[Congressional Record (Bound Edition), Volume 148 (2002), Part 4]
[Senate]
[Pages 5660-5675]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 3332. Mr. KYL submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, on page 4, line 8, strike ``subparagraphs 
     (A) and'' and insert ``Subparagraph''.
                                  ____

  SA 3333. Mr. KYL submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, beginning on page 17, line 9, strike all 
     through page 55, line 7.
                                  ____

  SA 3334. Mr. KYL submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, beginning on page 17, line 9, strike all 
     through page 55, line 7, and insert the following:

     SEC. 2001. PERMANENT EXTENSION OF ABOVE-THE-LINE DEDUCTION 
                   FOR TEACHER CLASSROOM EXPENSES.

       Section 62(a)(2)(D) is amended by striking ``In the case of 
     taxable years beginning during 2002 or 2003, the'' and 
     inserting ``The''.
                                  ____

  SA 3335. Mr. SESSIONS (for himself, Mr. Shelby, Mr. Specter, and Mr. 
Santorum) submitted an amendment intended to be proposed to amendment 
SA 2917 proposed by Mr. Daschle (for himself and Mr. Bingaman) to the 
bill (S. 517) to authorize funding the Department of Energy to enhance 
its mission areas through technology transfer and partnerships for 
fiscal years 2002 through 2006, and for other purposes; which was 
ordered to lie on the table; as follows:

       In Division H, on page 202, between lines 22 and 23, insert 
     the following:
       (b) Extension for Certain Fuel Produced at Existing 
     Facilities.--Paragraph (2) of section 29(f) (relating to 
     application of section) is amended by inserting ``(January 1, 
     2005, in the case of any coke or coke gas produced in a 
     facility described in paragraph (1)(B))'' after ``January 1, 
     2003''.
                                  ____

  SA 3336. Mr. GRAMM submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, on page 216, after line 21, add the 
     following:

     SEC. __. TREATMENT OF DAIRY PROPERTY.

       (a) Qualified Disposition of Dairy Property Treated as 
     Involuntary Conversion.--
       (1) In general.--Section 1033 (relating to involuntary 
     conversions) is amended by designating subsection (k) as 
     subsection (l) and inserting after subsection (j) the 
     following new subsection:
       ``(k) Qualified Disposition To Implement Bovine 
     Tuberculosis Eradication Program.--

[[Page 5661]]

       ``(1) In general.--For purposes of this subtitle, if a 
     taxpayer elects the application of this subsection to a 
     qualified disposition:
       ``(A) Treatment as involuntary conversion.--Such 
     disposition shall be treated as an involuntary conversion to 
     which this section applies.
       ``(B) Modification of similar property requirement.--
     Property to be held by the taxpayer either for productive use 
     in a trade or business or for investment shall be treated as 
     property similar or related in service or use to the property 
     disposed of.
       ``(C) Extension of period for replacing property.--
     Subsection (a)(2)(B)(i) shall be applied by substituting `4 
     years' for `2 years'.
       ``(D) Waiver of unrelated person requirement.--Subsection 
     (i) (relating to replacement property must be acquired from 
     unrelated person in certain cases) shall not apply.
       ``(E) Expanded capital gain for cattle and horses.--Section 
     1231(b)(3)(A) shall be applied by substituting `1 month' for 
     `24 months'.
       ``(2) Qualified disposition.--
       ``(A) In general.--For purposes of this subsection, the 
     term `qualified disposition' means the disposition of dairy 
     property which is certified by the Secretary of Agriculture 
     as having been the subject of an agreement under the bovine 
     tuberculosis eradication program, as implemented pursuant to 
     the Declaration of Emergency Because of Bovine Tuberculosis 
     (65 Federal Register 63,227 (2000)).
       ``(B) Payments received in connection with the bovine 
     tuberculosis eradication program.--For purposes of this 
     subsection, any amount received by a taxpayer in connection 
     with an agreement under such bovine tuberculosis eradication 
     program shall be treated as received in a qualified 
     disposition.
       ``(C) Transmittal of certifications.--The Secretary of 
     Agriculture shall transmit copies of certifications under 
     this paragraph to the Secretary.
       ``(3) Allowance of the adjusted basis of certified dairy 
     property as a depreciation deduction.--The adjusted basis of 
     any property certified under paragraph (2)(A) shall be 
     allowed as a depreciation deduction under section 167 for the 
     taxable year which includes the date of the certification 
     described in paragraph (2)(A).
       ``(4) Dairy property.--For purposes of this subsection, the 
     term `dairy property' means all tangible or intangible 
     property used in connection with a dairy business or a dairy 
     processing plant.
       ``(5) Special rules for certain business organizations.--
       ``(A) S corporations.--In the case of an S corporation, 
     gain on a qualified disposition shall not be treated as 
     recognized for the purposes of section 1374 (relating to tax 
     imposed on certain built-in gains).
       ``(B) Partnerships.--In the case of a partnership which 
     dissolves in anticipation of a qualified disposition 
     (including in anticipation of receiving the amount described 
     in paragraph (2)(B)), the dairy property owned by the 
     partners of such partnership at the time of such disposition 
     shall be treated, for the purposes of this section and 
     notwithstanding any regulation or rule of law, as owned by 
     such partners at the time of such disposition.
       ``(6) Termination.--This subsection shall not apply to 
     dispositions made after December 31, 2006.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to dispositions made and amounts received in 
     taxable years ending after May 22, 2001.
       (b) Deduction of Qualified Reclamation Expenditures.--
       (1) In general.--Part VI of subchapter B of chapter 1 
     (relating to itemized deductions for individuals and 
     corporations), as amended by this Act, is amended by adding 
     at the end the following new section:

     ``SEC. 199B. EXPENSING OF DAIRY PROPERTY RECLAMATION COSTS.

       ``(a) In General.--Notwithstanding section 280B (relating 
     to demolition of structures), a taxpayer may elect to treat 
     any qualified reclamation expenditure which is paid or 
     incurred by the taxpayer as an expense which is not 
     chargeable to capital account. Any expenditure which is so 
     treated shall be allowed as a deduction for the taxable year 
     in which it is paid or incurred.
       ``(b) Qualified Reclamation Expenditure.--
       ``(1) In general.--For purposes of this subparagraph, the 
     term `qualified reclamation expenditure' means amounts 
     otherwise chargeable to capital account and paid or incurred 
     to convert any real property certified under section 
     1033(k)(2) (relating to qualified disposition) into 
     unimproved land.
       ``(2) Special rule for expenditures for depreciable 
     property.--A rule similar to the rule of section 198(b)(2) 
     (relating to special rule for expenditures for depreciable 
     property) shall apply for purposes of paragraph (1).
       ``(c) Deduction Recaptured as Ordinary Income.--Rules 
     similar to the rules of section 198(e) (relating to deduction 
     recaptured as ordinary income on sale, etc.) shall apply with 
     respect to any qualified reclamation expenditure.
       ``(d) Termination.--This section shall not apply to 
     expenditures paid or incurred after December 31, 2006.''.
       (2) Clerical amendment.--The table of sections for part VI 
     of subchapter B of chapter 1, as amended by this Act, is 
     amended by adding at the end the following new item:

``Sec. 199B. Expensing of dairy property reclamation costs.''.

       (3) Effective date.--The amendments made by this subsection 
     shall apply to expenditures paid or incurred in taxable years 
     ending after May 22, 2001.
                                  ____

  SA 3337. Mr. WELLSTONE submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, add the following:

     SEC. __. FOREIGN CORPORATIONS CREATED THROUGH INVERSION 
                   TRANSACTIONS TAXED AS DOMESTIC CORPORATIONS.

       (a) In General.--Paragraph (4) of section 7701(a) (defining 
     domestic) is amended to read as follows:
       ``(4) Domestic.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `domestic' when applied to a corporation or 
     partnership means created or organized in the United States 
     or under the law of the United States or of any State unless, 
     in the case of a partnership, the Secretary provides 
     otherwise by regulations.
       ``(B) Inversion transactions disregarded.--
       ``(i) In general.--A corporation which would (but for this 
     subparagraph) be treated as a foreign corporation shall be 
     treated as a domestic corporation if such corporation is an 
     inverted domestic corporation.
       ``(ii) Inverted domestic corporation.--For purposes of 
     clause (i), a foreign corporation is an inverted domestic 
     corporation if, immediately after a transaction in which--

       ``(I) property is directly or indirectly transferred by a 
     domestic corporation to such foreign corporation, or
       ``(II) stock in a domestic corporation is transferred 
     directly or indirectly by its shareholders to such foreign 
     corporation,

     more than 50 percent of the stock (by vote or value) of such 
     foreign corporation is held by former shareholders of the 
     domestic corporation by reason of holding stock in such 
     domestic corporation.
       ``(iii) Regulations relating to inverted domestic 
     corporations.--The Secretary may by regulations provide that 
     clause (i) shall not apply to a foreign corporation which is 
     an inverted domestic corporation if, immediately before the 
     transaction described in clause (ii), such foreign 
     corporation was engaged in the active conduct of 1 or more 
     trades or businesses which are substantial in relation to the 
     trades or businesses which the domestic corporation described 
     in clause (ii) was engaged in the active conduct of at such 
     time.''
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years of any inverted domestic 
     corporation beginning after December 31, 2002, without regard 
     to whether the corporation became an inverted domestic 
     corporation before, on, or after such date.
                                  ____

  SA 3338. Mr. REID submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, on page 123, after line 25, add the 
     following:
       ``(v) Nonapplication of certain rules.--For purposes of 
     determining if the term `combined heat and power system 
     property' includes technologies which generate electricity or 
     mechanical power using back-pressure steam turbines in place 
     of existing pressure-reducing valves or which make use of 
     waste heat from industrial processes such as by using organic 
     rankin, stirling, or kalina heat engine systems, subparagraph 
     (A) shall be applied without regard to clauses (iii) and (iv) 
     thereof.
                                  ____

  SA 3339. Mr. DURBIN (for himself and Mr. Harkin) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and

[[Page 5662]]

for other purposes; which was ordered to lie on the table; as follows:

       At the appropriate place in Division H, insert the 
     following:

     SEC. __. ENERGY CREDIT FOR WIND ENERGY PROPERTY.

       (a) In General.--Subparagraph (A) of section 48(a)(3) 
     (defining energy property), as amended by this Act, is 
     amended by striking ``or'' at the end of clause (iii), by 
     adding ``or'' at the end of clause (iv), and by inserting 
     after clause (iv) the following new clause:
       ``(v) qualified wind energy property,''.
       (b) Qualified Wind Energy Property.--Subsection (a) of 
     section 48, as amended by this Act, is amended by 
     redesignating paragraphs (6) and (7) as paragraphs (7) and 
     (8), respectively, and by inserting after paragraph (5) the 
     following new paragraph:
       ``(6) Qualified wind energy property.--For purposes of this 
     subsection--
       ``(A) Qualified wind energy property.--The term `qualified 
     wind energy property' means a qualifying wind turbine if the 
     property carries at least a 5-year limited warranty covering 
     defects in design, material, or workmanship, and, for 
     property that is not installed by the taxpayer, at least a 5-
     year limited warranty covering defects in installation.
       ``(B) Qualifying wind turbine.--The term `qualifying wind 
     turbine' means a wind turbine of 75 kilowatts of rated 
     capacity or less which meets the latest performance rating 
     standards published by the American Wind Energy Association 
     or the International Electrotechnical Commission and which is 
     used to generate electricity.''.
       (c) No Carryback of Energy Credit Before Effective Date.--
     Subsection (d) of section 39, as amended by this Act, is 
     amended by adding at the end the following new paragraph:
       ``(20) No carryback of energy credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the energy credit with 
     respect to property described in section 48(a)(6) may be 
     carried back to a taxable year ending before January 1, 
     2003.''.
       (d) Conforming Amendments.--
       (A) Section 25C(e)(6), as added by this Act, is amended by 
     striking ``section 48(a)(6)(C)'' and inserting ``section 
     48(a)(7)(C)''.
       (B) Section 29(b)(3)(A)(i)(III), as amended by this Act, is 
     amended by striking ``section 48(a)(6)(C)'' and inserting 
     ``section 48(a)(7)(C)''.
       (C) Section 48(a)(3)(C) is amended by inserting ``(other 
     than property described in subparagraph (A)(v)),'' before 
     ``with respect''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to property placed in service or installed after 
     December 31, 2002, 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).
                                  ____

  SA 3340. Mr. DURBIN submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, on page 94, lines 18 and 19, strike ``for 
     use in such a dwelling unit''.
                                  ____

  SA 3341. Mr. DURBIN submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, on page 91, strike lines 7 and 8.
                                  ____

  SA 3342. Mr. DURBIN submitted an amendment intended to be proposed to 
amendment SA 2971 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; as follows:

       In Division H, on page 98, line 16, strike ``If'' and 
     insert ``Except in the case of qualified wind energy property 
     expenditures, if''.
                                  ____

  SA 3343. Mrs. LINCOLN (for herself, Mr. Hagel, Mr. Bond, Mr. Kerry, 
Mrs. Carnahan, Mr. Nelson of Nebraska, and Mr. Miller) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       In Division H, on page 202, between lines 17 and 18, insert 
     the following:
       ``(5) Facilities producing fuels from agricultural and 
     animal waste.--
       ``(A) In general.--In the case of facility for producing 
     liquid, gaseous, or solid fuels from qualified agricultural 
     and animal wastes, including such fuels when used as 
     feedstocks, which was placed in service after the date of the 
     enactment of this subsection and before January 1, 2005, this 
     section shall apply with respect to fuel produced at such 
     facility not later than the close of the 3-year period 
     beginning on the date such facility is placed in service.
       ``(B) Qualified agricultural and animal waste.--For 
     purposes of this paragraph, the term `qualified agricultural 
     and animal waste' means agriculture and animal waste, 
     including by-products, packaging, and any materials 
     associated with the processing, feeding, selling, 
     transporting, or disposal of agricultural or animal products 
     or wastes, including wood shavings, straw, rice hulls, and 
     other bedding for the disposition of manure.
                                  ____

  SA 3344. Mrs. LINCOLN submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, on page 216, after line 21, add the 
     following:

     SEC. __. CLARIFICATION OF EXCISE TAX EXEMPTIONS FOR 
                   AGRICULTURAL AERIAL APPLICATORS.

       (a) No Waiver by Farm Owner, Tenant, or Operator 
     Necessary.--Subparagraph (B) of section 6420(c)(4) (relating 
     to certain farming use other than by owner, etc.) is amended 
     to read as follows:
       ``(B) if the person so using the gasoline is an aerial or 
     other applicator of fertilizers or other substances and is 
     the ultimate purchaser of the gasoline, then subparagraph (A) 
     of this paragraph shall not apply and the aerial or other 
     applicator shall be treated as having used such gasoline on a 
     farm for farming purposes.''.
       (b) Exemption Includes Fuel Used Between Airfield and 
     Farm.--Section 6420(c)(4), as amended by subsection (a), is 
     amended by adding at the end the following new flush 
     sentence:

     ``For purposes of this paragraph, in the case of an aerial 
     applicator, gasoline shall be treated as used on a farm for 
     farming purposes if the gasoline is used for the direct 
     flight between the airfield and 1 or more farms.''.
       (c) Exemption From Tax on Air Transportation of Persons for 
     Forestry Purposes Extended to Fixed-Wing Aircraft.--
     Subsection (f) of section 4261 (relating to tax on air 
     transportation of persons) is amended to read as follows:
       ``(f) Exemption for Certain Uses.--No tax shall be imposed 
     under subsection (a) or (b) on air transportation--
       ``(1) by helicopter for the purpose of transporting 
     individuals, equipment, or supplies in the exploration for, 
     or the development or removal of, hard minerals, oil, or gas, 
     or
       ``(2) by helicopter or by fixed-wing aircraft for the 
     purpose of the planting, cultivation, cutting, or 
     transportation of, or caring for, trees (including logging 
     operations),

     but only if the helicopter or fixed-wing aircraft does not 
     take off from, or land at, a facility eligible for assistance 
     under the Airport and Airway Development Act of 1970, or 
     otherwise use services provided pursuant to section 44509 or 
     44913(b) or subchapter I of chapter 471 of title 49, United 
     States Code, during such use. In the case of helicopter 
     transportation described in paragraph (1), this subsection 
     shall be applied by treating each flight segment as a 
     distinct flight.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to fuel use or air transportation after December 
     31, 2001, and before January 1, 2003.
                                  ____

  SA 3345. Mr. JEFFORDS submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       (a) Extension to Small Systems.--On page 121, strike lines 
     12 through 16 and insert the following:
       ``(ii) which has an electrical capacity of no more than 15 
     megawatts or a mechanical energy capacity of no more than 
     2,000 horsepower or an equivalent combination of electrical 
     and mechanical energy capacities,''

[[Page 5663]]

       (b) Depreciation Schedule.--
       (1) On page 122, line 2, strike ``(70 percent'' and all 
     that follows through ``capacities)'' on page 122, line 8; and
       (2) On page 124, strike lines 1 through 8.
                                  ____

  SA 3346. Mr. KOHL submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, on page 17, between lines 8 and 9, insert 
     the following:

     SEC. __. CREDIT FOR ELECTRICITY PRODUCED FROM MUNICIPAL 
                   BIOSOLIDS AND RECYCLED SLUDGE.

       (a) In General.--Section 45(c)(1) (defining qualified 
     energy resources), as amended by this Act, is amended by 
     striking ``and'' at the end of subparagraph (G), by striking 
     the period at the end of subparagraph (H), and by adding at 
     the end the following new subparagraphs:
       ``(I) municipal biosolids, and
       ``(J) recycled sludge.''.
       (b) Qualified Facilities.--Section 45(c)(3) (relating to 
     qualified facility), as amended by this Act, is amended by 
     adding at the end the following new subparagraphs:
       ``(H) Municipal biosolids facility.--In the case of a 
     facility using municipal biosolids to produce electricity, 
     the term `qualified facility' means any facility owned by the 
     taxpayer which is originally placed in service after December 
     31, 2001, and before January 1, 2007.
       ``(I) Recycled sludge facility.--
       ``(i) In general.--In the case of a facility using recycled 
     sludge to produce electricity, the term `qualified facility' 
     means any facility owned by the taxpayer which is originally 
     placed in service before January 1, 2007.
       ``(ii) Special rule.--In the case of a qualified facility 
     described in clause (i), the 10-year period referred to in 
     subsection (a) shall be treated as beginning no earlier than 
     the date of the enactment of this subparagraph.''.
       (c) Definitions.--Section 45(c), as amended by this Act, is 
     amended by redesignating paragraph (9) as paragraph (11) and 
     by inserting after paragraph (8) the following new 
     paragraphs:
       ``(9) Municipal biosolids.--The term `municipal biosolids' 
     means the residue or solids removed by a municipal wastewater 
     treatment facility.
       ``(10) Recycled sludge.--
       ``(A) In general.--The term `recycled sludge' means the 
     recycled residue byproduct created in the treatment of 
     commercial, industrial, municipal, or navigational 
     wastewater.
       ``(B) Recycled.--The term `recycled' means the processing 
     of residue into a marketable product, but does not include 
     incineration for the purpose of volume reduction.''.
       (d) Exemption From Credit Reduction.--The last sentence of 
     section 45(b)(3), as added by this Act, is amended by 
     inserting ``, (c)(3)(H), or (c)(3)(I)'' after 
     ``(c)(3)(B)(i)(II)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to electricity sold after the date of the 
     enactment of this Act, in taxable years ending after such 
     date.
                                  ____

  SA 3347. Mr. INOUYE (for himself and Mr. Akaka) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       In Division H, on page 216, after line 21, add the 
     following:

     SEC. __. TREATMENT OF FACILITIES USING BAGASSE TO PRODUCE 
                   ENERGY AS SOLID WASTE DISPOSAL FACILITIES 
                   ELIGIBLE FOR TAX-EXEMPT FINANCING.

       (a) In General.--Section 142 (relating to exempt facility 
     bond) is amended by adding at the end the following:
       ``(l) Solid Waste Disposal Facilities.--For purposes of 
     subsection (a)(6), the term `solid waste disposal facilities' 
     includes property located in Hawaii and used for the disposal 
     of bagasse.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.
                                  ____

  SA 3348. Mr. INOUYE (for himself and Mr. Akaka) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       In Division H, on page 216, after line 21, add the 
     following:

     SEC. __. TREATMENT OF FACILITIES USING BAGASSE TO PRODUCE 
                   ENERGY AS SOLID WASTE DISPOSAL FACILITIES 
                   ELIGIBLE FOR TAX-EXEMPT FINANCING.

       (a) In General.--Section 142 (relating to exempt facility 
     bond) is amended by adding at the end the following:
       ``(l) Solid Waste Disposal Facilities.--For purposes of 
     subsection (a)(6), the term `solid waste disposal facilities' 
     includes property located in Hawaii and used for the disposal 
     of bagasse which has been used in the manufacture of 
     ethanol.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.
                                  ____

  SA 3349. Mr. BAUCUS submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, on page 199, lines 5 through 7, strike ``at 
     least 20 percent of the emissions of sulfur dioxide and 
     nitrogen oxide'' and insert ``at least 20 percent of the 
     emissions of nitrogen oxide and either sulfur dioxide or 
     mercury''.
                                  ____

  SA 3350. Mr. BAUCUS submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, on page 17, between lines 8 and 9, insert 
     the following:

     SEC. 1905. CREDIT FOR ELECTRICITY PRODUCED FROM SMALL 
                   IRRIGATION POWER.

       (a) In General.--Section 45(c)(1) (defining qualified 
     energy resources), as amended by this Act, is amended by 
     striking ``and'' at the end of subparagraph (F), by striking 
     the period at the end of subparagraph (G) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(H) small irrigation power.''.
       (b) Qualified Facility.--Section 45(c)(3) (relating to 
     qualified facility), as amended by this Act, is amended by 
     adding at the end the following new subparagraph:
       ``(G) Small irrigation power facility.--In the case of a 
     facility using small irrigation power to produce electricity, 
     the term `qualified facility' means any facility owned by the 
     taxpayer which is originally placed in service after date of 
     the enactment of this subparagraph and before January 1, 
     2007.''.
       (c) Definition.--Section 45(c), as amended by this Act, is 
     amended by redesignating paragraph (8) as paragraph (9) and 
     by inserting after paragraph (7) the following new paragraph:
       ``(8) Small irrigation power.--The term `small irrigation 
     power' means power--
       ``(A) generated without any dam or impoundment of water 
     through an irrigation system canal or ditch, and
       ``(B) the installed capacity of which is less than 5 
     megawatts.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to electricity sold after the date of the 
     enactment of this Act, in taxable years ending after such 
     date.
                                  ____

  SA 3351. Mr. BAUCUS submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, beginning on page 91, line 15, strike all 
     through page 95, line 17, and insert the following:
       ``(iii) $250 for each advanced natural gas furnace,
       ``(iv) $250 for each central air conditioner,
       ``(v) $75 for each natural gas water heater, and
       ``(vi) $250 for each geothermal heat pump.
       ``(2) Safety certifications.--No credit shall be allowed 
     under this section for an item of property unless--
       ``(A) in the case of solar water heating property, such 
     property is certified for performance and safety by the non-
     profit Solar

[[Page 5664]]

     Rating Certification Corporation or a comparable entity 
     endorsed by the government of the State in which such 
     property is installed,
       ``(B) in the case of a photovoltaic property, a fuel cell 
     property, or a wind energy property, such property meets 
     appropriate fire and electric code requirements, and
       ``(C) in the case of property described in subsection 
     (d)(6), such property meets the performance and quality 
     standards, and the certification requirements (if any), 
     which--
       ``(i) have been prescribed by the Secretary by regulations 
     (after consultation with the Secretary of Energy or the 
     Administrator of the Environmental Protection Agency, as 
     appropriate),
       ``(ii) in the case of the energy efficiency ratio (EER)--

       ``(I) require measurements to be based on published data 
     which is tested by manufacturers at 95 degrees Fahrenheit, 
     and
       ``(II) do not require ratings to be based on certified data 
     of the Air Conditioning and Refrigeration Institute, and

       ``(iii) are in effect at the time of the acquisition of the 
     property.
       ``(c) Carryforward of Unused Credit.--If the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by section 26(a) for such taxable year reduced by the sum of 
     the credits allowable under this subpart (other than this 
     section and section 25D), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such succeeding taxable year.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified solar water heating property expenditure.--
     The term `qualified solar water heating property expenditure' 
     means an expenditure for property to heat water for use in a 
     dwelling unit located in the United States and used as a 
     residence by the taxpayer if at least half of the energy used 
     by such property for such purpose is derived from the sun.
       ``(2) Qualified photovoltaic property expenditure.--The 
     term `qualified photovoltaic property expenditure' means an 
     expenditure for property that uses solar energy to generate 
     electricity for use in such a dwelling unit.
       ``(3) Solar panels.--No expenditure relating to a solar 
     panel or other property installed as a roof (or portion 
     thereof) shall fail to be treated as property described in 
     paragraph (1) or (2) solely because it constitutes a 
     structural component of the structure on which it is 
     installed.
       ``(4) Qualified fuel cell property expenditure.--The term 
     `qualified fuel cell property expenditure' means an 
     expenditure for qualified fuel cell property (as defined in 
     section 48(a)(4)) installed on or in connection with such a 
     dwelling unit.
       ``(5) Qualified wind energy property expenditure.--The term 
     `qualified wind energy property expenditure' means an 
     expenditure for property which uses wind energy to generate 
     electricity for use in such a dwelling unit.
       ``(6) Qualified tier 2 energy efficient building property 
     expenditure.--
       ``(A) In general.--The term `qualified Tier 2 energy 
     efficient building property expenditure' means an expenditure 
     for any Tier 2 energy efficient building property.
       ``(B) Tier 2 energy efficient building property.--The term 
     `Tier 2 energy efficient building property' means--
       ``(i) an electric heat pump water heater which yields an 
     energy factor of at least 1.7 in the standard Department of 
     Energy test procedure,
       ``(ii) an electric heat pump which has a heating seasonal 
     performance factor (HSPF) of at least 9, a seasonal energy 
     efficiency ratio (SEER) of at least 15, and an energy 
     efficiency ratio (EER) of at least 12.5,
       ``(iii) an advanced natural gas furnace which achieves at 
     least 95 percent annual fuel utilization efficiency 
     (AFUE),''.
                                  ____

  SA 3352. Mr. BAUCUS (for himself and Mr. Grassley) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       In Division H, beginning on page 64, line 1, strike all 
     through page 73, line 2, and insert the following:

     SEC. 2008. INCENTIVES FOR BIODIESEL.

       (a) Credit for Biodiesel Used as a Fuel.--
       (1) In general.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits), as amended 
     by this Act, is amended by inserting after section 40A the 
     following new section:

     ``SEC. 40B. BIODIESEL USED AS FUEL.

       ``(a) General Rule.--For purposes of section 38, the 
     biodiesel fuels credit determined under this section for the 
     taxable year is an amount equal to the biodiesel mixture 
     credit.
       ``(b) Definition of Biodiesel Mixture Credit.--For purposes 
     of this section--
       ``(1) Biodiesel mixture credit.--
       ``(A) In general.--The biodiesel mixture credit of any 
     taxpayer for any taxable year is the sum of the products of 
     the biodiesel mixture rate for each qualified biodiesel 
     mixture and the number of gallons of such mixture of the 
     taxpayer for the taxable year.
       ``(B) Biodiesel mixture rate.--For purposes of subparagraph 
     (A), the biodiesel mixture rate for each qualified biodiesel 
     mixture shall be--
       ``(i) in the case of a mixture with only biodiesel V, 1 
     cent for each whole percentage point (not exceeding 20 
     percentage points) of biodiesel V in such mixture, and
       ``(ii) in the case of a mixture with biodiesel NV, or a 
     combination of biodiesel V and biodiesel NV, 0.5 cent for 
     each whole percentage point (not exceeding 20 percentage 
     points) of such biodiesel in such mixture.
       ``(2) Qualified biodiesel mixture.--
       ``(A) In general.--The term `qualified biodiesel mixture' 
     means a mixture of diesel and biodiesel V or biodiesel NV 
     which--
       ``(i) is sold by the taxpayer producing such mixture to any 
     person for use as a fuel, or
       ``(ii) is used as a fuel by the taxpayer producing such 
     mixture.
       ``(B) Sale or use must be in trade or business, etc.--
       ``(i) In general.--Biodiesel V or biodiesel NV used in the 
     production of a qualified biodiesel mixture shall be taken 
     into account--

       ``(I) only if the sale or use described in subparagraph (A) 
     is in a trade or business of the taxpayer, and
       ``(II) for the taxable year in which such sale or use 
     occurs.

       ``(ii) Certification for biodiesel v.--Biodiesel V used in 
     the production of a qualified biodiesel mixture shall be 
     taken into account only if the taxpayer described in 
     subparagraph (A) obtains a certification from the producer of 
     the biodiesel V which identifies the product produced.
       ``(C) Casual off-farm production not eligible.--No credit 
     shall be allowed under this section with respect to any 
     casual off-farm production of a qualified biodiesel mixture.
       ``(c) Coordination With Exemption From Excise Tax.--The 
     amount of the credit determined under this section with 
     respect to any biodiesel V shall, under regulations 
     prescribed by the Secretary, be properly reduced to take into 
     account any benefit provided with respect to such biodiesel V 
     solely by reason of the application of section 4041(n) or 
     section 4081(f).
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Biodiesel v defined.--The term `biodiesel V' means 
     the monoalkyl esters of long chain fatty acids derived solely 
     from virgin vegetable oils for use in compressional-ignition 
     (diesel) engines. Such term shall include esters derived from 
     vegetable oils from corn, soybeans, sunflower seeds, 
     cottonseeds, canola, crambe, rapeseeds, safflowers, 
     flaxseeds, rice bran, and mustard seeds.
       ``(2) Biodiesel nv defined.--The term `biodiesel nv' means 
     the monoalkyl esters of long chain fatty acids derived from 
     nonvirgin vegetable oils or animal fats for use in 
     compressional-ignition (diesel) engines.
       ``(3) Registration requirements.--The terms `biodiesel V' 
     and `biodiesel NV' shall only include a biodiesel which 
     meets--
       ``(i) 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), and
       ``(ii) the requirements of the American Society of Testing 
     and Materials D6751.
       ``(2) Biodiesel mixture not used as a fuel, etc.--
       ``(A) Imposition of tax.--If--
       ``(i) any credit was determined under this section with 
     respect to biodiesel V or biodiesel NV used in the production 
     of any qualified biodiesel mixture, and
       ``(ii) any person--

       ``(I) separates such biodiesel from the mixture, or
       ``(II) without separation, uses the mixture other than as a 
     fuel,

     then there is hereby imposed on such person a tax equal to 
     the product of the biodiesel mixture rate applicable under 
     subsection (b)(1)(B) and the number of gallons of the 
     mixture.
       ``(B) Applicable laws.--All provisions of law, including 
     penalties, shall, insofar as applicable and not inconsistent 
     with this section, apply in respect of any tax imposed under 
     subparagraph (A) as if such tax were imposed by section 4081 
     and not by this chapter.
       ``(3) Pass-thru in the case of estates and trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(e) Election To Have Biodiesel Fuels Credit Not Apply.--
       ``(1) In general.--A taxpayer may elect to have this 
     section not apply for any taxable year.
       ``(2) Time for making election.--An election under 
     paragraph (1) for any taxable year may be made (or revoked) 
     at any time before the expiration of the 3-year period 
     beginning on the last date prescribed by law for filing the 
     return for such taxable year (determined without regard to 
     extensions).
       ``(3) Manner of making election.--An election under 
     paragraph (1) (or revocation

[[Page 5665]]

     thereof) shall be made in such manner as the Secretary may by 
     regulations prescribe.''.
       ``(f) Termination.--This section shall not apply to any 
     fuel sold after December 31, 2005.''.
       (2) Credit treated as part of general business credit.--
     Section 38(b), as amended by this Act, is amended by striking 
     ``plus'' at the end of paragraph (15), by striking the period 
     at the end of paragraph (16) and inserting ``, plus'', and by 
     adding at the end the following new paragraph:
       ``(17) the biodiesel fuels credit determined under section 
     40B(a).''.
       (3) Conforming amendments.--
       (A) Section 39(d), as amended by this Act, is amended by 
     adding at the end the following new paragraph:
       ``(12) No carryback of biodiesel fuels credit before 
     january 1, 2003.--No portion of the unused business credit 
     for any taxable year which is attributable to the biodiesel 
     fuels credit determined under section 40B may be carried back 
     to a taxable year beginning before January 1, 2003.''.
       (B) Section 196(c) is amended by striking ``and'' at the 
     end of paragraph (9), by striking the period at the end of 
     paragraph (10), and by adding at the end the following new 
     paragraph:
       ``(11) the biodiesel fuels credit determined under section 
     40B(a).''.
       (C) Section 6501(m), as amended by this Act, is amended by 
     inserting ``40B(e),'' after ``40(f),''.
       (D) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by adding after the item relating to section 40A the 
     following new item:

``Sec. 40B. Biodiesel used as fuel.''.

       (4) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2002.
       (b) Reduction of Motor Fuel Excise Taxes on Biodiesel V 
     Mixtures.--
       (1) In general.--Section 4081 (relating to manufacturers 
     tax on petroleum products) is amended by adding at the end 
     the following new subsection:
       ``(f) Biodiesel V Mixtures.--Under regulations prescribed 
     by the Secretary--
       ``(1) In general.--In the case of the removal or entry of a 
     qualified biodiesel mixture with biodiesel V, the rate of tax 
     under subsection (a) shall be the otherwise applicable rate 
     reduced by the biodiesel mixture rate (if any) applicable to 
     the mixture.
       ``(2) Tax prior to mixing.--
       ``(A) In general.--In the case of the removal or entry of 
     diesel fuel for use in producing at the time of such removal 
     or entry a qualified biodiesel mixture with biodiesel V, the 
     rate of tax under subsection (a) shall be the rate determined 
     under subparagraph (B).
       ``(B) Determination of rate.--For purposes of subparagraph 
     (A), the rate determined under this subparagraph is the rate 
     determined under paragraph (1), divided by a percentage equal 
     to 100 percent minus the percentage of biodiesel V which will 
     be in the mixture.
       ``(3) Definitions.--For purposes of this subsection, any 
     term used in this subsection which is also used in section 
     40B shall have the meaning given such term by section 40B.
       ``(4) Certain rules to apply.--Rules similar to the rules 
     of paragraphs (6) and (7) of subsection (c) shall apply for 
     purposes of this subsection.''.
       (2) Conforming amendments.--
       (A) Section 4041 is amended by adding at the end the 
     following new subsection:
       ``(n) Biodiesel V Mixtures.--Under regulations prescribed 
     by the Secretary, in the case of the sale or use of a 
     qualified biodiesel mixture (as defined in section 40B(b)(2)) 
     with biodiesel V, the rates under paragraphs (1) and (2) of 
     subsection (a) shall be the otherwise applicable rates, 
     reduced by any applicable biodiesel mixture rate (as defined 
     in section 40B(b)(1)(B)).''.
       (B) Section 6427 is amended by redesignating subsection (p) 
     as subsection (q) and by inserting after subsection (o) the 
     following new subsection:
       ``(p) Biodiesel V Mixtures.--Except as provided in 
     subsection (k), if any diesel fuel on which tax was imposed 
     by section 4081 at a rate not determined under section 
     4081(f) is used by any person in producing a qualified 
     biodiesel mixture (as defined in section 40B(b)(2)) with 
     biodiesel V which is sold or used in such person's trade or 
     business, the Secretary shall pay (without interest) to such 
     person an amount equal to the per gallon applicable biodiesel 
     mixture rate (as defined in section 40B(b)(1)(B)) with 
     respect to such fuel.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to any fuel sold after December 31, 2002, and 
     before January 1, 2006.
       (c) Highway Trust Fund Held Harmless.--There are hereby 
     transferred (from time to time) from the funds of the 
     Commodity Credit Corporation amounts determined by the 
     Secretary of the Treasury to be equivalent to the reductions 
     that would occur (but for this subsection) in the receipts of 
     the Highway Trust Fund by reason of the amendments made by 
     this section.
                                  ____

  SA 3353. Mr. BAUCUS (for himself, Mr. Grassley, Mr. Bingaman, and Mr. 
Murkowski) submitted an amendment intended to be proposed to amendment 
SA 2917 proposed by Mr. Daschle (for himself and Mr. Bingaman) to the 
bill (S. 517) to authorize funding the Department of Energy to enhance 
its mission areas through technology transfer and partnerships for 
fiscal years 2002 through 2006, and for other purposes; which was 
ordered to lie on the table; as follows:

       In Division H, on page 215, between lines 10 and 11, insert 
     the following:

     SEC. 2404. SALES OR DISPOSITIONS TO IMPLEMENT FEDERAL ENERGY 
                   REGULATORY COMMISSION OR STATE ELECTRIC 
                   RESTRUCTURING POLICY.

       (a) In General.--Section 451 (relating to general rule for 
     taxable year of inclusion) is amended by adding at the end 
     the following new subsection:
       ``(i) Special Rule for Sales or Dispositions To Implement 
     Federal Energy Regulatory Commission or State Electric 
     Restructuring Policy.--
       ``(1) In general.--For purposes of this subtitle, if a 
     taxpayer elects the application of this subsection to a 
     qualifying electric transmission transaction in any taxable 
     year--
       ``(A) any ordinary income derived from such transaction 
     which would be required to be recognized under section 1245 
     or 1250 for such taxable year (determined without regard to 
     this subsection), and
       ``(B) any income derived from such transaction in excess of 
     such ordinary income which is required to be included in 
     gross income for such taxable year,

     shall be so recognized and included ratably over the 8-
     taxable year period beginning with such taxable year.
       ``(2) Qualifying electric transmission transaction.--For 
     purposes of this subsection, the term `qualifying electric 
     transmission transaction' means any sale or other disposition 
     before January 1, 2007, of--
       ``(A) property used by the taxpayer in the trade or 
     business of providing electric transmission services, or
       ``(B) any stock or partnership interest in a corporation or 
     partnership, as the case may be, whose principal trade or 
     business consists of providing electric transmission 
     services,

     but only if such sale or disposition is to an independent 
     transmission company.
       ``(3) Independent transmission company.--For purposes of 
     this subsection, the term `independent transmission company' 
     means--
       ``(A) a regional transmission organization approved by the 
     Federal Energy Regulatory Commission,
       ``(B) a person--
       ``(i) who the Federal Energy Regulatory Commission 
     determines in its authorization of the transaction under 
     section 203 of the Federal Power Act (16 U.S.C. 824b) is not 
     a market participant within the meaning of such Commission's 
     rules applicable to regional transmission organizations, and
       ``(ii) whose transmission facilities to which the election 
     under this subsection applies are under the operational 
     control of a Federal Energy Regulatory Commission-approved 
     regional transmission organization before the close of the 
     period specified in such authorization, but not later than 
     the close of the period applicable under paragraph (1), or
       ``(C) in the case of facilities subject to the exclusive 
     jurisdiction of the Public Utility Commission of Texas, a 
     person which is approved by that Commission as consistent 
     with Texas State law regarding an independent transmission 
     organization.
       ``(4) Election.--An election under paragraph (1), once 
     made, shall be irrevocable.
       ``(5) Nonapplication of installment sales treatment.--
     Section 453 shall not apply to any qualifying electric 
     transmission transaction with respect to which an election to 
     apply this subsection is made.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to transactions occurring after the date of the 
     enactment of this Act.
                                  ____

  SA 3354. Mr. CONRAD (for himself and Mr. Dorgan) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       In Division H, on page 202, between lines 23 and 23, insert 
     the following:
       (b) Extension for Certain Fuel Produced at Existing 
     Facilities.--Paragraph (2) of section 29(f) (relating to 
     application of section) is amended by inserting ``(January 1, 
     2008, in the case of qualified fuel described in subsection 
     (c)(1)(C))'' after ``January 1, 2003''.
                                  ____

  SA 3355. Mr. CONRAD (for himself, Mr. Smith of New Hampshire, and Mr. 
Dorgan) submitted an amendment intended to be proposed to amendment SA 
2917 proposed by Mr. Daschle (for himself and Mr. Bingaman) to the bill

[[Page 5666]]

(S. 517) to authorize funding the Department of Energy to enhance its 
mission areas through technology transfer and partnerships for fiscal 
years 2002 through 2006, and for other purposes; which was ordered to 
lie on the table; as follows:

       In Division H, beginning on page 103, line 1, strike all 
     through page 105, line 12, and insert the following:

     SEC. 2104. CREDIT FOR BUSINESS INSTALLATION OF QUALIFIED FUEL 
                   CELLS AND STATIONARY MICROTURBINE POWER PLANTS.

       (a) In General.--Subparagraph (A) of section 48(a)(3) 
     (defining energy property) is amended by striking ``or'' at 
     the end of clause (i), by adding ``or'' at the end of clause 
     (ii), and by inserting after clause (ii) the following new 
     clause:
       ``(iii) qualified fuel cell property or qualified 
     microturbine property,''.
       (b) Qualified Fuel Cell Property; Qualified Microturbine 
     Property.--Subsection (a) of section 48 is amended by 
     redesignating paragraphs (4) and (5) as paragraphs (5) and 
     (6), respectively, and by inserting after paragraph (3) the 
     following new paragraph:
       ``(4) Qualified fuel cell property; qualified microturbine 
     property.--For purposes of this subsection--
       ``(A) Qualified fuel cell property.--
       ``(i) In general.--The term `qualified fuel cell property' 
     means a fuel cell power plant that--

       ``(I) generates at least 1 kilowatt of electricity using an 
     electrochemical process, and
       ``(II) has an electricity-only generation efficiency 
     greater than 30 percent.

       ``(ii) Limitation.--In the case of qualified fuel cell 
     property placed in service during the taxable year, the 
     credit determined under paragraph (1) for such year with 
     respect to such property shall not exceed an amount equal to 
     the lesser of--

       ``(I) 30 percent of the basis of such property, or
       ``(II) $1,000 for each kilowatt of capacity of such 
     property.

       ``(iii) Fuel cell power plant.--The term `fuel cell power 
     plant' means an integrated system comprised of a fuel cell 
     stack assembly and associated balance of plant components 
     that converts a fuel into electricity using electrochemical 
     means.
       ``(iv) Termination.--Such term shall not include any 
     property placed in service after December 31, 2007.
       ``(B) Qualified microturbine property.--
       ``(i) In general.--The term ``qualified microturbine 
     property' means a stationary microturbine power plant which 
     has an electricity-only generation efficiency not less than 
     26 percent at International Standard Organization conditions.
       ``(ii) Limitation.--In the case of qualified microturbine 
     property placed in service during the taxable year, the 
     credit determined under paragraph (1) for such year with 
     respect to such property shall not exceed an amount equal to 
     the lesser of--

       ``(I) 10 percent of the basis of such property, or
       ``(II) $200 for each kilowatt of capacity of such property.

       ``(iii) Stationary microturbine power plant.--The term 
     `stationary microturbine power plant means a system 
     comprising of a rotary engine which is actuated by the 
     aerodynamic reaction or impulse or both on radial or axial 
     curved full-circumferential-admission airfoils on a central 
     axial rotating spindle. Such system--

       ``(I) commonly includes an air compressor, combustor, gas 
     pathways which lead compressed air to the combustor and which 
     lead hot combusted gases from the combustor to 1 or more 
     rotating turbine spools, which in turn drive the compressor 
     and power output shaft,
       ``(II) includes a fuel compressor, recuperator/regenerator, 
     generator or alternator, integrated combined cycle equipment, 
     cooling-heating-and-power equipment, sound attenuation 
     apparatus, and power conditioning equipment, and
       ``(III) includes all secondary components located between 
     the existing infrastructure for fuel delivery and the 
     existing infrastructure for power distribution, including 
     equipment and controls for meeting relevant power standards, 
     such as voltage, frequency, and power factors.

       ``(iv) Termination.--Such term shall not include any 
     property placed in service after December 31, 2006.''.
       (c) Limitation.--Section 48(a)(2)(A) (relating to energy 
     percentage) is amended to read as follows:
       ``(A) In general.--The energy percentage is--
       ``(i) in the case of qualified fuel cell property, 30 
     percent, and
       ``(ii) in the case of any other energy property, 10 
     percent.''.
       (d) Conforming Amendments.--
       (A) Section 29(b)(3)(A)(i)(III) is amended by striking 
     ``section 48(a)(4)(C)'' and inserting ``section 
     48(a)(5)(C)''.
       (B) Section 48(a)(1) is amended by inserting ``except as 
     provided in subparagraph (A)(ii) or (B)(ii) of paragraph 
     (4),'' before ``the energy''.
       (e) Effective Date.--The amendments made by this subsection 
     shall apply to property placed in service after December 31, 
     2002, 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).
                                  ____

  SA 3356. Mr. HOLLINGS submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, on page 215, between lines 10 and 11, insert 
     the following:

     SEC. 2405. APPLICATION OF TEMPORARY REGULATIONS TO CERTAIN 
                   OUTPUT CONTRACTS.

       In the application of section 1-141-7(c)(4) of the Treasury 
     Temporary Regulations to output contracts entered into after 
     February 22, 1998, with respect to an issuer participating in 
     open access with respect to the issuer's transmission 
     facilities, an output contract in existence on or before such 
     date that is amended after such date shall be treated as a 
     contract entered into after such date only if the amendment 
     increases the amount of output sold under such contract by 
     extending the term of the contract or increasing the amount 
     of output sold, but such treatment as a contract entered into 
     after such date shall begin on the effective date of the 
     amendment and shall apply only with respect to the increased 
     output to be provided under such contract.
                                  ____

  SA 3357. Mr. ROCKEFELLER (for himself, Mrs. Carnahan, and Mr. Bond) 
submitted an amendment intended to be proposed by him to the bill S. 
517, to authorize funding the Department of Energy to enhance its 
mission areas through technology transfer and partnerships for fiscal 
years 2002 through 2006, and for other purposes; which was ordered to 
lie on the table; as follows:

       At the appropriate place insert the following:

     SEC. __. CREDIT FOR ENERGY EFFICIENT VENDING MACHINES.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business-related credits), as amended 
     by this Act, is amended by adding at the end the following 
     new section:

     ``SEC. 45K. ENERGY EFFICIENT VENDING MACHINE CREDIT.

       ``(a) General Rule.--For purposes of section 38, the energy 
     efficient vending machine credit determined under this 
     section for the taxable year is an amount equal to $75, 
     multiplied by the number of qualified energy efficient 
     vending machines purchased by the taxpayer during the 
     calendar year ending with or within the taxable year.
       ``(b) Qualified Energy Efficient Vending Machine.--For 
     purposes of this section, the term `qualified energy 
     efficient vending machine' means a refrigerated bottled or 
     canned beverage vending machine which--
       ``(1) has a capacity of at least 500 bottles or cans, and
       ``(2) consumes not more than 8.66 kWh per day of 
     electricity based on ASHRAE Standard 32.1-1997.
       ``(c) Verification.--The taxpayer shall submit such 
     information or certification as the Secretary determines 
     necessary to claim the credit amount under subsection (a).
       ``(d) Termination.--This section shall not apply with 
     respect to vending machines purchased in calendar years 
     beginning after December 31, 2005.''.
       (b) Limitation on Carryback.--Section 39(d) (relating to 
     transition rules), as amended by this Act, is amended by 
     adding at the end the following new paragraph:
       ``(20) No carryback of energy efficient vending machine 
     credit before effective date.--No portion of the unused 
     business credit for any taxable year which is attributable to 
     the energy efficient vending machine credit determined under 
     section 45K may be carried to a taxable year ending before 
     January 1, 2003.''.
       (c) Conforming Amendment.--Section 38(b) (relating to 
     general business credit), as amended by this Act, is amended 
     by striking ``plus'' at the end of paragraph (22), by 
     striking the period at the end of paragraph (23) and 
     inserting ``, plus'', and by adding at the end the following 
     new paragraph:
       ``(24) the energy efficient vending machine credit 
     determined under section 45K(a).''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45K. Energy efficient vending machine credit.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2002.
                                  ____

  SA 3358. Mr. ROCKEFELLER (for himself, Mr. Allen, Mr. Specter,  and 
Mr. Warner) submitted an amendment

[[Page 5667]]

intended to be proposed by him to the bill S. 517, to authorize funding 
the Department of Energy to enhance its mission areas through 
technology transfer and partnerships for fiscal years 2002 through 
2006, and for other purposes; which was ordered to lie on the table; as 
follows:

       At the appropriate place insert the following:

     SEC. __. CREDIT FOR RECYCLING CERTAIN COAL COMBUSTION WASTE 
                   MATERIALS.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits), as amended 
     by this Act, is amended by adding at the end the following 
     new section:

     ``SEC. 45K. CREDIT FOR RECYCLING CERTAIN COAL COMBUSTION 
                   WASTE MATERIALS.

       ``(a) Allowance of Credit.--For purposes of section 38, the 
     credit for recycling certain coal combustion waste materials 
     used by the taxpayer in qualifying production under this 
     section for any taxable year is equal to the sum of--
       ``(1) $6.00 for each wet ton of--
       ``(A) wet flue gas desulfurization sludge cake, and
       ``(B) any other wet waste material identified by the 
     Secretary of Energy, plus
       ``(2) $4.00 for each dry ton of--
       ``(A) dry flue gas desulfurization and fluidized bed 
     combustion waste material, and
       ``(B) any other dry waste material identified by the 
     Secretary of Energy.
       ``(b) Certain Coal Combustion Waste Materials Defined.--For 
     purposes of this section, the term `certain coal combustion 
     waste materials' means any solid waste material generated 
     using a sulfur dioxide emission control system and derived 
     from the combustion of coal in connection with the generation 
     of electricity or steam, including--
       ``(1) wet flue gas desulfurization sludge cake,
       ``(2) dry flue gas desulfurization and fluidized bed 
     combustion waste material, and
       ``(3) any other coal combustion waste material identified 
     by the Secretary of Energy as wet waste or dry waste material 
     attributable to the use of a sulfur dioxide emission control 
     system.
       ``(c) Qualifying Production.--For purposes of this 
     section--
       ``(1) In general.--The term `qualifying production' means 
     the use of certain coal combustion waste materials by the 
     taxpayer as substantial raw materials in the manufacture of 
     commercially saleable products which are--
       ``(A) manufactured in a qualifying facility,
       ``(B) sold by the taxpayer, and
       ``(C) not used in a landfill application.
       ``(2) Substantial use and manufacturing requirement.--
     Certain coal combustion waste materials shall not be deemed 
     to constitute substantial raw materials used in the 
     manufacture of commercially saleable products unless such 
     waste materials--
       ``(A) constitute at least 35 percent of the weight of the 
     commercially saleable manufactured products, determined on a 
     dry weight basis, and
       ``(B) undergo a physical and chemical change in the course 
     of the manufacturing process.
       ``(3) Unrelated person sale or use requirement.--The 
     taxpayer shall not be deemed to have engaged in qualifying 
     production with respect to certain coal combustion waste 
     materials used in manufacturing a product until--
       ``(A) the taxable year in which the taxpayer sells such 
     product to an unrelated person, or
       ``(B) if such product is sold to a related person, the 
     taxable year in which the related person--
       ``(i) resells such product to an unrelated person, or
       ``(ii) consumes or provides such product in the performance 
     of services to an unrelated person.
       ``(4) Qualifying facility.--
       ``(A) In general.--The term `qualifying facility' means a 
     manufacturing facility which--
       ``(i) is located within the United States (within the 
     meaning of section 638(1)) or within a possession of the 
     United States (within the meaning of section 638(2)), and
       ``(ii) is placed in service after December 31, 2001.
       ``(B) 10 year limit.--A facility shall cease to be a 
     qualifying facility on the date which is the tenth 
     anniversary of the date on which the facility was placed in 
     service.
       ``(5) Dry weight measurement.--For purposes of paragraph 
     (2)(A), dry weight shall be determined by excluding the 
     weight of all water in the materials used in the manufacture 
     of the products.
       ``(d) Other Definitions and Special Rules.--For purposes of 
     this section --
       ``(1) Wet ton.--The term `wet ton' shall mean the weight of 
     the desulfurization sludge cake (and any other wet waste 
     material) after adjusting the water content of the cake (and 
     other wet waste material) to not greater than 50 percent of 
     the total weight.
       ``(2) Dry ton.--The term `dry ton' shall mean the weight of 
     the dry flue gas desulfurization and fluidized bed combustion 
     waste material (and any other dry waste material) after 
     adjusting the water content of the material (and other dry 
     waste material) to not greater than 2 percent of the total 
     weight.
       ``(3) Related persons.--Persons shall be treated as related 
     to each other if such persons would be treated as a single 
     employer under the regulations prescribed under section 
     52(b).
       ``(4) Pass-through in the case of estates and trusts.--
     Under regulations prescribed by the Secretary, rules similar 
     to the rules of subsection (d) of section 52 shall apply.''.
       (b) Credit Treated as a Business Credit.--Section 38(b), as 
     amended by this Act, is amended by striking ``plus'' at the 
     end of paragraph (22), by striking the period at the end of 
     paragraph (23) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(24) the credit for recycling certain coal combustion 
     waste materials determined under section 45K(a).''.
       (c) Transitional Rule.--Section 39(d), as amended by this 
     Act, is amended by adding at the end the following new 
     paragraph:
       ``(20) No carryback of section 45k credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the credit for 
     recycling certain coal combustion waste materials determined 
     under section 45K may be carried back to a taxable year 
     ending before January 1, 2002.''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end of the following new 
     item:

``Sec. 45K. Credit for recycling certain coal combustion waste 
              materials.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
                                  ____

  SA 3359. Mr. BINGAMAN submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; as follows:

       In Division H, on page 74, line 16, strike ``Code'' and 
     insert ``Code, or a qualifying new home which is a 
     manufactured home which meets the applicable standards of the 
     Energy Star program managed jointly by the Environmental 
     Protection Agency and the Department of Energy''.
                                  ____

  SA 3360. Mr. TORRICELLI submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, on page 137, between lines 7 and 8, insert 
     the following:

     SEC. __. ALLOWANCE OF DEDUCTION FOR QUALIFIED NEW OR 
                   RETROFITTED WATER SUBMETERING DEVICES.

       (a) In General.--Part VI of subchapter B of chapter 1 
     (relating to itemized deductions for individuals and 
     corporations), as amended by this Act, is amended by 
     inserting after section 179D the following new section:

     ``SEC. 179E. DEDUCTION FOR QUALIFIED NEW OR RETROFITTED WATER 
                   SUBMETERING DEVICES.

       ``(a) Allowance of Deduction.--In the case of a taxpayer 
     who is an eligible resupplier, there shall be allowed as a 
     deduction an amount equal to the cost of each qualified water 
     submetering device placed in service during the taxable year.
       ``(b) Maximum Deduction.--The deduction allowed by this 
     section with respect to each qualified water submetering 
     device shall not exceed $30.
       ``(c) Eligible Resupplier.--For purposes of this section, 
     the term `eligible resupplier' means any taxpayer who 
     purchases and installs qualified water submetering devices in 
     every unit in any multi-unit property.
       ``(d) Qualified Water Submetering Device.--The term 
     `qualified water submetering device' means any tangible 
     property to which section 168 applies if such property is a 
     submetering device (including ancillary equipment)--
       ``(1) which is purchased and installed by the taxpayer to 
     enable consumers to manage their purchase or use of water in 
     response to water price and usage signals, and
       ``(2) which permits reading of water price and usage 
     signals on at least a daily basis.
       ``(e) Property Used Outside the United States Not 
     Qualified.--No deduction shall be allowed under subsection 
     (a) with respect to property which is used predominantly 
     outside the United States or with respect to the portion of 
     the cost of any property taken into account under section 
     179.
       ``(f) Basis Reduction.--
       ``(1) In general.--For purposes of this title, the basis of 
     any property shall be reduced by the amount of the deduction 
     with

[[Page 5668]]

     respect to such property which is allowed by subsection (a).
       ``(2) Ordinary income recapture.--For purposes of section 
     1245, the amount of the deduction allowable under subsection 
     (a) with respect to any property that is of a character 
     subject to the allowance for depreciation shall be treated as 
     a deduction allowed for depreciation under section 167.
       ``(g) Termination.--This section shall not apply to any 
     property placed in service after December 31, 2007.''.
       (b) Conforming Amendments.--
       (1) Section 263(a)(1), as amended by this Act, is amended 
     by striking ``or'' at the end of subparagraph (J), by 
     striking the period at the end of subparagraph (K) and 
     inserting ``, or'', and by inserting after subparagraph (K) 
     the following new subparagraph:
       ``(L) expenditures for which a deduction is allowed under 
     section 179E.''.
       (2) Section 312(k)(3)(B), as amended by this Act, is 
     amended by striking ``or 179D'' each place it appears in the 
     heading and text and inserting ``, 179D, or 179E''.
       (3) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (34), by striking 
     the period at the end of paragraph (35) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(36) to the extent provided in section 179E(f)(1).''.
       (4) Section 1245(a), as amended by this Act, is amended by 
     inserting ``179E,'' after ``179D,'' both places it appears in 
     paragraphs (2)(C) and (3)(C).
       (5) The table of contents for subpart B of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 179D the 
     following new item:

``Sec. 179E. Deduction for qualified new or retrofitted water 
              submetering devices.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to qualified water submetering devices placed in 
     service after the date of the enactment of this Act, in 
     taxable years ending after such date.

     SEC. __. THREE-YEAR APPLICABLE RECOVERY PERIOD FOR 
                   DEPRECIATION OF QUALIFIED WATER SUBMETERING 
                   DEVICES.

       (a) In General.--Subparagraph (A) of section 168(e)(3) 
     (relating to classification of property) 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) any qualified water submetering device.''.
       (b) Definition of Qualified Water Submetering Device.--
     Section 168(i) (relating to definitions and special rules), 
     as amended by this Act, is amended by inserting at the end 
     the following new paragraph:
       ``(16) Qualified water submetering device.--The term 
     `qualified water submetering device' means any qualified 
     water submetering device (as defined in section 179E(d)) 
     which is placed in service before January 1, 2008, by a 
     taxpayer who is an eligible resupplier (as defined in section 
     179E(c)).''.
       (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.
                                  ____

  SA 3361. Mr. KERRY (for himself and Mr. Bingaman) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       In Division H, beginning on page 91, line 9, strike all 
     through page 96, line 3, and insert the following:
       ``(E) for property described in subsection (d)(6)--
       ``(i) $150 for each electric heat pump water heater,
       ``(ii) $250 for each electric heat pump,
       ``(iii) $125 for each natural gas or propane furnace,
       ``(iv) $250 for each central air conditioner,
       ``(v) $150 for each advanced natural gas water heater,
       ``(vi) $250 for each geothermal heat pump,
       ``(vii) $50 for each main air circulating fan in a natural 
     gas, propane, or oil-fired furnace,
       ``(viii) $50 for each natural gas water heater,
       ``(ix) $150 for each advanced combination space and water 
     heating system, and
       ``(x) $50 for each combination space and water heating 
     system.
       ``(2) Safety certifications.--No credit shall be allowed 
     under this section for an item of property unless--
       ``(A) in the case of solar water heating property, such 
     property is certified for performance and safety by the non-
     profit Solar Rating Certification Corporation or a comparable 
     entity endorsed by the government of the State in which such 
     property is installed,
       ``(B) in the case of a photovoltaic property, a fuel cell 
     property, or a wind energy property, such property meets 
     appropriate fire and electric code requirements, and
       ``(C) in the case of property described in subsection 
     (d)(6), such property meets the performance and quality 
     standards, and the certification requirements (if any), 
     which--
       ``(i) have been prescribed by the Secretary by regulations 
     (after consultation with the Secretary of Energy or the 
     Administrator of the Environmental Protection Agency, as 
     appropriate),
       ``(ii) in the case of the energy efficiency ratio (EER)--

       ``(I) require measurements to be based on published data 
     which is tested by manufacturers at 95 degrees Fahrenheit, 
     and
       ``(II) do not require ratings to be based on certified data 
     of the Air Conditioning and Refrigeration Institute, and

       ``(iii) are in effect at the time of the acquisition of the 
     property.
       ``(c) Carryforward of Unused Credit.--If the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by section 26(a) for such taxable year reduced by the sum of 
     the credits allowable under this subpart (other than this 
     section and section 25D), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such succeeding taxable year.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified solar water heating property expenditure.--
     The term `qualified solar water heating property expenditure' 
     means an expenditure for property to heat water for use in a 
     dwelling unit located in the United States and used as a 
     residence by the taxpayer if at least half of the energy used 
     by such property for such purpose is derived from the sun.
       ``(2) Qualified photovoltaic property expenditure.--The 
     term `qualified photovoltaic property expenditure' means an 
     expenditure for property that uses solar energy to generate 
     electricity for use in such a dwelling unit.
       ``(3) Solar panels.--No expenditure relating to a solar 
     panel or other property installed as a roof (or portion 
     thereof) shall fail to be treated as property described in 
     paragraph (1) or (2) solely because it constitutes a 
     structural component of the structure on which it is 
     installed.
       ``(4) Qualified fuel cell property expenditure.--The term 
     `qualified fuel cell property expenditure' means an 
     expenditure for qualified fuel cell property (as defined in 
     section 48(a)(4)) installed on or in connection with such a 
     dwelling unit.
       ``(5) Qualified wind energy property expenditure.--The term 
     `qualified wind energy property expenditure' means an 
     expenditure for property which uses wind energy to generate 
     electricity for use in such a dwelling unit.
       ``(6) Qualified tier 2 energy efficient building property 
     expenditure.--
       ``(A) In general.--The term `qualified Tier 2 energy 
     efficient building property expenditure' means an expenditure 
     for any Tier 2 energy efficient building property.
       ``(B) Tier 2 energy efficient building property.--The term 
     `Tier 2 energy efficient building property' means--
       ``(i) an electric heat pump water heater which yields an 
     energy factor of at least 1.7 in the standard Department of 
     Energy test procedure,
       ``(ii) an electric heat pump which has a heating seasonal 
     performance factor (HSPF) of at least 9, a seasonal energy 
     efficiency ratio (SEER) of at least 15, and an energy 
     efficiency ratio (EER) of at least 12.5,
       ``(iii) a natural gas or propane furnace which achieves at 
     least 95 percent annual fuel utilization efficiency (AFUE),
       ``(iv) a central air conditioner which has a seasonal 
     energy efficiency ratio (SEER) of at least 15 and an energy 
     efficiency ratio (EER) of at least 12.5,
       ``(v) an advanced natural gas water heater which has an 
     energy factor of at least 0.80 in the standard Department of 
     Energy test procedure,
       ``(vi) a geothermal heat pump which has an energy 
     efficiency ratio (EER) of at least 21,
       ``(vii) a main air circulating fan in a natural gas, 
     propane, or oil-fired furnace using a brushless permanent 
     motor, or another type of motor which achieves similar or 
     greater efficiency at half and full speed, as determined by 
     the Secretary,
       ``(viii) a natural gas water heater which is not described 
     in clause (v) and which has an energy factor of at least 0.65 
     in the standard Department of Energy test procedure,
       ``(ix) an advanced combination space and water heating 
     system which has a combined energy factor of at least .80 in 
     the standard Department of Energy test procedure, and
       ``(x) a combination space and water heating system which is 
     not described in clause (ix) and which has a combined energy 
     factor of at least .65 in the standard Department of Energy 
     test procedure and achieves at least 78 percent combined 
     annual fuel utilization efficiency (AFUE).''.
                                  ____

  SA 3362. Mr. MURKOWSKI submitted an amendment intended to be proposed

[[Page 5669]]

to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place insert the following:

     SEC.  . MODIFICATION OF RURAL AIRPORT DEFINITION.

       (a) In General.--Clause (ii) of section 4261(e)(1(B) 
     (defining rural airport) is amended by striking the period at 
     the end of subclause (II) and inserting ``, or'' and by 
     adding at the end the following new subclause:
       ``(III) is not connected by paved roads to another 
     airport''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to calendar years beginning after 2002.
                                  ____

  SA 3363. Mr. MURKOWSKI submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place insert the following:

     SEC.  . EXEMPTION FROM TICKET TAXES FOR TRANSPORTATION 
                   PROVIDED BY SEA PLANES.

       (a) The taxes imposed by sections 4261 and 4271 shall not 
     apply to transportation by a seaplane with respect to any 
     segment consisting of a takeoff from, and a landing on, 
     water.
       (b) Effective Date.--The amendments made by this section 
     shall apply to calendar years beginning after 2002.
                                  ____

  SA 3364. Mr. THOMAS submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, on page 215, between lines 10 and 11, insert 
     the following:

     SEC. __. TREATMENT OF CERTAIN DEVELOPMENT INCOME OF 
                   COOPERATIVES.

       (a) In General.--Subparagraph (C) of section 501(c)(12), as 
     amended by this Act, is amended by striking ``or'' at the end 
     of clause (iv), by striking the period at the end of clause 
     (v) and insert ``, or'', and by adding at the end the 
     following new clause:
       ``(vi) from the receipt before January 1, 2007, of any 
     money, property, capital, or any other contribution in aid of 
     construction or connection charge intended to facilitate the 
     provision of electric service for the purpose of developing 
     qualified fuels from nonconventional sources (within the 
     meaning of section 29).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                  ____

  SA 3365. Mr. DOMENICI submitted an amendment intended to be proposed 
by him to the bill S. 517, to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 202, between lines 17 and 18, insert the following:
       ``(5) Facilities producing oil or gas on indian lands, 
     including lands owned and held by alaska native village 
     corporations and regional corporations under the alaska 
     native claims settlement act.--
       ``(A) In general.--In the case of facility for producing 
     Indian oil or gas which was placed in service after the date 
     of the enactment of this subsection and before January 1, 
     2007, this section shall apply with respect to Indian oil or 
     gas produced at such facility not later than the close of the 
     5-year period beginning on the date such facility is placed 
     in service.
       ``(B) Indian oil or gas.--For purposes of this paragraph--
       ``(i) In general.--The term `Indian oil or gas' means oil 
     or gas which is produced from Indian lands.
       ``(ii) Indian lands.--The term `Indian lands' means--

       ``(I) land held in trust by, or restricted against 
     alienation by, the United States for the benefit of an 
     individual Indian or an Indian tribe, or
       ``(II) land owned and held by any Alaska Native Village 
     Corporation or Regional Corporation organized under the 
     Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.).

       ``(iii) Individual indian.--The term `individual Indian' 
     means any individual member of an Indian tribe.
       ``(iv) Indian tribe.--The term `Indian tribe' means any 
     Indian tribe as defined in section 4(e) of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 
     450b(e)), including any Native village (as defined in section 
     3(c) of the Alaska Native Claims Settlement Act (43 U.S.C. 
     1602(c), whether organized traditionally or pursuant to the 
     Act of June 18, 1934 (commonly known as the Indian 
     Reorganization Act (25 U.S.C. 461 et seq.)).
       ``(C) Application of paragraph.--This paragraph shall not 
     apply with respect to any Indian oil or gas for which a 
     credit is allowed under any other provision of this 
     section.''
                                  ____

  SA 3366. Mr. LEVIN submitted an amendment intended to be proposed by 
him to the bill S. 517, to authorize funding the Department of Energy 
to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, on page 73, between lines 2 and 3, insert 
     the following:

     SEC. __. MODIFICATIONS TO THE INCENTIVES FOR ALTERNATIVE 
                   VEHICLES AND FUELS.

       (a) Modification to New Qualified Hybrid Motor Vehicle 
     Credit.--The table in section 30B(c)(2)(A) of the Internal 
     Revenue Code of 1986, as added by this Act, is amended by 
     striking ``5 percent'' and inserting ``4 percent''.
       (b) Modifications to Extension of Deduction for Certain 
     Refueling Property.--
       (1) In general.--Subsection (f) of section 179A of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(f) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2011, and
       ``(2) in the case of any other property, after December 31, 
     2007.''.
       (2) Extension of phaseout.--Section 179A(b)(1)(B) of such 
     Code, as amended by section 606(a) of the Job Creation and 
     Worker Assistance Act of 2002, is amended--
       (A) by striking ``calendar year 2004'' in clause (i) and 
     inserting ``calendar years 2004 and 2005 (calendar years 2004 
     through 2009 in the case of property relating to hydrogen) 
     '',
       (B) by striking ``2005'' in clause (ii) and inserting 
     ``2006 (calendar year 2010 in the case of property relating 
     to hydrogen)'', and
       (C) by striking ``2006'' in clause (iii) and inserting 
     ``2007 (calendar year 2011 in the case of property relating 
     to hydrogen)''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after December 31, 
     2003, in taxable years ending after such date.
       (c) Modification to Credit for Installation of Alternative 
     Fueling Stations.--Subsection (l) of section 30C of the 
     Internal Revenue Code of 1986, as added by this Act, is 
     amended to read as follows:
       ``(l) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2011, and
       ``(2) in the case of any other property, after December 31, 
     2007.''.
       (d) Effective Date.--Except as provided in subsection 
     (b)(3), the amendments made by this section shall apply to 
     property placed in service after September 30, 2002, in 
     taxable years ending after such date.
                                  ____

  SA 3367. Mr. HAGEL submitted an amendment intended to be proposed by 
him to the bill S. 517, to authorize funding the Department of Energy 
to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the end of Division H, insert the following:

     SEC. __. PERMANENT TAX CREDIT FOR RESEARCH AND DEVELOPMENT 
                   REGARDING GREENHOUSE GAS EMISSIONS REDUCTION, 
                   AVOIDANCE, OR SEQUESTRATION.

       Section 41(h) (relating to termination) is amended by 
     adding at the end the following:
       ``(3) Exception for certain research.--Paragraph (1)(B) 
     shall not apply in the case of any qualified research 
     expenses if the research--
       ``(A) has as one of its purposes the reducing, avoiding, or 
     sequestering of greenhouse gas emissions, and
       ``(B) has been reported to the Department of Energy under 
     section 1605(b) of the Energy Policy Act of 1992 or under the 
     national greenhouse gas emissions register established in 
     Division I of this Act.''.

     SEC. __. TAX CREDIT FOR GREENHOUSE GAS EMISSIONS FACILITIES.

       (a) Allowance of Greenhouse Gas Emissions Facilities 
     Credit.--Section 46 (relating to amount of credit), as 
     amended by this

[[Page 5670]]

     Act, 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:
       ``(5) the greenhouse gas emissions facilities credit.''.
       (b) Amount of Credit.--Subpart E of part IV of subchapter A 
     of chapter 1 (relating to rules for computing investment 
     credit), as amended by this Act, is amended by inserting 
     after section 48A the following:

     ``SEC. 48B. CREDIT FOR GREENHOUSE GAS EMISSIONS FACILITIES.

       ``(a) In General.--For purposes of section 46, the 
     greenhouse gas emissions facilities credit for any taxable 
     year is the applicable percentage of the qualified investment 
     in a greenhouse gas emissions facility for such taxable year.
       ``(b) Greenhouse Gas Emissions Facility.--For purposes of 
     subsection (a), the term `greenhouse gas emissions facility' 
     means a facility of the taxpayer--
       ``(1)(A) the construction, reconstruction, or erection of 
     which is completed by the taxpayer, or
       ``(B) which is acquired by the taxpayer if the original use 
     of such facility commences with the taxpayer,
       ``(2) the operation of which--
       ``(A) replaces the operation of a facility of the taxpayer,
       ``(B) reduces, avoids, or sequesters greenhouse gas 
     emissions on a per unit of output basis as compared to such 
     emissions of the replaced facility, and
       ``(C) uses the same type of fuel (or combination of the 
     same type of fuel and biomass fuel) as was used in the 
     replaced facility,
       ``(3) with respect to which depreciation (or amortization 
     in lieu of depreciation) is allowable, and
       ``(4) which meets the performance and quality standards (if 
     any) which--
       ``(A) have been jointly prescribed by the Secretary and the 
     Secretary of Energy by regulations,
       ``(B) are consistent with regulations prescribed under 
     section 1605(b) of the Energy Policy Act of 1992, and
       ``(C) are in effect at the time of the acquisition of the 
     facility.
       ``(c) Applicable Percentage.--For purposes of subsection 
     (a), the applicable percentage is one-half of the percentage 
     reduction, avoidance, or sequestration of greenhouse gas 
     emissions described in subsection (b)(2) and reported and 
     certified under section 1605(b) of the Energy Policy Act of 
     1992.
       ``(d) Qualified Investment.--For purposes of subsection 
     (a), the term `qualified investment' means, with respect to 
     any taxable year, the basis of a greenhouse gas emissions 
     facility placed in service by the taxpayer during such 
     taxable year, but only with respect to that portion of the 
     investment attributable to providing production capacity not 
     greater than the production capacity of the facility being 
     replaced.
       ``(e) Qualified Progress Expenditures.--
       ``(1) Increase in qualified investment.--In the case of a 
     taxpayer who has made an election under paragraph (5), the 
     amount of the qualified investment of such taxpayer for the 
     taxable year (determined under subsection (d) without regard 
     to this subsection) shall be increased by an amount equal to 
     the aggregate of each qualified progress expenditure for the 
     taxable year with respect to progress expenditure property.
       ``(2) Progress expenditure property defined.--For purposes 
     of this subsection, the term `progress expenditure property' 
     means any property being constructed by or for the taxpayer 
     and which it is reasonable to believe will qualify as a 
     greenhouse gas emissions facility which is being constructed 
     by or for the taxpayer when it is placed in service.
       ``(3) Qualified progress expenditures defined.--For 
     purposes of this subsection--
       ``(A) Self-constructed property.--In the case of any self-
     constructed property, the term `qualified progress 
     expenditures' means the amount which, for purposes of this 
     subpart, is properly chargeable (during such taxable year) to 
     capital account with respect to such property.
       ``(B) Non-self-constructed property.--In the case of non-
     self-constructed property, the term `qualified progress 
     expenditures' means the amount paid during the taxable year 
     to another person for the construction of such property.
       ``(4) Other definitions.--For purposes of this subsection--
       ``(A) Self-constructed property.--The term `self-
     constructed property' means property for which it is 
     reasonable to believe that more than half of the construction 
     expenditures will be made directly by the taxpayer.
       ``(B) Non-self-constructed property.--The term `non-self-
     constructed property' means property which is not self-
     constructed property.
       ``(C) Construction, etc.--The term `construction' includes 
     reconstruction and erection, and the term `constructed' 
     includes reconstructed and erected.
       ``(D) Only construction of greenhouse gas emissions 
     facility to be taken into account.--Construction shall be 
     taken into account only if, for purposes of this subpart, 
     expenditures therefor are properly chargeable to capital 
     account with respect to the property.
       ``(5) Election.--An election under this subsection may be 
     made at such time and in such manner as the Secretary may by 
     regulations prescribe. Such an election shall apply to the 
     taxable year for which made and to all subsequent taxable 
     years. Such an election, once made, may not be revoked except 
     with the consent of the Secretary.''.
       (c) Recapture.--Section 50(a) (relating to other special 
     rules), as amended by this Act, is amended by adding at the 
     end the following:
       ``(7) Special rules relating to greenhouse gas emissions 
     facility.--For purposes of applying this subsection in the 
     case of any credit allowable by reason of section 48B, the 
     following shall apply:
       ``(A) General rule.--In lieu of the amount of the increase 
     in tax under paragraph (1), the increase in tax shall be an 
     amount equal to the investment tax credit allowed under 
     section 38 for all prior taxable years with respect to a 
     greenhouse gas emissions facility (as defined by section 
     48B(b)) multiplied by a fraction whose numerator is the 
     number of years remaining to fully depreciate under this 
     title the greenhouse gas emissions facility disposed of, and 
     whose denominator is the total number of years over which 
     such facility would otherwise have been subject to 
     depreciation. For purposes of the preceding sentence, the 
     year of disposition of the greenhouse gas emissions facility 
     property shall be treated as a year of remaining 
     depreciation.
       ``(B) Property ceases to qualify for progress 
     expenditures.--Rules similar to the rules of paragraph (2) 
     shall apply in the case of qualified progress expenditures 
     for a greenhouse gas emissions facility under section 48B, 
     except that the amount of the increase in tax under 
     subparagraph (A) of this paragraph shall be substituted in 
     lieu of the amount described in such paragraph (2).
       ``(C) Application of paragraph.--This paragraph shall be 
     applied separately with respect to the credit allowed under 
     section 38 regarding a greenhouse gas emissions facility.''.
       (d) Technical Amendments.--
       (1) Section 49(a)(1)(C), as amended by this Act, 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:
       ``(v) the portion of the basis of any greenhouse gas 
     emissions facility attributable to any qualified investment 
     (as defined by section 48B(d)).''.
       (2) Section 50(a)(4), as amended by this Act, is amended by 
     striking ``and (6)'' and inserting ``, (6), and (7)''.
       (3) The table of sections for subpart E of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 48A the 
     following:

``Sec. 48B. Credit for greenhouse gas emissions facilities.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, 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).
       (f) Study of Additional Incentives for Voluntary Reduction, 
     Avoidance, or Sequestration of Greenhouse Gas Emissions.--
       (1) In general.--The Secretary of the Treasury and the 
     Secretary of Energy shall jointly study possible additional 
     incentives for, and removal of barriers to, voluntary, non 
     recoupable expenditures for the reduction, avoidance, or 
     sequestration of greenhouse gas emissions. For purposes of 
     this subsection, an expenditure shall be considered voluntary 
     and non recoupable if the expenditure is not recoupable--
       (A) from revenues generated from the investment, determined 
     under generally accepted accounting standards (or under the 
     applicable rate-of-return regulation, in the case of a 
     taxpayer subject to such regulation), or
       (B) from any tax or other financial incentive program 
     established under Federal, State, or local law.
       (2) Report.--Within 6 months of the date of enactment of 
     this Act, the Secretary of the Treasury and the Secretary of 
     Energy shall jointly report to Congress on the results of the 
     study described in paragraph (1), along with any 
     recommendations for legislative action.
       (g) Scope and Impact.--
       (1) Policy.--In order to achieve the broadest response for 
     reduction, avoidance, or sequestration of greenhouse gas 
     emissions and to ensure that the incentives established by or 
     pursuant to this Act do not advantage one segment of an 
     industry to the disadvantage of another, it is the sense of 
     Congress that such incentives should be available for 
     individuals, organizations, and entities, including both for-
     profit and non-profit institutions.
       (2) Level playing field study and report.--
       (A) In general.--The Secretary of the Treasury and the 
     Secretary of Energy shall jointly study possible additional 
     measures

[[Page 5671]]

     that would provide non-profit entities (such as municipal 
     utilities and energy cooperatives) with economic incentives 
     for greenhouse gas emissions facilities comparable to those 
     incentives provided to taxpayers under the amendments made to 
     the Internal Revenue Code of 1986 by this Act.
       (B) Report.--Within 6 months after the date of enactment of 
     this Act, the Secretary of the Treasury and the Secretary of 
     Energy shall jointly report to Congress on the results of the 
     study described in subparagraph (A), along with any 
     recommendations for legislative action.

                 DIVISION I--CLIMATE CHANGE MITIGATION

               TITLE   --NATIONAL GREENHOUSE GAS REGISTRY

     SECTION.  . SHORT TITLE.

       This title may be cited as the ``National Climate Registry 
     Initiative of 2002''.

     SEC.   . PURPOSE.

       The purpose of this title is to establish a new national 
     greenhouse gas registry--
       (1) to further encourage voluntary efforts, by persons and 
     entities conducting business and other operations in the 
     United States, to implement actions, projects and measures 
     that reduce greenhouse gas emissions;
       (2) to encourage such persons and entities to monitor and 
     voluntarily report greenhouse gas emissions, direct or 
     indirect, from their facilities, and to the extent 
     practicable, from other types of sources;
       (3) to adopt a procedure and uniform format for such 
     persons and entities to establish and report voluntarily 
     greenhouse gas emission baselines in connection with, and 
     furtherance of, such reductions;
       (4) to provide verification mechanisms to ensure for 
     participants and the public a high level of confidence in 
     accuracy and verifiability of reports made to the national 
     registry;
       (5) to encourage persons and entities, through voluntary 
     agreement with the Secretary, to report annually greenhouse 
     gas emissions from their facilities;
       (6) to provide to persons or entities that engage in such 
     voluntary agreements and reduce their emissions transferable 
     credits which, inter alia, shall be available for use by such 
     persons or entities for any incentive, market-based, or 
     regulatory programs determined by the Congress in a future 
     enactment to be necessary and feasible to reduce the risk of 
     climate change and its impacts; and
       (7) to provide for the registration, transfer and tracking 
     of the ownership or holding of such credits for purposes of 
     facilitating voluntary trading among persons and entities

     SEC.   . DEFINITIONS.

       In this title--
       (1) ``person'' means an individual, corporation, 
     association, joint venture, cooperative, or partnership;
       (2) ``entity'' means a public person, a Federal, 
     interstate, State, or local governmental agency, department, 
     corporation, or other publicly owned organization;
       (3) ``facility'' means those buildings, structures, 
     installations, or plants (including units thereof) that are 
     on contiguous or adjacent land, are under common control of 
     the same person or entity and are a source of emissions of 
     greenhouse gases in excess for emission purposes of a 
     threshold as recognized by the guidelines issued under this 
     title;
       (4) ``reductions'' means actions, projects or measures 
     taken, whether in the United States or internationally, by a 
     person or entity to reduce, avoid or sequester, directly or 
     indirectly, emissions of one or more greenhouse gases;
       (5) ``greenhouse gas'' means--
       (A) an anthropogenic gaseous constituent of the atmosphere 
     (including carbon dioxide, methane, nitrous oxide, 
     chlorofluorocarbons, hydrofluorocarbons, perfluorocarbons, 
     sulfur hexafluoride, and tropospheric ozone) that absorbs and 
     reemits infrared radiation and influences climate; and
       (B) an anthropogenic aerosol (such as black soot) that 
     absorbs solar radiation and influences climate;
       (6) ``Secretary'' means the Secretary of Energy;
       (7) ``Administrator'' means the Administrator of the Energy 
     Information Administration; and
       (8) ``Interagency Task Force'' means the Interagency Task 
     Force established under title X of this Act.

     SEC.   . ESTABLISHMENT.

       (a) In General.--Not later than 1 year after the enactment 
     of this title, the President shall, in consultation with the 
     Interagency Task Force, establish a National Greenhouse Gas 
     Registry to be administered by the Secretary through the 
     Administrator in accordance with the applicable provisions of 
     this title, section 205 of the Department of Energy Act (42 
     U.S.C. 7135) and other applicable provisions of that Act (42 
     U.S.C. 7101, et seq.).
       (b) Designation.--Upon establishment of the registry and 
     issuance of the guidelines pursuant to this title, such 
     registry shall thereafter be the depository for the United 
     States of data on greenhouse gas emissions and emissions 
     reductions collected from and reported by persons or entities 
     with facilities or operations in the United States, pursuant 
     to the guidelines issued under this title.
       (c) Participation.--Any person or entity conducting 
     business or activities in the United States may, in 
     accordance with the guidelines established pursuant to this 
     title, voluntarily report its total emissions levels and 
     register its certified emissions reductions with such 
     registry, provided that such reports--
       (1) represent a complete and accurate inventory of 
     emissions from facilities and operations within the United 
     States and any domestic or international reduction 
     activities; and
       (2) have been verified as accurate by an independent person 
     certified pursuant to guidelines developed pursuant to this 
     title, or other means.
       (d) Confidentiality of Reports.--Trade secret and 
     commercial or financial information that is privileged and 
     confidential submitted pursuant to activities under this 
     title shall be protected as provided in section 552(b)(4) of 
     title 5, United States Code.

     SEC.   . IMPLEMENTATION.

       (a) Guidelines.--Not later than 1 year after the date of 
     establishment of the registry pursuant to this title, the 
     Secretary shall, in consultation with the Interagency Task 
     Force, issue guidelines establishing procedures for the 
     administration of the national registry. Such guidelines 
     shall include--
       (1) means and methods for persons or entities to determine, 
     quantify, and report by appropriate and credible means their 
     baseline emissions levels on an annual basis, taking into 
     consideration any reports made by such participants under 
     past Federal programs;
       (2) procedures for the use of an independent third-party or 
     other effective verification process for reports on emissions 
     levels and emissions reductions, using the authorities 
     available to the Secretary under this and other provisions of 
     law and taking into account, to the extent possible, costs, 
     risks, the voluntary nature of the registry, and other 
     relevant factors;
       (3) a range of reference cases for reporting of project-
     based reductions in various sectors, and the inclusion of 
     benchmark and default methodologies and practices for use as 
     reference cases for eligible projects;
       (4) safeguards to prevent and address reporting, 
     inadvertently or otherwise, of some or all of the same 
     greenhouse gas emissions or reductions by more than one 
     reporting person or entity and to make corrections and 
     adjustments in data where necessary;
       (5) procedures and criteria for the review and registration 
     of ownership or holding of all or part of any reported and 
     independently verified emission reduction projects, actions 
     and measures relative to such reported baseline emissions 
     level;
       (6) measures or a process for providing to such persons or 
     entitles transferable credits with unique serial numbers for 
     such verified emissions reductions; and
       (7) accounting provisions needed to allow for changes in 
     registration and transfer of ownership of such credits 
     resulting from a voluntary private transaction between 
     persons or entities, provided that the Secretary is notified 
     of any such transfer within 30 days of the transfer having 
     been effected either by private contract or market mechanism.
       (b) Consideration.--In developing such guidelines, the 
     Secretary shall take into consideration--
       (1) the existing guidelines for voluntary emissions 
     reporting issued under section 1605(b) of the Energy Policy 
     Act of 1992 (42 U.S.C. 13385(b)), experience in apply such 
     guidelines, and any revisions thereof initiated by the 
     Secretary pursuant to direction of the President issued prior 
     to the enactment of this title;
       (2) protocols and guidelines developed under any Federal, 
     State, local, or private voluntary greenhouse gas emissions 
     reporting or reduction programs;
       (3) the various differences and potential uniqueness of the 
     facilities, operations and business and other relevant 
     practices of persons and entities in the private and public 
     sectors that may be expected to participate in the registry;
       (4) issues, such as comparability, that are associated with 
     the reporting of both emissions baselines and reductions from 
     activities and projects; and
       (5) the appropriate level or threshold emissions applicable 
     to a facility or activity of a person or entity that may be 
     reasonably and cost effectively identified, measured and 
     reported voluntarily taking into consideration different 
     types of facilities and activities and the de minimis nature 
     of some emissions and their sources; and
       (6) any other consideration the Secretary may deem 
     appropriate.
       (c) Experts and Consultants.--The Secretary, and any member 
     of the Interagency Task Force, may secure the services of 
     experts and consultants in the private and non-profit sectors 
     in accordance with the provisions of section 3109 of title 5, 
     United States Code, in the areas of greenhouse gas 
     measurement, certification, and emissions trading. In 
     securing such services, any grant, contract, cooperative 
     agreement, or other arrangement authorized by law and already 
     available to the Secretary or the member of the Interagency 
     Task Force securing such services may be used.

[[Page 5672]]

       (d) Transferability of Prior Reports.--Emissions reports 
     and reductions that have been made by a person or entity 
     pursuant to section 1605(b) of the Energy Policy Act of 1992 
     (42 U.S.C. 13385(b)) or under other Federal or State 
     voluntary greenhouse gas reduction programs may be 
     independently verified and registered with the registry using 
     the same guidelines developed by the Secretary pursuant to 
     this section.
       (e) Public Comment.--The Secretary shall make such 
     guidelines available in draft form for public notice and 
     opportunity for comment for a period of at least 90 days, and 
     thereafter shall adopt them for use in implementation of the 
     registry established pursuant to this title.
       (f) Review and Revision.--The Secretary, through the 
     Interagency Task Force, shall periodically thereafter review 
     the guidelines and, as needed, revise them in the same manner 
     as provided for in this section.

     SEC.  . VOLUNTARY AGREEMENTS.

       (a) In General.--In furtherance of the purposes of this 
     title, any person or entity, and the Secretary, may 
     voluntarily enter into an agreement to provide that--
       (1) such person or entity (and successors thereto) shall 
     report annually to the registry on emissions and sources of 
     greenhouse gases from applicable facilities and operations 
     which generate net emissions above any de minimis thresholds 
     specified in the guidelines issued by the Secretary pursuant 
     to this title;
       (2) such person or entity (and successors thereto) shall 
     commit to report and participate in the registry for a period 
     of at least 5 calendar years, provided that such agreements 
     may be renewed by mutual consent;
       (3) for purposes of measuring performance under the 
     agreement, such person or entity (and successors thereto) 
     shall determine, by mutual agreement with the Secretary--
       (A) pursuant to the guidelines issued under this title, a 
     baseline emissions level for a representative period 
     preceding the effective date of the agreement; and
       (B) emissions reduction goals, taking into consideration 
     the baseline emissions level determined under subparagraph 
     (A) and any relevant economic and operational factors that 
     may affect such baseline emissions level over the duration of 
     the agreement; and
       (4) for certified emissions reductions made relative to the 
     baseline emissions level, the Secretary shall provide, at the 
     request of the person or entity, transferable credits (with 
     unique assigned serial numbers) to the person or entity (and 
     successors thereto) which, inter alia,--
       (A) can be used by such person or entity towards meeting 
     emissions reductions goals set forth under the agreement;
       (B) can be transferred to other persons or entities through 
     a voluntary private transaction between persons or entities; 
     or
       (C) shall be applicable towards any incentive, market-
     based, or regulatory programs determined by the Congress in a 
     future enactment to be necessary and feasible to reduce the 
     risk of climate change and its impacts.
       (b) Public Notice and Comment.--At least 30 days before any 
     agreement is final, the Secretary shall give notice thereof 
     in the Federal Register and provide an opportunity for public 
     written comment. After reviewing such comments, the Secretary 
     may withdraw the agreement or the parties thereto may 
     mutually agree to revise it or finalize it without 
     substantive change. Such agreement shall be retained in the 
     national registry and be available to the public.
       (c) Emissions in Excess.--In the event that a person or 
     entity fails to certify that emissions from applicable 
     facilities and operations are less than the emissions 
     reduction goals contained in the agreement, such person or 
     entity shall take actions as necessary to reduce such excess 
     emissions, including--
       (1) redemption of transferable credits acquired in previous 
     years if owned by the person or entity;
       (2) acquisition of transferable credits from other persons 
     or entities participating in the registry through their own 
     agreements; or
       (3) the undertaking of additional emissions reductions 
     activities in subsequent years as may be determined by 
     agreement with the Secretary.
       (d) No New Authority.--This section shall not be construed 
     as providing any regulatory or mandate authority regarding 
     reporting of such emissions or reductions.

     SEC.  . MEASUREMENT AND VERIFICATION.

       (a) In General.--The Secretary of Commerce, through the 
     National Institute of Standards and Technology and in 
     consultation with the Secretary of Energy, shall develop and 
     propose standards and practices for accurate measurement and 
     verification of greenhouse gas emissions and emissions 
     reductions. Such standards and best practices shall address 
     the need for--
       (1) standardized measurement and verification practices for 
     reports made by all persons or entities participating in the 
     registry, taking into account--
       (A) existing protocols and standards already in use by 
     persons or entities desiring to participate in the registry;
       (B) boundary issues such as leakage and shifted 
     utilization;
       (C) avoidance of double-counting of greenhouse gas 
     emissions and emissions reductions; and
       (D) such other factors as the panel determines to be 
     appropriate;
       (2) measurement and verification of actions taken to 
     reduce, avoid or sequester greenhouse gas emissions;
       (3) in coordination with the Secretary of Agriculture, 
     measurement of the results of the use of carbon sequestration 
     and carbon recapture technologies, including--
       (A) organic soil carbon sequestration practices;
       (B) forest preservation and re-forestation activities which 
     adequately address the issues of permanence, leakage and 
     verification; and
       (4) such other measurement and certification standards as 
     the Secretary of Commerce, the Secretary of Agriculture, and 
     the Secretary of Energy shall determine to be appropriate.
       (b) Public Comment.--The Secretary of Commerce shall make 
     such standards and practices available in draft form for 
     public notice and opportunity for comment for a period of at 
     least 90 days, and thereafter shall adopt them, in 
     coordination with the Secretary of Energy, for use in the 
     guidelines for implementation of the registry as issued 
     pursuant to this title.

     SEC.  . CERTIFIED INDEPENDENT THIRD PARTIES.

       (a) Certification.--The Secretary of Commerce shall, 
     through the Director of the National Institute of Standards 
     and Technology and the Administrator, develop standards for 
     certification of independent persons to act as certified 
     parties to be employed in verifying the accuracy and 
     reliability of reports made under this title, including 
     standards that--
       (1) prohibit a certified party from themselves 
     participating in the registry through the ownership or 
     transaction of transferable credits recorded in the registry;
       (2) prohibit the receipt by a certified party of 
     compensation in the form of a commission where such party 
     receives payment based on the amount of emissions reductions 
     verified; and
       (3) authorize such certified parties to enter into 
     agreements with persons engaged in trading of transferable 
     credits recorded in the registry.
       (b) List of Certified Parties.--The Secretary shall 
     maintain and make available to persons or entities making 
     reports under this title and to the public upon request a 
     list of such certified parties and their clients making 
     reports under the title.

     SEC.  . REPORTS TO CONGRESS.

       Not later than 1 year after guidelines are issued for the 
     registry pursuant to this title, and biennially thereafter, 
     the President, through the Interagency Task Force, shall 
     report to the Congress on the status of the registry 
     established by this title. The report shall include--
       (a) an assessment of the level of participation in the 
     registry (both by sector and in terms of total national 
     emissions represented);
       (b) effectiveness of voluntary reporting agreements in 
     enhancing participation in the registry;
       (c) use of the registry for emissions trading and other 
     purposes;
       (d) assessment of progress towards individual and national 
     emissions reduction goals; and
       (e) an inventory of administrative actions taken or planned 
     to improve the national registry or the guidelines, or both, 
     and such recommendations for legislative changes to this 
     title or section 1605 of the Energy Policy Act of 1992 (42 
     U.S.C. 13385) as the President believes necessary to better 
     carry out the purposes of this title.

     SEC.  . REVIEW OF PARTICIPATION.

       (a) In General.--Not later than 5 years after the date of 
     enactment of this title, the Director of the Office of 
     National Climate Change Policy shall determine whether the 
     reports submitted to the registry represent less than 60 
     percent of the national aggregate greenhouse gas emissions as 
     inventoried in the official U.S. Inventory of Greenhouse Gas 
     Emissions and Sinks published by the Environmental Protection 
     Agency for the previous calendar year.
       (b) Mandatory Reporting.--If the Director of the Office of 
     National Climate Change Policy determines under subsection 
     (a) that less than 60 percent of such aggregate greenhouse 
     gas emissions are being reported to the registry--
       (1) all persons or entities, regardless of their 
     participation in the registry, shall submit to the Secretary 
     a report that describes, for the preceding calendar year, a 
     complete inventory of greenhouse gas emissions (as reported 
     at the facility level), including--
       (A) the total quantity of each greenhouse gas emitted by 
     such person or entity, expressed in terms of mass and in 
     terms of the quantity of carbon dioxide equivalent;
       (B) an estimate of the emissions from products manufactured 
     and sold by such person or entity in the previous calendar 
     year, determined over the average lifetime of those products; 
     and
       (C) such other categories of emissions as the Secretary 
     determines by regulation to be practicable and useful for the 
     purposes of this title, such as--
       (i) direct emissions from stationary sources;

[[Page 5673]]

       (ii) indirect emissions from imported electricity, heat, 
     and steam;
       (iii) process and fugitive emissions; and
       (iv) production or importation of greenhouse gases; and
       (2) each person or entity shall submit a report described 
     in this section--
       (A) not later than the earlier of--
       (i) April 30 of the calendar year immediately following the 
     year in which the Director of the Office of National Climate 
     Change Policy makes the determination under subsection (a); 
     or
       (ii) the date that is 1 year after the date on which the 
     Director of the Office of National Climate Change Policy 
     makes the determination under subsection (a); and
       (B) annually thereafter.
       (c) Exemptions From Reporting.--
       (1) In general.--A person or entity shall be required to 
     submit reports under subsection (b) only if, in any calendar 
     year after the date of enactment of this title--
       (A) the total greenhouse gas emissions of at least 1 
     facility owned by the person or entity exceeds 10,000 metric 
     tons of carbon dioxide equivalent greenhouse gas (or such 
     greater quantity as may be established by a designated agency 
     by regulation);
       (B) the total quantity of greenhouse gas produced, 
     distributed, or imported by the person or entity exceeds 
     10,000 metric tons of carbon dioxide equivalent greenhouse 
     gas (or such greater quantity as may be established by a 
     designated agency by regulation); or
       (C) the person or entity is not a feedlot or other farming 
     operation (as defined in section 101 of title 11, United 
     States Code).
       (2) Entities already reporting.--A person or entity that, 
     as of the date of enactment of this title, is required to 
     report carbon dioxide emissions data to a Federal agency 
     shall not be required to report that data again for the 
     purposes of this title. Such emissions data shall be 
     considered to be reported by the entity to the registry for 
     the purpose of this title and included in the determination 
     of the Director of the Office of National Climate Change 
     Policy made under subsection (a).
       (d) Enforcement.--If a person or entity that is required to 
     report greenhouse gas emissions under this section fails to 
     comply with that requirement, the Attorney General may, at 
     the request of the Secretary, bring a civil action in United 
     States district court against the person or entity to impose 
     on the person or entity a civil penalty of not more than 
     $25,000 for each day for which the entity fails to comply 
     with that requirement.
       (e) Resolution of Disapproval.--If made, the determination 
     of the Director of the Office of National Climate Change 
     Policy made under subsection (a) shall be considered to be a 
     major rule (as defined in section 804(2) of title 5, United 
     States Code) subject to the congressional disapproval 
     procedure under section 802 of title 5, United States Code.

     SEC.   . NATIONAL ACADEMY REVIEW.

       Not later than 1 year after guidelines are issued for the 
     registry pursuant to this title, the Secretary, in 
     consultation with the Interagency Task Force, shall enter 
     into an agreement with the National Academy of Sciences to 
     review the scientific and technological methods, assumptions, 
     and standards used by the Secretary and the Secretary of 
     Commerce for such guidelines and report to the President and 
     the Congress on the results of that review, together with 
     such recommendations as may be appropriate, within 6 months 
     after the effective date of that agreement.

     SEC.   . INAPPLICABILITY OF TITLE XI OF THIS ACT.

       Title XI of this Act shall be null and void.
                                  ____

  SA 3368. Mr. CARPER submitted an amendment intended to be proposed by 
him to the bill S. 517, to authorize funding the Department of Energy 
to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table, as follows:

       In Division H, on page 17, line 23, strike ``and'' and all 
     that follows through line 25, and insert the following:
       ``(3) the new qualified alternative fuel motor vehicle 
     credit determined under subsection (d), and
       ``(4) the new qualified advanced lean burn technology motor 
     vehicle credit determined under subsection (aa).
       ``(aa) Advanced Lean Burn Technology Motor Vehicle 
     Credit.--
       ``(1) In general.--For purposes of subsection (a), the 
     advanced lean burn technology motor vehicle credit determined 
     under this subsection with respect to a new qualified 
     advanced lean burn technology motor vehicle placed in service 
     by the taxpayer during the taxable year is the credit amount 
     determined under paragraph (2).
       ``(2) Credit amount.--
       ``(A) Increase for fuel efficiency.--The credit amount 
     determined under this paragraph shall be--
       ``(i) $750, if such vehicle achieves at least 125 percent 
     but less than 150 percent of the 2000 model year city fuel 
     economy,
       ``(ii) $1,250, if such vehicle achieves at least 150 
     percent but less than 175 percent of the 2000 model year city 
     fuel economy,
       ``(iii) $1,750, if such vehicle achieves at least 175 
     percent but less than 200 percent of the 2000 model year city 
     fuel economy,
       ``(iv) $2,250, if such vehicle achieves at least 200 
     percent but less than 225 percent of the 2000 model year city 
     fuel economy,
       ``(v) $2,750, if such vehicle achieves at least 225 percent 
     but less than 250 percent of the 2000 model year city fuel 
     economy, and
       ``(vi) $3,250, if such vehicle achieves at least 250 
     percent of the 2000 model year city fuel economy.
       ``(B) Increase for low emmisions.--The credit amount 
     determined under subparagraph (A) shall be increased by--
       ``(i) $250, if such vehicle achieves the emission standards 
     equivalent to TIER 2, bin 6,
       ``(ii) $500, if such vehicle achieves the emission 
     standards equivalent to TIER 2, bin 5,
       ``(iii) $750, if such vehicle achieves the emission 
     standards equivalent to TIER 2, bin 4,
       ``(iv) $1,000, if such vehicle achieves the emission 
     standards equivalent to TIER 2, bin 3 or lower.''
                                  ____

  SA 3369. Mr. GRAHAM submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H (relating to energy tax incentives), strike 
     section 2307.
                                  ____

  SA 3370. Mr. GRAHAM submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H (relating to energy tax incentives), strike 
     section 2308.
                                  ____

  SA 3371. Mr. GRAHAM submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H (relating to energy tax incentives), strike 
     section 2311.
                                  ____

  SA 3372. Mr. GRAHAM (for himself and Mr. Feingold) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       In Division H, on page 216, after line 21, add the 
     following:

     SEC. __. LIMITATION ON EFFECTIVE DATES.

       Notwithstanding any other provision of this division, no 
     provision of nor any amendment made by this division shall 
     take effect until the date of the enactment of legislation 
     which raises Federal revenues or reduces Federal spending 
     sufficient to offset the Federal budgetary cost of such 
     provisions and amendments for the 10-fiscal year period 
     beginning on October 1, 2002.

  SA 3373. Mr. GRAHAM submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In Division H, on page 216, after line 21, add the 
     following:

     SEC. __. LIMITATION ON EFFECTIVE DATES.

       Notwithstanding any other provision of this division, no 
     provision of nor any amendment made by this division shall 
     take effect until the date of the enactment of legislation 
     which raises Federal revenues sufficient to offset the 
     Federal budgetary cost of such provisions and amendments for 
     the 10-fiscal year period beginning on October 1, 2002.
                                  ____

  SA 3374. Mrs. LINCOLN submitted an amendment intended to be proposed 
to amendment SA 3344 submitted by Mrs. Lincoln and intended to be 
proposed to the amendment SA 2917 proposed by

[[Page 5674]]

Mr. Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       In lieu of the matter proposed to be inserted, insert the 
     following:

     SEC. __. CLARIFICATION OF EXCISE TAX EXEMPTIONS FOR 
                   AGRICULTURAL AERIAL APPLICATORS.

       (a) No Waiver by Farm Owner, Tenant, or Operator 
     Necessary.--Subparagraph (B) of section 6420(c)(4) (relating 
     to certain farming use other than by owner, etc.) is amended 
     to read as follows:
       ``(B) if the person so using the gasoline is an aerial or 
     other applicator of fertilizers or other substances and is 
     the ultimate purchaser of the gasoline, then subparagraph (A) 
     of this paragraph shall not apply and the aerial or other 
     applicator shall be treated as having used such gasoline on a 
     farm for farming purposes.''.
       (b) Exemption Includes Fuel Used Between Airfield and 
     Farm.--Section 6420(c)(4), as amended by subsection (a), is 
     amended by adding at the end the following new flush 
     sentence:

     ``For purposes of this paragraph, in the case of an aerial 
     applicator, gasoline shall be treated as used on a farm for 
     farming purposes if the gasoline is used for the direct 
     flight between the airfield and 1 or more farms.''.
       (c) Exemption From Tax on Air Transportation of Persons for 
     Forestry Purposes Extended to Fixed-Wing Aircraft.--
     Subsection (f) of section 4261 (relating to tax on air 
     transportation of persons) is amended to read as follows:
       ``(f) Exemption for Certain Uses.--No tax shall be imposed 
     under subsection (a) or (b) on air transportation--
       ``(1) by helicopter for the purpose of transporting 
     individuals, equipment, or supplies in the exploration for, 
     or the development or removal of, hard minerals, oil, or gas, 
     or
       ``(2) by helicopter or by fixed-wing aircraft for the 
     purpose of the planting, cultivation, cutting, or 
     transportation of, or caring for, trees (including logging 
     operations),

     but only if the helicopter or fixed-wing aircraft does not 
     take off from, or land at, a facility eligible for assistance 
     under the Airport and Airway Development Act of 1970, or 
     otherwise use services provided pursuant to section 44509 or 
     44913(b) or subchapter I of chapter 471 of title 49, United 
     States Code, during such use. In the case of helicopter 
     transportation described in paragraph (1), this subsection 
     shall be applied by treating each flight segment as a 
     distinct flight.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to fuel use or air transportation after the date 
     of enactment, and before January 1, 2004.
                                  ____

  SA 3375. Mr. GRAMM submitted an amendment intended to be proposed to 
amendment SA 3336 submitted by Mr. Gramm and intended to be proposed to 
the amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Strike all after the enacting clause and insert the 
     following:
       In Division H, on page 216, after line 21, add the 
     following:

     SEC. __. TREATMENT OF DAIRY PROPERTY.

       (a) Qualified Disposition of Dairy Property Treated as 
     Involuntary Conversion.--
       (1) In general.--Section 1033 (relating to involuntary 
     conversions) is amended by designating subsection (k) as 
     subsection (l) and inserting after subsection (j) the 
     following new subsection:
       ``(k) Qualified Disposition To Implement Bovine 
     Tuberculosis Eradication Program.--
       ``(1) In general.--For purposes of this subtitle, if a 
     taxpayer elects the application of this subsection to a 
     qualified disposition:
       ``(A) Treatment as involuntary conversion.--Such 
     disposition shall be treated as an involuntary conversion to 
     which this section applies.
       ``(B) Modification of similar property requirement.--
     Property to be held by the taxpayer either for productive use 
     in a trade or business or for investment shall be treated as 
     property similar or related in service or use to the property 
     disposed of.
       ``(C) Extension of period for replacing property.--
     Subsection (a)(2)(B)(i) shall be applied by substituting `4 
     years' for `2 years'.
       ``(D) Waiver of unrelated person requirement.--Subsection 
     (i) (relating to replacement property must be acquired from 
     unrelated person in certain cases) shall not apply.
       ``(E) Expanded capital gain for cattle and horses.--Section 
     1231(b)(3)(A) shall be applied by substituting `1 month' for 
     `24 months'.
       ``(2) Qualified disposition.--
       ``(A) In general.--For purposes of this subsection, the 
     term `qualified disposition' means the disposition of dairy 
     property which is certified by the Secretary of Agriculture 
     as having been the subject of an agreement under the bovine 
     tuberculosis eradication program, as implemented pursuant to 
     the Declaration of Emergency Because of Bovine Tuberculosis 
     (65 Federal Register 63,227 (2000)).
       ``(B) Payments received in connection with the bovine 
     tuberculosis eradication program.--For purposes of this 
     subsection, any amount received by a taxpayer in connection 
     with an agreement under such bovine tuberculosis eradication 
     program shall be treated as received in a qualified 
     disposition.
       ``(C) Transmittal of certifications.--The Secretary of 
     Agriculture shall transmit copies of certifications under 
     this paragraph to the Secretary.
       ``(3) Allowance of the adjusted basis of certified dairy 
     property as a depreciation deduction.--The adjusted basis of 
     any property certified under paragraph (2)(A) shall be 
     allowed as a depreciation deduction under section 167 for the 
     taxable year which includes the date of the certification 
     described in paragraph (2)(A).
       ``(4) Dairy property.--For purposes of this subsection, the 
     term `dairy property' means all tangible or intangible 
     property used in connection with a dairy business or a dairy 
     processing plant.
       ``(5) Special rules for certain business organizations.--
       ``(A) S corporations.--In the case of an S corporation, 
     gain on a qualified disposition shall not be treated as 
     recognized for the purposes of section 1374 (relating to tax 
     imposed on certain built-in gains).

       ``(B) Partnerships.--In the case of a partnership which 
     dissolves in anticipation of a qualified disposition 
     (including in anticipation of receiving the amount described 
     in paragraph (2)(B)), the dairy property owned by the 
     partners of such partnership at the time of such disposition 
     shall be treated, for the purposes of this section and 
     notwithstanding any regulation or rule of law, as owned by 
     such partners at the time of such disposition.

       ``(6) Termination.--This subsection shall not apply to 
     dispositions made after December 31, 2006.''.

       (2) Effective date.--The amendment made by this subsection 
     shall apply to dispositions made and amounts received in 
     taxable years ending after the date of enactment of this Act.
       (b) Deduction of Qualified Reclamation Expenditures.--

       (1) In general.--Part VI of subchapter B of chapter 1 
     (relating to itemized deductions for individuals and 
     corporations), as amended by this Act, is amended by adding 
     at the end the following new section:

     ``SEC. 199B. EXPENSING OF DAIRY PROPERTY RECLAMATION COSTS.

       ``(a) In General.--Notwithstanding section 280B (relating 
     to demolition of structures), a taxpayer may elect to treat 
     any qualified reclamation expenditure which is paid or 
     incurred by the taxpayer as an expense which is not 
     chargeable to capital account. Any expenditure which is so 
     treated shall be allowed as a deduction for the taxable year 
     in which it is paid or incurred.
       ``(b) Qualified Reclamation Expenditure.--
       ``(1) In general.--For purposes of this subparagraph, the 
     term `qualified reclamation expenditure' means amounts 
     otherwise chargeable to capital account and paid or incurred 
     to convert any real property certified under section 
     1033(k)(2) (relating to qualified disposition) into 
     unimproved land.

       ``(2) Special rule for expenditures for depreciable 
     property.--A rule similar to the rule of section 198(b)(2) 
     (relating to special rule for expenditures for depreciable 
     property) shall apply for purposes of paragraph (1).
       ``(c) Deduction Recaptured as Ordinary Income.--Rules 
     similar to the rules of section 198(e) (relating to deduction 
     recaptured as ordinary income on sale, etc.) shall apply with 
     respect to any qualified reclamation expenditure.
       ``(d) Termination.--This section shall not apply to 
     expenditures paid or incurred after December 31, 2006.''.

       (2) Clerical amendment.--The table of sections for part VI 
     of subchapter B of chapter 1, as amended by this Act, is 
     amended by adding at the end the following new item:

``Sec. 199B. Expensing of dairy property reclamation costs.''.

       (3) Effective date.--The amendments made by this subsection 
     shall apply to expenditures paid or incurred in taxable years 
     ending after the date of enactment of this Act.

[[Page 5675]]



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