[Congressional Record (Bound Edition), Volume 153 (2007), Part 17]
[House]
[Pages 23196-23233]
[From the U.S. Government Publishing Office, www.gpo.gov]




        RENEWABLE ENERGY AND ENERGY CONSERVATION TAX ACT OF 2007

  Mr. RANGEL. Mr. Speaker, pursuant to House Resolution 615, I call up 
the bill (H.R. 2776) to amend the Internal Revenue Code of 1986 to 
provide tax incentives for the production of renewable energy and 
energy conservation, and ask for its immediate consideration.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 2776

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

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF 
                   CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Renewable 
     Energy and Energy Conservation Tax Act of 2007''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.

                     TITLE I--PRODUCTION INCENTIVES

Sec. 101. Extension and modification of renewable energy credit.
Sec. 102. Production credit for electricity produced from marine 
              renewables.
Sec. 103. Extension and modification of energy credit.
Sec. 104. New clean renewable energy bonds.
Sec. 105. Extension and modification of special rule to implement FERC 
              and State electric restructuring policy.
Sec. 106. Repeal of dollar limitation and allowance against alternative 
              minimum tax for residential solar and fuel cell property 
              credit.

                         TITLE II--CONSERVATION

                       Subtitle A--Transportation

Sec. 201. Credit for plug-in hybrid vehicles.
Sec. 202. Extension and modification of alternative fuel vehicle 
              refueling property credit.
Sec. 203. Extension and modification of credits for biodiesel and 
              renewable diesel.
Sec. 204. Credit for production of cellulosic alcohol.
Sec. 205. Extension of transportation fringe benefit to bicycle 
              commuters.
Sec. 206. Modification of limitation on automobile depreciation.
Sec. 207. Restructuring of New York Liberty Zone tax credits.

               Subtitle B--Other Conservation Provisions

Sec. 211. Qualified energy conservation bonds.
Sec. 212. Qualified residential energy efficiency assistance bonds.
Sec. 213. Extension of energy efficient commercial buildings deduction.
Sec. 214. Modifications of energy efficient appliance credit for 
              appliances produced after 2007.
Sec. 215. Five-year applicable recovery period for depreciation of 
              qualified energy management devices.

                     TITLE III--REVENUE PROVISIONS

             Subtitle A--Denial of Oil and Gas Tax Benefits

Sec. 301. Denial of deduction for income attributable to domestic 
              production of oil, natural gas, or primary products 
              thereof.
Sec. 302. 7-year amortization of geological and geophysical 
              expenditures for certain major integrated oil companies.
Sec. 303. Clarification of determination of foreign oil and gas 
              extraction income.

   Subtitle B--Clarification of Eligibility for Certain Fuel Credits

Sec. 311. Clarification of eligibility for renewable diesel credit.
Sec. 312. Clarification that credits for fuel are designed to provide 
              an incentive for United States production.

                       TITLE IV--OTHER PROVISIONS

                          Subtitle A--Studies

Sec. 401. Carbon audit of the tax code.
Sec. 402. Comprehensive study of biofuels.

Subtitle B--Application of Certain Labor Standards on Projects Financed 
                         Under Tax Credit Bonds

Sec. 411. Application of certain labor standards on projects financed 
              under tax credit bonds.

                     TITLE I--PRODUCTION INCENTIVES

     SEC. 101. EXTENSION AND MODIFICATION OF RENEWABLE ENERGY 
                   CREDIT.

       (a) Extension of Credit.--Each of the following provisions 
     of section 45(d) (relating to qualified facilities) is 
     amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2013'':
       (1) Paragraph (1).
       (2) Clauses (i) and (ii) of paragraph (2)(A).
       (3) Clauses (i)(I) and (ii) of paragraph (3)(A).
       (4) Paragraph (4).
       (5) Paragraph (5).
       (6) Paragraph (6).
       (7) Paragraph (7).
       (8) Subparagraphs (A) and (B) of paragraph (9).
       (b) Modification of Credit Phaseout.--
       (1) Repeal of phaseout.--Subsection (b) of section 45 is 
     amended--
       (A) by striking paragraph (1), and
       (B) by striking ``the 8 cent amount in paragraph (1),'' in 
     paragraph (2) thereof.
       (2) Limitation based on investment in facility.--Subsection 
     (b) of section 45 is amended by inserting before paragraph 
     (2) the following new paragraph:
       ``(1) Limitation based on investment in facility.--
       ``(A) In general.--In the case of any qualified facility 
     originally placed in service after December 31, 2008, the 
     amount of the credit determined under subsection (a) for any 
     taxable year with respect to electricity produced at such 
     facility shall not exceed the product of--
       ``(i) the applicable percentage with respect to such 
     facility, multiplied by
       ``(ii) the eligible basis of such facility.
       ``(B) Carryforward of unused limitation and excess 
     credit.--
       ``(i) Unused limitation.--If the limitation imposed under 
     subparagraph (A) with respect to any facility for any taxable 
     year exceeds the credit determined under subsection (a) 
     (determined without regard to this paragraph) with respect to 
     such facility for such taxable year, the limitation imposed 
     under subparagraph (A) with respect to such facility for the 
     succeeding taxable year shall be increased by the amount of 
     such excess.
       ``(ii) Excess credit.--If the credit determined under 
     subsection (a) (determined without regard to this paragraph) 
     with respect to any facility for any taxable year exceeds the 
     limitation imposed under subparagraph (A) with respect to 
     such facility for such taxable year, the credit determined 
     under subsection (a) with respect to such facility for the 
     succeeding taxable year (determined before the application of 
     subparagraph (A) for such succeeding taxable year) shall be 
     increased by the amount of such excess. With respect to any 
     facility, no amount may carried forward under this clause to 
     any taxable year beginning after the 10-year period described 
     in subsection (a)(2)(A)(ii) with respect to such facility.
       ``(C) Applicable percentage.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `applicable percentage' means, 
     with respect to any facility, the appropriate percentage 
     prescribed by the Secretary for the month in which such 
     facility is originally placed in service.
       ``(ii) Method of prescribing percentages.--The percentages 
     prescribed by the Secretary for any month under clause (i) 
     shall be percentages which yield over a 10-year period 
     amounts of limitation under subparagraph (A) which have a 
     present value equal to 35 percent of the eligible basis of 
     the facility.
       ``(iii) Method of discounting.--The present value under 
     clause (ii) shall be determined--

       ``(I) as of the last day of the 1st year of the 10-year 
     period referred to in clause (ii),
       ``(II) by using a discount rate equal to the average annual 
     interest rate of tax-exempt obligations having a term of 10 
     years or more which are issued during the month preceding the 
     month for which the percentage is being prescribed, and
       ``(III) by taking into account the limitation under 
     subparagraph (A) for any year on the last day of such year.

       ``(D) Eligible basis.--For purposes of this paragraph, the 
     term `eligible basis' means, with respect to any facility, 
     the basis of such facility determined as of the time that 
     such facility is originally placed in service.
       ``(E) Special rule for first and last year of credit 
     period.--In the case of any taxable year any portion of which 
     is not

[[Page 23197]]

     within the 10-year period described in subsection 
     (a)(2)(A)(ii) with respect to any facility, the amount of the 
     limitation under subparagraph (A) with respect to such 
     facility shall be reduced by an amount which bears the same 
     ratio to the amount of such limitation (determined without 
     regard to this subparagraph) as such portion of the taxable 
     year which is not within such period bears to the entire 
     taxable year.''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to property 
     originally placed in service after December 31, 2008.
       (2) Repeal of credit phaseout.--The amendments made by 
     subsection (b)(1) shall apply to taxable years ending after 
     December 31, 2008.

     SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM 
                   MARINE RENEWABLES.

       (a) In General.--Paragraph (1) of section 45(c) (relating 
     to resources) is amended by striking ``and'' at the end of 
     subparagraph (G), by striking the period at the end of 
     subparagraph (H) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(I) marine and hydrokinetic renewable energy.''.
       (b) Marine Renewables.--Subsection (c) of section 45 is 
     amended by adding at the end the following new paragraph:
       ``(10) Marine and hydrokinetic renewable energy.--
       ``(A) In general.--The term `marine and hydrokinetic 
     renewable energy' means energy derived from--
       ``(i) waves, tides, and currents in oceans, estuaries, and 
     tidal areas,
       ``(ii) free flowing water in rivers, lakes, and streams,
       ``(iii) free flowing water in an irrigation system, canal, 
     or other man-made channel, including projects that utilize 
     nonmechanical structures to accelerate the flow of water for 
     electric power production purposes, or
       ``(iv) differentials in ocean temperature (ocean thermal 
     energy conversion).
       ``(B) Exceptions.--Such term shall not include any energy 
     which is derived from any source which utilizes a dam, 
     diversionary structure (except as provided in subparagraph 
     (A)(iii)), or impoundment for electric power production 
     purposes.''.
       (c) Definition of Facility.--Subsection (d) of section 45 
     is amended by adding at the end the following new paragraph:
       ``(11) Marine and hydrokinetic renewable energy 
     facilities.--In the case of a facility producing electricity 
     from marine and hydrokinetic renewable energy, the term 
     `qualified facility' means any facility owned by the 
     taxpayer--
       ``(A) which has a nameplate capacity rating of at least 150 
     kilowatts, and
       ``(B) which is originally placed in service on or after the 
     date of the enactment of this paragraph and before January 1, 
     2013.''.
       (d) Credit Rate.--Subparagraph (A) of section 45(b)(4) is 
     amended by striking ``or (9)'' and inserting ``(9), or 
     (11)''.
       (e) Coordination With Small Irrigation Power.--Paragraph 
     (5) of section 45(d), as amended by this Act, is amended by 
     striking ``January 1, 2013'' and inserting ``the date of the 
     enactment of paragraph (11)''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to electricity produced and sold after the date 
     of the enactment of this Act, in taxable years ending after 
     such date.

     SEC. 103. EXTENSION AND MODIFICATION OF ENERGY CREDIT.

       (a) Extension of Credit.--
       (1) Solar energy property.--Paragraphs (2)(A)(i)(II) and 
     (3)(A)(ii) of section 48(a) (relating to energy credit) are 
     each amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2017''.
       (2) Fuel cell property.--Subparagraph (E) of section 
     48(c)(1) (relating to qualified fuel cell property) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2016''.
       (b) Allowance of Energy Credit Against Alternative Minimum 
     Tax.--Subparagraph (B) of section 38(c)(4) (relating to 
     specified credits) 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) the credit determined under section 46 to the extent 
     that such credit is attributable to the energy credit 
     determined under section 48.''.
       (c) Increase of Credit Limitation for Fuel Cell Property.--
     Subparagraph (B) of section 48(c)(1) is amended by striking 
     ``$500'' and inserting ``$1,500''.
       (d) Public Electric Utility Property Taken Into Account.--
       (1) In general.--Paragraph (3) of section 48(a) is amended 
     by striking the second sentence thereof.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 48(c) is amended by striking 
     subparagraph (D) and redesignating subparagraph (E) as 
     subparagraph (D).
       (B) Paragraph (2) of section 48(c) is amended by striking 
     subparagraph (D) and redesignating subparagraph (E) as 
     subparagraph (D).
       (e) Clerical Amendments.--Paragraphs (1)(B) and (2)(B) of 
     section 48(c) are each amended by striking ``paragraph (1)'' 
     and inserting ``subsection (a)''.
       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall take 
     effect on the date of the enactment of this Act.
       (2) Allowance against alternative minimum tax.--The 
     amendments made by subsection (b) shall apply to credits 
     determined under section 46 of the Internal Revenue Code of 
     1986 in taxable years beginning after the date of the 
     enactment of this Act and to carrybacks of such credits.
       (3) Increase in limitation; public electric utility 
     property.--The amendments made by subsections (c) and (d) 
     shall apply to periods after the date of the enactment of 
     this Act, in taxable years ending after such date, under 
     rules similar to the rules of section 48(m) of the Internal 
     Revenue Code of 1986 (as in effect on the day before the date 
     of the enactment of the Revenue Reconciliation Act of 1990).

     SEC. 104. NEW CLEAN RENEWABLE ENERGY BONDS.

       (a) In General.--Part IV of subchapter A of chapter 1 
     (relating to credits against tax) is amended by adding at the 
     end the following new subpart:

                ``Subpart I--Qualified Tax Credit Bonds

``Sec. 54A. Credit to holders of qualified tax credit bonds.
``Sec. 54B. New clean renewable energy bonds.

     ``SEC. 54A. CREDIT TO HOLDERS OF QUALIFIED TAX CREDIT BONDS.

       ``(a) Allowance of Credit.--If a taxpayer holds a qualified 
     tax credit bond on one or more credit allowance dates of the 
     bond during any taxable year, there shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of the credits 
     determined under subsection (b) with respect to such dates.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a qualified tax credit bond is 25 percent of the 
     annual credit determined with respect to such bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any qualified tax credit bond is the product of--
       ``(A) the applicable credit rate, multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Applicable credit rate.--For purposes of paragraph 
     (2), the applicable credit rate is the rate which the 
     Secretary estimates will permit the issuance of qualified tax 
     credit bonds with a specified maturity or redemption date 
     without discount and without interest cost to the qualified 
     issuer. The applicable credit rate with respect to any 
     qualified tax credit bond shall be determined as of the first 
     day on which there is a binding, written contract for the 
     sale or exchange of the bond.
       ``(4) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed or matures.
       ``(c) Limitation Based on Amount of Tax.--
       ``(1) In general.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this part 
     (other than subpart C and this subpart).
       ``(2) Carryover of unused credit.--If the credit allowable 
     under subsection (a) exceeds the limitation imposed by 
     paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such taxable year 
     (determined before the application of paragraph (1) for such 
     succeeding taxable year).
       ``(d) Qualified Tax Credit Bond.--For purposes of this 
     section--
       ``(1) Qualified tax credit bond.--The term `qualified tax 
     credit bond' means a new clean renewable energy bond which is 
     part of an issue that meets the requirements of paragraphs 
     (2), (3), (4), and (5).
       ``(2) Special rules relating to expenditures.--
       ``(A) In general.--An issue shall be treated as meeting the 
     requirements of this paragraph if, as of the date of 
     issuance, the issuer reasonably expects--
       ``(i) 100 percent or more of the available project proceeds 
     to be spent for 1 or more qualified purposes within the 3-
     year period beginning on such date of issuance, and
       ``(ii) a binding commitment with a third party to spend at 
     least 10 percent of such available project proceeds will be 
     incurred

[[Page 23198]]

     within the 6-month period beginning on such date of issuance.
       ``(B) Failure to spend required amount of bond proceeds 
     within 3 years.--
       ``(i) In general.--To the extent that less than 100 percent 
     of the available project proceeds of the issue are expended 
     by the close of the expenditure period for 1 or more 
     qualified purposes, the issuer shall redeem all of the 
     nonqualified bonds within 90 days after the end of such 
     period. For purposes of this paragraph, the amount of the 
     nonqualified bonds required to be redeemed shall be 
     determined in the same manner as under section 142.
       ``(ii) Expenditure period.--For purposes of this subpart, 
     the term `expenditure period' means, with respect to any 
     issue, the 3-year period beginning on the date of issuance. 
     Such term shall include any extension of such period under 
     clause (iii).
       ``(iii) Extension of period.--Upon submission of a request 
     prior to the expiration of the expenditure period (determined 
     without regard to any extension under this clause), the 
     Secretary may extend such period if the issuer establishes 
     that the failure to expend the proceeds within the original 
     expenditure period is due to reasonable cause and the 
     expenditures for qualified purposes will continue to proceed 
     with due diligence.
       ``(C) Qualified purpose.--For purposes of this paragraph, 
     the term `qualified purpose' means a purpose specified in 
     section 54B(a)(1).
       ``(D) Reimbursement.--For purposes of this subtitle, 
     available project proceeds of an issue shall be treated as 
     spent for a qualified purpose if such proceeds are used to 
     reimburse the issuer for amounts paid for a qualified purpose 
     after the date that the Secretary makes an allocation of bond 
     limitation with respect to such issue, but only if--
       ``(i) prior to the payment of the original expenditure, the 
     issuer declared its intent to reimburse such expenditure with 
     the proceeds of a qualified tax credit bond,
       ``(ii) not later than 60 days after payment of the original 
     expenditure, the issuer adopts an official intent to 
     reimburse the original expenditure with such proceeds, and
       ``(iii) the reimbursement is made not later than 18 months 
     after the date the original expenditure is paid.
       ``(3) Reporting.--An issue shall be treated as meeting the 
     requirements of this paragraph if the issuer of qualified tax 
     credit bonds submits reports similar to the reports required 
     under section 149(e).
       ``(4) Special rules relating to arbitrage.--
       ``(A) In general.--An issue shall be treated as meeting the 
     requirements of this paragraph if the issuer satisfies the 
     requirements of section 148 with respect to the proceeds of 
     the issue.
       ``(B) Special rule for investments during expenditure 
     period.--An issue shall not be treated as failing to meet the 
     requirements of subparagraph (A) by reason of any investment 
     of available project proceeds during the expenditure period.
       ``(C) Special rule for reserve funds.--An issue shall not 
     be treated as failing to meet the requirements of 
     subparagraph (A) by reason of any fund which is expected to 
     be used to repay such issue if--
       ``(i) such fund is funded at a rate not more rapid than 
     equal annual installments,
       ``(ii) such fund is funded in a manner that such fund will 
     not exceed the amount necessary to repay the issue if 
     invested at the maximum rate permitted under clause (iii), 
     and
       ``(iii) the yield on such fund is not greater than the 
     discount rate determined under paragraph (5)(B) with respect 
     to the issue.
       ``(5) Maturity limitation.--
       ``(A) In general.--An issue shall not be treated as meeting 
     the requirements of this paragraph if the maturity of any 
     bond which is part of such issue exceeds the maximum term 
     determined by the Secretary under subparagraph (B).
       ``(B) Maximum term.--During each calendar month, the 
     Secretary shall determine the maximum term permitted under 
     this paragraph for bonds issued during the following calendar 
     month. Such maximum term shall be the term which the 
     Secretary estimates will result in the present value of the 
     obligation to repay the principal on the bond being equal to 
     50 percent of the face amount of such bond. Such present 
     value shall be determined using as a discount rate the 
     average annual interest rate of tax-exempt obligations having 
     a term of 10 years or more which are issued during the month. 
     If the term as so determined is not a multiple of a whole 
     year, such term shall be rounded to the next highest whole 
     year.
       ``(e) Other Definitions.--For purposes of this subchapter--
       ``(1) Credit allowance date.--The term `credit allowance 
     date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
     Such term includes the last day on which the bond is 
     outstanding.
       ``(2) Bond.--The term `bond' includes any obligation.
       ``(3) State.--The term `State' includes the District of 
     Columbia and any possession of the United States.
       ``(4) Available project proceeds.--The term `available 
     project proceeds' means--
       ``(A) the excess of--
       ``(i) the proceeds from the sale of an issue, over
       ``(ii) the issuance costs financed by the issue (to the 
     extent that such costs do not exceed 2 percent of such 
     proceeds), and
       ``(B) the proceeds from any investment of the excess 
     described in subparagraph (A).
       ``(f) Credit Treated as Interest.--For purposes of this 
     subtitle, the credit determined under subsection (a) shall be 
     treated as interest which is includible in gross income.
       ``(g) S Corporations and Partnerships.--In the case of a 
     tax credit bond held by an S corporation or partnership, the 
     allocation of the credit allowed by this section to the 
     shareholders of such corporation or partners of such 
     partnership shall be treated as a distribution.
       ``(h) Bonds Held by Regulated Investment Companies and Real 
     Estate Investment Trusts.--If any qualified tax credit bond 
     is held by a regulated investment company or a real estate 
     investment trust, the credit determined under subsection (a) 
     shall be allowed to shareholders of such company or 
     beneficiaries of such trust (and any gross income included 
     under subsection (f) with respect to such credit shall be 
     treated as distributed to such shareholders or beneficiaries) 
     under procedures prescribed by the Secretary.
       ``(i) Credits May Be Stripped.--Under regulations 
     prescribed by the Secretary--
       ``(1) In general.--There may be a separation (including at 
     issuance) of the ownership of a qualified tax credit bond and 
     the entitlement to the credit under this section with respect 
     to such bond. In case of any such separation, the credit 
     under this section shall be allowed to the person who on the 
     credit allowance date holds the instrument evidencing the 
     entitlement to the credit and not to the holder of the bond.
       ``(2) Certain rules to apply.--In the case of a separation 
     described in paragraph (1), the rules of section 1286 shall 
     apply to the qualified tax credit bond as if it were a 
     stripped bond and to the credit under this section as if it 
     were a stripped coupon.

     ``SEC. 54B. NEW CLEAN RENEWABLE ENERGY BONDS.

       ``(a) New Clean Renewable Energy Bond.--For purposes of 
     this subpart, the term `new clean renewable energy bond' 
     means any bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for capital expenditures incurred by 
     public power providers or cooperative electric companies for 
     one or more qualified renewable energy facilities,
       ``(2) the bond is issued by a qualified issuer, and
       ``(3) the issuer designates such bond for purposes of this 
     section.
       ``(b) Reduced Credit Amount.--The annual credit determined 
     under section 54A(b) with respect to any new clean renewable 
     energy bond shall be 70 percent of the amount so determined 
     without regard to this subsection.
       ``(c) Limitation on Amount of Bonds Designated.--
       ``(1) In general.--The maximum aggregate face amount of 
     bonds which may be designated under subsection (a) by any 
     issuer shall not exceed the limitation amount allocated under 
     this subsection to such issuer.
       ``(2) National limitation on amount of bonds designated.--
     There is a national new clean renewable energy bond 
     limitation of $2,000,000,000 which shall be allocated by the 
     Secretary as provided in paragraph (3), except that--
       ``(A) not more than 60 percent thereof may be allocated to 
     qualified projects of public power providers, and
       ``(B) not more than 40 percent thereof may be allocated to 
     qualified projects of cooperative electric companies.
       ``(3) Method of allocation.--
       ``(A) Allocation among public power providers.--After the 
     Secretary determines the qualified projects of public power 
     providers which are appropriate for receiving an allocation 
     of the national new clean renewable energy bond limitation, 
     the Secretary shall, to the maximum extent practicable, make 
     allocations among such projects in such manner that the 
     amount allocated to each such project bears the same ratio to 
     the cost of such project as the limitation under subparagraph 
     (2)(A) bears to the cost of all such projects.
       ``(B) Allocation among cooperative electric companies.--The 
     Secretary shall make allocations of the amount of the 
     national new clean renewable energy bond limitation described 
     in paragraph (2)(B) among qualified projects of cooperative 
     electric companies in such manner as the Secretary determines 
     appropriate.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified renewable energy facility.--The term 
     `qualified renewable energy facility' means a qualified 
     facility (as determined under section 45(d) without regard to 
     paragraphs (8) and (10) thereof and to any placed in service 
     date) owned by a public power provider or a cooperative 
     electric company.

[[Page 23199]]

       ``(2) Public power provider.--The term `public power 
     provider' means a State utility with a service obligation, as 
     such terms are defined in section 217 of the Federal Power 
     Act (as in effect on the date of the enactment of this 
     paragraph).
       ``(3) Cooperative electric company.--The term `cooperative 
     electric company' means a mutual or cooperative electric 
     company described in section 501(c)(12) or section 
     1381(a)(2)(C).
       ``(4) Clean renewable energy bond lender.--The term `clean 
     renewable energy bond lender' means a lender which is a 
     cooperative which is owned by, or has outstanding loans to, 
     100 or more cooperative electric companies and is in 
     existence on February 1, 2002, and shall include any 
     affiliated entity which is controlled by such lender.
       ``(5) Qualified issuer.--The term `qualified issuer' means 
     a public power provider, a cooperative electric company, a 
     clean renewable energy bond lender, or a not-for-profit 
     electric utility which has received a loan or loan guarantee 
     under the Rural Electrification Act.''.
       (b) Reporting.--Subsection (d) of section 6049 (relating to 
     returns regarding payments of interest) is amended by adding 
     at the end the following new paragraph:
       ``(9) Reporting of credit on qualified tax credit bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 54A and such amounts shall be treated as paid on the 
     credit allowance date (as defined in section 54A(e)(1)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A) of this paragraph, subsection 
     (b)(4) of this section shall be applied without regard to 
     subparagraphs (A), (H), (I), (J), (K), and (L)(i).
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''.
       (c) Conforming Amendments.--
       (1) Sections 54(c)(2) and 1400N(l)(3)(B) are each amended 
     by striking ``subpart C'' and inserting ``subparts C and I''.
       (2) Section 1397E(c)(2) is amended by striking ``subpart 
     H'' and inserting ``subparts H and I''.
       (3) Section 6401(b)(1) is amended by striking ``and H'' and 
     inserting ``H, and I''.
       (4) The heading of subpart H of part IV of subchapter A of 
     chapter 1 is amended by striking ``Certain Bonds'' and 
     inserting ``Clean Renewable Energy Bonds''.
       (5) The table of subparts for part IV of subchapter A of 
     chapter 1 is amended by striking the item relating to subpart 
     H and inserting the following new items:

``subpart h. nonrefundable credit to holders of clean renewable energy 
                                 bonds.

              ``subpart i. qualified tax credit bonds.''.

       (d) Effective Dates.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 105. EXTENSION AND MODIFICATION OF SPECIAL RULE TO 
                   IMPLEMENT FERC AND STATE ELECTRIC RESTRUCTURING 
                   POLICY.

       (a) Extension for Qualified Electric Utilities.--
       (1) In general.--Paragraph (3) of section 451(i) (relating 
     to special rule for sales or dispositions to implement 
     Federal Energy Regulatory Commission or State electric 
     restructuring policy) is amended by striking ``before January 
     1, 2008,'' and inserting ``before January 1, 2010, by a 
     qualified electric utility,''.
       (2) Qualified electric utility.--Subsection (i) of section 
     451 is amended by redesignating paragraphs (6) through (10) 
     as paragraphs (7) through (11), respectively, and by 
     inserting after paragraph (5) the following new paragraph:
       ``(6) Qualified electric utility.--For purposes of this 
     subsection, the term `qualified electric utility' means--
       ``(A) an electric utility (as defined in section 3(22) of 
     the Federal Power Act (16 U.S.C. 796(22)), and
       ``(B) any person in the same holding company system (as 
     defined in section 1262(9) of the Public Utility Holding 
     Company Act of 2005 (42 U.S.C. 16451(9)) as an electric 
     utility referred to subparagraph (A).''.
       (b) Extension of Period for Transfer of Operational Control 
     Authorized by FERC.--Clause (ii) of section 451(i)(4)(B) is 
     amended by striking ``December 31, 2007'' and inserting ``the 
     date which is 4 years after the close of the taxable year in 
     which the transaction occurs''.
       (c) Property Located Outside the United States Not Treated 
     as Exempt Utility Property.--Paragraph (5) of section 451(i) 
     is amended by adding at the end the following new 
     subparagraph:
       ``(C) Exception for property located outside the united 
     states.--The term `exempt utility property' shall not include 
     any property which is located outside the United States.''.
       (d) Effective Dates.--
       (1) Extension.--The amendment made by subsection (a) shall 
     apply to transactions after December 31, 2007.
       (2) Transfers of operational control.--The amendment made 
     by subsection (b) shall take effect as if included in section 
     909 of the American Jobs Creation Act of 2004.
       (3) Exception for property located outside the united 
     states.--The amendment made by subsection (c) shall apply to 
     transactions after the date of the enactment of this Act.

     SEC. 106. REPEAL OF DOLLAR LIMITATION AND ALLOWANCE AGAINST 
                   ALTERNATIVE MINIMUM TAX FOR RESIDENTIAL SOLAR 
                   AND FUEL CELL PROPERTY CREDIT.

       (a) Repeal of Maximum Dollar Limitation.--
       (1) In general.--Subsection (b) of section 25D (relating to 
     limitations) is amended to read as follows:
       ``(b) Certification of Solar Water Heating Property.--No 
     credit shall be allowed under this section for an item of 
     property described in subsection (d)(1) unless such property 
     is certified for performance 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.''.
       (2) Conforming amendments.--
       (A) Subsection (e) of section 25D is amended by striking 
     paragraph (4) and by redesignating paragraphs (5) through (9) 
     as paragraphs (4) through (8), respectively.
       (B) Paragraph (1) of section 25C(e) is amended by striking 
     ``(8), and (9)'' and inserting ``and (8) (and paragraph (4) 
     as in effect before its repeal by the Renewable Energy and 
     Energy Conservation Tax Act of 2007)''.
       (b) Credit Allowed Against Alternative Minimum Tax.--
       (1) In general.--Subsection (c) of section 25D is amended 
     to read as follows:
       ``(c) Limitation Based on Amount of Tax; Carryforward of 
     Unused Credit.--
       ``(1) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for the taxable year 
     shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section) and section 27 for the taxable 
     year.
       ``(2) Carryforward of unused credit.--
       ``(A) Rule for years in which all personal credits allowed 
     against regular and alternative minimum tax.--In the case of 
     a taxable year to which section 26(a)(2) applies, if the 
     credit allowable under subsection (a) exceeds the limitation 
     imposed by section 26(a)(2) for such taxable year reduced by 
     the sum of the credits allowable under this subpart (other 
     than this section), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such succeeding taxable year.
       ``(B) Rule for other years.--In the case of a taxable year 
     to which section 26(a)(2) does not apply, if the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such succeeding 
     taxable year.''.
       (2) Conforming amendments.--
       (A) Section 23(b)(4)(B) is amended by inserting ``and 
     section 25D'' after ``this section''.
       (B) Section 24(b)(3)(B) is amended by striking ``and 25B'' 
     and inserting ``, 25B, and 25D''.
       (C) Section 25B(g)(2) is amended by striking ``section 23'' 
     and inserting ``sections 23 and 25D''.
       (D) Section 26(a)(1) is amended by striking ``and 25B'' and 
     inserting ``25B, and 25D''.
       (c) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to expenditures made after the date of the enactment of this 
     Act.
       (2) Allowance against alternative minimum tax.--
       (A) In general.--The amendments made by subsection (b) 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
       (B) Application of egtrra sunset.--The amendments made by 
     subsection (b)(2) shall be subject to title IX of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001 in 
     the same manner as the provisions of such Act to which such 
     amendments relate.

                         TITLE II--CONSERVATION

                       Subtitle A--Transportation

     SEC. 201. CREDIT FOR PLUG-IN HYBRID VEHICLES.

       (a) In General.--Subpart B of part IV of subchapter A of 
     chapter 1 (relating to other credits) is amended by adding at 
     the end the following new section:

     ``SEC. 30D. PLUG-IN HYBRID VEHICLES.

       ``(a) Allowance of Credit.--There shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of the credit amounts 
     determined under subsection (b) with respect to each 
     qualified plug-in hybrid vehicle placed in service by the 
     taxpayer during the taxable year.
       ``(b) Per Vehicle Dollar Limitation.--

[[Page 23200]]

       ``(1) In general.--The amount determined under this 
     subsection with respect to any qualified plug-in hybrid 
     vehicle is the sum of the amounts determined under paragraphs 
     (2) and (3) with respect to such vehicle.
       ``(2) Base amount.--The amount determined under this 
     paragraph is $4,000.
       ``(3) Battery capacity.--In the case of vehicle which draws 
     propulsion energy from a battery with not less than 5 
     kilowatt hours of capacity, the amount determined under this 
     paragraph is $200, plus $200 for each kilowatt hour of 
     capacity in excess of 5 kilowatt hours. The amount determined 
     under this paragraph shall not exceed $2,000.
       ``(c) Application With Other Credits.--
       ``(1) Business credit treated as part of general business 
     credit.--So much of the credit which would be allowed under 
     subsection (a) for any taxable year (determined without 
     regard to this subsection) that is attributable to property 
     of a character subject to an allowance for depreciation shall 
     be treated as a credit listed in section 38(b) for such 
     taxable year (and not allowed under subsection (a)).
       ``(2) Personal credit.--
       ``(A) In general.--For purposes of this title, the credit 
     allowed under subsection (a) for any taxable year (determined 
     after application of paragraph (1)) shall be treated as a 
     credit allowable under subpart A for such taxable year.
       ``(B) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for any taxable year 
     (determined after application of paragraph (1)) shall not 
     exceed the excess of--
       ``(i) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(ii) the sum of the credits allowable under subpart A 
     (other than this section and sections 23 and 25D) and section 
     27 for the taxable year.
       ``(d) Qualified Plug-In Hybrid Vehicle.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified plug-in hybrid 
     vehicle' means a motor vehicle (as defined in section 
     30(c)(2))--
       ``(A) the original use of which commences with the 
     taxpayer,
       ``(B) which is acquired for use or lease by the taxpayer 
     and not for resale,
       ``(C) which is made by a manufacturer,
       ``(D) which has a gross vehicle weight rating of less than 
     14,000 pounds,
       ``(E) which has received a certificate of conformity under 
     the Clean Air Act and meets or exceeds the Bin 5 Tier II 
     emission standard established in regulations prescribed by 
     the Administrator of the Environmental Protection Agency 
     under section 202(i) of the Clean Air Act for that make and 
     model year vehicle,
       ``(F) which is propelled to a significant extent by an 
     electric motor which draws electricity from a battery which--
       ``(i) has a capacity of not less than 4 kilowatt hours, and
       ``(ii) is capable of being recharged from an external 
     source of electricity, and
       ``(G) which either--
       ``(i) is also propelled to a significant extent by other 
     than an electric motor, or
       ``(ii) has a significant onboard source of electricity 
     which also recharges the battery referred to in subparagraph 
     (F).
       ``(2) Exception.--The term `qualified plug-in hybrid 
     vehicle' shall not include any vehicle which is not a 
     passenger automobile or light truck if such vehicle has a 
     gross vehicle weight rating of less than 8,500 pounds.
       ``(3) Other terms.--The terms `passenger automobile', 
     `light truck', and `manufacturer' have the meanings given 
     such terms in regulations prescribed by the Administrator of 
     the Environmental Protection Agency for purposes of the 
     administration of title II of the Clean Air Act (42 U.S.C. 
     7521 et seq.).
       ``(4) Battery capacity.--The term `capacity' means, with 
     respect to any battery, the quantity of electricity which the 
     battery is capable of storing, expressed in kilowatt hours, 
     as measured from a 100 percent state of charge to a 0 percent 
     state of charge.
       ``(e) Limitation on Number of Qualified Plug-In Hybrid 
     Vehicles Eligible for Credit.--
       ``(1) In general.--In the case of a qualified plug-in 
     hybrid vehicle sold during the phaseout period, only the 
     applicable percentage of the credit otherwise allowable under 
     subsection (a) shall be allowed.
       ``(2) Phaseout period.--For purposes of this subsection, 
     the phaseout period is the period beginning with the second 
     calendar quarter following the calendar quarter which 
     includes the first date on which the number of qualified 
     plug-in hybrid vehicles manufactured by the manufacturer of 
     the vehicle referred to in paragraph (1) sold for use in the 
     United States after the date of the enactment of this 
     section, is at least 60,000.
       ``(3) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage is--
       ``(A) 50 percent for the first 2 calendar quarters of the 
     phaseout period,
       ``(B) 25 percent for the 3d and 4th calendar quarters of 
     the phaseout period, and
       ``(C) 0 percent for each calendar quarter thereafter.
       ``(4) Controlled groups.--Rules similar to the rules of 
     section 30B(f)(4) shall apply for purposes of this 
     subsection.
       ``(f) Special Rules.--
       ``(1) Basis reduction.--The basis of any property for which 
     a credit is allowable under subsection (a) shall be reduced 
     by the amount of such credit (determined without regard to 
     subsection (c)).
       ``(2) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any property which 
     ceases to be property eligible for such credit.
       ``(3) Property used outside united states, etc., not 
     qualified.--No credit shall be allowed under subsection (a) 
     with respect to any property referred to in section 50(b)(1) 
     or with respect to the portion of the cost of any property 
     taken into account under section 179.
       ``(4) Election not to take credit.--No credit shall be 
     allowed under subsection (a) for any vehicle if the taxpayer 
     elects to not have this section apply to such vehicle.
       ``(5) Property used by tax-exempt entity; interaction with 
     air quality and motor vehicle safety standards.--Rules 
     similar to the rules of paragraphs (6) and (10) of section 
     30B(h) shall apply for purposes of this section.''.
       (b) Plug-In Vehicles Not Treated as New Qualified Hybrid 
     Vehicles.--Section 30B(d)(3) is amended by adding at the end 
     the following new subparagraph:
       ``(D) Exclusion of plug-in vehicles.--Any vehicle with 
     respect to which a credit is allowable under section 30D 
     (determined without regard to subsection (c) thereof) shall 
     not be taken into account under this section.''.
       (c) Credit Made Part of General Business Credit.--Section 
     38(b) is amended by striking ``and'' at the end of paragraph 
     (30), by striking the period at the end of paragraph (31) and 
     inserting ``, plus'', and by adding at the end the following 
     new paragraph:
       ``(32) the portion of the plug-in hybrid vehicle credit to 
     which section 30D(c)(1) applies.''.
       (d) Conforming Amendments.--
       (1)(A) Section 24(b)(3)(B), as amended by this Act, is 
     amended by striking ``and 25D'' and inserting ``25D, and 
     30D''.
       (B) Section 25(e)(1)(C)(ii) is amended by inserting 
     ``30D,'' after ``25D,''.
       (C) Section 25B(g)(2), as amended by this Act, is amended 
     by striking ``and 25D'' and inserting ``, 25D, and 30D''.
       (D) Section 26(a)(1), as amended by this Act, is amended by 
     striking ``and 25D'' and inserting ``25D, and 30D''.
       (E) Section 1400C(d)(2) is amended by striking ``and 25D'' 
     and inserting ``25D, and 30D''.
       (2) Section 1016(a) is amended by striking ``and'' at the 
     end of paragraph (37), by striking the period at the end of 
     paragraph (38) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(38) to the extent provided in section 30D(f)(1).''.
       (3) Section 6501(m) is amended by inserting ``30D(f)(4),'' 
     after ``30C(e)(5),''.
       (4) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 30D. Plug-in hybrid vehicles.''.

       (e) Treatment of Alternative Motor Vehicle Credit as a 
     Personal Credit.--
       (1) In general.--Paragraph (2) of section 30B(g) is amended 
     to read as follows:
       ``(2) Personal credit.--The credit allowed under subsection 
     (a) for any taxable year (after application of paragraph (1)) 
     shall be treated as a credit allowable under subpart A for 
     such taxable year.''.
       (2) Conforming amendment.--Subparagraph (A) of section 
     30C(d)(2) is amended by striking ``sections 27, 30, and 30B'' 
     and inserting ``sections 27 and 30''.
       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to taxable years beginning after December 31, 2007.
       (2) Treatment of alternative motor vehicle credit as 
     personal credit.--The amendments made by subsection (e) shall 
     apply to taxable years beginning after December 31, 2006.
       (g) Application of EGTRRA Sunset.--The amendments made by 
     subsection (d)(1) shall be subject to title IX of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001 in 
     the same manner as the provisions of such Act to which such 
     amendments relate.

     SEC. 202. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL 
                   VEHICLE REFUELING PROPERTY CREDIT.

       (a) Increase in Credit Amount.--Section 30C (relating to 
     alternative fuel vehicle refueling property credit) is 
     amended--
       (1) by striking ``30 percent'' in subsection (a) and 
     inserting ``50 percent'', and
       (2) by striking ``$30,000'' in subsection (b)(1) and 
     inserting ``$50,000''.
       (b) Extension of Credit.--Paragraph (2) of section 30C(g) 
     (relating to termination) is amended by striking ``December 
     31, 2009'' and inserting ``December 31, 2010''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

[[Page 23201]]



     SEC. 203. EXTENSION AND MODIFICATION OF CREDITS FOR BIODIESEL 
                   AND RENEWABLE DIESEL.

       (a) In General.--Sections 40A(g), 6426(c)(6), and 
     6427(e)(5)(B) are each amended by striking ``December 31, 
     2008'' and inserting ``December 31, 2010''.
       (b) Uniform Treatment of Diesel Produced From Biomass.--
     Paragraph (3) of section 40A(f) is amended--
       (1) by striking ``using a thermal depolymerization 
     process'', and
       (2) by striking ``or D396'' in subparagraph (B).
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to fuel produced, 
     and sold or used, after the date of the enactment of this 
     Act.
       (2) Uniform treatment of diesel produced from biomass.--The 
     amendments made by subsection (b) shall apply to fuel 
     produced, and sold or used, after the date which is 30 days 
     after the date of the enactment of this Act.

     SEC. 204. CREDIT FOR PRODUCTION OF CELLULOSIC ALCOHOL.

       (a) In General.--Subsection (b) of section 40 is amended by 
     adding at the end the following new paragraph:
       ``(5) Cellulosic alcohol fuel producer credit.--
       ``(A) In general.--The cellulosic alcohol fuel producer 
     credit of any cellulosic alcohol fuel producer for any 
     taxable year is 50 cents for each gallon of qualified 
     cellulosic fuel production of such producer.
       ``(B) Qualified cellulosic fuel production.--For purposes 
     of this paragraph, the term `qualified cellulosic fuel 
     production' means any cellulosic alcohol which is produced by 
     a cellulosic alcohol fuel producer, and which during the 
     taxable year--
       ``(i) is sold by such producer to another person--

       ``(I) for use by such other person in the production of a 
     qualified mixture in such other person's trade or business 
     (other than casual off-farm production),
       ``(II) for use by such other person as a fuel in a trade or 
     business, or
       ``(III) who sells such alcohol at retail to another person 
     and places such alcohol in the fuel tank of such other 
     person, or

       ``(ii) is used or sold by such producer for any purpose 
     described in clause (i).
       ``(C) Cellulosic alcohol.--For purposes of this paragraph, 
     the term `cellulosic alcohol' means any alcohol which--
       ``(i) is produced in the United States for use as a fuel in 
     the United States, and
       ``(ii) is derived from any lignocellulosic or 
     hemicellulosic matter that is available on a renewable or 
     recurring basis.

     For purposes of this subparagraph, the term `United States' 
     includes any possession of the United States.
       ``(D) Cellulosic alcohol fuel producer.--For purposes of 
     this paragraph, the term `cellulosic alcohol fuel producer' 
     means any person who produces cellulosic alcohol in a trade 
     or business and is registered with the Secretary as a 
     cellulosic alcohol fuel producer.
       ``(E) Additional distillation excluded.--The qualified 
     cellulosic fuel production of any producer for any taxable 
     year shall not include any alcohol which is purchased by the 
     producer and with respect to which such producer increases 
     the proof of the alcohol by additional distillation.''.
       (b) Conforming Amendments.--
       (1) Subsection (a) of section 40 is amended by striking 
     ``plus'' at the end of paragraph (1), by striking ``plus'' at 
     the end of paragraph (2), by striking the period at the end 
     of paragraph (3) and inserting ``, plus'', and by adding at 
     the end the following new paragraph:
       ``(4) in the case of a cellulosic alcohol fuel producer, 
     the cellulosic alcohol fuel producer credit.''.
       (2) Clause (ii) of section 40(d)(3)(C) is amended by 
     striking ``subsection (b)(4)(B)'' and inserting ``paragraph 
     (4)(B) or (5)(B) of subsection (b)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to alcohol produced after December 31, 2007.

     SEC. 205. EXTENSION OF TRANSPORTATION FRINGE BENEFIT TO 
                   BICYCLE COMMUTERS.

       (a) In General.--Paragraph (1) of section 132(f) of the 
     Internal Revenue Code of 1986 (relating to general rule for 
     qualified transportation fringe) is amended by adding at the 
     end the following:
       ``(D) Any qualified bicycle commuting reimbursement.''.
       (b) Limitation on Exclusion.--Paragraph (2) of section 
     132(f) of such Code is amended by striking ``and'' at the end 
     of subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(C) the applicable annual limitation in the case of any 
     qualified bicycle commuting reimbursement.''.
       (c) Definitions.--Paragraph (5) of section 132(f) of such 
     Code (relating to definitions) is amended by adding at the 
     end the following:
       ``(F) Definitions related to bicycle commuting 
     reimbursement.--
       ``(i) Qualified bicycle commuting reimbursement.--The term 
     `qualified bicycle commuting reimbursement' means, with 
     respect to any calendar year, any employer reimbursement 
     during the 15-month period beginning with the first day of 
     such calendar year for reasonable expenses incurred by the 
     employee during such calendar year for the purchase of a 
     bicycle and bicycle improvements, repair, and storage, if 
     such bicycle is regularly used for travel between the 
     employee's residence and place of employment.
       ``(ii) Applicable annual limitation.--The term `applicable 
     annual limitation' means, with respect to any employee for 
     any calendar year, the product of $20 multiplied by the 
     number of qualified bicycle commuting months during such 
     year.
       ``(iii) Qualified bicycle commuting month.--The term 
     `qualified bicycle commuting month' means, with respect to 
     any employee, any month during which such employee--

       ``(I) regularly uses the bicycle for a substantial portion 
     of the travel between the employee's residence and place of 
     employment, and
       ``(II) does not receive any benefit described in 
     subparagraph (A), (B), or (C) of paragraph (1).''.

       (d) Constructive Receipt of Benefit.--Paragraph (4) of 
     section 132(f) is amended by inserting ``(other than a 
     qualified bicycle commuting reimbursement)'' after 
     ``qualified transportation fringe''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 206. MODIFICATION OF LIMITATION ON AUTOMOBILE 
                   DEPRECIATION.

       (a) In General.--Paragraph (5) of section 280F(d) of the 
     Internal Revenue Code of 1986 (defining passenger automobile) 
     is amended to read as follows:
       ``(5) Passenger automobile.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `passenger automobile' means any 4-wheeled vehicle--
       ``(i) which is primarily designed or which can be used to 
     carry passengers over public streets, roads, or highways 
     (except any vehicle operated exclusively on a rail or rails), 
     and
       ``(ii) which is rated at not more than 14,000 pounds gross 
     vehicle weight.
       ``(B) Exceptions.--The term `passenger automobile' shall 
     not include--
       ``(i) any exempt-design vehicle, and
       ``(ii) any exempt-use vehicle.
       ``(C) Exempt-design vehicle.--The term `exempt-design 
     vehicle' means--
       ``(i) any vehicle which, by reason of its nature or design, 
     is not likely to be used more than a de minimis amount for 
     personal purposes, and
       ``(ii) any vehicle--

       ``(I) which is designed to have a seating capacity of more 
     than 9 persons behind the driver's seat,
       ``(II) which is equipped with a cargo area of at least 5 
     feet in interior length which is an open area or is designed 
     for use as an open area but is enclosed by a cap and is not 
     readily accessible directly from the passenger compartment, 
     or
       ``(III) has an integral enclosure, fully enclosing the 
     driver compartment and load carrying device, does not have 
     seating rearward of the driver's seat, and has no body 
     section protruding more than 30 inches ahead of the leading 
     edge of the windshield.

       ``(D) Exempt-use vehicle.--The term `exempt-use vehicle' 
     means--
       ``(i) any ambulance, hearse, or combination ambulance-
     hearse used by the taxpayer directly in a trade or business,
       ``(ii) any vehicle used by the taxpayer directly in the 
     trade or business of transporting persons or property for 
     compensation or hire, and
       ``(iii) any truck or van if substantially all of the use of 
     such vehicle by the taxpayer is directly in--

       ``(I) a farming business (within the meaning of section 
     263A(e)(4)),
       ``(II) the transportation of a substantial amount of 
     equipment, supplies, or inventory, or
       ``(III) the moving or delivery of property which requires 
     substantial cargo capacity.

       ``(E) Recapture.--In the case of any vehicle which is not a 
     passenger automobile by reason of being an exempt-use 
     vehicle, if such vehicle ceases to be an exempt-use vehicle 
     in any taxable year after the taxable year in which such 
     vehicle is placed in service, a rule similar to the rule of 
     subsection (b) shall apply.''.
       (b) Conforming Amendment.--Section 179(b) of such Code 
     (relating to limitations) is amended by striking paragraph 
     (6).
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 207. RESTRUCTURING OF NEW YORK LIBERTY ZONE TAX CREDITS.

       (a) In General.--Part I of subchapter Y of chapter 1 is 
     amended by redesignating section 1400L as 1400K and by adding 
     at the end the following new section:

     ``SEC. 1400L. NEW YORK LIBERTY ZONE TAX CREDITS.

       ``(a) In General.--In the case of a New York Liberty Zone 
     governmental unit, there shall be allowed as a credit against 
     any taxes imposed for any payroll period by section 3402 for 
     which such governmental unit is liable under section 3403 an 
     amount equal to so

[[Page 23202]]

     much of the portion of the qualifying project expenditure 
     amount allocated under subsection (b)(3) to such governmental 
     unit for the calendar year as is allocated by such 
     governmental unit to such period under subsection (b)(4).
       ``(b) Qualifying Project Expenditure Amount.--For purposes 
     of this section--
       ``(1) In general.--The term `qualifying project expenditure 
     amount' means, with respect to any calendar year, the sum 
     of--
       ``(A) the total expenditures paid or incurred during such 
     calendar year by all New York Liberty Zone governmental units 
     and the Port Authority of New York and New Jersey for any 
     portion of qualifying projects located wholly within the City 
     of New York, New York, and
       ``(B) any such expenditures--
       ``(i) paid or incurred in any preceding calendar year which 
     begins after the date of enactment of this section, and
       ``(ii) not previously allocated under paragraph (3).
       ``(2) Qualifying project.--The term `qualifying project' 
     means any transportation infrastructure project, including 
     highways, mass transit systems, railroads, airports, ports, 
     and waterways, in or connecting with the New York Liberty 
     Zone (as defined in section 1400K(h)), which is designated as 
     a qualifying project under this section jointly by the 
     Governor of the State of New York and the Mayor of the City 
     of New York, New York.
       ``(3) General allocation.--
       ``(A) In general.--The Governor of the State of New York 
     and the Mayor of the City of New York, New York, shall 
     jointly allocate to each New York Liberty Zone governmental 
     unit the portion of the qualifying project expenditure amount 
     which may be taken into account by such governmental unit 
     under subsection (a) for any calendar year in the credit 
     period.
       ``(B) Aggregate limit.--The aggregate amount which may be 
     allocated under subparagraph (A) for all calendar years in 
     the credit period shall not exceed $2,000,000,000.
       ``(C) Annual limit.--The aggregate amount which may be 
     allocated under subparagraph (A) for any calendar year in the 
     credit period shall not exceed the sum of--
       ``(i) $169,000,000, plus
       ``(ii) the aggregate amount authorized to be allocated 
     under this paragraph for all preceding calendar years in the 
     credit period which was not so allocated.
       ``(D) Unallocated amounts at end of credit period.--If, as 
     of the close of the credit period, the amount under 
     subparagraph (B) exceeds the aggregate amount allocated under 
     subparagraph (A) for all calendar years in the credit period, 
     the Governor of the State of New York and the Mayor of the 
     City of New York, New York, may jointly allocate to New York 
     Liberty Zone governmental units for any calendar year in the 
     5-year period following the credit period an amount equal 
     to--
       ``(i) the lesser of--

       ``(I) such excess, or
       ``(II) the qualifying project expenditure amount for such 
     calendar year, reduced by

       ``(ii) the aggregate amount allocated under this 
     subparagraph for all preceding calendar years.
       ``(4) Allocation to payroll periods.--Each New York Liberty 
     Zone governmental unit which has been allocated a portion of 
     the qualifying project expenditure amount under paragraph (3) 
     for a calendar year may allocate such portion to payroll 
     periods beginning in such calendar year as such governmental 
     unit determines appropriate.
       ``(c) Carryover of Unused Allocations.--
       ``(1) In general.--Except as provided in paragraph (2), if 
     the amount allocated under subsection (b)(3) to a New York 
     Liberty Zone governmental unit for any calendar year exceeds 
     the aggregate taxes imposed by section 3402 for which such 
     governmental unit is liable under section 3403 for periods 
     beginning in such year, such excess shall be carried to the 
     succeeding calendar year and added to the allocation of such 
     governmental unit for such succeeding calendar year.
       ``(2) Reallocation.--If a New York Liberty Zone 
     governmental unit does not use an amount allocated to it 
     under subsection (b)(3) within the time prescribed by the 
     Governor of the State of New York and the Mayor of the City 
     of New York, New York, then such amount shall after such time 
     be treated for purposes of subsection (b)(3) in the same 
     manner as if it had never been allocated.
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Credit period.--The term `credit period' means the 
     12-year period beginning on January 1, 2008.
       ``(2) New york liberty zone governmental unit.--The term 
     `New York Liberty Zone governmental unit' means--
       ``(A) the State of New York,
       ``(B) the City of New York, New York, and
       ``(C) any agency or instrumentality of such State or City.
       ``(3) Treatment of funds.--Any expenditure for a qualifying 
     project taken into account for purposes of the credit under 
     this section shall be considered State and local funds for 
     the purpose of any Federal program.
       ``(4) Treatment of credit amounts for purposes of 
     withholding taxes.--For purposes of this title, a New York 
     Liberty Zone governmental unit shall be treated as having 
     paid to the Secretary, on the day on which wages are paid to 
     employees, an amount equal to the amount of the credit 
     allowed to such entity under subsection (a) with respect to 
     such wages, but only if such governmental unit deducts and 
     withholds wages for such payroll period under section 3401 
     (relating to wage withholding).
       ``(e) Reporting.--The Governor of the State of New York and 
     the Mayor of the City of New York, New York, shall jointly 
     submit to the Secretary an annual report--
       ``(1) which certifies--
       ``(A) the qualifying project expenditure amount for the 
     calendar year, and
       ``(B) the amount allocated to each New York Liberty Zone 
     governmental unit under subsection (b)(3) for the calendar 
     year, and
       ``(2) includes such other information as the Secretary may 
     require to carry out this section.
       ``(f) Guidance.--The Secretary may prescribe such guidance 
     as may be necessary or appropriate to ensure compliance with 
     the purposes of this section.''
       (b) Termination of Special Allowance and Expensing.--Clause 
     (v) of section 1400K(b)(2)(A), as redesignated by subsection 
     (a), is amended by striking the parenthetical therein and 
     inserting ``(in the case of nonresidential real property and 
     residential rental property, the date of the enactment of the 
     Renewable Energy and Energy Conservation Tax Act of 2007 or, 
     if acquired pursuant to a binding contract in effect on such 
     enactment date, December 31, 2009)''.
       (c) Conforming Amendments.--
       (1) Section 38(c)(3)(B) is amended by striking ``section 
     1400L(a)'' and inserting ``section 1400K(a)''.
       (2) Section 168(k)(2)(D)(ii) is amended by striking 
     ``section 1400L(c)(2)'' and inserting ``1400K(c)(2)''.
       (3) The table of sections for part I of subchapter Y of 
     chapter 1 is amended by redesignating the item relating to 
     section 1400L as an item relating to section 1400K and by 
     inserting after such item the following new item:

``Sec. 1400L. New York Liberty Zone tax credits.''.

       (d) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

               Subtitle B--Other Conservation Provisions

     SEC. 211. QUALIFIED ENERGY CONSERVATION BONDS.

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

     ``SEC. 54C. QUALIFIED ENERGY CONSERVATION BONDS.

       ``(a) Qualified Energy Conservation Bond.--For purposes of 
     this subchapter, the term `qualified energy conservation 
     bond' means any bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for one or more qualified conservation 
     purposes,
       ``(2) the bond is issued by a State or local government, 
     and
       ``(3) the issuer designates such bond for purposes of this 
     section.
       ``(b) Limitation on Amount of Bonds Designated.--The 
     maximum aggregate face amount of bonds which may be 
     designated under subsection (a) by any issuer shall not 
     exceed the limitation amount allocated to such issuer under 
     subsection (d).
       ``(c) National Limitation on Amount of Bonds Designated.--
     There is a national qualified energy conservation bond 
     limitation of $3,600,000,000.
       ``(d) Allocations.--
       ``(1) In general.--The limitation applicable under 
     subsection (c) shall be allocated by the Secretary among the 
     States in proportion to the population of the States.
       ``(2) Allocations to largest local governments.--
       ``(A) In general.--In the case of any State in which there 
     is a large local government, each such local government shall 
     be allocated a portion of such State's allocation which bears 
     the same ratio to the State's allocation (determined without 
     regard to this subparagraph) as the population of such large 
     local government bears to the population of such State.
       ``(B) Allocation of unused limitation to state.--The amount 
     allocated under this subsection to a large local government 
     may be reallocated by such local government to the State in 
     which such local government is located.
       ``(C) Large local government.--For purposes of this 
     section, the term `large local government' means any 
     municipality or county if such municipality or county has a 
     population of 100,000 or more.
       ``(3) Allocation to issuers; restriction on private 
     activity bonds.--Any allocation under this subsection to a 
     State or large local government shall be allocated by such 
     State or large local government to issuers within the State 
     in a manner that results in not less than 70 percent of the 
     allocation to such State or large local government being used 
     to designate bonds which are not private activity bonds.
       ``(e) Qualified Conservation Purpose.--For purposes of this 
     section--

[[Page 23203]]

       ``(1) In general.--The term `qualified conservation 
     purpose' means any of the following:
       ``(A) Capital expenditures incurred for purposes of--
       ``(i) reducing energy consumption in publicly-owned 
     buildings by at least 20 percent,
       ``(ii) implementing green community programs, or
       ``(iii) rural development involving the production of 
     electricity from renewable energy resources.
       ``(B) Expenditures with respect to research facilities, and 
     research grants, to support research in--
       ``(i) development of cellulosic ethanol or other nonfossil 
     fuels,
       ``(ii) technologies for the capture and sequestration of 
     carbon dioxide produced through the use of fossil fuels,
       ``(iii) increasing the efficiency of existing technologies 
     for producing nonfossil fuels,
       ``(iv) automobile battery technologies and other 
     technologies to reduce fossil fuel consumption in 
     transportation, or
       ``(v) technologies to reduce energy use in buildings.
       ``(C) Mass commuting facilities and related facilities that 
     reduce the consumption of energy, including expenditures to 
     reduce pollution from vehicles used for mass commuting.
       ``(D) Demonstration projects designed to promote the 
     commercialization of--
       ``(i) green building technology,
       ``(ii) conversion of agricultural waste into methane to be 
     used in producing fuel or otherwise,
       ``(iii) advanced battery manufacturing technologies,
       ``(iv) technologies to reduce peak use of electricity, or
       ``(v) technologies for the capture and sequestration of 
     carbon dioxide.
       ``(E) Public education campaigns to promote energy 
     efficiency.
       ``(2) Special rules for private activity bonds.--For 
     purposes of this section, in the case of any private activity 
     bond, the term `qualified conservation purposes' shall not 
     include any expenditure which is not a capital expenditure.
       ``(f) Population.--
       ``(1) In general.--The population of any State or local 
     government shall be determined for purposes of this section 
     as provided in section 146(j) for the calendar year which 
     includes the date of the enactment of this section.
       ``(2) Special rule for counties.--In determining the 
     population of any county for purposes of this section, any 
     population of such county which is taken into account in 
     determining the population of any municipality which is a 
     large local government shall not be taken into account in 
     determining the population of such county.
       ``(g) Application to Indian Tribal Governments.--An Indian 
     tribal government shall be treated for purposes of this 
     section in the same manner as a large local government, 
     except that--
       ``(1) an Indian tribal government shall be treated for 
     purposes of subsection (d) as located within a State to the 
     extent of so much of the population of such government as 
     resides within such State, and
       ``(2) any bond issued by an Indian tribal government shall 
     be treated as a qualified energy conservation bond only if 
     issued as part of an issue the available project proceeds of 
     which are used for purposes for which such Indian tribal 
     government could issue bonds to which section 103(a) 
     applies.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 54A(d), as added by section 
     104, is amended to read as follows:
       ``(1) Qualified tax credit bond.--The term `qualified tax 
     credit bond' means--
       ``(A) a new clean renewable energy bond, or
       ``(B) a qualified energy conservation bond,
     which is part of an issue that meets requirements of 
     paragraphs (2), (3), (4), and (5).''.
       (2) Subparagraph (C) of section 54A(d)(2), as added by 
     section 104, is amended to read as follows:
       ``(C) Qualified purpose.--For purposes of this paragraph, 
     the term `qualified purpose' means--
       ``(i) in the case of a new clean renewable energy bond, a 
     purpose specified in section 54B(a)(1), and
       ``(ii) in the case of a qualified energy conservation bond, 
     a purpose specified in section 54C(a)(1).''.
       (3) The table of sections for subpart I of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 54C. Qualified energy conservation bonds.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 212. QUALIFIED RESIDENTIAL ENERGY EFFICIENCY ASSISTANCE 
                   BONDS.

       (a) In General.--Subpart I of part IV of subchapter A of 
     chapter 1 (as amended by this Act) is amended by adding at 
     the end the following new section:

     ``SEC. 54D. QUALIFIED RESIDENTIAL ENERGY EFFICIENCY 
                   ASSISTANCE BONDS.

       ``(a) Qualified Residential Energy Efficiency Assistance 
     Bond.--For purposes of this subchapter, the term `qualified 
     residential energy efficiency assistance bond' means any bond 
     issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for 1 or more qualified residential 
     energy efficiency assistance purposes,
       ``(2) not less than 20 percent of the available project 
     proceeds of such issue are to be used for 1 or more qualified 
     low-income residential energy efficiency assistance purposes,
       ``(3) repayments of principal and applicable interest on 
     financing provided by the issue are used not later than the 
     close of the 3-month period beginning on the date the 
     prepayment (or complete repayment) is received to redeem 
     bonds which are part of the issue or to provide for 1 or more 
     qualified residential energy efficiency assistance purposes,
       ``(4) the bond is issued by a State, and
       ``(5) the issuer designates such bond for purposes of this 
     section.
       ``(b) Limitation on Amount of Bonds Designated.--The 
     maximum aggregate face amount of bonds which may be 
     designated under subsection (a) by any issuer shall not 
     exceed the limitation amount allocated under subsection (d) 
     to such issuer.
       ``(c) National Limitation on Amount of Bonds Designated.--
     There is a national qualified energy conservation bond 
     limitation of $2,400,000,000.
       ``(d) Limitation Allocated Among States.--The limitation 
     under subsection (c) shall be allocated by the Secretary 
     among the States in proportion to the population of the 
     States.
       ``(e) Qualified Residential Energy Efficiency Assistance 
     Purpose.--For purposes of this section--
       ``(1) In general.--The term `qualified residential energy 
     efficiency assistance purpose' means any grant or low-
     interest loan to acquire (including reasonable installation 
     costs)--
       ``(A) any property which meets (at a minimum) the 
     requirements of the Energy Star program and which is to be 
     installed in a dwelling unit,
       ``(B) any property which uses wind, solar, or geothermal 
     energy or qualified fuel cell property (as defined in section 
     48(c)(1)) to generate electricity, or to heat or cool water, 
     for use in a dwelling unit (other than property described in 
     section 25D(e)(3)), and
       ``(C) any improvements to a dwelling unit which are made 
     pursuant to a plan certified by an energy efficiency expert 
     that such improvement will yield at least a 20 percent 
     reduction in total household energy consumption related to 
     heating, cooling, lighting, and appliances.
       ``(2) Dollar limitations.--
       ``(A) In general.--Such term shall not include any grant or 
     loan for improvements described in paragraph (1)(C) with 
     respect to any dwelling unit to the extent that such grant or 
     loan (when added to all other grants or loans for such 
     improvements) exceeds $5,000.
       ``(B) Increased limitation for certain principal 
     residences.--In the case of a dwelling unit which is used as 
     a principal residence (within the meaning of section 121) by 
     the recipient of the grant or loan referred to in 
     subparagraph (A)--
       ``(i) subparagraph (A) shall be applied by substituting 
     `$12,000' for `$5,000' if such grant or loan would satisfy 
     the requirements of paragraph (1)(A) if such paragraph were 
     applied by substituting `50 percent' for `20 percent', and
       ``(ii) in any case to which clause (i) does not apply, 
     subparagraph (A) shall be applied by substituting `$8,000' 
     for `$5,000' if such grant or loan would satisfy the 
     requirements of paragraph (1)(A) if such paragraph were 
     applied by substituting `35 percent' for `20 percent'.
       ``(3) Low-interest loan.--The term `low interest loan' 
     means any loan which charges interest at a rate which does 
     not exceed the applicable Federal rate in effect under 
     section 1288(b)(1) determined as of the issuance of the loan.
       ``(f) Qualified Low-Income Residential Efficiency 
     Assistance Purpose.--For purposes of this section--
       ``(1) In general.--The term `qualified low-income 
     residential energy efficiency assistance purpose' means any 
     qualified residential energy efficiency assistance purpose 
     with respect to a dwelling unit which is occupied (at the 
     time of the grant or loan) by individuals whose income is 50 
     percent or less of area median gross income. Rules similar to 
     the rules of section 142(d)(2)(B) shall apply for purposes of 
     this paragraph.
       ``(2) Restriction to grants.--Such term shall not include 
     any loan.
       ``(g) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Applicable interest.--The term `applicable interest' 
     means, with respect to any loan, so much of any interest on 
     such loan which exceeds 1 percentage point.
       ``(2) Special rule relating to arbitrage.--An issue shall 
     not be treated as failing to meet the requirements of section 
     54A(d)(4)(A) by reason of any investment of available project 
     proceeds in 1 or more qualified residential energy efficiency 
     assistance purposes.
       ``(3) Population.--The population of any State or local 
     government shall be determined as provided in section 146(j) 
     for the calendar year which includes the date of the 
     enactment of this section.

[[Page 23204]]

       ``(4) Reporting.--
       ``(A) Reports by issuers.--Issuers of qualified residential 
     energy efficiency assistance bonds shall, not later than 6 
     months after the expenditure period (as defined in section 
     54A) and annually thereafter until the last such bond is 
     redeemed, submit reports to the Secretary regarding such 
     bonds, including information regarding--
       ``(i) the number and monetary value of loans and grants 
     provided and the purposes for which provided,
       ``(ii) the number of dwelling units the energy efficiency 
     of which improved as result of such loans and grants,
       ``(iii) the types of property described in subsection 
     (e)(1)(A) installed as a result of such loans and grants and 
     the projected energy savings with respect to such property,
       ``(iv) the types of property described in subsection 
     (e)(1)(B) installed as a result of such loans and grants and 
     the projected production of such property, and
       ``(v) the projected energy savings as a result of such 
     loans and grants for improvements described in subsection 
     (e)(1)(C).
       ``(B) Report to congress.--Not later than 12 months after 
     receipt of the first report under subparagraph (A) and 
     annually thereafter until the last such report is required to 
     be submitted, the Secretary, in consultation with the 
     Secretary of Energy and the Administrator of the 
     Environmental Protection Agency, shall submit a report to 
     Congress regarding the bond program under this section, 
     including information regarding--
       ``(i) the aggregate of each category of information 
     described in subparagraph (A) (including any independent 
     assessment of projected energy savings), and
       ``(ii) an estimate of the amount of greenhouse gas 
     emissions reduced as a result of such bond program.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 54A(d), as added by section 
     104 and amended by section 211, is amended by striking ``or'' 
     at the end of subparagraph (A), by inserting ``or'' at the 
     end of subparagraph (B), and by inserting after subparagraph 
     (B) the following new subparagraph:
       ``(C) a qualified residential energy efficiency assistance 
     bond,''.
       (2) Subparagraph (C) of section 54A(d)(2), as added by 
     section 104 and amended by section 211, is amended by 
     striking ``and'' at the end of clause (i), by striking the 
     period at the end of clause (ii) and inserting ``, and'', and 
     by adding at the end the following new clause:
       ``(iii) in the case of a qualified residential energy 
     efficiency assistance bond, a purpose specified in section 
     54D(a)(1).''.
       (3) The table of sections for subpart I 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. 54D. Qualified residential energy efficiency assistance 
              bonds.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 213. EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDINGS 
                   DEDUCTION.

       Subsection (h) of section 179D (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2013''.

     SEC. 214. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT 
                   FOR APPLIANCES PRODUCED AFTER 2007.

       (a) In General.--Subsection (b) of section 45M (relating to 
     applicable amount) is amended to read as follows:
       ``(b) Applicable Amount.--For purposes of subsection (a)--
       ``(1) Dishwashers.--The applicable amount is--
       ``(A) $45 in the case of a dishwasher which is manufactured 
     in calendar year 2008 or 2009 and which uses no more than 324 
     kilowatt hours per year and 5.8 gallons per cycle, and
       ``(B) $75 in the case of a dishwasher which is manufactured 
     in calendar year 2008, 2009, or 2010 and which uses no more 
     than 307 kilowatt hours per year and 5.0 gallons per cycle 
     (5.5 gallons per cycle for dishwashers designed for greater 
     than 12 place settings).
       ``(2) Clothes washers.--The applicable amount is--
       ``(A) $75 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 which meets or 
     exceeds a 1.72 modified energy factor and does not exceed a 
     8.0 water consumption factor,
       ``(B) $125 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 or 2009 which meets 
     or exceeds a 1.8 modified energy factor and does not exceed a 
     7.5 water consumption factor,
       ``(C) $150 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009 or 
     2010 which meets or exceeds 2.0 modified energy factor and 
     does not exceed a 6.0 water consumption factor, and
       ``(D) $250 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009, or 
     2010 which meets or exceeds 2.2 modified energy factor and 
     does not exceed a 4.5 water consumption factor.
       ``(3) Refrigerators.--The applicable amount is--
       ``(A) $50 in the case of a refrigerator which is 
     manufactured in calendar year 2008, and consumes at least 20 
     percent but not more than 22.9 percent less kilowatt hours 
     per year than the 2001 energy conservation standards,
       ``(B) $75 in the case of a refrigerator which is 
     manufactured in calendar year 2008 or 2009, and consumes at 
     least 23 percent but no more than 24.9 percent less kilowatt 
     hours per year than the 2001 energy conservation standards,
       ``(C) $100 in the case of a refrigerator which is 
     manufactured in calendar year 2008, 2009 or 2010, and 
     consumes at least 25 percent but not more than 29.9 percent 
     less kilowatt hours per year than the 2001 energy 
     conservation standards, and
       ``(D) $200 in the case of a refrigerator manufactured in 
     calendar year 2008, 2009 or 2010 and which consumes at least 
     30 percent less energy than the 2001 energy conservation 
     standards.
       ``(4) Dehumidifiers.--The applicable amount is--
       ``(A) $15 in the case of a dehumidifier manufactured in 
     calendar year 2008 that has a capacity less than or equal to 
     45 pints per day and is 7.5 percent more efficient than the 
     applicable Department of Energy energy conservation standard 
     effective October 2012, and
       ``(B) $25 in the case of a dehumidifier manufactured in 
     calendar year 2008 that has a capacity greater than 45 pints 
     per day and is 7.5 percent more efficient than the applicable 
     Department of Energy energy conservation standard effective 
     October 2012.''.
       (b) Eligible Production.--
       (1) Similar treatment for all appliances.--Subsection (c) 
     of section 45M (relating to eligible production) is amended--
       (A) by striking paragraph (2),
       (B) by striking ``(1) In general'' and all that follows 
     through ``the eligible'' and inserting ``The eligible'', and
       (C) by moving the text of such subsection in line with the 
     subsection heading and redesignating subparagraphs (A) and 
     (B) as paragraphs (1) and (2), respectively.
       (2) Modification of base period.--Paragraph (2) of section 
     45M(c), as amended by paragraph (1) of this section, is 
     amended by striking ``3-calendar year'' and inserting ``2-
     calendar year''.
       (c) Types of Energy Efficient Appliances.--Subsection (d) 
     of section 45M (defining types of energy efficient 
     appliances) is amended to read as follows:
       ``(d) Types of Energy Efficient Appliance.--For purposes of 
     this section, the types of energy efficient appliances are--
       ``(1) dishwashers described in subsection (b)(1),
       ``(2) clothes washers described in subsection (b)(2),
       ``(3) refrigerators described in subsection (b)(3), and
       ``(4) dehumidifiers described in subsection (b)(4).''.
       (d) Aggregate Credit Amount Allowed.--
       (1) Increase in limit.--Paragraph (1) of section 45M(e) 
     (relating to aggregate credit amount allowed) is amended to 
     read as follows:
       ``(1) Aggregate credit amount allowed.--The aggregate 
     amount of credit allowed under subsection (a) with respect to 
     a taxpayer for any taxable year shall not exceed $75,000,000 
     reduced by the amount of the credit allowed under subsection 
     (a) to the taxpayer (or any predecessor) for all prior 
     taxable years beginning after December 31, 2007.''.
       (2) Exception for certain refrigerator and clothes 
     washers.--Paragraph (2) of section 45M(e) is amended to read 
     as follows:
       ``(2) Amount allowed for certain refrigerators and clothes 
     washers.--Refrigerators described in subsection (b)(3)(D) and 
     clothes washers described in subsection (b)(2)(D) shall not 
     be taken into account under paragraph (1).''.
       (e) Qualified Energy Efficient Appliances.--
       (1) In general.--Paragraph (1) of section 45M(f) (defining 
     qualified energy efficient appliance) is amended to read as 
     follows:
       ``(1) Qualified energy efficient appliance.--The term 
     `qualified energy efficient appliance' means--
       ``(A) any dishwasher described in subsection (b)(1),
       ``(B) any clothes washer described in subsection (b)(2),
       ``(C) any refrigerator described in subsection (b)(3), and
       ``(D) any dehumidifier described in subsection (b)(4).''.
       (2) Clothes washer.--Section 45M(f)(3) (defining clothes 
     washer) is amended by inserting ``commercial'' before 
     ``residential'' the second place it appears.
       (3) Top-loading clothes washer.--Subsection (f) of section 
     45M (relating to definitions) is amended by redesignating 
     paragraphs (4), (5), (6), and (7) as paragraphs (5), (6), 
     (7), and (8), respectively, and by inserting after paragraph 
     (3) the following new paragraph:
       ``(4) Top-loading clothes washer.--The term ``top-loading 
     clothes washer'' means a clothes washer which has the clothes 
     container compartment access located on the

[[Page 23205]]

     top of the machine and which operates on a vertical axis.''.
       (4) Dehumidifier.--Subsection (f) of section 45M, as 
     amended by paragraph (3), is amended by redesignating 
     paragraphs (6), (7), and (8) as paragraphs (7), (8) and (9), 
     respectively, and by inserting after paragraph (5) the 
     following new paragraph:
       ``(6) Dehumidifier.--The term `dehumidifier' means a self-
     contained, electrically operated, and mechanically 
     refrigerated encased assembly consisting of--
       ``(A) a refrigerated surface that condenses moisture from 
     the atmosphere,
       ``(B) a refrigerating system, including an electric motor,
       ``(C) an air-circulating fan, and
       ``(D) means for collecting or disposing of condensate.''.
       (5) Replacement of energy factor.--Section 45M(f)(7), as 
     amended by paragraph (4), is amended to read as follows:
       ``(7) Modified energy factor.--The term `modified energy 
     factor' means the modified energy factor established by the 
     Department of Energy for compliance with the Federal energy 
     conservation standard.''.
       (6) Gallons per cycle; water consumption factor.--Section 
     45M(f) (relating to definitions) is amended by adding at the 
     end the following:
       ``(10) Gallons per cycle.--The term `gallons per cycle' 
     means, with respect to a dishwasher, the amount of water, 
     expressed in gallons, required to complete a normal cycle of 
     a dishwasher.
       ``(11) Water consumption factor.--The term `water 
     consumption factor' means, with respect to a clothes washer, 
     the quotient of the total weighted per-cycle water 
     consumption divided by the cubic foot (or liter) capacity of 
     the clothes washer.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to appliances produced after December 31, 2007.

     SEC. 215. FIVE-YEAR APPLICABLE RECOVERY PERIOD FOR 
                   DEPRECIATION OF QUALIFIED ENERGY MANAGEMENT 
                   DEVICES.

       (a) In General.--Section 168(e)(3)(B) (relating to 5-year 
     property) is amended by striking ``and'' at the end of clause 
     (v), by striking the period at the end of clause (vi) and 
     inserting ``, and'', and by inserting after clause (vi) the 
     following new clause:
       ``(vii) any qualified energy management device.''.
       (b) Definition of Qualified Energy Management Device.--
     Section 168(i) (relating to definitions and special rules) is 
     amended by inserting at the end the following new paragraph:
       ``(18) Qualified energy management device.--
       ``(A) In general.--The term `qualified energy management 
     device' means any energy management device which is installed 
     on real property of a customer of the taxpayer and is placed 
     in service by a taxpayer who--
       ``(i) is a supplier of electric energy or a provider of 
     electric energy services, and
       ``(ii) provides all commercial and residential customers of 
     such supplier or provider with net metering upon the request 
     of such customer.
       ``(B) Energy management device.--For purposes of 
     subparagraph (A), the term `energy management device' means 
     any time-based meter and related communication equipment 
     which is capable of being used by the taxpayer as part of a 
     system that--
       ``(i) measures and records electricity usage data on a 
     time-differentiated basis in at least 24 separate time 
     segments per day,
       ``(ii) provides for the exchange of information between 
     supplier or provider and the customer's energy management 
     device in support of time-based rates or other forms of 
     demand response, and
       ``(iii) provides data to such supplier or provider so that 
     the supplier or provider can provide energy usage information 
     to customers electronically.
       ``(C) Net metering.--For purposes of subparagraph (A), the 
     term `net metering' means allowing customers a credit for 
     providing electricity to the supplier or provider.''.
       (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.

                     TITLE III--REVENUE PROVISIONS

             Subtitle A--Denial of Oil and Gas Tax Benefits

     SEC. 301. DENIAL OF DEDUCTION FOR INCOME ATTRIBUTABLE TO 
                   DOMESTIC PRODUCTION OF OIL, NATURAL GAS, OR 
                   PRIMARY PRODUCTS THEREOF.

       (a) In General.--Subparagraph (B) of section 199(c)(4) 
     (relating to exceptions) is amended by striking ``or'' at the 
     end of clause (ii), by striking the period at the end of 
     clause (iii) and inserting ``, or'', and by inserting after 
     clause (iii) the following new clause:
       ``(iv) the sale, exchange, or other disposition of oil, 
     natural gas, or any primary product thereof.''.
       (b) Primary Product.--Section 199(c)(4)(B) is amended by 
     adding at the end the following flush sentence:

     ``For purposes of clause (iv), the term `primary product' has 
     the same meaning as when used in section 927(a)(2)(C), as in 
     effect before its repeal.''.

       (c) Conforming Amendments.--Section 199(c)(4) is amended--
       (1) in subparagraph (A)(i)(III) by striking ``electricity, 
     natural gas,'' and inserting ``electricity'', and
       (2) in subparagraph (B)(ii) by striking ``electricity, 
     natural gas,'' and inserting ``electricity''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 302. 7-YEAR AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL 
                   EXPENDITURES FOR CERTAIN MAJOR INTEGRATED OIL 
                   COMPANIES.

       (a) In General.--Subparagraph (A) of section 167(h)(5) 
     (relating to special rule for major integrated oil companies) 
     is amended by striking ``5-year'' and inserting ``7-year''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to amounts paid or incurred after the date of the 
     enactment of this Act.

     SEC. 303. CLARIFICATION OF DETERMINATION OF FOREIGN OIL AND 
                   GAS EXTRACTION INCOME.

       (a) In General.--Paragraph (1) of section 907(c) is amended 
     by redesignating subparagraph (B) as subparagraph (C), by 
     striking ``or'' at the end of subparagraph (A), and by 
     inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) so much of any transportation of such minerals as 
     occurs before the fair market value event, or''.
       (b) Fair Market Value Event.--Subsection (c) of section 907 
     is amended by adding at the end the following new paragraph:
       ``(6) Fair market value event.--For purposes of this 
     section, the term `fair market value event' means, with 
     respect to any mineral, the first point in time at which such 
     mineral--
       ``(A) has a fair market value which can be determined on 
     the basis of a transfer, which is an arm's length 
     transaction, of such mineral from the taxpayer to a person 
     who is not related (within the meaning of section 482) to 
     such taxpayer, or
       ``(B) is at a location at which the fair market value is 
     readily ascertainable by reason of transactions among 
     unrelated third parties with respect to the same mineral 
     (taking into account source, location, quality, and chemical 
     composition).''.
       (c) Special Rule for Certain Petroleum Taxes.--Subsection 
     (c) of section 907, as amended by subsection (b), is amended 
     to by adding at the end the following new paragraph:
       ``(7) Oil and gas taxes.--In the case of any tax imposed by 
     a foreign country which is limited in its application to 
     taxpayers engaged in oil or gas activities--
       ``(A) the term `oil and gas extraction taxes' shall include 
     such tax,
       ``(B) the term `foreign oil and gas extraction income' 
     shall include any taxable income which is taken into account 
     in determining such tax (or is directly attributable to the 
     activity to which such tax relates), and
       ``(C) the term `foreign oil related income' shall not 
     include any taxable income which is treated as foreign oil 
     and gas extraction income under subparagraph (B).''.
       (d) Conforming Amendments.--
       (1) Subparagraph (C) of section 907(c)(1), as redesignated 
     by this section, is amended by inserting ``or used by the 
     taxpayer in the activity described in subparagraph (B)'' 
     before the period at the end.
       (2) Subparagraph (B) of section 907(c)(2) is amended to 
     read as follows:
       ``(B) so much of the transportation of such minerals or 
     primary products as is not taken into account under paragraph 
     (1)(B),''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

   Subtitle B--Clarification of Eligibility for Certain Fuel Credits

     SEC. 311. CLARIFICATION OF ELIGIBILITY FOR RENEWABLE DIESEL 
                   CREDIT.

       (a) Coproduction With Petroleum Feedstock.--
       (1) In general.--Paragraph (3) of section 40A(f) (defining 
     renewable diesel) is amended by adding at the end the 
     following flush sentence:

     ``Such term does not include any fuel derived from 
     coprocessing biomass with a feedstock which is not biomass. 
     For purposes of this paragraph, the term `biomass' has the 
     meaning given such term by section 45K(c)(3).''.
       (2) Conforming amendment.--Paragraph (3) of section 40A(f) 
     is amended by striking ``(as defined in section 45K(c)(3))''.
       (b) Clarification of Eligibility for Alternative Fuel 
     Credit.--
       (1) In general.--Subparagraph (F) of section 6426(d)(2) is 
     amended by striking ``hydrocarbons'' and inserting ``fuel''.
       (2) Conforming amendment.--Section 6426 is amended by 
     adding at the end the following new subsection:
       ``(h) Denial of Double Benefit.--No credit shall be 
     determined under subsection (d) or (e) with respect to any 
     fuel with respect to which credit may be determined under 
     subsection (b) or (c) or under section 40 or 40A.''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to fuel produced, 
     and sold or used, after June 30, 2007.

[[Page 23206]]

       (2) Clarification of eligibility for alternative fuel 
     credit.--The amendment made by subsection (b) shall take 
     effect as if included in section 11113 of the Safe, 
     Accountable, Flexible, Efficient Transportation Equity Act: A 
     Legacy for Users.

     SEC. 312. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO 
                   PROVIDE AN INCENTIVE FOR UNITED STATES 
                   PRODUCTION.

       (a) Biodiesel Fuels Credit.--Paragraph (5) of section 
     40A(d), as added by subsection (c), is amended to read as 
     follows:
       ``(5) Limitation to biodiesel with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any biodiesel unless--
       ``(A) such biodiesel is produced in the United States for 
     use as a fuel in the United States, and
       ``(B) the taxpayer obtains a certification (in such form 
     and manner as prescribed by the Secretary) from the producer 
     of the biodiesel which identifies the product produced and 
     the location of such production.

     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States.''.
       (b) Excise Tax Credit.--Paragraph (2) of section 6426(h), 
     as added by subsection (c), is amended to read as follows:
       ``(2) Biodiesel and alternative fuels.--No credit shall be 
     determined under this section with respect to any biodiesel 
     or alternative fuel unless--
       ``(A) such biodiesel or alternative fuel is produced in the 
     United States for use as a fuel in the United States, and
       ``(B) the taxpayer obtains a certification (in such form 
     and manner as prescribed by the Secretary) from the producer 
     of such biodiesel or alternative fuel which identifies the 
     product produced and the location of such production.''.
       (c) Provisions Clarifying Treatment of Fuels With No Nexus 
     to the United States.--
       (1) Alcohol fuels credit.--Subsection (d) of section 40 is 
     amended by adding at the end the following new paragraph:
       ``(6) Limitation to alcohol with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any alcohol which is produced outside the 
     United States for use as a fuel outside the United States. 
     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States''.
       (2) Biodiesel fuels credit.--Subsection (d) of section 40A 
     is amended by adding at the end the following new paragraph:
       ``(5) Limitation to biodiesel with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any biodiesel which is produced outside the 
     United States for use as a fuel outside the United States. 
     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States''.
       (3) Excise tax credit.--
       (A) In general.--Section 6426 is amended by adding at the 
     end the following new subsection:
       ``(h) Limitation to Fuels With Connection to the United 
     States.--
       ``(1) Alcohol.--No credit shall be determined under this 
     section with respect to any alcohol which is produced outside 
     the United States for use as a fuel outside the United 
     States.
       ``(2) Biodiesel and alternative fuels.--No credit shall be 
     determined under this section with respect to any biodiesel 
     or alternative fuel which is produced outside the United 
     States for use as a fuel outside the United States.

     For purposes of this subsection, the term `United States' 
     includes any possession of the United States.''.
       (B) Conforming amendment.--Subsection (e) of section 6427 
     is amended by redesignating paragraph (5) as paragraph (6) 
     and by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) Limitation to fuels with connection to the united 
     states.--No amount shall be payable under paragraph (1) or 
     (2) with respect to any mixture or alternative fuel if credit 
     is not allowed with respect to such mixture or alternative 
     fuel by reason of section 6426(h).''.
       (d) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to fuel produced, 
     and sold or used, after the date of the enactment of this 
     Act.
       (2) Provisions clarifying treatment of fuels with no nexus 
     to the united states.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the amendments made by subsection (c) shall take 
     effect as if included in section 301 of the American Jobs 
     Creation Act of 2004.
       (B) Alternative fuel credits.--So much of the amendments 
     made by subsection (c) as relate to the alternative fuel 
     credit or the alternative fuel mixture credit shall take 
     effect as if included in section 11113 of the Safe, 
     Accountable, Flexible, Efficient Transportation Equity Act: A 
     Legacy for Users.
       (C) Renewable diesel.--So much of the amendments made by 
     subsection (c) as relate to renewable diesel shall take 
     effect as if included in section 1346 of the Energy Policy 
     Act of 2005.

                       TITLE IV--OTHER PROVISIONS

                          Subtitle A--Studies

     SEC. 401. CARBON AUDIT OF THE TAX CODE.

       (a) Study.--The Secretary of the Treasury shall enter into 
     an agreement with the National Academy of Sciences to 
     undertake a comprehensive review of the Internal Revenue Code 
     of 1986 to identify the types of and specific tax provisions 
     that have the largest effects on carbon and other greenhouse 
     gas emissions and to estimate the magnitude of those effects.
       (b) Report.--Not later than 2 years after the date of 
     enactment of this Act, the National Academy of Sciences shall 
     submit to Congress a report containing the results of study 
     authorized under this section.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $1,500,000 for 
     the period of fiscal years 2008 and 2009.

     SEC. 402. COMPREHENSIVE STUDY OF BIOFUELS.

       (a) Study.--The Secretary of the Treasury, in consultation 
     with the Secretary of Agriculture, the Secretary of Energy, 
     and the Administrator of the Environmental Protection Agency, 
     shall enter into an agreement with the National Academy of 
     Sciences to produce an analysis of current scientific 
     findings to determine--
       (1) current biofuels production, as well as projections for 
     future production,
       (2) the maximum amount of biofuels production capable on 
     United States farmland,
       (3) the domestic effects of a dramatic increase in biofuels 
     production, for example--
       (A) the price of fuel,
       (B) the price of land in rural and suburban communities,
       (C) crop acreage and other land use,
       (D) the environment, due to changes in crop acreage, 
     fertilizer use, runoff, water use, emissions from vehicles 
     utilizing biofuels, and other factors,
       (E) the price of feed,
       (F) the selling price of grain crops,
       (G) exports and imports of grains,
       (H) taxpayers, through cost or savings to commodity crop 
     payments, and
       (I) the expansion of refinery capacity,
       (4) the ability to convert corn ethanol plants for other 
     uses, such as cellulosic ethanol or biodiesel,
       (5) a comparative analysis of corn ethanol versus other 
     biofuels and renewable energy sources, considering cost, 
     energy output, and ease of implementation, and
       (6) the need for additional scientific inquiry, and 
     specific areas of interest for future research.
       (b) Report.--The National Academy of Sciences shall submit 
     an initial report of the findings of the report required 
     under subsection (a) to the Congress not later than 3 months 
     after the date of the enactment of this Act, and a final 
     report not later than 6 months after such date of enactment.

Subtitle B--Application of Certain Labor Standards on Projects Financed 
                         Under Tax Credit Bonds

     SEC. 411. APPLICATION OF CERTAIN LABOR STANDARDS ON PROJECTS 
                   FINANCED UNDER TAX CREDIT BONDS.

       Subchapter IV of chapter 31 of title 40, United States 
     Code, shall apply to projects financed with the proceeds of 
     any tax credit bond (as defined in section 54A of the 
     Internal Revenue Code of 1986).

  The SPEAKER pro tempore (Mr. Weiner). Pursuant to House Resolution 
615, the amendment in the nature of a substitute printed in the bill is 
adopted and the bill, as amended, is considered read.
  The text of the bill, as amended, is as follows:

                               H.R. 2776

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

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF 
                   CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Renewable 
     Energy and Energy Conservation Tax Act of 2007''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.

                     TITLE I--PRODUCTION INCENTIVES

Sec. 101. Extension and modification of renewable energy credit.
Sec. 102. Production credit for electricity produced from marine 
              renewables.
Sec. 103. Extension and modification of energy credit.
Sec. 104. New clean renewable energy bonds.
Sec. 105. Extension and modification of special rule to implement FERC 
              and State electric restructuring policy.
Sec. 106. Repeal of dollar limitation and allowance against alternative 
              minimum tax for residential solar and fuel cell property 
              credit.

[[Page 23207]]

                         TITLE II--CONSERVATION

                       Subtitle A--Transportation

Sec. 201. Credit for plug-in hybrid vehicles.
Sec. 202. Extension and modification of alternative fuel vehicle 
              refueling property credit.
Sec. 203. Extension and modification of credits for biodiesel and 
              renewable diesel.
Sec. 204. Credit for production of cellulosic alcohol.
Sec. 205. Extension of transportation fringe benefit to bicycle 
              commuters.
Sec. 206. Modification of limitation on automobile depreciation.
Sec. 207. Restructuring of New York Liberty Zone tax credits.

               Subtitle B--Other Conservation Provisions

Sec. 211. Qualified energy conservation bonds.
Sec. 212. Qualified residential energy efficiency assistance bonds.
Sec. 213. Extension of energy efficient commercial buildings deduction.
Sec. 214. Modifications of energy efficient appliance credit for 
              appliances produced after 2007.
Sec. 215. Five-year applicable recovery period for depreciation of 
              qualified energy management devices.

                     TITLE III--REVENUE PROVISIONS

             Subtitle A--Denial of Oil and Gas Tax Benefits

Sec. 301. Denial of deduction for income attributable to domestic 
              production of oil, natural gas, or primary products 
              thereof.
Sec. 302. 7-year amortization of geological and geophysical 
              expenditures for certain major integrated oil companies.
Sec. 303. Clarification of determination of foreign oil and gas 
              extraction income.

   Subtitle B--Clarification of Eligibility for Certain Fuel Credits

Sec. 311. Clarification of eligibility for renewable diesel credit.
Sec. 312. Clarification that credits for fuel are designed to provide 
              an incentive for United States production.

                       TITLE IV--OTHER PROVISIONS

                          Subtitle A--Studies

Sec. 401. Carbon audit of the tax code.
Sec. 402. Comprehensive study of biofuels.

Subtitle B--Application of Certain Labor Standards on Projects Financed 
                         Under Tax Credit Bonds

Sec. 411. Application of certain labor standards on projects financed 
              under tax credit bonds.

                     TITLE I--PRODUCTION INCENTIVES

     SEC. 101. EXTENSION AND MODIFICATION OF RENEWABLE ENERGY 
                   CREDIT.

       (a) Extension of Credit.--Each of the following provisions 
     of section 45(d) (relating to qualified facilities) is 
     amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2013'':
       (1) Paragraph (1).
       (2) Clauses (i) and (ii) of paragraph (2)(A).
       (3) Clauses (i)(I) and (ii) of paragraph (3)(A).
       (4) Paragraph (4).
       (5) Paragraph (5).
       (6) Paragraph (6).
       (7) Paragraph (7).
       (8) Subparagraphs (A) and (B) of paragraph (9).
       (b) Modification of Credit Phaseout.--
       (1) Repeal of phaseout.--Subsection (b) of section 45 is 
     amended--
       (A) by striking paragraph (1), and
       (B) by striking ``the 8 cent amount in paragraph (1),'' in 
     paragraph (2) thereof.
       (2) Limitation based on investment in facility.--Subsection 
     (b) of section 45 is amended by inserting before paragraph 
     (2) the following new paragraph:
       ``(1) Limitation based on investment in facility.--
       ``(A) In general.--In the case of any qualified facility 
     originally placed in service after December 31, 2008, the 
     amount of the credit determined under subsection (a) for any 
     taxable year with respect to electricity produced at such 
     facility shall not exceed the product of--
       ``(i) the applicable percentage with respect to such 
     facility, multiplied by
       ``(ii) the eligible basis of such facility.
       ``(B) Carryforward of unused limitation and excess 
     credit.--
       ``(i) Unused limitation.--If the limitation imposed under 
     subparagraph (A) with respect to any facility for any taxable 
     year exceeds the credit determined under subsection (a) 
     (determined without regard to this paragraph) with respect to 
     such facility for such taxable year, the limitation imposed 
     under subparagraph (A) with respect to such facility for the 
     succeeding taxable year shall be increased by the amount of 
     such excess.
       ``(ii) Excess credit.--If the credit determined under 
     subsection (a) (determined without regard to this paragraph) 
     with respect to any facility for any taxable year exceeds the 
     limitation imposed under subparagraph (A) with respect to 
     such facility for such taxable year, the credit determined 
     under subsection (a) with respect to such facility for the 
     succeeding taxable year (determined before the application of 
     subparagraph (A) for such succeeding taxable year) shall be 
     increased by the amount of such excess. With respect to any 
     facility, no amount may carried forward under this clause to 
     any taxable year beginning after the 10-year period described 
     in subsection (a)(2)(A)(ii) with respect to such facility.
       ``(C) Applicable percentage.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `applicable percentage' means, 
     with respect to any facility, the appropriate percentage 
     prescribed by the Secretary for the month in which such 
     facility is originally placed in service.
       ``(ii) Method of prescribing percentages.--The percentages 
     prescribed by the Secretary for any month under clause (i) 
     shall be percentages which yield over a 10-year period 
     amounts of limitation under subparagraph (A) which have a 
     present value equal to 35 percent of the eligible basis of 
     the facility.
       ``(iii) Method of discounting.--The present value under 
     clause (ii) shall be determined--

       ``(I) as of the last day of the 1st year of the 10-year 
     period referred to in clause (ii),
       ``(II) by using a discount rate equal to the average annual 
     interest rate of tax-exempt obligations having a term of 10 
     years or more which are issued during the month preceding the 
     month for which the percentage is being prescribed, and
       ``(III) by taking into account the limitation under 
     subparagraph (A) for any year on the last day of such year.

       ``(D) Eligible basis.--For purposes of this paragraph, the 
     term `eligible basis' means, with respect to any facility, 
     the basis of such facility determined as of the time that 
     such facility is originally placed in service.
       ``(E) Special rule for first and last year of credit 
     period.--In the case of any taxable year any portion of which 
     is not within the 10-year period described in subsection 
     (a)(2)(A)(ii) with respect to any facility, the amount of the 
     limitation under subparagraph (A) with respect to such 
     facility shall be reduced by an amount which bears the same 
     ratio to the amount of such limitation (determined without 
     regard to this subparagraph) as such portion of the taxable 
     year which is not within such period bears to the entire 
     taxable year.''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to property 
     originally placed in service after December 31, 2008.
       (2) Repeal of credit phaseout.--The amendments made by 
     subsection (b)(1) shall apply to taxable years ending after 
     December 31, 2008.

     SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM 
                   MARINE RENEWABLES.

       (a) In General.--Paragraph (1) of section 45(c) (relating 
     to resources) is amended by striking ``and'' at the end of 
     subparagraph (G), by striking the period at the end of 
     subparagraph (H) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(I) marine and hydrokinetic renewable energy.''.
       (b) Marine Renewables.--Subsection (c) of section 45 is 
     amended by adding at the end the following new paragraph:
       ``(10) Marine and hydrokinetic renewable energy.--
       ``(A) In general.--The term `marine and hydrokinetic 
     renewable energy' means energy derived from--
       ``(i) waves, tides, and currents in oceans, estuaries, and 
     tidal areas,
       ``(ii) free flowing water in rivers, lakes, and streams,
       ``(iii) free flowing water in an irrigation system, canal, 
     or other man-made channel, including projects that utilize 
     nonmechanical structures to accelerate the flow of water for 
     electric power production purposes, or
       ``(iv) differentials in ocean temperature (ocean thermal 
     energy conversion).
       ``(B) Exceptions.--Such term shall not include any energy 
     which is derived from any source which utilizes a dam, 
     diversionary structure (except as provided in subparagraph 
     (A)(iii)), or impoundment for electric power production 
     purposes.''.
       (c) Definition of Facility.--Subsection (d) of section 45 
     is amended by adding at the end the following new paragraph:
       ``(11) Marine and hydrokinetic renewable energy 
     facilities.--In the case of a facility producing electricity 
     from marine and hydrokinetic renewable energy, the term 
     `qualified facility' means any facility owned by the 
     taxpayer--
       ``(A) which has a nameplate capacity rating of at least 150 
     kilowatts, and
       ``(B) which is originally placed in service on or after the 
     date of the enactment of this paragraph and before January 1, 
     2013.''.
       (d) Credit Rate.--Subparagraph (A) of section 45(b)(4) is 
     amended by striking ``or (9)'' and inserting ``(9), or 
     (11)''.
       (e) Coordination With Small Irrigation Power.--Paragraph 
     (5) of section 45(d), as amended by this Act, is amended by 
     striking ``January 1, 2013'' and inserting ``the date of the 
     enactment of paragraph (11)''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to electricity produced and sold after the date 
     of the enactment of this Act, in taxable years ending after 
     such date.

     SEC. 103. EXTENSION AND MODIFICATION OF ENERGY CREDIT.

       (a) Extension of Credit.--
       (1) Solar energy property.--Paragraphs (2)(A)(i)(II) and 
     (3)(A)(ii) of section 48(a) (relating to energy credit) are 
     each amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2017''.
       (2) Fuel cell property.--Subparagraph (E) of section 
     48(c)(1) (relating to qualified fuel cell

[[Page 23208]]

     property) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2016''.
       (b) Allowance of Energy Credit Against Alternative Minimum 
     Tax.--Subparagraph (B) of section 38(c)(4) (relating to 
     specified credits) 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) the credit determined under section 46 to the extent 
     that such credit is attributable to the energy credit 
     determined under section 48.''.
       (c) Increase of Credit Limitation for Fuel Cell Property.--
     Subparagraph (B) of section 48(c)(1) is amended by striking 
     ``$500'' and inserting ``$1,500''.
       (d) Public Electric Utility Property Taken Into Account.--
       (1) In general.--Paragraph (3) of section 48(a) is amended 
     by striking the second sentence thereof.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 48(c) is amended by striking 
     subparagraph (D) and redesignating subparagraph (E) as 
     subparagraph (D).
       (B) Paragraph (2) of section 48(c) is amended by striking 
     subparagraph (D) and redesignating subparagraph (E) as 
     subparagraph (D).
       (e) Clerical Amendments.--Paragraphs (1)(B) and (2)(B) of 
     section 48(c) are each amended by striking ``paragraph (1)'' 
     and inserting ``subsection (a)''.
       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall take 
     effect on the date of the enactment of this Act.
       (2) Allowance against alternative minimum tax.--The 
     amendments made by subsection (b) shall apply to credits 
     determined under section 46 of the Internal Revenue Code of 
     1986 in taxable years beginning after the date of the 
     enactment of this Act and to carrybacks of such credits.
       (3) Increase in limitation for fuel cell property.--The 
     amendment made by subsection (c) shall apply to periods after 
     the date of the enactment of this Act, in taxable years 
     ending after such date, under rules similar to the rules of 
     section 48(m) of the Internal Revenue Code of 1986 (as in 
     effect on the day before the date of the enactment of the 
     Revenue Reconciliation Act of 1990).
       (4)  Public electric utility property.--The amendments made 
     by subsection (d) shall apply to periods after June 20, 2007, 
     in taxable years ending after such date, under rules similar 
     to the rules of section 48(m) of the Internal Revenue Code of 
     1986 (as in effect on the day before the date of the 
     enactment of the Revenue Reconciliation Act of 1990).

     SEC. 104. NEW CLEAN RENEWABLE ENERGY BONDS.

       (a) In General.--Part IV of subchapter A of chapter 1 
     (relating to credits against tax) is amended by adding at the 
     end the following new subpart:

                ``Subpart I--Qualified Tax Credit Bonds

``Sec. 54A. Credit to holders of qualified tax credit bonds.
``Sec. 54B. New clean renewable energy bonds.

     ``SEC. 54A. CREDIT TO HOLDERS OF QUALIFIED TAX CREDIT BONDS.

       ``(a) Allowance of Credit.--If a taxpayer holds a qualified 
     tax credit bond on one or more credit allowance dates of the 
     bond during any taxable year, there shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of the credits 
     determined under subsection (b) with respect to such dates.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a qualified tax credit bond is 25 percent of the 
     annual credit determined with respect to such bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any qualified tax credit bond is the product of--
       ``(A) the applicable credit rate, multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Applicable credit rate.--For purposes of paragraph 
     (2), the applicable credit rate is the rate which the 
     Secretary estimates will permit the issuance of qualified tax 
     credit bonds with a specified maturity or redemption date 
     without discount and without interest cost to the qualified 
     issuer. The applicable credit rate with respect to any 
     qualified tax credit bond shall be determined as of the first 
     day on which there is a binding, written contract for the 
     sale or exchange of the bond.
       ``(4) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed or matures.
       ``(c) Limitation Based on Amount of Tax.--
       ``(1) In general.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this part 
     (other than subpart C and this subpart).
       ``(2) Carryover of unused credit.--If the credit allowable 
     under subsection (a) exceeds the limitation imposed by 
     paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such taxable year 
     (determined before the application of paragraph (1) for such 
     succeeding taxable year).
       ``(d) Qualified Tax Credit Bond.--For purposes of this 
     section--
       ``(1) Qualified tax credit bond.--The term `qualified tax 
     credit bond' means a new clean renewable energy bond which is 
     part of an issue that meets the requirements of paragraphs 
     (2), (3), (4), (5), and (6).
       ``(2) Special rules relating to expenditures.--
       ``(A) In general.--An issue shall be treated as meeting the 
     requirements of this paragraph if, as of the date of 
     issuance, the issuer reasonably expects--
       ``(i) 100 percent or more of the available project proceeds 
     to be spent for 1 or more qualified purposes within the 3-
     year period beginning on such date of issuance, and
       ``(ii) a binding commitment with a third party to spend at 
     least 10 percent of such available project proceeds will be 
     incurred within the 6-month period beginning on such date of 
     issuance.
       ``(B) Failure to spend required amount of bond proceeds 
     within 3 years.--
       ``(i) In general.--To the extent that less than 100 percent 
     of the available project proceeds of the issue are expended 
     by the close of the expenditure period for 1 or more 
     qualified purposes, the issuer shall redeem all of the 
     nonqualified bonds within 90 days after the end of such 
     period. For purposes of this paragraph, the amount of the 
     nonqualified bonds required to be redeemed shall be 
     determined in the same manner as under section 142.
       ``(ii) Expenditure period.--For purposes of this subpart, 
     the term `expenditure period' means, with respect to any 
     issue, the 3-year period beginning on the date of issuance. 
     Such term shall include any extension of such period under 
     clause (iii).
       ``(iii) Extension of period.--Upon submission of a request 
     prior to the expiration of the expenditure period (determined 
     without regard to any extension under this clause), the 
     Secretary may extend such period if the issuer establishes 
     that the failure to expend the proceeds within the original 
     expenditure period is due to reasonable cause and the 
     expenditures for qualified purposes will continue to proceed 
     with due diligence.
       ``(C) Qualified purpose.--For purposes of this paragraph, 
     the term `qualified purpose' means a purpose specified in 
     section 54B(a)(1).
       ``(D) Reimbursement.--For purposes of this subtitle, 
     available project proceeds of an issue shall be treated as 
     spent for a qualified purpose if such proceeds are used to 
     reimburse the issuer for amounts paid for a qualified purpose 
     after the date that the Secretary makes an allocation of bond 
     limitation with respect to such issue, but only if--
       ``(i) prior to the payment of the original expenditure, the 
     issuer declared its intent to reimburse such expenditure with 
     the proceeds of a qualified tax credit bond,
       ``(ii) not later than 60 days after payment of the original 
     expenditure, the issuer adopts an official intent to 
     reimburse the original expenditure with such proceeds, and
       ``(iii) the reimbursement is made not later than 18 months 
     after the date the original expenditure is paid.
       ``(3) Reporting.--An issue shall be treated as meeting the 
     requirements of this paragraph if the issuer of qualified tax 
     credit bonds submits reports similar to the reports required 
     under section 149(e).
       ``(4) Special rules relating to arbitrage.--
       ``(A) In general.--An issue shall be treated as meeting the 
     requirements of this paragraph if the issuer satisfies the 
     requirements of section 148 with respect to the proceeds of 
     the issue.
       ``(B) Special rule for investments during expenditure 
     period.--An issue shall not be treated as failing to meet the 
     requirements of subparagraph (A) by reason of any investment 
     of available project proceeds during the expenditure period.
       ``(C) Special rule for reserve funds.--An issue shall not 
     be treated as failing to meet the requirements of 
     subparagraph (A) by reason of any fund which is expected to 
     be used to repay such issue if--
       ``(i) such fund is funded at a rate not more rapid than 
     equal annual installments,
       ``(ii) such fund is funded in a manner that such fund will 
     not exceed the amount necessary to repay the issue if 
     invested at the maximum rate permitted under clause (iii), 
     and
       ``(iii) the yield on such fund is not greater than the 
     discount rate determined under paragraph (5)(B) with respect 
     to the issue.
       ``(5) Maturity limitation.--
       ``(A) In general.--An issue shall not be treated as meeting 
     the requirements of this paragraph if the maturity of any 
     bond which is part of such issue exceeds the maximum term 
     determined by the Secretary under subparagraph (B).
       ``(B) Maximum term.--During each calendar month, the 
     Secretary shall determine the maximum term permitted under 
     this paragraph for bonds issued during the following calendar 
     month. Such maximum term shall be the term which the 
     Secretary estimates will result in the present value of the 
     obligation to repay the principal on the bond being equal to 
     50 percent of the face amount of such bond. Such present 
     value shall be determined using as a discount rate the 
     average annual interest rate of tax-exempt obligations having 
     a term of 10 years or

[[Page 23209]]

     more which are issued during the month. If the term as so 
     determined is not a multiple of a whole year, such term shall 
     be rounded to the next highest whole year.
       ``(6) Prohibition on financial conflicts of interest.--An 
     issue shall be treated as meeting the requirements of this 
     paragraph if the issuer certifies that--
       ``(A) applicable State and local law requirements governing 
     conflicts of interest are satisfied with respect to such 
     issue, and
       ``(B) if the Secretary prescribes additional conflicts of 
     interest rules governing the appropriate Members of Congress, 
     Federal, State, and local officials, and their spouses, such 
     additional rules are satisfied with respect to such issue.
       ``(e) Other Definitions.--For purposes of this subchapter--
       ``(1) Credit allowance date.--The term `credit allowance 
     date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
     Such term includes the last day on which the bond is 
     outstanding.
       ``(2) Bond.--The term `bond' includes any obligation.
       ``(3) State.--The term `State' includes the District of 
     Columbia and any possession of the United States.
       ``(4) Available project proceeds.--The term `available 
     project proceeds' means--
       ``(A) the excess of--
       ``(i) the proceeds from the sale of an issue, over
       ``(ii) the issuance costs financed by the issue (to the 
     extent that such costs do not exceed 2 percent of such 
     proceeds), and
       ``(B) the proceeds from any investment of the excess 
     described in subparagraph (A).
       ``(f) Credit Treated as Interest.--For purposes of this 
     subtitle, the credit determined under subsection (a) shall be 
     treated as interest which is includible in gross income.
       ``(g) S Corporations and Partnerships.--In the case of a 
     tax credit bond held by an S corporation or partnership, the 
     allocation of the credit allowed by this section to the 
     shareholders of such corporation or partners of such 
     partnership shall be treated as a distribution.
       ``(h) Bonds Held by Regulated Investment Companies and Real 
     Estate Investment Trusts.--If any qualified tax credit bond 
     is held by a regulated investment company or a real estate 
     investment trust, the credit determined under subsection (a) 
     shall be allowed to shareholders of such company or 
     beneficiaries of such trust (and any gross income included 
     under subsection (f) with respect to such credit shall be 
     treated as distributed to such shareholders or beneficiaries) 
     under procedures prescribed by the Secretary.
       ``(i) Credits May Be Stripped.--Under regulations 
     prescribed by the Secretary--
       ``(1) In general.--There may be a separation (including at 
     issuance) of the ownership of a qualified tax credit bond and 
     the entitlement to the credit under this section with respect 
     to such bond. In case of any such separation, the credit 
     under this section shall be allowed to the person who on the 
     credit allowance date holds the instrument evidencing the 
     entitlement to the credit and not to the holder of the bond.
       ``(2) Certain rules to apply.--In the case of a separation 
     described in paragraph (1), the rules of section 1286 shall 
     apply to the qualified tax credit bond as if it were a 
     stripped bond and to the credit under this section as if it 
     were a stripped coupon.

     ``SEC. 54B. NEW CLEAN RENEWABLE ENERGY BONDS.

       ``(a) New Clean Renewable Energy Bond.--For purposes of 
     this subpart, the term `new clean renewable energy bond' 
     means any bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for capital expenditures incurred by 
     public power providers or cooperative electric companies for 
     one or more qualified renewable energy facilities,
       ``(2) the bond is issued by a qualified issuer, and
       ``(3) the issuer designates such bond for purposes of this 
     section.
       ``(b) Reduced Credit Amount.--The annual credit determined 
     under section 54A(b) with respect to any new clean renewable 
     energy bond shall be 70 percent of the amount so determined 
     without regard to this subsection.
       ``(c) Limitation on Amount of Bonds Designated.--
       ``(1) In general.--The maximum aggregate face amount of 
     bonds which may be designated under subsection (a) by any 
     issuer shall not exceed the limitation amount allocated under 
     this subsection to such issuer.
       ``(2) National limitation on amount of bonds designated.--
     There is a national new clean renewable energy bond 
     limitation of $2,000,000,000 which shall be allocated by the 
     Secretary as provided in paragraph (3), except that--
       ``(A) not more than 60 percent thereof may be allocated to 
     qualified projects of public power providers, and
       ``(B) not more than 40 percent thereof may be allocated to 
     qualified projects of cooperative electric companies.
       ``(3) Method of allocation.--
       ``(A) Allocation among public power providers.--After the 
     Secretary determines the qualified projects of public power 
     providers which are appropriate for receiving an allocation 
     of the national new clean renewable energy bond limitation, 
     the Secretary shall, to the maximum extent practicable, make 
     allocations among such projects in such manner that the 
     amount allocated to each such project bears the same ratio to 
     the cost of such project as the limitation under subparagraph 
     (2)(A) bears to the cost of all such projects.
       ``(B) Allocation among cooperative electric companies.--The 
     Secretary shall make allocations of the amount of the 
     national new clean renewable energy bond limitation described 
     in paragraph (2)(B) among qualified projects of cooperative 
     electric companies in such manner as the Secretary determines 
     appropriate.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified renewable energy facility.--The term 
     `qualified renewable energy facility' means a qualified 
     facility (as determined under section 45(d) without regard to 
     paragraphs (8) and (10) thereof and to any placed in service 
     date) owned by a public power provider or a cooperative 
     electric company.
       ``(2) Public power provider.--The term `public power 
     provider' means a State utility with a service obligation, as 
     such terms are defined in section 217 of the Federal Power 
     Act (as in effect on the date of the enactment of this 
     paragraph).
       ``(3) Cooperative electric company.--The term `cooperative 
     electric company' means a mutual or cooperative electric 
     company described in section 501(c)(12) or section 
     1381(a)(2)(C).
       ``(4) Clean renewable energy bond lender.--The term `clean 
     renewable energy bond lender' means a lender which is a 
     cooperative which is owned by, or has outstanding loans to, 
     100 or more cooperative electric companies and is in 
     existence on February 1, 2002, and shall include any 
     affiliated entity which is controlled by such lender.
       ``(5) Qualified issuer.--The term `qualified issuer' means 
     a public power provider, a cooperative electric company, a 
     clean renewable energy bond lender, or a not-for-profit 
     electric utility which has received a loan or loan guarantee 
     under the Rural Electrification Act.''.
       (b) Reporting.--Subsection (d) of section 6049 (relating to 
     returns regarding payments of interest) is amended by adding 
     at the end the following new paragraph:
       ``(9) Reporting of credit on qualified tax credit bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 54A and such amounts shall be treated as paid on the 
     credit allowance date (as defined in section 54A(e)(1)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A) of this paragraph, subsection 
     (b)(4) of this section shall be applied without regard to 
     subparagraphs (A), (H), (I), (J), (K), and (L)(i).
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''.
       (c) Conforming Amendments.--
       (1) Sections 54(c)(2) and 1400N(l)(3)(B) are each amended 
     by striking ``subpart C'' and inserting ``subparts C and I''.
       (2) Section 1397E(c)(2) is amended by striking ``subpart 
     H'' and inserting ``subparts H and I''.
       (3) Section 6401(b)(1) is amended by striking ``and H'' and 
     inserting ``H, and I''.
       (4) The heading of subpart H of part IV of subchapter A of 
     chapter 1 is amended by striking ``Certain Bonds'' and 
     inserting ``Clean Renewable Energy Bonds''.
       (5) The table of subparts for part IV of subchapter A of 
     chapter 1 is amended by striking the item relating to subpart 
     H and inserting the following new items:

``subpart h. nonrefundable credit to holders of clean renewable energy 
                                 bonds.

              ``subpart i. qualified tax credit bonds.''.

       (d) Effective Dates.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 105. EXTENSION AND MODIFICATION OF SPECIAL RULE TO 
                   IMPLEMENT FERC AND STATE ELECTRIC RESTRUCTURING 
                   POLICY.

       (a) Extension for Qualified Electric Utilities.--
       (1) In general.--Paragraph (3) of section 451(i) (relating 
     to special rule for sales or dispositions to implement 
     Federal Energy Regulatory Commission or State electric 
     restructuring policy) is amended by striking ``before January 
     1, 2008,'' and inserting ``before January 1, 2010, by a 
     qualified electric utility,''.
       (2) Qualified electric utility.--Subsection (i) of section 
     451 is amended by redesignating paragraphs (6) through (10) 
     as paragraphs (7) through (11), respectively, and by 
     inserting after paragraph (5) the following new paragraph:
       ``(6) Qualified electric utility.--For purposes of this 
     subsection, the term `qualified electric utility' means--
       ``(A) an electric utility (as defined in section 3(22) of 
     the Federal Power Act (16 U.S.C. 796(22))), and
       ``(B) any person in the same holding company system (as 
     defined in section 1262(9) of the Public Utility Holding 
     Company Act of 2005 (42 U.S.C. 16451(9))) as an electric 
     utility referred to subparagraph (A).''.
       (b) Extension of Period for Transfer of Operational Control 
     Authorized by FERC.--Clause (ii) of section 451(i)(4)(B) is 
     amended by striking ``December 31, 2007'' and inserting ``the 
     date which is 4 years after the close of the taxable year in 
     which the transaction occurs''.

[[Page 23210]]

       (c) Property Located Outside the United States Not Treated 
     as Exempt Utility Property.--Paragraph (5) of section 451(i) 
     is amended by adding at the end the following new 
     subparagraph:
       ``(C) Exception for property located outside the united 
     states.--The term `exempt utility property' shall not include 
     any property which is located outside the United States.''.
       (d) Effective Dates.--
       (1) Extension.--The amendment made by subsection (a) shall 
     apply to transactions after December 31, 2007.
       (2) Transfers of operational control.--The amendment made 
     by subsection (b) shall take effect as if included in section 
     909 of the American Jobs Creation Act of 2004.
       (3) Exception for property located outside the united 
     states.--The amendment made by subsection (c) shall apply to 
     transactions after the date of the enactment of this Act.

     SEC. 106. REPEAL OF DOLLAR LIMITATION AND ALLOWANCE AGAINST 
                   ALTERNATIVE MINIMUM TAX FOR RESIDENTIAL SOLAR 
                   AND FUEL CELL PROPERTY CREDIT.

       (a) Repeal of Maximum Dollar Limitation.--
       (1) In general.--Subsection (b) of section 25D (relating to 
     limitations) is amended to read as follows:
       ``(b) Certification of Solar Water Heating Property.--No 
     credit shall be allowed under this section for an item of 
     property described in subsection (d)(1) unless such property 
     is certified for performance 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.''.
       (2) Conforming amendments.--
       (A) Subsection (e) of section 25D is amended by striking 
     paragraph (4) and by redesignating paragraphs (5) through (9) 
     as paragraphs (4) through (8), respectively.
       (B) Paragraph (1) of section 25C(e) is amended by striking 
     ``(8), and (9)'' and inserting ``and (8) (and paragraph (4) 
     as in effect before its repeal by the Renewable Energy and 
     Energy Conservation Tax Act of 2007)''.
       (b) Credit Allowed Against Alternative Minimum Tax.--
       (1) In general.--Subsection (c) of section 25D is amended 
     to read as follows:
       ``(c) Limitation Based on Amount of Tax; Carryforward of 
     Unused Credit.--
       ``(1) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for the taxable year 
     shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section) and section 27 for the taxable 
     year.
       ``(2) Carryforward of unused credit.--
       ``(A) Rule for years in which all personal credits allowed 
     against regular and alternative minimum tax.--In the case of 
     a taxable year to which section 26(a)(2) applies, if the 
     credit allowable under subsection (a) exceeds the limitation 
     imposed by section 26(a)(2) for such taxable year reduced by 
     the sum of the credits allowable under this subpart (other 
     than this section), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such succeeding taxable year.
       ``(B) Rule for other years.--In the case of a taxable year 
     to which section 26(a)(2) does not apply, if the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such succeeding 
     taxable year.''.
       (2) Conforming amendments.--
       (A) Section 23(b)(4)(B) is amended by inserting ``and 
     section 25D'' after ``this section''.
       (B) Section 24(b)(3)(B) is amended by striking ``and 25B'' 
     and inserting ``, 25B, and 25D''.
       (C) Section 25B(g)(2) is amended by striking ``section 23'' 
     and inserting ``sections 23 and 25D''.
       (D) Section 26(a)(1) is amended by striking ``and 25B'' and 
     inserting ``25B, and 25D''.
       (c) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to expenditures made after the date of the enactment of this 
     Act.
       (2) Allowance against alternative minimum tax.--
       (A) In general.--The amendments made by subsection (b) 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
       (B) Application of egtrra sunset.--The amendments made by 
     subparagraphs (A) and (B) of subsection (b)(2) shall be 
     subject to title IX of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 in the same manner as the 
     provisions of such Act to which such amendments relate.

                         TITLE II--CONSERVATION

                       Subtitle A--Transportation

     SEC. 201. CREDIT FOR PLUG-IN HYBRID VEHICLES.

       (a) In General.--Subpart B of part IV of subchapter A of 
     chapter 1 (relating to other credits) is amended by adding at 
     the end the following new section:

     ``SEC. 30D. PLUG-IN HYBRID VEHICLES.

       ``(a) Allowance of Credit.--There shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of the credit amounts 
     determined under subsection (b) with respect to each 
     qualified plug-in hybrid vehicle placed in service by the 
     taxpayer during the taxable year.
       ``(b) Per Vehicle Dollar Limitation.--
       ``(1) In general.--The amount determined under this 
     subsection with respect to any qualified plug-in hybrid 
     vehicle is the sum of the amounts determined under paragraphs 
     (2) and (3) with respect to such vehicle.
       ``(2) Base amount.--The amount determined under this 
     paragraph is $4,000.
       ``(3) Battery capacity.--In the case of vehicle which draws 
     propulsion energy from a battery with not less than 5 
     kilowatt hours of capacity, the amount determined under this 
     paragraph is $200, plus $200 for each kilowatt hour of 
     capacity in excess of 5 kilowatt hours. The amount determined 
     under this paragraph shall not exceed $2,000.
       ``(c) Application With Other Credits.--
       ``(1) Business credit treated as part of general business 
     credit.--So much of the credit which would be allowed under 
     subsection (a) for any taxable year (determined without 
     regard to this subsection) that is attributable to property 
     of a character subject to an allowance for depreciation shall 
     be treated as a credit listed in section 38(b) for such 
     taxable year (and not allowed under subsection (a)).
       ``(2) Personal credit.--
       ``(A) In general.--For purposes of this title, the credit 
     allowed under subsection (a) for any taxable year (determined 
     after application of paragraph (1)) shall be treated as a 
     credit allowable under subpart A for such taxable year.
       ``(B) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for any taxable year 
     (determined after application of paragraph (1)) shall not 
     exceed the excess of--
       ``(i) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(ii) the sum of the credits allowable under subpart A 
     (other than this section and sections 23 and 25D) and section 
     27 for the taxable year.
       ``(d) Qualified Plug-In Hybrid Vehicle.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified plug-in hybrid 
     vehicle' means a motor vehicle (as defined in section 
     30(c)(2))--
       ``(A) the original use of which commences with the 
     taxpayer,
       ``(B) which is acquired for use or lease by the taxpayer 
     and not for resale,
       ``(C) which is made by a manufacturer,
       ``(D) which has a gross vehicle weight rating of less than 
     14,000 pounds,
       ``(E) which has received a certificate of conformity under 
     the Clean Air Act and meets or exceeds the Bin 5 Tier II 
     emission standard established in regulations prescribed by 
     the Administrator of the Environmental Protection Agency 
     under section 202(i) of the Clean Air Act for that make and 
     model year vehicle,
       ``(F) which is propelled to a significant extent by an 
     electric motor which draws electricity from a battery which--
       ``(i) has a capacity of not less than 4 kilowatt hours, and
       ``(ii) is capable of being recharged from an external 
     source of electricity, and
       ``(G) which either--
       ``(i) is also propelled to a significant extent by other 
     than an electric motor, or
       ``(ii) has a significant onboard source of electricity 
     which also recharges the battery referred to in subparagraph 
     (F).
       ``(2) Exception.--The term `qualified plug-in hybrid 
     vehicle' shall not include any vehicle which is not a 
     passenger automobile or light truck if such vehicle has a 
     gross vehicle weight rating of less than 8,500 pounds.
       ``(3) Other terms.--The terms `passenger automobile', 
     `light truck', and `manufacturer' have the meanings given 
     such terms in regulations prescribed by the Administrator of 
     the Environmental Protection Agency for purposes of the 
     administration of title II of the Clean Air Act (42 U.S.C. 
     7521 et seq.).
       ``(4) Battery capacity.--The term `capacity' means, with 
     respect to any battery, the quantity of electricity which the 
     battery is capable of storing, expressed in kilowatt hours, 
     as measured from a 100 percent state of charge to a 0 percent 
     state of charge.
       ``(e) Limitation on Number of Qualified Plug-In Hybrid 
     Vehicles Eligible for Credit.--
       ``(1) In general.--In the case of a qualified plug-in 
     hybrid vehicle sold during the phaseout period, only the 
     applicable percentage of the credit otherwise allowable under 
     subsection (a) shall be allowed.
       ``(2) Phaseout period.--For purposes of this subsection, 
     the phaseout period is the period beginning with the second 
     calendar quarter following the calendar quarter which 
     includes the first date on which the number of qualified 
     plug-in hybrid vehicles manufactured by the manufacturer of 
     the vehicle referred to in paragraph (1) sold for use in the 
     United States after the date of the enactment of this 
     section, is at least 60,000.
       ``(3) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage is--
       ``(A) 50 percent for the first 2 calendar quarters of the 
     phaseout period,
       ``(B) 25 percent for the 3d and 4th calendar quarters of 
     the phaseout period, and
       ``(C) 0 percent for each calendar quarter thereafter.
       ``(4) Controlled groups.--Rules similar to the rules of 
     section 30B(f)(4) shall apply for purposes of this 
     subsection.

[[Page 23211]]

       ``(f) Special Rules.--
       ``(1) Basis reduction.--The basis of any property for which 
     a credit is allowable under subsection (a) shall be reduced 
     by the amount of such credit (determined without regard to 
     subsection (c)).
       ``(2) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any property which 
     ceases to be property eligible for such credit.
       ``(3) Property used outside united states, etc., not 
     qualified.--No credit shall be allowed under subsection (a) 
     with respect to any property referred to in section 50(b)(1) 
     or with respect to the portion of the cost of any property 
     taken into account under section 179.
       ``(4) Election not to take credit.--No credit shall be 
     allowed under subsection (a) for any vehicle if the taxpayer 
     elects to not have this section apply to such vehicle.
       ``(5) Property used by tax-exempt entity; interaction with 
     air quality and motor vehicle safety standards.--Rules 
     similar to the rules of paragraphs (6) and (10) of section 
     30B(h) shall apply for purposes of this section.''.
       (b) Plug-In Vehicles Not Treated as New Qualified Hybrid 
     Vehicles.--Section 30B(d)(3) is amended by adding at the end 
     the following new subparagraph:
       ``(D) Exclusion of plug-in vehicles.--Any vehicle with 
     respect to which a credit is allowable under section 30D 
     (determined without regard to subsection (c) thereof) shall 
     not be taken into account under this section.''.
       (c) Credit Made Part of General Business Credit.--Section 
     38(b) is amended--
       (1) by striking ``and'' each place it appears at the end of 
     any paragraph,
       (2) by striking ``plus'' each place it appears at the end 
     of any paragraph,
       (3) by striking the period at the end of paragraph (31) and 
     inserting ``, plus'', and
       (4) by adding at the end the following new paragraph:
       ``(32) the portion of the plug-in hybrid vehicle credit to 
     which section 30D(c)(1) applies.''.
       (d) Conforming Amendments.--
       (1)(A) Section 24(b)(3)(B), as amended by this Act, is 
     amended by striking ``and 25D'' and inserting ``25D, and 
     30D''.
       (B) Section 25(e)(1)(C)(ii) is amended by inserting 
     ``30D,'' after ``25D,''.
       (C) Section 25B(g)(2), as amended by this Act, is amended 
     by striking ``and 25D'' and inserting ``, 25D, and 30D''.
       (D) Section 26(a)(1), as amended by this Act, is amended by 
     striking ``and 25D'' and inserting ``25D, and 30D''.
       (E) Section 1400C(d)(2) is amended by striking ``and 25D'' 
     and inserting ``25D, and 30D''.
       (2) Section 1016(a) is amended by striking ``and'' at the 
     end of paragraph (36), by striking the period at the end of 
     paragraph (37) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(38) to the extent provided in section 30D(f)(1).''.
       (3) Section 6501(m) is amended by inserting ``30D(f)(4),'' 
     after ``30C(e)(5),''.
       (4) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 30D. Plug-in hybrid vehicles.''.
       (e) Treatment of Alternative Motor Vehicle Credit as a 
     Personal Credit.--
       (1) In general.--Paragraph (2) of section 30B(g) is amended 
     to read as follows:
       ``(2) Personal credit.--The credit allowed under subsection 
     (a) for any taxable year (after application of paragraph (1)) 
     shall be treated as a credit allowable under subpart A for 
     such taxable year.''.
       (2) Conforming amendments.--
       (A) Subparagraph (A) of section 30C(d)(2) is amended by 
     striking ``sections 27, 30, and 30B'' and inserting 
     ``sections 27 and 30''.
       (B) Paragraph (3) of section 55(c) is amended by striking 
     ``30B(g)(2),''.
       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to taxable years beginning after December 31, 2007.
       (2) Treatment of alternative motor vehicle credit as 
     personal credit.--The amendments made by subsection (e) shall 
     apply to taxable years beginning after December 31, 2006.
       (g) Application of EGTRRA Sunset.--The amendment made by 
     subsection (d)(1)(A) shall be subject to title IX of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001 in 
     the same manner as the provision of such Act to which such 
     amendment relates.

     SEC. 202. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL 
                   VEHICLE REFUELING PROPERTY CREDIT.

       (a) Increase in Credit Amount.--Section 30C (relating to 
     alternative fuel vehicle refueling property credit) is 
     amended--
       (1) by striking ``30 percent'' in subsection (a) and 
     inserting ``50 percent'', and
       (2) by striking ``$30,000'' in subsection (b)(1) and 
     inserting ``$50,000''.
       (b) Extension of Credit.--Paragraph (2) of section 30C(g) 
     (relating to termination) is amended by striking ``December 
     31, 2009'' and inserting ``December 31, 2010''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

     SEC. 203. EXTENSION AND MODIFICATION OF CREDITS FOR BIODIESEL 
                   AND RENEWABLE DIESEL.

       (a) In General.--Sections 40A(g), 6426(c)(6), and 
     6427(e)(5)(B) are each amended by striking ``December 31, 
     2008'' and inserting ``December 31, 2010''.
       (b) Uniform Treatment of Diesel Produced From Biomass.--
     Paragraph (3) of section 40A(f) is amended--
       (1) by striking ``using a thermal depolymerization 
     process'', and
       (2) by striking ``or D396'' in subparagraph (B) and 
     inserting ``or other equivalent standard approved by the 
     Secretary for fuels to be used in diesel-powered highway 
     vehicles''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to fuel produced, 
     and sold or used, after the date of the enactment of this 
     Act.
       (2) Uniform treatment of diesel produced from biomass.--The 
     amendments made by subsection (b) shall apply to fuel 
     produced, and sold or used, after the date which is 30 days 
     after the date of the enactment of this Act.

     SEC. 204. CREDIT FOR PRODUCTION OF CELLULOSIC ALCOHOL.

       (a) In General.--Subsection (b) of section 40 is amended by 
     redesignating paragraph (5) as paragraph (6) and by inserting 
     after paragraph (4) the following new paragraph:
       ``(5) Cellulosic alcohol fuel producer credit.--
       ``(A) In general.--The cellulosic alcohol fuel producer 
     credit of any cellulosic alcohol fuel producer for any 
     taxable year is 50 cents for each gallon of qualified 
     cellulosic fuel production of such producer.
       ``(B) Qualified cellulosic fuel production.--For purposes 
     of this paragraph, the term `qualified cellulosic fuel 
     production' means any cellulosic alcohol which is produced by 
     a cellulosic alcohol fuel producer, and which during the 
     taxable year--
       ``(i) is sold by such producer to another person--

       ``(I) for use by such other person in the production of a 
     qualified mixture in such other person's trade or business 
     (other than casual off-farm production),
       ``(II) for use by such other person as a fuel in a trade or 
     business, or
       ``(III) who sells such alcohol at retail to another person 
     and places such alcohol in the fuel tank of such other 
     person, or

       ``(ii) is used or sold by such producer for any purpose 
     described in clause (i).
       ``(C) Cellulosic alcohol.--For purposes of this paragraph, 
     the term `cellulosic alcohol' means any alcohol which--
       ``(i) is produced in the United States for use as a fuel in 
     the United States, and
       ``(ii) is derived from any lignocellulosic or 
     hemicellulosic matter that is available on a renewable or 
     recurring basis.
     For purposes of this subparagraph, the term `United States' 
     includes any possession of the United States.
       ``(D) Cellulosic alcohol fuel producer.--For purposes of 
     this paragraph, the term `cellulosic alcohol fuel producer' 
     means any person who produces cellulosic alcohol in a trade 
     or business and is registered with the Secretary as a 
     cellulosic alcohol fuel producer.
       ``(E) Additional distillation excluded.--The qualified 
     cellulosic fuel production of any producer for any taxable 
     year shall not include any alcohol which is purchased by the 
     producer and with respect to which such producer increases 
     the proof of the alcohol by additional distillation.''.
       (b) Conforming Amendments.--
       (1) Subsection (a) of section 40 is amended by striking 
     ``plus'' at the end of paragraph (1), by striking ``plus'' at 
     the end of paragraph (2), by striking the period at the end 
     of paragraph (3) and inserting ``, plus'', and by adding at 
     the end the following new paragraph:
       ``(4) in the case of a cellulosic alcohol fuel producer, 
     the cellulosic alcohol fuel producer credit.''.
       (2) Clause (ii) of section 40(d)(3)(C) is amended by 
     striking ``subsection (b)(4)(B)'' and inserting ``paragraph 
     (4)(B) or (5)(B) of subsection (b)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to alcohol produced after December 31, 2007.

     SEC. 205. EXTENSION OF TRANSPORTATION FRINGE BENEFIT TO 
                   BICYCLE COMMUTERS.

       (a) In General.--Paragraph (1) of section 132(f) of the 
     Internal Revenue Code of 1986 (relating to general rule for 
     qualified transportation fringe) is amended by adding at the 
     end the following:
       ``(D) Any qualified bicycle commuting reimbursement.''.
       (b) Limitation on Exclusion.--Paragraph (2) of section 
     132(f) of such Code is amended by striking ``and'' at the end 
     of subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(C) the applicable annual limitation in the case of any 
     qualified bicycle commuting reimbursement.''.
       (c) Definitions.--Paragraph (5) of section 132(f) of such 
     Code (relating to definitions) is amended by adding at the 
     end the following:
       ``(F) Definitions related to bicycle commuting 
     reimbursement.--
       ``(i) Qualified bicycle commuting reimbursement.--The term 
     `qualified bicycle commuting reimbursement' means, with 
     respect to any calendar year, any employer reimbursement 
     during the 15-month period beginning with the first day of 
     such calendar year for reasonable expenses incurred by the 
     employee during such calendar year for the purchase of a 
     bicycle and

[[Page 23212]]

     bicycle improvements, repair, and storage, if such bicycle is 
     regularly used for travel between the employee's residence 
     and place of employment.
       ``(ii) Applicable annual limitation.--The term `applicable 
     annual limitation' means, with respect to any employee for 
     any calendar year, the product of $20 multiplied by the 
     number of qualified bicycle commuting months during such 
     year.
       ``(iii) Qualified bicycle commuting month.--The term 
     `qualified bicycle commuting month' means, with respect to 
     any employee, any month during which such employee--

       ``(I) regularly uses the bicycle for a substantial portion 
     of the travel between the employee's residence and place of 
     employment, and
       ``(II) does not receive any benefit described in 
     subparagraph (A), (B), or (C) of paragraph (1).''.

       (d) Constructive Receipt of Benefit.--Paragraph (4) of 
     section 132(f) is amended by inserting ``(other than a 
     qualified bicycle commuting reimbursement)'' after 
     ``qualified transportation fringe''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 206. MODIFICATION OF LIMITATION ON AUTOMOBILE 
                   DEPRECIATION.

       (a) In General.--Paragraph (5) of section 280F(d) of the 
     Internal Revenue Code of 1986 (defining passenger automobile) 
     is amended to read as follows:
       ``(5) Passenger automobile.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `passenger automobile' means any 4-wheeled vehicle--
       ``(i) which is primarily designed or which can be used to 
     carry passengers over public streets, roads, or highways 
     (except any vehicle operated exclusively on a rail or rails), 
     and
       ``(ii) which is rated at not more than 14,000 pounds gross 
     vehicle weight.
       ``(B) Exceptions.--The term `passenger automobile' shall 
     not include--
       ``(i) any exempt-design vehicle, and
       ``(ii) any exempt-use vehicle.
       ``(C) Exempt-design vehicle.--The term `exempt-design 
     vehicle' means--
       ``(i) any vehicle which, by reason of its nature or design, 
     is not likely to be used more than a de minimis amount for 
     personal purposes, and
       ``(ii) any vehicle--

       ``(I) which is designed to have a seating capacity of more 
     than 9 persons behind the driver's seat,
       ``(II) which is equipped with a cargo area of at least 5 
     feet in interior length which is an open area or is designed 
     for use as an open area but is enclosed by a cap and is not 
     readily accessible directly from the passenger compartment, 
     or
       ``(III) has an integral enclosure, fully enclosing the 
     driver compartment and load carrying device, does not have 
     seating rearward of the driver's seat, and has no body 
     section protruding more than 30 inches ahead of the leading 
     edge of the windshield.

       ``(D) Exempt-use vehicle.--The term `exempt-use vehicle' 
     means--
       ``(i) any ambulance, hearse, or combination ambulance-
     hearse used by the taxpayer directly in a trade or business,
       ``(ii) any vehicle used by the taxpayer directly in the 
     trade or business of transporting persons or property for 
     compensation or hire, and
       ``(iii) any truck or van if substantially all of the use of 
     such vehicle by the taxpayer is directly in--

       ``(I) a farming business (within the meaning of section 
     263A(e)(4)),
       ``(II) the transportation of a substantial amount of 
     equipment, supplies, or inventory, or
       ``(III) the moving or delivery of property which requires 
     substantial cargo capacity.

       ``(E) Recapture.--In the case of any vehicle which is not a 
     passenger automobile by reason of being an exempt-use 
     vehicle, if such vehicle ceases to be an exempt-use vehicle 
     in any taxable year after the taxable year in which such 
     vehicle is placed in service, a rule similar to the rule of 
     subsection (b) shall apply.''.
       (b) Conforming Amendment.--Section 179(b) of such Code 
     (relating to limitations) is amended by striking paragraph 
     (6).
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 207. RESTRUCTURING OF NEW YORK LIBERTY ZONE TAX CREDITS.

       (a) In General.--Part I of subchapter Y of chapter 1 is 
     amended by redesignating section 1400L as section 1400K and 
     by adding at the end the following new section:

     ``SEC. 1400L. NEW YORK LIBERTY ZONE TAX CREDITS.

       ``(a) In General.--In the case of a New York Liberty Zone 
     governmental unit, there shall be allowed as a credit against 
     any taxes imposed for any payroll period by section 3402 for 
     which such governmental unit is liable under section 3403 an 
     amount equal to so much of the portion of the qualifying 
     project expenditure amount allocated under subsection (b)(3) 
     to such governmental unit for the calendar year as is 
     allocated by such governmental unit to such period under 
     subsection (b)(4).
       ``(b) Qualifying Project Expenditure Amount.--For purposes 
     of this section--
       ``(1) In general.--The term `qualifying project expenditure 
     amount' means, with respect to any calendar year, the sum 
     of--
       ``(A) the total expenditures paid or incurred during such 
     calendar year by all New York Liberty Zone governmental units 
     and the Port Authority of New York and New Jersey for any 
     portion of qualifying projects located wholly within the City 
     of New York, New York, and
       ``(B) any such expenditures--
       ``(i) paid or incurred in any preceding calendar year which 
     begins after the date of enactment of this section, and
       ``(ii) not previously allocated under paragraph (3).
       ``(2) Qualifying project.--The term `qualifying project' 
     means any transportation infrastructure project, including 
     highways, mass transit systems, railroads, airports, ports, 
     and waterways, in or connecting with the New York Liberty 
     Zone (as defined in section 1400K(h)), which is designated as 
     a qualifying project under this section jointly by the 
     Governor of the State of New York and the Mayor of the City 
     of New York, New York.
       ``(3) General allocation.--
       ``(A) In general.--The Governor of the State of New York 
     and the Mayor of the City of New York, New York, shall 
     jointly allocate to each New York Liberty Zone governmental 
     unit the portion of the qualifying project expenditure amount 
     which may be taken into account by such governmental unit 
     under subsection (a) for any calendar year in the credit 
     period.
       ``(B) Aggregate limit.--The aggregate amount which may be 
     allocated under subparagraph (A) for all calendar years in 
     the credit period shall not exceed $2,000,000,000.
       ``(C) Annual limit.--The aggregate amount which may be 
     allocated under subparagraph (A) for any calendar year in the 
     credit period shall not exceed the sum of--
       ``(i) $169,000,000, plus
       ``(ii) the aggregate amount authorized to be allocated 
     under this paragraph for all preceding calendar years in the 
     credit period which was not so allocated.
       ``(D) Unallocated amounts at end of credit period.--If, as 
     of the close of the credit period, the amount under 
     subparagraph (B) exceeds the aggregate amount allocated under 
     subparagraph (A) for all calendar years in the credit period, 
     the Governor of the State of New York and the Mayor of the 
     City of New York, New York, may jointly allocate to New York 
     Liberty Zone governmental units for any calendar year in the 
     5-year period following the credit period an amount equal 
     to--
       ``(i) the lesser of--

       ``(I) such excess, or
       ``(II) the qualifying project expenditure amount for such 
     calendar year, reduced by

       ``(ii) the aggregate amount allocated under this 
     subparagraph for all preceding calendar years.
       ``(4) Allocation to payroll periods.--Each New York Liberty 
     Zone governmental unit which has been allocated a portion of 
     the qualifying project expenditure amount under paragraph (3) 
     for a calendar year may allocate such portion to payroll 
     periods beginning in such calendar year as such governmental 
     unit determines appropriate.
       ``(c) Carryover of Unused Allocations.--
       ``(1) In general.--Except as provided in paragraph (2), if 
     the amount allocated under subsection (b)(3) to a New York 
     Liberty Zone governmental unit for any calendar year exceeds 
     the aggregate taxes imposed by section 3402 for which such 
     governmental unit is liable under section 3403 for periods 
     beginning in such year, such excess shall be carried to the 
     succeeding calendar year and added to the allocation of such 
     governmental unit for such succeeding calendar year.
       ``(2) Reallocation.--If a New York Liberty Zone 
     governmental unit does not use an amount allocated to it 
     under subsection (b)(3) within the time prescribed by the 
     Governor of the State of New York and the Mayor of the City 
     of New York, New York, then such amount shall after such time 
     be treated for purposes of subsection (b)(3) in the same 
     manner as if it had never been allocated.
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Credit period.--The term `credit period' means the 
     12-year period beginning on January 1, 2008.
       ``(2) New york liberty zone governmental unit.--The term 
     `New York Liberty Zone governmental unit' means--
       ``(A) the State of New York,
       ``(B) the City of New York, New York, and
       ``(C) any agency or instrumentality of such State or City.
       ``(3) Treatment of funds.--Any expenditure for a qualifying 
     project taken into account for purposes of the credit under 
     this section shall be considered State and local funds for 
     the purpose of any Federal program.
       ``(4) Treatment of credit amounts for purposes of 
     withholding taxes.--For purposes of this title, a New York 
     Liberty Zone governmental unit shall be treated as having 
     paid to the Secretary, on the day on which wages are paid to 
     employees, an amount equal to the amount of the credit 
     allowed to such entity under subsection (a) with respect to 
     such wages, but only if such governmental unit deducts and 
     withholds wages for such payroll period under section 3401 
     (relating to wage withholding).
       ``(e) Reporting.--The Governor of the State of New York and 
     the Mayor of the City of New York, New York, shall jointly 
     submit to the Secretary an annual report--
       ``(1) which certifies--
       ``(A) the qualifying project expenditure amount for the 
     calendar year, and
       ``(B) the amount allocated to each New York Liberty Zone 
     governmental unit under subsection (b)(3) for the calendar 
     year, and
       ``(2) includes such other information as the Secretary may 
     require to carry out this section.

[[Page 23213]]

       ``(f) Guidance.--The Secretary may prescribe such guidance 
     as may be necessary or appropriate to ensure compliance with 
     the purposes of this section.''
       (b) Termination of Special Allowance and Expensing.--
     Subparagraph (A) of section 1400K(b)(2), as redesignated by 
     subsection (a), is amended by striking the parenthetical 
     therein and inserting ``(in the case of nonresidential real 
     property and residential rental property, the date of the 
     enactment of the Renewable Energy and Energy Conservation Tax 
     Act of 2007 or, if acquired pursuant to a binding contract in 
     effect on such enactment date, December 31, 2009)''.
       (c) Conforming Amendments.--
       (1) Section 38(c)(3)(B) is amended by striking ``section 
     1400L(a)'' and inserting ``section 1400K(a)''.
       (2) Section 168(k)(2)(D)(ii) is amended by striking 
     ``section 1400L(c)(2)'' and inserting ``section 
     1400K(c)(2)''.
       (3) The table of sections for part I of subchapter Y of 
     chapter 1 is amended by redesignating the item relating to 
     section 1400L as an item relating to section 1400K and by 
     inserting after such item the following new item:

``Sec. 1400L. New York Liberty Zone tax credits.''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

               Subtitle B--Other Conservation Provisions

     SEC. 211. QUALIFIED ENERGY CONSERVATION BONDS.

       (a) In General.--Subpart I of part IV of subchapter A of 
     chapter 1, as added by section 104, is amended by adding at 
     the end the following new section:

     ``SEC. 54C. QUALIFIED ENERGY CONSERVATION BONDS.

       ``(a) Qualified Energy Conservation Bond.--For purposes of 
     this subchapter, the term `qualified energy conservation 
     bond' means any bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for one or more qualified conservation 
     purposes,
       ``(2) the bond is issued by a State or local government, 
     and
       ``(3) the issuer designates such bond for purposes of this 
     section.
       ``(b) Limitation on Amount of Bonds Designated.--The 
     maximum aggregate face amount of bonds which may be 
     designated under subsection (a) by any issuer shall not 
     exceed the limitation amount allocated to such issuer under 
     subsection (d).
       ``(c) National Limitation on Amount of Bonds Designated.--
     There is a national qualified energy conservation bond 
     limitation of $3,600,000,000.
       ``(d) Allocations.--
       ``(1) In general.--The limitation applicable under 
     subsection (c) shall be allocated by the Secretary among the 
     States in proportion to the population of the States.
       ``(2) Allocations to largest local governments.--
       ``(A) In general.--In the case of any State in which there 
     is a large local government, each such local government shall 
     be allocated a portion of such State's allocation which bears 
     the same ratio to the State's allocation (determined without 
     regard to this subparagraph) as the population of such large 
     local government bears to the population of such State.
       ``(B) Allocation of unused limitation to state.--The amount 
     allocated under this subsection to a large local government 
     may be reallocated by such local government to the State in 
     which such local government is located.
       ``(C) Large local government.--For purposes of this 
     section, the term `large local government' means any 
     municipality or county if such municipality or county has a 
     population of 100,000 or more.
       ``(3) Allocation to issuers; restriction on private 
     activity bonds.--Any allocation under this subsection to a 
     State or large local government shall be allocated by such 
     State or large local government to issuers within the State 
     in a manner that results in not less than 70 percent of the 
     allocation to such State or large local government being used 
     to designate bonds which are not private activity bonds.
       ``(e) Qualified Conservation Purpose.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified conservation 
     purpose' means any of the following:
       ``(A) Capital expenditures incurred for purposes of--
       ``(i) reducing energy consumption in publicly-owned 
     buildings by at least 20 percent,
       ``(ii) implementing green community programs, or
       ``(iii) rural development involving the production of 
     electricity from renewable energy resources.
       ``(B) Expenditures with respect to research facilities, and 
     research grants, to support research in--
       ``(i) development of cellulosic ethanol or other nonfossil 
     fuels,
       ``(ii) technologies for the capture and sequestration of 
     carbon dioxide produced through the use of fossil fuels,
       ``(iii) increasing the efficiency of existing technologies 
     for producing nonfossil fuels,
       ``(iv) automobile battery technologies and other 
     technologies to reduce fossil fuel consumption in 
     transportation, or
       ``(v) technologies to reduce energy use in buildings.
       ``(C) Mass commuting facilities and related facilities that 
     reduce the consumption of energy, including expenditures to 
     reduce pollution from vehicles used for mass commuting.
       ``(D) Demonstration projects designed to promote the 
     commercialization of--
       ``(i) green building technology,
       ``(ii) conversion of agricultural waste for use in the 
     production of fuel or otherwise,
       ``(iii) advanced battery manufacturing technologies,
       ``(iv) technologies to reduce peak use of electricity, or
       ``(v) technologies for the capture and sequestration of 
     carbon dioxide emitted from combusting fossil fuels in order 
     to produce electricity.
       ``(E) Public education campaigns to promote energy 
     efficiency.
       ``(2) Special rules for private activity bonds.--For 
     purposes of this section, in the case of any private activity 
     bond, the term `qualified conservation purposes' shall not 
     include any expenditure which is not a capital expenditure.
       ``(f) Population.--
       ``(1) In general.--The population of any State or local 
     government shall be determined for purposes of this section 
     as provided in section 146(j) for the calendar year which 
     includes the date of the enactment of this section.
       ``(2) Special rule for counties.--In determining the 
     population of any county for purposes of this section, any 
     population of such county which is taken into account in 
     determining the population of any municipality which is a 
     large local government shall not be taken into account in 
     determining the population of such county.
       ``(g) Application to Indian Tribal Governments.--An Indian 
     tribal government shall be treated for purposes of this 
     section in the same manner as a large local government, 
     except that--
       ``(1) an Indian tribal government shall be treated for 
     purposes of subsection (d) as located within a State to the 
     extent of so much of the population of such government as 
     resides within such State, and
       ``(2) any bond issued by an Indian tribal government shall 
     be treated as a qualified energy conservation bond only if 
     issued as part of an issue the available project proceeds of 
     which are used for purposes for which such Indian tribal 
     government could issue bonds to which section 103(a) 
     applies.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 54A(d), as added by section 
     104, is amended to read as follows:
       ``(1) Qualified tax credit bond.--The term `qualified tax 
     credit bond' means--
       ``(A) a new clean renewable energy bond, or
       ``(B) a qualified energy conservation bond,
     which is part of an issue that meets requirements of 
     paragraphs (2), (3), (4), and (5).''.
       (2) Subparagraph (C) of section 54A(d)(2), as added by 
     section 104, is amended to read as follows:
       ``(C) Qualified purpose.--For purposes of this paragraph, 
     the term `qualified purpose' means--
       ``(i) in the case of a new clean renewable energy bond, a 
     purpose specified in section 54B(a)(1), and
       ``(ii) in the case of a qualified energy conservation bond, 
     a purpose specified in section 54C(a)(1).''.
       (3) The table of sections for subpart I of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 54C. Qualified energy conservation bonds.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 212. QUALIFIED RESIDENTIAL ENERGY EFFICIENCY ASSISTANCE 
                   BONDS.

       (a) In General.--Subpart I of part IV of subchapter A of 
     chapter 1 (as amended by this Act) is amended by adding at 
     the end the following new section:

     ``SEC. 54D. QUALIFIED RESIDENTIAL ENERGY EFFICIENCY 
                   ASSISTANCE BONDS.

       ``(a) Qualified Residential Energy Efficiency Assistance 
     Bond.--For purposes of this subchapter, the term `qualified 
     residential energy efficiency assistance bond' means any bond 
     issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for 1 or more qualified residential 
     energy efficiency assistance purposes,
       ``(2) not less than 20 percent of the available project 
     proceeds of such issue are to be used for 1 or more qualified 
     low-income residential energy efficiency assistance purposes,
       ``(3) repayments of principal and applicable interest on 
     financing provided by the issue are used not later than the 
     close of the 3-month period beginning on the date the 
     prepayment (or complete repayment) is received to redeem 
     bonds which are part of the issue or to provide for 1 or more 
     qualified residential energy efficiency assistance purposes,
       ``(4) the bond is issued by a State, and
       ``(5) the issuer designates such bond for purposes of this 
     section.
       ``(b) Limitation on Amount of Bonds Designated.--The 
     maximum aggregate face amount of bonds which may be 
     designated under subsection (a) by any issuer shall not 
     exceed the limitation amount allocated under subsection (d) 
     to such issuer.
       ``(c) National Limitation on Amount of Bonds Designated.--
     There is a national qualified energy conservation bond 
     limitation of $2,400,000,000.
       ``(d) Limitation Allocated Among States.--The limitation 
     under subsection (c) shall be allocated by the Secretary 
     among the

[[Page 23214]]

     States in proportion to the population of the States.
       ``(e) Qualified Residential Energy Efficiency Assistance 
     Purpose.--For purposes of this section--
       ``(1) In general.--The term `qualified residential energy 
     efficiency assistance purpose' means any grant or low-
     interest loan to acquire (including reasonable installation 
     costs)--
       ``(A) any property which meets (at a minimum) the 
     requirements of the Energy Star program and which is to be 
     installed in a dwelling unit,
       ``(B) any property which uses wind, solar, or geothermal 
     energy or qualified fuel cell property (as defined in section 
     48(c)(1)) to generate electricity, or to heat or cool water, 
     for use in a dwelling unit (other than property described in 
     section 25D(e)(3)), and
       ``(C) any improvements to a dwelling unit which are made 
     pursuant to a plan certified by an energy efficiency expert 
     that such improvement will yield at least a 20 percent 
     reduction in total household energy consumption related to 
     heating, cooling, lighting, and appliances.
       ``(2) Geothermal heat pump.--Any geothermal heat pump to 
     provide heating or cooling in a dwelling unit described in 
     paragraph (1)(B) shall be treated as described in paragraph 
     (1)(B).
       ``(3) Dollar limitations.--
       ``(A) In general.--Such term shall not include any grant or 
     loan for improvements described in paragraph (1)(C) with 
     respect to any dwelling unit to the extent that such grant or 
     loan (when added to all other grants or loans for such 
     improvements) exceeds $5,000.
       ``(B) Increased limitation for certain principal 
     residences.--In the case of a dwelling unit which is used as 
     a principal residence (within the meaning of section 121) by 
     the recipient of the grant or loan referred to in 
     subparagraph (A)--
       ``(i) subparagraph (A) shall be applied by substituting 
     `$12,000' for `$5,000' if such grant or loan would satisfy 
     the requirements of paragraph (1)(A) if such paragraph were 
     applied by substituting `50 percent' for `20 percent', and
       ``(ii) in any case to which clause (i) does not apply, 
     subparagraph (A) shall be applied by substituting `$8,000' 
     for `$5,000' if such grant or loan would satisfy the 
     requirements of paragraph (1)(A) if such paragraph were 
     applied by substituting `35 percent' for `20 percent'.
       ``(4) Low-interest loan.--The term `low interest loan' 
     means any loan which charges interest at a rate which does 
     not exceed the applicable Federal rate in effect under 
     section 1288(b)(1) determined as of the issuance of the loan.
       ``(5) Exclusion of certain property.--The following 
     property shall not be taken into account for purposes of 
     paragraph (1)(A):
       ``(A) Any equipment used in connection with a swimming 
     pool, hot tub, or similar property.
       ``(B) Any television.
       ``(C) Any device for converting digital signal to analog.
       ``(D) Any DVD player.
       ``(E) Any video cassette recorder (VCR).
       ``(F) Any audio equipment.
       ``(G) Any cordless phone.
       ``(H) Any other item of property where there is substantial 
     recreational use.
       ``(f) Qualified Low-Income Residential Efficiency 
     Assistance Purpose.--For purposes of this section--
       ``(1) In general.--The term `qualified low-income 
     residential energy efficiency assistance purpose' means any 
     qualified residential energy efficiency assistance purpose 
     with respect to a dwelling unit which is occupied (at the 
     time of the grant or loan) by individuals whose income is 50 
     percent or less of area median gross income. Rules similar to 
     the rules of section 142(d)(2)(B) shall apply for purposes of 
     this paragraph.
       ``(2) Restriction to grants.--Such term shall not include 
     any loan.
       ``(g) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Applicable interest.--The term `applicable interest' 
     means, with respect to any loan, so much of any interest on 
     such loan which exceeds 1 percentage point.
       ``(2) Special rule relating to arbitrage.--An issue shall 
     not be treated as failing to meet the requirements of section 
     54A(d)(4)(A) by reason of any investment of available project 
     proceeds in 1 or more qualified residential energy efficiency 
     assistance purposes.
       ``(3) Population.--The population of any State or local 
     government shall be determined as provided in section 146(j) 
     for the calendar year which includes the date of the 
     enactment of this section.
       ``(4) Reporting.--
       ``(A) Reports by issuers.--Issuers of qualified residential 
     energy efficiency assistance bonds shall, not later than 6 
     months after the expenditure period (as defined in section 
     54A) and annually thereafter until the last such bond is 
     redeemed, submit reports to the Secretary regarding such 
     bonds, including information regarding--
       ``(i) the number and monetary value of loans and grants 
     provided and the purposes for which provided,
       ``(ii) the number of dwelling units the energy efficiency 
     of which improved as result of such loans and grants,
       ``(iii) the types of property described in subsection 
     (e)(1)(A) installed as a result of such loans and grants and 
     the projected energy savings with respect to such property,
       ``(iv) the types of property described in subsection 
     (e)(1)(B) installed as a result of such loans and grants and 
     the projected production of such property, and
       ``(v) the projected energy savings as a result of such 
     loans and grants for improvements described in subsection 
     (e)(1)(C).
       ``(B) Report to congress.--Not later than 12 months after 
     receipt of the first report under subparagraph (A) and 
     annually thereafter until the last such report is required to 
     be submitted, the Secretary, in consultation with the 
     Secretary of Energy and the Administrator of the 
     Environmental Protection Agency, shall submit a report to 
     Congress regarding the bond program under this section, 
     including information regarding--
       ``(i) the aggregate of each category of information 
     described in subparagraph (A) (including any independent 
     assessment of projected energy savings), and
       ``(ii) an estimate of the amount of greenhouse gas 
     emissions reduced as a result of such bond program.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 54A(d), as added by section 
     104 and amended by section 211, is amended by striking ``or'' 
     at the end of subparagraph (A), by inserting ``or'' at the 
     end of subparagraph (B), and by inserting after subparagraph 
     (B) the following new subparagraph:
       ``(C) a qualified residential energy efficiency assistance 
     bond,''.
       (2) Subparagraph (C) of section 54A(d)(2), as added by 
     section 104 and amended by section 211, is amended by 
     striking ``and'' at the end of clause (i), by striking the 
     period at the end of clause (ii) and inserting ``, and'', and 
     by adding at the end the following new clause:
       ``(iii) in the case of a qualified residential energy 
     efficiency assistance bond, a purpose specified in section 
     54D(a)(1).''.
       (3) The table of sections for subpart I 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. 54D. Qualified residential energy efficiency assistance 
              bonds.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 213. EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDINGS 
                   DEDUCTION.

       Subsection (h) of section 179D (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2013''.

     SEC. 214. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT 
                   FOR APPLIANCES PRODUCED AFTER 2007.

       (a) In General.--Subsection (b) of section 45M (relating to 
     applicable amount) is amended to read as follows:
       ``(b) Applicable Amount.--For purposes of subsection (a)--
       ``(1) Dishwashers.--The applicable amount is--
       ``(A) $45 in the case of a dishwasher which is manufactured 
     in calendar year 2008 or 2009 and which uses no more than 324 
     kilowatt hours per year and 5.8 gallons per cycle, and
       ``(B) $75 in the case of a dishwasher which is manufactured 
     in calendar year 2008, 2009, or 2010 and which uses no more 
     than 307 kilowatt hours per year and 5.0 gallons per cycle 
     (5.5 gallons per cycle for dishwashers designed for greater 
     than 12 place settings).
       ``(2) Clothes washers.--The applicable amount is--
       ``(A) $75 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 which meets or 
     exceeds a 1.72 modified energy factor and does not exceed a 
     8.0 water consumption factor,
       ``(B) $125 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 or 2009 which meets 
     or exceeds a 1.8 modified energy factor and does not exceed a 
     7.5 water consumption factor,
       ``(C) $150 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009 or 
     2010 which meets or exceeds 2.0 modified energy factor and 
     does not exceed a 6.0 water consumption factor, and
       ``(D) $250 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009, or 
     2010 which meets or exceeds 2.2 modified energy factor and 
     does not exceed a 4.5 water consumption factor.
       ``(3) Refrigerators.--The applicable amount is--
       ``(A) $50 in the case of a refrigerator which is 
     manufactured in calendar year 2008, and consumes at least 20 
     percent but not more than 22.9 percent less kilowatt hours 
     per year than the 2001 energy conservation standards,
       ``(B) $75 in the case of a refrigerator which is 
     manufactured in calendar year 2008 or 2009, and consumes at 
     least 23 percent but no more than 24.9 percent less kilowatt 
     hours per year than the 2001 energy conservation standards,
       ``(C) $100 in the case of a refrigerator which is 
     manufactured in calendar year 2008, 2009 or 2010, and 
     consumes at least 25 percent but not more than 29.9 percent 
     less kilowatt hours per year than the 2001 energy 
     conservation standards, and
       ``(D) $200 in the case of a refrigerator manufactured in 
     calendar year 2008, 2009 or 2010 and which consumes at least 
     30 percent less energy than the 2001 energy conservation 
     standards.
       ``(4) Dehumidifiers.--The applicable amount is--
       ``(A) $15 in the case of a dehumidifier manufactured in 
     calendar year 2008 that has a capacity less than or equal to 
     45 pints per day and is 7.5 percent more efficient than the 
     applicable Department of Energy energy conservation standard 
     effective October 2012, and

[[Page 23215]]

       ``(B) $25 in the case of a dehumidifier manufactured in 
     calendar year 2008 that has a capacity greater than 45 pints 
     per day and is 7.5 percent more efficient than the applicable 
     Department of Energy energy conservation standard effective 
     October 2012.''.
       (b) Eligible Production.--
       (1) Similar treatment for all appliances.--Subsection (c) 
     of section 45M (relating to eligible production) is amended--
       (A) by striking paragraph (2),
       (B) by striking ``(1) In general'' and all that follows 
     through ``the eligible'' and inserting ``The eligible'', and
       (C) by moving the text of such subsection in line with the 
     subsection heading and redesignating subparagraphs (A) and 
     (B) as paragraphs (1) and (2), respectively.
       (2) Modification of base period.--Paragraph (2) of section 
     45M(c), as amended by paragraph (1) of this section, is 
     amended by striking ``3-calendar year'' and inserting ``2-
     calendar year''.
       (c) Types of Energy Efficient Appliances.--Subsection (d) 
     of section 45M (defining types of energy efficient 
     appliances) is amended to read as follows:
       ``(d) Types of Energy Efficient Appliance.--For purposes of 
     this section, the types of energy efficient appliances are--
       ``(1) dishwashers described in subsection (b)(1),
       ``(2) clothes washers described in subsection (b)(2),
       ``(3) refrigerators described in subsection (b)(3), and
       ``(4) dehumidifiers described in subsection (b)(4).''.
       (d) Aggregate Credit Amount Allowed.--
       (1) Increase in limit.--Paragraph (1) of section 45M(e) 
     (relating to aggregate credit amount allowed) is amended to 
     read as follows:
       ``(1) Aggregate credit amount allowed.--The aggregate 
     amount of credit allowed under subsection (a) with respect to 
     a taxpayer for any taxable year shall not exceed $75,000,000 
     reduced by the amount of the credit allowed under subsection 
     (a) to the taxpayer (or any predecessor) for all prior 
     taxable years beginning after December 31, 2007.''.
       (2) Exception for certain refrigerator and clothes 
     washers.--Paragraph (2) of section 45M(e) is amended to read 
     as follows:
       ``(2) Amount allowed for certain refrigerators and clothes 
     washers.--Refrigerators described in subsection (b)(3)(D) and 
     clothes washers described in subsection (b)(2)(D) shall not 
     be taken into account under paragraph (1).''.
       (e) Qualified Energy Efficient Appliances.--
       (1) In general.--Paragraph (1) of section 45M(f) (defining 
     qualified energy efficient appliance) is amended to read as 
     follows:
       ``(1) Qualified energy efficient appliance.--The term 
     `qualified energy efficient appliance' means--
       ``(A) any dishwasher described in subsection (b)(1),
       ``(B) any clothes washer described in subsection (b)(2),
       ``(C) any refrigerator described in subsection (b)(3), and
       ``(D) any dehumidifier described in subsection (b)(4).''.
       (2) Clothes washer.--Section 45M(f)(3) (defining clothes 
     washer) is amended by inserting ``commercial'' before 
     ``residential'' the second place it appears.
       (3) Top-loading clothes washer.--Subsection (f) of section 
     45M (relating to definitions) is amended by redesignating 
     paragraphs (4), (5), (6), and (7) as paragraphs (5), (6), 
     (7), and (8), respectively, and by inserting after paragraph 
     (3) the following new paragraph:
       ``(4) Top-loading clothes washer.--The term `top-loading 
     clothes washer' means a clothes washer which has the clothes 
     container compartment access located on the top of the 
     machine and which operates on a vertical axis.''.
       (4) Dehumidifier.--Subsection (f) of section 45M, as 
     amended by paragraph (3), is amended by redesignating 
     paragraphs (6), (7), and (8) as paragraphs (7), (8) and (9), 
     respectively, and by inserting after paragraph (5) the 
     following new paragraph:
       ``(6) Dehumidifier.--The term `dehumidifier' means a self-
     contained, electrically operated, and mechanically 
     refrigerated encased assembly consisting of--
       ``(A) a refrigerated surface that condenses moisture from 
     the atmosphere,
       ``(B) a refrigerating system, including an electric motor,
       ``(C) an air-circulating fan, and
       ``(D) means for collecting or disposing of condensate.''.
       (5) Replacement of energy factor.--Section 45M(f)(7), as 
     amended by paragraph (4), is amended to read as follows:
       ``(7) Modified energy factor.--The term `modified energy 
     factor' means the modified energy factor established by the 
     Department of Energy for compliance with the Federal energy 
     conservation standard.''.
       (6) Gallons per cycle; water consumption factor.--Section 
     45M(f) (relating to definitions) is amended by adding at the 
     end the following:
       ``(10) Gallons per cycle.--The term `gallons per cycle' 
     means, with respect to a dishwasher, the amount of water, 
     expressed in gallons, required to complete a normal cycle of 
     a dishwasher.
       ``(11) Water consumption factor.--The term `water 
     consumption factor' means, with respect to a clothes washer, 
     the quotient of the total weighted per-cycle water 
     consumption divided by the cubic foot (or liter) capacity of 
     the clothes washer.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to appliances produced after December 31, 2007.

     SEC. 215. FIVE-YEAR APPLICABLE RECOVERY PERIOD FOR 
                   DEPRECIATION OF QUALIFIED ENERGY MANAGEMENT 
                   DEVICES.

       (a) In General.--Section 168(e)(3)(B) (relating to 5-year 
     property) is amended by striking ``and'' at the end of clause 
     (v), by striking the period at the end of clause (vi) and 
     inserting ``, and'', and by inserting after clause (vi) the 
     following new clause:
       ``(vii) any qualified energy management device.''.
       (b) Definition of Qualified Energy Management Device.--
     Section 168(i) (relating to definitions and special rules) is 
     amended by inserting at the end the following new paragraph:
       ``(18) Qualified energy management device.--
       ``(A) In general.--The term `qualified energy management 
     device' means any energy management device which is installed 
     on real property of a customer of the taxpayer and is placed 
     in service by a taxpayer who--
       ``(i) is a supplier of electric energy or a provider of 
     electric energy services, and
       ``(ii) provides all commercial and residential customers of 
     such supplier or provider with net metering upon the request 
     of such customer.
       ``(B) Energy management device.--For purposes of 
     subparagraph (A), the term `energy management device' means 
     any time-based meter and related communication equipment 
     which is capable of being used by the taxpayer as part of a 
     system that--
       ``(i) measures and records electricity usage data on a 
     time-differentiated basis in at least 24 separate time 
     segments per day,
       ``(ii) provides for the exchange of information between 
     supplier or provider and the customer's energy management 
     device in support of time-based rates or other forms of 
     demand response, and
       ``(iii) provides data to such supplier or provider so that 
     the supplier or provider can provide energy usage information 
     to customers electronically.
       ``(C) Net metering.--For purposes of subparagraph (A), the 
     term `net metering' means allowing customers a credit for 
     providing electricity to the supplier or provider.''.
       (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.

                     TITLE III--REVENUE PROVISIONS

             Subtitle A--Denial of Oil and Gas Tax Benefits

     SEC. 301. DENIAL OF DEDUCTION FOR INCOME ATTRIBUTABLE TO 
                   DOMESTIC PRODUCTION OF OIL, NATURAL GAS, OR 
                   PRIMARY PRODUCTS THEREOF.

       (a) In General.--Subparagraph (B) of section 199(c)(4) 
     (relating to exceptions) is amended by striking ``or'' at the 
     end of clause (ii), by striking the period at the end of 
     clause (iii) and inserting ``, or'', and by inserting after 
     clause (iii) the following new clause:
       ``(iv) the sale, exchange, or other disposition of oil, 
     natural gas, or any primary product thereof.''.
       (b) Primary Product.--Section 199(c)(4)(B) is amended by 
     adding at the end the following flush sentence:

     ``For purposes of clause (iv), the term `primary product' has 
     the same meaning as when used in section 927(a)(2)(C), as in 
     effect before its repeal.''.
       (c) Conforming Amendments.--Section 199(c)(4) is amended--
       (1) in subparagraph (A)(i)(III) by striking ``electricity, 
     natural gas,'' and inserting ``electricity'', and
       (2) in subparagraph (B)(ii) by striking ``electricity, 
     natural gas,'' and inserting ``electricity''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 302. 7-YEAR AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL 
                   EXPENDITURES FOR CERTAIN MAJOR INTEGRATED OIL 
                   COMPANIES.

       (a) In General.--Subparagraph (A) of section 167(h)(5) 
     (relating to special rule for major integrated oil companies) 
     is amended by striking ``5-year'' and inserting ``7-year''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to amounts paid or incurred after the date of the 
     enactment of this Act.

     SEC. 303. CLARIFICATION OF DETERMINATION OF FOREIGN OIL AND 
                   GAS EXTRACTION INCOME.

       (a) In General.--Paragraph (1) of section 907(c) is amended 
     by redesignating subparagraph (B) as subparagraph (C), by 
     striking ``or'' at the end of subparagraph (A), and by 
     inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) so much of any transportation of such minerals as 
     occurs before the fair market value event, or''.
       (b) Fair Market Value Event.--Subsection (c) of section 907 
     is amended by adding at the end the following new paragraph:
       ``(6) Fair market value event.--For purposes of this 
     section, the term `fair market value event' means, with 
     respect to any mineral, the first point in time at which such 
     mineral--
       ``(A) has a fair market value which can be determined on 
     the basis of a transfer, which is an

[[Page 23216]]

     arm's length transaction, of such mineral from the taxpayer 
     to a person who is not related (within the meaning of section 
     482) to such taxpayer, or
       ``(B) is at a location at which the fair market value is 
     readily ascertainable by reason of transactions among 
     unrelated third parties with respect to the same mineral 
     (taking into account source, location, quality, and chemical 
     composition).''.
       (c) Special Rule for Certain Petroleum Taxes.--Subsection 
     (c) of section 907, as amended by subsection (b), is amended 
     to by adding at the end the following new paragraph:
       ``(7) Oil and gas taxes.--In the case of any tax imposed by 
     a foreign country which is limited in its application to 
     taxpayers engaged in oil or gas activities--
       ``(A) the term `oil and gas extraction taxes' shall include 
     such tax,
       ``(B) the term `foreign oil and gas extraction income' 
     shall include any taxable income which is taken into account 
     in determining such tax (or is directly attributable to the 
     activity to which such tax relates), and
       ``(C) the term `foreign oil related income' shall not 
     include any taxable income which is treated as foreign oil 
     and gas extraction income under subparagraph (B).''.
       (d) Conforming Amendments.--
       (1) Subparagraph (C) of section 907(c)(1), as redesignated 
     by this section, is amended by inserting ``or used by the 
     taxpayer in the activity described in subparagraph (B)'' 
     before the period at the end.
       (2) Subparagraph (B) of section 907(c)(2) is amended to 
     read as follows:
       ``(B) so much of the transportation of such minerals or 
     primary products as is not taken into account under paragraph 
     (1)(B),''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

   Subtitle B--Clarification of Eligibility for Certain Fuel Credits

     SEC. 311. CLARIFICATION OF ELIGIBILITY FOR RENEWABLE DIESEL 
                   CREDIT.

       (a) Coproduction With Petroleum Feedstock.--
       (1) In general.--Paragraph (3) of section 40A(f) (defining 
     renewable diesel) is amended by adding at the end the 
     following flush sentence:
     ``Such term does not include any fuel derived from 
     coprocessing biomass with a feedstock which is not biomass. 
     For purposes of this paragraph, the term `biomass' has the 
     meaning given such term by section 45K(c)(3).''.
       (2) Conforming amendment.--Paragraph (3) of section 40A(f) 
     is amended by striking ``(as defined in section 45K(c)(3))''.
       (b) Clarification of Eligibility for Alternative Fuel 
     Credit.--
       (1) In general.--Subparagraph (F) of section 6426(d)(2) is 
     amended by striking ``hydrocarbons'' and inserting ``fuel''.
       (2) Conforming amendment.--Section 6426 is amended by 
     adding at the end the following new subsection:
       ``(h) Denial of Double Benefit.--No credit shall be 
     determined under subsection (d) or (e) with respect to any 
     fuel with respect to which credit may be determined under 
     subsection (b) or (c) or under section 40 or 40A.''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to fuel produced, 
     and sold or used, after June 30, 2007.
       (2) Clarification of eligibility for alternative fuel 
     credit.--The amendment made by subsection (b) shall take 
     effect as if included in section 11113 of the Safe, 
     Accountable, Flexible, Efficient Transportation Equity Act: A 
     Legacy for Users.

     SEC. 312. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO 
                   PROVIDE AN INCENTIVE FOR UNITED STATES 
                   PRODUCTION.

       (a) Biodiesel Fuels Credit.--Paragraph (5) of section 
     40A(d), as added by subsection (c), is amended to read as 
     follows:
       ``(5) Limitation to biodiesel with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any biodiesel unless--
       ``(A) such biodiesel is produced in the United States for 
     use as a fuel in the United States, and
       ``(B) the taxpayer obtains a certification (in such form 
     and manner as prescribed by the Secretary) from the producer 
     of the biodiesel which identifies the product produced and 
     the location of such production.

     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States.''.
       (b) Excise Tax Credit.--Paragraph (2) of section 6426(i), 
     as added by subsection (c), is amended to read as follows:
       ``(2) Biodiesel and alternative fuels.--No credit shall be 
     determined under this section with respect to any biodiesel 
     or alternative fuel unless--
       ``(A) such biodiesel or alternative fuel is produced in the 
     United States for use as a fuel in the United States, and
       ``(B) the taxpayer obtains a certification (in such form 
     and manner as prescribed by the Secretary) from the producer 
     of such biodiesel or alternative fuel which identifies the 
     product produced and the location of such production.''.
       (c) Provisions Clarifying Treatment of Fuels With No Nexus 
     to the United States.--
       (1) Alcohol fuels credit.--Subsection (d) of section 40 is 
     amended by adding at the end the following new paragraph:
       ``(6) Limitation to alcohol with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any alcohol which is produced outside the 
     United States for use as a fuel outside the United States. 
     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States.''.
       (2) Biodiesel fuels credit.--Subsection (d) of section 40A 
     is amended by adding at the end the following new paragraph:
       ``(5) Limitation to biodiesel with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any biodiesel which is produced outside the 
     United States for use as a fuel outside the United States. 
     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States.''.
       (3) Excise tax credit.--
       (A) In general.--Section 6426, as amended by section 311, 
     is amended by adding at the end the following new subsection:
       ``(i) Limitation to Fuels With Connection to the United 
     States.--
       ``(1) Alcohol.--No credit shall be determined under this 
     section with respect to any alcohol which is produced outside 
     the United States for use as a fuel outside the United 
     States.
       ``(2) Biodiesel and alternative fuels.--No credit shall be 
     determined under this section with respect to any biodiesel 
     or alternative fuel which is produced outside the United 
     States for use as a fuel outside the United States.

     For purposes of this subsection, the term `United States' 
     includes any possession of the United States.''.
       (B) Conforming amendment.--Subsection (e) of section 6427 
     is amended by redesignating paragraph (5) as paragraph (6) 
     and by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) Limitation to fuels with connection to the united 
     states.--No amount shall be payable under paragraph (1) or 
     (2) with respect to any mixture or alternative fuel if credit 
     is not allowed with respect to such mixture or alternative 
     fuel by reason of section 6426(i).''.
       (d) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to fuel produced, 
     and sold or used, after the date of the enactment of this 
     Act.
       (2) Provisions clarifying treatment of fuels with no nexus 
     to the united states.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the amendments made by subsection (c) shall take 
     effect as if included in section 301 of the American Jobs 
     Creation Act of 2004.
       (B) Alternative fuel credits.--So much of the amendments 
     made by subsection (c) as relate to the alternative fuel 
     credit or the alternative fuel mixture credit shall take 
     effect as if included in section 11113 of the Safe, 
     Accountable, Flexible, Efficient Transportation Equity Act: A 
     Legacy for Users.
       (C) Renewable diesel.--So much of the amendments made by 
     subsection (c) as relate to renewable diesel shall take 
     effect as if included in section 1346 of the Energy Policy 
     Act of 2005.

                       TITLE IV--OTHER PROVISIONS

                          Subtitle A--Studies

     SEC. 401. CARBON AUDIT OF THE TAX CODE.

       (a) Study.--The Secretary of the Treasury shall enter into 
     an agreement with the National Academy of Sciences to 
     undertake a comprehensive review of the Internal Revenue Code 
     of 1986 to identify the types of and specific tax provisions 
     that have the largest effects on carbon and other greenhouse 
     gas emissions and to estimate the magnitude of those effects.
       (b) Report.--Not later than 2 years after the date of 
     enactment of this Act, the National Academy of Sciences shall 
     submit to Congress a report containing the results of study 
     authorized under this section.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $1,500,000 for 
     the period of fiscal years 2008 and 2009.

     SEC. 402. COMPREHENSIVE STUDY OF BIOFUELS.

       (a) Study.--The Secretary of the Treasury, in consultation 
     with the Secretary of Agriculture, the Secretary of Energy, 
     and the Administrator of the Environmental Protection Agency, 
     shall enter into an agreement with the National Academy of 
     Sciences to produce an analysis of current scientific 
     findings to determine--
       (1) current biofuels production, as well as projections for 
     future production,
       (2) the maximum amount of biofuels production capable on 
     United States farmland,
       (3) the domestic effects of a dramatic increase in biofuels 
     production on, for example--
       (A) the price of fuel,
       (B) the price of land in rural and suburban communities,
       (C) crop acreage and other land use,
       (D) the environment, due to changes in crop acreage, 
     fertilizer use, runoff, water use, emissions from vehicles 
     utilizing biofuels, and other factors,
       (E) the price of feed,
       (F) the selling price of grain crops,
       (G) exports and imports of grains,
       (H) taxpayers, through cost or savings to commodity crop 
     payments, and
       (I) the expansion of refinery capacity,
       (4) the ability to convert corn ethanol plants for other 
     uses, such as cellulosic ethanol or biodiesel,
       (5) a comparative analysis of corn ethanol versus other 
     biofuels and renewable energy sources, considering cost, 
     energy output, and ease of implementation, and

[[Page 23217]]

       (6) the need for additional scientific inquiry, and 
     specific areas of interest for future research.
       (b) Report.--The National Academy of Sciences shall submit 
     an initial report of the findings of the report required 
     under subsection (a) to the Congress not later than 3 months 
     after the date of the enactment of this Act, and a final 
     report not later than 6 months after such date of enactment.

Subtitle B--Application of Certain Labor Standards on Projects Financed 
                         Under Tax Credit Bonds

     SEC. 411. APPLICATION OF CERTAIN LABOR STANDARDS ON PROJECTS 
                   FINANCED UNDER TAX CREDIT BONDS.

       Subchapter IV of chapter 31 of title 40, United States 
     Code, shall apply to projects financed with the proceeds of 
     any tax credit bond (as defined in section 54A of the 
     Internal Revenue Code of 1986).

  The SPEAKER pro tempore. The gentleman from New York (Mr. Rangel) and 
the gentleman from Louisiana (Mr. McCrery) each will control 30 
minutes.
  The Chair recognizes the gentleman from New York.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in strong support of 2776, the Renewable Energy 
and Energy Efficient Tax Act.
  Our committee has provided long-term incentives for electricity for 
renewable sources, production from wind, solar, biomass, geothermal, 
river currents, ocean tides, landfill gas and tracks combustion 
resources. And at the same time, we were able to provide incentives for 
States to provide bonds and grants in order to make certain that 
working families would be able to purchase energy-efficient heat pumps, 
home improvement appliances, solar, and a variety of other things.
  And in order to pay for this, at the recommendation of the Internal 
Revenue Service, we were able to raise the funds to close the loopholes 
to make certain that at the end of the day the bill is revenue-neutral.
  Mr. Speaker, I ask unanimous consent at this time that the remainder 
of my time I be able to yield to Mr. McDermott on the committee, who 
has provided a lot of work on this subject and which we're so proud to 
present to this House and ultimately to the American people.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
  I rise today, Mr. Speaker, in strong opposition to H.R. 2776.
  It seems that many of my colleagues in the majority have developed a 
sort of schizophrenia when it comes to energy. Throughout last year, 
they held press conference after press conference saying that the 
Republicans weren't doing enough to lower the price of gasoline at the 
pump; yet, since the new Democratic majority was elected, the price of 
gasoline has jumped an average of nearly $1 a gallon across the 
country. Now that my colleagues have brought to the floor a bill which 
they call ``energy legislation,'' which includes substantial tax 
increases on the oil and gas industry, surely they don't believe this 
will do anything to bring down gasoline prices.
  The majority will claim that this legislation is basically the same 
as H.R. 6, an energy tax increase bill passed by this House in January. 
That is not the case. This bill contains double the tax increase that 
that legislation did. This bill has over $15 billion worth of tax 
increases. Now, some of that is because the Joint Tax Committee 
reestimated the impact of one of the provisions in H.R. 6, but other 
provisions are new, including a massive tax increase on United States 
companies producing energy abroad.
  And while overseas production of oil and gas might seem like a 
tempting target for a tax hike, the Statement of Administration Policy 
has rightly warned that this provision will ``disadvantage United 
States-based companies by reducing their ability to compete for 
investments and foreign energy-related projects.''
  At a time when worldwide energy demand is increasing, it defies logic 
why we would unilaterally raise taxes on American companies competing 
in an international market for future exploration and production deals. 
What logical reason could there be for using the tax code to help 
ensure more of the world's oil production is done by non-United States 
companies? And in addition to raising taxes by more than $15 billion on 
energy production, the majority has made, in my view, some poor 
decisions when they decided how to spend the tax increase. Their bill, 
for example, would allow several Republican-created incentives 
promoting conservation to expire, including incentives for individuals 
to buy hybrid cars, to install solar power and solar water heaters, and 
to make energy-efficiency upgrades to their homes.
  Even worse, the bill before us would also authorize up to $6 billion 
in tax credit bonds for so-called ``green energy products.'' At our 
markup, we in the minority offered a variety of amendments to try to 
define or limit the allowable uses of these bond proceeds, and those 
amendments were repeatedly rejected by the majority.
  During the debate today, we will hear about some of the possible uses 
of these bonds and our concern that they will amount to little more 
than green pork doled out to Governors, State legislatures, mayors and 
city councils to fund all manner of boondoggles and white elephants. 
The majority could have avoided this debate by accepting language 
requiring that these products reduce energy consumption or greenhouse 
gas emissions, but they didn't.
  In closing, Mr. Speaker, three facts about this legislation should be 
painfully obvious.
  Number 1, you don't lower prices at the pump by raising taxes on the 
companies that find, refine and transport gasoline.
  Number 2, you don't increase America's energy independence by raising 
taxes on our domestic energy industry, making American energy even more 
expensive compared with foreign sources.
  And 3, you certainly don't improve anything by shoveling money at 
Governors and big-city mayors with a vague mandate and zero oversight.
  I urge my colleagues to reject this bill.
  Mr. Speaker, I reserve the balance of my time.


                             General Leave

  Mr. McDERMOTT. Mr. Speaker, I ask unanimous consent that all Members 
be given 5 legislative days in which to revise and extend their remarks 
on H.R. 2776.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Washington?
  There was no objection.
  Mr. McDERMOTT. Mr. Speaker, I want to begin by acknowledging and 
thanking Mr. Rangel for his leadership in providing the energy 
legislation which is before us today and to applaud Speaker Pelosi for 
setting the agenda at the beginning of this session that will change 
this country's energy.
  We live in a Nation addicted to oil, and we simply can't afford it 
anymore. It's too expensive for the American pocketbook; it's too 
adverse for American security, and too perilous for the Earth's 
atmosphere. But the key to any and every part of the energy solution 
lies here in the Congress in its political will to change what we can 
change for the good of the American people and the Earth.
  Our energy legislation is bigger and bolder than a barrel of oil. 
It's a balance of support for alternative energy production and 
conservation. Every American has a stake and an ability to make a 
change, and our energy legislation unleashes America's ability to 
create, innovate and seek out and do that which has not been done. This 
is America's declaration of energy independence, and the first campaign 
plans to win what must be won. Our grandchildren, our children, our 
constituents, our country deserves no less. To those who say we cannot 
rise to meet the future and that we must embrace the past, I say 
America's boundless optimism has plenty of room to grow and shine. When 
it comes to energy policy, we have not risen to the occasion or to 
America's potential. That changes today with this legislation. It 
deserves bipartisan support.
  And I would point out that the rhetoric we're going to hear from the 
other

[[Page 23218]]

side is basically, we have to protect the oil companies; we can't touch 
their profits. Now, at a time when Americans are paying record prices 
at the pump and oil is at $70 a barrel, we have to change the status 
quo, and we're going to do it. It doesn't affect oil produced in this 
country, and it will be better for us in the long run.
  Mr. Speaker, I reserve the balance of my time.
  Mr. McCRERY. Mr. Speaker, I ask unanimous consent to allow the 
gentleman from Pennsylvania (Mr. English), the ranking member of the 
Select Revenue Measures Subcommittee, to control the balance of the 
time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Louisiana?
  There was no objection.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I yield myself such time as 
I may consume.
  Mr. Speaker, I rise tonight to lament a lost opportunity. Mr. 
Speaker, our friends on the other side of the aisle had promised to 
produce an energy tax bill that would promote America's energy 
independence. They had a real opening to produce innovative policies, 
to incentivize new technologies and promote the diversification of our 
energy consumption. Instead, Mr. Speaker, the Democrats have presented 
the House with a placebo that will ultimately reduce domestic energy 
production, give American energy companies less of a reason to invest 
in exploration here at home, encourage greater dependence on foreign 
oil, and damage America's manufacturing base.
  This bill is energy policy light and consists of a dog's breakfast of 
stale notions clearly intended to appeal to the blogosphere rather than 
to market forces.

                              {time}  1815

  The Democrats' solution to America's energy crisis is to single out 
oil and gas producers for a tax increase. That is a great sound bite. 
But the fact is, Mr. Speaker, this legislation is not likely to impact 
oil producers' profits in any way, shape or form. The one thing you can 
you can be sure this bill will do is raise prices at the pump for 
American consumers.
  Furthermore, it creates disincentives that will decrease the supply 
of domestic natural gas and oil and increase our country's energy 
imports. While this legislation not only forces our country to become 
more dependent on foreign oil, it will also force America's working 
families to bear the brunt of increased energy costs. The more than $15 
billion tax increase built into this bill will inevitably be borne 
entirely by consumers in the form of higher gasoline and home emergency 
prices.
  This is vastly, in fact, about double, the tax increase contained in 
H.R. 6, a staggering sum that will stifle growth and hit working 
families' bottom line. The effect of high gas prices will ripple 
throughout the economy, increasing prices on everything from 
electronics to school supplies.
  This legislation is also an assault against America's manufacturing 
base. Using nearly one-third of the Nation's energy both as fuel and 
feedstock, energy is the heart of American manufacturing. With such an 
energy-intensive sector, raising energy prices will make domestic 
manufacturers less competitive in the world market, forcing more of our 
good-paying manufacturing jobs offshore.
  Mr. Speaker, we have long advocated for a comprehensive energy plan 
to reduce our dependence on foreign oil and increase America's access 
to clean, affordable and dependable energy for their cars, their homes 
and their businesses. Yet, here again, Mr. Speaker, this bill is moving 
in the wrong direction. It throws out our effective incentives for 
producing renewable energy and replaces them with retrograde policies.
  In this bill, the Democrats have created a $6 billion slush fund for 
local projects in States and cities, with no safeguards to ensure that 
the money is actually used to improve America's energy independence or 
the environment. This is a blank check for so-called green pork 
projects all over the country that mayors and governors can dole out 
like candy on Halloween. But, Mr. Speaker, this is going to be no treat 
for the American taxpayer.
  In addition, the wind credit, one of our most proven and effective 
sources of renewable energy, gets a substantial haircut in this bill 
and is effectively, under current conditions, gutted. This legislation 
is bad energy policy. It is bad tax policy.
  Mr. Speaker, I would hope that our colleagues would join us today in 
standing up for American manufacturers, for American consumers, and 
stand up to preserve our domestic energy supply and guarantee our 
energy future by voting this bill down.
  Mr. Speaker, I reserve the balance of my time.
  Mr. McDERMOTT. My prediction is correct. We are here to protect the 
oil companies, and we are glad to see that.
  I will just take one of your arguments, the American Wind 
Association. You said, this is no use. They say ``strengthening our 
Nation's energy security, revitalizing world economies and addressing 
climate change are the central goals of the 110th Congress.'' Wind 
energy is a large part of the answer. They are in support of this bill.
  Mr. Speaker, I reserve the balance of my time.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore. The Chair would remind all Members to direct 
their remarks to the Chair.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I yield 2 minutes to the 
distinguished minority whip of the House (Mr. Blunt).
  Mr. BLUNT. I thank the gentleman for yielding.
  Mr. Speaker, I think you will be able to characterize our remarks in 
one of two ways: One is that we are continuing to encourage domestic 
exploration; the other is we are trying to do things that reach energy 
independence.
  Following up on the bill that moved us toward energy independence 
that was passed in 2005 would have been a good idea. The efforts to 
have an energy bill this year are a good idea. But this bill imposes 
taxes double that already passed in H.R. 6. This would hurt our 
investment in energy independence and domestic supply. I don't have 
very many people in my district at all or in our State that are in gas 
and oil production. Almost everybody in our State that buys anything is 
in gas and oil purchasing.
  Things that raise gas prices, things that don't allow us to fully 
utilize our resources, things that continue to make us more and more 
dependent on parts of the world that don't like us can't be a good 
idea. There is nothing wrong with buying things from people who don't 
like you, but there is something really dumb about having to buy things 
from people who don't like you. We are still in that mode today. This 
bill heads us more in that direction.
  The incentives for many conservation measures are allowed to expire 
in this bill. I see my good friend with a bicycle on his lapel. I note 
that there is a tax benefit to pay people to bicycle to work. He would 
argue, I suppose, that we don't have enough people in southwest 
Missouri that bicycle to work, because we have almost no people that 
bicycle to work. We have lots of people that drive 50 and 60 miles to 
get to good manufacturing jobs, and they are not going to ride a 
bicycle there. They don't need more expensive gasoline to get there.
  Mr. Speaker, we need to move toward energy independence. This bill, 
regretfully, moves us toward energy dependence.
  Mr. Speaker, I urge my colleagues to vote ``no.''
  Mr. McDERMOTT. The gentleman from Missouri should stay and listen. 
The fact is that 36 of your Members voted for H.R. 6 because we were 
closing a loophole which was never designed for the oil companies. It 
was to deal with the World Trade Organization.
  Mr. Speaker, the gentleman from Missouri says that we are taking 
money somehow and doing bad things with it. He forgets that this issue 
was to deal with FSC, and, lo and behold, the oil companies slipped in 
under the door. They were never eligible for FSC before, but the 
chairman of the Ways

[[Page 23219]]

and Means Committee allowed them in in the last Congress. They have 
been taking their profits and just going hell-bent for leather.
  We are taking it back from them. I am sure they are upset about it. 
But it is more important that we use that money for alternative energy, 
both in production of new energy sources and in conservation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, it is now my privilege to 
yield 2 minutes to the gentleman from California (Mr. Herger), a 
distinguished member of our committee.
  Mr. HERGER. Mr. Speaker, every time I visit with constituents, like 
most of you here in Congress, I hear about high gas prices. And they're 
right. Gas prices are too high. Prices in our free market are governed 
by supply and demand. Record high prices result from, among other 
things, the fact that we don't produce enough of our own supply 
domestically and are therefore at the mercy of unpredictable and often 
unstable foreign producers.
  Thirty years ago, when we had our first oil crisis, we were dependent 
on foreign sources of oil for only about one-third of our supplies. 
Today it is roughly two-thirds of our supply. A sure way to fix this 
situation is to encourage environmentally safe oil exploration and 
production here in the United States.
  But this is the opposite of what today's legislation seeks. In fact, 
today's bill proposes to raise taxes on domestic oil and gas 
exploration by nearly $12 billion. This discourages investment in U.S. 
supplies and will, over time, increase our dependence even more on 
foreign sources of fossil fuels.
  Mr. Speaker, I encourage my colleagues to vote against higher gas 
prices and against H.R. 2776, this ill-conceived energy legislation.
  Mr. McDERMOTT. Mr. Speaker, I yield 1 minute to the gentleman from 
California (Mr. Farr).

                              {time}  1830

  Mr. FARR. I thank the gentleman for yielding.
  Mr. Speaker, I would like to rise after my colleague from California 
as a fellow Californian and tell him he is dead wrong. This is the best 
bill you could ever have for investment in California. We are booming 
with energy alternatives. And do you know what we have done? We have 
banned offshore oil. The public in California does that unanimously. We 
are not about oil in California; we are about investment in the future.
  This bill allows the utility companies, which now every utility 
company in California gives a rebate. There are companies in California 
that are buying cars for their workers if they are hybrid cars. This 
allows the incentive to be increased, doubled, tripled.
  This is about investment, and I just totally disagree with my 
colleague on the other side of the aisle. It is not about looking at 
the future through the rearview mirror; it is about investment. That is 
what this bill is all about. This is the best gift you could ever have 
in the tool box to help California grow economically.
  I ask for an ``aye'' vote on this bill.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I reserve the balance of my 
time.
  Mr. McDERMOTT. Mr. Speaker, I reserve the balance of my time.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I yield 2 minutes to a 
distinguished member of our committee, the gentleman from Michigan (Mr. 
Camp).
  Mr. CAMP of Michigan. Mr. Speaker, this bill is a missed opportunity. 
In Michigan, where the average price of gas is 12 cents higher than the 
national average, energy prices are a sore subject. Gas prices are too 
high, the U.S. is too dependent on foreign oil, and yet the majority 
party refuses to allow expanding our domestic supply of energy sources.
  This bill misses the mark. H.R. 2776 is certainly creative in how it 
spends taxpayer dollars. Under this legislation, $6 billion will be 
given away to States for just about any project that has the word 
``energy'' in it.
  Republicans in the Ways and Means Committee debated this new spending 
scheme at length during the bill's markup. During that debate, we found 
out that States could use taxpayer money to buy hybrid Lexuses for 
State employees, construct indoor rainforests, distribute complimentary 
copies of Al Gore's ``An Inconvenient Truth'' in every classroom, or 
hand out energy-efficient light bulbs.
  In my view, the new tax credit bond programs this legislation creates 
will fail to do anything to secure our Nation's energy independence 
because there is no requirement that they reduce greenhouse gases or 
increase energy production.
  The bill, however, does have a few bright spots. It includes measures 
I have supported on plug-in vehicles, solar energy and energy-efficient 
programs for appliances and homes. I believe these initiatives have the 
potential to have significant impact on energy conservation.
  I am disappointed the underlying bill does nothing to promote hybrid 
and advanced-technology diesel vehicles. In 2005 the Energy Policy Act 
was enacted. It included legislation that provided tax credits to 
consumers for the purchase of a new hybrid and advanced-technology 
diesel vehicle. With this tax credit, Americans can knock hundreds or 
thousands of dollars off the sale price of a clean fuel car or truck. 
This bill does nothing to help consumers better afford hybrid or 
advanced technology diesel vehicles.
  In closing, I urge my colleagues to reject this flawed bill.
  Mr. McDERMOTT. Mr. Speaker, I yield 1 minute to the gentleman from 
Massachusetts (Mr. Neal).
  Mr. NEAL of Massachusetts. Mr. Speaker, imagine Republicans today 
saying that they don't trust local government and local decision-
making. As a former mayor, let me tell you, that is where much of the 
great creativity and innovation takes place, in America's cities and 
town halls.
  There is an opportunity here to experiment. This is using a 
Republican argument. What might work well in Arizona might not work 
well in Connecticut, or vice versa. This is an opportunity to hear from 
the mayors of America, to hear from the town halls, to hear from 
legislative leaders and Governors. They are the people every day who 
make important decisions.
  Are Republicans saying at this moment they have contempt or mistrust 
of local decision-making? That has been almost the phrase that they 
have adopted for the last 25 years: ``turn decision-making back to 
local government.'' There are different regional problems that demand 
different regional solutions, and this offers the opportunity.
  Lastly, our friend, the gentleman from Pennsylvania, said it was good 
for the blogosphere. One thing we know about Republicans, if they 
thought they could drill for oil in the blogosphere, they would give it 
a go.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I yield myself 15 seconds.
  As a former city controller, I look to a future time when I can bring 
my friend from Massachusetts up to speed on why with good reason we 
think there needs to be aggressive auditing and oversight of local 
governments.
  Mr. Speaker, I yield 2 minutes to the gentleman from Illinois (Mr. 
Weller), a member of our committee.
  Mr. WELLER of Illinois. Mr. Speaker, I reluctantly rise in opposition 
to this legislation before us today. I generally enjoy working with 
Chairman Rangel and my subcommittee chairman, Mr. McDermott, and Mr. 
Neal, people I enjoy working with. But it is hard to support policy 
that fails to include some good ideas. We should have a bipartisan bill 
before us today, and the issue is this bill fails to build on the 
successes of the 2005 energy bill.
  The district that I represent south of Chicago, cities like Joliet, a 
lot of rural communities, bedroom communities, was a big winner in the 
2005 energy bill. Thanks to the incentives for wind and biofuels, 
ethanol and biodiesel, we are seeing hundreds of millions of dollars of 
new investment in wind energy and biofuels in the district that I 
represent, thanks to the energy bill of 2005. I was hoping we would 
build on that. I was also hoping that this legislation would include 
good ideas about energy conservation.

[[Page 23220]]

  We made one of the centerpieces of the 2005 energy bill incentives 
for homeowners to make their home more energy efficient. It said that 
about 20 percent of the energy we consume is consumed in our home, and 
we included a tax credit for homebuilders as well as homeowners to 
invest in better insulation and better windows and better roofs and 
better heating and cooling technology, and they could save on that 
investment and, in the long term, save on energy consumption.
  It is estimated that today about 65 percent of U.S. homes are not 
insulated adequately, according to Harvard. That same study said if 
they were insulated properly, we would reduce the need to import 76 
supertankers of crude oil from Saudi Arabia or Venezuela or some other 
foreign country. So energy efficiency is a key part of our strategy for 
energy independence. Also, because you are consuming less, you reduce 
climate change.
  We should have extended the tax credit for existing homes. We should 
have extended the tax credit for new homes. Let's give tax incentives 
to those who want to bring energy efficiency to home.
  Mr. McDERMOTT. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Pennsylvania (Ms. Schwartz).
  Ms. SCHWARTZ. Mr. Speaker, I stand here today to be not only 
supportive, but enthusiastic about this legislation. It does very much 
what we have all been talking about really actually for hours today, 
about the fact that it embraces our ingenuity, our innovation and our 
deep interest in energy efficiency and conservation and in new 
technologies.
  In fact, this legislation provides for tax credit bond financing, to 
make sure that our cities and our States can move forward in helping 
our people be able to do this. There are special provisions to make 
sure that people can make sure their homes or residences are more 
energy efficient. It uses tax credits to do that.
  And there is a provision I have worked on particularly to make sure 
that our largest commercial buildings can be the most energy efficient 
that we know they can be. We know that giving them some tax incentives 
to make sure that our commercial buildings are as energy efficient will 
help us not only today, but for 50 and 75 years in the future.
  So I support this legislation. I am proud of it. I think we have used 
our public dollars in a very creative and important way.
  Mr. Speaker, I rise in support of the Renewable Energy and Energy 
Conservation Act.
  This bill redirects $16 billion in oil industry tax giveaways into 
the development of renewable energy and energy conservation--setting a 
new direction for U.S. energy policy and putting the Nation on a path 
to energy independence.
  This new direction provides tax incentives for alternative sources of 
energy--renewable, American-made sources, including wind, geothermal, 
solar, fuel cells, and bio-diesel;
  This new direction invests seriously in energy conservation, 
providing tax incentives for energy efficient vehicles, energy 
efficient buildings and energy efficient appliances;
  And, this new direction empowers local and State governments, through 
new tax credit bonds, to invest in local initiatives that reduce energy 
use such as public transit, green buildings, and renewable energy 
production;
  We are serious about putting America's innovation and talents to work 
to develop and distribute new sources of American-made energy for 
American businesses and American families.
  I am particularly proud that this bill contains a 5-year extension of 
the energy efficient commercial building tax deduction, which I 
proposed in my Buildings for the 21st Century Act.
  The building industry can play an important role in enabling America 
to meet its future energy needs by being models of energy efficiency. 
Buildings account for 39 percent of total U.S. energy consumption and 
71 percent of total U.S. electricity consumption.
  We must take advantage of this moment to ensure that the next 
generation of buildings are constructed to the highest efficiency 
standards, and my proposal, contained in this legislation, which is 
supported by the American Institute of Architects, the U.S. Green 
Building Council, and the National Electrical Manufacturers 
Association, will ensure that happens.
  I urge a yes vote because this legislation recognizes our ingenuity, 
innovation and technology as a Nation and moves the Nation forward 
towards energy efficiency, conservation, and energy independence.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, how much time is remaining 
on both sides?
  The SPEAKER pro tempore. The gentleman from Pennsylvania has 13\3/4\ 
minutes, and the gentleman from Washington has 22\1/2\ minutes.
  Mr. ENGLISH of Pennsylvania. Obviously I am going to reserve the 
balance of my time at this point.
  Mr. McDERMOTT. Mr. Speaker, I reserve the balance of my time.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I reserve the balance of my 
time.
  Mr. McDERMOTT. Mr. Speaker, having the right to close, I will reserve 
the balance of my time.
  Mr. ENGLISH of Pennsylvania. Can the gentleman enlighten us on how 
many speakers he has remaining, or is he prepared to close now?
  Mr. McDERMOTT. At this moment, we haven't heard anything to respond 
to. All we have heard is a defense of the insurance companies.
  The SPEAKER pro tempore. The gentleman from Washington will suspend.
  The gentleman from Washington reserves.
  The gentleman from Pennsylvania is recognized.
  Mr. ENGLISH of Pennsylvania. Then I reserve the balance of my time.
  The SPEAKER pro tempore. The gentleman from Washington has the 
opportunity to close.
  The gentleman from Pennsylvania is recognized.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, is he prepared to close 
then?
  The SPEAKER pro tempore. The gentleman from Washington has reserved 
his time, as is his prerogative.
  The gentleman from Pennsylvania is recognized.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I yield 2 minutes to the 
gentleman from Wisconsin (Mr. Ryan).
  Mr. RYAN of Wisconsin. Mr. Speaker, this bill and the bill that just 
passed before us is a fiscal Frankenstein. It is a typical pattern: 
more budget gimmicks on spending, more tax increases.
  Last week, a farm bill passed. Budget gimmicks, tax increases. 
Earlier this week, the SCHIP bill passed. Budget gimmicks, tax 
increases. Today, right now, these energy bills are passing. What are 
they? Budget gimmicks, tax increases.
  Right now, the bill that just passed before had $6 billion in savings 
that were used last week in last week's farm bill, all to give the 
appearance that the majority is keeping their word on their PAYGO.
  More importantly, these bills, in addition to their budget gimmicks, 
raise taxes on consumers. This will cost our constituents at their 
pocketbooks and at the pump.
  The worst part of this bill, I think, aside from the fact that it 
seeks to pick winners and losers in the marketplace, to do nothing, 
nothing, to reduce our dependence on foreign oil, to reduce our 
independence, it has $6 billion of walk-around money, of green pork, 
for large city mayors and Governors. No accountability. Just as long as 
it is in the spirit of green, in the spirit of, you know, energy, you 
get the money.
  Every time we have ever built a new program before, as this one does, 
you have example after example of waste, fraud and abuse. It doesn't do 
a thing to help the environment, it doesn't do a thing to help our 
fiscal balance sheet, but it does everything to create a new program 
that wastes money, that requires higher taxes.
  We are seeing a consistent pattern here: More spending gimmicks and 
more tax increases. These tax increases will raise prices. They will 
raise prices on energy. They will raise gas prices.
  This is a missed opportunity, and the missed opportunity is we could 
have worked together to make ourselves less dependent on foreign oil, 
do a better job on energy conservation, and advance the cause for 
renewables.
  Sadly, this does not do it, because it is more budget gimmicks and 
spending increases.
  Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentleman from 
Oregon (Mr. Blumenauer).

[[Page 23221]]


  Mr. BLUMENAUER. Mr. Speaker, while I agreed with my friend from 
Wisconsin about the farm bill, he could not be more wrong when it comes 
to what is happening here on this energy legislation.
  First and foremost, it is not just the appearance of PAYGO. We are 
rolling up our sleeves and actually funding this legislation, instead 
of the borrow-and-spend policies that we have seen the other side of 
the aisle practice for the last 12 years. We have a bipartisan ``pay-
for'' that was approved in the first hours of this session, closing an 
unnecessary loophole that was snuck in in the last session of Congress.
  The notion about picking winners and losers is also wrong. With the 
leadership our Chair of the select committee, Mr. Neal, we had 
extensive hearings to listen to what happened across-the-board in terms 
of alternative energy. We have rationalized how they are treated for 
subsidizing wind, for solar, for biomass, for wave energy, a whole 
range of alternative energy sources.
  We are not picking winners and losers. We are extending tax 
subsidies, and we are treating them all fairly to let the marketplace 
act. We are increasing the supply of energy. By providing incentives 
for domestic production of alternatives it is going to make a huge 
difference. And we are relying on the energy and activity of cities and 
States across the country that are far ahead of the Federal Government 
when it comes to dealing with global warming, with dealing with energy 
efficiency. We have at least 612 cities that have already initiated 
their own Programs of Kyoto compliance. We are providing some resources 
to help them do something about it.
  Last, but not least, we are closing the egregious loophole that had 
the Federal Government subsidize the purchase of the largest, most 
energy-inefficient luxury cars. We have closed that hummer loophole. We 
are instead using this money to provide opportunities for using 
smaller, more fuel efficient vehicles; and we are subsidizing plug-in 
hybrids, a very good trade off.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, it is my privilege to yield 
2\1/2\ minutes to the gentleman from Texas (Mr. Brady), a member of our 
committee.
  Mr. BRADY of Texas. Mr. Speaker, this bill does do some good things, 
no question. It does focus on renewable energy, providing incentives 
for plug-in hybrid vehicles. It encourages energy-efficient homes and 
appliances in buildings. All of that is very good. We need to be more 
green as a country, and we need to have a balanced portfolio. Without 
question. But this is, I think, an extreme way, in some ways even a 
vindictive way, to achieve it.
  In this bill, we create a tax on suburban moms for buying Explorers 
to take their children around town. We punish American companies for 
creating jobs here in America. We punish them for creating energy here 
in the United States.
  There are 1.8 million jobs related to energy. What this bill does is 
encourage outsourcing. It actually decreases production in the U.S. of 
oil and gas and punishes companies for investing in the United States, 
a tax break that was not singled out for oil and gas. In fact, 73 
Democrats on this floor supported the investment in new manufacturing 
and new investment in the United States.
  This bill increases dependence on foreign oil; cripples America's 
fledgling biodiesel industry. It kills a major renewable diesel 
problem. There is no nuclear, no hydrogen, no new refineries, no 
transmission lines, no coal-to-liquid, no clean coal technology.
  But it does have a study on the carbon footprint of the American Tax 
Code, which surely ranks just below suing OPEC as an effective way to 
lower prices.
  Whether you call this a ``$6 a gallon gas'' bill, a ``hug Hugo 
Chavez'' gas bill, a ``less energy'' tax bill, the fact of the matter 
is we all want a new direction. But we want a new direction away from 
higher prices. We want a new direction away from dependence on foreign 
oil.
  The truth is, we have to get serious about lessening our dependence 
on foreign oil. Light bulbs alone won't do it. New production of oil 
and gas, along with these new renewables, will.
  Mr. McDERMOTT. Mr. Speaker, I yield 30 seconds to the gentleman from 
Oregon (Mr. Blumenauer) to answer the arguments presented.
  Mr. BLUMENAUER. Mr. Speaker, my good friend from Texas doesn't 
understand, I fear, how the Hummer loophole works. It is not the 
suburban mom running around with their kids in a Hummer or a Cadillac 
Escalante. It only is for business use that the Hummer loophole 
applies.
  We are closing it for business use, so there is not an extra 
incentive for somebody to buy the largest, most fuel inefficient 
vehicles, and gives them a tax break that they won't give to somebody 
who buys a Ford Taurus.

                              {time}  1845

  Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Doggett).
  Mr. DOGGETT. Mr. Speaker, with the passage of the energy bill just 
approved and the passage of this energy bill today, we move America in 
a historic direction, a new direction on energy, not just away from our 
overdependence on fossil fuels, but away from our overdependence on 
fossilized ideas like those that have dominated this House for the last 
12 years.
  One of those fossilized ideas is that it is okay to keep borrowing 
from our grandchildren. So today the reason that we hear talk about 
higher taxes on a bill that is basically revenue neutral, that doesn't 
borrow from our grandchildren and doesn't raise significant new 
revenues, but rather restricts and evaluates our tax credits to 
determine how they can be most effective, is that they don't understand 
this new kind of thinking.
  Just as they favored foreign corporations over farmers last week, 
today they favor fossilized energy over new energy and energy 
independence.
  You know, going green is not just about securing a healthy planet to 
raise our children. It is creating opportunities for jobs and economic 
development in biodiesel and in renewable energy like solar and 
geothermal power. New technologies bring new opportunities. A new class 
of jobs are being created, neither blue collar nor white collar but 
green collar jobs of many types from green energy.
  It is a matter of recognizing that some boondoggles come along, like 
where a oil company decides it will drop a little dab of grease in its 
petroleum byproducts in order to claim a renewable biodiesel tax credit 
and destroy a new emerging industry like our biodiesel companies and 
our biofuels companies that are helping us become energy independent.
  So this is a bill about jobs and about evaluating the 
oversubsidization of a fossil fuel industry and moving to new energies, 
biodiesel, recognizing the power of solar power, plug-in hybrids, 
recognizing that we can become the leaders in the world in green jobs, 
green collar jobs. This bill offers us a chance to lead on green 
energy, not become green with envy as other countries leap over us.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I yield 30 seconds to the 
gentleman from Texas (Mr. Brady).
  Mr. BRADY of Texas. Mr. Speaker, we are told this bill is fully paid 
for and is fiscally responsible. But how many times have we seen this 
same tax break on the floor supposedly paying for another bill? Is it 
the second time, third time? I don't mind double-counting, but there is 
something offensive about triple-counting. I think that is what got 
Enron in trouble in the first place.
  Today we are using this as an excuse to raise taxes and cut jobs and 
cut energy production here. It is not fiscally responsible.
  And by the way, the tax on SUVs is not Hummers. It is above $15,300, 
and that is a lot of Explorers and a lot of small business vehicles.
  Mr. McDERMOTT. Mr. Speaker, I yield to the gentlewoman from Nevada 
(Ms. Berkley) for a unanimous consent request.
  Ms. BERKLEY. I thank the gentleman for yielding.
  Mr. Speaker, I rise today in support of energy independence, national 
security and weaning ourselves off of Middle Eastern oil.

[[Page 23222]]

  It is sheer madness that--6 years after 
9/11--we still rely on unstable and dictatorial regimes like Saudi 
Arabia to feed our oil habit. They have shown time and time again that 
they care nothing for international peace, peace in the Middle East or 
helping us find a solution for the debacle in Iraq: We know they use 
our oil dollars to fund terrorist organizations like Hamas, and Sunni 
insurgents in Iraq. And yet we still send them billions of dollars a 
year in oil revenues, because we are so dependent on their oil to fuel 
our energy needs.
  We are funding both sides of the war on terror. No country on Earth 
has ever successfully fought a war against itself. This bill is a step 
in the right direction by funding alternative, clean energies that will 
set America on the path to energy independence.
  With Mr. Rangel's leadership, my colleagues and I on the Ways and 
Means Committee have expanded and extended the tax credits for plug-in 
hybrid vehicles, cellulosic alcohol, ethanol and biodiesel.
  This package also promotes alternative fuels by providing assistance 
for the installation and conversion of E-85 fuel pumps and the 
production of flex-fuel vehicles that run on renewable fuel. Another 
provision encourages the domestic development and production of 
advanced technology vehicles and the next generation of vehicle 
batteries and plug-in hybrid vehicles.
  Our addiction to oil has gone on long enough. It is time we declare 
independence by harnessing the Sun, wind, geothermal, biomass and other 
clean renewable technology, so that future generations of Americans 
won't have to rely on our enemies to satisfy our energy needs.
  Mr. McDERMOTT. Mr. Speaker, I yield myself such time as I may 
consume.
  I'm sorry, it seems like the gentleman from Texas has forgotten what 
happened in the early hours of this session. We passed H.R. 6; 36 of 
your Members voted for it, to close the tax, to set the money aside to 
be put into this bill when we decided what were reasonable uses of that 
money. It has never been used before. This funding source has not been 
used ever on this floor before, so you are incorrect in your assertion.
  Mr. Speaker, I reserve the balance of my time.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I yield 2 minutes to a 
member of our leadership, who is also a member of our committee, the 
gentleman from Virginia (Mr. Cantor).
  Mr. CANTOR. Mr. Speaker, I rise in opposition to this bill. Frankly, 
I think that the American people are looking for some common sense when 
we talk about an energy plan. I don't think there is any disagreement 
among my colleagues in this House that we certainly ought to be looking 
at ways to diversify our energy sources. There is no question.
  But I think that the imperative, and that most Americans would agree, 
that we must first look to securing our energy independence. I would 
dare say there aren't many experts out there who would predict that we 
can establish our energy independence through the tax benefits allowed 
through this bill.
  I think most Americans would agree we do have a fossil fuel economy. 
And given the instability around the globe today, it is imperative that 
we do all we can to support our domestic production industries so that 
we do not, do not find ourselves on the receiving end of the global 
pricing structure or from other countries that we rely on for our 
global energy supplies.
  With that, I would posit, Mr. Speaker, that $14 billion in taxes on 
our production industry will do so much to damage the incentive to see 
an increase in domestic production, much less do anything to help our 
constituents and the people of this country when they go to the pump 
and see prices nearing $3 a gallon.
  So I don't see the common sense in this bill. My colleagues have 
already talked about the $6 billion in taxpayer funds that are going to 
flow to localities unfettered. These are taxpayer dollars. These are 
not our dollars. This kind of allocation of funds deserves some 
transparency. This reminds me of some of the hidden funds that we see 
in many of the other bills, and that somehow this money is going to 
show up and add to our energy independence.
  Mr. McDERMOTT. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, the gentleman just made some arguments. He said the 
country is like a supertanker and we are heading for the rocks and we 
shouldn't change the direction. No, no, no, we should keep going right 
straight into the rocks.
  Now if you want to criticize this bill for not doing enough, I will 
go along with you, and I think there are many other Members on our 
side. But our problem is we can't seem to get any help from the other 
side to turn the wheel even a half inch. They say oh, if you take money 
away from the oil industry; they don't want to pay for anything, Mr. 
Speaker. They simply want to run on the rocks and the Democrats are not 
going to run this country onto the rocks.
  We are going to change the direction we are going with energy. This 
bill is not the answer to everything. It is not as much as it should be 
or could be, but we are going in the right direction.
  Mr. Speaker, I reserve the balance of my time.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, how much time remains on 
both sides?
  The SPEAKER pro tempore. The gentleman from Pennsylvania has 7 
minutes remaining. The gentleman from Washington has 16\1/2\ minutes.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, is it not generally the 
obligation of the Chair to invite the two sides to even up time to some 
extent?
  The SPEAKER pro tempore. Does the gentleman from Washington seek 
recognition?
  Does the gentleman from Pennsylvania seek recognition?
  Mr. ENGLISH of Pennsylvania. I will defer to the gentleman.
  Mr. McDERMOTT. Mr. Speaker, is closing the right of the majority?
  The SPEAKER pro tempore. The gentleman is correct.
  Mr. McDERMOTT. I reserve the balance of my time to close.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, do I understand the 
gentleman is now prepared to close?
  The SPEAKER pro tempore. Does the gentleman from Pennsylvania seek to 
yield time?
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, is it our understanding 
that the gentleman is prepared to close?
  The SPEAKER pro tempore. Does the gentleman yield to the gentleman 
from Washington to ask a question?
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I would hope I wouldn't 
have to yield any time to determine this.
  The SPEAKER pro tempore. The gentleman from Washington has the right 
to close.
  Mr. ENGLISH of Pennsylvania. Is the gentleman prepared to close?
  The SPEAKER pro tempore. It is the prerogative of the gentleman from 
Pennsylvania to yield time to the gentleman from Washington to inquire 
as to that.
  Mr. ENGLISH of Pennsylvania. Very well. I will yield 5 seconds.
  Mr. McDERMOTT. No, I'll take my own time. I'm prepared to close.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, in that case, I would like 
to yield 3 minutes to 1 additional speaker, a gentleman who I think has 
proven himself in this particular policy area for many years, and I 
think a good Democrat, the gentleman from Texas (Mr. Gene Green).
  Mr. GENE GREEN of Texas. Mr. Speaker, I thank the gentleman. And if I 
had known we had so much time on our side, Jim, I would have asked you 
for time.
  Mr. Speaker, I begin by stating how disappointed I am to come to the 
House floor today and speak against one of this Congress's first major 
energy initiatives. It pains me because I truly support the bill's 
goals of promoting clean, domestic, renewable energy.
  What I disagree with is how this Congress chooses to pay for these 
worthy initiatives. I understand we have a budget deficit and funds for 
new alternative energy programs are in short supply, but like a broken 
record, this Congress continues to raid the piggybank of America's 
energy producers.
  Now I know it makes great press releases to say this Congress is 
taking

[[Page 23223]]

away the record profits of big oil to invest in renewable energy. But 
are we drafting press releases or are we drafting sound policy?
  Earlier this year, I stood on the floor and supported H.R. 6, the 
Clean Energy Act, which included many of the same tax provisions as the 
bill today, and I encouraged my colleagues at that time to do the same. 
While I had concerns, it could reduce incentives for domestic 
production, the bill did not include more punitive measures that could 
destabilize our Nation's gasoline supply even further.
  As a show of good faith during that critical 100 hours for our new 
majority, I voted for that bill. But I expressed my support for H.R. 6 
on the floor concluding with my remarks with one important message: If 
we hit one industry for billions and billions of dollars, you can't go 
back for more and more and expect enough gasoline for our cars and fuel 
to heat and cool our homes.
  Only 6 months later, here we are again, only this time we are almost 
doubling the amount of taxes on U.S. oil and gas companies. I am not 
here to protect the interest of big oil, I am here to protect the 
interests of the American consumer who relies on those critical energy 
supplies. And I'm here to protect the jobs of U.S. workers.
  Neither of these interests are advanced if we in Congress continue to 
view America's energy industry as the ATM for Congress.
  Everyone agrees we must invest more in renewable sources of energy, 
but this isn't a buffet. We don't have the luxury to pick and choose 
which energy resources our Nation will rely on. The Energy Information 
Administration predicts that natural gas, oil and coal will comprise 
approximately the same share of our total energy supply in 2030 as it 
did in 2005, even with the new investments for renewable energy. That 
is why our Nation's energy security requires tax policies that promote 
greater supplies of these fuels, not policies that hinder domestic 
production and refinery capacity.
  H.R. 6 included tax provisions that brought in $7.7 billion, mostly 
from the section 199 repeal. That same section now scores $11.4. In 
only 6 months, the same proposal has increased in cost by an additional 
$4 billion.
  This large increase in new taxes targeted at the U.S. energy industry 
will reduce our Nation's energy security by discouraging domestic oil 
and gas production, discouraging new investments in refining capacity, 
and actually tilting the competitive playing field for global energy 
resources against U.S.-based oil and gas companies.
  I've heard many Members of this chamber preach to the energy industry 
on the need to reduce the cost of gasoline for consumers and invest 
more in refinary capacity.
  Can anyone tell me how increasing their taxes could possibly 
accomplish these twin goals?
  From 1992-2006 the five major oil companies invested $765 billion in 
new capital energy infrastructure, compared to their net income of $662 
billion.
  These companies invested more than they earned, and less money in 
their coffers means less money for critical infrastructure investments.
  And finally, let's talk about jobs. In the United States, there are 
almost 1.9 million Americans directly employed in the oil and natural 
gas industry and almost 6 million total U.S. jobs resulting from oil 
and gas activity when indirect and other employment is considered.
  Increasing costs on the domestic oil and gas industry, and on U.S. 
based oil and gas companies operating abroad, will jeopardize these 
highpaying jobs.
  So before this Congress makes yet another ATM withdrawal from the oil 
and gas industry, let us not ignore the big picture of ensuring 
Americans have a stable supply of energy to help move us towards our 
long term goals of cleaner energy sources.
  I urge my colleagues to vote for sound energy policy and vote against 
this bill.
  Mr. ENGLISH of Pennsylvania. Does the gentleman have any additional 
speakers?
  Mr. McDERMOTT. No. I reserve the balance of my time.
  Mr. ENGLISH of Pennsylvania. I yield 1 minute to the gentleman from 
Texas (Mr. Gohmert).
  Mr. GOHMERT. Mr. Speaker, I thank my friend from Pennsylvania.
  We are told this is a new direction. This isn't a new direction. This 
isn't new thinking. We saw it 30 years which brought gas shrines. We 
saw it 30 years ago, and it brought us gas lines. We had a chance in 
this bill to fix a lot of problems.
  We lost in my district, down in Lufkin, Texas, home of Charlie 
Wilson, we lost nearly 1,000 hardworking union jobs because natural gas 
was too expensive. We have lost a whole bunch more, and are in danger 
of losing more in Longview because natural gas is too high. We could 
have addressed that and fixed that.
  But I guess the good thing that came out 30 years ago was that the 
gas lines and the problems that arose and the high gas prices brought 
us Ronald Reagan, and people's memories have waned some.
  But this is Saturday, and there are not many people watching, but 
please note that when the policies in this bill end up helping gas run 
up to $5 a gallon--yes, it will help alternative fuels, but we would 
have gotten there eventually anyway. But please note that when it gets 
to $5 a gallon and more people, including union people, are losing 
their jobs, they will ultimately note and voters will long remember.
  So long live gas lines and Jimmy Carter's legacy.

                              {time}  1900

  Mr. ENGLISH of Pennsylvania. Mr. Speaker, how much time do we have 
remaining?
  The SPEAKER pro tempore. The gentleman from Pennsylvania has 3 
minutes remaining.
  Mr. ENGLISH of Pennsylvania. And may I confirm again that the 
gentleman is prepared to close?
  Mr. McDERMOTT. Yes.
  Mr. ENGLISH of Pennsylvania. Thank you. In that case, I yield the 
balance of our time to a member of the Ways and Means Committee and the 
ranking member of the Budget Committee, the gentleman from Wisconsin 
(Mr. Ryan).
  Mr. RYAN of Wisconsin. Mr. Speaker, I appreciate the gentleman 
yielding.
  I rise in opposition to this for a number of reasons. Does anybody on 
Earth think that by raising taxes on oil and gas that we're not going 
to raise prices on oil and gas? Does anybody believe that we're not 
going to raise gas prices with this bill? Does anybody believe that 
we're not going to make it more expensive for people to heat their 
homes? Does anybody believe we're not going to make us more dependent 
on foreign oil? That's what this bill does. This bill raises gas 
prices, makes it more expensive for us to heat our homes, make us more 
dependent on foreign oil, and less competitive internationally.
  It could have been a good bill. It could have done more to make us 
less dependent on foreign oil. It could have helped us do more to make 
us energy independent, renewable. And why are we raising all these 
taxes? So we can come up with a new pork barrel spending program to 
give to big cities to spend as they wish.
  Why on Earth would we do that when we're going to make our 
constituents pay higher gas prices? The intentions are noble. The 
delivery is bad. This policy has been tried before, and it has failed.
  I urge defeat of this bill because it is a missed opportunity. It's a 
missed opportunity to a real bipartisan success, like we had in the 
Energy Policy Act of 2005, where we invested in hydrogen, in renewable 
energy, in conservation and, yes, in more domestic production. That's 
what we should do. You can't do one and not the other.
  We need to produce more energy here so we're less dependent on 
foreign oil. That's very important. This does none of that. It goes in 
the wrong direction.
  We need to incentivize conservation. There's some conservation 
incentives here. We need to do more on renewables and do it in such a 
way where it's not picking winners and losers; where the best 
technology gets funded. Sadly, this bill says we're going to pick this 
technology and not that technology, and by doing so, we're hurting 
tomorrow's breakthroughs, tomorrow's innovations.

[[Page 23224]]

  What we really ought to do is make us less dependent on foreign oil, 
lower gas prices, lower home heating costs, more conservation, and not 
pick winners and losers, and incentivize tomorrow's breakthroughs so 
the genius of America can continue to expand and come up with those new 
technologies we never heard of before.
  Sadly, this prevents that from happening. It disincentivizes that. I 
urge a ``no'' vote because we shouldn't be raising taxes, doing budget 
gimmicks and making it more expensive for us to take our kids to 
school, to go to work and heat our homes.
  Mr. McDERMOTT. Mr. Speaker, I yield myself such time as I may 
consume.
  This is really a defining moment for the Congress, Mr. Speaker, and 
how we vote will define whether we embrace the future or cling to the 
past that is destroying us.
  Now, the last speaker talked about somehow, if we take back some of 
the obscene profits from the oil industry and use it to develop 
alternative energy and to invest in conservation measures around this 
country, that that will be the end of the Western World as we've known 
it. Between 2004 and 2006, oil companies experienced profit increases 
of an average of 62 percent, some of them as high as 117 percent. Now, 
oil profits, in the dictionary, that would be obscene, and anybody who 
thinks we're destroying the oil industry here simply is unwilling to 
look at the facts.
  Supporting this energy legislation is really a vote to move toward 
our national security because our addiction to oil makes us vulnerable 
to foreign countries and keeps our soldiers fighting and dying in Iraq. 
No one here in this House still believes that oil wasn't a major reason 
why we went into Iraq.
  Supporting this energy legislation is a vote to strengthen America's 
domestic economy because our addiction has made the American people 
vulnerable to punishing and unrelenting price shocks. We didn't start 
the increase in prices in energy. Gasoline prices weren't started in 
here by raising taxes. If you think that the oil companies, I don't 
know if there's anybody in this country who thinks that the Congress is 
what makes the oil prices go up, the gasoline prices.
  Now, supporting this energy legislation is also a vote to save our 
planet, because addiction to oil has placed us on a collision course 
with global warming. Every witness who came before the Ways and Means 
Committee, whether they were called by the Republicans or the 
Democrats, agreed that global warming is something we must deal with. 
The arguments I hear are not about whether there is global warming. The 
question is how should we deal with it how quickly, what's the best 
way.
  Now, you either turn back now and we will face economic calamity and 
planetary catastrophe, that's a choice you guys can make, or turn back 
now and we fail the American people in our global responsibility.
  The choice is very clear. The choice is really easy, and the need is 
urgent for our children, for our grandchildren, for the planet.
  I ask all the Members to support this legislation.
  Mr. LEWIS of Georgia. Mr. Speaker, I rise today in support of greater 
energy efficiency. I read an article recently about the residents of 
Gudda, a small village in India, who are harnessing the Sun's power to 
bring light into their homes when the Sun sets. This tiny village has 
nothing; no power lines to bring electricity, no real roads for 
vehicles to bring food and supplies, water is scarce, and yet this 
village has easily succeeded to make use of alternative energy. Gudda 
has shown that being green is easy and can be done by anyone!
  The time has come for America to lead the world in the fight against 
climate change and in protecting our environment. We must not delay as 
we move toward energy independence.
  Alternative energy means new jobs for Americans, lower energy costs 
and more technology that we can export to other countries. This 
legislation does more than fight global warming and protect our 
environment, it will strengthen our economy and make the United States 
the leader in providing alternative energy.
  Let's show the world that the United States cares about global 
warming and is willing to do something about it. Let's show the world 
that our talent and technology will improve lives around the world. 
Let's vote for this bill today.
  Mr. NEAL of Massachusetts. Mr. Speaker, I rise today to support an 
energy bill that puts our country on a greener energy path. The tax 
provisions will expedite the adoption of green energy from solar, wind, 
biofuels, geothermal and other environmentally friendly sources.
  The $16 billion energy tax package helps energy stakeholders and 
communities to invest in renewable sources as well as energy 
conservation and efficiency.
  One of the new and more progressive tax provisions is an energy 
conservation bond program which helps municipalities finance 
conservation projects that reduce greenhouse gas emissions. 
Massachusetts stands to receive over $76 million through this program 
and since the largest cities and counties are given priority in this 
program, Springfield, Massachusetts, would be eligible for $1.8 million 
in bonding authority helping to lead the way to a greener 
Massachusetts.
  Mr. Speaker, this legislation takes an innovative approach to new 
technologies and ideas to promote greener energy. The incentives are 
not narrowly focused on energy industry players alone. Consumers are 
also given incentives to make energy-efficient investments in their 
homes and properties, which represents a holistic approach to lessening 
our reliance on fossil fuels and towards a greener, cleaner America.
  Mr. STARK. Mr. Speaker, I rise today in support of ending senseless 
tax breaks and subsidies for giant oil and gas companies and making 
needed investments in clean energy and efficiency. Although I support 
the energy package before us today, I urge my colleagues to realize 
that this is a small, first step. There is a tremendous amount of work 
to be done to confront global warming and shift our Nation away from 
our addiction to fossil fuels.
  Today we have an opportunity to greatly increase energy conservation 
by setting new efficiency standards for appliances and promoting 
carbon-neutral green buildings. These two steps will prevent as much as 
10 billion tons of carbon dioxide from entering the atmosphere. In 
addition to these measures, I strongly support the Udall-Platts 
amendment to establish a Renewable Electricity Standard, which will 
ensure that 15 percent of our electricity is produced through renewable 
sources by 2020.
  In 2006 the top five oil companies raked in record-breaking profits 
of over $119 billion. As President Bush himself has admitted, there is 
no need to give oil companies taxpayer-funded subsidies when the price 
of oil is at or near all time highs. I support the tax portion of the 
package that ends $16 billion in tax breaks for companies like Exxon/
Mobil and closes the ridiculous loophole that has allowed business 
owners a $25,000 deduction for purchasing a gaz-guzzling Hummer. The 
savings generated are then invested in developing clean energy.
  My support for the energy package is tempered by the fact that it 
does not include any increase in our woefully out-of-date CAFE 
standards. I am also troubled that we are continuing to subsidize corn-
based ethanol production. A simple shift from gasoline to ethanol will 
do nothing to reduce greenhouse gas emissions, but it will eat up open 
space and continue to drive up food prices.
  Both bills make important progress and I urge my colleagues to 
support them. However, larger changes, such as a carbon tax, are needed 
if we are serious about stopping global warming.
  Mr. THOMPSON of California. Mr. Speaker, my district--California's 
First Congressional District--provides ample evidence of the importance 
of renewable energy. My district is home to The Geysers, the largest 
complex of geothermal power plants in the world--which can generate 
enough energy to run over 750,000 homes. My district is also home to 
California's best wine country and wineries that use solar systems to 
generate all of their electricity.
  This legislation extends and improves Federal incentives for 
renewable energy production so that States across America can follow 
California's lead.
  We extend the tax credit for the production of biomass, geothermal, 
wind, and many other types of renewable energy. We extend the solar 
investment tax credit for 8 years providing long-term stability to that 
industry. We expand existing and create new incentives for taxpayers to 
make their homes and their businesses more energy efficient. And we 
make an investment in technology known as ``smart meters''--tools that 
will allow consumers to better manage their electricity usage during 
peak hours.
  I have some concerns with the language in this section that refers to 
net metering, but I

[[Page 23225]]

am confident that we can use the conference process to clarify these 
specific provisions.
  Mr. Speaker, this legislation makes a critical investment renewable 
energy, and it does so without increasing the Federal deficit by a 
dime.
  The new Democratic Leadership has made a strong commitment to fiscal 
responsibility and this legislation meets the rigorous Pay-As-You-Go 
requirements of the 110th Congress.
  I am proud of this investment in alternative energy and I urge an aye 
vote on this legislation.
  Mr. CONYERS. Mr. Speaker, today I rise in support of H.R. 2776. Every 
day we see the effects of global warming and it is imperative the 
Congress act on this critical issue. It is important that we continue 
to improve our environment as we strive to fight the effects of global 
warming. H.R. 2776 would implement tax incentives to encourage the 
production of renewable resources and other energy efficient programs, 
necessary measures towards fighting global warming. There are many 
groups, businesses and trade organizations who join me in supporting 
this bill including Greenpeace, General Electric, Friends of the Earth, 
Public Citizen, Sierra Club, and Whirlpool.
  H.R. 2776 will use tax credits and incentives to increase the use of 
renewable and alternative fuels. It will extend the renewable energy 
tax credit for those who choose to use renewable energy sources such as 
wind facilities, hydropower, and marine renewable energies. The bill 
will also continue providing the solar energy and fuel cell investment 
credit by extending a 30 percent investment tax credit for 8 years. 
Finally, this bill will provide tax incentives for renewable fuels such 
as biodiesel, renewable diesel, celloslosic alcohol.
  In addition, this legislation promotes the use of energy-efficient 
products to reduce the Nation's consumption of energy. It provides tax 
incentives for consumers to purchase energy efficient products such as 
hybrid vehicles and to outfit workplaces with energy efficient 
products. Manufacturers are also granted tax incentives encouraging 
them to create energy efficient products. H.R. 2776 builds a 
partnership between Federal, State, and local governments that would 
provide local authorities the ability to raise interest free funds for 
energy conservation programs in mass transit and green buildings.
  Furthermore, H.R. 2776 will increase funding to encourage the 
research and development of renewable energy. This bill provides 
billions to States to give low interest loan programs to working 
families to purchase energy-efficient appliances and energy-efficient 
home improvements such as solar panels, insulation or geothermal heat 
pumps. These energy saving improvements will dramatically reduce energy 
consumption. This legislation also grants interest free loans for 
research facilities and research grants for the development of 
celloslosic ethanol, cleaner carbon dioxide, and automobile battery 
technologies.
  H.R. 2776 also repeals a tax loophole. The bill limits the ability of 
oil and gas companies to claim foreign tax credits, while leaving 
significant tax breaks untouched. Yet, this provision has no impact on 
oil and gas production in the United States, providing additional 
revenue to the U.S. treasury.
  Mr. Speaker, Southeast Michigan has been hit hard due to the Bush 
administration's misguided trade policy. Governor Granholm unveiled a 
21st century job initiative where billions of dollars will be invested 
in developing new technologies and emerging industries. In my hometown 
of Detroit, Next Energy, a 501 (c)3 organization that promotes 
renewable energy, will directly benefit from these tax breaks because 
they have made impressive strides in automotive and electric power.
  I believe, this piece of legislation will directly contribute to 
providing jobs to my constituents, end America's addiction to oil, and 
hopefully transform the automotive industry. I urge my colleagues to 
support H.R. 2776.
  Mr. LEVIN. Mr. Speaker, I rise In strong support of the Renewable 
Energy and Energy Conservation Tax Act.
  This legislation provides a balanced, responsible and long-term 
approach to addressing the critical issue of energy security in this 
country. It provides long-term incentives for renewable energy that 
will give the solar, wind, and biomass industries the stability they 
need to increase production capacity. There are also significant 
incentives for making our Nation and economy more energy efficient.
  The bill provides resources to States and localities to help their 
residents improve the efficiency of their homes, as well as make public 
investments in energy-efficiency, transportation and research.
  The bill works across sectors and technologies, across governmental 
and private sector lines, and in both residential and commercial 
settings to reduce our Nation's dependence on fossil fuels. In a word, 
Mr. Speaker, the approach taken by this bill is comprehensive. I want 
to highlight two provisions in the bill that I think are particularly 
important.
  First, this legislation will increase the tax credit for alternative 
refueling property from 30 percent to 50 percent, and extend the credit 
through 2010. Nearly everyone agrees that biofuels such as E85 are an 
increasingly important component of our Nation's evolving energy 
strategy. Real progress has been made in recent years to spur use of 
alternative transportation fuels, and U.S. automakers have made 
significant investments to bring flex-fuel vehicles to market. But we 
need to speed the deployment of E85 pumps. This bill does just that.
  Next, this legislation provides incentives for manufacturers to 
produce washing machines, refrigerators and dishwashers that push the 
boundaries of energy and water efficiency, and to build them in the 
United States. Reducing the energy or water usage of a washing machine 
may seem like a small thing, but over time and across millions of 
households, these incentives will produce remarkable reductions in 
energy and water usage, and consumers will save money on their utility 
bills.
  Finally, I think it is unfortunate that so many of my colleagues on 
the other side of the aisle are opposing this package because it takes 
back just a few of the most outrageous tax breaks for the oil and gas 
industry. Our work in this House is about priorities, and the 
difference in priorities on this bill could not be more clear. I urge 
all of my colleagues to support this responsible legislation.
  Mr. MCDERMOTT. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 615, the previous question is ordered on 
the bill, as amended.
  The question is on the engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


       Motion to Recommit Offered by Mr. English of Pennsylvania

  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I offer a motion to 
recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. ENGLISH of Pennsylvania. I am indeed, in its current form.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mr. English of Pennsylvania moves to recommit the bill H.R. 
     2776 to the Committee on Ways and Means with instructions to 
     report the same back to the House forthwith with the 
     following amendment:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF 
                   CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Renewable 
     Energy and Energy Conservation Tax Act of 2007''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.

             TITLE I--PRODUCTION AND INVESTMENT INCENTIVES

Sec. 101. Extension of renewable energy credit.
Sec. 102. Extension of energy credit.
Sec. 103. Expansion and modification of advanced coal project 
              investment credit.
Sec. 104. Expansion and modification of coal gasification investment 
              credit.
Sec. 105. Expansion of special allowance to cellulosic biomass alcohol 
              fuel plant property.
Sec. 106. Extension of alternative fuel vehicle refueling property 
              credit.
Sec. 107. Extension of biodiesel and renewable diesel used as fuel.
Sec. 108. Extension of energy efficient commercial building deduction.

                       TITLE II--TAX CREDIT BONDS

Sec. 201. Extension and modification of clean renewable energy bonds.

                   TITLE III--CONSERVATION INCENTIVES

Sec. 301. Extension and modification of credit for residential energy 
              efficient property.
Sec. 302. Extension of credit for hybrid motor vehicles and advanced 
              lean burn vehicles.
Sec. 303. Extension of nonbusiness energy property credit.

[[Page 23226]]

Sec. 304. Extension of new energy efficient home credit.

                      TITLE IV--REVENUE PROVISIONS

Sec. 401. Revision of tax rules on expatriation.
Sec. 402. Repeal of suspension of certain penalties and interest.
Sec. 403. Increase in information return penalties.
Sec. 404. Clarification that credits for fuel are designed to provide 
              incentive for United States production.
Sec. 405. Modification of limitation on automobile depreciation.
Sec. 406. Extension of coal excise tax levels.
Sec. 407. Bulk transfer exception not to apply to finished gasoline.
Sec. 408. Participants in government section 457 plans allowed to treat 
              elective deferrals as Roth contributions.
Sec. 409. Reducing REIT holding period safe harbor.
Sec. 410. Time for payment of corporate estimated taxes.

             TITLE I--PRODUCTION AND INVESTMENT INCENTIVES

     SEC. 101. EXTENSION OF RENEWABLE ENERGY CREDIT.

       (a) In General.--Subsection (d) of section 45 (relating to 
     qualified facilities) is amended by striking ``January 1, 
     2009'' each place it appears and inserting ``January 1, 
     2010''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 102. EXTENSION OF ENERGY CREDIT.

       (a) In General.--
       (1) Qualified fuel cell property.--Subparagraph (E) of 
     section 48(c)(1) is amended by striking ``December 31, 2008'' 
     and inserting ``December 31, 2009''.
       (2) Qualified microturbine property.--Subparagraph (E) of 
     section 48(c)(2) is amended by striking ``December 31, 2008'' 
     and inserting ``December 31, 2009''.
       (3) Solar property.--Paragraphs (2)(A)(i)(II) and 
     (3)(A)(ii) of section 48(a) are each amended by striking 
     ``January 1, 2009'' and inserting ``January 1, 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment this Act.

     SEC. 103. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT 
                   INVESTMENT CREDIT.

       (a) Credit Rate Parity Among Projects.--Section 48A(a) 
     (relating to qualifying advanced coal project credit) is 
     amended by striking ``equal to'' and all that follows and 
     inserting ``equal to 30 percent of the qualified investment 
     for such taxable year.''.
       (b) Expansion of Aggregate Credits.--Section 48A(d)(3)(A) 
     (relating to aggregate credits) is amended by striking 
     ``$1,300,000,000'' and inserting ``$1,800,000,000''.
       (c) Authorization of Additional Projects.--
       (1) In general.--Subparagraph (B) of section 48A(d)(3) 
     (relating to aggregate credits) is amended to read as 
     follows:
       ``(B) Particular projects.--Of the dollar amount in 
     subparagraph (A), the Secretary is authorized to certify--
       ``(i) $800,000,000 for integrated gasification combined 
     cycle projects the application for which is submitted during 
     the period described in paragraph (2)(A)(i),
       ``(ii) $500,000,000 for projects which use other advanced 
     coal-based generation technologies the application for which 
     is submitted during the period described in paragraph 
     (2)(A)(i),
       ``(iii) $300,000,000 for integrated gasification combined 
     cycle projects the application for which is submitted during 
     the period described in paragraph (2)(A)(ii), and
       ``(iv) $200,000,000 for other advanced coal-based 
     generation technology projects the application for which is 
     submitted during the period described in paragraph 
     (2)(A)(ii).''.
       (2) Application period for additional projects.--
     Subparagraph (A) of section 48A(d)(2) (relating to 
     certification) is amended to read as follows:
       ``(A) Application period.--Each applicant for certification 
     under this paragraph shall submit an application meeting the 
     requirements of subparagraph (B). An applicant may only 
     submit an application--
       ``(i) for an allocation from the dollar amount specified in 
     clause (i) or (ii) of paragraph (3)(B) during the 3-year 
     period beginning on the date the Secretary establishes the 
     program under paragraph (1), and
       ``(ii) for an allocation from the dollar amount specified 
     in clause (iii) or (iv) of paragraph (3)(B) during the 3-year 
     period beginning at the earlier of the termination of the 
     period described in clause (i) or the date prescribed by the 
     Secretary.''.
       (3) Capture and sequestration of carbon dioxide emissions 
     requirement.--Section 48A(e)(1) (relating to requirements) is 
     amended by striking ``and'' at the end of subparagraph (E), 
     by striking the period at the end of subparagraph (F) and 
     inserting ``, and'', and by adding at the end the following 
     new subparagraph:
       ``(G) in the case of any project the application for which 
     is submitted during the period described in paragraph 
     (2)(A)(ii), the project includes equipment to separate and 
     sequester 65 percent of such project's total carbon dioxide 
     emissions.''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 104. EXPANSION AND MODIFICATION OF COAL GASIFICATION 
                   INVESTMENT CREDIT.

       (a) Credit Rate.--Section 48B(a) (relating to qualifying 
     gasification project credit) is amended by striking ``20 
     percent'' and inserting ``30 percent''.
       (b) Expansion of Aggregate Credits.--Section 48B(d)(1) 
     (relating to qualifying gasification project program) is 
     amended by striking ``$350,000,000'' and inserting 
     ``$500,000,000 (of which $150,000,000 shall be allocated for 
     qualifying gasification projects that include equipment to 
     separate and sequester 75 percent of such a project's total 
     carbon dioxide emissions)''.
       (c) Eligible Projects Include Fischer-Tropsch Process.--
     Section 48B(c)(7) (defining eligible entity) 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) transportation grade liquid fuels.''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 105. EXPANSION OF SPECIAL ALLOWANCE TO CELLULOSIC 
                   BIOMASS ALCOHOL FUEL PLANT PROPERTY.

       (a) In General.--Paragraph (3) of section 168(l) (relating 
     to special allowance for cellulosic biomass ethanol plant 
     property) is amended to read as follows:
       ``(3) Cellulosic biomass alcohol.--For purposes of this 
     subsection, the term `cellulosic biomass alcohol' means any 
     alcohol produced from any lignocellulosic or hemicellulosic 
     matter that is available on a renewable or recurring 
     basis.''.
       (b) Conforming Amendments.--
       (1) Subsection (l) of section 168 is amended by striking 
     ``cellulosic biomass ethanol'' each place it appears and 
     inserting ``cellulosic biomass alcohol''.
       (2) The heading of section 168(l) is amended by striking 
     ``Cellulosic Biomass Ethanol'' and inserting ``Cellulosic 
     Biomass Alcohol''.
       (3) The heading of paragraph (2) of section 168(l) is 
     amended by striking ``cellulosic biomass ethanol'' and 
     inserting ``cellulosic biomass alcohol''.
       (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.

     SEC. 106. EXTENSION OF ALTERNATIVE FUEL VEHICLE REFUELING 
                   PROPERTY CREDIT.

       (a) In General.--Paragraph (2) of section 30C(g) (relating 
     to termination) is amended by striking ``December 31, 2009'' 
     and inserting ``December 31, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 107. EXTENSION OF BIODIESEL AND RENEWABLE DIESEL USED AS 
                   FUEL.

       (a) In General.--
       (1) Income tax credits for biodiesel and renewable diesel 
     and small agri-biodiesel producer credit.--Subsection (g) of 
     section 40A (relating to termination) is amended by striking 
     ``December 31, 2008'' and inserting ``December 31, 2009''.
       (2) Excise tax credit.--Section 6426(c)(6) (relating to 
     termination) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2009''.
       (3) Fuels not used for taxable purposes.--Section 
     6427(e)(5)(B) (relating to termination) is amended by 
     striking ``December 31, 2008'' and inserting ``December 31, 
     2009''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 108. EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDING 
                   DEDUCTION.

       (a) In General.--Subsection (h) of section 179D (relating 
     to termination) is amended by striking ``December 31, 2008'' 
     and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

                       TITLE II--TAX CREDIT BONDS

     SEC. 201. EXTENSION AND MODIFICATION OF CLEAN RENEWABLE 
                   ENERGY BONDS.

       (a) In General.--
       (1) Increase.--Section 54(f) (relating to limitation on 
     amount of bonds designated) is amended--
       (A) by striking ``$1,200,000,000'' in paragraph (1) and 
     inserting ``$1,600,000,000'', and
       (B) by striking ``$750,000,000'' in paragraph (2) and 
     inserting ``$1,000,000,000''.
       (2) Extension.--Subsection (m) of section 54 (relating to 
     termination) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2009''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to allocations after the date of the enactment of 
     this Act.

[[Page 23227]]



                   TITLE III--CONSERVATION INCENTIVES

     SEC. 301. EXTENSION AND MODIFICATION OF CREDIT FOR 
                   RESIDENTIAL ENERGY EFFICIENT PROPERTY.

       (a) Extension.--Section 25D(g) (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) Maximum Credit for Solar Electric Property.--
       (1) In general.--Section 25D(b)(1)(A) (relating to maximum 
     credit) is amended by striking ``$2,000'' and inserting 
     ``$4,000''.
       (2) Conforming amendment.--Section 25D(e)(4)(A)(i) is 
     amended by striking ``$6,667'' and inserting ``$13,334''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to expenditures made after December 31, 2007.

     SEC. 302. EXTENSION OF CREDIT FOR HYBRID MOTOR VEHICLES AND 
                   ADVANCED LEAN BURN VEHICLES.

       (a) In General.--Subsection (j) of section 30B (relating to 
     termination) is amended--
       (1) by striking ``December 31, 2010'' in paragraph (2) and 
     inserting ``December 31, 2011'', and
       (2) by striking ``December 31, 2009'' in paragraph (3) and 
     inserting ``December 31, 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 303. EXTENSION OF NONBUSINESS ENERGY PROPERTY CREDIT.

       (a) In General.--Subsection (g) of section 25C (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2008''
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to property placed in service after 
     December 31, 2007.

     SEC. 304. EXTENSION OF NEW ENERGY EFFICIENT HOME CREDIT.

       (a) In General.--Subsection (g) of section 45L (relating to 
     termination) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

                      TITLE IV--REVENUE PROVISIONS

     SEC. 401. REVISION OF TAX RULES ON EXPATRIATION.

       (a) In General.--Subpart A of part II of subchapter N of 
     chapter 1 is amended by inserting after section 877 the 
     following new section:

     ``SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.

       ``(a) General Rules.--For purposes of this subtitle--
       ``(1) Mark to market.--All property of a covered expatriate 
     shall be treated as sold on the day before the expatriation 
     date for its fair market value.
       ``(2) Recognition of gain or loss.--In the case of any sale 
     under paragraph (1)--
       ``(A) notwithstanding any other provision of this title, 
     any gain arising from such sale shall be taken into account 
     for the taxable year of the sale, and
       ``(B) any loss arising from such sale shall be taken into 
     account for the taxable year of the sale to the extent 
     otherwise provided by this title, except that section 1091 
     shall not apply to any such loss.

     Proper adjustment shall be made in the amount of any gain or 
     loss subsequently realized for gain or loss taken into 
     account under the preceding sentence, determined without 
     regard to paragraph (3).
       ``(3) Exclusion for certain gain.--
       ``(A) In general.--The amount which would (but for this 
     paragraph) be includible in the gross income of any 
     individual by reason of paragraph (1) shall be reduced (but 
     not below zero) by $600,000.
       ``(B) Adjustment for inflation.--
       ``(i) In general.--In the case of any taxable year 
     beginning in a calendar year after 2008, the dollar amount in 
     subparagraph (A) shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, by substituting `calendar year 2007' for 
     `calendar year 1992' in subparagraph (B) thereof.

       ``(ii) Rounding.--If any amount as adjusted under clause 
     (i) is not a multiple of $1,000, such amount shall be rounded 
     to the nearest multiple of $1,000.
       ``(b) Election To Defer Tax.--
       ``(1) In general.--If the taxpayer elects the application 
     of this subsection with respect to any property treated as 
     sold by reason of subsection (a), the time for payment of the 
     additional tax attributable to such property shall be 
     extended until the due date of the return for the taxable 
     year in which such property is disposed of (or, in the case 
     of property disposed of in a transaction in which gain is not 
     recognized in whole or in part, until such other date as the 
     Secretary may prescribe).
       ``(2) Determination of tax with respect to property.--For 
     purposes of paragraph (1), the additional tax attributable to 
     any property is an amount which bears the same ratio to the 
     additional tax imposed by this chapter for the taxable year 
     solely by reason of subsection (a) as the gain taken into 
     account under subsection (a) with respect to such property 
     bears to the total gain taken into account under subsection 
     (a) with respect to all property to which subsection (a) 
     applies.
       ``(3) Termination of extension.--The due date for payment 
     of tax may not be extended under this subsection later than 
     the due date for the return of tax imposed by this chapter 
     for the taxable year which includes the date of death of the 
     expatriate (or, if earlier, the time that the security 
     provided with respect to the property fails to meet the 
     requirements of paragraph (4), unless the taxpayer corrects 
     such failure within the time specified by the Secretary).
       ``(4) Security.--
       ``(A) In general.--No election may be made under paragraph 
     (1) with respect to any property unless adequate security is 
     provided with respect to such property.
       ``(B) Adequate security.--For purposes of subparagraph (A), 
     security with respect to any property shall be treated as 
     adequate security if--
       ``(i) it is a bond which is furnished to, and accepted by, 
     the Secretary, which is conditioned on the payment of tax 
     (and interest thereon), and which meets the requirements of 
     section 6325, or
       ``(ii) it is another form of security for such payment 
     (including letters of credit) that meets such requirements as 
     the Secretary may prescribe.
       ``(5) Waiver of certain rights.--No election may be made 
     under paragraph (1) unless the taxpayer makes an irrevocable 
     waiver of any right under any treaty of the United States 
     which would preclude assessment or collection of any tax 
     imposed by reason of this section.
       ``(6) Elections.--An election under paragraph (1) shall 
     only apply to property described in the election and, once 
     made, is irrevocable.
       ``(7) Interest.--For purposes of section 6601, the last 
     date for the payment of tax shall be determined without 
     regard to the election under this subsection.
       ``(c) Exception for Certain Property.--Subsection (a) shall 
     not apply to--
       ``(1) any deferred compensation item (as defined in 
     subsection (d)(4)),
       ``(2) any specified tax deferred account (as defined in 
     subsection (e)(2)), and
       ``(3) any interest in a nongrantor trust (as defined in 
     subsection (f)(3)).
       ``(d) Treatment of Deferred Compensation Items.--
       ``(1) Withholding on eligible deferred compensation 
     items.--
       ``(A) In general.--In the case of any eligible deferred 
     compensation item, the payor shall deduct and withhold from 
     any taxable payment to a covered expatriate with respect to 
     such item a tax equal to 30 percent thereof.
       ``(B) Taxable payment.--For purposes of subparagraph (A), 
     the term `taxable payment' means with respect to a covered 
     expatriate any payment to the extent it would be includible 
     in the gross income of the covered expatriate if such 
     expatriate continued to be subject to tax as a citizen or 
     resident of the United States. A deferred compensation item 
     shall be taken into account as a payment under the preceding 
     sentence when such item would be so includible.
       ``(2) Other deferred compensation items.--In the case of 
     any deferred compensation item which is not an eligible 
     deferred compensation item--
       ``(A)(i) with respect to any deferred compensation item to 
     which clause (ii) does not apply, an amount equal to the 
     present value of the covered expatriate's accrued benefit 
     shall be treated as having been received by such individual 
     on the day before the expatriation date as a distribution 
     under the plan, and
       ``(ii) with respect to any deferred compensation item 
     referred to in paragraph (4)(D), the rights of the covered 
     expatriate to such item shall be treated as becoming 
     transferable and not subject to a substantial risk of 
     forfeiture on the day before the expatriation date,
       ``(B) no early distribution tax shall apply by reason of 
     such treatment, and
       ``(C) appropriate adjustments shall be made to subsequent 
     distributions from the plan to reflect such treatment.
       ``(3) Eligible deferred compensation items.--For purposes 
     of this subsection, the term `eligible deferred compensation 
     item' means any deferred compensation item with respect to 
     which--
       ``(A) the payor of such item is--
       ``(i) a United States person, or
       ``(ii) a person who is not a United States person but who 
     elects to be treated as a United States person for purposes 
     of paragraph (1) and meets such requirements as the Secretary 
     may provide to ensure that the payor will meet the 
     requirements of paragraph (1), and
       ``(B) the covered expatriate--
       ``(i) notifies the payor of his status as a covered 
     expatriate, and
       ``(ii) makes an irrevocable waiver of any right to claim 
     any reduction under any treaty with the United States in 
     withholding on such item.
       ``(4) Deferred compensation item.--For purposes of this 
     subsection, the term `deferred compensation item' means--
       ``(A) any interest in a plan or arrangement described in 
     section 219(g)(5),

[[Page 23228]]

       ``(B) any interest in a foreign pension plan or similar 
     retirement arrangement or program,
       ``(C) any item of deferred compensation, and
       ``(D) any property, or right to property, which the 
     individual is entitled to receive in connection with the 
     performance of services to the extent not previously taken 
     into account under section 83 or in accordance with section 
     83.
       ``(5) Exception.--Paragraphs (1) and (2) shall not apply to 
     any deferred compensation item which is attributable to 
     services performed outside the United States while the 
     covered expatriate was not a citizen or resident of the 
     United States.
       ``(6) Special rules.--
       ``(A) Application of withholding rules.--Rules similar to 
     the rules of subchapter B of chapter 3 shall apply for 
     purposes of this subsection.
       ``(B) Application of tax.--Any item subject to the 
     withholding tax imposed under paragraph (1) shall be subject 
     to tax under section 871.
       ``(C) Coordination with other withholding requirements.--
     Any item subject to withholding under paragraph (1) shall not 
     be subject to withholding under section 1441 or chapter 24.
       ``(e) Treatment of Specified Tax Deferred Accounts.--
       ``(1) Account treated as distributed.--In the case of any 
     interest in a specified tax deferred account held by a 
     covered expatriate on the day before the expatriation date--
       ``(A) the covered expatriate shall be treated as receiving 
     a distribution of his entire interest in such account on the 
     day before the expatriation date,
       ``(B) no early distribution tax shall apply by reason of 
     such treatment, and
       ``(C) appropriate adjustments shall be made to subsequent 
     distributions from the account to reflect such treatment.
       ``(2) Specified tax deferred account.--For purposes of 
     paragraph (1), the term `specified tax deferred account' 
     means an individual retirement plan (as defined in section 
     7701(a)(37)) other than any arrangement described in 
     subsection (k) or (p) of section 408, a qualified tuition 
     program (as defined in section 529), a Coverdell education 
     savings account (as defined in section 530), a health savings 
     account (as defined in section 223), and an Archer MSA (as 
     defined in section 220).
       ``(f) Special Rules for Nongrantor Trusts.--
       ``(1) In general.--In the case of a distribution (directly 
     or indirectly) of any property from a nongrantor trust to a 
     covered expatriate--
       ``(A) the trustee shall deduct and withhold from such 
     distribution an amount equal to 30 percent of the taxable 
     portion of the distribution, and
       ``(B) if the fair market value of such property exceeds its 
     adjusted basis in the hands of the trust, gain shall be 
     recognized to the trust as if such property were sold to the 
     expatriate at its fair market value.
       ``(2) Taxable portion.--For purposes of this subsection, 
     the term `taxable portion' means, with respect to any 
     distribution, that portion of the distribution which would be 
     includible in the gross income of the covered expatriate if 
     such expatriate continued to be subject to tax as a citizen 
     or resident of the United States.
       ``(3) Nongrantor trust.--For purposes of this subsection, 
     the term `nongrantor trust' means the portion of any trust 
     that the individual is not considered the owner of under 
     subpart E of part I of subchapter J. The determination under 
     the preceding sentence shall be made immediately before the 
     expatriation date.
       ``(4) Special rules relating to withholding.--For purposes 
     of this subsection--
       ``(A) rules similar to the rules of subsection (d)(6) shall 
     apply, and
       ``(B) the covered expatriate shall be treated as having 
     waived any right to claim any reduction under any treaty with 
     the United States in withholding on any distribution to which 
     paragraph (1)(A) applies.
       ``(g) Definitions and Special Rules Relating to 
     Expatriation.--For purposes of this section--
       ``(1) Covered expatriate.--
       ``(A) In general.--The term `covered expatriate' means an 
     expatriate who meets the requirements of subparagraph (A), 
     (B), or (C) of section 877(a)(2).
       ``(B) Exceptions.--An individual shall not be treated as 
     meeting the requirements of subparagraph (A) or (B) of 
     section 877(a)(2) if--
       ``(i) the individual--

       ``(I) became at birth a citizen of the United States and a 
     citizen of another country and, as of the expatriation date, 
     continues to be a citizen of, and is taxed as a resident of, 
     such other country, and
       ``(II) has been a resident of the United States (as defined 
     in section 7701(b)(1)(A)(ii)) for not more than 10 taxable 
     years during the 15-taxable year period ending with the 
     taxable year during which the expatriation date occurs, or

       ``(ii)(I) the individual's relinquishment of United States 
     citizenship occurs before such individual attains age 18\1/
     2\, and
       ``(II) the individual has been a resident of the United 
     States (as so defined) for not more than 10 taxable years 
     before the date of relinquishment.
       ``(C) Covered expatriates also subject to tax as citizens 
     or residents.--In the case of any covered expatriate who is 
     subject to tax as a citizen or resident of the United States 
     for any period beginning after the expatriation date, such 
     individual shall not be treated as a covered expatriate 
     during such period for purposes of subsections (d)(1) and (f) 
     and section 2801.
       ``(2) Expatriate.--The term `expatriate' means--
       ``(A) any United States citizen who relinquishes his 
     citizenship, and
       ``(B) any long-term resident of the United States who 
     ceases to be a lawful permanent resident of the United States 
     (within the meaning of section 7701(b)(6)).
       ``(3) Expatriation date.--The term `expatriation date' 
     means--
       ``(A) the date an individual relinquishes United States 
     citizenship, or
       ``(B) in the case of a long-term resident of the United 
     States, the date on which the individual ceases to be a 
     lawful permanent resident of the United States (within the 
     meaning of section 7701(b)(6)).
       ``(4) Relinquishment of citizenship.--A citizen shall be 
     treated as relinquishing his United States citizenship on the 
     earliest of--
       ``(A) the date the individual renounces his United States 
     nationality before a diplomatic or consular officer of the 
     United States pursuant to paragraph (5) of section 349(a) of 
     the Immigration and Nationality Act (8 U.S.C. 1481(a)(5)),
       ``(B) the date the individual furnishes to the United 
     States Department of State a signed statement of voluntary 
     relinquishment of United States nationality confirming the 
     performance of an act of expatriation specified in paragraph 
     (1), (2), (3), or (4) of section 349(a) of the Immigration 
     and Nationality Act (8 U.S.C. 1481(a)(1)-(4)),
       ``(C) the date the United States Department of State issues 
     to the individual a certificate of loss of nationality, or
       ``(D) the date a court of the United States cancels a 
     naturalized citizen's certificate of naturalization.

     Subparagraph (A) or (B) shall not apply to any individual 
     unless the renunciation or voluntary relinquishment is 
     subsequently approved by the issuance to the individual of a 
     certificate of loss of nationality by the United States 
     Department of State.
       ``(5) Long-term resident.--The term `long-term resident' 
     has the meaning given to such term by section 877(e)(2).
       ``(6) Early distribution tax.--The term `early distribution 
     tax' means any increase in tax imposed under section 72(t), 
     220(e)(4), 223(f)(4), 409A(a)(1)(B), 529(c)(6), or 530(d)(4).
       ``(h) Other Rules.--
       ``(1) Termination of deferrals, etc.--In the case of any 
     covered expatriate, notwithstanding any other provision of 
     this title--
       ``(A) any time period for acquiring property which would 
     result in the reduction in the amount of gain recognized with 
     respect to property disposed of by the taxpayer shall 
     terminate on the day before the expatriation date, and
       ``(B) any extension of time for payment of tax shall cease 
     to apply on the day before the expatriation date and the 
     unpaid portion of such tax shall be due and payable at the 
     time and in the manner prescribed by the Secretary.
       ``(2) Step-up in basis.--Solely for purposes of determining 
     any tax imposed by reason of subsection (a), property which 
     was held by an individual on the date the individual first 
     became a resident of the United States (within the meaning of 
     section 7701(b)) shall be treated as having a basis on such 
     date of not less than the fair market value of such property 
     on such date. The preceding sentence shall not apply if the 
     individual elects not to have such sentence apply. Such an 
     election, once made, shall be irrevocable.
       ``(3) Coordination with section 684.--If the expatriation 
     of any individual would result in the recognition of gain 
     under section 684, this section shall be applied after the 
     application of section 684.
       ``(i) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Tax on Gifts and Bequests Received by United States 
     Citizens and Residents From Expatriates.--
       (1) In general.--Subtitle B (relating to estate and gift 
     taxes) is amended by inserting after chapter 14 the following 
     new chapter:

           ``CHAPTER 15--GIFTS AND BEQUESTS FROM EXPATRIATES

``Sec. 2801. Imposition of tax.

     ``SEC. 2801. IMPOSITION OF TAX.

       ``(a) In General.--If, during any calendar year, any United 
     States citizen or resident receives any covered gift or 
     bequest, there is hereby imposed a tax equal to the product 
     of--
       ``(1) the highest rate of tax specified in the table 
     contained in section 2001(c) as in effect on the date of such 
     receipt (or, if greater, the highest rate of tax specified in 
     the table applicable under section 2502(a) as in effect on 
     the date), and
       ``(2) the value of such covered gift or bequest.

[[Page 23229]]

       ``(b) Tax To Be Paid by Recipient.--The tax imposed by 
     subsection (a) on any covered gift or bequest shall be paid 
     by the person receiving such gift or bequest.
       ``(c) Exception for Certain Gifts.--Subsection (a) shall 
     apply only to the extent that the value of covered gifts and 
     bequests received by any person during the calendar year 
     exceeds $10,000.
       ``(d) Tax Reduced by Foreign Gift or Estate Tax.--The tax 
     imposed by subsection (a) on any covered gift or bequest 
     shall be reduced by the amount of any gift or estate tax paid 
     to a foreign country with respect to such covered gift or 
     bequest.
       ``(e) Covered Gift or Bequest.--
       ``(1) In general.--For purposes of this chapter, the term 
     `covered gift or bequest' means--
       ``(A) any property acquired by gift directly or indirectly 
     from an individual who, at the time of such acquisition, is a 
     covered expatriate, and
       ``(B) any property acquired directly or indirectly by 
     reason of the death of an individual who, immediately before 
     such death, was a covered expatriate.
       ``(2) Exceptions for transfers otherwise subject to estate 
     or gift tax.--Such term shall not include--
       ``(A) any property shown on a timely filed return of tax 
     imposed by chapter 12 which is a taxable gift by the covered 
     expatriate, and
       ``(B) any property included in the gross estate of the 
     covered expatriate for purposes of chapter 11 and shown on a 
     timely filed return of tax imposed by chapter 11 of the 
     estate of the covered expatriate.
       ``(3) Transfers in trust.--
       ``(A) Domestic trusts.--In the case of a covered gift or 
     bequest made to a domestic trust--
       ``(i) subsection (a) shall apply in the same manner as if 
     such trust were a United States citizen, and
       ``(ii) the tax imposed by subsection (a) on such gift or 
     bequest shall be paid by such trust.
       ``(B) Foreign trusts.--
       ``(i) In general.--In the case of a covered gift or bequest 
     made to a foreign trust, subsection (a) shall apply to any 
     distribution attributable to such gift or bequest from such 
     trust (whether from income or corpus) to a United States 
     citizen or resident in the same manner as if such 
     distribution were a covered gift or bequest.
       ``(ii) Deduction for tax paid by recipient.--There shall be 
     allowed as a deduction under section 164 the amount of tax 
     imposed by this section which is paid or accrued by a United 
     States citizen or resident by reason of a distribution from a 
     foreign trust, but only to the extent such tax is imposed on 
     the portion of such distribution which is included in the 
     gross income of such citizen or resident.
       ``(iii) Election to be treated as domestic trust.--Solely 
     for purposes of this section, a foreign trust may elect to be 
     treated as a domestic trust. Such an election may be revoked 
     with the consent of the Secretary.
       ``(f) Covered Expatriate.--For purposes of this section, 
     the term `covered expatriate' has the meaning given to such 
     term by section 877A(g)(1).''.
       (2) Clerical amendment.--The table of chapters for subtitle 
     B is amended by inserting after the item relating to chapter 
     14 the following new item:

         ``Chapter 15. Gifts and Bequests From Expatriates.''.

       (c) Definition of Termination of United States 
     Citizenship.--
       (1) In general.--Section 7701(a) is amended by adding at 
     the end the following new paragraph:
       ``(50) Termination of united states citizenship.--
       ``(A) In general.--An individual shall not cease to be 
     treated as a United States citizen before the date on which 
     the individual's citizenship is treated as relinquished under 
     section 877A(g)(4).
       ``(B) Dual citizens.--Under regulations prescribed by the 
     Secretary, subparagraph (A) shall not apply to an individual 
     who became at birth a citizen of the United States and a 
     citizen of another country.''.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 877(e) is amended to read as 
     follows:
       ``(1) In general.--Any long-term resident of the United 
     States who ceases to be a lawful permanent resident of the 
     United States (within the meaning of section 7701(b)(6)) 
     shall be treated for purposes of this section and sections 
     2107, 2501, and 6039G in the same manner as if such resident 
     were a citizen of the United States who lost United States 
     citizenship on the date of such cessation or commencement.''.
       (B) Paragraph (6) of section 7701(b) is amended by adding 
     at the end the following flush sentence:

     ``An individual shall cease to be treated as a lawful 
     permanent resident of the United States if such individual 
     commences to be treated as a resident of a foreign country 
     under the provisions of a tax treaty between the United 
     States and the foreign country, does not waive the benefits 
     of such treaty applicable to residents of the foreign 
     country, and notifies the Secretary of the commencement of 
     such treatment.''.
       (C) Section 7701 is amended by striking subsection (n) and 
     by redesignating subsections (o) and (p) as subsections (n) 
     and (o), respectively.
       (d) Information Returns.--Section 6039G is amended--
       (1) by inserting ``or 877A'' after ``section 877(b)'' in 
     subsection (a), and
       (2) by inserting ``or 877A'' after ``section 877(a)'' in 
     subsection (d).
       (e) Clerical Amendment.--The table of sections for subpart 
     A of part II of subchapter N of chapter 1 is amended by 
     inserting after the item relating to section 877 the 
     following new item:

``Sec. 877A. Tax responsibilities of expatriation.''.

       (f) Effective Date.--
       (1) In general.--Except as provided in this subsection, the 
     amendments made by this section shall apply to expatriates 
     (as defined in section 877A(g) of the Internal Revenue Code 
     of 1986, as added by this section) whose expatriation date 
     (as so defined) is on or after the date of the enactment of 
     this Act.
       (2) Gifts and bequests.--Chapter 15 of the Internal Revenue 
     Code of 1986 (as added by subsection (b)) shall apply to 
     covered gifts and bequests (as defined in section 2801 of 
     such Code, as so added) received on or after the date of the 
     enactment of this Act, regardless of when the transferor 
     expatriated.

     SEC. 402. REPEAL OF SUSPENSION OF CERTAIN PENALTIES AND 
                   INTEREST.

       (a) In General.--Section 6404 is amended by striking 
     subsection (g) and by redesignating subsection (h) as 
     subsection (g).
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to notices provided by the Secretary of the 
     Treasury, or his delegate, after the date which is 6 months 
     after the date of the enactment of the Small Business and 
     Work Opportunity Tax Act of 2007.

     SEC. 403. INCREASE IN INFORMATION RETURN PENALTIES.

       (a) Failure to File Correct Information Returns.--
       (1) In general.--Subsections (a)(1), (b)(1)(A), and 
     (b)(2)(A) of section 6721 are each amended by striking 
     ``$50'' and inserting ``$100''.
       (2) Aggregate annual limitation.--Subsections (a)(1), 
     (d)(1)(A), and (e)(3)(A) of section 6721 are each amended by 
     striking ``$250,000'' and inserting ``$900,000''.
       (b) Reduction Where Correction Within 30 Days.--
       (1) In general.--Subparagraph (A) of section 6721(b)(1) is 
     amended by striking ``$15'' and inserting ``$30''.
       (2) Aggregate annual limitation.--Subsections (b)(1)(B) and 
     (d)(1)(B) of section 6721 are each amended by striking 
     ``$75,000'' and inserting ``$200,000''.
       (c) Reduction Where Correction On or Before August 1.--
       (1) In general.--Subparagraph (A) of section 6721(b)(2) is 
     amended by striking ``$30'' and inserting ``$60''.
       (2) Aggregate annual limitation.--Subsections (b)(2)(B) and 
     (d)(1)(C) of section 6721 are each amended by striking 
     ``$150,000'' and inserting ``$400,000''.
       (d) Aggregate Annual Limitations for Persons With Gross 
     Receipts of Not More Than $5,000,000.--Paragraph (1) of 
     section 6721(d) is amended--
       (1) by striking ``$100,000'' in subparagraph (A) and 
     inserting ``$250,000'',
       (2) by striking ``$25,000'' in subparagraph (B) and 
     inserting ``$75,000'', and
       (3) by striking ``$50,000'' in subparagraph (C) and 
     inserting ``$150,000''.
       (e) Penalty in Case of Intentional Disregard.--Paragraph 
     (2) of section 6721(e) is amended by striking ``$100'' and 
     inserting ``$250''.
       (f) Failure To Furnish Correct Payee Statements.--
       (1) In general.--Subsection (a) of section 6722 is amended 
     by striking ``$50'' and inserting ``$100''.
       (2) Aggregate annual limitation.--Subsections (a) and 
     (c)(2)(A) of section 6722 are each amended by striking 
     ``$100,000'' and inserting ``$600,000''.
       (3) Penalty in case of intentional disregard.--Paragraph 
     (1) of section 6722(c) is amended by striking ``$100'' and 
     inserting ``$250''.
       (g) Failure To Comply With Other Information Reporting 
     Requirements.--Section 6723 is amended--
       (1) by striking ``$50'' and inserting ``$100'', and
       (2) by striking ``$100,000'' and inserting ``$600,000''.
       (h) Effective Date.--The amendments made by this section 
     shall apply with respect to information returns required to 
     be filed on or after January 1, 2008.

     SEC. 404. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO 
                   PROVIDE INCENTIVE FOR UNITED STATES PRODUCTION.

       (a) Biodiesel Fuels Credit.--Paragraph (5) of section 
     40A(d), as added by subsection (c), is amended to read as 
     follows:
       ``(5) Limitation to biodiesel with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any biodiesel unless--
       ``(A) such biodiesel is produced in the United States for 
     use as a fuel in the United States, and

[[Page 23230]]

       ``(B) the taxpayer obtains a certification (in such form 
     and manner as prescribed by the Secretary) from the producer 
     of the biodiesel which identifies the product produced and 
     the location of such production.

     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States.''.
       (b) Excise Tax Credit.--Paragraph (2) of section 6426(i), 
     as added by subsection (c), is amended to read as follows:
       ``(2) Biodiesel and alternative fuels.--No credit shall be 
     determined under this section with respect to any biodiesel 
     or alternative fuel unless--
       ``(A) such biodiesel or alternative fuel is produced in the 
     United States for use as a fuel in the United States, and
       ``(B) the taxpayer obtains a certification (in such form 
     and manner as prescribed by the Secretary) from the producer 
     of such biodiesel or alternative fuel which identifies the 
     product produced and the location of such production.''.
       (c) Provisions Clarifying Treatment of Fuels With No Nexus 
     to the United States.--
       (1) Alcohol fuels credit.--Subsection (d) of section 40 is 
     amended by adding at the end the following new paragraph:
       ``(6) Limitation to alcohol with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any alcohol which is produced outside the 
     United States for use as a fuel outside the United States. 
     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States.''.
       (2) Biodiesel fuels credit.--Subsection (d) of section 40A 
     is amended by adding at the end the following new paragraph:
       ``(5) Limitation to biodiesel with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any biodiesel which is produced outside the 
     United States for use as a fuel outside the United States. 
     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States.''.
       (3) Excise tax credit.--
       (A) In general.--Section 6426 is amended by adding at the 
     end the following new subsection:
       ``(h) Limitation to Fuels With Connection to the United 
     States.--
       ``(1) Alcohol.--No credit shall be determined under this 
     section with respect to any alcohol which is produced outside 
     the United States for use as a fuel outside the United 
     States.
       ``(2) Biodiesel and alternative fuels.--No credit shall be 
     determined under this section with respect to any biodiesel 
     or alternative fuel which is produced outside the United 
     States for use as a fuel outside the United States.

     For purposes of this subsection, the term `United States' 
     includes any possession of the United States.''.
       (B) Conforming amendment.--Subsection (e) of section 6427 
     is amended by redesignating paragraph (5) as paragraph (6) 
     and by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) Limitation to fuels with connection to the united 
     states.--No amount shall be payable under paragraph (1) or 
     (2) with respect to any mixture or alternative fuel if credit 
     is not allowed with respect to such mixture or alternative 
     fuel by reason of section 6426(h).''.
       (d) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to fuel produced, 
     and sold or used, after the date of the enactment of this 
     Act.
       (2) Provisions clarifying treatment of fuels with no nexus 
     to the united states.--
       (A) In general.--Except as otherwise provided in this 
     paragraph, the amendments made by subsection (c) shall take 
     effect as if included in section 301 of the American Jobs 
     Creation Act of 2004.
       (B) Alternative fuel credits.--So much of the amendments 
     made by subsection (c) as relate to the alternative fuel 
     credit or the alternative fuel mixture credit shall take 
     effect as if included in section 11113 of the Safe, 
     Accountable, Flexible, Efficient Transportation Equity Act: A 
     Legacy for Users.
       (C) Renewable diesel.--So much of the amendments made by 
     subsection (c) as relate to renewable diesel shall take 
     effect as if included in section 1346 of the Energy Policy 
     Act of 2005.

     SEC. 405. MODIFICATION OF LIMITATION ON AUTOMOBILE 
                   DEPRECIATION.

       (a) In General.--Paragraph (5) of section 280F(d) (defining 
     passenger automobile) is amended to read as follows:
       ``(5) Passenger automobile.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `passenger automobile' means any 4-wheeled vehicle--
       ``(i) which is primarily designed or which can be used to 
     carry passengers over public streets, roads, or highways 
     (except any vehicle operated exclusively on a rail or rails), 
     and
       ``(ii) which is rated at not more than 14,000 pounds gross 
     vehicle weight.
       ``(B) Exceptions.--The term `passenger automobile' shall 
     not include--
       ``(i) any exempt-design vehicle, and
       ``(ii) any exempt-use vehicle.
       ``(C) Exempt-design vehicle.--The term `exempt-design 
     vehicle' means--
       ``(i) any vehicle which, by reason of its nature or design, 
     is not likely to be used more than a de minimis amount for 
     personal purposes, and
       ``(ii) any vehicle--

       ``(I) which is designed to have a seating capacity of more 
     than 9 persons behind the driver"s seat,
       ``(II) which is equipped with a cargo area of at least 5 
     feet in interior length which is an open area or is designed 
     for use as an open area but is enclosed by a cap and is not 
     readily accessible directly from the passenger compartment, 
     or
       ``(III) has an integral enclosure, fully enclosing the 
     driver compartment and load carrying device, does not have 
     seating rearward of the driver's seat, and has no body 
     section protruding more than 30 inches ahead of the leading 
     edge of the windshield.

       ``(D) Exempt-use vehicle.--The term `exempt-use vehicle' 
     means--
       ``(i) any ambulance, hearse, or combination ambulance-
     hearse used by the taxpayer directly in a trade or business,
       ``(ii) any vehicle used by the taxpayer directly in the 
     trade or business of transporting persons or property for 
     compensation or hire, and
       ``(iii) any truck or van if substantially all of the use of 
     such vehicle by the taxpayer is directly in--

       ``(I) a farming business (within the meaning of section 
     263A(e)(4)),
       ``(II) the transportation of a substantial amount of 
     equipment, supplies, or inventory, or
       ``(III) the moving or delivery of property which requires 
     substantial cargo capacity.

       ``(E) Recapture.--In the case of any vehicle which is not a 
     passenger automobile by reason of being an exempt-use 
     vehicle, if such vehicle ceases to be an exempt-use vehicle 
     in any taxable year after the taxable year in which such 
     vehicle is placed in service, a rule similar to the rule of 
     subsection (b) shall apply.''.
       (b) Conforming Amendment.--Section 179(b) (relating to 
     limitations) is amended by striking paragraph (6).
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 406. EXTENSION OF COAL EXCISE TAX LEVELS.

       Paragraph (2) of section 4121(e) (relating to reduction in 
     amount of tax) is amended to read as follows:
       ``(2) Temporary increase termination date.--For purposes of 
     paragraph (1), the temporary increase termination date is the 
     first January 1 after the date of the enactment of this 
     paragraph as of which there is--
       ``(A) no balance of repayable advances made to the Black 
     Lung Disability Trust Fund, and
       ``(B) no unpaid interest on such advances.''.

     SEC. 407. BULK TRANSFER EXCEPTION NOT TO APPLY TO FINISHED 
                   GASOLINE.

       (a) In General.--Subparagraph (B) of section 4081(a)(1) 
     (relating to tax on removal, entry, or sale) is amended by 
     adding at the end the following new clause:
       ``(iii) Exception for finished gasoline.--Clause (i) shall 
     not apply to any gasoline which meets the requirements for 
     gasoline under section 211 of the Clean Air Act.''.
       (b) Exception to Tax on Finished Gasoline for Prior Taxable 
     Removals.--Paragraph (1) of section 4081(a) is amended by 
     adding at the end the following new subparagraph:
       ``(C) Exemption for previously taxed finished gasoline.--
     The tax imposed by this paragraph shall not apply to the 
     removal of gasoline described in subparagraph (B)(iii) from 
     any terminal if there was a prior taxable removal or entry of 
     such fuel under clause (i), (ii), or (iii) of subparagraph 
     (A). The preceding sentence shall not apply to the volume of 
     any product added to such gasoline at the terminal unless 
     there was a prior taxable removal or entry of such product 
     under clause (i), (ii), or (iii) of subparagraph (A).''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to fuel removed, entered, or sold after December 
     31, 2007.

     SEC. 408. PARTICIPANTS IN GOVERNMENT SECTION 457 PLANS 
                   ALLOWED TO TREAT ELECTIVE DEFERRALS AS ROTH 
                   CONTRIBUTIONS.

       (a) In General.--Section 402A(e)(1) (defining applicable 
     retirement plan) is amended by striking ``and'' at the end of 
     subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(C) an eligible deferred compensation plan (as defined in 
     section 457(b)) of an eligible employer described in section 
     457(e)(1)(A).''.
       (b) Elective Deferrals.--Section 402A(e)(2) (defining 
     elective deferral) is amended to read as follows:
       ``(2) Elective deferral.--The term `elective deferral' 
     means--
       ``(A) any elective deferral described in subparagraph (A) 
     or (C) of section 402(g)(3), and
       ``(B) any elective deferral of compensation by an 
     individual under an eligible deferred

[[Page 23231]]

     compensation plan (as defined in section 457(b)) of an 
     eligible employer described in section 457(e)(1)(A).''.
       (c) Effective Date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 409. REDUCING REIT HOLDING PERIOD SAFE HARBOR.

       (a) In General.--Paragraph (6) of section 857(b) (relating 
     to income from prohibited transactions) is amended--
       (1) by striking ``4 years'' each place it appears and 
     inserting ``2 years'', and
       (2) by striking ``4-year'' each place it appears and 
     inserting ``2-year''.
       (b) Conforming Amendment.--
       (1) Subparagraph (A) of section 856(j)(4) (relating to 
     coordination with coordination with 4-year holding period) is 
     amended by striking ``4 years'' and inserting ``2 years''.
       (2) The heading for paragraph (4) of section 856(j) is 
     amended by striking ``4-year'' and inserting ``2-year''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 410. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

       Subparagraph (B) of section 401(1) of the Tax Increase 
     Prevention and Reconciliation Act of 2005 is amended by 
     striking ``114.75 percent'' and inserting ``117.50''.

  Mr. ENGLISH of Pennsylvania (during the reading). Mr. Speaker, I ask 
unanimous consent that the motion be considered as read and printed in 
the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Pennsylvania?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Pennsylvania is recognized for 5 minutes in support of his motion.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, we have had, I think, a 
very good debate today on the energy tax bill, and I admire the passion 
on the other side, even if I don't associate myself with all of its 
particulars. I believe the debate offered Members a chance to hear both 
good and bad about what is in this bill.
  The very bad, huge tax increases on American oil and gas companies 
and on domestic production and the green bond slush fund are removed 
from our substitute in this motion to recommit.
  But the fact that I strongly oppose the bill put together by the 
other side does not mean that the tax code can't play a constructive 
and creative role in promoting conservation and increasing the use of 
renewable and alternative fuels.
  The motion to recommit provides Members of the House with the 
opportunity to consider a different approach on these issues.
  This motion would extend many current law provisions designed to 
encourage the production of alternative fuels and the conservation of 
energy, many of which the majority saw fit to include in their bill.
  But several current tax provisions encouraging energy conservation 
will expire if H.R. 2776 is enacted in its current form, including 
incentives for individuals to make energy efficiency upgrades in their 
home, to install solar power and solar water heating capacity, and to 
purchase hybrid and other fuel-efficient vehicles.
  I believe the extension of these consumer-based tax credits is 
important, and I regret that the majority chose not to include them in 
their bill and rejected, on a party-line vote in committee, an effort 
to restore the tax credit for making energy efficiency upgrades to 
existing homes.
  It is unfortunate that the majority has become so enamored of their 
tax credit slush fund program that they forgot the tax credits for 
consumers are highly effective. For example, 2007 hybrid vehicle sales 
in the United States are projected to be double the level from 2005, 
the year Republicans first enacted the credit.
  In addition, my substitute would extend the section 45 production tax 
credit that has helped increase the amount of electricity generated 
from sources like wind and biomass and landfill gas.
  But unlike the bill before us, H.R. 2776 as reported by the 
committee, my substitute does not reduce the value of the wind credit. 
Many supporters of the credit, even those who have endorsed the 
extension provided by the bill, have expressed real reservations that 
the ``haircut'' given to the credit, that it could threaten the 
continued rapid expansion of this promising alternative to fossil fuel-
powered electricity generation.
  Finally, let me highlight the fact that the motion to recommit does 
justice to America's greatest energy source, coal.
  This country's vast reserves of coal can continue to fuel America's 
economic engine for decades, even centuries to come. More than half of 
the electricity in America comes from coal. It would be irresponsible, 
if not irrational, to ignore this inconvenient truth.
  Therefore, Mr. Speaker, the substitute would extend and reauthorize 
the advanced coal and coal gasification investment tax credits. These 
credits reward companies for investing in promising technologies that 
convert coal into clean-burning natural gas. By placing a new carbon 
sequestration requirement on these projects, the provision helps secure 
our energy security while protecting our environment at the same time.
  The credit also helps manufacturers who depend on natural gas as a 
feedstock, because it will ensure a secure, reliable and affordable 
source of this vital commodity. In doing so, we can help keep the high-
paying manufacturing jobs that rely on natural gas right here in the 
United States.
  And Mr. Speaker, if Members want to vote for an energy bill that 
might actually increase the supply of energy, that might actually lower 
the price of gasoline or heating oil, that will encourage the clean 
development of our Nation's most abundant energy source, coal, you have 
your chance right now.
  Join us in voting for this motion to recommit.
  Mr. McDERMOTT. Mr. Speaker, I rise in opposition.
  The SPEAKER pro tempore. The gentleman from Washington is recognized 
for 5 minutes.
  Mr. McDERMOTT. Mr. Speaker, the proposal Republicans have put on the 
table here are like the things that addicts say. They just want one 
more fix; let's just have one more quick fix to take care of their 
problems.
  The things that you have said here make me wonder if you understand 
how business operates. To give people a one-year extension of money and 
say, make plans, build buildings, hire people and start a new industry, 
but you've got a one-year guarantee, indicates you have no idea how 
business runs. That's why we made it 4 years, to give people an 
opportunity to actually do this.
  People listening might ask themselves, well, what's the cost to all 
this. Well, it costs a long-term extension for renewable energies. It 
costs a long-term extension for solar properties. It costs the 
production tax credit for cellulosic ethanol, which plays into the 
ethanol question. It costs a long-term extension of energy-efficient 
commercial building expenditures. How can you build a building in one 
year, from planning to building to constructing, how can you do that? 
But that's what you're suggesting; we will give them one year.
  The Republican motion to recommit makes sure that the renewable 
energy industry is denied the economic certainty they need to drive 
production of energy from renewable sources in order that the oil and 
gas industry can be fully sheltered.
  You wouldn't want any competition for Big Oil.
  I yield 2 minutes to the gentleman from Texas to talk about how you 
pay for it.
  The SPEAKER pro tempore. The gentleman is free to yield, but he has 
to control the amount of time. The Chair cannot do that for him.
  Mr. DOGGETT. Mr. Speaker, we know, first of all, what is not in this 
motion to recommit. What is not in this motion to recommit is anything 
about the exciting new opportunity with plug-in hybrids. This has been 
deleted from the bill with this motion to recommit.
  We know, as the gentleman from Washington is just saying, that what 
those who have worked so hard in solar power have requested, an 8-year 
extension so we can get the investment. We heard from investment 
bankers saying

[[Page 23232]]

you need that kind of dependability in order to get the money that 
solar power needs to expand particularly throughout the South and 
Southwest. That will not be available under this Republican proposal.
  But what is in this proposal? Well, after all of the very strange 
comments that have been made about denying Mom an opportunity to drive 
an SUV, the same tax on Hummers that is in our proposal is in their 
motion to recommit. Look at the bill. Look at the scoring from the 
Joint Committee on Taxation for the motion to recommit at page 2, line 
7, and you will see exactly that same matter.

                              {time}  1915

  In fact, after all the talk about how we don't want taxes on the 
petroleum industry, when I look at their proposal, I find almost $1 
billion in taxes on gasoline that they are proposing in their motion to 
recommit.
  When I look at the line just above that in the same scoring document, 
I find almost $1 billion that is proposed by them in a tax on coal.
  Now, there may be a need to do that at some point as we build our 
energy future here.
  But everyone who votes for their motion to recommit, they need to 
understand today that they are voting for about $1 billion in gasoline 
taxes and almost $1 billion in taxes on coal, all at the same time they 
are denying our renewable industries what they need in wind and solar. 
They are denying them the dependability necessary to attract private 
investment to let those industries grow.
  You know, we have so much fossilized thinking that we must overcome 
if we are to combat the real threat of climate change that endangers 
our country, that is perhaps our greatest long-term national security 
challenge. It's certainly a challenge to our health and our future.
  And we also have to address the need for a new energy future that 
does not leave us dependent on foreign sources of energy. We have ample 
solar power here, we have great potential in this country, if we are 
willing to make the hard decisions to not be bound by the ideas of the 
past and move to the future.
  You can do that today by rejecting this motion to recommit. When you 
reject the motion to recommit, you will also be rejecting about $1 
billion in taxes on gasoline, about $1 billion in taxes on coal.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, on that I demand the yeas 
and nays.
  The yeas and nays were ordered.
  The vote was taken by electronic device, and there were--yeas 65, 
nays 346, not voting 22, as follows:

                             [Roll No. 834]

                                YEAS--65

     Alexander
     Bachus
     Baker
     Barton (TX)
     Bishop (UT)
     Blunt
     Boehner
     Bono
     Boustany
     Brady (TX)
     Broun (GA)
     Camp (MI)
     Cannon
     Cantor
     Capito
     Conaway
     Davis, Tom
     Deal (GA)
     Dent
     Ehlers
     English (PA)
     Fortenberry
     Frelinghuysen
     Gerlach
     Gillmor
     Granger
     Hastings (WA)
     Herger
     Hobson
     Hoekstra
     Hulshof
     Inglis (SC)
     Kingston
     Knollenberg
     Linder
     Lungren, Daniel E.
     McCrery
     Myrick
     Nunes
     Peterson (PA)
     Petri
     Pickering
     Platts
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Regula
     Reichert
     Renzi
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Shadegg
     Smith (NE)
     Smith (TX)
     Thornberry
     Tiberi
     Upton
     Walsh (NY)
     Weldon (FL)
     Weller
     Westmoreland
     Whitfield
     Wolf

                               NAYS--346

     Abercrombie
     Ackerman
     Aderholt
     Akin
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Bachmann
     Baird
     Baldwin
     Barrett (SC)
     Barrow
     Bartlett (MD)
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Blackburn
     Blumenauer
     Bonner
     Boozman
     Boren
     Boswell
     Boucher
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown (SC)
     Brown, Corrine
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Butterfield
     Buyer
     Calvert
     Campbell (CA)
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Carson
     Carter
     Castle
     Castor
     Chabot
     Chandler
     Cleaver
     Clyburn
     Cohen
     Cole (OK)
     Conyers
     Cooper
     Costa
     Costello
     Courtney
     Cramer
     Crowley
     Cubin
     Cuellar
     Culberson
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis (KY)
     Davis, David
     Davis, Lincoln
     DeFazio
     DeGette
     DeLauro
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Donnelly
     Doolittle
     Doyle
     Drake
     Dreier
     Duncan
     Edwards
     Ellison
     Ellsworth
     Emanuel
     Emerson
     Engel
     Eshoo
     Etheridge
     Everett
     Fallin
     Farr
     Fattah
     Feeney
     Ferguson
     Filner
     Flake
     Forbes
     Fossella
     Foxx
     Frank (MA)
     Franks (AZ)
     Gallegly
     Garrett (NJ)
     Giffords
     Gilchrest
     Gillibrand
     Gingrey
     Gohmert
     Gonzalez
     Goodlatte
     Gordon
     Graves
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hall (TX)
     Hare
     Harman
     Hastings (FL)
     Heller
     Hensarling
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hirono
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Issa
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Johnson (IL)
     Johnson, E. B.
     Jones (NC)
     Jones (OH)
     Jordan
     Kagen
     Kanjorski
     Kaptur
     Keller
     Kennedy
     Kildee
     Kind
     King (IA)
     King (NY)
     Kirk
     Kline (MN)
     Kucinich
     Kuhl (NY)
     Lamborn
     Lampson
     Langevin
     Larsen (WA)
     Larson (CT)
     Latham
     LaTourette
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Lipinski
     LoBiondo
     Loebsack
     Lofgren, Zoe
     Lowey
     Lucas
     Lynch
     Mack
     Mahoney (FL)
     Maloney (NY)
     Manzullo
     Marchant
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (CA)
     McCarthy (NY)
     McCaul (TX)
     McCollum (MN)
     McCotter
     McDermott
     McGovern
     McHenry
     McHugh
     McIntyre
     McKeon
     McMorris Rodgers
     McNerney
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Mica
     Michaud
     Miller (FL)
     Miller (MI)
     Miller (NC)
     Miller, Gary
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (KS)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murphy, Tim
     Murtha
     Musgrave
     Nadler
     Napolitano
     Neal (MA)
     Neugebauer
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Pearce
     Pelosi
     Pence
     Perlmutter
     Peterson (MN)
     Pitts
     Poe
     Pomeroy
     Price (NC)
     Radanovich
     Rahall
     Ramstad
     Rangel
     Rehberg
     Reyes
     Reynolds
     Rodriguez
     Rogers (AL)
     Ros-Lehtinen
     Roskam
     Ross
     Rothman
     Roybal-Allard
     Royce
     Ruppersberger
     Rush
     Ryan (OH)
     Ryan (WI)
     Salazar
     Sali
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schmidt
     Schwartz
     Scott (GA)
     Scott (VA)
     Sensenbrenner
     Serrano
     Sessions
     Sestak
     Shays
     Shea-Porter
     Sherman
     Shimkus
     Shuler
     Shuster
     Simpson
     Sires
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder
     Solis
     Souder
     Space
     Spratt
     Stark
     Stearns
     Stupak
     Sullivan
     Sutton
     Tanner
     Tauscher
     Taylor
     Terry
     Thompson (CA)
     Thompson (MS)
     Tiahrt
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Walberg
     Walden (OR)
     Walz (MN)
     Wamp
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wexler
     Wicker
     Wilson (NM)
     Wilson (OH)
     Wilson (SC)
     Woolsey
     Wu
     Wynn
     Yarmuth
     Young (FL)

                             NOT VOTING--22

     Clarke
     Clay
     Coble
     Crenshaw
     Davis, Jo Ann
     Delahunt
     Goode
     Hastert
     Hayes
     Hinojosa
     Hunter
     Jindal
     Johnson, Sam
     Kilpatrick
     Klein (FL)
     LaHood
     Lantos
     Paul
     Saxton
     Skelton
     Tancredo
     Young (AK)


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are advised they 
have less than 2 minutes to vote.

                              {time}  1954

  Messrs. MANZULLO, WALBERG, CAMPBELL of California, LoBIONDO, WILSON 
of South Carolina, TIM MURPHY of Pennsylvania, CASTLE, FARR, FORBES, 
BURTON of Indiana, MARKEY, SALI, POE, FOSSELLA, AKIN, ALTMIRE, 
MARCHANT, McHENRY, PEARCE, MAHONEY of Florida, GOHMERT, SOUDER, 
DONNELLY, NEUGEBAUER, CARTER, BOREN, WAMP, LATHAM, FRANKS of Arizona, 
HENSARLING, SESSIONS, LAMBORN, Mrs. MILLER of Michigan, Mrs. BACHMANN, 
Messrs. HILL, SENSENBRENNER, REHBERG, BONNER, KLINE of Minnesota, Ms. 
ROS-

[[Page 23233]]

LEHTINEN, Messrs. CALVERT, TURNER, SPACE, TERRY, ROGERS of Alabama, 
DUNCAN, LINCOLN DIAZ-BALART of Florida, BUCHANAN, MARIO DIAZ-BALART of 
Florida, BURGESS, SULLIVAN, Ms. FALLIN, Messrs. DAVID DAVIS of 
Tennessee, COLE of Oklahoma, McHUGH, KUHL of New York, WALDEN of 
Oregon, BILIRAKIS, GARY G. MILLER of California, CHABOT, McKEON, 
STEARNS, Mrs. EMERSON, Messrs. HALL of Texas, BARTLETT of Maryland, 
GINGREY, GALLEGLY, HELLER of Nevada, LEWIS of Kentucky, EVERETT, 
GRAVES, YOUNG of Florida, JONES of North Carolina, DAVIS of Kentucky, 
SHIMKUS, ROSKAM, ADERHOLT, BROWN of South Carolina, ROYCE, Mrs. 
BIGGERT, Messrs. ISSA, LEWIS of California, SHUSTER, WICKER, LUCAS, 
MORAN of Kansas, TIAHRT, RAMSTAD, FEENEY, Mrs. BLACKBURN, Messrs. 
BUYER, BOOZMAN, DREIER, McCAUL of Texas, JOHNSON of Illinois, MICA, 
Mrs. SCHMIDT, Mr. RADANOVICH, Ms. GINNY BROWN-WAITE of Florida and Mrs. 
WILSON of New Mexico changed their vote from ``yea'' to ``nay.''
  Mr. SHADEGG and Mr. ROHRABACHER changed their vote from ``nay'' to 
``yea.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  The SPEAKER pro tempore. For what purpose does the gentleman from 
Louisiana rise?
  Mr. McCRERY. Parliamentary inquiry, Mr. Speaker.
  The SPEAKER pro tempore. For what purpose does the gentleman from 
Florida rise?
  Mr. LINCOLN DIAZ-BALART of Florida. Parliamentary inquiry, Mr. 
Speaker.
  The SPEAKER pro tempore. For what purpose does the gentleman from 
Massachusetts rise?
  Mr. McGOVERN. To demand the yeas and nays.
  The yeas and nays were ordered.
  The vote was taken by electronic device, and there were--yeas 221, 
nays 189, not voting 23, as follows:

                             [Roll No. 835]

                               YEAS--221

     Abercrombie
     Ackerman
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Boucher
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Carson
     Castle
     Castor
     Chandler
     Cleaver
     Clyburn
     Cohen
     Conyers
     Cooper
     Costa
     Costello
     Courtney
     Cramer
     Crowley
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Lincoln
     DeFazio
     DeGette
     DeLauro
     Dicks
     Dingell
     Doggett
     Donnelly
     Doyle
     Ellison
     Ellsworth
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Ferguson
     Filner
     Frank (MA)
     Giffords
     Gilchrest
     Gillibrand
     Gordon
     Green, Al
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hirono
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Johnson, E. B.
     Jones (OH)
     Kagen
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kind
     Kirk
     Kucinich
     Langevin
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     LoBiondo
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Markey
     Marshall
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McNerney
     McNulty
     Meek (FL)
     Meeks (NY)
     Michaud
     Miller (NC)
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Perlmutter
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Ramstad
     Rangel
     Reichert
     Reyes
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shays
     Shea-Porter
     Sherman
     Shuler
     Sires
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder
     Solis
     Space
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wexler
     Wilson (OH)
     Woolsey
     Wu
     Wynn
     Yarmuth

                               NAYS--189

     Aderholt
     Akin
     Alexander
     Bachmann
     Bachus
     Baker
     Barrett (SC)
     Barrow
     Bartlett (MD)
     Barton (TX)
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blunt
     Boehner
     Bonner
     Bono
     Boozman
     Boren
     Boustany
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Capito
     Carter
     Chabot
     Cole (OK)
     Conaway
     Cubin
     Cuellar
     Culberson
     Davis (KY)
     Davis, David
     Davis, Tom
     Deal (GA)
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Edwards
     Ehlers
     Emerson
     English (PA)
     Everett
     Fallin
     Feeney
     Flake
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gillmor
     Gingrey
     Gohmert
     Gonzalez
     Goodlatte
     Granger
     Graves
     Green, Gene
     Hall (TX)
     Hastings (WA)
     Heller
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hulshof
     Inglis (SC)
     Issa
     Johnson (IL)
     Jones (NC)
     Jordan
     Keller
     King (IA)
     King (NY)
     Kingston
     Kline (MN)
     Knollenberg
     Kuhl (NY)
     Lamborn
     Lampson
     Latham
     LaTourette
     Lewis (CA)
     Lewis (KY)
     Linder
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     Matheson
     McCarthy (CA)
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris Rodgers
     Melancon
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy, Tim
     Musgrave
     Myrick
     Neugebauer
     Nunes
     Ortiz
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Regula
     Rehberg
     Renzi
     Reynolds
     Rodriguez
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roskam
     Royce
     Ryan (WI)
     Sali
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shimkus
     Shuster
     Simpson
     Smith (NE)
     Smith (TX)
     Souder
     Stearns
     Sullivan
     Terry
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walberg
     Walden (OR)
     Walsh (NY)
     Wamp
     Weldon (FL)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (FL)

                             NOT VOTING--23

     Blackburn
     Clarke
     Clay
     Coble
     Crenshaw
     Davis, Jo Ann
     Delahunt
     Goode
     Hastert
     Hayes
     Hinojosa
     Hunter
     Jindal
     Johnson, Sam
     Kilpatrick
     Klein (FL)
     LaHood
     Lantos
     Paul
     Saxton
     Skelton
     Tancredo
     Young (AK)


                      Announcement by the Speaker

  The SPEAKER (during the vote). Members are advised there is 1 minute 
remaining on this vote.

                              {time}  2016

  Mr. RAMSTAD changed his vote from ``nay'' to ``yea.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated against:
  Mrs. BLACKBURN. Mr. Speaker, on rollcall No. 835, my voting card 
malfunctioned and did not register my vote. Had my vote been accurately 
recorded, I would have been recorded as ``nay.''
  The SPEAKER. Pursuant to section 3(b) of House Resolution 615, H.R. 
2776 is laid on the table.

                          ____________________