers of energy from a variety of
sectors including coal, electric, natural gas, nuclear, oil, and
alternative energy sources as well as energy producers from West
Africa.
My Energy Braintrusts were designed to be a call of action to all of
the sectors that comprise the American and international energy
industry, to the African American community, and to the nation as a
whole.
Energy is the lifeblood of every economy, especially ours. Producing
more of it leads to more good jobs, cheaper goods, lower fuel prices,
and greater economic and national security. Bringing together
thoughtful yet distinct voices to engage each other on the issue of
energy independence has resulted in the beginning of a transformative
dialectic which can ultimately result in reforming our energy industry
to the extent that we as a nation achieve energy security and energy
independence.
Because I represent the city of Houston, the energy capital of the
world, I realize that many oil and gas companies provide many jobs for
many of my constituents and serve a valuable need. The energy industry
in Houston exemplifies the stakeholders who must be instrumental in
devising a pragmatic strategy for resolving our national energy crisis.
Mr. Speaker, this legislation will aid Americans as we seek to wean
ourselves from our foreign oil dependence. I urge my colleagues to
support H.R. 6049.
Mr. CONYERS. Mr. Speaker, I rise today in support of this common
sense piece of legislation offered by my dear friend, Representative
Charlie Rangel, the Chairman of the Ways and Means Committee. If
enacted, his bill will marshal the tremendous economic power of our
Nation's physical and human capital and direct it towards solving the
twin challenges of energy dependence and global warming. Through $20
billion investment in renewable energy tax incentives, carbon
mitigation provisions, transportation efficiency tax credits, and
energy efficiency incentives, this bill offers a comprehensive strategy
that empowers both individual citizens and the private sector.
The bill empowers everyday Americans by providing tax credits to
green citizens who add energy-efficient improvements to their homes and
businesses and purchase plug-in electric cars. The bill helps the
private sector push the limits of research and development by
encouraging the building of carbon capture and sequestration
demonstration projects. The bill also creates incentives for the energy
production sector to invest in nontraditional cutting edge energy
production methods. I am particularly excited that this bill will, for
the first time, incentivize investment in technologies that will
harness the power of the waves and tides found in our Nation's Great
Lakes and oceans.
I am also proud of this body's recent efforts to address the global
climate change crisis. This bill is a logical and important next step
toward this end. For too long, our country lagged behind the rest of
the industrialized world in recognizing and taking action to address
the climate change crisis. Global warming endangers all of us, but
threatens to have the most devastating impact on the poorest and the
most vulnerable. By encouraging our Nation's citizens and businesses to
act in a carbon-conscious way, we protect not only ourselves, but show
compassion for our brothers and sisters around the world. At a time
when global public opinion regarding our Nation is at an all-time low,
the important positive impact this bill will have on our country's
public diplomacy efforts should not be downplayed.
Lastly, I believe that this bill serves as a powerful example of the
tax policy differences between the 110th Congress and past Congresses.
Instead of using the tax code to promote inequality and corporate
largess, the American people now know that the tax code can be used to
promote personal responsibility, national security, compassion, and
global sustainability. I am proud to join with my colleagues here today
as we continue to establish a progressive tax policy for the 21st
century.
Mr. ETHERIDGE. Mr. Speaker, I rise in support of H.R. 6049, Renewable
Energy and Job Creation Act of 2008. This bill provides tax relief for
millions of Americans while spurring business investment and innovation
in renewable energy.
I am pleased to note that H.R. 6049 will benefit the families of
millions of children by expanding the child tax credit to those earning
$8,500 a year. This bill will also provide tax relief by extending the
State and local sales tax deduction, provide property tax relief for 30
million homeowners, and help families afford college with the tuition
deduction. As the only former school superintendent serving in
Congress, I am especially pleased to note that this bill is supported
by the National Education Association because it includes an extension
of the tax deduction for educators who help supply their classrooms,
and an extension of the Quality Zone Academy Bonds school modernization
program that helps school districts address renovation and repair
needs.
H.R. 6049 includes important tax relief provisions for businesses as
well as individuals
[[Page H4394]]
and families. This bill extends the Research and Development Tax Credit
for over 27,000 businesses, the 15-year straight-line cost recovery for
leasehold improvements and qualified restaurant improvements, and the
tax credit for the environmental remediation of brownfields areas. We
need to strengthen our economy by helping to spur American innovation
with investment in American businesses.
Developing alternative energy sources and ending our dependence on
foreign oil is one of the most critical challenges facing our nation.
H.R. 6049 includes several provisions that will spur innovation in this
area such as an extension of investment and production tax credits for
solar energy, wind energy, and energy derived from biomass, geothermal,
hydropower, and solid waste. In addition, H.R. 6049 includes incentives
that promote the production of homegrown renewable fuels, like
biodiesel, for the installation of more E-85 pumps, and a $3,000 tax
credit for the purchase of fuel-efficient plug-in hybrid vehicles.
These provisions will create and preserve thousands of ``green collar
jobs'' as well as provide relief for Americans who continue to see gas
prices rise to historic records across the country.
I support the passage of H.R. 6049, Renewable Energy and Job Creation
Act of 2008, and I urge my colleagues to join me.
Mr. MARKEY. Mr. Speaker, for nearly eight years, this
Administration's backwards energy policy has lined the pockets of oil
company executives while hurting American consumers, the economy, and
the planet. This bill encourages production of clean alternative fuels
and renewable energy while creating jobs. It transfers Oil Executive
Power to Blue Collar Renewable Power.
Last week the House passed legislation on the Strategic Petroleum
Reserve to give hurting Americans an immediate break at the pump. But
the energy crisis demands long term action, breaking our addiction to
oil and transitioning our economy to clean renewable energy sources
once and for all.
Last week immediate relief with SPR, this week we put our nation on a
path to a clean renewable future.
President Bush and Senate Republicans have been given opportunity
after opportunity to pass tax credit extensions for renewable energy.
They have sided with Big Oil each time, even as oil prices have blown
past $100 a barrel and many Americans are now paying $4 per gallon for
gas. This morning oil reached $130 a barrel.
This bill finds alternative revenue raisers which I do support. But
let's not forget what this Administration fought to protect. ExxonMobil
had $40 billion in profit last year. Do you know how the largest
corporate profit in history was used in 2007?
It repurchased $31.8 billion worth of stock.
It increased compensation for top executives by 170 percent since
2001.
It financed a $100 million public relations campaign to try to
deflect blame from angry consumers.
It invested around $10 million in renewable energy alternatives. That
is less than one tenth of one percent of their profits.
These and other findings are being released today in a report by the
Select Committee that analyzes where Big Oil's profits are going. Let's
hope President Bush's love for the oil industry doesn't extend to hedge
fund managers and corporate CEOs using offshore tax havens.
Today, because of this Administration's misguided policies, the
renewable energy industry has its back against the wall. Solar and wind
companies are delaying projects because of investment uncertainty.
There is no more time to delay.
The other side likes to tell America that wind and solar and biomass
cannot be real solutions to our energy challenge. They tell us that
drilling in our most pristine natural areas and building nuclear power
plants with taxpayer support are the only things that can solve this
problem.
No. Last year the United States installed 5,244 megawatts of wind
power, 30 percent of all the new capacity installed nationwide in 2007.
Solar photovoltaic installations in the U.S. also grew an incredible 80
percent. This was the start of the renewable energy revolution.
Last week, the Department of Energy produced a study detailing what
it would take for America to meet 20 percent of its electricity needs
with wind power in 2030. The way the industry has grown over the last
decade--about 30 percent a year--we can meet this target ahead of time.
This bill also provides valuable incentives for carbon capture and
sequestration, plug-in hybrid cars, and renewable fuels. The American
entrepreneur will rise to the energy and climate challenge if Congress
puts the right incentives in place.
Passing H.R. 6049 will give renewable energy the support it needs,
drive economic expansion and job growth in this country and put America
on a greener path towards realizing long-term solutions to global
warming. I urge an ``aye'' vote on the rule and on the underlying bill.
Mr. KIND. Mr. Speaker, I rise today in support of H.R. 6049, the
Renewable Energy and Job Creation Act of 2008. As a member of the Ways
& Means Committee, I am proud to have helped craft this very important
tax bill that will give much needed relief to millions of American
taxpayers while also moving forward on our agenda to reduce greenhouse
gas emissions and stimulate our economy.
Unfortunately, over the last several years we have seen tax bills
pushed through Congress and signed by the President under the guise of
``relief' for the middle class and the poorest in the country. I think
many in this chamber have now come to recognize that many of these
measures presented as tax relief for the middle class were in fact more
tax breaks for the richest in society. Today we finally have before us
a bill that will give real relief to millions of taxpayers, many of
whom are hardworking middle class families struggling with rising
energy and food bills.
First, H.R. 6049 addresses the need for more clean energy production
in our country by providing long-term extensions of the renewable
energy production tax credit and the solar energy and fuel cell
investment tax credit, while amending them to increase accessibility.
These long-term extensions will give utilities and investors the
predictability they need to move forward with new generation projects
in the years to come. The bill also addresses energy use and carbon
emissions by extending multiple energy-efficient credits for homes and
businesses, creating incentives for carbon capture and sequestration
demonstration projects, and calling for carbon audit of the tax code to
determine what policies are encouraging wasteful energy use and
unnecessary carbon emissions. The Act also addresses our dependence on
dirty foreign oil by extending and improving tax credits for the
production of cellulosic biofuels and plug-in electric vehicles.
Most exciting of all, however, are the innovative qualified energy
conservation bonds this bill creates. The qualified energy conservation
bonds give states and local governments the resources needed to invest
in green programs designed to reduce greenhouse gas emissions. Giving
local authorities the power to choose what green energies to implement
in their backyard is good public policy, because I know the energy
needs of western Wisconsin are vastly different than those of Queens.
By not picking the winners and losers in Washington, we are allowing
exciting technological changes, advancements, and the market--not
Congress--drive the green energy revolution.
In the area of tax relief, H.R. 6049 extends several popular expiring
tax provisions. In particular, the bill will provide property tax
relief for 30 million Americans, help for more than 12 million children
through an expanded child tax credit, tax relief for more than 11
million families through state and local sales tax deduction, help for
more than 4.5 million families to cover the cost of education through
the tuition deduction, and relief for more than 3.5 million teachers
who will be reimbursed for out-of-pocket expenses for their classrooms.
Finally, this bill is fully offset and complies with pay-go rules.
Under the leadership of Chairman Rangel and Speaker Pelosi, we are
demonstrating that we can provide tax relief without sending the debt
on to our children. After years of fiscal recklessness--deficit-
financed tax cuts for the wealthy and out-of-control government
spending--this bill sets a precedent of fiscally responsible tax
reform.
Again, .Mr. Speaker, I am happy to support this sensible and fair tax
bill before us today. Offering some tax relief in uncertain economic
times and meeting the challenge of climate change with innovative and
constructive solutions are exactly the issues this Congress should be
focused on. I urge my colleagues to support H.R. 6049.
Ms. McCOLLUM of Minnesota. Mr. Speaker, I rise in support of the
Renewable Energy and Job Creation Act and congratulate Speaker Pelosi
and Chairman Rangel for putting forward legislation that will make a
real difference for American families.
H.R. 6049 extends and expands tax incentives for renewable energy and
encourages energy efficiency. At a time when families are facing
record-breaking gas prices, this bill will help to reduce our
dependence on foreign oil and lower energy bills. These tax incentives
will also create and preserve good-paying ``green collar'' jobs such as
those in the wind and solar industries.
The Renewable Energy and Job Creation Act also furthers our nation's
innovation efforts by extending the research and development tax credit
for 27,000 companies. It is critical for our global competitiveness
that we encourage and support entrepeneurs and new ideas.
For families struggling to make ends meet in this difficult economy,
this bill provides 30 million homeowners with property tax relief,
expands the child tax credit, and extends the state and local sales tax
deduction. It also helps students afford higher education with a
tuition deduction and provides our teachers a tax deduction for
classroom expenses. Finally,
[[Page H4395]]
this legislation provides additional tax relief under the Earned Income
Tax Credit for 22,000 troops in combat.
Mr. Speaker, to ensure that our children and grandchildren are not
burdened with additional debt, this bill is fully paid for by closing a
tax loophole for offshore companies and delaying a tax break for U.S.
multinational companies. These changes not only ensure this bill
follows pay-go, they also improve the fairness of our tax code.
H.R. 6049 is critical to our long term energy policy and to family
budgets. I urge my colleagues to join me in supporting this important
bill.
Mrs. BOYDA of Kansas. Mr. Speaker, this past fall, this House passed
H.R. 3997, which included a provision to permanently extend the
military eligibility for the earned income tax credit (EITC). However,
we are back here again while our men and women in uniform still wait
for a permanent solution. We provided a 1-year extension, but our
military deserve a permanent fix.
Without action today, hundreds of thousands of troops could find
their EITC eligibility slashed. It would be a tax borne solely by our
soldiers and our military families. We call it a soldier tax.
Our military continues to serve our country with honor and
distinction. The last thing we need is for our soldiers and their
families to have to worry about paying higher taxes next year. That is
why I authored the Tax Relief for Armed Combat Families Act for 2007.
It will permanently end the soldier tax. Our military families should
not have to worry from year to year what funds are going to be
available to take care of their families.
I thank Chairman Rangel for working my language into today's
legislation, and I call on my colleagues to pass this important
legislation. Let's permanently end the soldier tax.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 1212, the previous question is ordered
on the bill, as amended.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
Motion to Recommit Offered by Mr. McCrery
Mr. McCRERY. Mr. Speaker, I have a motion to recommit at the desk.
The SPEAKER pro tempore. Is the gentleman opposed to the bill?
Mr. Mc CRERY. I am in its current form.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:
Mr. McCrery moves to recommit the bill H.R. 6049 to the
Committee on Ways and Means with instructions to report the
same back to the House promptly with the following amendment:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF
CONTENTS.
(a) Short Title.--This Act may be cited as the
``Alternative Minimum Tax and Extenders Tax Relief Act of
2008''.
(b) Amendment of 1986 Code.--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; amendment of 1986 Code; table of contents.
TITLE I--ALTERNATIVE MINIMUM TAX RELIEF
Sec. 101. Extension of alternative minimum tax relief for nonrefundable
personal credits.
Sec. 102. Extension of increased alternative minimum tax exemption
amount.
TITLE II--INDIVIDUAL TAX PROVISIONS
Sec. 201. Election to include combat pay as earned income for purposes
of the earned income credit.
Sec. 202. Distributions from retirement plans to individuals called to
active duty.
Sec. 203. Deduction for State and local sales taxes.
Sec. 204. Deduction of qualified tuition and related expenses.
Sec. 205. Deduction for certain expenses of elementary and secondary
school teachers.
Sec. 206. Modification of mortgage revenue bonds for veterans.
Sec. 207. Tax-free distributions from individual retirement plans for
charitable purposes.
Sec. 208. Treatment of certain dividends of regulated investment
companies.
Sec. 209. Stock in RIC for purposes of determining estates of
nonresidents not citizens.
Sec. 210. Qualified investment entities.
Sec. 211. Qualified conservation contributions.
TITLE III--BUSINESS TAX PROVISIONS
Sec. 301. Extension of research credit.
Sec. 302. New markets tax credit.
Sec. 303. Subpart F exception for active financing income.
Sec. 304. Extension of look-thru rule for related controlled foreign
corporations.
Sec. 305. Extension of 15-year straight-line cost recovery for
qualified leasehold improvements and qualified restaurant
improvements.
Sec. 306. Enhanced charitable deduction for contributions of food
inventory.
Sec. 307. Extension of enhanced charitable deduction for contributions
of book inventory.
Sec. 308. Modification of tax treatment of certain payments to
controlling exempt organizations.
Sec. 309. Basis adjustment to stock of S corporations making charitable
contributions of property.
Sec. 310. Increase in limit on cover over of rum excise tax to Puerto
Rico and the Virgin Islands.
Sec. 311. Parity in the application of certain limits to mental health
benefits.
Sec. 312. Extension of economic development credit for American Samoa.
Sec. 313. Extension of mine rescue team training credit.
Sec. 314. Extension of election to expense advanced mine safety
equipment.
Sec. 315. Extension of expensing rules for qualified film and
television productions.
Sec. 316. Deduction allowable with respect to income attributable to
domestic production activities in Puerto Rico.
Sec. 317. Extension of qualified zone academy bonds.
Sec. 318. Indian employment credit.
Sec. 319. Accelerated depreciation for business property on Indian
reservation.
Sec. 320. Railroad track maintenance.
Sec. 321. Seven-year cost recovery period for motorsports racing track
facility.
Sec. 322. Expensing of environmental remediation costs.
Sec. 323. Extension of work opportunity tax credit for Hurricane
Katrina employees.
Sec. 324. Enhanced deduction for qualified computer contributions.
Sec. 325. Tax incentives for investment in the District of Columbia.
TITLE IV--EXTENSIONS OF ENERGY PROVISIONS
Sec. 401. Extension of credit for energy efficient appliances.
Sec. 402. Extension of credit for nonbusiness energy property.
Sec. 403. Extension of credit for residential energy efficient
property.
Sec. 404. Extension of renewable electricity, refined coal, and Indian
coal production credit.
Sec. 405. Extension of new energy efficient home credit.
Sec. 406. Extension of energy credit.
Sec. 407. Extension and modification of credit for clean renewable
energy bonds.
Sec. 408. Extension of energy efficient commercial buildings deduction.
Sec. 409. Extension of special rule to implement FERC and State
electric restructuring policy.
Sec. 410. Suspension of taxable income limit with respect to marginal
production.
Sec. 411. Extension of credits for biodiesel and renewable diesel.
TITLE V--TAX ADMINISTRATION
Sec. 501. Permanent authority for undercover operations.
Sec. 502. Permanent disclosures of certain tax return information.
Sec. 503. Disclosure of information relating to terrorist activities.
TITLE I--ALTERNATIVE MINIMUM TAX RELIEF
SEC. 101. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR
NONREFUNDABLE PERSONAL CREDITS.
(a) In General.--Paragraph (2) of section 26(a) (relating
to special rule for taxable years 2000 through 2007) is
amended--
(1) by striking ``or 2007'' and inserting ``2007, or
2008'', and
(2) by striking ``2007'' in the heading thereof and
inserting ``2008''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 102. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX
EXEMPTION AMOUNT.
(a) In General.--Paragraph (1) of section 55(d) (relating
to exemption amount) is amended--
(1) by striking ``($66,250 in the case of taxable years
beginning in 2007)'' in subparagraph (A) and inserting
``($69,950 in the case of taxable years beginning in 2008)'',
and
(2) by striking ``($44,350 in the case of taxable years
beginning in 2007)'' in subparagraph (B) and inserting
``($46,200 in the case of taxable years beginning in 2008)''.
[[Page H4396]]
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
TITLE II--INDIVIDUAL TAX PROVISIONS
SEC. 201. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR
PURPOSES OF THE EARNED INCOME CREDIT.
(a) In General.--Subclause (II) of section 32(c)(2)(B)(vi)
(defining earned income) is amended by striking ``January 1,
2008'' and inserting ``January 1, 2014''.
(b) Conforming Amendment.--Paragraph (4) of section 6428,
as amended by the Economic Stimulus Act of 2008, is amended
to read as follows:
``(4) Earned income.--The term `earned income' has the
meaning set forth in section 32(c)(2) except that such term
shall not include net earnings from self-employment which are
not taken into account in computing taxable income.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending after December 31, 2007.
SEC. 202. DISTRIBUTIONS FROM RETIREMENT PLANS TO INDIVIDUALS
CALLED TO ACTIVE DUTY.
(a) In General.--Clause (iv) of section 72(t)(2)(G) is
amended by striking ``December 31, 2007'' and inserting
``January 1, 2014''.
(b) Effective Date.--The amendment made by this section
shall apply to individuals ordered or called to active duty
on or after December 31, 2007.
SEC. 203. DEDUCTION FOR STATE AND LOCAL SALES TAXES.
(a) In General.--Subparagraph (I) of section 164(b)(5) is
amended by striking ``January 1, 2008'' and inserting
``January 1, 2014''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 204. DEDUCTION OF QUALIFIED TUITION AND RELATED
EXPENSES.
(a) In General.--Subsection (e) of section 222 (relating to
termination) is amended by striking ``December 31, 2007'' and
inserting ``December 31, 2013''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 205. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND
SECONDARY SCHOOL TEACHERS.
(a) In General.--Subparagraph (D) of section 62(a)(2)
(relating to certain expenses of elementary and secondary
school teachers) is amended by striking ``or 2007'' and
inserting ``2007, 2008, 2009, 2010, 2011, 2012, or 2013''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31,
2007.
SEC. 206. MODIFICATION OF MORTGAGE REVENUE BONDS FOR
VETERANS.
(a) Qualified Mortgage Bonds Used To Finance Residences for
Veterans Without Regard to First-Time Homebuyer
Requirement.--Subparagraph (D) of section 143(d)(2) (relating
to exceptions) is amended by inserting ``and after the date
of the enactment of the Alternative Minimum Tax and Extenders
Tax Relief Act of 2008 and before January 1, 2014'' after
``January 1, 2008''.
(b) Effective Date.--The amendment made by this section
shall apply to bonds issued after the date of the enactment
of this Act.
SEC. 207. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT
PLANS FOR CHARITABLE PURPOSES.
(a) In General.--Subparagraph (F) of section 408(d)(8)
(relating to termination) is amended by striking ``December
31, 2007'' and inserting ``December 31, 2013''.
(b) Effective Date.--The amendment made by this section
shall apply to distributions made in taxable years beginning
after December 31, 2007.
SEC. 208. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED
INVESTMENT COMPANIES.
(a) Interest-Related Dividends.--Subparagraph (C) of
section 871(k)(1) (defining interest-related dividend) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2013''.
(b) Short-Term Capital Gain Dividends.--Subparagraph (C) of
section 871(k)(2) (defining short-term capital gain dividend)
is amended by striking ``December 31, 2007'' and inserting
``December 31, 2013''.
(c) Effective Date.--The amendments made by this section
shall apply to dividends with respect to taxable years of
regulated investment companies beginning after December 31,
2007.
SEC. 209. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES OF
NONRESIDENTS NOT CITIZENS.
(a) In General.--Paragraph (3) of section 2105(d) (relating
to stock in a RIC) is amended by striking ``December 31,
2007'' and inserting ``December 31, 2013''.
(b) Effective Date.--The amendment made by this section
shall apply to decedents dying after December 31, 2007.
SEC. 210. QUALIFIED INVESTMENT ENTITIES.
(a) In General.--Clause (ii) of section 897(h)(4)(A)
(relating to termination) is amended by striking ``December
31, 2007'' and inserting ``December 31, 2013''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on January 1, 2008.
SEC. 211. QUALIFIED CONSERVATION CONTRIBUTIONS.
(a) In General.--Clause (vi) of section 170(b)(1)(E)
(relating to termination) is amended by striking ``December
31, 2007'' and inserting ``December 31, 2013''.
(b) Contributions by Corporate Farmers and Ranchers.--
Clause (iii) of section 170(b)(2)(B) (relating to
termination) is amended by striking ``December 31, 2007'' and
inserting ``December 31, 2013''.
(c) Effective Date.--The amendments made by this section
shall apply to contributions made in taxable years beginning
after December 31, 2007.
TITLE III--BUSINESS TAX PROVISIONS
SEC. 301. EXTENSION OF RESEARCH CREDIT.
(a) Extension.--Subparagraph (B) of section 41(h)(1) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2013''.
(b) Conforming Amendment.--Subparagraph (D) of section
45C(b)(1) is amended by striking ``December 31, 2007'' and
inserting ``December 31, 2013''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred after December 31,
2007.
SEC. 302. NEW MARKETS TAX CREDIT.
Subparagraph (D) of section 45D(f)(1) (relating to national
limitation on amount of investments designated) is amended by
striking ``and 2008'' and inserting ``2008, 2009, 2010, 2011,
2012, and 2013''.
SEC. 303. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME.
(a) Exempt Insurance Income.--Paragraph (10) of section
953(e) (relating to application) is amended--
(1) by striking ``January 1, 2009'' and inserting ``January
1, 2014'', and
(2) by striking ``December 31, 2008'' and inserting
``December 31, 2013''.
(b) Exception to Treatment as Foreign Personal Holding
Company Income.--Paragraph (9) of section 954(h) (relating to
application) is amended by striking ``January 1, 2009'' and
inserting ``January 1, 2014''.
SEC. 304. EXTENSION OF LOOK-THRU RULE FOR RELATED CONTROLLED
FOREIGN CORPORATIONS.
(a) In General.--Subparagraph (B) of section 954(c)(6)
(relating to application) is amended by striking ``January 1,
2009'' and inserting ``January 1, 2014''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years of foreign corporations
beginning after December 31, 2007, and to taxable years of
United States shareholders with or within which such taxable
years of foreign corporations end.
SEC. 305. EXTENSION OF 15-YEAR STRAIGHT-LINE COST RECOVERY
FOR QUALIFIED LEASEHOLD IMPROVEMENTS AND
QUALIFIED RESTAURANT IMPROVEMENTS.
(a) In General.--Clauses (iv) and (v) of section
168(e)(3)(E) (relating to 15-year property) are each amended
by striking ``January 1, 2008'' and inserting ``January 1,
2014''.
(b) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
2007.
SEC. 306. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF
FOOD INVENTORY.
(a) In General.--Clause (iv) of section 170(e)(3)(C)
(relating to termination) is amended by striking ``December
31, 2007'' and inserting ``December 31, 2013''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made after December 31, 2007.
SEC. 307. EXTENSION OF ENHANCED CHARITABLE DEDUCTION FOR
CONTRIBUTIONS OF BOOK INVENTORY.
(a) Extension.--Clause (iv) of section 170(e)(3)(D)
(relating to termination) is amended by striking ``December
31, 2007'' and inserting ``December 31, 2013''.
(b) Clerical Amendment.--Clause (iii) of section
170(e)(3)(D) (relating to certification by donee) is amended
by inserting ``of books'' after ``to any contribution''.
(c) Effective Date.--The amendments made by this section
shall apply to contributions made after December 31, 2007.
SEC. 308. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS
TO CONTROLLING EXEMPT ORGANIZATIONS.
(a) In General.--Clause (iv) of section 512(b)(13)(E)
(relating to termination) is amended by striking ``December
31, 2007'' and inserting ``December 31, 2013''.
(b) Effective Date.--The amendment made by this section
shall apply to payments received or accrued after December
31, 2007.
SEC. 309. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING
CHARITABLE CONTRIBUTIONS OF PROPERTY.
(a) In General.--The last sentence of section 1367(a)(2)
(relating to decreases in basis) is amended by striking
``December 31, 2007'' and inserting ``December 31, 2013''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made in taxable years beginning
after December 31, 2007.
SEC. 310. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX
TO PUERTO RICO AND THE VIRGIN ISLANDS.
(a) In General.--Paragraph (1) of section 7652(f) is
amended by striking ``January 1, 2008'' and inserting
``January 1, 2014''.
(b) Effective Date.--The amendment made by this section
shall apply to distilled spirits brought into the United
States after December 31, 2007.
SEC. 311. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO
MENTAL HEALTH BENEFITS.
(a) In General.--Subsection (f) of section 9812 (relating
to application of section) is amended--
(1) by striking ``and'' at the end of paragraph (2),
(2) by striking the period at the end of paragraph (3) and
inserting ``, and before the date of the enactment of the
Alternative
[[Page H4397]]
Minimum Tax and Extenders Tax Relief Act of 2008, and'', and
(3) by adding at the end the following new paragraph:
``(4) after December 31, 2013.''.
(b) Amendment to the Employee Retirement Income Security
Act of 1974.--Section 712(f) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1185a(f)) is amended
by inserting ``, and before the date of the enactment of the
Alternative Minimum Tax and Extenders Tax Relief Act of 2008,
and after December 31, 2013'' after ``December 31, 2007''.
(c) Amendment to the Public Health Service Act.--Section
2705(f) of the Public Health Service Act (42 U.S.C. 300gg-
5(f)) is amended by inserting ``, and before the date of the
enactment of the Alternative Minimum Tax and Extenders Tax
Relief Act of 2008, and after December 31, 2013'' after
``December 31, 2007''.
(d) Effective Date.--The amendments made by this section
shall apply to benefits for services furnished on or after
the date of the enactment of this Act.
SEC. 312. EXTENSION OF ECONOMIC DEVELOPMENT CREDIT FOR
AMERICAN SAMOA.
(a) In General.--Subsection (d) of section 119 of division
A of the Tax Relief and Health Care Act of 2006 is amended--
(1) by striking ``first two taxable years'' and inserting
``first 8 taxable years'', and
(2) by striking ``January 1, 2008'' and inserting ``January
1, 2014''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 313. EXTENSION OF MINE RESCUE TEAM TRAINING CREDIT.
Section 45N(e) (relating to termination) is amended by
striking ``December 31, 2008'' and inserting ``December 31,
2013''.
SEC. 314. EXTENSION OF ELECTION TO EXPENSE ADVANCED MINE
SAFETY EQUIPMENT.
Section 179E(g) (relating to termination) is amended by
striking ``December 31, 2008'' and inserting ``December 31,
2013''.
SEC. 315. EXTENSION OF EXPENSING RULES FOR QUALIFIED FILM AND
TELEVISION PRODUCTIONS.
Section 181(f) (relating to termination) is amended by
striking ``December 31, 2008'' and inserting ``December 31,
2013''.
SEC. 316. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME
ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES
IN PUERTO RICO.
(a) In General.--Subparagraph (C) of section 199(d)(8)
(relating to termination) is amended--
(1) by striking ``first 2 taxable years'' and inserting
``first 8 taxable years'', and
(2) by striking ``January 1, 2008'' and inserting ``January
1, 2014''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 317. EXTENSION OF QUALIFIED ZONE ACADEMY BONDS.
(a) In General.--Paragraph (1) of section 1397E(e) is
amended by striking ``and 2007'' and inserting ``2007, 2008,
2009, 2010, 2011, 2012, and 2013''.
(b) Effective Date.--The amendment made by this section
shall apply to obligations issued after the date of the
enactment of this Act.
SEC. 318. INDIAN EMPLOYMENT CREDIT.
(a) In General.--Subsection (f) of section 45A (relating to
termination) is amended by striking ``December 31, 2007'' and
inserting ``December 31, 2013''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 319. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON
INDIAN RESERVATION.
(a) In General.--Paragraph (8) of section 168(j) (relating
to termination) is amended by striking ``December 31, 2007''
and inserting ``December 31, 2013''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2007.
SEC. 320. RAILROAD TRACK MAINTENANCE.
(a) In General.--Subsection (f) of section 45G (relating to
application of section) is amended by striking ``January 1,
2008'' and inserting ``January 1, 2014''.
(b) Effective Date.--The amendment made by this section
shall apply to expenditures paid or incurred during taxable
years beginning after December 31, 2007.
SEC. 321. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS
RACING TRACK FACILITY.
(a) In General.--Subparagraph (D) of section 168(i)(15)
(relating to termination) is amended to read as follows:
``(D) Application of paragraph.--Such term shall apply to
property placed in service after the date of the enactment of
the Alternative Minimum Tax and Extenders Tax Relief Act of
2008 and before January 1, 2014.''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after the date of
the enactment of this Act.
SEC. 322. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.
(a) In General.--Subsection (h) of section 198 (relating to
termination) is amended by striking ``December 31, 2007'' and
inserting ``December 31, 2013''.
(b) Effective Date.--The amendment made by this section
shall apply to expenditures paid or incurred after December
31, 2007.
SEC. 323. EXTENSION OF WORK OPPORTUNITY TAX CREDIT FOR
HURRICANE KATRINA EMPLOYEES.
(a) In General.--Paragraph (1) of section 201(b) of the
Katrina Emergency Tax Relief Act of 2005 is amended by
striking ``2-year'' and inserting ``8-year''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to individuals hired after August 27, 2007.
SEC. 324. ENHANCED DEDUCTION FOR QUALIFIED COMPUTER
CONTRIBUTIONS.
(a) In General.--Subparagraph (G) of section 170(e)(6) is
amended by striking ``December 31, 2007'' and inserting
``December 31, 2013''.
(b) Effective Date.--The amendment made by this section
shall apply to contributions made during taxable years
beginning after December 31, 2007.
SEC. 325. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF
COLUMBIA.
(a) Designation of Zone.--
(1) In general.--Subsection (f) of section 1400 is amended
by striking ``2007'' both places it appears and inserting
``2013''.
(2) Effective date.--The amendments made by this subsection
shall apply to periods beginning after December 31, 2007.
(b) Tax-Exempt Economic Development Bonds.--
(1) In general.--Subsection (b) of section 1400A is amended
by striking ``2007'' and inserting ``2013''.
(2) Effective date.--The amendment made by this subsection
shall apply to bonds issued after December 31, 2007.
(c) Zero Percent Capital Gains Rate.--
(1) In general.--Subsection (b) of section 1400B is amended
by striking ``2008'' each place it appears and inserting
``2014''.
(2) Conforming amendments.--
(A) Section 1400B(e)(2) is amended--
(i) by striking ``2012'' and inserting ``2018'', and
(ii) by striking ``2012'' in the heading thereof and
inserting ``2018''.
(B) Section 1400B(g)(2) is amended by striking ``2012'' and
inserting ``2018''.
(C) Section 1400F(d) is amended by striking ``2012'' and
inserting ``2018''.
(3) Effective dates.--
(A) Extension.--The amendments made by paragraph (1) shall
apply to acquisitions after December 31, 2007.
(B) Conforming amendments.--The amendments made by
paragraph (2) shall take effect on the date of the enactment
of this Act.
(d) First-Time Homebuyer Credit.--
(1) In general.--Subsection (i) of section 1400C is amended
by striking ``2008'' and inserting ``2013''.
(2) Effective date.--The amendment made by this subsection
shall apply to property purchased after December 31, 2007.
TITLE IV--EXTENSIONS OF ENERGY PROVISIONS
SEC. 401. EXTENSION OF CREDIT FOR ENERGY EFFICIENT
APPLIANCES.
(a) In General.--Subsection (b) of section 45M (relating to
applicable amount) is amended by striking ``calendar year
2006 or 2007'' each place it appears in paragraphs (1)(A)(i),
(1)(B)(i), (1)(C)(ii)(I), and (1)(C)(iii)(I), and inserting
``calendar year 2006, 2007, 2008, 2009, 2010, 2011, 2012, or
2013''.
(b) Restart of Credit Limitation.--Paragraph (1) of section
45M(e) (relating to aggregate credit amount allowed) is
amended by inserting ``beginning after December 31, 2007''
after ``for all prior taxable years''.
(c) Effective Date.--The amendments made by this section
shall apply to appliances produced after December 31, 2007.
SEC. 402. EXTENSION OF CREDIT FOR NONBUSINESS ENERGY
PROPERTY.
(a) In General.--Section 25C(g) (relating to termination)
is amended by striking ``December 31, 2007'' and inserting
``December 31, 2013''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2007.
SEC. 403. EXTENSION OF CREDIT FOR RESIDENTIAL ENERGY
EFFICIENT PROPERTY.
Section 25D(g) (relating to termination) is amended by
striking ``December 31, 2008'' and inserting ``December 31,
2013''.
SEC. 404. EXTENSION OF RENEWABLE ELECTRICITY, REFINED COAL,
AND INDIAN COAL PRODUCTION CREDIT.
Section 45(d) (relating to qualified facilities) is amended
by striking ``January 1, 2009'' each place it appears in
paragraphs (1), (2), (3), (4), (5), (6), (7), (8), (9), and
(10) and inserting ``January 1, 2014''.
SEC. 405. EXTENSION OF NEW ENERGY EFFICIENT HOME CREDIT.
Subsection (g) of section 45L (relating to termination) is
amended by striking ``December 31, 2008'' and inserting
``December 31, 2013''.
SEC. 406. EXTENSION OF ENERGY CREDIT.
(a) Solar Energy Property.--Paragraphs (2)(A)(i)(II) and
(3)(A)(ii) of section 48(a) (relating to energy credit) are
each amended by striking ``January 1, 2009'' and inserting
``January 1, 2014''.
(b) Fuel Cell Property.--Subparagraph (E) of section
48(c)(1) (relating to qualified fuel cell property) is
amended by striking ``December 31, 2008'' and inserting
``December 31, 2013''.
(c) Microturbine Property.--Subparagraph (E) of section
48(c)(2) (relating to qualified microturbine property) is
amended by striking ``December 31, 2008'' and inserting
``December 31, 2013''.
[[Page H4398]]
SEC. 407. EXTENSION AND MODIFICATION OF CREDIT FOR CLEAN
RENEWABLE ENERGY BONDS.
(a) Extension.--Section 54(m) (relating to termination) is
amended by striking ``December 31, 2008'' and inserting
``December 31, 2013''.
(b) Increase in National Limitation.--Section 54(f)
(relating to limitation on amount of bonds designated) is
amended--
(1) by striking ``$1,200,000,000'' in paragraph (1) and
inserting ``$1,600,000,000'', and
(2) by striking ``$750,000,000'' in paragraph (2) and
inserting ``$1,000,000,000''.
(c) Modification of Ratable Principal Amortization
Requirement.--
(1) In general.--Paragraph (5) of section 54(l) is amended
to read as follows:
``(5) Ratable principal amortization required.--A bond
shall not be treated as a clean renewable energy bond unless
it is part of an issue which provides for an equal amount of
principal to be paid by the qualified issuer during each 12-
month period that the issue is outstanding (other than the
first 12-month period).''.
(2) Technical amendment.--The third sentence of section
54(e)(2) is amended by striking ``subsection (l)(6)'' and
inserting ``subsection (l)(5)''.
(d) Effective Date.--The amendments made by this section
shall apply to bonds issued after the date of the enactment
of this Act.
SEC. 408. EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDINGS
DEDUCTION.
Section 179D(h) (relating to termination) is amended by
striking ``December 31, 2008'' and inserting ``December 31,
2013''.
SEC. 409. EXTENSION OF SPECIAL RULE TO IMPLEMENT FERC AND
STATE ELECTRIC RESTRUCTURING POLICY.
(a) In General.--Paragraph (3) of section 451(i) is amended
by striking ``January 1, 2008'' and inserting ``January 1,
2014''.
(b) Extension of Period for Transfer of Operational Control
Authorized by FERC.--Clause (ii) of section 451(i)(4)(B) is
amended by striking ``December 31, 2007'' and inserting ``the
date which is 4 years after the close of the taxable year in
which the transaction occurs''.
(c) Effective Dates.--
(1) Extension.--The amendments made by subsection (a) shall
apply to transactions after December 31, 2007.
(2) Transfers of operational control.--The amendment made
by subsection (b) shall take effect as if included in section
909 of the American Jobs Creation Act of 2004.
SEC. 410. SUSPENSION OF TAXABLE INCOME LIMIT WITH RESPECT TO
MARGINAL PRODUCTION.
(a) In General.--Subparagraph (H) of section 613A(c)(6) is
amended by striking ``January 1, 2008'' and inserting
``January 1, 2014''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2007.
SEC. 411. EXTENSION OF CREDITS FOR BIODIESEL AND RENEWABLE
DIESEL.
(a) In General.--Sections 40A(g), 6426(c)(6), and
6427(e)(5)(B) are each amended by striking ``December 31,
2008'' and inserting ``December 31, 2013''.
(b) Effective Date.--The amendments made by this section
shall apply to fuel produced, and sold or used, after
December 31, 2008.
TITLE V--TAX ADMINISTRATION
SEC. 501. PERMANENT AUTHORITY FOR UNDERCOVER OPERATIONS.
(a) In General.--Section 7608(c) (relating to rules
relating to undercover operations) is amended by striking
paragraph (6).
(b) Effective Date.--The amendment made by this section
shall apply to operations conducted after the date of the
enactment of this Act.
SEC. 502. PERMANENT DISCLOSURES OF CERTAIN TAX RETURN
INFORMATION.
(a) Disclosures To Facilitate Combined Employment Tax
Reporting.--
(1) In general.--Section 6103(d)(5) (relating to disclosure
for combined employment tax reporting) is amended--
(A) by striking ``reporting'' in the heading thereof and
all that follows through ``The Secretary'' in subparagraph
(A) and inserting ``reporting.--The Secretary'', and
(B) by striking subparagraph (B).
(2) Effective date.--The amendments made by this subsection
shall apply to disclosures after the date of the enactment of
this Act.
(b) Disclosures Relating to Certain Programs Administered
by the Department of Veterans Affairs.--
(1) In general.--Section 6103(l)(7)(D) (relating to
programs to which rule applies) is amended by striking the
last sentence.
(2) Technical amendment.--Section 6103(l)(7)(D)(viii)(III)
is amended by striking ``sections 1710(a)(1)(I), 1710(a)(2),
1710(b), and 1712(a)(2)(B)'' and inserting ``sections
1710(a)(2)(G), 1710(a)(3), and 1710(b)''.
SEC. 503. DISCLOSURE OF INFORMATION RELATING TO TERRORIST
ACTIVITIES.
(a) Disclosure of Return Information to Apprise Appropriate
Officials of Terrorist Activities.--Clause (iv) of section
6103(i)(3)(C) (relating to termination) is amended by
striking ``December 31, 2007'' and inserting ``December 31,
2013''.
(b) Disclosure Upon Request of Information Relating to
Terrorist Activities.--Subparagraph (E) of section 6103(i)(7)
(relating to termination) is amended by striking ``December
31, 2007'' and inserting ``December 31, 2013''.
(c) Effective Date.--The amendments made by this section
shall apply to disclosures after the date of the enactment of
this Act.
Mr. McCRERY (during the reading). Mr. Speaker, I ask unanimous
consent to dispense with the reading of the motion.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Louisiana?
There was no objection.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Louisiana is recognized for 5 minutes in support of his motion.
Mr. McCRERY. Mr. Speaker, this is a straightforward motion that
offers Members of this House a simple choice. Are you in favor of long-
term extensions of these expiring tax provisions and extending the all-
important AMT patch, without raising taxes?
As we have discussed at length here today, the majority's bill
unwisely adheres to their ill-advised PAYGO rules. Thus, they have once
again found themselves boxed in a corner, scouring the Tax Code for
ways to fuel their agenda. Whether that agenda involves additional
spending, new tax incentives, or even just extensions of the low-tax
policies that Republicans originally enacted during our time in the
majority, the Democrat solution seems to always be the same: tax, tax,
tax.
Today's bill is no different. While there is virtually no
disagreement in this House that the expiring tax reductions contained
in the underlying legislation need to be renewed, the two parties seem
to have a major disagreement about whether revenue-raisers should be
necessary to pay for them. The majority's bill represents a clear
choice in favor of higher taxes. Our motion to recommit, on the other
hand, represents a clear choice in favor of extending current tax
relief, without offsetting tax increases.
Unlike the bill brought forward today by the majority, Mr. Speaker,
which contains $55.5 billion in revenue-raisers, our motion contains
no--repeat, no--tax increases. Democrats were wrong to propose these
sorts of offsetting tax hikes last year, and they're wrong again today.
If they stick with their misguided PAYGO rules, they'll be wrong again
in 2010 as well, when a huge number of critically important tax
policies, ranging from the expanded $1,000 child credit to the lower
rates on dividends and capital gains and lower individual rates will
expire. And the majority's PAYGO logic will then require more than a
$3.5 trillion tax increase simply to maintain current law. But that's
where PAYGO will take us.
This motion to recommit offers us a different path, Mr. Speaker. Not
only does our motion reject the majority's tax hikes, it extends the
bill's positive provisions for considerably longer than the underlying
bill does. Indeed, our motion extends the package of expiring
provisions, including all the expiring energy tax provisions, through
2013.
So if you support the deduction for State and local sales taxes,
here's your chance to extend it for 6 years, not just 1. If you support
the research and development tax credit, here's your chance to extend
it for 6 years, not just 1.
In short, if you want to extend all of the important low-tax policies
that expired last year--as well as the energy extenders that are set to
expire just months from now--on a long-term basis, here's your chance.
This motion also gives Members the opportunity to extend one final
crucial provision that has gone completely unaddressed by the majority:
the AMT patch. As we've highlighted throughout today's debate, the
majority's legislation is deafeningly silent on the urgently needed AMT
patch. Their bill's failure to patch the AMT for 2008 means that more
than 25 million middle class individuals and families are in line for a
$61.5 billion tax hike next April, an average tax increase for those
families of more than $2,400 per taxpayer.
Our motion does what everyone knows must be done. It patches the AMT
for 2008, and it does so early in the year to help ensure that we avoid
a repeat performance of the legislative meltdown engineered by the
majority last year, which prevented the 2007 patch from being enacted
until the day after Christmas. We need to patch the AMT and we need to
patch it now. This motion gives us that opportunity.
[[Page H4399]]
I will close, Mr. Speaker, with just a word about process. I suspect
that we'll hear from our friends on the other side that this motion
will kill the bill. Well, Mr. Speaker, I would submit to you that you
can't kill a bill that's already dead. This bill is dead on arrival in
the other body, Mr. Speaker. Forty-one Senators signed a letter last
month pledging to oppose tax bills that contain revenue-raising
offsets.
On the very same day that our committee, the Ways and Means
Committee, reported out this bill last week, our colleagues across the
Capitol passed a motion on the Senate floor instructing Senate
conferees on the budget resolution to reject the House's plan to raise
$110 billion in taxes in order to pay for the extension of expiring
provisions, including the AMT patch.
And, Mr. Speaker, even if this legislation somehow got through the
Senate, the President has indicated he would veto the bill.
You can't kill a bill that's already dead, Mr. Speaker. So let's use
this motion to recommit to revive this bill, send it back to committee
so that we can do our work in a bipartisan way, and get a bill passed
and to the President that he will sign.
Mr. RANGEL. Mr. Speaker, I rise in outrageous opposition to the
motion to recommit that has been offered to this House.
The SPEAKER pro tempore. The gentleman from New York is recognized
for 5 minutes.
Mr. RANGEL. One, the outrage concerns my love for the Congress and
the Constitution. And to think that this great House and the committee
which I'm proud to chair would even have to consider what they're
thinking, if they're thinking at all on the other side, to decide what
we're going to legislate outrages me.
{time} 1530
Two, whatever the President says he's going to do or may do--we
understand that he's addicted to veto, but that shouldn't stop us from
doing the right thing.
And why do I think basically it's the right thing? Well, it has to be
if you want to extend it for 5 years. So your vote on this, after the
motion to recommit dies on this floor, is going to be very interesting
as to if you want it for 5, why wouldn't you want to extend it at least
for 1?
Lastly, I wish that I had some time to share with my friend, whom
I've enjoyed working with as the ranking member of the Ways and Means
Committee, to ask him how much money do you think they have in Japan
and China to loan us? There must be some limit to their capacity.
Our bill costs about $125 billion altogether, I think. $54 billion
for the energy provisions as well as for this. So I assume that you
want to add another $200 billion to that. And I don't remember you
using the creative language that you used when you and the Senate--that
you and the other body, whatever they call themselves--decided that you
don't have to pay for the alternative minimum tax.
First of all, if I understood that, I'll take it home to my wife and
explain that there are ways that you can lose revenue and not renew it
and still not change your lifestyle. And if it works at home, I will
come here, and at least for the next Congress, ask Mr. McCrery, if he
can't stay over there, come on our side and explain how, if the
President puts in the budget that we should be expecting money from
these 25 million hostages that shouldn't have to pay the tax, that we
don't have to make up for the money.
So I assume that you have now extended this to cover the extenders.
And I hope really that you would stick around a little while so that
you will be able to work with me and the next President, not to explain
why in the last 8 years we haven't reformed this doggone tax system.
Most of this stuff shouldn't be in the Tax Code. You know it and I know
it. And the things that should be in the Tax Code should be made
permanent. The stuff that shouldn't be in there should be taken out.
So in 8 years, the President is now talking about vetoing. Why didn't
he take enough time to say, Let's straighten out the code, let's
attempt to balance the budget, let's do the right thing for energy and
whatever has to be in an extender that expires, help us to get rid of
it without being charged with raising taxes. Any extender that expires,
we would say that it raises taxes.
I know and Secretary Paulson knows, and we'll be hearing more from
him probably after he leaves the administration, that this House has
the responsibility of having a Tax Code that is simple, that is
economically inspiring, and is something that can be confident and
things shouldn't expire. If they expire, they shouldn't be in there in
the first place. If it is good, it should stay in the Tax Code so
there's reliability.
And if you're going to say that we're not going to get revenues as a
result of extending this, we say for 1 year, we will raise the money,
we will do it the right way, we will be proud of it, and in a small way
attempt to stop this deficit.
But be kind to the people in Japan. Be kind to the people in China.
They can't forever support everything that the Republicans want.
We're going to have to make sacrifices if we want to make changes. So
this war is one against ignorance and not having the research and
development. It's one in trying to have research and development for
our corporations, but, more importantly, to find alternatives to this
addiction that we have.
So you have been there for 8 years. Please don't try to change the
things in 10 minutes here. Join with us. Let's work together in a
bipartisan way, and let's mark down this day that is a day that House
Democrats and Republicans said, stop the addiction, move to the
alternatives, and dedicate ourselves to having a reformed Tax Code, if
not this year then certainly next year.
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore. Members are reminded to address their
remarks to the Chair.
Without objection, the previous question is ordered on the motion to
recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. McCRERY. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
Pursuant to clause 8 and clause 9 of rule XX, this 15-minute vote on
the motion to recommit will be followed by 5-minute votes on passage of
H.R. 6049 and motions to suspend the rules on H.R. 1771 and H.R. 4841.
The vote was taken by electronic device, and there were--yeas 201,
nays 220, not voting 13, as follows:
[Roll No. 343]
YEAS--201
Aderholt
Akin
Alexander
Bachmann
Bachus
Barrett (SC)
Bartlett (MD)
Barton (TX)
Bean
Biggert
Bilbray
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehner
Bonner
Bono Mack
Boozman
Boustany
Brady (TX)
Broun (GA)
Brown (SC)
Brown-Waite, Ginny
Buchanan
Burgess
Burton (IN)
Buyer
Calvert
Camp (MI)
Campbell (CA)
Cannon
Cantor
Capito
Castle
Chabot
Cole (OK)
Conaway
Cubin
Culberson
Davis (KY)
Davis, David
Davis, Tom
Deal (GA)
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Donnelly
Doolittle
Drake
Dreier
Duncan
Ehlers
Ellsworth
Emerson
English (PA)
Everett
Fallin
Feeney
Ferguson
Flake
Forbes
Fortenberry
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Gilchrest
Gingrey
Gohmert
Goode
Goodlatte
Granger
Graves
Hall (TX)
Hastings (WA)
Hayes
Heller
Hensarling
Herger
Hobson
Hoekstra
Hulshof
Hunter
Inglis (SC)
Issa
Johnson (IL)
Johnson, Sam
Jones (NC)
Jordan
Keller
King (IA)
King (NY)
Kingston
Kirk
Kline (MN)
Knollenberg
Kuhl (NY)
LaHood
Lamborn
Lampson
Latham
LaTourette
Latta
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas
Lungren, Daniel E.
Mack
Manzullo
Marchant
McCarthy (CA)
McCaul (TX)
McCotter
McCrery
McHenry
McHugh
McIntyre
McKeon
McMorris Rodgers
McNerney
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Mitchell
Moran (KS)
Murphy, Tim
Musgrave
Myrick
Neugebauer
Nunes
Paul
[[Page H4400]]
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Porter
Price (GA)
Pryce (OH)
Putnam
Radanovich
Ramstad
Regula
Rehberg
Reichert
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Roskam
Royce
Ryan (WI)
Sali
Saxton
Scalise
Schmidt
Sessions
Shadegg
Shays
Shimkus
Shuster
Simpson
Smith (NE)
Smith (NJ)
Smith (TX)
Souder
Stearns
Sullivan
Tancredo
Terry
Thornberry
Tiberi
Turner
Upton
Walberg
Walden (OR)
Walsh (NY)
Wamp
Weldon (FL)
Weller
Westmoreland
Whitfield (KY)
Wilson (NM)
Wilson (SC)
Wittman (VA)
Wolf
Young (AK)
Young (FL)
NAYS--220
Abercrombie
Ackerman
Allen
Altmire
Andrews
Arcuri
Baca
Baird
Baldwin
Barrow
Becerra
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Boren
Boswell
Boucher
Boyd (FL)
Boyda (KS)
Brady (PA)
Braley (IA)
Butterfield
Capps
Capuano
Cardoza
Carnahan
Carney
Carson
Cazayoux
Chandler
Childers
Clarke
Clay
Cleaver
Clyburn
Cohen
Conyers
Cooper
Costello
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Lincoln
DeFazio
DeGette
Delahunt
DeLauro
Dicks
Dingell
Doggett
Doyle
Edwards
Ellison
Emanuel
Engel
Eshoo
Etheridge
Farr
Fattah
Filner
Foster
Frank (MA)
Giffords
Gonzalez
Gordon
Green, Al
Green, Gene
Grijalva
Gutierrez
Hall (NY)
Hare
Harman
Hastings (FL)
Herseth Sandlin
Higgins
Hill
Hinchey
Hinojosa
Hirono
Hodes
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (GA)
Johnson, E. B.
Jones (OH)
Kagen
Kanjorski
Kaptur
Kildee
Kilpatrick
Kind
Klein (FL)
Kucinich
Langevin
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lipinski
Loebsack
Lofgren, Zoe
Lowey
Lynch
Mahoney (FL)
Maloney (NY)
Markey
Marshall
Matheson
Matsui
McCarthy (NY)
McCollum (MN)
McDermott
McGovern
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Miller (NC)
Miller, George
Mollohan
Moore (KS)
Moore (WI)
Moran (VA)
Murphy (CT)
Murphy, Patrick
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Perlmutter
Peterson (MN)
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Richardson
Rodriguez
Ross
Rothman
Roybal-Allard
Ruppersberger
Ryan (OH)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schwartz
Scott (GA)
Scott (VA)
Serrano
Sestak
Shea-Porter
Sherman
Shuler
Sires
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Space
Speier
Spratt
Stark
Stupak
Sutton
Tanner
Tauscher
Taylor
Thompson (CA)
Thompson (MS)
Tierney
Towns
Tsongas
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Walz (MN)
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch (VT)
Wilson (OH)
Woolsey
Wu
Yarmuth
NOT VOTING--13
Brown, Corrine
Carter
Castor
Coble
Costa
Crenshaw
Gillibrand
Kennedy
Rush
Sensenbrenner
Tiahrt
Wexler
Wynn
{time} 1600
Messrs. BERRY, KUCINICH, SPRATT, BUTTERFIELD, KLEIN of Florida,
ALTMIRE, DICKS, LANGEVIN, OLVER, GEORGE MILLER of California,
RUPPERSBERGER, REYES and SHERMAN changed their vote from ``yea'' to
``nay.''
Messrs. McKEON, WALSH of New York, BURGESS, McINTYRE and MITCHELL
changed their vote from ``nay'' to ``yea.''
So the motion to recommit was rejected.
The result of the vote was announced as above recorded.
Stated for:
Mr. COBLE. Mr. Speaker, on rollcall No. 343, I was attending the
graduation ceremony at the United States Coast Guard Academy. Had I
been present, I would have voted ``yea.''
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Recorded Vote
Mr. HERGER. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. This will be a 5-minute vote.
The vote was taken by electronic device, and there were--ayes 263,
noes 160, not voting 12, as follows:
[Roll No. 344]
AYES--263
Abercrombie
Ackerman
Allen
Altmire
Andrews
Arcuri
Baca
Baird
Baldwin
Barrow
Bean
Becerra
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Boren
Boswell
Boucher
Boyd (FL)
Boyda (KS)
Brady (PA)
Braley (IA)
Brown-Waite, Ginny
Buchanan
Butterfield
Capito
Capps
Capuano
Cardoza
Carnahan
Carney
Carson
Castle
Cazayoux
Chandler
Childers
Clarke
Clay
Cleaver
Clyburn
Cohen
Conyers
Cooper
Costa
Costello
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Lincoln
DeFazio
DeGette
Delahunt
DeLauro
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Dingell
Doggett
Donnelly
Doyle
Duncan
Edwards
Ehlers
Ellison
Ellsworth
Emanuel
Engel
English (PA)
Eshoo
Etheridge
Farr
Fattah
Filner
Foster
Frank (MA)
Gerlach
Giffords
Gilchrest
Gonzalez
Gordon
Green, Al
Green, Gene
Grijalva
Gutierrez
Hall (NY)
Hare
Harman
Hastings (FL)
Hayes
Herseth Sandlin
Higgins
Hill
Hinchey
Hinojosa
Hirono
Hobson
Hodes
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (GA)
Johnson, E. B.
Johnson, Sam
Jones (NC)
Jones (OH)
Kagen
Kanjorski
Kaptur
Kildee
Kilpatrick
Kind
Klein (FL)
Kucinich
LaHood
Langevin
Larsen (WA)
Larson (CT)
Latham
LaTourette
Lee
Levin
Lewis (GA)
Lipinski
LoBiondo
Loebsack
Lofgren, Zoe
Lowey
Lynch
Mahoney (FL)
Maloney (NY)
Markey
Marshall
Matheson
Matsui
McCarthy (NY)
McCollum (MN)
McDermott
McGovern
McHugh
McIntyre
McNerney
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Miller (MI)
Miller (NC)
Miller, George
Mitchell
Mollohan
Moore (KS)
Moore (WI)
Moran (KS)
Moran (VA)
Murphy (CT)
Murphy, Patrick
Murphy, Tim
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Pelosi
Perlmutter
Peterson (MN)
Platts
Pomeroy
Porter
Price (NC)
Pryce (OH)
Rahall
Rangel
Regula
Reyes
Richardson
Rodriguez
Rogers (AL)
Ros-Lehtinen
Ross
Rothman
Roybal-Allard
Ruppersberger
Ryan (OH)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schwartz
Scott (GA)
Scott (VA)
Serrano
Sestak
Shays
Shea-Porter
Sherman
Shuler
Sires
Skelton
Slaughter
Smith (NJ)
Smith (WA)
Snyder
Solis
Souder
Space
Speier
Spratt
Stark
Stupak
Sutton
Tanner
Tauscher
Taylor
Thompson (CA)
Thompson (MS)
Tiberi
Tierney
Towns
Tsongas
Udall (CO)
Udall (NM)
Upton
Van Hollen
Velazquez
Visclosky
Walz (MN)
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch (VT)
Wilson (OH)
Woolsey
Wu
Yarmuth
NOES--160
Aderholt
Akin
Alexander
Bachmann
Bachus
Barrett (SC)
Bartlett (MD)
Barton (TX)
Biggert
Bilbray
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehner
Bonner
Bono Mack
Boozman
Boustany
Brady (TX)
Broun (GA)
Brown (SC)
Burgess
Burton (IN)
Buyer
Calvert
Camp (MI)
Campbell (CA)
Cannon
Cantor
Chabot
Cole (OK)
Conaway
Cubin
Culberson
Davis (KY)
Davis, David
Davis, Tom
Deal (GA)
Doolittle
Drake
Dreier
Emerson
Everett
Fallin
Feeney
Ferguson
Flake
Forbes
Fortenberry
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gingrey
Gohmert
Goode
Goodlatte
Granger
Graves
Hall (TX)
Hastings (WA)
Heller
Hensarling
Herger
Hoekstra
Hulshof
Hunter
Inglis (SC)
Issa
Johnson (IL)
Jordan
Keller
King (IA)
King (NY)
Kingston
Kirk
Kline (MN)
Knollenberg
Kuhl (NY)
Lamborn
Lampson
Latta
Lewis (CA)
Lewis (KY)
Linder
Lucas
Lungren, Daniel E.
Mack
Manzullo
Marchant
McCarthy (CA)
McCaul (TX)
McCotter
McCrery
McHenry
McKeon
McMorris Rodgers
Mica
Miller (FL)
Miller, Gary
Musgrave
Myrick
Neugebauer
Nunes
Paul
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Poe
Price (GA)
Putnam
Radanovich
Ramstad
Rehberg
Reichert
Renzi
Reynolds
Rogers (KY)
Rogers (MI)
Rohrabacher
Roskam
Royce
Ryan (WI)
Sali
Saxton
Scalise
Schmidt
Sessions
Shadegg
Shimkus
Shuster
Simpson
Smith (NE)
Smith (TX)
Stearns
Sullivan
Tancredo
Terry
Thornberry
Turner
Walberg
Walden (OR)
Walsh (NY)
Wamp
Weldon (FL)
[[Page H4401]]
Weller
Westmoreland
Whitfield (KY)
Wilson (NM)
Wilson (SC)
Wittman (VA)
Wolf
Young (AK)
Young (FL)
NOT VOTING--12
Brown, Corrine
Carter
Castor
Coble
Crenshaw
Gillibrand
Kennedy
Rush
Sensenbrenner
Tiahrt
Wexler
Wynn
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (during the vote). Members are reminded there
are 2 minutes remaining on this vote.
{time} 1608
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Stated against:
Mr. COBLE. Mr. Speaker, on rollcall No. 344, I was attending the
graduation ceremony at the United States Coast Guard Academy. Had I
been present, I would have voted ``no.''
____________________