[Congressional Record (Bound Edition), Volume 154 (2008), Part 7]
[House]
[Pages 10222-10276]
[From the U.S. Government Publishing Office, www.gpo.gov]




             RENEWABLE ENERGY AND JOB CREATION ACT OF 2008

  Mr. RANGEL. Mr. Speaker, pursuant to House Resolution 1212, I call up 
the bill (H.R. 6049) to amend the Internal Revenue Code of 1986 to 
provide incentives for energy production and conservation, to extend 
certain expiring provisions, to provide individual income tax relief, 
and for other purposes, and ask for its immediate consideration.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 6049

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

     SECTION 1. SHORT TITLE, ETC.

       (a) Short Title.--This Act may be cited as the ``Energy and 
     Tax Extenders Act of 2008''.
       (b) Reference.--Except as otherwise expressly provided, 
     whenever in this Act an amendment or repeal is expressed in 
     terms of an amendment to, or repeal of, a section or other 
     provision, the reference shall be considered to be made to a 
     section or other provision of the Internal Revenue Code of 
     1986.
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title, etc.

                     TITLE I--ENERGY TAX INCENTIVES

                Subtitle A--Energy Production Incentives

                  Part I--Renewable Energy Incentives

Sec. 101. Renewable energy credit.
Sec. 102. Production credit for electricity produced from marine 
              renewables.
Sec. 103. Energy credit.
Sec. 104. Credit for residential energy efficient property.
Sec. 105. Special rule to implement FERC and State electric 
              restructuring policy.
Sec. 106. New clean renewable energy bonds.

                 Part II--Carbon Mitigation Provisions

Sec. 111. Expansion and modification of advanced coal project 
              investment credit.
Sec. 112. Expansion and modification of coal gasification investment 
              credit.
Sec. 113. Temporary increase in coal excise tax.
Sec. 114. Special rules for refund of the coal excise tax to certain 
              coal producers and exporters.
Sec. 115. Carbon audit of the tax code.

    Subtitle B--Transportation and Domestic Fuel Security Provisions

Sec. 121. Credit for production of cellulosic biofuel.
Sec. 122. Inclusion of cellulosic biofuel in bonus depreciation for 
              biomass ethanol plant property.
Sec. 123. Credits for biodiesel and renewable diesel.
Sec. 124. Modification of alcohol credit.
Sec. 125. Calculation of volume of alcohol for fuel credits.
Sec. 126. Clarification that credits for fuel are designed to provide 
              an incentive for United States production.
Sec. 127. Credit for new qualified plug-in electric drive motor 
              vehicles.
Sec. 128. Exclusion from heavy truck tax for idling reduction units and 
              advanced insulation.
Sec. 129. Restructuring of New York Liberty Zone tax credits.
Sec. 130. Transportation fringe benefit to bicycle commuters.
Sec. 131. Alternative fuel vehicle refueling property credit.
Sec. 132. Comprehensive study of biofuels.

       Subtitle C--Energy Conservation and Efficiency Provisions

Sec. 141. Qualified energy conservation bonds.
Sec. 142. Credit for nonbusiness energy property.
Sec. 143. Energy efficient commercial buildings deduction.
Sec. 144. Modifications of energy efficient appliance credit for 
              appliances produced after 2007.
Sec. 145. Accelerated recovery period for depreciation of smart meters 
              and smart grid systems.
Sec. 146. Qualified green building and sustainable design projects.

          TITLE II--ONE-YEAR EXTENSION OF TEMPORARY PROVISIONS

         Subtitle A--Extensions Primarily Affecting Individuals

Sec. 201. Deduction for State and local sales taxes.

[[Page 10223]]

Sec. 202. Deduction of qualified tuition and related expenses.
Sec. 203. Treatment of certain dividends of regulated investment 
              companies.
Sec. 204. Qualified conservation contributions.
Sec. 205. Tax-free distributions from individual retirement plans for 
              charitable purposes.
Sec. 206. Deduction for certain expenses of elementary and secondary 
              school teachers.
Sec. 207. Election to include combat pay as earned income for purposes 
              of earned income tax credit.
Sec. 208. Modification of mortgage revenue bonds for veterans.
Sec. 209. Distributions from retirement plans to individuals called to 
              active duty.
Sec. 210. Stock in RIC for purposes of determining estates of 
              nonresidents not citizens.
Sec. 211. Qualified investment entities.
Sec. 212. Exclusion of amounts received under qualified group legal 
              services plans.

         Subtitle B--Extensions Primarily Affecting Businesses

Sec. 221. Research credit.
Sec. 222. Indian employment credit.
Sec. 223. New markets tax credit.
Sec. 224. Railroad track maintenance.
Sec. 225. Fifteen-year straight-line cost recovery for qualified 
              leasehold improvements and qualified restaurant property.
Sec. 226. Seven-year cost recovery period for motorsports racing track 
              facility.
Sec. 227. Accelerated depreciation for business property on Indian 
              reservation.
Sec. 228. Expensing of environmental remediation costs.
Sec. 229. Deduction allowable with respect to income attributable to 
              domestic production activities in Puerto Rico.
Sec. 230. Modification of tax treatment of certain payments to 
              controlling exempt organizations.
Sec. 231. Qualified zone academy bonds.
Sec. 232. Tax incentives for investment in the District of Columbia.
Sec. 233. Economic development credit for American Samoa.
Sec. 234. Enhanced charitable deduction for contributions of food 
              inventory.
Sec. 235. Enhanced charitable deduction for contributions of book 
              inventory to public schools.
Sec. 236. Enhanced deduction for qualified computer contributions.
Sec. 237. Basis adjustment to stock of S corporations making charitable 
              contributions of property.
Sec. 238. Work opportunity tax credit for Hurricane Katrina employees.
Sec. 239. Subpart F exception for active financing income.
Sec. 240. Look-thru rule for related controlled foreign corporations.
Sec. 241. Expensing for certain qualified film and television 
              productions.

                      Subtitle C--Other Extensions

Sec. 251. Authority to disclose information related to terrorist 
              activities made permanent.
Sec. 252. Authority for undercover operations made permanent.
Sec. 253. Authority to disclose return information for certain veterans 
              programs made permanent.
Sec. 254. Increase in limit on cover over of rum excise tax to Puerto 
              Rico and the Virgin Islands.

                    TITLE III--ADDITIONAL TAX RELIEF

                   Subtitle A--Individual Tax Relief

Sec. 301. Additional standard deduction for real property taxes for 
              nonitemizers.
Sec. 302. Refundable child credit.
Sec. 303. Increase of AMT refundable credit amount for individuals with 
              long-term unused credits for prior year minimum tax 
              liability, etc.

                Subtitle B--Business Related Provisions

Sec. 311. Uniform treatment of attorney-advanced expenses and court 
              costs in contingency fee cases.
Sec. 312. Provisions related to film and television productions.

  Subtitle C--Modification of Penalty on Understatement of Taxpayer's 
                    Liability by Tax Return Preparer

Sec. 321. Modification of penalty on understatement of taxpayer's 
              liability by tax return preparer.

   Subtitle D--Extension and Expansion of Certain GO Zone Incentives

Sec. 331. Certain GO Zone incentives.

                      TITLE IV--REVENUE PROVISIONS

Sec. 401. Nonqualified deferred compensation from certain tax 
              indifferent parties.
Sec. 402. Delay in application of worldwide allocation of interest.
Sec. 403. Time for payment of corporate estimated taxes.

                     TITLE I--ENERGY TAX INCENTIVES

                Subtitle A--Energy Production Incentives

                  PART I--RENEWABLE ENERGY INCENTIVES

     SEC. 101. RENEWABLE ENERGY CREDIT.

       (a) Extension of Credit.--
       (1) 1-year extension for wind facilities.--Paragraph (1) of 
     section 45(d) is amended by striking ``January 1, 2009'' and 
     inserting ``January 1, 2010''.
       (2) 3-year extension for certain other facilities.--Each of 
     the following provisions of section 45(d) is amended by 
     striking ``January 1, 2009'' and inserting ``January 1, 
     2012'':
       (A) Clauses (i) and (ii) of paragraph (2)(A).
       (B) Clauses (i)(I) and (ii) of paragraph (3)(A).
       (C) Paragraph (4).
       (D) Paragraph (5).
       (E) Paragraph (6).
       (F) Paragraph (7).
       (G) Subparagraphs (A) and (B) of paragraph (9).
       (b) Modification of Credit Phaseout.--
       (1) Repeal of phaseout.--Subsection (b) of section 45 is 
     amended--
       (A) by striking paragraph (1), and
       (B) by striking ``the 8 cent amount in paragraph (1),'' in 
     paragraph (2) thereof.
       (2) Limitation based on investment in facility.--Subsection 
     (b) of section 45 is amended by inserting before paragraph 
     (2) the following new paragraph:
       ``(1) Limitation based on investment in facility.--
       ``(A) In general.--In the case of any qualified facility 
     originally placed in service after December 31, 2009, the 
     amount of the credit determined under subsection (a) for any 
     taxable year with respect to electricity produced at such 
     facility shall not exceed the product of--
       ``(i) the applicable percentage with respect to such 
     facility, multiplied by
       ``(ii) the eligible basis of such facility.
       ``(B) Carryforward of unused limitation and excess 
     credit.--
       ``(i) Unused limitation.--If the limitation imposed under 
     subparagraph (A) with respect to any facility for any taxable 
     year exceeds the prelimitation credit for such facility for 
     such taxable year, the limitation imposed under subparagraph 
     (A) with respect to such facility for the succeeding taxable 
     year shall be increased by the amount of such excess.
       ``(ii) Excess credit.--If the prelimitation credit with 
     respect to any facility for any taxable year exceeds the 
     limitation imposed under subparagraph (A) with respect to 
     such facility for such taxable year, the credit determined 
     under subsection (a) with respect to such facility for the 
     succeeding taxable year (determined before the application of 
     subparagraph (A) for such succeeding taxable year) shall be 
     increased by the amount of such excess. With respect to any 
     facility, no amount may be carried forward under this clause 
     to any taxable year beginning after the 10-year period 
     described in subsection (a)(2)(A)(ii) with respect to such 
     facility.
       ``(iii) Prelimitation credit.--The term `prelimitation 
     credit' with respect to any facility for a taxable year means 
     the credit determined under subsection (a) with respect to 
     such facility for such taxable year, determined without 
     regard to subparagraph (A) and after taking into account any 
     increase for such taxable year under clause (ii).
       ``(C) Applicable percentage.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `applicable percentage' means, 
     with respect to any facility, the appropriate percentage 
     prescribed by the Secretary for the month in which such 
     facility is originally placed in service.
       ``(ii) Method of prescribing applicable percentages.--The 
     applicable percentages prescribed by the Secretary for any 
     month under clause (i) shall be percentages which yield over 
     a 10-year period amounts of limitation under subparagraph (A) 
     which have a present value equal to 35 percent of the 
     eligible basis of the facility.
       ``(iii) Method of discounting.--The present value under 
     clause (ii) shall be determined--

       ``(I) as of the last day of the 1st year of the 10-year 
     period referred to in clause (ii),
       ``(II) by using a discount rate equal to the greater of 110 
     percent of the Federal long-term rate as in effect under 
     section 1274(d) for the month preceding the month for which 
     the applicable percentage is being prescribed, or 4.5 
     percent, and
       ``(III) by taking into account the limitation under 
     subparagraph (A) for any year on the last day of such year.

       ``(D) Eligible basis.--For purposes of this paragraph--
       ``(i) In general.--The term `eligible basis' means, with 
     respect to any facility, the sum of--

       ``(I) the basis of such facility determined as of the time 
     that such facility is originally placed in service, and
       ``(II) the portion of the basis of any shared qualified 
     property which is properly allocable to such facility under 
     clause (ii).

       ``(ii) Rules for allocation.--For purposes of subclause 
     (II) of clause (i), the basis of shared qualified property 
     shall be allocated among all qualified facilities which are 
     projected to be placed in service and which require 
     utilization of such property in proportion to projected 
     generation from such facilities.
       ``(iii) Shared qualified property.--For purposes of this 
     paragraph, the term `shared

[[Page 10224]]

     qualified property' means, with respect to any facility, any 
     property described in section 168(e)(3)(B)(vi)--

       ``(I) which a qualified facility will require for 
     utilization of such facility, and
       ``(II) which is not a qualified facility.

       ``(iv) Special rule relating to geothermal facilities.--In 
     the case of any qualified facility using geothermal energy to 
     produce electricity, the basis of such facility for purposes 
     of this paragraph shall be determined as though intangible 
     drilling and development costs described in section 263(c) 
     were capitalized rather than expensed.
       ``(E) Special rule for first and last year of credit 
     period.--In the case of any taxable year any portion of which 
     is not within the 10-year period described in subsection 
     (a)(2)(A)(ii) with respect to any facility, the amount of the 
     limitation under subparagraph (A) with respect to such 
     facility shall be reduced by an amount which bears the same 
     ratio to the amount of such limitation (determined without 
     regard to this subparagraph) as such portion of the taxable 
     year which is not within such period bears to the entire 
     taxable year.
       ``(F) Election to treat all facilities placed in service in 
     a year as 1 facility.--At the election of the taxpayer, all 
     qualified facilities which are part of the same project and 
     which are placed in service during the same calendar year 
     shall be treated for purposes of this section as 1 facility 
     which is placed in service at the mid-point of such year or 
     the first day of the following calendar year.''.
       (c) Trash Facility Clarification.--Paragraph (7) of section 
     45(d) is amended--
       (1) by striking ``facility which burns'' and inserting 
     ``facility (other than a facility described in paragraph (6)) 
     which uses'', and
       (2) by striking ``combustion''.
       (d) Expansion of Biomass Facilities.--
       (1) Open-loop biomass facilities.--Paragraph (3) of section 
     45(d) is amended by redesignating subparagraph (B) as 
     subparagraph (C) and by inserting after subparagraph (A) the 
     following new subparagraph:
       ``(B) Expansion of facility.--Such term shall include a new 
     unit placed in service after the date of the enactment of 
     this subparagraph in connection with a facility described in 
     subparagraph (A), but only to the extent of the increased 
     amount of electricity produced at the facility by reason of 
     such new unit.''.
       (2) Closed-loop biomass facilities.--Paragraph (2) of 
     section 45(d) is amended by redesignating subparagraph (B) as 
     subparagraph (C) and inserting after subparagraph (A) the 
     following new subparagraph:
       ``(B) Expansion of facility.--Such term shall include a new 
     unit placed in service after the date of the enactment of 
     this subparagraph in connection with a facility described in 
     subparagraph (A)(i), but only to the extent of the increased 
     amount of electricity produced at the facility by reason of 
     such new unit.''.
       (e) Sales of Net Electricity to Regulated Public Utilities 
     Treated as Sales to Unrelated Persons.--Paragraph (4) of 
     section 45(e) is amended by adding at the end the following 
     new sentence: ``The net amount of electricity sold by any 
     taxpayer to a regulated public utility (as defined in section 
     7701(a)(33)) shall be treated as sold to an unrelated 
     person.''.
       (f) Modification of Rules for Hydropower Production.--
     Subparagraph (C) of section 45(c)(8) is amended to read as 
     follows:
       ``(C) Nonhydroelectric dam.--For purposes of subparagraph 
     (A), a facility is described in this subparagraph if--
       ``(i) the hydroelectric project installed on the 
     nonhydroelectric dam is licensed by the Federal Energy 
     Regulatory Commission and meets all other applicable 
     environmental, licensing, and regulatory requirements,
       ``(ii) the nonhydroelectric dam was placed in service 
     before the date of the enactment of this paragraph and 
     operated for flood control, navigation, or water supply 
     purposes and did not produce hydroelectric power on the date 
     of the enactment of this paragraph, and
       ``(iii) the hydroelectric project is operated so that the 
     water surface elevation at any given location and time that 
     would have occurred in the absence of the hydroelectric 
     project is maintained, subject to any license requirements 
     imposed under applicable law that change the water surface 
     elevation for the purpose of improving environmental quality 
     of the affected waterway.

     The Secretary, in consultation with the Federal Energy 
     Regulatory Commission, shall certify if a hydroelectric 
     project licensed at a nonhydroelectric dam meets the criteria 
     in clause (iii). Nothing in this section shall affect the 
     standards under which the Federal Energy Regulatory 
     Commission issues licenses for and regulates hydropower 
     projects under part I of the Federal Power Act.''.
       (g) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to property originally placed in service after December 31, 
     2008.
       (2) Repeal of credit phaseout.--The amendments made by 
     subsection (b)(1) shall apply to taxable years ending after 
     December 31, 2008.
       (3) Limitation based on investment in facility.--The 
     amendment made by subsection (b)(2) shall apply to property 
     originally placed in service after December 31, 2009.
       (4) Trash facility clarification; sales to related 
     regulated public utilities.--The amendments made by 
     subsections (c) and (e) shall apply to electricity produced 
     and sold after the date of the enactment of this Act.
       (5) Expansion of biomass facilities.--The amendments made 
     by subsection (d) shall apply to property placed in service 
     after the date of the enactment of this Act.

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

       (a) In General.--Paragraph (1) of section 45(c) is amended 
     by striking ``and'' at the end of subparagraph (G), by 
     striking the period at the end of subparagraph (H) and 
     inserting ``, and'', and by adding at the end the following 
     new subparagraph:
       ``(I) marine and hydrokinetic renewable energy.''.
       (b) Marine Renewables.--Subsection (c) of section 45 is 
     amended by adding at the end the following new paragraph:
       ``(10) Marine and hydrokinetic renewable energy.--
       ``(A) In general.--The term `marine and hydrokinetic 
     renewable energy' means energy derived from--
       ``(i) waves, tides, and currents in oceans, estuaries, and 
     tidal areas,
       ``(ii) free flowing water in rivers, lakes, and streams,
       ``(iii) free flowing water in an irrigation system, canal, 
     or other man-made channel, including projects that utilize 
     nonmechanical structures to accelerate the flow of water for 
     electric power production purposes, or
       ``(iv) differentials in ocean temperature (ocean thermal 
     energy conversion).
       ``(B) Exceptions.--Such term shall not include any energy 
     which is derived from any source which utilizes a dam, 
     diversionary structure (except as provided in subparagraph 
     (A)(iii)), or impoundment for electric power production 
     purposes.''.
       (c) Definition of Facility.--Subsection (d) of section 45 
     is amended by adding at the end the following new paragraph:
       ``(11) Marine and hydrokinetic renewable energy 
     facilities.--In the case of a facility producing electricity 
     from marine and hydrokinetic renewable energy, the term 
     `qualified facility' means any facility owned by the 
     taxpayer--
       ``(A) which has a nameplate capacity rating of at least 150 
     kilowatts, and
       ``(B) which is originally placed in service on or after the 
     date of the enactment of this paragraph and before January 1, 
     2012.''.
       (d) Credit Rate.--Subparagraph (A) of section 45(b)(4) is 
     amended by striking ``or (9)'' and inserting ``(9), or 
     (11)''.
       (e) Coordination With Small Irrigation Power.--Paragraph 
     (5) of section 45(d), as amended by section 101, is amended 
     by striking ``January 1, 2012'' and inserting ``the date of 
     the enactment of paragraph (11)''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to electricity produced and sold after the date 
     of the enactment of this Act, in taxable years ending after 
     such date.

     SEC. 103. ENERGY CREDIT.

       (a) Extension of Credit.--
       (1) Solar energy property.--Paragraphs (2)(A)(i)(II) and 
     (3)(A)(ii) of section 48(a) are each amended by striking 
     ``January 1, 2009'' and inserting ``January 1, 2015''.
       (2) Fuel cell property.--Subparagraph (E) of section 
     48(c)(1) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2014''.
       (3) Microturbine property.--Subparagraph (E) of section 
     48(c)(2) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2014''.
       (b) Allowance of Energy Credit Against Alternative Minimum 
     Tax.--Subparagraph (B) of section 38(c)(4) is amended by 
     striking ``and'' at the end of clause (iii), by redesignating 
     clause (iv) as clause (v), and by inserting after clause 
     (iii) the following new clause:
       ``(iv) the credit determined under section 46 to the extent 
     that such credit is attributable to the energy credit 
     determined under section 48, and''.
       (c) Energy Credit for Combined Heat and Power System 
     Property.--
       (1) In general.--Section 48(a)(3)(A) (defining energy 
     property) is amended by striking ``or'' at the end of clause 
     (iii), by inserting ``or'' at the end of clause (iv), and by 
     adding at the end the following new clause:
       ``(v) combined heat and power system property,''.
       (2) Combined heat and power system property.--Section 48 is 
     amended by adding at the end the following new subsection:
       ``(d) Combined Heat and Power System Property.--For 
     purposes of subsection (a)(3)(A)(v)--
       ``(1) Combined heat and power system property.--The term 
     `combined heat and power system property' means property 
     comprising a system--
       ``(A) which uses the same energy source for the 
     simultaneous or sequential generation of electrical power, 
     mechanical shaft power, or both, in combination with the 
     generation of steam or other forms of useful thermal energy 
     (including heating and cooling applications),

[[Page 10225]]

       ``(B) which produces--
       ``(i) at least 20 percent of its total useful energy in the 
     form of thermal energy which is not used to produce 
     electrical or mechanical power (or combination thereof), and
       ``(ii) at least 20 percent of its total useful energy in 
     the form of electrical or mechanical power (or combination 
     thereof),
       ``(C) the energy efficiency percentage of which exceeds 60 
     percent, and
       ``(D) which is placed in service before January 1, 2015.
       ``(2) Limitation.--
       ``(A) In general.--In the case of combined heat and power 
     system property with an electrical capacity in excess of the 
     applicable capacity placed in service during the taxable 
     year, the credit under subsection (a)(1) (determined without 
     regard to this paragraph) for such year shall be equal to the 
     amount which bears the same ratio to such credit as the 
     applicable capacity bears to the capacity of such property.
       ``(B) Applicable capacity.--For purposes of subparagraph 
     (A), the term `applicable capacity' means 15 megawatts or a 
     mechanical energy capacity of more than 20,000 horsepower or 
     an equivalent combination of electrical and mechanical energy 
     capacities.
       ``(C) Maximum capacity.--The term `combined heat and power 
     system property' shall not include any property comprising a 
     system if such system has a capacity in excess of 50 
     megawatts or a mechanical energy capacity in excess of 67,000 
     horsepower or an equivalent combination of electrical and 
     mechanical energy capacities.
       ``(3) Special rules.--
       ``(A) Energy efficiency percentage.--For purposes of this 
     subsection, the energy efficiency percentage of a system is 
     the fraction--
       ``(i) the numerator of which is the total useful 
     electrical, thermal, and mechanical power produced by the 
     system at normal operating rates, and expected to be consumed 
     in its normal application, and
       ``(ii) the denominator of which is the lower heating value 
     of the fuel sources for the system.
       ``(B) Determinations made on btu basis.--The energy 
     efficiency percentage and the percentages under paragraph 
     (1)(B) shall be determined on a Btu basis.
       ``(C) Input and output property not included.--The term 
     `combined heat and power system property' does not include 
     property used to transport the energy source to the facility 
     or to distribute energy produced by the facility.
       ``(4) Systems using biomass.--If a system is designed to 
     use biomass (within the meaning of paragraphs (2) and (3) of 
     section 45(c) without regard to the last sentence of 
     paragraph (3)(A)) for at least 90 percent of the energy 
     source--
       ``(A) paragraph (1)(C) shall not apply, but
       ``(B) the amount of credit determined under subsection (a) 
     with respect to such system shall not exceed the amount which 
     bears the same ratio to such amount of credit (determined 
     without regard to this paragraph) as the energy efficiency 
     percentage of such system bears to 60 percent.''.
       (d) Increase of Credit Limitation for Fuel Cell Property.--
     Subparagraph (B) of section 48(c)(1) is amended by striking 
     ``$500'' and inserting ``$1,500''.
       (e) Public Utility Property Taken Into Account.--
       (1) In general.--Paragraph (3) of section 48(a) is amended 
     by striking the second sentence thereof.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 48(c) is amended by striking 
     subparagraph (D) and redesignating subparagraph (E) as 
     subparagraph (D).
       (B) Paragraph (2) of section 48(c) is amended by striking 
     subparagraph (D) and redesignating subparagraph (E) as 
     subparagraph (D).
       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall take 
     effect on the date of the enactment of this Act.
       (2) Allowance against alternative minimum tax.--The 
     amendments made by subsection (b) shall apply to credits 
     determined under section 46 of the Internal Revenue Code of 
     1986 in taxable years beginning after the date of the 
     enactment of this Act and to carrybacks of such credits.
       (3) Combined heat and power and fuel cell property.--The 
     amendments made by subsections (c) and (d) shall apply to 
     periods after the date of the enactment of this Act, in 
     taxable years ending after such date, under rules similar to 
     the rules of section 48(m) of the Internal Revenue Code of 
     1986 (as in effect on the day before the date of the 
     enactment of the Revenue Reconciliation Act of 1990).
       (4)  Public utility property.--The amendments made by 
     subsection (e) shall apply to periods after February 13, 
     2008, in taxable years ending after such date, under rules 
     similar to the rules of section 48(m) of the Internal Revenue 
     Code of 1986 (as in effect on the day before the date of the 
     enactment of the Revenue Reconciliation Act of 1990).

     SEC. 104. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

       (a) Extension.--Section 25D(g) is amended by striking 
     ``December 31, 2008'' and inserting ``December 31, 2014''.
       (b) Maximum Credit for Solar Electric Property.--
       (1) In general.--Section 25D(b)(1)(A) is amended by 
     striking ``$2,000'' and inserting ``$4,000''.
       (2) Conforming amendment.--Section 25D(e)(4)(A)(i) is 
     amended by striking ``$6,667'' and inserting ``$13,333''.
       (c) Credit for Residential Wind Property.--
       (1) In general.--Section 25D(a) is amended by striking 
     ``and'' at the end of paragraph (2), by striking the period 
     at the end of paragraph (3) and inserting ``, and'', and by 
     adding at the end the following new paragraph:
       ``(4) 30 percent of the qualified small wind energy 
     property expenditures made by the taxpayer during such 
     year.''.
       (2) Limitation.--Section 25D(b)(1) is amended by striking 
     ``and'' at the end of subparagraph (B), by striking the 
     period at the end of subparagraph (C) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(D) $500 with respect to each half kilowatt of capacity 
     (not to exceed $4,000) of wind turbines for which qualified 
     small wind energy property expenditures are made.''.
       (3) Qualified small wind energy property expenditures.--
       (A) In general.--Section 25D(d) is amended by adding at the 
     end the following new paragraph:
       ``(4) Qualified small wind energy property expenditure.--
     The term `qualified small wind energy property expenditure' 
     means an expenditure for property which uses a wind turbine 
     to generate electricity for use in connection with a dwelling 
     unit located in the United States and used as a residence by 
     the taxpayer.''.
       (B) No double benefit.--Section 45(d)(1) is amended by 
     adding at the end the following new sentence: ``Such term 
     shall not include any facility with respect to which any 
     qualified small wind energy property expenditure (as defined 
     in subsection (d)(4) of section 25D) is taken into account in 
     determining the credit under such section.''.
       (4) Maximum expenditures in case of joint occupancy.--
     Section 25D(e)(4)(A) is amended by striking ``and'' at the 
     end of clause (ii), by striking the period at the end of 
     clause (iii) and inserting ``, and'', and by adding at the 
     end the following new clause:
       ``(iv) $1,667 in the case of each half kilowatt of capacity 
     (not to exceed $13,333) of wind turbines for which qualified 
     small wind energy property expenditures are made.''.
       (d) Credit for Geothermal Heat pump Systems.--
       (1) In general.--Section 25D(a), as amended by subsection 
     (c), is amended by striking ``and'' at the end of paragraph 
     (3), by striking the period at the end of paragraph (4) and 
     inserting ``, and'', and by adding at the end the following 
     new paragraph:
       ``(5) 30 percent of the qualified geothermal heat pump 
     property expenditures made by the taxpayer during such 
     year.''.
       (2) Limitation.--Section 25D(b)(1), as amended by 
     subsection (c), is amended by striking ``and'' at the end of 
     subparagraph (C), by striking the period at the end of 
     subparagraph (D) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(E) $2,000 with respect to any qualified geothermal heat 
     pump property expenditures.''.
       (3) Qualified geothermal heat pump property expenditure.--
     Section 25D(d), as amended by subsection (c), is amended by 
     adding at the end the following new paragraph:
       ``(5) Qualified geothermal heat pump property 
     expenditure.--
       ``(A) In general.--The term `qualified geothermal heat pump 
     property expenditure' means an expenditure for qualified 
     geothermal heat pump property installed on or in connection 
     with a dwelling unit located in the United States and used as 
     a residence by the taxpayer.
       ``(B) Qualified geothermal heat pump property.--The term 
     `qualified geothermal heat pump property' means any equipment 
     which--
       ``(i) uses the ground or ground water as a thermal energy 
     source to heat the dwelling unit referred to in subparagraph 
     (A) or as a thermal energy sink to cool such dwelling unit, 
     and
       ``(ii) meets the requirements of the Energy Star program 
     which are in effect at the time that the expenditure for such 
     equipment is made.''.
       (4) Maximum expenditures in case of joint occupancy.--
     Section 25D(e)(4)(A), as amended by subsection (c), is 
     amended by striking ``and'' at the end of clause (iii), by 
     striking the period at the end of clause (iv) and inserting 
     ``, and'', and by adding at the end the following new clause:
       ``(v) $6,667 in the case of any qualified geothermal heat 
     pump property expenditures.''.
       (e) Credit Allowed Against Alternative Minimum Tax.--
       (1) In general.--Subsection (c) of section 25D is amended 
     to read as follows:
       ``(c) Limitation Based on Amount of Tax; Carryforward of 
     Unused Credit.--
       ``(1) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed

[[Page 10226]]

     under subsection (a) for the taxable year shall not exceed 
     the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section) and section 27 for the taxable 
     year.
       ``(2) Carryforward of unused credit.--
       ``(A) Rule for years in which all personal credits allowed 
     against regular and alternative minimum tax.--In the case of 
     a taxable year to which section 26(a)(2) applies, if the 
     credit allowable under subsection (a) exceeds the limitation 
     imposed by section 26(a)(2) for such taxable year reduced by 
     the sum of the credits allowable under this subpart (other 
     than this section), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such succeeding taxable year.
       ``(B) Rule for other years.--In the case of a taxable year 
     to which section 26(a)(2) does not apply, if the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such succeeding 
     taxable year.''.
       (2) Conforming amendments.--
       (A) Section 23(b)(4)(B) is amended by inserting ``and 
     section 25D'' after ``this section''.
       (B) Section 24(b)(3)(B) is amended by striking ``and 25B'' 
     and inserting ``, 25B, and 25D''.
       (C) Section 25B(g)(2) is amended by striking ``section 23'' 
     and inserting ``sections 23 and 25D''.
       (D) Section 26(a)(1) is amended by striking ``and 25B'' and 
     inserting ``25B, and 25D''.
       (f) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years beginning after December 31, 2007.
       (2) Application of egtrra sunset.--The amendments made by 
     subparagraphs (A) and (B) of subsection (e)(2) shall be 
     subject to title IX of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 in the same manner as the 
     provisions of such Act to which such amendments relate.

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

       (a) Extension for Qualified Electric Utilities.--
       (1) In general.--Paragraph (3) of section 451(i) is amended 
     by inserting ``(before January 1, 2010, in the case of a 
     qualified electric utility)'' after ``January 1, 2008''.
       (2) Qualified electric utility.--Subsection (i) of section 
     451 is amended by redesignating paragraphs (6) through (10) 
     as paragraphs (7) through (11), respectively, and by 
     inserting after paragraph (5) the following new paragraph:
       ``(6) Qualified electric utility.--For purposes of this 
     subsection, the term `qualified electric utility' means a 
     person that, as of the date of the qualifying electric 
     transmission transaction, is vertically integrated, in that 
     it is both--
       ``(A) a transmitting utility (as defined in section 3(23) 
     of the Federal Power Act (16 U.S.C. 796(23))) with respect to 
     the transmission facilities to which the election under this 
     subsection applies, and
       ``(B) an electric utility (as defined in section 3(22) of 
     the Federal Power Act (16 U.S.C. 796(22))).''.
       (b) Extension of Period for Transfer of Operational Control 
     Authorized by FERC.--Clause (ii) of section 451(i)(4)(B) is 
     amended by striking ``December 31, 2007'' and inserting ``the 
     date which is 4 years after the close of the taxable year in 
     which the transaction occurs''.
       (c) Property Located Outside the United States Not Treated 
     as Exempt Utility Property.--Paragraph (5) of section 451(i) 
     is amended by adding at the end the following new 
     subparagraph:
       ``(C) Exception for property located outside the united 
     states.--The term `exempt utility property' shall not include 
     any property which is located outside the United States.''.
       (d) Effective Dates.--
       (1) Extension.--The amendments made by subsection (a) shall 
     apply to transactions after December 31, 2007.
       (2) Transfers of operational control.--The amendment made 
     by subsection (b) shall take effect as if included in section 
     909 of the American Jobs Creation Act of 2004.
       (3) Exception for property located outside the united 
     states.--The amendment made by subsection (c) shall apply to 
     transactions after the date of the enactment of this Act.

     SEC. 106. NEW CLEAN RENEWABLE ENERGY BONDS.

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

                ``Subpart I--Qualified Tax Credit Bonds

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

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

       ``(a) Allowance of Credit.--If a taxpayer holds a qualified 
     tax credit bond on one or more credit allowance dates of the 
     bond during any taxable year, there shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of the credits 
     determined under subsection (b) with respect to such dates.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a qualified tax credit bond is 25 percent of the 
     annual credit determined with respect to such bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any qualified tax credit bond is the product of--
       ``(A) the applicable credit rate, multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Applicable credit rate.--For purposes of paragraph 
     (2), the applicable credit rate is the rate which the 
     Secretary estimates will permit the issuance of qualified tax 
     credit bonds with a specified maturity or redemption date 
     without discount and without interest cost to the qualified 
     issuer. The applicable credit rate with respect to any 
     qualified tax credit bond shall be determined as of the first 
     day on which there is a binding, written contract for the 
     sale or exchange of the bond.
       ``(4) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed or matures.
       ``(c) Limitation Based on Amount of Tax.--
       ``(1) In general.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this part 
     (other than subpart C and this subpart).
       ``(2) Carryover of unused credit.--If the credit allowable 
     under subsection (a) exceeds the limitation imposed by 
     paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such taxable year 
     (determined before the application of paragraph (1) for such 
     succeeding taxable year).
       ``(d) Qualified Tax Credit Bond.--For purposes of this 
     section--
       ``(1) Qualified tax credit bond.--The term `qualified tax 
     credit bond' means a new clean renewable energy bond which is 
     part of an issue that meets the requirements of paragraphs 
     (2), (3), (4), (5), and (6).
       ``(2) Special rules relating to expenditures.--
       ``(A) In general.--An issue shall be treated as meeting the 
     requirements of this paragraph if, as of the date of 
     issuance, the issuer reasonably expects--
       ``(i) 100 percent or more of the available project proceeds 
     to be spent for 1 or more qualified purposes within the 3-
     year period beginning on such date of issuance, and
       ``(ii) a binding commitment with a third party to spend at 
     least 10 percent of such available project proceeds will be 
     incurred within the 6-month period beginning on such date of 
     issuance.
       ``(B) Failure to spend required amount of bond proceeds 
     within 3 years.--
       ``(i) In general.--To the extent that less than 100 percent 
     of the available project proceeds of the issue are expended 
     by the close 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--

[[Page 10227]]

       ``(i) prior to the payment of the original expenditure, the 
     issuer declared its intent to reimburse such expenditure with 
     the proceeds of a qualified tax credit bond,
       ``(ii) not later than 60 days after payment of the original 
     expenditure, the issuer adopts an official intent to 
     reimburse the original expenditure with such proceeds, and
       ``(iii) the reimbursement is made not later than 18 months 
     after the date the original expenditure is paid.
       ``(3) Reporting.--An issue shall be treated as meeting the 
     requirements of this paragraph if the issuer of qualified tax 
     credit bonds submits reports similar to the reports required 
     under section 149(e).
       ``(4) Special rules relating to arbitrage.--
       ``(A) In general.--An issue shall be treated as meeting the 
     requirements of this paragraph if the issuer satisfies the 
     requirements of section 148 with respect to the proceeds of 
     the issue.
       ``(B) Special rule for investments during expenditure 
     period.--An issue shall not be treated as failing to meet the 
     requirements of subparagraph (A) by reason of any investment 
     of available project proceeds during the expenditure period.
       ``(C) Special rule for reserve funds.--An issue shall not 
     be treated as failing to meet the requirements of 
     subparagraph (A) by reason of any fund which is expected to 
     be used to repay such issue if--
       ``(i) such fund is funded at a rate not more rapid than 
     equal annual installments,
       ``(ii) such fund is funded in a manner reasonably expected 
     to result in an amount not greater than an amount necessary 
     to repay the issue, and
       ``(iii) the yield on such fund is not greater than the 
     discount rate determined under paragraph (5)(B) with respect 
     to the issue.
       ``(5) Maturity limitation.--
       ``(A) In general.--An issue shall not be treated as meeting 
     the requirements of this paragraph if the maturity of any 
     bond which is part of such issue exceeds the maximum term 
     determined by the Secretary under subparagraph (B).
       ``(B) Maximum term.--During each calendar month, the 
     Secretary shall determine the maximum term permitted under 
     this paragraph for bonds issued during the following calendar 
     month. Such maximum term shall be the term which the 
     Secretary estimates will result in the present value of the 
     obligation to repay the principal on the bond being equal to 
     50 percent of the face amount of such bond. Such present 
     value shall be determined using as a discount rate the 
     average annual interest rate of tax-exempt obligations having 
     a term of 10 years or more which are issued during the month. 
     If the term as so determined is not a multiple of a whole 
     year, such term shall be rounded to the next highest whole 
     year.
       ``(6) Prohibition on financial conflicts of interest.--An 
     issue shall be treated as meeting the requirements of this 
     paragraph if the issuer certifies that--
       ``(A) applicable State and local law requirements governing 
     conflicts of interest are satisfied with respect to such 
     issue, and
       ``(B) if the Secretary prescribes additional conflicts of 
     interest rules governing the appropriate Members of Congress, 
     Federal, State, and local officials, and their spouses, such 
     additional rules are satisfied with respect to such issue.
       ``(e) Other Definitions.--For purposes of this subchapter--
       ``(1) Credit allowance date.--The term `credit allowance 
     date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
     Such term includes the last day on which the bond is 
     outstanding.
       ``(2) Bond.--The term `bond' includes any obligation.
       ``(3) State.--The term `State' includes the District of 
     Columbia and any possession of the United States.
       ``(4) Available project proceeds.--The term `available 
     project proceeds' means--
       ``(A) the excess of--
       ``(i) the proceeds from the sale of an issue, over
       ``(ii) the issuance costs financed by the issue (to the 
     extent that such costs do not exceed 2 percent of such 
     proceeds), and
       ``(B) the proceeds from any investment of the excess 
     described in subparagraph (A).
       ``(f) Credit Treated as Interest.--For purposes of this 
     subtitle, the credit determined under subsection (a) shall be 
     treated as interest which is includible in gross income.
       ``(g) S Corporations and Partnerships.--In the case of a 
     tax credit bond held by an S corporation or partnership, the 
     allocation of the credit allowed by this section to the 
     shareholders of such corporation or partners of such 
     partnership shall be treated as a distribution.
       ``(h) Bonds Held by Regulated Investment Companies and Real 
     Estate Investment Trusts.--If any qualified tax credit bond 
     is held by a regulated investment company or a real estate 
     investment trust, the credit determined under subsection (a) 
     shall be allowed to shareholders of such company or 
     beneficiaries of such trust (and any gross income included 
     under subsection (f) with respect to such credit shall be 
     treated as distributed to such shareholders or beneficiaries) 
     under procedures prescribed by the Secretary.
       ``(i) Credits May Be Stripped.--Under regulations 
     prescribed by the Secretary--
       ``(1) In general.--There may be a separation (including at 
     issuance) of the ownership of a qualified tax credit bond and 
     the entitlement to the credit under this section with respect 
     to such bond. In case of any such separation, the credit 
     under this section shall be allowed to the person who on the 
     credit allowance date holds the instrument evidencing the 
     entitlement to the credit and not to the holder of the bond.
       ``(2) Certain rules to apply.--In the case of a separation 
     described in paragraph (1), the rules of section 1286 shall 
     apply to the qualified tax credit bond as if it were a 
     stripped bond and to the credit under this section as if it 
     were a stripped coupon.

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

       ``(a) New Clean Renewable Energy Bond.--For purposes of 
     this subpart, the term `new clean renewable energy bond' 
     means any bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for capital expenditures incurred by 
     public power providers or cooperative electric companies for 
     one or more qualified renewable energy facilities,
       ``(2) the bond is issued by a qualified issuer, and
       ``(3) the issuer designates such bond for purposes of this 
     section.
       ``(b) Reduced Credit Amount.--The annual credit determined 
     under section 54A(b) with respect to any new clean renewable 
     energy bond shall be 70 percent of the amount so determined 
     without regard to this subsection.
       ``(c) Limitation on Amount of Bonds Designated.--
       ``(1) In general.--The maximum aggregate face amount of 
     bonds which may be designated under subsection (a) by any 
     issuer shall not exceed the limitation amount allocated under 
     this subsection to such issuer.
       ``(2) National limitation on amount of bonds designated.--
     There is a national new clean renewable energy bond 
     limitation of $2,000,000,000 which shall be allocated by the 
     Secretary as provided in paragraph (3), except that--
       ``(A) not more than 33\1/3\ percent thereof may be 
     allocated to qualified projects of public power providers,
       ``(B) not more than 33\1/3\ percent thereof may be 
     allocated to qualified projects of governmental bodies, and
       ``(C) not more than 33\1/3\ percent thereof may be 
     allocated to qualified projects of cooperative electric 
     companies.
       ``(3) Method of allocation.--
       ``(A) Allocation among public power providers.--After the 
     Secretary determines the qualified projects of public power 
     providers which are appropriate for receiving an allocation 
     of the national new clean renewable energy bond limitation, 
     the Secretary shall, to the maximum extent practicable, make 
     allocations among such projects in such manner that the 
     amount allocated to each such project bears the same ratio to 
     the cost of such project as the limitation under paragraph 
     (2)(A) bears to the cost of all such projects.
       ``(B) Allocation among governmental bodies and cooperative 
     electric companies.--The Secretary shall make allocations of 
     the amount of the national new clean renewable energy bond 
     limitation described in paragraphs (2)(B) and (2)(C) among 
     qualified projects of governmental bodies and cooperative 
     electric companies, respectively, in such manner as the 
     Secretary determines appropriate.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified renewable energy facility.--The term 
     `qualified renewable energy facility' means a qualified 
     facility (as determined under section 45(d) without regard to 
     paragraphs (8) and (10) thereof and to any placed in service 
     date) owned by a public power provider, a governmental body, 
     or a cooperative electric company.
       ``(2) Public power provider.--The term `public power 
     provider' means a State utility with a service obligation, as 
     such terms are defined in section 217 of the Federal Power 
     Act (as in effect on the date of the enactment of this 
     paragraph).
       ``(3) Governmental body.--The term `governmental body' 
     means any State or Indian tribal government, or any political 
     subdivision thereof.
       ``(4) Cooperative electric company.--The term `cooperative 
     electric company' means a mutual or cooperative electric 
     company described in section 501(c)(12) or section 
     1381(a)(2)(C).
       ``(5) Clean renewable energy bond lender.--The term `clean 
     renewable energy bond lender' means a lender which is a 
     cooperative which is owned by, or has outstanding loans to, 
     100 or more cooperative electric companies and is in 
     existence on February 1, 2002, and shall include any 
     affiliated entity which is controlled by such lender.
       ``(6) Qualified issuer.--The term `qualified issuer' means 
     a public power provider, a cooperative electric company, a 
     governmental body, a clean renewable energy bond

[[Page 10228]]

     lender, or a not-for-profit electric utility which has 
     received a loan or loan guarantee under the Rural 
     Electrification Act.''.
       (b) Reporting.--Subsection (d) of section 6049 is amended 
     by adding at the end the following new paragraph:
       ``(9) Reporting of credit on qualified tax credit bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 54A and such amounts shall be treated as paid on the 
     credit allowance date (as defined in section 54A(e)(1)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A) of this paragraph, subsection 
     (b)(4) of this section shall be applied without regard to 
     subparagraphs (A), (H), (I), (J), (K), and (L)(i).
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''.
       (c) Conforming Amendments.--
       (1) Sections 54(c)(2) and 1400N(l)(3)(B) are each amended 
     by striking ``subpart C'' and inserting ``subparts C and I''.
       (2) Section 1397E(c)(2) is amended by striking ``subpart 
     H'' and inserting ``subparts H and I''.
       (3) Section 6401(b)(1) is amended by striking ``and H'' and 
     inserting ``H, and I''.
       (4) The heading of subpart H of part IV of subchapter A of 
     chapter 1 is amended by striking ``Certain Bonds'' and 
     inserting ``Clean Renewable Energy Bonds''.
       (5) The table of subparts for part IV of subchapter A of 
     chapter 1 is amended by striking the item relating to subpart 
     H and inserting the following new items:

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

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

       (d) Application of Certain Labor Standards on Projects 
     Financed Under Tax Credit Bonds.--Subchapter IV of chapter 31 
     of title 40, United States Code, shall apply to projects 
     financed with the proceeds of any tax credit bond (as defined 
     in section 54A of the Internal Revenue Code of 1986).
       (e) Effective Dates.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

                 PART II--CARBON MITIGATION PROVISIONS

     SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT 
                   INVESTMENT CREDIT.

       (a) Modification of Credit Amount.--Section 48A(a) is 
     amended by striking ``and'' at the end of paragraph (1), by 
     striking the period at the end of paragraph (2) and inserting 
     ``, and'', and by adding at the end the following new 
     paragraph:
       ``(3) 30 percent of the qualified investment for such 
     taxable year in the case of projects described in clause 
     (iii) of subsection (d)(3)(B).''.
       (b) Expansion of Aggregate Credits.--Section 48A(d)(3)(A) 
     is amended by striking ``$1,300,000,000'' and inserting 
     ``$2,550,000,000''.
       (c) Authorization of Additional Projects.--
       (1) In general.--Subparagraph (B) of section 48A(d)(3) is 
     amended to read as follows:
       ``(B) Particular projects.--Of the dollar amount in 
     subparagraph (A), the Secretary is authorized to certify--
       ``(i) $800,000,000 for integrated gasification combined 
     cycle projects the application for which is submitted during 
     the period described in paragraph (2)(A)(i),
       ``(ii) $500,000,000 for projects which use other advanced 
     coal-based generation technologies the application for which 
     is submitted during the period described in paragraph 
     (2)(A)(i), and
       ``(iii) $1,250,000,000 for advanced coal-based generation 
     technology projects the application for which is submitted 
     during the period described in paragraph (2)(A)(ii).''.
       (2) Application period for additional projects.--
     Subparagraph (A) of section 48A(d)(2) is amended to read as 
     follows:
       ``(A) Application period.--Each applicant for certification 
     under this paragraph shall submit an application meeting the 
     requirements of subparagraph (B). An applicant may only 
     submit an application--
       ``(i) for an allocation from the dollar amount specified in 
     clause (i) or (ii) of paragraph (3)(B) during the 3-year 
     period beginning on the date the Secretary establishes the 
     program under paragraph (1), and
       ``(ii) for an allocation from the dollar amount specified 
     in paragraph (3)(B)(iii) during the 3-year period beginning 
     at the earlier of the termination of the period described in 
     clause (i) or the date prescribed by the Secretary.''.
       (3) Capture and sequestration of carbon dioxide emissions 
     requirement.--
       (A) In general.--Section 48A(e)(1) is amended by striking 
     ``and'' at the end of subparagraph (E), by striking the 
     period at the end of subparagraph (F) and inserting ``; 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(G) in the case of any project the application for which 
     is submitted during the period described in subsection 
     (d)(2)(A)(ii), the project includes equipment which separates 
     and sequesters at least 65 percent (70 percent in the case of 
     an application for reallocated credits under subsection 
     (d)(4)) of such project's total carbon dioxide emissions.''.
       (B) Highest priority for projects which sequester carbon 
     dioxide emissions.--Section 48A(e)(3) is amended by striking 
     ``and'' at the end of subparagraph (A)(iii), by striking the 
     period at the end of subparagraph (B)(iii) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(C) give highest priority to projects with the greatest 
     separation and sequestration percentage of total carbon 
     dioxide emissions.''.
       (C) Recapture of credit for failure to sequester.--Section 
     48A is amended by adding at the end the following new 
     subsection:
       ``(h) Recapture of Credit for Failure To Sequester.--The 
     Secretary shall provide for recapturing the benefit of any 
     credit allowable under subsection (a) with respect to any 
     project which fails to attain or maintain the separation and 
     sequestration requirements of subsection (e)(1)(G).''.
       (4) Additional priority for research partnerships.--Section 
     48A(e)(3)(B), as amended by paragraph (3)(B), is amended--
       (A) by striking ``and'' at the end of clause (ii),
       (B) by redesignating clause (iii) as clause (iv), and
       (C) by inserting after clause (ii) the following new 
     clause:
       ``(iii) applicant participants who have a research 
     partnership with an eligible educational institution (as 
     defined in section 529(e)(5)), and''.
       (5) Clerical amendment.--Section 48A(e)(3) is amended by 
     striking ``integrated gasification combined cycle'' in the 
     heading and inserting ``certain''.
       (d) Competitive Certification Awards Modification 
     Authority.--Section 48A, as amended by subsection (c)(3), is 
     amended by adding at the end the following new subsection:
       ``(i) Competitive Certification Awards Modification 
     Authority.--In implementing this section or section 48B, the 
     Secretary is directed to modify the terms of any competitive 
     certification award and any associated closing agreement 
     where such modification--
       ``(1) is consistent with the objectives of such section,
       ``(2) is requested by the recipient of the competitive 
     certification award, and
       ``(3) involves moving the project site to improve the 
     potential to capture and sequester carbon dioxide emissions, 
     reduce costs of transporting feedstock, and serve a broader 
     customer base,

     unless the Secretary determines that the dollar amount of tax 
     credits available to the taxpayer under such section would 
     increase as a result of the modification or such modification 
     would result in such project not being originally certified. 
     In considering any such modification, the Secretary shall 
     consult with other relevant Federal agencies, including the 
     Department of Energy.''.
       (e) Disclosure of Allocations.--Section 48A(d) is amended 
     by adding at the end the following new paragraph:
       ``(5) Disclosure of allocations.--The Secretary shall, upon 
     making a certification under this subsection or section 
     48B(d), publicly disclose the identity of the applicant and 
     the amount of the credit certified with respect to such 
     applicant.''.
       (f) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to credits the application for which is submitted during the 
     period described in section 48A(d)(2)(A)(ii) of the Internal 
     Revenue Code of 1986 and which are allocated or reallocated 
     after the date of the enactment of this Act.
       (2) Competitive certification awards modification 
     authority.--The amendment made by subsection (d) shall take 
     effect on the date of the enactment of this Act and is 
     applicable to all competitive certification awards entered 
     into under section 48A or 48B of the Internal Revenue Code of 
     1986, whether such awards were issued before, on, or after 
     such date of enactment.
       (3) Disclosure of allocations.--The amendment made by 
     subsection (e) shall apply to certifications made after the 
     date of the enactment of this Act.
       (4) Clerical amendment.--The amendment made by subsection 
     (c)(5) shall take effect as if included in the amendment made 
     by section 1307(b) of the Energy Tax Incentives Act of 2005.

     SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFICATION 
                   INVESTMENT CREDIT.

       (a) Modification of Credit Amount.--Section 48B(a) is 
     amended by inserting ``(30 percent in the case of credits 
     allocated under subsection (d)(1)(B))'' after ``20 percent''.
       (b) Expansion of Aggregate Credits.--Section 48B(d)(1) is 
     amended by striking ``shall not exceed $350,000,000'' and all 
     that follows and inserting ``shall not exceed--
       ``(A) $350,000,000, plus
       ``(B) $250,000,000 for qualifying gasification projects 
     that include equipment which separates and sequesters at 
     least 75 percent of such project's total carbon dioxide 
     emissions.''.

[[Page 10229]]

       (c) Recapture of Credit for Failure To Sequester.--Section 
     48B is amended by adding at the end the following new 
     subsection:
       ``(f) Recapture of Credit for Failure To Sequester.--The 
     Secretary shall provide for recapturing the benefit of any 
     credit allowable under subsection (a) with respect to any 
     project which fails to attain or maintain the separation and 
     sequestration requirements for such project under subsection 
     (d)(1).''.
       (d) Selection Priorities.--Section 48B(d) is amended by 
     adding at the end the following new paragraph:
       ``(4) Selection priorities.--In determining which 
     qualifying gasification projects to certify under this 
     section, the Secretary shall--
       ``(A) give highest priority to projects with the greatest 
     separation and sequestration percentage of total carbon 
     dioxide emissions, and
       ``(B) give high priority to applicant participants who have 
     a research partnership with an eligible educational 
     institution (as defined in section 529(e)(5)).''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to credits described in section 48B(d)(1)(B) of 
     the Internal Revenue Code of 1986 which are allocated or 
     reallocated after the date of the enactment of this Act.

     SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX.

       Paragraph (2) of section 4121(e) is amended--
       (1) by striking ``January 1, 2014'' in subparagraph (A) and 
     inserting ``December 31, 2018'', and
       (2) by striking ``January 1 after 1981'' in subparagraph 
     (B) and inserting ``December 31 after 2007''.

     SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EXCISE TAX TO 
                   CERTAIN COAL PRODUCERS AND EXPORTERS.

       (a) Refund.--
       (1) Coal producers.--
       (A) In general.--Notwithstanding subsections (a)(1) and (c) 
     of section 6416 and section 6511 of the Internal Revenue Code 
     of 1986, if--
       (i) a coal producer establishes that such coal producer, or 
     a party related to such coal producer, exported coal produced 
     by such coal producer to a foreign country or shipped coal 
     produced by such coal producer to a possession of the United 
     States, or caused such coal to be exported or shipped, the 
     export or shipment of which was other than through an 
     exporter who meets the requirements of paragraph (2),
       (ii) such coal producer filed an excise tax return on or 
     after October 1, 1990, and on or before the date of the 
     enactment of this Act, and
       (iii) such coal producer files a claim for refund with the 
     Secretary not later than the close of the 30-day period 
     beginning on the date of the enactment of this Act,

     then the Secretary shall pay to such coal producer an amount 
     equal to the tax paid under section 4121 of such Code on such 
     coal exported or shipped by the coal producer or a party 
     related to such coal producer, or caused by the coal producer 
     or a party related to such coal producer to be exported or 
     shipped.
       (B) Special rules for certain taxpayers.--For purposes of 
     this section--
       (i) In general.--If a coal producer or a party related to a 
     coal producer has received a judgment described in clause 
     (iii), such coal producer shall be deemed to have established 
     the export of coal to a foreign country or shipment of coal 
     to a possession of the United States under subparagraph 
     (A)(i).
       (ii) Amount of payment.--If a taxpayer described in clause 
     (i) is entitled to a payment under subparagraph (A), the 
     amount of such payment shall be reduced by any amount paid 
     pursuant to the judgment described in clause (iii).
       (iii) Judgment described.--A judgment is described in this 
     subparagraph if such judgment--

       (I) is made by a court of competent jurisdiction within the 
     United States,
       (II) relates to the constitutionality of any tax paid on 
     exported coal under section 4121 of the Internal Revenue Code 
     of 1986, and
       (III) is in favor of the coal producer or the party related 
     to the coal producer.

       (2) Exporters.--Notwithstanding subsections (a)(1) and (c) 
     of section 6416 and section 6511 of the Internal Revenue Code 
     of 1986, and a judgment described in paragraph (1)(B)(iii) of 
     this subsection, if--
       (A) an exporter establishes that such exporter exported 
     coal to a foreign country or shipped coal to a possession of 
     the United States, or caused such coal to be so exported or 
     shipped,
       (B) such exporter filed a tax return on or after October 1, 
     1990, and on or before the date of the enactment of this Act, 
     and
       (C) such exporter files a claim for refund with the 
     Secretary not later than the close of the 30-day period 
     beginning on the date of the enactment of this Act,

     then the Secretary shall pay to such exporter an amount equal 
     to $0.825 per ton of such coal exported by the exporter or 
     caused to be exported or shipped, or caused to be exported or 
     shipped, by the exporter.
       (b) Limitations.--Subsection (a) shall not apply with 
     respect to exported coal if a settlement with the Federal 
     Government has been made with and accepted by, the coal 
     producer, a party related to such coal producer, or the 
     exporter, of such coal, as of the date that the claim is 
     filed under this section with respect to such exported coal. 
     For purposes of this subsection, the term ``settlement with 
     the Federal Government'' shall not include any settlement or 
     stipulation entered into as of the date of the enactment of 
     this Act, the terms of which contemplate a judgment 
     concerning which any party has reserved the right to file an 
     appeal, or has filed an appeal.
       (c) Subsequent Refund Prohibited.--No refund shall be made 
     under this section to the extent that a credit or refund of 
     such tax on such exported or shipped coal has been paid to 
     any person.
       (d) Definitions.--For purposes of this section--
       (1) Coal producer.--The term ``coal producer'' means the 
     person in whom is vested ownership of the coal immediately 
     after the coal is severed from the ground, without regard to 
     the existence of any contractual arrangement for the sale or 
     other disposition of the coal or the payment of any royalties 
     between the producer and third parties. The term includes any 
     person who extracts coal from coal waste refuse piles or from 
     the silt waste product which results from the wet washing (or 
     similar processing) of coal.
       (2) Exporter.--The term ``exporter'' means a person, other 
     than a coal producer, who does not have a contract, fee 
     arrangement, or any other agreement with a producer or seller 
     of such coal to export or ship such coal to a third party on 
     behalf of the producer or seller of such coal and--
       (A) is indicated in the shipper's export declaration or 
     other documentation as the exporter of record, or
       (B) actually exported such coal to a foreign country or 
     shipped such coal to a possession of the United States, or 
     caused such coal to be so exported or shipped.
       (3) Related party.--The term ``a party related to such coal 
     producer'' means a person who--
       (A) is related to such coal producer through any degree of 
     common management, stock ownership, or voting control,
       (B) is related (within the meaning of section 144(a)(3) of 
     the Internal Revenue Code of 1986) to such coal producer, or
       (C) has a contract, fee arrangement, or any other agreement 
     with such coal producer to sell such coal to a third party on 
     behalf of such coal producer.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Treasury or the Secretary's designee.
       (e) Timing of Refund.--With respect to any claim for refund 
     filed pursuant to this section, the Secretary shall determine 
     whether the requirements of this section are met not later 
     than 180 days after such claim is filed. If the Secretary 
     determines that the requirements of this section are met, the 
     claim for refund shall be paid not later than 180 days after 
     the Secretary makes such determination.
       (f) Interest.--Any refund paid pursuant to this section 
     shall be paid by the Secretary with interest from the date of 
     overpayment determined by using the overpayment rate and 
     method under section 6621 of the Internal Revenue Code of 
     1986.
       (g) Denial of Double Benefit.--The payment under subsection 
     (a) with respect to any coal shall not exceed--
       (1) in the case of a payment to a coal producer, the amount 
     of tax paid under section 4121 of the Internal Revenue Code 
     of 1986 with respect to such coal by such coal producer or a 
     party related to such coal producer, and
       (2) in the case of a payment to an exporter, an amount 
     equal to $0.825 per ton with respect to such coal exported by 
     the exporter or caused to be exported by the exporter.
       (h) Application of Section.--This section applies only to 
     claims on coal exported or shipped on or after October 1, 
     1990, through the date of the enactment of this Act.
       (i) Standing Not Conferred.--
       (1) Exporters.--With respect to exporters, this section 
     shall not confer standing upon an exporter to commence, or 
     intervene in, any judicial or administrative proceeding 
     concerning a claim for refund by a coal producer of any 
     Federal or State tax, fee, or royalty paid by the coal 
     producer.
       (2) Coal producers.--With respect to coal producers, this 
     section shall not confer standing upon a coal producer to 
     commence, or intervene in, any judicial or administrative 
     proceeding concerning a claim for refund by an exporter of 
     any Federal or State tax, fee, or royalty paid by the 
     producer and alleged to have been passed on to an exporter.

     SEC. 115. CARBON AUDIT OF THE TAX CODE.

       (a) Study.--The Secretary of the Treasury shall enter into 
     an agreement with the National Academy of Sciences to 
     undertake a comprehensive review of the Internal Revenue Code 
     of 1986 to identify the types of and specific tax provisions 
     that have the largest 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

[[Page 10230]]

     carry out this section $1,500,000 for the period of fiscal 
     years 2008 and 2009.

    Subtitle B--Transportation and Domestic Fuel Security Provisions

     SEC. 121. CREDIT FOR PRODUCTION OF CELLULOSIC BIOFUEL.

       (a) In General.--Subsection (a) of section 40 is amended by 
     striking ``plus'' at the end of paragraph (1), by striking 
     ``plus'' at the end of paragraph (2), by striking the period 
     at the end of paragraph (3) and inserting ``, plus'', and by 
     adding at the end the following new paragraph:
       ``(4) the cellulosic biofuel producer credit.''.
       (b) Cellulosic Biofuel Producer Credit.--
       (1) In general.--Subsection (b) of section 40 is amended by 
     adding at the end the following new paragraph:
       ``(6) Cellulosic biofuel producer credit.--
       ``(A) In general.--The cellulosic biofuel producer credit 
     of any taxpayer is an amount equal to the applicable amount 
     for each gallon of qualified cellulosic biofuel production.
       ``(B) Applicable amount.--For purposes of subparagraph (A), 
     the applicable amount means $1.01, except that such amount 
     shall, in the case of cellulosic biofuel which is alcohol, be 
     reduced by the sum of--
       ``(i) the amount of the credit in effect for such alcohol 
     under subsection (b)(1) (without regard to subsection (b)(3)) 
     at the time of the qualified cellulosic biofuel production, 
     plus
       ``(ii) in the case of ethanol, the amount of the credit in 
     effect under subsection (b)(4) at the time of such 
     production.
       ``(C) Qualified cellulosic biofuel production.--For 
     purposes of this section, the term `qualified cellulosic 
     biofuel production' means any cellulosic biofuel which is 
     produced by the taxpayer, and which during the taxable year--
       ``(i) is sold by the taxpayer to another person--

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

       ``(ii) is used or sold by the taxpayer for any purpose 
     described in clause (i).

     The qualified cellulosic biofuel production of any taxpayer 
     for any taxable year shall not include any alcohol which is 
     purchased by the taxpayer and with respect to which such 
     producer increases the proof of the alcohol by additional 
     distillation.
       ``(D) Qualified cellulosic biofuel mixture.--For purposes 
     of this paragraph, the term `qualified cellulosic biofuel 
     mixture' means a mixture of cellulosic biofuel and gasoline 
     or of cellulosic biofuel and a special fuel which--
       ``(i) is sold by the person producing such mixture to any 
     person for use as a fuel, or
       ``(ii) is used as a fuel by the person producing such 
     mixture.
       ``(E) Cellulosic biofuel.--For purposes of this paragraph--
       ``(i) In general.--The term `cellulosic biofuel' means any 
     liquid fuel which--

       ``(I) is produced from any lignocellulosic or 
     hemicellulosic matter that is available on a renewable or 
     recurring basis, and
       ``(II) meets the registration requirements for fuels and 
     fuel additives established by the Environmental Protection 
     Agency under section 211 of the Clean Air Act (42 U.S.C. 
     7545).

       ``(ii) Exclusion of low-proof alcohol.--Such term shall not 
     include any alcohol with a proof of less than 150. The 
     determination of the proof of any alcohol shall be made 
     without regard to any added denaturants.
       ``(F) Allocation of cellulosic biofuel producer credit to 
     patrons of cooperative.--Rules similar to the rules under 
     subsection (g)(6) shall apply for purposes of this paragraph.
       ``(G) Registration requirement.--No credit shall be 
     determined under this paragraph with respect to any taxpayer 
     unless such taxpayer is registered with the Secretary as a 
     producer of cellulosic biofuel under section 4101.
       ``(H) Application of paragraph.--This paragraph shall apply 
     with respect to qualified cellulosic biofuel production after 
     December 31, 2008, and before January 1, 2016.''.
       (2) Termination date not to apply.--Subsection (e) of 
     section 40 is amended--
       (A) by inserting ``or subsection (b)(6)(H)'' after ``by 
     reason of paragraph (1)'' in paragraph (2), and
       (B) by adding at the end the following new paragraph:
       ``(3) Exception for cellulosic biofuel producer credit.--
     Paragraph (1) shall not apply to the portion of the credit 
     allowed under this section by reason of subsection (a)(4).''.
       (3) Conforming amendments.--
       (A) Paragraph (1) of section 4101(a) is amended--
       (i) by striking ``and every person'' and inserting ``, 
     every person'', and
       (ii) by inserting ``, and every person producing cellulosic 
     biofuel (as defined in section 40(b)(6)(E))'' after ``section 
     6426(b)(4)(A))''.
       (B) The heading of section 40, and the item relating to 
     such section in the table of sections for subpart D of part 
     IV of subchapter A of chapter 1, are each amended by 
     inserting ``, etc.,'' after ``Alcohol''.
       (c) Biofuel Not Used as a Fuel, etc.--
       (1) In general.--Paragraph (3) of section 40(d) is amended 
     by redesignating subparagraph (D) as subparagraph (E) and by 
     inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) Cellulosic biofuel producer credit.--If--
       ``(i) any credit is allowed under subsection (a)(4), and
       ``(ii) any person does not use such fuel for a purpose 
     described in subsection (b)(6)(C),

     then there is hereby imposed on such person a tax equal to 
     the applicable amount (as defined in subsection (b)(6)(B)) 
     for each gallon of such cellulosic biofuel.''.
       (2) Conforming amendments.--
       (A) Subparagraph (C) of section 40(d)(3) is amended by 
     striking ``Producer'' in the heading and inserting ``Small 
     ethanol producer''.
       (B) Subparagraph (E) of section 40(d)(3), as redesignated 
     by paragraph (1), is amended by striking ``or (C)'' and 
     inserting ``(C), or (D)''.
       (d) Biofuel Produced in the United States.--Section 40(d) 
     is amended by adding at the end the following new paragraph:
       ``(6) Special rule for cellulosic biofuel producer 
     credit.--No cellulosic biofuel producer credit shall be 
     determined under subsection (a) with respect to any 
     cellulosic biofuel unless such cellulosic biofuel is produced 
     in the United States and used as a fuel in the United States. 
     For purposes of this subsection, the term `United States' 
     includes any possession of the United States.''.
       (e) Waiver of Credit Limit for Cellulosic Biofuel 
     Production by Small Ethanol Producers.--Section 40(b)(4)(C) 
     is amended by inserting ``(determined without regard to any 
     qualified cellulosic biofuel production)'' after ``15,000,000 
     gallons''.
       (f) Denial of Double Benefit.--
       (1) Biodiesel.--Paragraph (1) of section 40A(d) is amended 
     by adding at the end the following new flush sentence:

     ``Such term shall not include any liquid with respect to 
     which a credit may be determined under section 40.''.
       (2) Renewable diesel.--Paragraph (3) of section 40A(f) is 
     amended by adding at the end the following new flush 
     sentence:

     ``Such term shall not include any liquid with respect to 
     which a credit may be determined under section 40.''.
       (g) Effective Date.--The amendments made by this section 
     shall apply to fuel produced after December 31, 2008.

     SEC. 122. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS 
                   DEPRECIATION FOR BIOMASS ETHANOL PLANT 
                   PROPERTY.

       (a) In General.--Paragraph (3) of section 168(l) is amended 
     to read as follows:
       ``(3) Cellulosic biofuel.--The term `cellulosic biofuel' 
     means any liquid fuel which is produced from any 
     lignocellulosic or hemicellulosic matter that is available on 
     a renewable or recurring basis.''.
       (b) Conforming Amendments.--Subsection (l) of section 168 
     is amended--
       (1) by striking ``cellulosic biomass ethanol'' each place 
     it appears and inserting ``cellulosic biofuel'',
       (2) by striking ``Cellulosic Biomass Ethanol'' in the 
     heading of such subsection and inserting ``Cellulosic 
     Biofuel'', and
       (3) by striking ``cellulosic biomass ethanol'' in the 
     heading of paragraph (2) thereof and inserting ``cellulosic 
     biofuel''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

     SEC. 123. CREDITS FOR BIODIESEL AND RENEWABLE DIESEL.

       (a) In General.--Sections 40A(g), 6426(c)(6), and 
     6427(e)(5)(B) are each amended by striking ``December 31, 
     2008'' and inserting ``December 31, 2009''.
       (b) Increase in Rate of Credit.--
       (1) Income tax credit.--Paragraphs (1)(A) and (2)(A) of 
     section 40A(b) are each amended by striking ``50 cents'' and 
     inserting ``$1.00''.
       (2) Excise tax credit.--Paragraph (2) of section 6426(c) is 
     amended to read as follows:
       ``(2) Applicable amount.--For purposes of this subsection, 
     the applicable amount is $1.00.''.
       (3) Conforming amendments.--
       (A) Subsection (b) of section 40A is amended by striking 
     paragraph (3) and by redesignating paragraphs (4) and (5) as 
     paragraphs (3) and (4), respectively.
       (B) Paragraph (2) of section 40A(f) is amended to read as 
     follows:
       ``(2) Exception.--Subsection (b)(4) shall not apply with 
     respect to renewable diesel.''.
       (C) Paragraphs (2) and (3) of section 40A(e) are each 
     amended by striking ``subsection (b)(5)(C)'' and inserting 
     ``subsection (b)(4)(C)''.
       (D) Clause (ii) of section 40A(d)(3)(C) is amended by 
     striking ``subsection (b)(5)(B)'' and inserting ``subsection 
     (b)(4)(B)''.
       (c) Uniform Treatment of Diesel Produced From Biomass.--
     Paragraph (3) of section 40A(f) is amended--
       (1) by striking ``diesel fuel'' and inserting ``liquid 
     fuel'',

[[Page 10231]]

       (2) by striking ``using a thermal depolymerization 
     process'', and
       (3) by striking ``or D396'' in subparagraph (B) and 
     inserting ``, D396, or other equivalent standard approved by 
     the Secretary''.
       (d) Coproduction of Renewable Diesel With Petroleum 
     Feedstock.--
       (1) In general.--Paragraph (3) of section 40A(f) (defining 
     renewable diesel) is amended by adding at the end the 
     following flush sentence:

     ``Such term does not include any fuel derived from 
     coprocessing biomass with a feedstock which is not biomass. 
     For purposes of this paragraph, the term `biomass' has the 
     meaning given such term by section 45K(c)(3).''.
       (2) Conforming amendment.--Paragraph (3) of section 40A(f) 
     is amended by striking ``(as defined in section 45K(c)(3))''.
       (e) Eligibility of Certain Aviation Fuel.--Paragraph (3) of 
     section 40A(f) (defining renewable diesel) is amended by 
     adding at the end the following new flush sentence:

     ``The term `renewable diesel' also means fuel derived from 
     biomass which meets the requirements of a Department of 
     Defense specification for military jet fuel or an American 
     Society of Testing and Materials specification for aviation 
     turbine fuel.''.
       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to fuel produced, and sold or used, after December 31, 2008.
       (2) Coproduction of renewable diesel with petroleum 
     feedstock.--The amendments made by subsection (c) shall apply 
     to fuel produced, and sold or used, after February 13, 2008.

     SEC. 124. MODIFICATION OF ALCOHOL CREDIT.

       (a) Income Tax Credit.--
       (1) In general.--The table in paragraph (2) of section 
     40(h) is amended--
       (A) by striking ``through 2010'' in the first column and 
     inserting ``, 2006, 2007, or 2008'',
       (B) by striking the period at the end of the third row, and
       (C) by adding at the end the following new row:


``2009 through 2010.............  45 cents..........  33.33 cents.''.
 

       (2) Exception.--Section 40(h) is amended by adding at the 
     end the following new paragraph:
       ``(3) Reduction delayed until annual production or 
     importation of 7,500,000,000 gallons.--
       ``(A) In general.--In the case of any calendar year 
     beginning after 2008, if the Secretary makes a determination 
     described in subparagraph (B) with respect to all preceding 
     calendar years beginning after 2007, the last row in the 
     table in paragraph (2) shall be applied by substituting `51 
     cents' for `45 cents'.
       ``(B) Determination.--A determination described in this 
     subparagraph with respect to any calendar year is a 
     determination, in consultation with the Administrator of the 
     Environmental Protection Agency, that an amount less than 
     7,500,000,000 gallons of ethanol (including cellulosic 
     ethanol) has been produced in or imported into the United 
     States in such year.''.
       (b) Excise Tax Credit.--
       (1) In general.--Subparagraph (A) of section 6426(b)(2) 
     (relating to alcohol fuel mixture credit) is amended by 
     striking ``the applicable amount is 51 cents'' and inserting 
     ``the applicable amount is--
       ``(i) in the case of calendar years beginning before 2009, 
     51 cents, and
       ``(ii) in the case of calendar years beginning after 2008, 
     45 cents.''.
       (2) Exception.--Paragraph (2) of section 6426(b) is amended 
     by adding at the end the following new subparagraph:
       ``(C) Reduction delayed until annual production or 
     importation of 7,500,000,000 gallons.--In the case of any 
     calendar year beginning after 2008, if the Secretary makes a 
     determination described in section 40(h)(3)(B) with respect 
     to all preceding calendar years beginning after 2007, 
     subparagraph (A)(ii) shall be applied by substituting `51 
     cents' for `45 cents'.''
       (3) Conforming amendment.--Subparagraph (A) of section 
     6426(b)(2) is amended by striking ``subparagraph (B)'' and 
     inserting ``subparagraphs (B) and (C)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 125. CALCULATION OF VOLUME OF ALCOHOL FOR FUEL CREDITS.

       (a) In General.--Paragraph (4) of section 40(d) is amended 
     by striking ``5 percent'' and inserting ``2 percent''.
       (b) Conforming Amendment for Excise Tax Credit.--Section 
     6426(b) is amended by redesignating paragraph (5) as 
     paragraph (6) and by inserting after paragraph (4) the 
     following new paragraph:
       ``(5) Volume of alcohol.--For purposes of determining under 
     subsection (a) the number of gallons of alcohol with respect 
     to which a credit is allowable under subsection (a), the 
     volume of alcohol shall include the volume of any denaturant 
     (including gasoline) which is added under any formulas 
     approved by the Secretary to the extent that such denaturants 
     do not exceed 2 percent of the volume of such alcohol 
     (including denaturants).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to fuel sold or used after December 31, 2008.

     SEC. 126. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO 
                   PROVIDE AN INCENTIVE FOR UNITED STATES 
                   PRODUCTION.

       (a) Alcohol Fuels Credit.--Subsection (d) of section 40 is 
     amended by adding at the end the following new paragraph:
       ``(6) Limitation to alcohol with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any alcohol which is produced outside the 
     United States for use as a fuel outside the United States. 
     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States.''.
       (b) Biodiesel Fuels Credit.--Subsection (d) of section 40A 
     is amended by adding at the end the following new paragraph:
       ``(5) Limitation to biodiesel with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any biodiesel which is produced outside the 
     United States for use as a fuel outside the United States. 
     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States.''.
       (c) Excise Tax Credit.--
       (1) In general.--Section 6426 is amended by adding at the 
     end the following new subsection:
       ``(i) Limitation to Fuels With Connection to the United 
     States.--
       ``(1) Alcohol.--No credit shall be determined under this 
     section with respect to any alcohol which is produced outside 
     the United States for use as a fuel outside the United 
     States.
       ``(2) Biodiesel and alternative fuels.--No credit shall be 
     determined under this section with respect to any biodiesel 
     or alternative fuel which is produced outside the United 
     States for use as a fuel outside the United States.

     For purposes of this subsection, the term `United States' 
     includes any possession of the United States.''.
       (2) Conforming amendment.--Subsection (e) of section 6427 
     is amended by redesignating paragraph (5) as paragraph (6) 
     and by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) Limitation to fuels with connection to the united 
     states.--No amount shall be payable under paragraph (1) or 
     (2) with respect to any mixture or alternative fuel if credit 
     is not allowed with respect to such mixture or alternative 
     fuel by reason of section 6426(i).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to claims for credit or payment made on or after 
     May 15, 2008.

     SEC. 127. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE 
                   MOTOR VEHICLES.

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

     ``SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR 
                   VEHICLES.

       ``(a) Allowance of Credit.--There shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of the credit amounts 
     determined under subsection (b) with respect to each new 
     qualified plug-in electric drive motor vehicle placed in 
     service by the taxpayer during the taxable year.
       ``(b) Per Vehicle Dollar Limitation.--
       ``(1) In general.--The amount determined under this 
     subsection with respect to any new qualified plug-in electric 
     drive motor vehicle is the sum of the amounts determined 
     under paragraphs (2) and (3) with respect to such vehicle.
       ``(2) Base amount.--The amount determined under this 
     paragraph is $3,000.
       ``(3) Battery capacity.--In the case of a vehicle which 
     draws propulsion energy from a battery with not less than 5 
     kilowatt hours of capacity, the amount determined under this 
     paragraph is $200, plus $200 for each kilowatt hour of 
     capacity in excess of 5 kilowatt hours. The amount determined 
     under this paragraph shall not exceed $2,000.
       ``(c) Application With Other Credits.--
       ``(1) Business credit treated as part of general business 
     credit.--So much of the credit which would be allowed under 
     subsection (a) for any taxable year (determined without 
     regard to this subsection) that is attributable to property 
     of a character subject to an allowance for depreciation shall 
     be treated as a credit listed in section 38(b) for such 
     taxable year (and not allowed under subsection (a)).
       ``(2) Personal credit.--
       ``(A) In general.--For purposes of this title, the credit 
     allowed under subsection (a) for any taxable year (determined 
     after application of paragraph (1)) shall be treated as a 
     credit allowable under subpart A for such taxable year.
       ``(B) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for any taxable year 
     (determined after application of paragraph (1)) shall not 
     exceed the excess of--
       ``(i) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over

[[Page 10232]]

       ``(ii) the sum of the credits allowable under subpart A 
     (other than this section and sections 23 and 25D) and section 
     27 for the taxable year.
       ``(d) New Qualified Plug-in Electric Drive Motor Vehicle.--
     For purposes of this section--
       ``(1) In general.--The term `new qualified plug-in electric 
     drive motor vehicle' means a motor vehicle (as defined in 
     section 30(c)(2))--
       ``(A) the original use of which commences with the 
     taxpayer,
       ``(B) which is acquired for use or lease by the taxpayer 
     and not for resale,
       ``(C) which is made by a manufacturer,
       ``(D) which has a gross vehicle weight rating of less than 
     14,000 pounds,
       ``(E) which has received a certificate of conformity under 
     the Clean Air Act and meets or exceeds the Bin 5 Tier II 
     emission standard established in regulations prescribed by 
     the Administrator of the Environmental Protection Agency 
     under section 202(i) of the Clean Air Act for that make and 
     model year vehicle, and
       ``(F) which is propelled to a significant extent by an 
     electric motor which draws electricity from a battery which--
       ``(i) has a capacity of not less than 4 kilowatt hours, and
       ``(ii) is capable of being recharged from an external 
     source of electricity.
       ``(2) Exception.--The term `new qualified plug-in electric 
     drive motor vehicle' shall not include any vehicle which is 
     not a passenger automobile or light truck if such vehicle has 
     a gross vehicle weight rating of less than 8,500 pounds.
       ``(3) Other terms.--The terms `passenger automobile', 
     `light truck', and `manufacturer' have the meanings given 
     such terms in regulations prescribed by the Administrator of 
     the Environmental Protection Agency for purposes of the 
     administration of title II of the Clean Air Act (42 U.S.C. 
     7521 et seq.).
       ``(4) Battery capacity.--The term `capacity' means, with 
     respect to any battery, the quantity of electricity which the 
     battery is capable of storing, expressed in kilowatt hours, 
     as measured from a 100 percent state of charge to a 0 percent 
     state of charge.
       ``(e) Limitation on Number of New Qualified Plug-in 
     Electric Drive Motor Vehicles Eligible for Credit.--
       ``(1) In general.--In the case of a new qualified plug-in 
     electric drive motor vehicle sold during the phaseout period, 
     only the applicable percentage of the credit otherwise 
     allowable under subsection (a) shall be allowed.
       ``(2) Phaseout period.--For purposes of this subsection, 
     the phaseout period is the period beginning with the second 
     calendar quarter following the calendar quarter which 
     includes the first date on which the number of new qualified 
     plug-in electric drive motor vehicles manufactured by the 
     manufacturer of the vehicle referred to in paragraph (1) sold 
     for use in the United States after the date of the enactment 
     of this section, is at least 60,000.
       ``(3) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage is--
       ``(A) 50 percent for the first 2 calendar quarters of the 
     phaseout period,
       ``(B) 25 percent for the 3d and 4th calendar quarters of 
     the phaseout period, and
       ``(C) 0 percent for each calendar quarter thereafter.
       ``(4) Controlled groups.--Rules similar to the rules of 
     section 30B(f)(4) shall apply for purposes of this 
     subsection.
       ``(f) Special Rules.--
       ``(1) Basis reduction.--The basis of any property for which 
     a credit is allowable under sub- section (a) shall be reduced 
     by the amount of such credit (determined without regard to 
     subsection (c)).
       ``(2) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any property which 
     ceases to be property eligible for such credit.
       ``(3) Property used outside united states, etc., not 
     qualified.--No credit shall be allowed under subsection (a) 
     with respect to any property referred to in section 50(b)(1) 
     or with respect to the portion of the cost of any property 
     taken into account under section 179.
       ``(4) Election not to take credit.--No credit shall be 
     allowed under subsection (a) for any vehicle if the taxpayer 
     elects to not have this section apply to such vehicle.
       ``(5) Property used by tax-exempt entity; interaction with 
     air quality and motor vehicle safety standards.--Rules 
     similar to the rules of paragraphs (6) and (10) of section 
     30B(h) shall apply for purposes of this section.''.
       (b) Coordination With Alternative Motor Vehicle Credit.--
     Section 30B(d)(3) is amended by adding at the end the 
     following new subparagraph:
       ``(D) Exclusion of plug-in vehicles.--Any vehicle with 
     respect to which a credit is allowable under section 30D 
     (determined without regard to subsection (c) thereof) shall 
     not be taken into account under this section.''.
       (c) Credit Made Part of General Business Credit.--Section 
     38(b) is amended--
       (1) by striking ``and'' each place it appears at the end of 
     any paragraph,
       (2) by striking ``plus'' each place it appears at the end 
     of any paragraph,
       (3) by striking the period at the end of paragraph (31) and 
     inserting ``, plus'', and
       (4) by adding at the end the following new paragraph:
       ``(32) the portion of the new qualified plug-in electric 
     drive motor vehicle credit to which section 30D(c)(1) 
     applies.''.
       (d) Conforming Amendments.--
       (1)(A) Section 24(b)(3)(B), as amended by section 104, is 
     amended by striking ``and 25D'' and inserting ``25D, and 
     30D''.
       (B) Section 25(e)(1)(C)(ii) is amended by inserting 
     ``30D,'' after ``25D,''.
       (C) Section 25B(g)(2), as amended by section 104, is 
     amended by striking ``and 25D'' and inserting ``, 25D, and 
     30D''.
       (D) Section 26(a)(1), as amended by section 104, is amended 
     by striking ``and 25D'' and inserting ``25D, and 30D''.
       (E) Section 1400C(d)(2) is amended by striking ``and 25D'' 
     and inserting ``25D, and 30D''.
       (2) Section 1016(a) is amended by striking ``and'' at the 
     end of paragraph (36), by striking the period at the end of 
     paragraph (37) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(38) to the extent provided in section 30D(f)(1).''.
       (3) Section 6501(m) is amended by inserting ``30D(f)(4),'' 
     after ``30C(e)(5),''.
       (e) Treatment of Alternative Motor Vehicle Credit as a 
     Personal Credit.--
       (1) In general.--Paragraph (2) of section 30B(g) is amended 
     to read as follows:
       ``(2) Personal credit.--The credit allowed under subsection 
     (a) for any taxable year (after application of paragraph (1)) 
     shall be treated as a credit allowable under subpart A for 
     such taxable year.''.
       (2) Conforming amendments.--
       (A) Subparagraph (A) of section 30C(d)(2) is amended by 
     striking ``sections 27, 30, and 30B'' and inserting 
     ``sections 27 and 30''.
       (B) Paragraph (3) of section 55(c) is amended by striking 
     ``30B(g)(2),''.
       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to taxable years beginning after December 31, 2008.
       (2) Treatment of alternative motor vehicle credit as 
     personal credit.--The amendments made by subsection (e) shall 
     apply to taxable years beginning after December 31, 2007.
       (g) Application of EGTRRA Sunset.--The amendment made by 
     subsection (d)(1)(A) shall be subject to title IX of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001 in 
     the same manner as the provision of such Act to which such 
     amendment relates.

     SEC. 128. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING REDUCTION 
                   UNITS AND ADVANCED INSULATION.

       (a) In General.--Section 4053 is amended by adding at the 
     end the following new paragraphs:
       ``(9) Idling reduction device.--Any device or system of 
     devices which--
       ``(A) is designed to provide to a vehicle those services 
     (such as heat, air conditioning, or electricity) that would 
     otherwise require the operation of the main drive engine 
     while the vehicle is temporarily parked or remains stationary 
     using one or more devices affixed to a tractor, and
       ``(B) is certified by the Secretary of Energy, in 
     consultation with the Administrator of the Environmental 
     Protection Agency and the Secretary of Transportation, to 
     reduce idling of such vehicle at a motor vehicle rest stop or 
     other location where such vehicles are temporarily parked or 
     remain stationary.
       ``(10) Advanced insulation.--Any insulation that has an R 
     value of not less than R35 per inch.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales or installations after the date of the 
     enactment of this Act.

     SEC. 129. RESTRUCTURING OF NEW YORK LIBERTY ZONE TAX CREDITS.

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

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

       ``(a) In General.--In the case of a New York Liberty Zone 
     governmental unit, there shall be allowed as a credit against 
     any taxes imposed for any payroll period by section 3402 for 
     which such governmental unit is liable under section 3403 an 
     amount equal to so much of the portion of the qualifying 
     project expenditure amount allocated under subsection (b)(3) 
     to such governmental unit for the calendar year as is 
     allocated by such governmental unit to such period under 
     subsection (b)(4).
       ``(b) Qualifying Project Expenditure Amount.--For purposes 
     of this section--
       ``(1) In general.--The term `qualifying project expenditure 
     amount' means, with respect to any calendar year, the sum 
     of--
       ``(A) the total expenditures paid or incurred during such 
     calendar year by all New York Liberty Zone governmental units 
     and the Port Authority of New York and New Jersey for any 
     portion of qualifying projects located wholly within the City 
     of New York, New York, and
       ``(B) any such expenditures--

[[Page 10233]]

       ``(i) paid or incurred in any preceding calendar year which 
     begins after the date of enactment of this section, and
       ``(ii) not previously allocated under paragraph (3).
       ``(2) Qualifying project.--The term `qualifying project' 
     means any transportation infrastructure project, including 
     highways, mass transit systems, railroads, airports, ports, 
     and waterways, in or connecting with the New York Liberty 
     Zone (as defined in section 1400K(h)), which is designated as 
     a qualifying project under this section jointly by the 
     Governor of the State of New York and the Mayor of the City 
     of New York, New York.
       ``(3) General allocation.--
       ``(A) In general.--The Governor of the State of New York 
     and the Mayor of the City of New York, New York, shall 
     jointly allocate to each New York Liberty Zone governmental 
     unit the portion of the qualifying project expenditure amount 
     which may be taken into account by such governmental unit 
     under subsection (a) for any calendar year in the credit 
     period.
       ``(B) Aggregate limit.--The aggregate amount which may be 
     allocated under subparagraph (A) for all calendar years in 
     the credit period shall not exceed $2,000,000,000.
       ``(C) Annual limit.--The aggregate amount which may be 
     allocated under subparagraph (A) for any calendar year in the 
     credit period shall not exceed the sum of--
       ``(i) $115,000,000 ($425,000,000 in the case of the last 2 
     years in the credit period), plus
       ``(ii) the aggregate amount authorized to be allocated 
     under this paragraph for all preceding calendar years in the 
     credit period which was not so allocated.
       ``(D) Unallocated amounts at end of credit period.--If, as 
     of the close of the credit period, the amount under 
     subparagraph (B) exceeds the aggregate amount allocated under 
     subparagraph (A) for all calendar years in the credit period, 
     the Governor of the State of New York and the Mayor of the 
     City of New York, New York, may jointly allocate to New York 
     Liberty Zone governmental units for any calendar year in the 
     5-year period following the credit period an amount equal 
     to--
       ``(i) the lesser of--

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

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

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

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

     SEC. 130. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS.

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

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

       (d) Constructive Receipt of Benefit.--Paragraph (4) of 
     section 132(f) is amended by inserting ``(other than a 
     qualified bicycle commuting reimbursement)'' after 
     ``qualified transportation fringe''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 131. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

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

     SEC. 132. COMPREHENSIVE STUDY OF BIOFUELS.

       (a) Study.--The Secretary of the Treasury, in consultation 
     with the Secretary of Agriculture, the Secretary of Energy, 
     and the Administrator of the Environmental Protection Agency, 
     shall enter into an agreement with the National Academy of 
     Sciences to

[[Page 10234]]

     produce an analysis of current scientific findings to 
     determine--
       (1) current biofuels production, as well as projections for 
     future production,
       (2) the maximum amount of biofuels production capable in 
     United States forests and farmlands, including the current 
     quantities and character of the feedstocks and including such 
     information as regional forest inventories that are 
     commercially available, used in the production of biofuels,
       (3) the domestic effects of an increase in biofuels 
     production levels, including the effects of such levels on--
       (A) the price of fuel,
       (B) the price of land in rural and suburban communities,
       (C) crop acreage, forest acreage, and other land use,
       (D) the environment, due to changes in crop acreage, 
     fertilizer use, runoff, water use, emissions from vehicles 
     utilizing biofuels, and other factors,
       (E) the price of feed,
       (F) the selling price of grain crops and unprocessed forest 
     products,
       (G) exports and imports of grains and unprocessed forest 
     products,
       (H) taxpayers, through cost or savings to commodity crop 
     payments, and
       (I) the expansion of refinery capacity,
       (4) the ability to convert corn ethanol plants for other 
     uses, such as cellulosic ethanol or biodiesel,
       (5) a comparative analysis of corn ethanol versus other 
     biofuels and renewable energy sources, considering cost, 
     energy output, and ease of implementation,
       (6) the impact of the tax credit established by section 121 
     of this Act on the regional agricultural and silvicultural 
     capabilities of commercially available forest inventories, 
     and
       (7) the need for additional scientific inquiry, and 
     specific areas of interest for future research.
       (b) Report.--The Secretary of the Treasury shall submit an 
     initial report of the findings of the study required under 
     subsection (a) to Congress not later than 6 months after the 
     date of the enactment of this Act (36 months after such date 
     in the case of the information required by subsection 
     (a)(6)), and a final report not later than 12 months after 
     such date (42 months after such date in the case of the 
     information required by subsection (a)(6)).

       Subtitle C--Energy Conservation and Efficiency Provisions

     SEC. 141. QUALIFIED ENERGY CONSERVATION BONDS.

       (a) In General.--Subpart I of part IV of subchapter A of 
     chapter 1, as added by section 106, is amended by adding at 
     the end the following new section:

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

       ``(a) Qualified Energy Conservation Bond.--For purposes of 
     this subchapter, the term `qualified energy conservation 
     bond' means any bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for one or more qualified conservation 
     purposes,
       ``(2) the bond is issued by a State or local government, 
     and
       ``(3) the issuer designates such bond for purposes of this 
     section.
       ``(b) Reduced Credit Amount.--The annual credit determined 
     under section 54A(b) with respect to any qualified energy 
     conservation bond shall be 70 percent of the amount so 
     determined without regard to this subsection.
       ``(c) Limitation on Amount of Bonds Designated.--The 
     maximum aggregate face amount of bonds which may be 
     designated under subsection (a) by any issuer shall not 
     exceed the limitation amount allocated to such issuer under 
     subsection (e).
       ``(d) National Limitation on Amount of Bonds Designated.--
     There is a national qualified energy conservation bond 
     limitation of $3,000,000,000.
       ``(e) Allocations.--
       ``(1) In general.--The limitation applicable under 
     subsection (d) shall be allocated by the Secretary among the 
     States in proportion to the population of the States.
       ``(2) Allocations to largest local governments.--
       ``(A) In general.--In the case of any State in which there 
     is a large local government, each such local government shall 
     be allocated a portion of such State's allocation which bears 
     the same ratio to the State's allocation (determined without 
     regard to this subparagraph) as the population of such large 
     local government bears to the population of such State.
       ``(B) Allocation of unused limitation to state.--The amount 
     allocated under this subsection to a large local government 
     may be reallocated by such local government to the State in 
     which such local government is located.
       ``(C) Large local government.--For purposes of this 
     section, the term `large local government' means any 
     municipality or county if such municipality or county has a 
     population of 100,000 or more.
       ``(3) Allocation to issuers; restriction on private 
     activity bonds.--Any allocation under this subsection to a 
     State or large local government shall be allocated by such 
     State or large local government to issuers within the State 
     in a manner that results in not less than 70 percent of the 
     allocation to such State or large local government being used 
     to designate bonds which are not private activity bonds.
       ``(f) Qualified Conservation Purpose.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified conservation 
     purpose' means any of the following:
       ``(A) Capital expenditures incurred for purposes of--
       ``(i) reducing energy consumption in publicly-owned 
     buildings by at least 20 percent,
       ``(ii) implementing green community programs,
       ``(iii) rural development involving the production of 
     electricity from renewable energy resources, or
       ``(iv) any qualified facility (as determined under section 
     45(d) without regard to paragraphs (8) and (10) thereof and 
     without regard to any placed in service date).
       ``(B) Expenditures with respect to research facilities, and 
     research grants, to support research in--
       ``(i) development of cellulosic ethanol or other nonfossil 
     fuels,
       ``(ii) technologies for the capture and sequestration of 
     carbon dioxide produced through the use of fossil fuels,
       ``(iii) increasing the efficiency of existing technologies 
     for producing nonfossil fuels,
       ``(iv) automobile battery technologies and other 
     technologies to reduce fossil fuel consumption in 
     transportation, or
       ``(v) technologies to reduce energy use in buildings.
       ``(C) Mass commuting facilities and related facilities that 
     reduce the consumption of energy, including expenditures to 
     reduce pollution from vehicles used for mass commuting.
       ``(D) Demonstration projects designed to promote the 
     commercialization of--
       ``(i) green building technology,
       ``(ii) conversion of agricultural waste for use in the 
     production of fuel or otherwise,
       ``(iii) advanced battery manufacturing technologies,
       ``(iv) technologies to reduce peak use of electricity, or
       ``(v) technologies for the capture and sequestration of 
     carbon dioxide emitted from combusting fossil fuels in order 
     to produce electricity.
       ``(E) Public education campaigns to promote energy 
     efficiency.
       ``(2) Special rules for private activity bonds.--For 
     purposes of this section, in the case of any private activity 
     bond, the term `qualified conservation purposes' shall not 
     include any expenditure which is not a capital expenditure.
       ``(g) Population.--
       ``(1) In general.--The population of any State or local 
     government shall be determined for purposes of this section 
     as provided in section 146(j) for the calendar year which 
     includes the date of the enactment of this section.
       ``(2) Special rule for counties.--In determining the 
     population of any county for purposes of this section, any 
     population of such county which is taken into account in 
     determining the population of any municipality which is a 
     large local government shall not be taken into account in 
     determining the population of such county.
       ``(h) Application to Indian Tribal Governments.--An Indian 
     tribal government shall be treated for purposes of this 
     section in the same manner as a large local government, 
     except that--
       ``(1) an Indian tribal government shall be treated for 
     purposes of subsection (e) as located within a State to the 
     extent of so much of the population of such government as 
     resides within such State, and
       ``(2) any bond issued by an Indian tribal government shall 
     be treated as a qualified energy conservation bond only if 
     issued as part of an issue the available project proceeds of 
     which are used for purposes for which such Indian tribal 
     government could issue bonds to which section 103(a) 
     applies.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 54A(d), as added by section 
     106, is amended to read as follows:
       ``(1) Qualified tax credit bond.--The term `qualified tax 
     credit bond' means--
       ``(A) a new clean renewable energy bond, or
       ``(B) a qualified energy conservation bond,
     which is part of an issue that meets requirements of 
     paragraphs (2), (3), (4), (5), and (6).''.
       (2) Subparagraph (C) of section 54A(d)(2), as added by 
     section 106, is amended to read as follows:
       ``(C) Qualified purpose.--For purposes of this paragraph, 
     the term `qualified purpose' means--
       ``(i) in the case of a new clean renewable energy bond, a 
     purpose specified in section 54B(a)(1), and
       ``(ii) in the case of a qualified energy conservation bond, 
     a purpose specified in section 54C(a)(1).''.
       (3) The table of sections for subpart I of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

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

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

[[Page 10235]]



     SEC. 142. CREDIT FOR NONBUSINESS ENERGY PROPERTY.

       (a) Extension of Credit.--Section 25C(g) is amended by 
     striking ``December 31, 2007'' and inserting ``December 31, 
     2008''.
       (b) Qualified Biomass Fuel Property.--
       (1) In general.--Section 25C(d)(3) is amended--
       (A) by striking ``and'' at the end of subparagraph (D),
       (B) by striking the period at the end of subparagraph (E) 
     and inserting ``, and'', and
       (C) by adding at the end the following new subparagraph:
       ``(F) a stove which uses the burning of biomass fuel to 
     heat a dwelling unit located in the United States and used as 
     a residence by the taxpayer, or to heat water for use in such 
     a dwelling unit, and which has a thermal efficiency rating of 
     at least 75 percent.''.
       (2) Biomass fuel.--Section 25C(d) is amended by adding at 
     the end the following new paragraph:
       ``(6) Biomass fuel.--The term `biomass fuel' means any 
     plant-derived fuel available on a renewable or recurring 
     basis, including agricultural crops and trees, wood and wood 
     waste and residues (including wood pellets), plants 
     (including aquatic plants), grasses, residues, and fibers.''.
       (c) Coordination With Credit for Qualified Geothermal Heat 
     Pump Property Expenditures.--
       (1) In general.--Paragraph (3) of section 25C(d) is amended 
     by striking subparagraph (C) and by redesignating 
     subparagraphs (D) and (E) as subparagraphs (C) and (D), 
     respectively.
       (2) Conforming amendment.--Subparagraph (C) of section 
     25C(d)(2) is amended to read as follows:
       ``(C) Requirements and standards for air conditioners and 
     heat pumps.--The standards and requirements prescribed by the 
     Secretary under subparagraph (B) with respect to the energy 
     efficiency ratio (EER) for central air conditioners and 
     electric heat pumps--
       ``(i) shall require measurements to be based on published 
     data which is tested by manufacturers at 95 degrees 
     Fahrenheit, and
       ``(ii) may be based on the certified data of the Air 
     Conditioning and Refrigeration Institute that are prepared in 
     partnership with the Consortium for Energy Efficiency.''.
       (d) Effective Date.--The amendments made this section shall 
     apply to expenditures made after December 31, 2007.

     SEC. 143. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

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

     SEC. 144. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT 
                   FOR APPLIANCES PRODUCED AFTER 2007.

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

     SEC. 145. ACCELERATED RECOVERY PERIOD FOR DEPRECIATION OF 
                   SMART METERS AND SMART GRID SYSTEMS.

       (a) In General.--Section 168(e)(3)(D) is amended by 
     striking ``and'' at the end of clause (i), by striking the 
     period at the end of clause (ii) and inserting ``, and'', and 
     by inserting after clause (ii) the following new clauses:
       ``(iii) any qualified smart electric meter, and
       ``(iv) any qualified smart electric grid system.''.
       (b) Definitions.--Section 168(i) is amended by inserting at 
     the end the following new paragraph:

[[Page 10236]]

       ``(18) Qualified smart electric meters.--
       ``(A) In general.--The term `qualified smart electric 
     meter' means any smart electric meter which is placed in 
     service by a taxpayer who is a supplier of electric energy or 
     a provider of electric energy services.
       ``(B) Smart electric meter.--For purposes of subparagraph 
     (A), the term `smart electric meter' means any time-based 
     meter and related communication equipment which is capable of 
     being used by the taxpayer as part of a system that--
       ``(i) measures and records electricity usage data on a 
     time-differentiated basis in at least 24 separate time 
     segments per day,
       ``(ii) provides for the exchange of information between 
     supplier or provider and the customer's electric meter in 
     support of time-based rates or other forms of demand 
     response,
       ``(iii) provides data to such supplier or provider so that 
     the supplier or provider can provide energy usage information 
     to customers electronically, and
       ``(iv) provides net metering.
       ``(19) Qualified smart electric grid systems.--
       ``(A) In general.--The term `qualified smart electric grid 
     system' means any smart grid property used as part of a 
     system for electric distribution grid communications, 
     monitoring, and management placed in service by a taxpayer 
     who is a supplier of electric energy or a provider of 
     electric energy services.
       ``(B) Smart grid property.--For the purposes of 
     subparagraph (A), the term `smart grid property' means 
     electronics and related equipment that is capable of--
       ``(i) sensing, collecting, and monitoring data of or from 
     all portions of a utility's electric distribution grid,
       ``(ii) providing real-time, two-way communications to 
     monitor or manage such grid, and
       ``(iii) providing real time analysis of and event 
     prediction based upon collected data that can be used to 
     improve electric distribution system reliability, quality, 
     and performance.''.
       (c) Continued Application of 150 Percent Declining Balance 
     Method.--Paragraph (2) of section 168(b) is amended by 
     striking ``or'' at the end of subparagraph (B), by 
     redesignating subparagraph (C) as subparagraph (D), and by 
     inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) any property (other than property described in 
     paragraph (3)) which is a qualified smart electric meter or 
     qualified smart electric grid system, or''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 146. QUALIFIED GREEN BUILDING AND SUSTAINABLE DESIGN 
                   PROJECTS.

       (a) In General.--Paragraph (8) of section 142(l) is amended 
     by striking ``September 30, 2009'' and inserting ``September 
     30, 2012''.
       (b) Treatment of Current Refunding Bonds.--Paragraph (9) of 
     section 142(l) is amended by striking ``October 1, 2009'' and 
     inserting ``October 1, 2012''.
       (c) Accountability.--The second sentence of section 701(d) 
     of the American Jobs Creation Act of 2004 is amended by 
     striking ``issuance,'' and inserting ``issuance of the last 
     issue with respect to such project,''.

          TITLE II--ONE-YEAR EXTENSION OF TEMPORARY PROVISIONS

         Subtitle A--Extensions Primarily Affecting Individuals

     SEC. 201. DEDUCTION FOR STATE AND LOCAL SALES TAXES.

       (a) In General.--Subparagraph (I) of section 164(b)(5) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 202. DEDUCTION OF QUALIFIED TUITION AND RELATED 
                   EXPENSES.

       (a) In General.--Subsection (e) of section 222 is amended 
     by striking ``December 31, 2007'' and inserting ``December 
     31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 203. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED 
                   INVESTMENT COMPANIES.

       (a) Interest-Related Dividends.--Subparagraph (C) of 
     section 871(k)(1) (defining interest-related dividend) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Short-Term Capital Gain Dividends.--Subparagraph (C) of 
     section 871(k)(2) (defining short-term capital gain dividend) 
     is amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to dividends with respect to taxable years of 
     regulated investment companies beginning after December 31, 
     2007.

     SEC. 204. QUALIFIED CONSERVATION CONTRIBUTIONS.

       (a) In General.--Paragraphs (1)(E)(vi) and (2)(B)(iii) of 
     section 170(b) are each amended by striking ``December 31, 
     2007'' and inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2007.

     SEC. 205. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT 
                   PLANS FOR CHARITABLE PURPOSES.

       (a) In General.--Subparagraph (F) of section 408(d)(8) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distributions made in taxable years beginning 
     after December 31, 2007.

     SEC. 206. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND 
                   SECONDARY SCHOOL TEACHERS.

       (a) In General.--Subparagraph (D) of section 62(a)(2) is 
     amended by striking ``or 2007'' and inserting ``2007, or 
     2008''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 207. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR 
                   PURPOSES OF EARNED INCOME TAX CREDIT.

       (a) In General.--Subclause (II) of section 32(c)(2)(B)(vi) 
     (defining earned income) is amended by striking ``January 1, 
     2008'' and inserting ``January 1, 2009''.
       (b) Conforming Amendment.--Paragraph (4) of section 6428(e) 
     is amended by striking ``except that'' and all that follows 
     through ``such term'' and inserting ``except that such 
     term''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to taxable years ending after December 31, 2007.

     SEC. 208. MODIFICATION OF MORTGAGE REVENUE BONDS FOR 
                   VETERANS.

       (a) Qualified Mortgage Bonds Used To Finance Residences for 
     Veterans Without Regard to First-Time Homebuyer 
     Requirement.--Subparagraph (D) of section 143(d)(2) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to bonds issued after December 31, 2007.

     SEC. 209. DISTRIBUTIONS FROM RETIREMENT PLANS TO INDIVIDUALS 
                   CALLED TO ACTIVE DUTY.

       (a) In General.--Clause (iv) of section 72(t)(2)(G) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``January 1, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to individuals ordered or called to active duty 
     on or after December 31, 2007.

     SEC. 210. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES OF 
                   NONRESIDENTS NOT CITIZENS.

       (a) In General.--Paragraph (3) of section 2105(d) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to decedents dying after December 31, 2007.

     SEC. 211. QUALIFIED INVESTMENT ENTITIES.

       (a) In General.--Clause (ii) of section 897(h)(4)(A) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on January 1, 2008, except that such 
     amendment shall not apply to the application of withholding 
     requirements with respect to any payment made on or before 
     the date of the enactment of this Act.

     SEC. 212. EXCLUSION OF AMOUNTS RECEIVED UNDER QUALIFIED GROUP 
                   LEGAL SERVICES PLANS.

       (a) In General.--Subsection (e) of section 120 is amended 
     by striking ``shall not apply to taxable years beginning 
     after June 30, 1992'' and inserting ``shall apply to taxable 
     years beginning after December 31, 2007, and before January 
     1, 2009''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

         Subtitle B--Extensions Primarily Affecting Businesses

     SEC. 221. RESEARCH CREDIT.

       (a) In General.--Subparagraph (B) of section 41(h)(1) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Computation of Credit for Taxable Year in Which Credit 
     Terminates.--Paragraph (2) of section 41(h) is amended to 
     read as follows:
       ``(2) Computation of credit for taxable year in which 
     credit terminates.--
       ``(A) In general.--In the case of any taxable year with 
     respect to which this section applies to a number of days 
     which is less than the total number of days in such taxable 
     year, the applicable base amount with respect to such taxable 
     year shall be the amount which bears the same ratio to such 
     applicable amount (determined without regard to this 
     paragraph) as the number of days in such taxable year to 
     which this section applies bears to the total number of days 
     in such taxable year.
       ``(B) Applicable base amount.--For purposes of subparagraph 
     (A), the term `applicable base amount' means, with respect to 
     any taxable year--
       ``(i) except as otherwise provided in this subparagraph, 
     the base amount for the taxable year,
       ``(ii) in the case of a taxable year with respect to which 
     an election under subsection

[[Page 10237]]

     (c)(4) (relating to election of alternative incremental 
     credit) is in effect, the average described in subsection 
     (c)(1)(B) for the taxable year, and
       ``(iii) in the case of a taxable year with respect to which 
     an election under subsection (c)(5) (relating to election of 
     alternative simplified credit) is in effect, the average 
     qualified research expenses for the 3 taxable years preceding 
     the taxable year.''.
       (c) Conforming Amendment.--Subparagraph (D) of section 
     45C(b)(1) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2008''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after December 31, 
     2007.

     SEC. 222. INDIAN EMPLOYMENT CREDIT.

       (a) In General.--Subsection (f) of section 45A is amended 
     by striking ``December 31, 2007'' and inserting ``December 
     31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 223. NEW MARKETS TAX CREDIT.

       Subparagraph (D) of section 45D(f)(1) is amended by 
     striking ``and 2008'' and inserting ``2008, and 2009''.

     SEC. 224. RAILROAD TRACK MAINTENANCE.

       (a) In General.--Subsection (f) of section 45G is amended 
     by striking ``January 1, 2008'' and inserting ``January 1, 
     2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred during taxable 
     years beginning after December 31, 2007.

     SEC. 225. FIFTEEN-YEAR STRAIGHT-LINE COST RECOVERY FOR 
                   QUALIFIED LEASEHOLD IMPROVEMENTS AND QUALIFIED 
                   RESTAURANT PROPERTY.

       (a) In General.--Clauses (iv) and (v) of section 
     168(e)(3)(E) are each amended by striking ``January 1, 2008'' 
     and inserting ``January 1, 2009''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 226. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS 
                   RACING TRACK FACILITY.

       (a) In General.--Subparagraph (D) of section 168(i)(15) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 227. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON 
                   INDIAN RESERVATION.

       (a) In General.--Paragraph (8) of section 168(j) is amended 
     by striking ``December 31, 2007'' and inserting ``December 
     31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 228. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.

       (a) In General.--Subsection (h) of section 198 is amended 
     by striking ``December 31, 2007'' and inserting ``December 
     31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred after December 
     31, 2007.

     SEC. 229. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME 
                   ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES 
                   IN PUERTO RICO.

       (a) In General.--Subparagraph (C) of section 199(d)(8) is 
     amended--
       (1) by striking ``first 2 taxable years'' and inserting 
     ``first 3 taxable years'', and
       (2) by striking ``January 1, 2008'' and inserting ``January 
     1, 2009''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 230. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS 
                   TO CONTROLLING EXEMPT ORGANIZATIONS.

       (a) In General.--Clause (iv) of section 512(b)(13)(E) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments received or accrued after December 
     31, 2007.

     SEC. 231. QUALIFIED ZONE ACADEMY BONDS.

       (a) In General.--Subpart I of part IV of subchapter A of 
     chapter 1, as amended by sections 106 and 141, is amended by 
     adding at the end the following new section:

     ``SEC. 54D. QUALIFIED ZONE ACADEMY BONDS.

       ``(a) Qualified Zone Academy Bonds.--For purposes of this 
     subchapter, the term `qualified zone academy bond' means any 
     bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for a qualified purpose with respect to 
     a qualified zone academy established by an eligible local 
     education agency,
       ``(2) the bond is issued by a State or local government 
     within the jurisdiction of which such academy is located, and
       ``(3) the issuer--
       ``(A) designates such bond for purposes of this section,
       ``(B) certifies that it has written assurances that the 
     private business contribution requirement of subsection (b) 
     will be met with respect to such academy, and
       ``(C) certifies that it has the written approval of the 
     eligible local education agency for such bond issuance.
       ``(b)  Private Business Contribution Requirement.--For 
     purposes of subsection (a), the private business contribution 
     requirement of this subsection is met with respect to any 
     issue if the eligible local education agency that established 
     the qualified zone academy has written commitments from 
     private entities to make qualified contributions having a 
     present value (as of the date of issuance of the issue) of 
     not less than 10 percent of the proceeds of the issue.
       ``(c) Limitation on Amount of Bonds Designated.--
       ``(1) National limitation.--There is a national zone 
     academy bond limitation for each calendar year. Such 
     limitation is $400,000,000 for 2008, and, except as provided 
     in paragraph (4), zero thereafter.
       ``(2) Allocation of limitation.--The national zone academy 
     bond limitation for a calendar year shall be allocated by the 
     Secretary among the States on the basis of their respective 
     populations of individuals below the poverty line (as defined 
     by the Office of Management and Budget). The limitation 
     amount allocated to a State under the preceding sentence 
     shall be allocated by the State education agency to qualified 
     zone academies within such State.
       ``(3) Designation subject to limitation amount.--The 
     maximum aggregate face amount of bonds issued during any 
     calendar year which may be designated under subsection (a) 
     with respect to any qualified zone academy shall not exceed 
     the limitation amount allocated to such academy under 
     paragraph (2) for such calendar year.
       ``(4) Carryover of unused limitation.--
       ``(A) In general.--If for any calendar year--
       ``(i) the limitation amount for any State, exceeds
       ``(ii) the amount of bonds issued during such year which 
     are designated under subsection (a) with respect to qualified 
     zone academies within such State,
     the limitation amount for such State for the following 
     calendar year shall be increased by the amount of such 
     excess.
       ``(B) Limitation on carryover.--Any carryforward of a 
     limitation amount may be carried only to the first 2 years 
     following the unused limitation year. For purposes of the 
     preceding sentence, a limitation amount shall be treated as 
     used on a first-in first-out basis.
       ``(C) Coordination with section 1397e.--Any carryover 
     determined under section 1397E(e)(4) (relating to carryover 
     of unused limitation) with respect to any State to calendar 
     year 2008 shall be treated for purposes of this section as a 
     carryover with respect to such State for such calendar year 
     under subparagraph (A), and the limitation of subparagraph 
     (B) shall apply to such carryover taking into account the 
     calendar years to which such carryover relates.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified zone academy.--The term `qualified zone 
     academy' means any public school (or academic program within 
     a public school) which is established by and operated under 
     the supervision of an eligible local education agency to 
     provide education or training below the postsecondary level 
     if--
       ``(A) such public school or program (as the case may be) is 
     designed in cooperation with business to enhance the academic 
     curriculum, increase graduation and employment rates, and 
     better prepare students for the rigors of college and the 
     increasingly complex workforce,
       ``(B) students in such public school or program (as the 
     case may be) will be subject to the same academic standards 
     and assessments as other students educated by the eligible 
     local education agency,
       ``(C) the comprehensive education plan of such public 
     school or program is approved by the eligible local education 
     agency, and
       ``(D)(i) such public school is located in an empowerment 
     zone or enterprise community (including any such zone or 
     community designated after the date of the enactment of this 
     section), or
       ``(ii) there is a reasonable expectation (as of the date of 
     issuance of the bonds) that at least 35 percent of the 
     students attending such school or participating in such 
     program (as the case may be) will be eligible for free or 
     reduced-cost lunches under the school lunch program 
     established under the National School Lunch Act.
       ``(2) Eligible local education agency.--For purposes of 
     this section, the term `eligible local education agency' 
     means any local educational agency as defined in section 9101 
     of the Elementary and Secondary Education Act of 1965.
       ``(3) Qualified purpose.--The term `qualified purpose' 
     means, with respect to any qualified zone academy--
       ``(A) rehabilitating or repairing the public school 
     facility in which the academy is established,
       ``(B) providing equipment for use at such academy,
       ``(C) developing course materials for education to be 
     provided at such academy, and
       ``(D) training teachers and other school personnel in such 
     academy.
       ``(4) Qualified contributions.--The term `qualified 
     contribution' means any contribution (of a type and quality 
     acceptable to the eligible local education agency) of--
       ``(A) equipment for use in the qualified zone academy 
     (including state-of-the-art technology and vocational 
     equipment),

[[Page 10238]]

       ``(B) technical assistance in developing curriculum or in 
     training teachers in order to promote appropriate market 
     driven technology in the classroom,
       ``(C) services of employees as volunteer mentors,
       ``(D) internships, field trips, or other educational 
     opportunities outside the academy for students, or
       ``(E) any other property or service specified by the 
     eligible local education agency.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 54A(d), as amended by sections 
     106 and 141, is amended by striking ``or'' at the end of 
     subparagraph (A), by inserting ``or'' at the end of 
     subparagraph (B), and by inserting after subparagraph (B) the 
     following new subparagraph:
       ``(C) a qualified zone academy bond,''.
       (2) Subparagraph (C) of section 54A(d)(2), as amended by 
     sections 106 and 141, is amended by striking ``and'' at the 
     end of clause (i), by striking the period at the end of 
     clause (ii) and inserting ``, and'', and by adding at the end 
     the following new clause:
       ``(iii) in the case of a qualified zone academy bond, a 
     purpose specified in section 54D(a)(1).''.
       (3) Section 1397E is amended by adding at the end the 
     following new subsection:
       ``(m) Termination.--This section shall not apply to any 
     obligation issued after the date of the enactment of this 
     Act.''.
       (4) The table of sections for subpart I of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

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

     SEC. 232. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF 
                   COLUMBIA.

       (a) Designation of Zone.--
       (1) In general.--Subsection (f) of section 1400 is amended 
     by striking ``2007'' both places it appears and inserting 
     ``2008''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to periods beginning after December 31, 2007.
       (b) Tax-Exempt Economic Development Bonds.--
       (1) In general.--Subsection (b) of section 1400A is amended 
     by striking ``2007'' and inserting ``2008''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to bonds issued after December 31, 2007.
       (c) Zero Percent Capital Gains Rate.--
       (1) In general.--Subsection (b) of section 1400B is amended 
     by striking ``2008'' each place it appears and inserting 
     ``2009''.
       (2) Conforming amendments.--
       (A) Section 1400B(e)(2) is amended--
       (i) by striking ``2012'' and inserting ``2013'', and
       (ii) by striking ``2012'' in the heading thereof and 
     inserting ``2013''.
       (B) Section 1400B(g)(2) is amended by striking ``2012'' and 
     inserting ``2013''.
       (C) Section 1400F(d) is amended by striking ``2012'' and 
     inserting ``2013''.
       (3) Effective dates.--
       (A) Extension.--The amendments made by paragraph (1) shall 
     apply to acquisitions after December 31, 2007.
       (B) Conforming amendments.--The amendments made by 
     paragraph (2) shall take effect on the date of the enactment 
     of this Act.
       (d) First-Time Homebuyer Credit.--
       (1) In general.--Subsection (i) of section 1400C is amended 
     by striking ``2008'' and inserting ``2009''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property purchased after December 31, 2007.

     SEC. 233. ECONOMIC DEVELOPMENT CREDIT FOR AMERICAN SAMOA.

       (a) In General.--Subsection (d) of section 119 of division 
     A of the Tax Relief and Health Care Act of 2006 is amended--
       (1) by striking ``first two taxable years'' and inserting 
     ``first 3 taxable years'', and
       (2) by striking ``January 1, 2008'' and inserting ``January 
     1, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 234. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF 
                   FOOD INVENTORY.

       (a) In General.--Clause (iv) of section 170(e)(3)(C) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after December 31, 2007.

     SEC. 235. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF 
                   BOOK INVENTORY TO PUBLIC SCHOOLS.

       (a) In General.--Clause (iv) of section 170(e)(3)(D) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after December 31, 2007.

     SEC. 236. ENHANCED DEDUCTION FOR QUALIFIED COMPUTER 
                   CONTRIBUTIONS.

       (a) In General.--Subparagraph (G) of section 170(e)(6) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made during taxable years 
     beginning after December 31, 2007.

     SEC. 237. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING 
                   CHARITABLE CONTRIBUTIONS OF PROPERTY.

       (a) In General.--The last sentence of section 1367(a)(2) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2007.

     SEC. 238. WORK OPPORTUNITY TAX CREDIT FOR HURRICANE KATRINA 
                   EMPLOYEES.

       (a) In General.--Paragraph (1) of section 201(b) of the 
     Katrina Emergency Tax Relief Act of 2005 is amended by 
     striking ``2-year'' and inserting ``3-year''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to individuals hired after August 27, 2007.

     SEC. 239. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME.

       (a) Exempt Insurance Income.--Paragraph (10) of section 
     953(e) (relating to application) is amended--
       (1) by striking ``January 1, 2009'' and inserting ``January 
     1, 2010'', and
       (2) by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) Exception to Treatment as Foreign Personal Holding 
     Company Income.--Paragraph (9) of section 954(h) (relating to 
     application) is amended by striking ``January 1, 2009'' and 
     inserting ``January 1, 2010''.

     SEC. 240. LOOK-THRU RULE FOR RELATED CONTROLLED FOREIGN 
                   CORPORATIONS.

       (a) In General.--Subparagraph (B) of section 954(c)(6) 
     (relating to application) is amended by striking ``January 1, 
     2009'' and inserting ``January 1, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years of foreign corporations 
     beginning after December 31, 2008, and to taxable years of 
     United States shareholders with or within which such taxable 
     years of foreign corporations end.

     SEC. 241. EXPENSING FOR CERTAIN QUALIFIED FILM AND TELEVISION 
                   PRODUCTIONS.

       (a) In General.--Subsection (f) of section 181 is amended 
     by striking ``December 31, 2008'' and inserting ``December 
     31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to productions commencing after December 31, 
     2008.

                      Subtitle C--Other Extensions

     SEC. 251. AUTHORITY TO DISCLOSE INFORMATION RELATED TO 
                   TERRORIST ACTIVITIES MADE PERMANENT.

       (a) In General.--Subparagraph (C) of section 6103(i)(3) is 
     amended by striking clause (iv).
       (b) Disclosure on Request.--Paragraph (7) of section 
     6103(i) is amended by striking subparagraph (E).
       (c) Effective Date.--The amendments made by this section 
     shall apply to disclosures after the date of the enactment of 
     this Act.

     SEC. 252. AUTHORITY FOR UNDERCOVER OPERATIONS MADE PERMANENT.

       (a) In General.--Subsection (c) of section 7608 is amended 
     by striking paragraph (6).
       (b) Effective Date.--The amendment made by this section 
     shall take effect on January 1, 2008.

     SEC. 253. AUTHORITY TO DISCLOSE RETURN INFORMATION FOR 
                   CERTAIN VETERANS PROGRAMS MADE PERMANENT.

       (a) In General.--Paragraph (7) of section 6103(l) is 
     amended by striking the last sentence thereof.
       (b) Conforming Amendment.--Section 6103(l)(7)(D)(viii)(III) 
     is amended by striking ``sections 1710(a)(1)(I), 1710(a)(2), 
     1710(b), and 1712(a)(2)(B)'' and inserting ``sections 
     1710(a)(2)(G), 1710(a)(3), and 1710(b)''.
       (c) Effective Date.--The amendment made by subsection (a) 
     shall apply to requests made after September 30, 2008.

     SEC. 254. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX 
                   TO PUERTO RICO AND THE VIRGIN ISLANDS.

       (a) In General.--Paragraph (1) of section 7652(f) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distilled spirits brought into the United 
     States after December 31, 2007.

                    TITLE III--ADDITIONAL TAX RELIEF

                   Subtitle A--Individual Tax Relief

     SEC. 301. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY 
                   TAXES FOR NONITEMIZERS.

       (a) In General.--Section 63(c)(1) (defining standard 
     deduction) is amended by striking ``and'' at the end of 
     subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(C) in the case of any taxable year beginning in 2008, 
     the real property tax deduction.''.
       (b) Definition.--Section 63(c) is amended by adding at the 
     end the following new paragraph:
       ``(7) Real property tax deduction.--For purposes of 
     paragraph (1), the real property tax deduction is the lesser 
     of--

[[Page 10239]]

       ``(A) the amount allowable as a deduction under this 
     chapter for State and local taxes described in section 
     164(a)(1), or
       ``(B) $350 ($700 in the case of a joint return).
     Any taxes taken into account under section 62(a) shall not be 
     taken into account under this paragraph.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 302. REFUNDABLE CHILD CREDIT.

       (a) Modification of Threshold Amount.--Clause (i) of 
     section 24(d)(1)(B) is amended by inserting ``($8,500 in the 
     case of taxable years beginning in 2008)'' after ``$10,000''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 303. INCREASE OF AMT REFUNDABLE CREDIT AMOUNT FOR 
                   INDIVIDUALS WITH LONG-TERM UNUSED CREDITS FOR 
                   PRIOR YEAR MINIMUM TAX LIABILITY, ETC.

       (a) In General.--Paragraph (2) of section 53(e) is amended 
     to read as follows:
       ``(2) AMT refundable credit amount.--For purposes of 
     paragraph (1), the term `AMT refundable credit amount' means, 
     with respect to any taxable year, the amount (not in excess 
     of the long-term unused minimum tax credit for such taxable 
     year) equal to the greater of--
       ``(A) 50 percent of the long-term unused minimum tax credit 
     for such taxable year, or
       ``(B) the amount (if any) of the AMT refundable credit 
     amount for the taxpayer's preceding taxable year (determined 
     without regard to subsection (f)(2)).''.
       (b) Treatment of Certain Underpayments, Interest, and 
     Penalties Attributable to the Treatment of Incentive Stock 
     Options.--Section 53 is amended by adding at the end the 
     following new subsection:
       ``(f) Treatment of Certain Underpayments, Interest, and 
     Penalties Attributable to the Treatment of Incentive Stock 
     Options.--
       ``(1) Abatement.--Any underpayment of tax outstanding on 
     the date of the enactment of this subsection which is 
     attributable to the application of section 56(b)(3) for any 
     taxable year ending before January 1, 2008 (and any interest 
     or penalty with respect to such underpayment which is 
     outstanding on such date of enactment), is hereby abated. The 
     amount determined under subsection (b)(1) shall not include 
     any tax abated under the preceding sentence.
       ``(2) Increase in credit for certain interest and penalties 
     already paid.--The AMT refundable credit amount for the 
     taxpayer's first 2 taxable years beginning after December 31, 
     2007, shall each be increased by 50 percent of the aggregate 
     amount of the interest and penalties which were paid by the 
     taxpayer before the date of the enactment of this subsection 
     and which would (but for such payment) have been abated under 
     paragraph (1).''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendment made by this section shall apply to taxable years 
     beginning after December 31, 2007.
       (2) Abatement.--Section 53(f)(1) of the Internal Revenue 
     Code of 1986, as added by subsection (b), shall take effect 
     on the date of the enactment of this Act.

                Subtitle B--Business Related Provisions

     SEC. 311. UNIFORM TREATMENT OF ATTORNEY-ADVANCED EXPENSES AND 
                   COURT COSTS IN CONTINGENCY FEE CASES.

       (a) In General.--Section 162 is amended by redesignating 
     subsection (q) as subsection (r) and by inserting after 
     subsection (p) the following new subsection:
       ``(q) Attorney-Advanced Expenses and Court Costs in 
     Contingency Fee Cases.--In the case of any expense or court 
     cost which is paid or incurred in the course of the trade or 
     business of practicing law and the repayment of which is 
     contingent on a recovery by judgment or settlement in the 
     action to which such expense or cost relates, the deduction 
     under subsection (a) shall be determined as if such expense 
     or cost was not subject to repayment.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenses and costs paid or incurred in taxable 
     years beginning after the date of the enactment of this Act.

     SEC. 312. PROVISIONS RELATED TO FILM AND TELEVISION 
                   PRODUCTIONS.

       (a) Modification of Limitation on Expensing.--Subparagraph 
     (A) of section 181(a)(2) is amended to read as follows:
       ``(A) In general.--Paragraph (1) shall not apply to so much 
     of the aggregate cost of any qualified film or television 
     production as exceeds $15,000,000.''.
       (b) Modifications to Deduction for Domestic Activities.--
       (1) Determination of w-2 wages.--Paragraph (2) of section 
     199(b) is amended by adding at the end the following new 
     subparagraph:
       ``(D) Special rule for qualified film.--In the case of a 
     qualified film, such term shall include compensation for 
     services performed in the United States by actors, production 
     personnel, directors, and producers.''.
       (2) Definition of qualified film.--Paragraph (6) of section 
     199(c) is amended by adding at the end the following: ``A 
     qualified film shall include any copyrights, trademarks, or 
     other intangibles with respect to such film. The methods and 
     means of distributing a qualified film shall not affect the 
     availability of the deduction under this section.''.
       (3) Partnerships.--Subparagraph (A) of section 199(d)(1) is 
     amended by striking ``and'' at the end of clause (ii), by 
     striking the period at the end of clause (iii) and inserting 
     ``, and'', and by adding at the end the following new clause:
       ``(iv) in the case of each partner of a partnership, or 
     shareholder of an S corporation, who owns (directly or 
     indirectly) at least 20 percent of the capital interests in 
     such partnership or of the stock of such S corporation--

       ``(I) such partner or shareholder shall be treated as 
     having engaged directly in any film produced by such 
     partnership or S corporation, and
       ``(II) such partnership or S corporation shall be treated 
     as having engaged directly in any film produced by such 
     partner or shareholder.''.

       (c) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to taxable years beginning after December 31, 2007.
       (2) Expensing.--The amendments made by subsection (a) shall 
     apply to qualified film and television productions commencing 
     after December 31, 2007.

  Subtitle C--Modification of Penalty on Understatement of Taxpayer's 
                    Liability by Tax Return Preparer

     SEC. 321. MODIFICATION OF PENALTY ON UNDERSTATEMENT OF 
                   TAXPAYER'S LIABILITY BY TAX RETURN PREPARER.

       (a) In General.--Subsection (a) of section 6694 (relating 
     to understatement due to unreasonable positions) is amended 
     to read as follows:
       ``(a) Understatement Due to Unreasonable Positions.--
       ``(1) In general.--If a tax return preparer--
       ``(A) prepares any return or claim of refund with respect 
     to which any part of an understatement of liability is due to 
     a position described in paragraph (2), and
       ``(B) knew (or reasonably should have known) of the 
     position,
     such tax return preparer shall pay a penalty with respect to 
     each such return or claim in an amount equal to the greater 
     of $1,000 or 50 percent of the income derived (or to be 
     derived) by the tax return preparer with respect to the 
     return or claim.
       ``(2) Unreasonable position.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, a position is described in this paragraph unless 
     there is or was substantial authority for the position.
       ``(B) Disclosed positions.--If the position was disclosed 
     as provided in section 6662(d)(2)(B)(ii)(I) and is not a 
     position to which subparagraph (C) applies, the position is 
     described in this paragraph unless there is a reasonable 
     basis for the position.
       ``(C) Tax shelters and reportable transactions.--If the 
     position is with respect to a tax shelter (as defined in 
     section 6662(d)(2)(C)(ii)) or a reportable transaction to 
     which section 6662A applies, the position is described in 
     this paragraph unless it is reasonable to believe that the 
     position would more likely than not be sustained on its 
     merits.
       ``(3) Reasonable cause exception.--No penalty shall be 
     imposed under this subsection if it is shown that there is 
     reasonable cause for the understatement and the tax return 
     preparer acted in good faith.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply--
       (1) in the case of a position other than a position 
     described in subparagraph (C) of section 6694(a)(2) of the 
     Internal Revenue Code of 1986 (as amended by this section), 
     to returns prepared after May 25, 2007, and
       (2) in the case of a position described in such 
     subparagraph (C), to returns prepared for taxable years 
     ending after the date of the enactment of this Act.

   Subtitle D--Extension and Expansion of Certain GO Zone Incentives

     SEC. 331. CERTAIN GO ZONE INCENTIVES.

       (a) Use of Amended Income Tax Returns To Take Into Account 
     Receipt of Certain Hurricane-Related Casualty Loss Grants by 
     Disallowing Previously Taken Casualty Loss Deductions.--
       (1) In general.--Notwithstanding any other provision of the 
     Internal Revenue Code of 1986, if a taxpayer claims a 
     deduction for any taxable year with respect to a casualty 
     loss to a principal residence (within the meaning of section 
     121 of such Code) resulting from Hurricane Katrina, Hurricane 
     Rita, or Hurricane Wilma and in a subsequent taxable year 
     receives a grant under Public Law 109-148, 109-234, or 110-
     116 as reimbursement for such loss, such taxpayer may elect 
     to file an amended income tax return for the taxable year in 
     which such deduction was allowed (and for any taxable year to 
     which such deduction is carried) and reduce (but not below 
     zero) the amount of such deduction by the amount of such 
     reimbursement.
       (2) Time of filing amended return.--Paragraph (1) shall 
     apply with respect to any grant only if any amended income 
     tax returns with respect to such grant are filed not later 
     than the later of--

[[Page 10240]]

       (A) the due date for filing the tax return for the taxable 
     year in which the taxpayer receives such grant, or
       (B) the date which is 1 year after the date of the 
     enactment of this Act.
       (3) Waiver of penalties and interest.--Any underpayment of 
     tax resulting from the reduction under paragraph (1) of the 
     amount otherwise allowable as a deduction shall not be 
     subject to any penalty or interest under such Code if such 
     tax is paid not later than 1 year after the filing of the 
     amended return to which such reduction relates.
       (b) Waiver of Deadline on Construction of GO Zone Property 
     Eligible for Bonus Depreciation.--
       (1) In general.--Subparagraph (B) of section 1400N(d)(3) is 
     amended to read as follows:
       ``(B) without regard to `and before January 1, 2009' in 
     clause (i) thereof,''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property placed in service after December 31, 
     2007.
       (c) Inclusion of Certain Counties in Gulf Opportunity Zone 
     for Purposes of Tax-Exempt Bond Financing.--
       (1) In general.--Subsection (a) of section 1400N is amended 
     by adding at the end the following new paragraph:
       ``(8) Inclusion of certain counties.--For purposes of this 
     subsection, the Gulf Opportunity Zone includes Colbert 
     County, Alabama and Dallas County, Alabama.''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the provisions of the 
     Gulf Opportunity Zone Act of 2005 to which it relates.

                      TITLE IV--REVENUE PROVISIONS

     SEC. 401. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX 
                   INDIFFERENT PARTIES.

       (a) In General.--Subpart B of part II of subchapter E of 
     chapter 1 is amended by inserting after section 457 the 
     following new section:

     ``SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN 
                   TAX INDIFFERENT PARTIES.

       ``(a) In General.--Any compensation which is deferred under 
     a nonqualified deferred compensation plan of a nonqualified 
     entity shall be includible in gross income when there is no 
     substantial risk of forfeiture of the rights to such 
     compensation.
       ``(b) Nonqualified Entity.--For purposes of this section, 
     the term `nonqualified entity' means--
       ``(1) any foreign corporation unless substantially all of 
     its income is--
       ``(A) effectively connected with the conduct of a trade or 
     business in the United States, or
       ``(B) subject to a comprehensive foreign income tax, and
       ``(2) any partnership unless substantially all of its 
     income is allocated to persons other than--
       ``(A) foreign persons with respect to whom such income is 
     not subject to a comprehensive foreign income tax, and
       ``(B) organizations which are exempt from tax under this 
     title.
       ``(c) Determinability of Amounts of Compensation.--
       ``(1) In general.--If the amount of any compensation is not 
     determinable at the time that such compensation is otherwise 
     includible in gross income under subsection (a)--
       ``(A) such amount shall be so includible in gross income 
     when determinable, and
       ``(B) the tax imposed under this chapter for the taxable 
     year in which such compensation is includible in gross income 
     shall be increased by the sum of--
       ``(i) the amount of interest determined under paragraph 
     (2), and
       ``(ii) an amount equal to 20 percent of the amount of such 
     compensation.
       ``(2) Interest.--For purposes of paragraph (1)(B)(i), the 
     interest determined under this paragraph for any taxable year 
     is the amount of interest at the underpayment rate under 
     section 6621 plus 1 percentage point on the underpayments 
     that would have occurred had the deferred compensation been 
     includible in gross income for the taxable year in which 
     first deferred or, if later, the first taxable year in which 
     such deferred compensation is not subject to a substantial 
     risk of forfeiture.
       ``(d) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Substantial risk of forfeiture.--
       ``(A) In general.--The rights of a person to compensation 
     shall be treated as subject to a substantial risk of 
     forfeiture only if such person's rights to such compensation 
     are conditioned upon the future performance of substantial 
     services by any individual.
       ``(B) Exception for compensation based on gain recognized 
     on an investment asset.--
       ``(i) In general.--To the extent provided in regulations 
     prescribed by the Secretary, if compensation is determined 
     solely by reference to the amount of gain recognized on the 
     disposition of an investment asset, such compensation shall 
     be treated as subject to a substantial risk of forfeiture 
     until the date of such disposition.
       ``(ii) Investment asset.--For purposes of clause (i), the 
     term `investment asset' means any single asset (other than an 
     investment fund or similar entity)--

       ``(I) acquired directly by an investment fund or similar 
     entity,
       ``(II) with respect to which such entity does not (nor does 
     any person related to such entity) participate in the active 
     management of such asset (or if such asset is an interest in 
     an entity, in the active management of the activities of such 
     entity), and
       ``(III) substantially all of any gain on the disposition of 
     which (other than such deferred compensation) is allocated to 
     investors in such entity.

       ``(iii) Coordination with special rule.--Paragraph (3)(B) 
     shall not apply to any compensation to which clause (i) 
     applies.
       ``(2) Comprehensive foreign income tax.--The term 
     `comprehensive foreign income tax' means, with respect to any 
     foreign person, the income tax of a foreign country if--
       ``(A) such person is eligible for the benefits of a 
     comprehensive income tax treaty between such foreign country 
     and the United States, or
       ``(B) such person demonstrates to the satisfaction of the 
     Secretary that such foreign country has a comprehensive 
     income tax.
       ``(3) Nonqualified deferred compensation plan.--
       ``(A) In general.--The term `nonqualified deferred 
     compensation plan' has the meaning given such term under 
     section 409A(d), except that such term shall include any plan 
     that provides a right to compensation based on the 
     appreciation in value of a specified number of equity units 
     of the service recipient.
       ``(B) Exception.--Compensation shall not be treated as 
     deferred for purposes of this section if the service provider 
     receives payment of such compensation not later than 12 
     months after the end of the taxable year of the service 
     recipient during which the right to the payment of such 
     compensation is no longer subject to a substantial risk of 
     forfeiture.
       ``(4) Exception for certain compensation with respect to 
     effectively connected income.--In the case a foreign 
     corporation with income which is taxable under section 882, 
     this section shall not apply to compensation which, had such 
     compensation had been paid in cash on the date that such 
     compensation ceased to be subject to a substantial risk of 
     forfeiture, would have been deductible by such foreign 
     corporation against such income.
       ``(5) Application of rules.--Rules similar to the rules of 
     paragraphs (5) and (6) of section 409A(d) shall apply.
       ``(e) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section, including regulations 
     disregarding a substantial risk of forfeiture in cases where 
     necessary to carry out the purposes of this section.''.
       (b) Conforming Amendment.--Section 26(b)(2) is amended by 
     striking ``and'' at the end of subparagraph (U), by striking 
     the period at the end of subparagraph (V) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(W) section 457A(c)(1)(B) (relating to determinability of 
     amounts of compensation).''.
       (c) Clerical Amendment.--The table of sections of subpart B 
     of part II of subchapter E of chapter 1 is amended by 
     inserting after the item relating to section 457 the 
     following new item:

``Sec. 457A. Nonqualified deferred compensation from certain tax 
              indifferent parties.''.
       (d) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to amounts deferred which are attributable to services 
     performed after December 31, 2008.
       (2) Application to existing deferrals.--In the case of any 
     amount deferred to which the amendments made by this section 
     do not apply solely by reason of the fact that the amount is 
     attributable to services performed before January 1, 2009, to 
     the extent such amount is not includible in gross income in a 
     taxable year beginning before 2018, such amounts shall be 
     includible in gross income in the later of--
       (A) the last taxable year beginning before 2018, or
       (B) the taxable year in which there is no substantial risk 
     of forfeiture of the rights to such compensation (determined 
     in the same manner as determined for purposes of section 457A 
     of the Internal Revenue Code of 1986, as added by this 
     section).
       (3) Charitable contributions of existing deferrals 
     permitted.--
       (A) In general.--Notwithstanding section 170(b) of the 
     Internal Revenue Code of 1986, any qualified contribution 
     shall be allowed as a deduction under section 170 of such 
     Code for the taxpayer's last taxable year beginning before 
     2018 to the extent the aggregate of such contributions made 
     during such taxable year does not exceed the excess of the 
     qualified inclusion amount over the amount of the deduction 
     for all other charitable contributions allowable under 
     section 170 of such Code for such taxable year. Proper 
     adjustments shall be made under section 170(d) to take 
     account of the preceding sentence.

[[Page 10241]]

       (B) Qualified contribution.--For purposes of this 
     paragraph, the term ``qualified contribution'' means any 
     charitable contribution (as defined in section 170(c) of such 
     Code) made during taxpayer's last taxable year beginning 
     before 2018 if such contribution is paid in cash to an 
     organization described in section 170(b)(1)(A) of such Code 
     (other than any organization described in section 509(a)(3) 
     of such Code or any fund or account described in section 
     4966(d)(2) of such Code).
       (C) Qualified inclusion amount.--For purposes of this 
     paragraph, the term ``qualified inclusion amount'' means the 
     amount includible in the taxpayer's gross income for the last 
     taxable year beginning before 2018 by reason of paragraph 
     (2).
       (4) Accelerated payments.--No later than 120 days after the 
     date of the enactment of this Act, the Secretary shall issue 
     guidance providing a limited period of time during which a 
     nonqualified deferred compensation arrangement attributable 
     to services performed on or before December 31, 2008, may, 
     without violating the requirements of section 409A(a) of the 
     Internal Revenue Code of 1986, be amended to conform the date 
     of distribution to the date the amounts are required to be 
     included in income.
       (5) Certain back-to-back arrangements.--If the taxpayer is 
     also a service recipient and maintains one or more 
     nonqualified deferred compensation arrangements for its 
     service providers under which any amount is attributable to 
     services performed on or before December 31, 2008, the 
     guidance issued under paragraph (4) shall permit such 
     arrangements to be amended to conform the dates of 
     distribution under such arrangement to the date amounts are 
     required to be included in the income of such taxpayer under 
     this subsection.
       (6) Accelerated payment not treated as material 
     modification.--Any amendment to a nonqualified deferred 
     compensation arrangement made pursuant to paragraph (4) or 
     (5) shall not be treated as a material modification of the 
     arrangement for purposes of section 409A of the Internal 
     Revenue Code of 1986.

     SEC. 402. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF 
                   INTEREST.

       (a) In General.--Paragraphs (5)(D) and (6) of section 
     864(f) are each amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2018''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 403. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

       (a) Repeal of Adjustment for 2012.--Subparagraph (B) of 
     section 401(1) of the Tax Increase Prevention and 
     Reconciliation Act of 2005 is amended by striking the 
     percentage contained therein and inserting ``100 percent''.
       (b) Modification of Adjustment for 2013.--The percentage 
     under subparagraph (C) of section 401(1) of the Tax Increase 
     Prevention and Reconciliation Act of 2005 in effect on the 
     date of the enactment of this Act is increased by 36.75 
     percentage points.

  The SPEAKER pro tempore. Pursuant to House Resolution 1212, the 
amendment in the nature of a substitute printed in the bill is adopted 
and the bill, as amended, is considered read.
  The text of the bill, as amended, is as follows:

                               H.R. 6049

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

     SECTION 1. SHORT TITLE, ETC.

       (a) Short Title.--This Act may be cited as the ``Renewable 
     Energy and Job Creation Act of 2008''.
       (b) Reference.--Except as otherwise expressly provided, 
     whenever in this Act an amendment or repeal is expressed in 
     terms of an amendment to, or repeal of, a section or other 
     provision, the reference shall be considered to be made to a 
     section or other provision of the Internal Revenue Code of 
     1986.
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title, etc.

                     TITLE I--ENERGY TAX INCENTIVES

                Subtitle A--Energy Production Incentives

                  Part I--Renewable Energy Incentives

Sec. 101. Renewable energy credit.
Sec. 102. Production credit for electricity produced from marine 
              renewables.
Sec. 103. Energy credit.
Sec. 104. Credit for residential energy efficient property.
Sec. 105. Special rule to implement FERC and State electric 
              restructuring policy.
Sec. 106. New clean renewable energy bonds.

                 Part II--Carbon Mitigation Provisions

Sec. 111. Expansion and modification of advanced coal project 
              investment credit.
Sec. 112. Expansion and modification of coal gasification investment 
              credit.
Sec. 113. Temporary increase in coal excise tax.
Sec. 114. Special rules for refund of the coal excise tax to certain 
              coal producers and exporters.
Sec. 115. Carbon audit of the tax code.

    Subtitle B--Transportation and Domestic Fuel Security Provisions

Sec. 121. Inclusion of cellulosic biofuel in bonus depreciation for 
              biomass ethanol plant property.
Sec. 122. Credits for biodiesel and renewable diesel.
Sec. 123. Clarification that credits for fuel are designed to provide 
              an incentive for United States production.
Sec. 124. Credit for new qualified plug-in electric drive motor 
              vehicles.
Sec. 125. Exclusion from heavy truck tax for idling reduction units and 
              advanced insulation.
Sec. 126. Restructuring of New York Liberty Zone tax credits.
Sec. 127. Transportation fringe benefit to bicycle commuters.
Sec. 128. Alternative fuel vehicle refueling property credit.

       Subtitle C--Energy Conservation and Efficiency Provisions

Sec. 141. Qualified energy conservation bonds.
Sec. 142. Credit for nonbusiness energy property.
Sec. 143. Energy efficient commercial buildings deduction.
Sec. 144. Modifications of energy efficient appliance credit for 
              appliances produced after 2007.
Sec. 145. Accelerated recovery period for depreciation of smart meters 
              and smart grid systems.
Sec. 146. Qualified green building and sustainable design projects.

          TITLE II--ONE-YEAR EXTENSION OF TEMPORARY PROVISIONS

         Subtitle A--Extensions Primarily Affecting Individuals

Sec. 201. Deduction for State and local sales taxes.
Sec. 202. Deduction of qualified tuition and related expenses.
Sec. 203. Treatment of certain dividends of regulated investment 
              companies.
Sec. 204. Tax-free distributions from individual retirement plans for 
              charitable purposes.
Sec. 205. Deduction for certain expenses of elementary and secondary 
              school teachers.
Sec. 206. Election to include combat pay as earned income for purposes 
              of earned income tax credit.
Sec. 207. Modification of mortgage revenue bonds for veterans.
Sec. 208. Distributions from retirement plans to individuals called to 
              active duty.
Sec. 209. Stock in RIC for purposes of determining estates of 
              nonresidents not citizens.
Sec. 210. Qualified investment entities.
Sec. 211. Exclusion of amounts received under qualified group legal 
              services plans.

         Subtitle B--Extensions Primarily Affecting Businesses

Sec. 221. Research credit.
Sec. 222. Indian employment credit.
Sec. 223. New markets tax credit.
Sec. 224. Railroad track maintenance.
Sec. 225. Fifteen-year straight-line cost recovery for qualified 
              leasehold improvements and qualified restaurant property.
Sec. 226. Seven-year cost recovery period for motorsports racing track 
              facility.
Sec. 227. Accelerated depreciation for business property on Indian 
              reservation.
Sec. 228. Expensing of environmental remediation costs.
Sec. 229. Deduction allowable with respect to income attributable to 
              domestic production activities in Puerto Rico.
Sec. 230. Modification of tax treatment of certain payments to 
              controlling exempt organizations.
Sec. 231. Qualified zone academy bonds.
Sec. 232. Tax incentives for investment in the District of Columbia.
Sec. 233. Economic development credit for American Samoa.
Sec. 234. Enhanced charitable deduction for contributions of food 
              inventory.
Sec. 235. Enhanced charitable deduction for contributions of book 
              inventory to public schools.
Sec. 236. Enhanced deduction for qualified computer contributions.
Sec. 237. Basis adjustment to stock of S corporations making charitable 
              contributions of property.
Sec. 238. Work opportunity tax credit for Hurricane Katrina employees.
Sec. 239. Subpart F exception for active financing income.
Sec. 240. Look-thru rule for related controlled foreign corporations.
Sec. 241. Expensing for certain qualified film and television 
              productions.

                      Subtitle C--Other Extensions

Sec. 251. Authority to disclose information related to terrorist 
              activities made permanent.
Sec. 252. Authority for undercover operations made permanent.
Sec. 253. Authority to disclose return information for certain veterans 
              programs made permanent.
Sec. 254. Increase in limit on cover over of rum excise tax to Puerto 
              Rico and the Virgin Islands.
Sec. 255. Parity in the application of certain limits to mental health 
              benefits.

[[Page 10242]]

                    TITLE III--ADDITIONAL TAX RELIEF

                   Subtitle A--Individual Tax Relief

Sec. 301. Additional standard deduction for real property taxes for 
              nonitemizers.
Sec. 302. Refundable child credit.
Sec. 303. Increase of AMT refundable credit amount for individuals with 
              long-term unused credits for prior year minimum tax 
              liability, etc.

                Subtitle B--Business Related Provisions

Sec. 311. Uniform treatment of attorney-advanced expenses and court 
              costs in contingency fee cases.
Sec. 312. Provisions related to film and television productions.

  Subtitle C--Modification of Penalty on Understatement of Taxpayer's 
                    Liability by Tax Return Preparer

Sec. 321. Modification of penalty on understatement of taxpayer's 
              liability by tax return preparer.

   Subtitle D--Extension and Expansion of Certain GO Zone Incentives

Sec. 331. Certain GO Zone incentives.

                      TITLE IV--REVENUE PROVISIONS

Sec. 401. Nonqualified deferred compensation from certain tax 
              indifferent parties.
Sec. 402. Delay in application of worldwide allocation of interest.
Sec. 403. Time for payment of corporate estimated taxes.

                     TITLE I--ENERGY TAX INCENTIVES

                Subtitle A--Energy Production Incentives

                  PART I--RENEWABLE ENERGY INCENTIVES

     SEC. 101. RENEWABLE ENERGY CREDIT.

       (a) Extension of Credit.--
       (1) 1-year extension for wind facilities.--Paragraph (1) of 
     section 45(d) is amended by striking ``January 1, 2009'' and 
     inserting ``January 1, 2010''.
       (2) 3-year extension for certain other facilities.--Each of 
     the following provisions of section 45(d) is amended by 
     striking ``January 1, 2009'' and inserting ``January 1, 
     2012'':
       (A) Clauses (i) and (ii) of paragraph (2)(A).
       (B) Clauses (i)(I) and (ii) of paragraph (3)(A).
       (C) Paragraph (4).
       (D) Paragraph (5).
       (E) Paragraph (6).
       (F) Paragraph (7).
       (G) Subparagraphs (A) and (B) of paragraph (9).
       (b) Modification of Credit Phaseout.--
       (1) Repeal of phaseout.--Subsection (b) of section 45 is 
     amended--
       (A) by striking paragraph (1), and
       (B) by striking ``the 8 cent amount in paragraph (1),'' in 
     paragraph (2) thereof.
       (2) Limitation based on investment in facility.--Subsection 
     (b) of section 45 is amended by inserting before paragraph 
     (2) the following new paragraph:
       ``(1) Limitation based on investment in facility.--
       ``(A) In general.--In the case of any qualified facility 
     originally placed in service after December 31, 2009, the 
     amount of the credit determined under subsection (a) for any 
     taxable year with respect to electricity produced at such 
     facility shall not exceed the product of--
       ``(i) the applicable percentage with respect to such 
     facility, multiplied by
       ``(ii) the eligible basis of such facility.
       ``(B) Carryforward of unused limitation and excess 
     credit.--
       ``(i) Unused limitation.--If the limitation imposed under 
     subparagraph (A) with respect to any facility for any taxable 
     year exceeds the prelimitation credit for such facility for 
     such taxable year, the limitation imposed under subparagraph 
     (A) with respect to such facility for the succeeding taxable 
     year shall be increased by the amount of such excess.
       ``(ii) Excess credit.--If the prelimitation credit with 
     respect to any facility for any taxable year exceeds the 
     limitation imposed under subparagraph (A) with respect to 
     such facility for such taxable year, the credit determined 
     under subsection (a) with respect to such facility for the 
     succeeding taxable year (determined before the application of 
     subparagraph (A) for such succeeding taxable year) shall be 
     increased by the amount of such excess. With respect to any 
     facility, no amount may be carried forward under this clause 
     to any taxable year beginning after the 10-year period 
     described in subsection (a)(2)(A)(ii) with respect to such 
     facility.
       ``(iii) Prelimitation credit.--The term `prelimitation 
     credit' with respect to any facility for a taxable year means 
     the credit determined under subsection (a) with respect to 
     such facility for such taxable year, determined without 
     regard to subparagraph (A) and after taking into account any 
     increase for such taxable year under clause (ii).
       ``(C) Applicable percentage.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `applicable percentage' means, 
     with respect to any facility, the appropriate percentage 
     prescribed by the Secretary for the month in which such 
     facility is originally placed in service.
       ``(ii) Method of prescribing applicable percentages.--The 
     applicable percentages prescribed by the Secretary for any 
     month under clause (i) shall be percentages which yield over 
     a 10-year period amounts of limitation under subparagraph (A) 
     which have a present value equal to 35 percent of the 
     eligible basis of the facility.
       ``(iii) Method of discounting.--The present value under 
     clause (ii) shall be determined--

       ``(I) as of the last day of the 1st year of the 10-year 
     period referred to in clause (ii),
       ``(II) by using a discount rate equal to the greater of 110 
     percent of the Federal long-term rate as in effect under 
     section 1274(d) for the month preceding the month for which 
     the applicable percentage is being prescribed, or 4.5 
     percent, and
       ``(III) by taking into account the limitation under 
     subparagraph (A) for any year on the last day of such year.

       ``(D) Eligible basis.--For purposes of this paragraph--
       ``(i) In general.--The term `eligible basis' means, with 
     respect to any facility, the sum of--

       ``(I) the basis of such facility determined as of the time 
     that such facility is originally placed in service, and
       ``(II) the portion of the basis of any shared qualified 
     property which is properly allocable to such facility under 
     clause (ii).

       ``(ii) Rules for allocation.--For purposes of subclause 
     (II) of clause (i), the basis of shared qualified property 
     shall be allocated among all qualified facilities which are 
     projected to be placed in service and which require 
     utilization of such property in proportion to projected 
     generation from such facilities.
       ``(iii) Shared qualified property.--For purposes of this 
     paragraph, the term `shared qualified property' means, with 
     respect to any facility, any property described in section 
     168(e)(3)(B)(vi)--

       ``(I) which a qualified facility will require for 
     utilization of such facility, and
       ``(II) which is not a qualified facility.

       ``(iv) Special rule relating to geothermal facilities.--In 
     the case of any qualified facility using geothermal energy to 
     produce electricity, the basis of such facility for purposes 
     of this paragraph shall be determined as though intangible 
     drilling and development costs described in section 263(c) 
     were capitalized rather than expensed.
       ``(E) Special rule for first and last year of credit 
     period.--In the case of any taxable year any portion of which 
     is not within the 10-year period described in subsection 
     (a)(2)(A)(ii) with respect to any facility, the amount of the 
     limitation under subparagraph (A) with respect to such 
     facility shall be reduced by an amount which bears the same 
     ratio to the amount of such limitation (determined without 
     regard to this subparagraph) as such portion of the taxable 
     year which is not within such period bears to the entire 
     taxable year.
       ``(F) Election to treat all facilities placed in service in 
     a year as 1 facility.--At the election of the taxpayer, all 
     qualified facilities which are part of the same project and 
     which are placed in service during the same calendar year 
     shall be treated for purposes of this section as 1 facility 
     which is placed in service at the mid-point of such year or 
     the first day of the following calendar year.''.
       (c) Trash Facility Clarification.--Paragraph (7) of section 
     45(d) is amended--
       (1) by striking ``facility which burns'' and inserting 
     ``facility (other than a facility described in paragraph (6)) 
     which uses'', and
       (2) by striking ``combustion''.
       (d) Expansion of Biomass Facilities.--
       (1) Open-loop biomass facilities.--Paragraph (3) of section 
     45(d) is amended by redesignating subparagraph (B) as 
     subparagraph (C) and by inserting after subparagraph (A) the 
     following new subparagraph:
       ``(B) Expansion of facility.--Such term shall include a new 
     unit placed in service after the date of the enactment of 
     this subparagraph in connection with a facility described in 
     subparagraph (A), but only to the extent of the increased 
     amount of electricity produced at the facility by reason of 
     such new unit.''.
       (2) Closed-loop biomass facilities.--Paragraph (2) of 
     section 45(d) is amended by redesignating subparagraph (B) as 
     subparagraph (C) and inserting after subparagraph (A) the 
     following new subparagraph:
       ``(B) Expansion of facility.--Such term shall include a new 
     unit placed in service after the date of the enactment of 
     this subparagraph in connection with a facility described in 
     subparagraph (A)(i), but only to the extent of the increased 
     amount of electricity produced at the facility by reason of 
     such new unit.''.
       (e) Sales of Net Electricity to Regulated Public Utilities 
     Treated as Sales to Unrelated Persons.--Paragraph (4) of 
     section 45(e) is amended by adding at the end the following 
     new sentence: ``The net amount of electricity sold by any 
     taxpayer to a regulated public utility (as defined in section 
     7701(a)(33)) shall be treated as sold to an unrelated 
     person.''.
       (f) Modification of Rules for Hydropower Production.--
     Subparagraph (C) of section 45(c)(8) is amended to read as 
     follows:
       ``(C) Nonhydroelectric dam.--For purposes of subparagraph 
     (A), a facility is described in this subparagraph if--
       ``(i) the hydroelectric project installed on the 
     nonhydroelectric dam is licensed by the Federal Energy 
     Regulatory Commission and meets all other applicable 
     environmental, licensing, and regulatory requirements,
       ``(ii) the nonhydroelectric dam was placed in service 
     before the date of the enactment of this paragraph and 
     operated for flood control, navigation, or water supply 
     purposes and did not produce hydroelectric power on the date 
     of the enactment of this paragraph, and
       ``(iii) the hydroelectric project is operated so that the 
     water surface elevation at any given location and time that 
     would have occurred in the absence of the hydroelectric 
     project is maintained, subject to any license requirements 
     imposed under applicable law that change the

[[Page 10243]]

     water surface elevation for the purpose of improving 
     environmental quality of the affected waterway.

     The Secretary, in consultation with the Federal Energy 
     Regulatory Commission, shall certify if a hydroelectric 
     project licensed at a nonhydroelectric dam meets the criteria 
     in clause (iii). Nothing in this section shall affect the 
     standards under which the Federal Energy Regulatory 
     Commission issues licenses for and regulates hydropower 
     projects under part I of the Federal Power Act.''.
       (g) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to property originally placed in service after December 31, 
     2008.
       (2) Repeal of credit phaseout.--The amendments made by 
     subsection (b)(1) shall apply to taxable years ending after 
     December 31, 2008.
       (3) Limitation based on investment in facility.--The 
     amendment made by subsection (b)(2) shall apply to property 
     originally placed in service after December 31, 2009.
       (4) Trash facility clarification; sales to related 
     regulated public utilities.--The amendments made by 
     subsections (c) and (e) shall apply to electricity produced 
     and sold after the date of the enactment of this Act.
       (5) Expansion of biomass facilities.--The amendments made 
     by subsection (d) shall apply to property placed in service 
     after the date of the enactment of this Act.

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

       (a) In General.--Paragraph (1) of section 45(c) is amended 
     by striking ``and'' at the end of subparagraph (G), by 
     striking the period at the end of subparagraph (H) and 
     inserting ``, and'', and by adding at the end the following 
     new subparagraph:
       ``(I) marine and hydrokinetic renewable energy.''.
       (b) Marine Renewables.--Subsection (c) of section 45 is 
     amended by adding at the end the following new paragraph:
       ``(10) Marine and hydrokinetic renewable energy.--
       ``(A) In general.--The term `marine and hydrokinetic 
     renewable energy' means energy derived from--
       ``(i) waves, tides, and currents in oceans, estuaries, and 
     tidal areas,
       ``(ii) free flowing water in rivers, lakes, and streams,
       ``(iii) free flowing water in an irrigation system, canal, 
     or other man-made channel, including projects that utilize 
     nonmechanical structures to accelerate the flow of water for 
     electric power production purposes, or
       ``(iv) differentials in ocean temperature (ocean thermal 
     energy conversion).
       ``(B) Exceptions.--Such term shall not include any energy 
     which is derived from any source which utilizes a dam, 
     diversionary structure (except as provided in subparagraph 
     (A)(iii)), or impoundment for electric power production 
     purposes.''.
       (c) Definition of Facility.--Subsection (d) of section 45 
     is amended by adding at the end the following new paragraph:
       ``(11) Marine and hydrokinetic renewable energy 
     facilities.--In the case of a facility producing electricity 
     from marine and hydrokinetic renewable energy, the term 
     `qualified facility' means any facility owned by the 
     taxpayer--
       ``(A) which has a nameplate capacity rating of at least 150 
     kilowatts, and
       ``(B) which is originally placed in service on or after the 
     date of the enactment of this paragraph and before January 1, 
     2012.''.
       (d) Credit Rate.--Subparagraph (A) of section 45(b)(4) is 
     amended by striking ``or (9)'' and inserting ``(9), or 
     (11)''.
       (e) Coordination With Small Irrigation Power.--Paragraph 
     (5) of section 45(d), as amended by section 101, is amended 
     by striking ``January 1, 2012'' and inserting ``the date of 
     the enactment of paragraph (11)''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to electricity produced and sold after the date 
     of the enactment of this Act, in taxable years ending after 
     such date.

     SEC. 103. ENERGY CREDIT.

       (a) Extension of Credit.--
       (1) Solar energy property.--Paragraphs (2)(A)(i)(II) and 
     (3)(A)(ii) of section 48(a) are each amended by striking 
     ``January 1, 2009'' and inserting ``January 1, 2015''.
       (2) Fuel cell property.--Subparagraph (E) of section 
     48(c)(1) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2014''.
       (3) Microturbine property.--Subparagraph (E) of section 
     48(c)(2) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2014''.
       (b) Allowance of Energy Credit Against Alternative Minimum 
     Tax.--Subparagraph (B) of section 38(c)(4) is amended by 
     striking ``and'' at the end of clause (iii), by redesignating 
     clause (iv) as clause (v), and by inserting after clause 
     (iii) the following new clause:
       ``(iv) the credit determined under section 46 to the extent 
     that such credit is attributable to the energy credit 
     determined under section 48, and''.
       (c) Energy Credit for Combined Heat and Power System 
     Property.--
       (1) In general.--Section 48(a)(3)(A) (defining energy 
     property) is amended by striking ``or'' at the end of clause 
     (iii), by inserting ``or'' at the end of clause (iv), and by 
     adding at the end the following new clause:
       ``(v) combined heat and power system property,''.
       (2) Combined heat and power system property.--Section 48 is 
     amended by adding at the end the following new subsection:
       ``(d) Combined Heat and Power System Property.--For 
     purposes of subsection (a)(3)(A)(v)--
       ``(1) Combined heat and power system property.--The term 
     `combined heat and power system property' means property 
     comprising a system--
       ``(A) which uses the same energy source for the 
     simultaneous or sequential generation of electrical power, 
     mechanical shaft power, or both, in combination with the 
     generation of steam or other forms of useful thermal energy 
     (including heating and cooling applications),
       ``(B) which produces--
       ``(i) at least 20 percent of its total useful energy in the 
     form of thermal energy which is not used to produce 
     electrical or mechanical power (or combination thereof), and
       ``(ii) at least 20 percent of its total useful energy in 
     the form of electrical or mechanical power (or combination 
     thereof),
       ``(C) the energy efficiency percentage of which exceeds 60 
     percent, and
       ``(D) which is placed in service before January 1, 2015.
       ``(2) Limitation.--
       ``(A) In general.--In the case of combined heat and power 
     system property with an electrical capacity in excess of the 
     applicable capacity placed in service during the taxable 
     year, the credit under subsection (a)(1) (determined without 
     regard to this paragraph) for such year shall be equal to the 
     amount which bears the same ratio to such credit as the 
     applicable capacity bears to the capacity of such property.
       ``(B) Applicable capacity.--For purposes of subparagraph 
     (A), the term `applicable capacity' means 15 megawatts or a 
     mechanical energy capacity of more than 20,000 horsepower or 
     an equivalent combination of electrical and mechanical energy 
     capacities.
       ``(C) Maximum capacity.--The term `combined heat and power 
     system property' shall not include any property comprising a 
     system if such system has a capacity in excess of 50 
     megawatts or a mechanical energy capacity in excess of 67,000 
     horsepower or an equivalent combination of electrical and 
     mechanical energy capacities.
       ``(3) Special rules.--
       ``(A) Energy efficiency percentage.--For purposes of this 
     subsection, the energy efficiency percentage of a system is 
     the fraction--
       ``(i) the numerator of which is the total useful 
     electrical, thermal, and mechanical power produced by the 
     system at normal operating rates, and expected to be consumed 
     in its normal application, and
       ``(ii) the denominator of which is the lower heating value 
     of the fuel sources for the system.
       ``(B) Determinations made on btu basis.--The energy 
     efficiency percentage and the percentages under paragraph 
     (1)(B) shall be determined on a Btu basis.
       ``(C) Input and output property not included.--The term 
     `combined heat and power system property' does not include 
     property used to transport the energy source to the facility 
     or to distribute energy produced by the facility.
       ``(4) Systems using biomass.--If a system is designed to 
     use biomass (within the meaning of paragraphs (2) and (3) of 
     section 45(c) without regard to the last sentence of 
     paragraph (3)(A)) for at least 90 percent of the energy 
     source--
       ``(A) paragraph (1)(C) shall not apply, but
       ``(B) the amount of credit determined under subsection (a) 
     with respect to such system shall not exceed the amount which 
     bears the same ratio to such amount of credit (determined 
     without regard to this paragraph) as the energy efficiency 
     percentage of such system bears to 60 percent.''.
       (d) Increase of Credit Limitation for Fuel Cell Property.--
     Subparagraph (B) of section 48(c)(1) is amended by striking 
     ``$500'' and inserting ``$1,500''.
       (e) Public Utility Property Taken Into Account.--
       (1) In general.--Paragraph (3) of section 48(a) is amended 
     by striking the second sentence thereof.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 48(c) is amended by striking 
     subparagraph (D) and redesignating subparagraph (E) as 
     subparagraph (D).
       (B) Paragraph (2) of section 48(c) is amended by striking 
     subparagraph (D) and redesignating subparagraph (E) as 
     subparagraph (D).
       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall take 
     effect on the date of the enactment of this Act.
       (2) Allowance against alternative minimum tax.--The 
     amendments made by subsection (b) shall apply to credits 
     determined under section 46 of the Internal Revenue Code of 
     1986 in taxable years beginning after the date of the 
     enactment of this Act and to carrybacks of such credits.
       (3) Combined heat and power and fuel cell property.--The 
     amendments made by subsections (c) and (d) shall apply to 
     periods after the date of the enactment of this Act, in 
     taxable years ending after such date, under rules similar to 
     the rules of section 48(m) of the Internal Revenue Code of 
     1986 (as in effect on the day before the date of the 
     enactment of the Revenue Reconciliation Act of 1990).
       (4)  Public utility property.--The amendments made by 
     subsection (e) shall apply to periods after February 13, 
     2008, in taxable years

[[Page 10244]]

     ending after such date, under rules similar to the rules of 
     section 48(m) of the Internal Revenue Code of 1986 (as in 
     effect on the day before the date of the enactment of the 
     Revenue Reconciliation Act of 1990).

     SEC. 104. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

       (a) Extension.--Section 25D(g) is amended by striking 
     ``December 31, 2008'' and inserting ``December 31, 2014''.
       (b) Maximum Credit for Solar Electric Property.--
       (1) In general.--Section 25D(b)(1)(A) is amended by 
     striking ``$2,000'' and inserting ``$4,000''.
       (2) Conforming amendment.--Section 25D(e)(4)(A)(i) is 
     amended by striking ``$6,667'' and inserting ``$13,333''.
       (c) Credit for Residential Wind Property.--
       (1) In general.--Section 25D(a) is amended by striking 
     ``and'' at the end of paragraph (2), by striking the period 
     at the end of paragraph (3) and inserting ``, and'', and by 
     adding at the end the following new paragraph:
       ``(4) 30 percent of the qualified small wind energy 
     property expenditures made by the taxpayer during such 
     year.''.
       (2) Limitation.--Section 25D(b)(1) is amended by striking 
     ``and'' at the end of subparagraph (B), by striking the 
     period at the end of subparagraph (C) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(D) $500 with respect to each half kilowatt of capacity 
     (not to exceed $4,000) of wind turbines for which qualified 
     small wind energy property expenditures are made.''.
       (3) Qualified small wind energy property expenditures.--
       (A) In general.--Section 25D(d) is amended by adding at the 
     end the following new paragraph:
       ``(4) Qualified small wind energy property expenditure.--
     The term `qualified small wind energy property expenditure' 
     means an expenditure for property which uses a wind turbine 
     to generate electricity for use in connection with a dwelling 
     unit located in the United States and used as a residence by 
     the taxpayer.''.
       (B) No double benefit.--Section 45(d)(1) is amended by 
     adding at the end the following new sentence: ``Such term 
     shall not include any facility with respect to which any 
     qualified small wind energy property expenditure (as defined 
     in subsection (d)(4) of section 25D) is taken into account in 
     determining the credit under such section.''.
       (4) Maximum expenditures in case of joint occupancy.--
     Section 25D(e)(4)(A) is amended by striking ``and'' at the 
     end of clause (ii), by striking the period at the end of 
     clause (iii) and inserting ``, and'', and by adding at the 
     end the following new clause:
       ``(iv) $1,667 in the case of each half kilowatt of capacity 
     (not to exceed $13,333) of wind turbines for which qualified 
     small wind energy property expenditures are made.''.
       (d) Credit for Geothermal Heat pump Systems.--
       (1) In general.--Section 25D(a), as amended by subsection 
     (c), is amended by striking ``and'' at the end of paragraph 
     (3), by striking the period at the end of paragraph (4) and 
     inserting ``, and'', and by adding at the end the following 
     new paragraph:
       ``(5) 30 percent of the qualified geothermal heat pump 
     property expenditures made by the taxpayer during such 
     year.''.
       (2) Limitation.--Section 25D(b)(1), as amended by 
     subsection (c), is amended by striking ``and'' at the end of 
     subparagraph (C), by striking the period at the end of 
     subparagraph (D) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(E) $2,000 with respect to any qualified geothermal heat 
     pump property expenditures.''.
       (3) Qualified geothermal heat pump property expenditure.--
     Section 25D(d), as amended by subsection (c), is amended by 
     adding at the end the following new paragraph:
       ``(5) Qualified geothermal heat pump property 
     expenditure.--
       ``(A) In general.--The term `qualified geothermal heat pump 
     property expenditure' means an expenditure for qualified 
     geothermal heat pump property installed on or in connection 
     with a dwelling unit located in the United States and used as 
     a residence by the taxpayer.
       ``(B) Qualified geothermal heat pump property.--The term 
     `qualified geothermal heat pump property' means any equipment 
     which--
       ``(i) uses the ground or ground water as a thermal energy 
     source to heat the dwelling unit referred to in subparagraph 
     (A) or as a thermal energy sink to cool such dwelling unit, 
     and
       ``(ii) meets the requirements of the Energy Star program 
     which are in effect at the time that the expenditure for such 
     equipment is made.''.
       (4) Maximum expenditures in case of joint occupancy.--
     Section 25D(e)(4)(A), as amended by subsection (c), is 
     amended by striking ``and'' at the end of clause (iii), by 
     striking the period at the end of clause (iv) and inserting 
     ``, and'', and by adding at the end the following new clause:
       ``(v) $6,667 in the case of any qualified geothermal heat 
     pump property expenditures.''.
       (e) Credit Allowed Against Alternative Minimum Tax.--
       (1) In general.--Subsection (c) of section 25D is amended 
     to read as follows:
       ``(c) Limitation Based on Amount of Tax; Carryforward of 
     Unused Credit.--
       ``(1) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for the taxable year 
     shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section) and section 27 for the taxable 
     year.
       ``(2) Carryforward of unused credit.--
       ``(A) Rule for years in which all personal credits allowed 
     against regular and alternative minimum tax.--In the case of 
     a taxable year to which section 26(a)(2) applies, if the 
     credit allowable under subsection (a) exceeds the limitation 
     imposed by section 26(a)(2) for such taxable year reduced by 
     the sum of the credits allowable under this subpart (other 
     than this section), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such succeeding taxable year.
       ``(B) Rule for other years.--In the case of a taxable year 
     to which section 26(a)(2) does not apply, if the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such succeeding 
     taxable year.''.
       (2) Conforming amendments.--
       (A) Section 23(b)(4)(B) is amended by inserting ``and 
     section 25D'' after ``this section''.
       (B) Section 24(b)(3)(B) is amended by striking ``and 25B'' 
     and inserting ``, 25B, and 25D''.
       (C) Section 25B(g)(2) is amended by striking ``section 23'' 
     and inserting ``sections 23 and 25D''.
       (D) Section 26(a)(1) is amended by striking ``and 25B'' and 
     inserting ``25B, and 25D''.
       (f) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years beginning after December 31, 2007.
       (2) Application of egtrra sunset.--The amendments made by 
     subparagraphs (A) and (B) of subsection (e)(2) shall be 
     subject to title IX of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 in the same manner as the 
     provisions of such Act to which such amendments relate.

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

       (a) Extension for Qualified Electric Utilities.--
       (1) In general.--Paragraph (3) of section 451(i) is amended 
     by inserting ``(before January 1, 2010, in the case of a 
     qualified electric utility)'' after ``January 1, 2008''.
       (2) Qualified electric utility.--Subsection (i) of section 
     451 is amended by redesignating paragraphs (6) through (10) 
     as paragraphs (7) through (11), respectively, and by 
     inserting after paragraph (5) the following new paragraph:
       ``(6) Qualified electric utility.--For purposes of this 
     subsection, the term `qualified electric utility' means a 
     person that, as of the date of the qualifying electric 
     transmission transaction, is vertically integrated, in that 
     it is both--
       ``(A) a transmitting utility (as defined in section 3(23) 
     of the Federal Power Act (16 U.S.C. 796(23))) with respect to 
     the transmission facilities to which the election under this 
     subsection applies, and
       ``(B) an electric utility (as defined in section 3(22) of 
     the Federal Power Act (16 U.S.C. 796(22))).''.
       (b) Extension of Period for Transfer of Operational Control 
     Authorized by FERC.--Clause (ii) of section 451(i)(4)(B) is 
     amended by striking ``December 31, 2007'' and inserting ``the 
     date which is 4 years after the close of the taxable year in 
     which the transaction occurs''.
       (c) Property Located Outside the United States Not Treated 
     as Exempt Utility Property.--Paragraph (5) of section 451(i) 
     is amended by adding at the end the following new 
     subparagraph:
       ``(C) Exception for property located outside the united 
     states.--The term `exempt utility property' shall not include 
     any property which is located outside the United States.''.
       (d) Effective Dates.--
       (1) Extension.--The amendments made by subsection (a) shall 
     apply to transactions after December 31, 2007.
       (2) Transfers of operational control.--The amendment made 
     by subsection (b) shall take effect as if included in section 
     909 of the American Jobs Creation Act of 2004.
       (3) Exception for property located outside the united 
     states.--The amendment made by subsection (c) shall apply to 
     transactions after the date of the enactment of this Act.

     SEC. 106. NEW CLEAN RENEWABLE ENERGY BONDS.

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

                ``Subpart I--Qualified Tax Credit Bonds

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

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

       ``(a) Allowance of Credit.--If a taxpayer holds a qualified 
     tax credit bond on one or more credit allowance dates of the 
     bond during any taxable year, there shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of the credits 
     determined under subsection (b) with respect to such dates.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to

[[Page 10245]]

     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 reasonably expected 
     to result in an amount not greater than an amount necessary 
     to repay the issue, and
       ``(iii) the yield on such fund is not greater than the 
     discount rate determined under paragraph (5)(B) with respect 
     to the issue.
       ``(5) Maturity limitation.--
       ``(A) In general.--An issue shall not be treated as meeting 
     the requirements of this paragraph if the maturity of any 
     bond which is part of such issue exceeds the maximum term 
     determined by the Secretary under subparagraph (B).
       ``(B) Maximum term.--During each calendar month, the 
     Secretary shall determine the maximum term permitted under 
     this paragraph for bonds issued during the following calendar 
     month. Such maximum term shall be the term which the 
     Secretary estimates will result in the present value of the 
     obligation to repay the principal on the bond being equal to 
     50 percent of the face amount of such bond. Such present 
     value shall be determined using as a discount rate the 
     average annual interest rate of tax-exempt obligations having 
     a term of 10 years or more which are issued during the month. 
     If the term as so determined is not a multiple of a whole 
     year, such term shall be rounded to the next highest whole 
     year.
       ``(6) Prohibition on financial conflicts of interest.--An 
     issue shall be treated as meeting the requirements of this 
     paragraph if the issuer certifies that--
       ``(A) applicable State and local law requirements governing 
     conflicts of interest are satisfied with respect to such 
     issue, and
       ``(B) if the Secretary prescribes additional conflicts of 
     interest rules governing the appropriate Members of Congress, 
     Federal, State, and local officials, and their spouses, such 
     additional rules are satisfied with respect to such issue.
       ``(e) Other Definitions.--For purposes of this subchapter--
       ``(1) Credit allowance date.--The term `credit allowance 
     date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
     Such term includes the last day on which the bond is 
     outstanding.
       ``(2) Bond.--The term `bond' includes any obligation.
       ``(3) State.--The term `State' includes the District of 
     Columbia and any possession of the United States.
       ``(4) Available project proceeds.--The term `available 
     project proceeds' means--
       ``(A) the excess of--
       ``(i) the proceeds from the sale of an issue, over
       ``(ii) the issuance costs financed by the issue (to the 
     extent that such costs do not exceed 2 percent of such 
     proceeds), and
       ``(B) the proceeds from any investment of the excess 
     described in subparagraph (A).
       ``(f) Credit Treated as Interest.--For purposes of this 
     subtitle, the credit determined under subsection (a) shall be 
     treated as interest which is includible in gross income.
       ``(g) S Corporations and Partnerships.--In the case of a 
     tax credit bond held by an S corporation or partnership, the 
     allocation of the credit allowed by this section to the 
     shareholders of such corporation or partners of such 
     partnership shall be treated as a distribution.
       ``(h) Bonds Held by Regulated Investment Companies and Real 
     Estate Investment Trusts.--If any qualified tax credit bond 
     is held by a regulated investment company or a real estate 
     investment trust, the credit determined under subsection (a) 
     shall be allowed to shareholders of such company or 
     beneficiaries of such trust (and any gross income included 
     under subsection (f) with respect to such credit shall be 
     treated as distributed to such shareholders or beneficiaries) 
     under procedures prescribed by the Secretary.
       ``(i) Credits May Be Stripped.--Under regulations 
     prescribed by the Secretary--
       ``(1) In general.--There may be a separation (including at 
     issuance) of the ownership of a qualified tax credit bond and 
     the entitlement to the credit under this section with respect 
     to such bond. In case of any such separation, the credit 
     under this section shall be allowed to the person who on the 
     credit allowance date holds the instrument evidencing the 
     entitlement to the credit and not to the holder of the bond.
       ``(2) Certain rules to apply.--In the case of a separation 
     described in paragraph (1), the rules of section 1286 shall 
     apply to the qualified tax credit bond as if it were a 
     stripped bond and to the credit under this section as if it 
     were a stripped coupon.

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

       ``(a) New Clean Renewable Energy Bond.--For purposes of 
     this subpart, the term `new

[[Page 10246]]

     clean renewable energy bond' means any bond issued as part of 
     an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for capital expenditures incurred by 
     public power providers or cooperative electric companies for 
     one or more qualified renewable energy facilities,
       ``(2) the bond is issued by a qualified issuer, and
       ``(3) the issuer designates such bond for purposes of this 
     section.
       ``(b) Reduced Credit Amount.--The annual credit determined 
     under section 54A(b) with respect to any new clean renewable 
     energy bond shall be 70 percent of the amount so determined 
     without regard to this subsection.
       ``(c) Limitation on Amount of Bonds Designated.--
       ``(1) In general.--The maximum aggregate face amount of 
     bonds which may be designated under subsection (a) by any 
     issuer shall not exceed the limitation amount allocated under 
     this subsection to such issuer.
       ``(2) National limitation on amount of bonds designated.--
     There is a national new clean renewable energy bond 
     limitation of $2,000,000,000 which shall be allocated by the 
     Secretary as provided in paragraph (3), except that--
       ``(A) not more than 33\1/3\ percent thereof may be 
     allocated to qualified projects of public power providers,
       ``(B) not more than 33\1/3\ percent thereof may be 
     allocated to qualified projects of governmental bodies, and
       ``(C) not more than 33\1/3\ percent thereof may be 
     allocated to qualified projects of cooperative electric 
     companies.
       ``(3) Method of allocation.--
       ``(A) Allocation among public power providers.--After the 
     Secretary determines the qualified projects of public power 
     providers which are appropriate for receiving an allocation 
     of the national new clean renewable energy bond limitation, 
     the Secretary shall, to the maximum extent practicable, make 
     allocations among such projects in such manner that the 
     amount allocated to each such project bears the same ratio to 
     the cost of such project as the limitation under paragraph 
     (2)(A) bears to the cost of all such projects.
       ``(B) Allocation among governmental bodies and cooperative 
     electric companies.--The Secretary shall make allocations of 
     the amount of the national new clean renewable energy bond 
     limitation described in paragraphs (2)(B) and (2)(C) among 
     qualified projects of governmental bodies and cooperative 
     electric companies, respectively, in such manner as the 
     Secretary determines appropriate.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified renewable energy facility.--The term 
     `qualified renewable energy facility' means a qualified 
     facility (as determined under section 45(d) without regard to 
     paragraphs (8) and (10) thereof and to any placed in service 
     date) owned by a public power provider, a governmental body, 
     or a cooperative electric company.
       ``(2) Public power provider.--The term `public power 
     provider' means a State utility with a service obligation, as 
     such terms are defined in section 217 of the Federal Power 
     Act (as in effect on the date of the enactment of this 
     paragraph).
       ``(3) Governmental body.--The term `governmental body' 
     means any State or Indian tribal government, or any political 
     subdivision thereof.
       ``(4) Cooperative electric company.--The term `cooperative 
     electric company' means a mutual or cooperative electric 
     company described in section 501(c)(12) or section 
     1381(a)(2)(C).
       ``(5) Clean renewable energy bond lender.--The term `clean 
     renewable energy bond lender' means a lender which is a 
     cooperative which is owned by, or has outstanding loans to, 
     100 or more cooperative electric companies and is in 
     existence on February 1, 2002, and shall include any 
     affiliated entity which is controlled by such lender.
       ``(6) Qualified issuer.--The term `qualified issuer' means 
     a public power provider, a cooperative electric company, a 
     governmental body, a clean renewable energy bond lender, or a 
     not-for-profit electric utility which has received a loan or 
     loan guarantee under the Rural Electrification Act.''.
       (b) Reporting.--Subsection (d) of section 6049 is amended 
     by adding at the end the following new paragraph:
       ``(9) Reporting of credit on qualified tax credit bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 54A and such amounts shall be treated as paid on the 
     credit allowance date (as defined in section 54A(e)(1)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A) of this paragraph, subsection 
     (b)(4) of this section shall be applied without regard to 
     subparagraphs (A), (H), (I), (J), (K), and (L)(i).
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''.
       (c) Conforming Amendments.--
       (1) Sections 54(c)(2) and 1400N(l)(3)(B) are each amended 
     by striking ``subpart C'' and inserting ``subparts C and I''.
       (2) Section 1397E(c)(2) is amended by striking ``subpart 
     H'' and inserting ``subparts H and I''.
       (3) Section 6401(b)(1) is amended by striking ``and H'' and 
     inserting ``H, and I''.
       (4) The heading of subpart H of part IV of subchapter A of 
     chapter 1 is amended by striking ``Certain Bonds'' and 
     inserting ``Clean Renewable Energy Bonds''.
       (5) The table of subparts for part IV of subchapter A of 
     chapter 1 is amended by striking the item relating to subpart 
     H and inserting the following new items:

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

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

       (d) Application of Certain Labor Standards on Projects 
     Financed Under Tax Credit Bonds.--Subchapter IV of chapter 31 
     of title 40, United States Code, shall apply to projects 
     financed with the proceeds of any tax credit bond (as defined 
     in section 54A of the Internal Revenue Code of 1986).
       (e) Effective Dates.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

                 PART II--CARBON MITIGATION PROVISIONS

     SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT 
                   INVESTMENT CREDIT.

       (a) Modification of Credit Amount.--Section 48A(a) is 
     amended by striking ``and'' at the end of paragraph (1), by 
     striking the period at the end of paragraph (2) and inserting 
     ``, and'', and by adding at the end the following new 
     paragraph:
       ``(3) 30 percent of the qualified investment for such 
     taxable year in the case of projects described in clause 
     (iii) of subsection (d)(3)(B).''.
       (b) Expansion of Aggregate Credits.--Section 48A(d)(3)(A) 
     is amended by striking ``$1,300,000,000'' and inserting 
     ``$2,550,000,000''.
       (c) Authorization of Additional Projects.--
       (1) In general.--Subparagraph (B) of section 48A(d)(3) is 
     amended to read as follows:
       ``(B) Particular projects.--Of the dollar amount in 
     subparagraph (A), the Secretary is authorized to certify--
       ``(i) $800,000,000 for integrated gasification combined 
     cycle projects the application for which is submitted during 
     the period described in paragraph (2)(A)(i),
       ``(ii) $500,000,000 for projects which use other advanced 
     coal-based generation technologies the application for which 
     is submitted during the period described in paragraph 
     (2)(A)(i), and
       ``(iii) $1,250,000,000 for advanced coal-based generation 
     technology projects the application for which is submitted 
     during the period described in paragraph (2)(A)(ii).''.
       (2) Application period for additional projects.--
     Subparagraph (A) of section 48A(d)(2) is amended to read as 
     follows:
       ``(A) Application period.--Each applicant for certification 
     under this paragraph shall submit an application meeting the 
     requirements of subparagraph (B). An applicant may only 
     submit an application--
       ``(i) for an allocation from the dollar amount specified in 
     clause (i) or (ii) of paragraph (3)(B) during the 3-year 
     period beginning on the date the Secretary establishes the 
     program under paragraph (1), and
       ``(ii) for an allocation from the dollar amount specified 
     in paragraph (3)(B)(iii) during the 3-year period beginning 
     at the earlier of the termination of the period described in 
     clause (i) or the date prescribed by the Secretary.''.
       (3) Capture and sequestration of carbon dioxide emissions 
     requirement.--
       (A) In general.--Section 48A(e)(1) is amended by striking 
     ``and'' at the end of subparagraph (E), by striking the 
     period at the end of subparagraph (F) and inserting ``; 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(G) in the case of any project the application for which 
     is submitted during the period described in subsection 
     (d)(2)(A)(ii), the project includes equipment which separates 
     and sequesters at least 65 percent (70 percent in the case of 
     an application for reallocated credits under subsection 
     (d)(4)) of such project's total carbon dioxide emissions.''.
       (B) Highest priority for projects which sequester carbon 
     dioxide emissions.--Section 48A(e)(3) is amended by striking 
     ``and'' at the end of subparagraph (A)(iii), by striking the 
     period at the end of subparagraph (B)(iii) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(C) give highest priority to projects with the greatest 
     separation and sequestration percentage of total carbon 
     dioxide emissions.''.
       (C) Recapture of credit for failure to sequester.--Section 
     48A is amended by adding at the end the following new 
     subsection:
       ``(h) Recapture of Credit for Failure To Sequester.--The 
     Secretary shall provide for recapturing the benefit of any 
     credit allowable under subsection (a) with respect to any 
     project which fails to attain or maintain the separation and 
     sequestration requirements of subsection (e)(1)(G).''.
       (4) Additional priority for research partnerships.--Section 
     48A(e)(3)(B), as amended by paragraph (3)(B), is amended--
       (A) by striking ``and'' at the end of clause (ii),
       (B) by redesignating clause (iii) as clause (iv), and
       (C) by inserting after clause (ii) the following new 
     clause:
       ``(iii) applicant participants who have a research 
     partnership with an eligible educational institution (as 
     defined in section 529(e)(5)), and''.
       (5) Clerical amendment.--Section 48A(e)(3) is amended by 
     striking ``integrated gasification combined cycle'' in the 
     heading and inserting ``certain''.

[[Page 10247]]

       (d) Competitive Certification Awards Modification 
     Authority.--Section 48A, as amended by subsection (c)(3), is 
     amended by adding at the end the following new subsection:
       ``(i) Competitive Certification Awards Modification 
     Authority.--In implementing this section or section 48B, the 
     Secretary is directed to modify the terms of any competitive 
     certification award and any associated closing agreement 
     where such modification--
       ``(1) is consistent with the objectives of such section,
       ``(2) is requested by the recipient of the competitive 
     certification award, and
       ``(3) involves moving the project site to improve the 
     potential to capture and sequester carbon dioxide emissions, 
     reduce costs of transporting feedstock, and serve a broader 
     customer base,
     unless the Secretary determines that the dollar amount of tax 
     credits available to the taxpayer under such section would 
     increase as a result of the modification or such modification 
     would result in such project not being originally certified. 
     In considering any such modification, the Secretary shall 
     consult with other relevant Federal agencies, including the 
     Department of Energy.''.
       (e) Disclosure of Allocations.--Section 48A(d) is amended 
     by adding at the end the following new paragraph:
       ``(5) Disclosure of allocations.--The Secretary shall, upon 
     making a certification under this subsection or section 
     48B(d), publicly disclose the identity of the applicant and 
     the amount of the credit certified with respect to such 
     applicant.''.
       (f) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to credits the application for which is submitted during the 
     period described in section 48A(d)(2)(A)(ii) of the Internal 
     Revenue Code of 1986 and which are allocated or reallocated 
     after the date of the enactment of this Act.
       (2) Competitive certification awards modification 
     authority.--The amendment made by subsection (d) shall take 
     effect on the date of the enactment of this Act and is 
     applicable to all competitive certification awards entered 
     into under section 48A or 48B of the Internal Revenue Code of 
     1986, whether such awards were issued before, on, or after 
     such date of enactment.
       (3) Disclosure of allocations.--The amendment made by 
     subsection (e) shall apply to certifications made after the 
     date of the enactment of this Act.
       (4) Clerical amendment.--The amendment made by subsection 
     (c)(5) shall take effect as if included in the amendment made 
     by section 1307(b) of the Energy Tax Incentives Act of 2005.

     SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFICATION 
                   INVESTMENT CREDIT.

       (a) Modification of Credit Amount.--Section 48B(a) is 
     amended by inserting ``(30 percent in the case of credits 
     allocated under subsection (d)(1)(B))'' after ``20 percent''.
       (b) Expansion of Aggregate Credits.--Section 48B(d)(1) is 
     amended by striking ``shall not exceed $350,000,000'' and all 
     that follows and inserting ``shall not exceed--
       ``(A) $350,000,000, plus
       ``(B) $250,000,000 for qualifying gasification projects 
     that include equipment which separates and sequesters at 
     least 75 percent of such project's total carbon dioxide 
     emissions.''.
       (c) Recapture of Credit for Failure To Sequester.--Section 
     48B is amended by adding at the end the following new 
     subsection:
       ``(f) Recapture of Credit for Failure To Sequester.--The 
     Secretary shall provide for recapturing the benefit of any 
     credit allowable under subsection (a) with respect to any 
     project which fails to attain or maintain the separation and 
     sequestration requirements for such project under subsection 
     (d)(1).''.
       (d) Selection Priorities.--Section 48B(d) is amended by 
     adding at the end the following new paragraph:
       ``(4) Selection priorities.--In determining which 
     qualifying gasification projects to certify under this 
     section, the Secretary shall--
       ``(A) give highest priority to projects with the greatest 
     separation and sequestration percentage of total carbon 
     dioxide emissions, and
       ``(B) give high priority to applicant participants who have 
     a research partnership with an eligible educational 
     institution (as defined in section 529(e)(5)).''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to credits described in section 48B(d)(1)(B) of 
     the Internal Revenue Code of 1986 which are allocated or 
     reallocated after the date of the enactment of this Act.

     SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX.

       Paragraph (2) of section 4121(e) is amended--
       (1) by striking ``January 1, 2014'' in subparagraph (A) and 
     inserting ``December 31, 2018'', and
       (2) by striking ``January 1 after 1981'' in subparagraph 
     (B) and inserting ``December 31 after 2007''.

     SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EXCISE TAX TO 
                   CERTAIN COAL PRODUCERS AND EXPORTERS.

       (a) Refund.--
       (1) Coal producers.--
       (A) In general.--Notwithstanding subsections (a)(1) and (c) 
     of section 6416 and section 6511 of the Internal Revenue Code 
     of 1986, if--
       (i) a coal producer establishes that such coal producer, or 
     a party related to such coal producer, exported coal produced 
     by such coal producer to a foreign country or shipped coal 
     produced by such coal producer to a possession of the United 
     States, or caused such coal to be exported or shipped, the 
     export or shipment of which was other than through an 
     exporter who meets the requirements of paragraph (2),
       (ii) such coal producer filed an excise tax return on or 
     after October 1, 1990, and on or before the date of the 
     enactment of this Act, and
       (iii) such coal producer files a claim for refund with the 
     Secretary not later than the close of the 30-day period 
     beginning on the date of the enactment of this Act,
     then the Secretary shall pay to such coal producer an amount 
     equal to the tax paid under section 4121 of such Code on such 
     coal exported or shipped by the coal producer or a party 
     related to such coal producer, or caused by the coal producer 
     or a party related to such coal producer to be exported or 
     shipped.
       (B) Special rules for certain taxpayers.--For purposes of 
     this section--
       (i) In general.--If a coal producer or a party related to a 
     coal producer has received a judgment described in clause 
     (iii), such coal producer shall be deemed to have established 
     the export of coal to a foreign country or shipment of coal 
     to a possession of the United States under subparagraph 
     (A)(i).
       (ii) Amount of payment.--If a taxpayer described in clause 
     (i) is entitled to a payment under subparagraph (A), the 
     amount of such payment shall be reduced by any amount paid 
     pursuant to the judgment described in clause (iii).
       (iii) Judgment described.--A judgment is described in this 
     subparagraph if such judgment--

       (I) is made by a court of competent jurisdiction within the 
     United States,
       (II) relates to the constitutionality of any tax paid on 
     exported coal under section 4121 of the Internal Revenue Code 
     of 1986, and
       (III) is in favor of the coal producer or the party related 
     to the coal producer.

       (2) Exporters.--Notwithstanding subsections (a)(1) and (c) 
     of section 6416 and section 6511 of the Internal Revenue Code 
     of 1986, and a judgment described in paragraph (1)(B)(iii) of 
     this subsection, if--
       (A) an exporter establishes that such exporter exported 
     coal to a foreign country or shipped coal to a possession of 
     the United States, or caused such coal to be so exported or 
     shipped,
       (B) such exporter filed a tax return on or after October 1, 
     1990, and on or before the date of the enactment of this Act, 
     and
       (C) such exporter files a claim for refund with the 
     Secretary not later than the close of the 30-day period 
     beginning on the date of the enactment of this Act,
     then the Secretary shall pay to such exporter an amount equal 
     to $0.825 per ton of such coal exported by the exporter or 
     caused to be exported or shipped, or caused to be exported or 
     shipped, by the exporter.
       (b) Limitations.--Subsection (a) shall not apply with 
     respect to exported coal if a settlement with the Federal 
     Government has been made with and accepted by, the coal 
     producer, a party related to such coal producer, or the 
     exporter, of such coal, as of the date that the claim is 
     filed under this section with respect to such exported coal. 
     For purposes of this subsection, the term ``settlement with 
     the Federal Government'' shall not include any settlement or 
     stipulation entered into as of the date of the enactment of 
     this Act, the terms of which contemplate a judgment 
     concerning which any party has reserved the right to file an 
     appeal, or has filed an appeal.
       (c) Subsequent Refund Prohibited.--No refund shall be made 
     under this section to the extent that a credit or refund of 
     such tax on such exported or shipped coal has been paid to 
     any person.
       (d) Definitions.--For purposes of this section--
       (1) Coal producer.--The term ``coal producer'' means the 
     person in whom is vested ownership of the coal immediately 
     after the coal is severed from the ground, without regard to 
     the existence of any contractual arrangement for the sale or 
     other disposition of the coal or the payment of any royalties 
     between the producer and third parties. The term includes any 
     person who extracts coal from coal waste refuse piles or from 
     the silt waste product which results from the wet washing (or 
     similar processing) of coal.
       (2) Exporter.--The term ``exporter'' means a person, other 
     than a coal producer, who does not have a contract, fee 
     arrangement, or any other agreement with a producer or seller 
     of such coal to export or ship such coal to a third party on 
     behalf of the producer or seller of such coal and--
       (A) is indicated in the shipper's export declaration or 
     other documentation as the exporter of record, or
       (B) actually exported such coal to a foreign country or 
     shipped such coal to a possession of the United States, or 
     caused such coal to be so exported or shipped.
       (3) Related party.--The term ``a party related to such coal 
     producer'' means a person who--
       (A) is related to such coal producer through any degree of 
     common management, stock ownership, or voting control,
       (B) is related (within the meaning of section 144(a)(3) of 
     the Internal Revenue Code of 1986) to such coal producer, or
       (C) has a contract, fee arrangement, or any other agreement 
     with such coal producer to sell such coal to a third party on 
     behalf of such coal producer.

[[Page 10248]]

       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Treasury or the Secretary's designee.
       (e) Timing of Refund.--With respect to any claim for refund 
     filed pursuant to this section, the Secretary shall determine 
     whether the requirements of this section are met not later 
     than 180 days after such claim is filed. If the Secretary 
     determines that the requirements of this section are met, the 
     claim for refund shall be paid not later than 180 days after 
     the Secretary makes such determination.
       (f) Interest.--Any refund paid pursuant to this section 
     shall be paid by the Secretary with interest from the date of 
     overpayment determined by using the overpayment rate and 
     method under section 6621 of the Internal Revenue Code of 
     1986.
       (g) Denial of Double Benefit.--The payment under subsection 
     (a) with respect to any coal shall not exceed--
       (1) in the case of a payment to a coal producer, the amount 
     of tax paid under section 4121 of the Internal Revenue Code 
     of 1986 with respect to such coal by such coal producer or a 
     party related to such coal producer, and
       (2) in the case of a payment to an exporter, an amount 
     equal to $0.825 per ton with respect to such coal exported by 
     the exporter or caused to be exported by the exporter.
       (h) Application of Section.--This section applies only to 
     claims on coal exported or shipped on or after October 1, 
     1990, through the date of the enactment of this Act.
       (i) Standing Not Conferred.--
       (1) Exporters.--With respect to exporters, this section 
     shall not confer standing upon an exporter to commence, or 
     intervene in, any judicial or administrative proceeding 
     concerning a claim for refund by a coal producer of any 
     Federal or State tax, fee, or royalty paid by the coal 
     producer.
       (2) Coal producers.--With respect to coal producers, this 
     section shall not confer standing upon a coal producer to 
     commence, or intervene in, any judicial or administrative 
     proceeding concerning a claim for refund by an exporter of 
     any Federal or State tax, fee, or royalty paid by the 
     producer and alleged to have been passed on to an exporter.

     SEC. 115. CARBON AUDIT OF THE TAX CODE.

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

    Subtitle B--Transportation and Domestic Fuel Security Provisions

     SEC. 121. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS 
                   DEPRECIATION FOR BIOMASS ETHANOL PLANT 
                   PROPERTY.

       (a) In General.--Paragraph (3) of section 168(l) is amended 
     to read as follows:
       ``(3) Cellulosic biofuel.--The term `cellulosic biofuel' 
     means any liquid fuel which is produced from any 
     lignocellulosic or hemicellulosic matter that is available on 
     a renewable or recurring basis.''.
       (b) Conforming Amendments.--Subsection (l) of section 168 
     is amended--
       (1) by striking ``cellulosic biomass ethanol'' each place 
     it appears and inserting ``cellulosic biofuel'',
       (2) by striking ``Cellulosic Biomass Ethanol'' in the 
     heading of such subsection and inserting ``Cellulosic 
     Biofuel'', and
       (3) by striking ``cellulosic biomass ethanol'' in the 
     heading of paragraph (2) thereof and inserting ``cellulosic 
     biofuel''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

     SEC. 122. CREDITS FOR BIODIESEL AND RENEWABLE DIESEL.

       (a) In General.--Sections 40A(g), 6426(c)(6), and 
     6427(e)(5)(B) are each amended by striking ``December 31, 
     2008'' and inserting ``December 31, 2009''.
       (b) Increase in Rate of Credit.--
       (1) Income tax credit.--Paragraphs (1)(A) and (2)(A) of 
     section 40A(b) are each amended by striking ``50 cents'' and 
     inserting ``$1.00''.
       (2) Excise tax credit.--Paragraph (2) of section 6426(c) is 
     amended to read as follows:
       ``(2) Applicable amount.--For purposes of this subsection, 
     the applicable amount is $1.00.''.
       (3) Conforming amendments.--
       (A) Subsection (b) of section 40A is amended by striking 
     paragraph (3) and by redesignating paragraphs (4) and (5) as 
     paragraphs (3) and (4), respectively.
       (B) Paragraph (2) of section 40A(f) is amended to read as 
     follows:
       ``(2) Exception.--Subsection (b)(4) shall not apply with 
     respect to renewable diesel.''.
       (C) Paragraphs (2) and (3) of section 40A(e) are each 
     amended by striking ``subsection (b)(5)(C)'' and inserting 
     ``subsection (b)(4)(C)''.
       (D) Clause (ii) of section 40A(d)(3)(C) is amended by 
     striking ``subsection (b)(5)(B)'' and inserting ``subsection 
     (b)(4)(B)''.
       (c) Uniform Treatment of Diesel Produced From Biomass.--
     Paragraph (3) of section 40A(f) is amended--
       (1) by striking ``diesel fuel'' and inserting ``liquid 
     fuel'',
       (2) by striking ``using a thermal depolymerization 
     process'', and
       (3) by striking ``or D396'' in subparagraph (B) and 
     inserting ``, D396, or other equivalent standard approved by 
     the Secretary''.
       (d) Coproduction of Renewable Diesel With Petroleum 
     Feedstock.--
       (1) In general.--Paragraph (3) of section 40A(f) (defining 
     renewable diesel) is amended by adding at the end the 
     following flush sentence:
     ``Such term does not include any fuel derived from 
     coprocessing biomass with a feedstock which is not biomass. 
     For purposes of this paragraph, the term `biomass' has the 
     meaning given such term by section 45K(c)(3).''.
       (2) Conforming amendment.--Paragraph (3) of section 40A(f) 
     is amended by striking ``(as defined in section 45K(c)(3))''.
       (e) Eligibility of Certain Aviation Fuel.--Paragraph (3) of 
     section 40A(f) (defining renewable diesel) is amended by 
     adding at the end the following: ``The term `renewable 
     diesel' also means fuel derived from biomass which meets the 
     requirements of a Department of Defense specification for 
     military jet fuel or an American Society of Testing and 
     Materials specification for aviation turbine fuel.''
       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to fuel produced, and sold or used, after December 31, 2008.
       (2) Coproduction of renewable diesel with petroleum 
     feedstock.--The amendments made by subsection (c) shall apply 
     to fuel produced, and sold or used, after February 13, 2008.

     SEC. 123. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO 
                   PROVIDE AN INCENTIVE FOR UNITED STATES 
                   PRODUCTION.

       (a) Alcohol Fuels Credit.--Subsection (d) of section 40 is 
     amended by adding at the end the following new paragraph:
       ``(6) Limitation to alcohol with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any alcohol which is produced outside the 
     United States for use as a fuel outside the United States. 
     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States.''.
       (b) Biodiesel Fuels Credit.--Subsection (d) of section 40A 
     is amended by adding at the end the following new paragraph:
       ``(5) Limitation to biodiesel with connection to the united 
     states.--No credit shall be determined under this section 
     with respect to any biodiesel which is produced outside the 
     United States for use as a fuel outside the United States. 
     For purposes of this paragraph, the term `United States' 
     includes any possession of the United States.''.
       (c) Excise Tax Credit.--
       (1) In general.--Section 6426 is amended by adding at the 
     end the following new subsection:
       ``(i) Limitation to Fuels With Connection to the United 
     States.--
       ``(1) Alcohol.--No credit shall be determined under this 
     section with respect to any alcohol which is produced outside 
     the United States for use as a fuel outside the United 
     States.
       ``(2) Biodiesel and alternative fuels.--No credit shall be 
     determined under this section with respect to any biodiesel 
     or alternative fuel which is produced outside the United 
     States for use as a fuel outside the United States.
     For purposes of this subsection, the term `United States' 
     includes any possession of the United States.''.
       (2) Conforming amendment.--Subsection (e) of section 6427 
     is amended by redesignating paragraph (5) as paragraph (6) 
     and by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) Limitation to fuels with connection to the united 
     states.--No amount shall be payable under paragraph (1) or 
     (2) with respect to any mixture or alternative fuel if credit 
     is not allowed with respect to such mixture or alternative 
     fuel by reason of section 6426(i).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to claims for credit or payment made on or after 
     May 15, 2008.

     SEC. 124. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE 
                   MOTOR VEHICLES.

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

     ``SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR 
                   VEHICLES.

       ``(a) Allowance of Credit.--There shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of the credit amounts 
     determined under subsection (b) with respect to each new 
     qualified plug-in electric drive motor vehicle placed in 
     service by the taxpayer during the taxable year.
       ``(b) Per Vehicle Dollar Limitation.--
       ``(1) In general.--The amount determined under this 
     subsection with respect to any new qualified plug-in electric 
     drive motor vehicle is the sum of the amounts determined 
     under paragraphs (2) and (3) with respect to such vehicle.
       ``(2) Base amount.--The amount determined under this 
     paragraph is $3,000.
       ``(3) Battery capacity.--In the case of a vehicle which 
     draws propulsion energy from a battery with not less than 5 
     kilowatt hours of capacity, the amount determined under this 
     paragraph is $200, plus $200 for each kilowatt hour of 
     capacity in excess of 5 kilowatt hours. The amount determined 
     under this paragraph shall not exceed $2,000.
       ``(c) Application With Other Credits.--
       ``(1) Business credit treated as part of general business 
     credit.--So much of the

[[Page 10249]]

     credit which would be allowed under subsection (a) for any 
     taxable year (determined without regard to this subsection) 
     that is attributable to property of a character subject to an 
     allowance for depreciation shall be treated as a credit 
     listed in section 38(b) for such taxable year (and not 
     allowed under subsection (a)).
       ``(2) Personal credit.--
       ``(A) In general.--For purposes of this title, the credit 
     allowed under subsection (a) for any taxable year (determined 
     after application of paragraph (1)) shall be treated as a 
     credit allowable under subpart A for such taxable year.
       ``(B) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for any taxable year 
     (determined after application of paragraph (1)) shall not 
     exceed the excess of--
       ``(i) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(ii) the sum of the credits allowable under subpart A 
     (other than this section and sections 23 and 25D) and section 
     27 for the taxable year.
       ``(d) New Qualified Plug-In Electric Drive Motor Vehicle.--
     For purposes of this section--
       ``(1) In general.--The term `new qualified plug-in electric 
     drive motor vehicle' means a motor vehicle (as defined in 
     section 30(c)(2))--
       ``(A) the original use of which commences with the 
     taxpayer,
       ``(B) which is acquired for use or lease by the taxpayer 
     and not for resale,
       ``(C) which is made by a manufacturer,
       ``(D) which has a gross vehicle weight rating of less than 
     14,000 pounds,
       ``(E) which has received a certificate of conformity under 
     the Clean Air Act and meets or exceeds the Bin 5 Tier II 
     emission standard established in regulations prescribed by 
     the Administrator of the Environmental Protection Agency 
     under section 202(i) of the Clean Air Act for that make and 
     model year vehicle, and
       ``(F) which is propelled to a significant extent by an 
     electric motor which draws electricity from a battery which--
       ``(i) has a capacity of not less than 4 kilowatt hours, and
       ``(ii) is capable of being recharged from an external 
     source of electricity.
       ``(2) Exception.--The term `new qualified plug-in electric 
     drive motor vehicle' shall not include any vehicle which is 
     not a passenger automobile or light truck if such vehicle has 
     a gross vehicle weight rating of less than 8,500 pounds.
       ``(3) Other terms.--The terms `passenger automobile', 
     `light truck', and `manufacturer' have the meanings given 
     such terms in regulations prescribed by the Administrator of 
     the Environmental Protection Agency for purposes of the 
     administration of title II of the Clean Air Act (42 U.S.C. 
     7521 et seq.).
       ``(4) Battery capacity.--The term `capacity' means, with 
     respect to any battery, the quantity of electricity which the 
     battery is capable of storing, expressed in kilowatt hours, 
     as measured from a 100 percent state of charge to a 0 percent 
     state of charge.
       ``(e) Limitation on Number of New Qualified Plug-In 
     Electric Drive Motor Vehicles Eligible for Credit.--
       ``(1) In general.--In the case of a new qualified plug-in 
     electric drive motor vehicle sold during the phaseout period, 
     only the applicable percentage of the credit otherwise 
     allowable under subsection (a) shall be allowed.
       ``(2) Phaseout period.--For purposes of this subsection, 
     the phaseout period is the period beginning with the second 
     calendar quarter following the calendar quarter which 
     includes the first date on which the number of new qualified 
     plug-in electric drive motor vehicles manufactured by the 
     manufacturer of the vehicle referred to in paragraph (1) sold 
     for use in the United States after the date of the enactment 
     of this section, is at least 60,000.
       ``(3) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage is--
       ``(A) 50 percent for the first 2 calendar quarters of the 
     phaseout period,
       ``(B) 25 percent for the 3d and 4th calendar quarters of 
     the phaseout period, and
       ``(C) 0 percent for each calendar quarter thereafter.
       ``(4) Controlled groups.--Rules similar to the rules of 
     section 30B(f)(4) shall apply for purposes of this 
     subsection.
       ``(f) Special Rules.--
       ``(1) Basis reduction.--The basis of any property for which 
     a credit is allowable under subsection (a) shall be reduced 
     by the amount of such credit (determined without regard to 
     subsection (c)).
       ``(2) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any property which 
     ceases to be property eligible for such credit.
       ``(3) Property used outside united states, etc., not 
     qualified.--No credit shall be allowed under subsection (a) 
     with respect to any property referred to in section 50(b)(1) 
     or with respect to the portion of the cost of any property 
     taken into account under section 179.
       ``(4) Election not to take credit.--No credit shall be 
     allowed under subsection (a) for any vehicle if the taxpayer 
     elects to not have this section apply to such vehicle.
       ``(5) Property used by tax-exempt entity; interaction with 
     air quality and motor vehicle safety standards.--Rules 
     similar to the rules of paragraphs (6) and (10) of section 
     30B(h) shall apply for purposes of this section.''.
       (b) Coordination With Alternative Motor Vehicle Credit.--
     Section 30B(d)(3) is amended by adding at the end the 
     following new subparagraph:
       ``(D) Exclusion of plug-in vehicles.--Any vehicle with 
     respect to which a credit is allowable under section 30D 
     (determined without regard to subsection (c) thereof) shall 
     not be taken into account under this section.''.
       (c) Credit Made Part of General Business Credit.--Section 
     38(b) is amended--
       (1) by striking ``and'' each place it appears at the end of 
     any paragraph,
       (2) by striking ``plus'' each place it appears at the end 
     of any paragraph,
       (3) by striking the period at the end of paragraph (31) and 
     inserting ``, plus'', and
       (4) by adding at the end the following new paragraph:
       ``(32) the portion of the new qualified plug-in electric 
     drive motor vehicle credit to which section 30D(c)(1) 
     applies.''.
       (d) Conforming Amendments.--
       (1)(A) Section 24(b)(3)(B), as amended by section 104, is 
     amended by striking ``and 25D'' and inserting ``25D, and 
     30D''.
       (B) Section 25(e)(1)(C)(ii) is amended by inserting 
     ``30D,'' after ``25D,''.
       (C) Section 25B(g)(2), as amended by section 104, is 
     amended by striking ``and 25D'' and inserting ``, 25D, and 
     30D''.
       (D) Section 26(a)(1), as amended by section 104, is amended 
     by striking ``and 25D'' and inserting ``25D, and 30D''.
       (E) Section 1400C(d)(2) is amended by striking ``and 25D'' 
     and inserting ``25D, and 30D''.
       (2) Section 1016(a) is amended by striking ``and'' at the 
     end of paragraph (35), by striking the period at the end of 
     paragraph (36) and inserting
     ``, and'', and by adding at the end the following new 
     paragraph:
       ``(37) to the extent provided in section 30D(f)(1).''.
       (3) Section 6501(m) is amended by inserting ``30D(f)(4),'' 
     after ``30C(e)(5),''.
       (4) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 30D. New qualified plug-in electric drive motor vehicles.''.
       (e) Treatment of Alternative Motor Vehicle Credit as a 
     Personal Credit.--
       (1) In general.--Paragraph (2) of section 30B(g) is amended 
     to read as follows:
       ``(2) Personal credit.--The credit allowed under subsection 
     (a) for any taxable year (after application of paragraph (1)) 
     shall be treated as a credit allowable under subpart A for 
     such taxable year.''.
       (2) Conforming amendments.--
       (A) Subparagraph (A) of section 30C(d)(2) is amended by 
     striking ``sections 27, 30, and 30B'' and inserting 
     ``sections 27 and 30''.
       (B) Paragraph (3) of section 55(c) is amended by striking 
     ``30B(g)(2),''.
       (f) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to taxable years beginning after December 31, 2008.
       (2) Treatment of alternative motor vehicle credit as 
     personal credit.--The amendments made by subsection (e) shall 
     apply to taxable years beginning after December 31, 2007.
       (g) Application of EGTRRA Sunset.--The amendment made by 
     subsection (d)(1)(A) shall be subject to title IX of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001 in 
     the same manner as the provision of such Act to which such 
     amendment relates.

     SEC. 125. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING REDUCTION 
                   UNITS AND ADVANCED INSULATION.

       (a) In General.--Section 4053 is amended by adding at the 
     end the following new paragraphs:
       ``(9) Idling reduction device.--Any device or system of 
     devices which--
       ``(A) is designed to provide to a vehicle those services 
     (such as heat, air conditioning, or electricity) that would 
     otherwise require the operation of the main drive engine 
     while the vehicle is temporarily parked or remains stationary 
     using one or more devices affixed to a tractor, and
       ``(B) is certified by the Secretary of Energy, in 
     consultation with the Administrator of the Environmental 
     Protection Agency and the Secretary of Transportation, to 
     reduce idling of such vehicle at a motor vehicle rest stop or 
     other location where such vehicles are temporarily parked or 
     remain stationary.
       ``(10) Advanced insulation.--Any insulation that has an R 
     value of not less than R35 per inch.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales or installations after the date of the 
     enactment of this Act.

     SEC. 126. RESTRUCTURING OF NEW YORK LIBERTY ZONE TAX CREDITS.

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

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

       ``(a) In General.--In the case of a New York Liberty Zone 
     governmental unit, there shall be allowed as a credit against 
     any taxes imposed for any payroll period by section 3402 for 
     which such governmental unit is liable under section 3403 an 
     amount equal to so much of the portion of the qualifying 
     project expenditure amount allocated under subsection (b)(3) 
     to such governmental unit for the calendar year as is 
     allocated by such governmental unit to such period under 
     subsection (b)(4).

[[Page 10250]]

       ``(b) Qualifying Project Expenditure Amount.--For purposes 
     of this section--
       ``(1) In general.--The term `qualifying project expenditure 
     amount' means, with respect to any calendar year, the sum 
     of--
       ``(A) the total expenditures paid or incurred during such 
     calendar year by all New York Liberty Zone governmental units 
     and the Port Authority of New York and New Jersey for any 
     portion of qualifying projects located wholly within the City 
     of New York, New York, and
       ``(B) any such expenditures--
       ``(i) paid or incurred in any preceding calendar year which 
     begins after the date of enactment of this section, and
       ``(ii) not previously allocated under paragraph (3).
       ``(2) Qualifying project.--The term `qualifying project' 
     means any transportation infrastructure project, including 
     highways, mass transit systems, railroads, airports, ports, 
     and waterways, in or connecting with the New York Liberty 
     Zone (as defined in section 1400K(h)), which is designated as 
     a qualifying project under this section jointly by the 
     Governor of the State of New York and the Mayor of the City 
     of New York, New York.
       ``(3) General allocation.--
       ``(A) In general.--The Governor of the State of New York 
     and the Mayor of the City of New York, New York, shall 
     jointly allocate to each New York Liberty Zone governmental 
     unit the portion of the qualifying project expenditure amount 
     which may be taken into account by such governmental unit 
     under subsection (a) for any calendar year in the credit 
     period.
       ``(B) Aggregate limit.--The aggregate amount which may be 
     allocated under subparagraph (A) for all calendar years in 
     the credit period shall not exceed $2,000,000,000.
       ``(C) Annual limit.--The aggregate amount which may be 
     allocated under subparagraph (A) for any calendar year in the 
     credit period shall not exceed the sum of--
       ``(i) $115,000,000 ($425,000,000 in the case of the last 2 
     years in the credit period), plus
       ``(ii) the aggregate amount authorized to be allocated 
     under this paragraph for all preceding calendar years in the 
     credit period which was not so allocated.
       ``(D) Unallocated amounts at end of credit period.--If, as 
     of the close of the credit period, the amount under 
     subparagraph (B) exceeds the aggregate amount allocated under 
     subparagraph (A) for all calendar years in the credit period, 
     the Governor of the State of New York and the Mayor of the 
     City of New York, New York, may jointly allocate to New York 
     Liberty Zone governmental units for any calendar year in the 
     5-year period following the credit period an amount equal 
     to--
       ``(i) the lesser of--

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

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

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

     SEC. 127. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS.

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

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

       (d) Constructive Receipt of Benefit.--Paragraph (4) of 
     section 132(f) is amended by inserting ``(other than a 
     qualified bicycle commuting reimbursement)'' after 
     ``qualified transportation fringe''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 128. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

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

       Subtitle C--Energy Conservation and Efficiency Provisions

     SEC. 141. QUALIFIED ENERGY CONSERVATION BONDS.

       (a) In General.--Subpart I of part IV of subchapter A of 
     chapter 1, as added by section 106, is amended by adding at 
     the end the following new section:

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

       ``(a) Qualified Energy Conservation Bond.--For purposes of 
     this subchapter, the

[[Page 10251]]

     term `qualified energy conservation bond' means any bond 
     issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for one or more qualified conservation 
     purposes,
       ``(2) the bond is issued by a State or local government, 
     and
       ``(3) the issuer designates such bond for purposes of this 
     section.
       ``(b) Reduced Credit Amount.--The annual credit determined 
     under section 54A(b) with respect to any qualified energy 
     conservation bond shall be 70 percent of the amount so 
     determined without regard to this subsection.
       ``(c) Limitation on Amount of Bonds Designated.--The 
     maximum aggregate face amount of bonds which may be 
     designated under subsection (a) by any issuer shall not 
     exceed the limitation amount allocated to such issuer under 
     subsection (e).
       ``(d) National Limitation on Amount of Bonds Designated.--
     There is a national qualified energy conservation bond 
     limitation of $3,000,000,000.
       ``(e) Allocations.--
       ``(1) In general.--The limitation applicable under 
     subsection (d) shall be allocated by the Secretary among the 
     States in proportion to the population of the States.
       ``(2) Allocations to largest local governments.--
       ``(A) In general.--In the case of any State in which there 
     is a large local government, each such local government shall 
     be allocated a portion of such State's allocation which bears 
     the same ratio to the State's allocation (determined without 
     regard to this subparagraph) as the population of such large 
     local government bears to the population of such State.
       ``(B) Allocation of unused limitation to state.--The amount 
     allocated under this subsection to a large local government 
     may be reallocated by such local government to the State in 
     which such local government is located.
       ``(C) Large local government.--For purposes of this 
     section, the term `large local government' means any 
     municipality or county if such municipality or county has a 
     population of 100,000 or more.
       ``(3) Allocation to issuers; restriction on private 
     activity bonds.--Any allocation under this subsection to a 
     State or large local government shall be allocated by such 
     State or large local government to issuers within the State 
     in a manner that results in not less than 70 percent of the 
     allocation to such State or large local government being used 
     to designate bonds which are not private activity bonds.
       ``(f) Qualified Conservation Purpose.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified conservation 
     purpose' means any of the following:
       ``(A) Capital expenditures incurred for purposes of--
       ``(i) reducing energy consumption in publicly-owned 
     buildings by at least 20 percent,
       ``(ii) implementing green community programs,
       ``(iii) rural development involving the production of 
     electricity from renewable energy resources, or
       ``(iv) any qualified facility (as determined under section 
     45(d) without regard to paragraphs (8) and (10) thereof and 
     without regard to any placed in service date).
       ``(B) Expenditures with respect to research facilities, and 
     research grants, to support research in--
       ``(i) development of cellulosic ethanol or other nonfossil 
     fuels,
       ``(ii) technologies for the capture and sequestration of 
     carbon dioxide produced through the use of fossil fuels,
       ``(iii) increasing the efficiency of existing technologies 
     for producing nonfossil fuels,
       ``(iv) automobile battery technologies and other 
     technologies to reduce fossil fuel consumption in 
     transportation, or
       ``(v) technologies to reduce energy use in buildings.
       ``(C) Mass commuting facilities and related facilities that 
     reduce the consumption of energy, including expenditures to 
     reduce pollution from vehicles used for mass commuting.
       ``(D) Demonstration projects designed to promote the 
     commercialization of--
       ``(i) green building technology,
       ``(ii) conversion of agricultural waste for use in the 
     production of fuel or otherwise,
       ``(iii) advanced battery manufacturing technologies,
       ``(iv) technologies to reduce peak use of electricity, or
       ``(v) technologies for the capture and sequestration of 
     carbon dioxide emitted from combusting fossil fuels in order 
     to produce electricity.
       ``(E) Public education campaigns to promote energy 
     efficiency.
       ``(2) Special rules for private activity bonds.--For 
     purposes of this section, in the case of any private activity 
     bond, the term `qualified conservation purposes' shall not 
     include any expenditure which is not a capital expenditure.
       ``(g) Population.--
       ``(1) In general.--The population of any State or local 
     government shall be determined for purposes of this section 
     as provided in section 146(j) for the calendar year which 
     includes the date of the enactment of this section.
       ``(2) Special rule for counties.--In determining the 
     population of any county for purposes of this section, any 
     population of such county which is taken into account in 
     determining the population of any municipality which is a 
     large local government shall not be taken into account in 
     determining the population of such county.
       ``(h) Application to Indian Tribal Governments.--An Indian 
     tribal government shall be treated for purposes of this 
     section in the same manner as a large local government, 
     except that--
       ``(1) an Indian tribal government shall be treated for 
     purposes of subsection (e) as located within a State to the 
     extent of so much of the population of such government as 
     resides within such State, and
       ``(2) any bond issued by an Indian tribal government shall 
     be treated as a qualified energy conservation bond only if 
     issued as part of an issue the available project proceeds of 
     which are used for purposes for which such Indian tribal 
     government could issue bonds to which section 103(a) 
     applies.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 54A(d), as added by section 
     106, is amended to read as follows:
       ``(1) Qualified tax credit bond.--The term `qualified tax 
     credit bond' means--
       ``(A) a new clean renewable energy bond, or
       ``(B) a qualified energy conservation bond,
     which is part of an issue that meets requirements of 
     paragraphs (2), (3), (4), (5), and (6).''.
       (2) Subparagraph (C) of section 54A(d)(2), as added by 
     section 106, is amended to read as follows:
       ``(C) Qualified purpose.--For purposes of this paragraph, 
     the term `qualified purpose' means--
       ``(i) in the case of a new clean renewable energy bond, a 
     purpose specified in section 54B(a)(1), and
       ``(ii) in the case of a qualified energy conservation bond, 
     a purpose specified in section 54C(a)(1).''.
       (3) The table of sections for subpart I of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

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

     SEC. 142. CREDIT FOR NONBUSINESS ENERGY PROPERTY.

       (a) Extension of Credit.--Section 25C(g) is amended by 
     striking ``December 31, 2007'' and inserting ``December 31, 
     2008''.
       (b) Qualified Biomass Fuel Property.--
       (1) In general.--Section 25C(d)(3) is amended--
       (A) by striking ``and'' at the end of subparagraph (D),
       (B) by striking the period at the end of subparagraph (E) 
     and inserting ``, and'', and
       (C) by adding at the end the following new subparagraph:
       ``(F) a stove which uses the burning of biomass fuel to 
     heat a dwelling unit located in the United States and used as 
     a residence by the taxpayer, or to heat water for use in such 
     a dwelling unit, and which has a thermal efficiency rating of 
     at least 75 percent.''.
       (2) Biomass fuel.--Section 25C(d) is amended by adding at 
     the end the following new paragraph:
       ``(6) Biomass fuel.--The term `biomass fuel' means any 
     plant-derived fuel available on a renewable or recurring 
     basis, including agricultural crops and trees, wood and wood 
     waste and residues (including wood pellets), plants 
     (including aquatic plants), grasses, residues, and fibers.''.
       (c) Coordination With Credit for Qualified Geothermal Heat 
     Pump Property Expenditures.--
       (1) In general.--Paragraph (3) of section 25C(d), as 
     amended by subsection (b), is amended by striking 
     subparagraph (C) and by redesignating subparagraphs (D), (E), 
     and (F) as subparagraphs (C), (D), and (E), respectively.
       (2) Conforming amendment.--Subparagraph (C) of section 
     25C(d)(2) is amended to read as follows:
       ``(C) Requirements and standards for air conditioners and 
     heat pumps.--The standards and requirements prescribed by the 
     Secretary under subparagraph (B) with respect to the energy 
     efficiency ratio (EER) for central air conditioners and 
     electric heat pumps--
       ``(i) shall require measurements to be based on published 
     data which is tested by manufacturers at 95 degrees 
     Fahrenheit, and
       ``(ii) may be based on the certified data of the Air 
     Conditioning and Refrigeration Institute that are prepared in 
     partnership with the Consortium for Energy Efficiency.''.
       (d) Effective Date.--The amendments made this section shall 
     apply to expenditures made after December 31, 2007.

     SEC. 143. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

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

     SEC. 144. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT 
                   FOR APPLIANCES PRODUCED AFTER 2007.

       (a) In General.--Subsection (b) of section 45M is amended 
     to read as follows:
       ``(b) Applicable Amount.--For purposes of subsection (a)--
       ``(1) Dishwashers.--The applicable amount is--
       ``(A) $45 in the case of a dishwasher which is manufactured 
     in calendar year 2008 or 2009 and which uses no more than 324 
     kilowatt hours per year and 5.8 gallons per cycle, and
       ``(B) $75 in the case of a dishwasher which is manufactured 
     in calendar year 2008, 2009, or 2010 and which uses no more 
     than 307 kilowatt hours per year and 5.0 gallons per cycle 
     (5.5 gallons per cycle for dishwashers designed for greater 
     than 12 place settings).

[[Page 10252]]

       ``(2) Clothes washers.--The applicable amount is--
       ``(A) $75 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 which meets or 
     exceeds a 1.72 modified energy factor and does not exceed a 
     8.0 water consumption factor,
       ``(B) $125 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 or 2009 which meets 
     or exceeds a 1.8 modified energy factor and does not exceed a 
     7.5 water consumption factor,
       ``(C) $150 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009, or 
     2010 which meets or exceeds 2.0 modified energy factor and 
     does not exceed a 6.0 water consumption factor, and
       ``(D) $250 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009, or 
     2010 which meets or exceeds 2.2 modified energy factor and 
     does not exceed a 4.5 water consumption factor.
       ``(3) Refrigerators.--The applicable amount is--
       ``(A) $50 in the case of a refrigerator which is 
     manufactured in calendar year 2008, and consumes at least 20 
     percent but not more than 22.9 percent less kilowatt hours 
     per year than the 2001 energy conservation standards,
       ``(B) $75 in the case of a refrigerator which is 
     manufactured in calendar year 2008 or 2009, and consumes at 
     least 23 percent but no more than 24.9 percent less kilowatt 
     hours per year than the 2001 energy conservation standards,
       ``(C) $100 in the case of a refrigerator which is 
     manufactured in calendar year 2008, 2009, or 2010, and 
     consumes at least 25 percent but not more than 29.9 percent 
     less kilowatt hours per year than the 2001 energy 
     conservation standards, and
       ``(D) $200 in the case of a refrigerator manufactured in 
     calendar year 2008, 2009, or 2010 and which consumes at least 
     30 percent less energy than the 2001 energy conservation 
     standards.''.
       (b) Eligible Production.--
       (1) Similar treatment for all appliances.--Subsection (c) 
     of section 45M is amended--
       (A) by striking paragraph (2),
       (B) by striking ``(1) In general'' and all that follows 
     through ``the eligible'' and inserting ``The eligible'',
       (C) by moving the text of such subsection in line with the 
     subsection heading, and
       (D) by redesignating subparagraphs (A) and (B) as 
     paragraphs (1) and (2), respectively, and by moving such 
     paragraphs 2 ems to the left.
       (2) Modification of base period.--Paragraph (2) of section 
     45M(c), as amended by paragraph (1), is amended by striking 
     ``3-calendar year'' and inserting ``2-calendar year''.
       (c) Types of Energy Efficient Appliances.--Subsection (d) 
     of section 45M (defining types of energy efficient 
     appliances) is amended to read as follows:
       ``(d) Types of Energy Efficient Appliance.--For purposes of 
     this section, the types of energy efficient appliances are--
       ``(1) dishwashers described in subsection (b)(1),
       ``(2) clothes washers described in subsection (b)(2), and
       ``(3) refrigerators described in subsection (b)(3).''.
       (d) Aggregate Credit Amount Allowed.--
       (1) Increase in limit.--Paragraph (1) of section 45M(e) is 
     amended to read as follows:
       ``(1) Aggregate credit amount allowed.--The aggregate 
     amount of credit allowed under subsection (a) with respect to 
     a taxpayer for any taxable year shall not exceed $75,000,000 
     reduced by the amount of the credit allowed under subsection 
     (a) to the taxpayer (or any predecessor) for all prior 
     taxable years beginning after December 31, 2007.''.
       (2) Exception for certain refrigerator and clothes 
     washers.--Paragraph (2) of section 45M(e) is amended to read 
     as follows:
       ``(2) Amount allowed for certain refrigerators and clothes 
     washers.--Refrigerators described in subsection (b)(3)(D) and 
     clothes washers described in subsection (b)(2)(D) shall not 
     be taken into account under paragraph (1).''.
       (e) Qualified Energy Efficient Appliances.--
       (1) In general.--Paragraph (1) of section 45M(f) (defining 
     qualified energy efficient appliance) is amended to read as 
     follows:
       ``(1) Qualified energy efficient appliance.--The term 
     `qualified energy efficient appliance' means--
       ``(A) any dishwasher described in subsection (b)(1),
       ``(B) any clothes washer described in subsection (b)(2), 
     and
       ``(C) any refrigerator described in subsection (b)(3).''.
       (2) Clothes washer.--Section 45M(f)(3) is amended by 
     inserting ``commercial'' before ``residential'' the second 
     place it appears.
       (3) Top-loading clothes washer.--Subsection (f) of section 
     45M is amended by redesignating paragraphs (4), (5), (6), and 
     (7) as paragraphs (5), (6), (7), and (8), respectively, and 
     by inserting after paragraph (3) the following new paragraph:
       ``(4) Top-loading clothes washer.--The term `top-loading 
     clothes washer' means a clothes washer which has the clothes 
     container compartment access located on the top of the 
     machine and which operates on a vertical axis.''.
       (4) Replacement of energy factor.--Section 45M(f)(6), as 
     redesignated by paragraph (3), is amended to read as follows:
       ``(6) Modified energy factor.--The term `modified energy 
     factor' means the modified energy factor established by the 
     Department of Energy for compliance with the Federal energy 
     conservation standard.''.
       (5) Gallons per cycle; water consumption factor.--Section 
     45M(f), as amended by paragraph (3), is amended by adding at 
     the end the following:
       ``(9) Gallons per cycle.--The term `gallons per cycle' 
     means, with respect to a dishwasher, the amount of water, 
     expressed in gallons, required to complete a normal cycle of 
     a dishwasher.
       ``(10) Water consumption factor.--The term `water 
     consumption factor' means, with respect to a clothes washer, 
     the quotient of the total weighted per-cycle water 
     consumption divided by the cubic foot (or liter) capacity of 
     the clothes washer.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to appliances produced after December 31, 2007.

     SEC. 145. ACCELERATED RECOVERY PERIOD FOR DEPRECIATION OF 
                   SMART METERS AND SMART GRID SYSTEMS.

       (a) In General.--Section 168(e)(3)(D) is amended by 
     striking ``and'' at the end of clause (i), by striking the 
     period at the end of clause (ii) and inserting a comma, and 
     by inserting after clause (ii) the following new clauses:
       ``(iii) any qualified smart electric meter, and
       ``(iv) any qualified smart electric grid system.''.
       (b) Definitions.--Section 168(i) is amended by inserting at 
     the end the following new paragraph:
       ``(18) Qualified smart electric meters.--
       ``(A) In general.--The term `qualified smart electric 
     meter' means any smart electric meter which is placed in 
     service by a taxpayer who is a supplier of electric energy or 
     a provider of electric energy services.
       ``(B) Smart electric meter.--For purposes of subparagraph 
     (A), the term `smart electric meter' means any time-based 
     meter and related communication equipment which is capable of 
     being used by the taxpayer as part of a system that--
       ``(i) measures and records electricity usage data on a 
     time-differentiated basis in at least 24 separate time 
     segments per day,
       ``(ii) provides for the exchange of information between 
     supplier or provider and the customer's electric meter in 
     support of time-based rates or other forms of demand 
     response,
       ``(iii) provides data to such supplier or provider so that 
     the supplier or provider can provide energy usage information 
     to customers electronically, and
       ``(iv) provides net metering.
       ``(19) Qualified smart electric grid systems.--
       ``(A) In general.--The term `qualified smart electric grid 
     system' means any smart grid property used as part of a 
     system for electric distribution grid communications, 
     monitoring, and management placed in service by a taxpayer 
     who is a supplier of electric energy or a provider of 
     electric energy services.
       ``(B) Smart grid property.--For the purposes of 
     subparagraph (A), the term `smart grid property' means 
     electronics and related equipment that is capable of--
       ``(i) sensing, collecting, and monitoring data of or from 
     all portions of a utility's electric distribution grid,
       ``(ii) providing real-time, two-way communications to 
     monitor or manage such grid, and
       ``(iii) providing real time analysis of and event 
     prediction based upon collected data that can be used to 
     improve electric distribution system reliability, quality, 
     and performance.''.
       (c) Continued Application of 150 Percent Declining Balance 
     Method.--Paragraph (2) of section 168(b) is amended by 
     striking ``or'' at the end of subparagraph (B), by 
     redesignating subparagraph (C) as subparagraph (D), and by 
     inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) any property (other than property described in 
     paragraph (3)) which is a qualified smart electric meter or 
     qualified smart electric grid system, or''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 146. QUALIFIED GREEN BUILDING AND SUSTAINABLE DESIGN 
                   PROJECTS.

       (a) In General.--Paragraph (8) of section 142(l) is amended 
     by striking ``September 30, 2009'' and inserting ``September 
     30, 2012''.
       (b) Treatment of Current Refunding Bonds.--Paragraph (9) of 
     section 142(l) is amended by striking ``October 1, 2009'' and 
     inserting ``October 1, 2012''.
       (c) Accountability.--The second sentence of section 701(d) 
     of the American Jobs Creation Act of 2004 is amended by 
     striking ``issuance,'' and inserting ``issuance of the last 
     issue with respect to such project,''.

          TITLE II--ONE-YEAR EXTENSION OF TEMPORARY PROVISIONS

         Subtitle A--Extensions Primarily Affecting Individuals

     SEC. 201. DEDUCTION FOR STATE AND LOCAL SALES TAXES.

       (a) In General.--Subparagraph (I) of section 164(b)(5) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 202. DEDUCTION OF QUALIFIED TUITION AND RELATED 
                   EXPENSES.

       (a) In General.--Subsection (e) of section 222 is amended 
     by striking ``December 31, 2007'' and inserting ``December 
     31, 2008''.

[[Page 10253]]

       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 203. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED 
                   INVESTMENT COMPANIES.

       (a) Interest-Related Dividends.--Subparagraph (C) of 
     section 871(k)(1) (defining interest-related dividend) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Short-Term Capital Gain Dividends.--Subparagraph (C) of 
     section 871(k)(2) (defining short-term capital gain dividend) 
     is amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to dividends with respect to taxable years of 
     regulated investment companies beginning after December 31, 
     2007.

     SEC. 204. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT 
                   PLANS FOR CHARITABLE PURPOSES.

       (a) In General.--Subparagraph (F) of section 408(d)(8) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distributions made in taxable years beginning 
     after December 31, 2007.

     SEC. 205. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND 
                   SECONDARY SCHOOL TEACHERS.

       (a) In General.--Subparagraph (D) of section 62(a)(2) is 
     amended by striking ``or 2007'' and inserting ``2007, or 
     2008''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 206. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR 
                   PURPOSES OF EARNED INCOME TAX CREDIT.

       (a) In General.--Subclause (II) of section 32(c)(2)(B)(vi) 
     (defining earned income) is amended by striking ``January 1, 
     2008'' and inserting ``January 1, 2009''.
       (b) Conforming Amendment.--Paragraph (4) of section 6428(e) 
     is amended by striking ``except that'' and all that follows 
     through ``such term'' and inserting ``except that such 
     term''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to taxable years ending after December 31, 2007.

     SEC. 207. MODIFICATION OF MORTGAGE REVENUE BONDS FOR 
                   VETERANS.

       (a) Qualified Mortgage Bonds Used To Finance Residences for 
     Veterans Without Regard to First-Time Homebuyer 
     Requirement.--Subparagraph (D) of section 143(d)(2) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to bonds issued after December 31, 2007.

     SEC. 208. DISTRIBUTIONS FROM RETIREMENT PLANS TO INDIVIDUALS 
                   CALLED TO ACTIVE DUTY.

       (a) In General.--Clause (iv) of section 72(t)(2)(G) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``January 1, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to individuals ordered or called to active duty 
     on or after December 31, 2007.

     SEC. 209. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES OF 
                   NONRESIDENTS NOT CITIZENS.

       (a) In General.--Paragraph (3) of section 2105(d) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to decedents dying after December 31, 2007.

     SEC. 210. QUALIFIED INVESTMENT ENTITIES.

       (a) In General.--Clause (ii) of section 897(h)(4)(A) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on January 1, 2008, except that such 
     amendment shall not apply to the application of withholding 
     requirements with respect to any payment made on or before 
     the date of the enactment of this Act.

     SEC. 211. EXCLUSION OF AMOUNTS RECEIVED UNDER QUALIFIED GROUP 
                   LEGAL SERVICES PLANS.

       (a) In General.--Subsection (e) of section 120 is amended 
     by striking ``shall not apply to taxable years beginning 
     after June 30, 1992'' and inserting ``shall apply to taxable 
     years beginning after December 31, 2007, and before January 
     1, 2009''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

         Subtitle B--Extensions Primarily Affecting Businesses

     SEC. 221. RESEARCH CREDIT.

       (a) In General.--Subparagraph (B) of section 41(h)(1) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Computation of Credit for Taxable Year in Which Credit 
     Terminates.--Paragraph (2) of section 41(h) is amended to 
     read as follows:
       ``(2) Computation of credit for taxable year in which 
     credit terminates.--
       ``(A) In general.--In the case of any taxable year with 
     respect to which this section applies to a number of days 
     which is less than the total number of days in such taxable 
     year, the applicable base amount with respect to such taxable 
     year shall be the amount which bears the same ratio to such 
     applicable amount (determined without regard to this 
     paragraph) as the number of days in such taxable year to 
     which this section applies bears to the total number of days 
     in such taxable year.
       ``(B) Applicable base amount.--For purposes of subparagraph 
     (A), the term `applicable base amount' means, with respect to 
     any taxable year--
       ``(i) except as otherwise provided in this subparagraph, 
     the base amount for the taxable year,
       ``(ii) in the case of a taxable year with respect to which 
     an election under subsection (c)(4) (relating to election of 
     alternative incremental credit) is in effect, the average 
     described in subsection (c)(1)(B) for the taxable year, and
       ``(iii) in the case of a taxable year with respect to which 
     an election under subsection (c)(5) (relating to election of 
     alternative simplified credit) is in effect, the average 
     qualified research expenses for the 3 taxable years preceding 
     the taxable year.''.
       (c) Conforming Amendment.--Subparagraph (D) of section 
     45C(b)(1) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2008''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after December 31, 
     2007.

     SEC. 222. INDIAN EMPLOYMENT CREDIT.

       (a) In General.--Subsection (f) of section 45A is amended 
     by striking ``December 31, 2007'' and inserting ``December 
     31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 223. NEW MARKETS TAX CREDIT.

       Subparagraph (D) of section 45D(f)(1) is amended by 
     striking ``and 2008'' and inserting ``2008, and 2009''.

     SEC. 224. RAILROAD TRACK MAINTENANCE.

       (a) In General.--Subsection (f) of section 45G is amended 
     by striking ``January 1, 2008'' and inserting ``January 1, 
     2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred during taxable 
     years beginning after December 31, 2007.

     SEC. 225. FIFTEEN-YEAR STRAIGHT-LINE COST RECOVERY FOR 
                   QUALIFIED LEASEHOLD IMPROVEMENTS AND QUALIFIED 
                   RESTAURANT PROPERTY.

       (a) In General.--Clauses (iv) and (v) of section 
     168(e)(3)(E) are each amended by striking ``January 1, 2008'' 
     and inserting ``January 1, 2009''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 226. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS 
                   RACING TRACK FACILITY.

       (a) In General.--Subparagraph (D) of section 168(i)(15) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 227. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON 
                   INDIAN RESERVATION.

       (a) In General.--Paragraph (8) of section 168(j) is amended 
     by striking ``December 31, 2007'' and inserting ``December 
     31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 228. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.

       (a) In General.--Subsection (h) of section 198 is amended 
     by striking ``December 31, 2007'' and inserting ``December 
     31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred after December 
     31, 2007.

     SEC. 229. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME 
                   ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES 
                   IN PUERTO RICO.

       (a) In General.--Subparagraph (C) of section 199(d)(8) is 
     amended--
       (1) by striking ``first 2 taxable years'' and inserting 
     ``first 3 taxable years'', and
       (2) by striking ``January 1, 2008'' and inserting ``January 
     1, 2009''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 230. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS 
                   TO CONTROLLING EXEMPT ORGANIZATIONS.

       (a) In General.--Clause (iv) of section 512(b)(13)(E) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments received or accrued after December 
     31, 2007.

     SEC. 231. QUALIFIED ZONE ACADEMY BONDS.

       (a) In General.--Subpart I of part IV of subchapter A of 
     chapter 1, as amended by sections 106 and 141, is amended by 
     adding at the end the following new section:

     ``SEC. 54D. QUALIFIED ZONE ACADEMY BONDS.

       ``(a) Qualified Zone Academy Bonds.--For purposes of this 
     subchapter, the term `qualified zone academy bond' means any 
     bond issued as part of an issue if--
       ``(1) 100 percent of the available project proceeds of such 
     issue are to be used for a qualified purpose with respect to 
     a qualified zone academy established by an eligible local 
     education agency,
       ``(2) the bond is issued by a State or local government 
     within the jurisdiction of which such academy is located, and
       ``(3) the issuer--
       ``(A) designates such bond for purposes of this section,

[[Page 10254]]

       ``(B) certifies that it has written assurances that the 
     private business contribution requirement of subsection (b) 
     will be met with respect to such academy, and
       ``(C) certifies that it has the written approval of the 
     eligible local education agency for such bond issuance.
       ``(b)  Private Business Contribution Requirement.--For 
     purposes of subsection (a), the private business contribution 
     requirement of this subsection is met with respect to any 
     issue if the eligible local education agency that established 
     the qualified zone academy has written commitments from 
     private entities to make qualified contributions having a 
     present value (as of the date of issuance of the issue) of 
     not less than 10 percent of the proceeds of the issue.
       ``(c) Limitation on Amount of Bonds Designated.--
       ``(1) National limitation.--There is a national zone 
     academy bond limitation for each calendar year. Such 
     limitation is $400,000,000 for 2008, and, except as provided 
     in paragraph (4), zero thereafter.
       ``(2) Allocation of limitation.--The national zone academy 
     bond limitation for a calendar year shall be allocated by the 
     Secretary among the States on the basis of their respective 
     populations of individuals below the poverty line (as defined 
     by the Office of Management and Budget). The limitation 
     amount allocated to a State under the preceding sentence 
     shall be allocated by the State education agency to qualified 
     zone academies within such State.
       ``(3) Designation subject to limitation amount.--The 
     maximum aggregate face amount of bonds issued during any 
     calendar year which may be designated under subsection (a) 
     with respect to any qualified zone academy shall not exceed 
     the limitation amount allocated to such academy under 
     paragraph (2) for such calendar year.
       ``(4) Carryover of unused limitation.--
       ``(A) In general.--If for any calendar year--
       ``(i) the limitation amount for any State, exceeds
       ``(ii) the amount of bonds issued during such year which 
     are designated under subsection (a) with respect to qualified 
     zone academies within such State,

     the limitation amount for such State for the following 
     calendar year shall be increased by the amount of such 
     excess.
       ``(B) Limitation on carryover.--Any carryforward of a 
     limitation amount may be carried only to the first 2 years 
     following the unused limitation year. For purposes of the 
     preceding sentence, a limitation amount shall be treated as 
     used on a first-in first-out basis.
       ``(C) Coordination with section 1397e.--Any carryover 
     determined under section 1397E(e)(4) (relating to carryover 
     of unused limitation) with respect to any State to calendar 
     year 2008 shall be treated for purposes of this section as a 
     carryover with respect to such State for such calendar year 
     under subparagraph (A), and the limitation of subparagraph 
     (B) shall apply to such carryover taking into account the 
     calendar years to which such carryover relates.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified zone academy.--The term `qualified zone 
     academy' means any public school (or academic program within 
     a public school) which is established by and operated under 
     the supervision of an eligible local education agency to 
     provide education or training below the postsecondary level 
     if--
       ``(A) such public school or program (as the case may be) is 
     designed in cooperation with business to enhance the academic 
     curriculum, increase graduation and employment rates, and 
     better prepare students for the rigors of college and the 
     increasingly complex workforce,
       ``(B) students in such public school or program (as the 
     case may be) will be subject to the same academic standards 
     and assessments as other students educated by the eligible 
     local education agency,
       ``(C) the comprehensive education plan of such public 
     school or program is approved by the eligible local education 
     agency, and
       ``(D)(i) such public school is located in an empowerment 
     zone or enterprise community (including any such zone or 
     community designated after the date of the enactment of this 
     section), or
       ``(ii) there is a reasonable expectation (as of the date of 
     issuance of the bonds) that at least 35 percent of the 
     students attending such school or participating in such 
     program (as the case may be) will be eligible for free or 
     reduced-cost lunches under the school lunch program 
     established under the National School Lunch Act.
       ``(2) Eligible local education agency.--For purposes of 
     this section, the term `eligible local education agency' 
     means any local educational agency as defined in section 9101 
     of the Elementary and Secondary Education Act of 1965.
       ``(3) Qualified purpose.--The term `qualified purpose' 
     means, with respect to any qualified zone academy--
       ``(A) rehabilitating or repairing the public school 
     facility in which the academy is established,
       ``(B) providing equipment for use at such academy,
       ``(C) developing course materials for education to be 
     provided at such academy, and
       ``(D) training teachers and other school personnel in such 
     academy.
       ``(4) Qualified contributions.--The term `qualified 
     contribution' means any contribution (of a type and quality 
     acceptable to the eligible local education agency) of--
       ``(A) equipment for use in the qualified zone academy 
     (including state-of-the-art technology and vocational 
     equipment),
       ``(B) technical assistance in developing curriculum or in 
     training teachers in order to promote appropriate market 
     driven technology in the classroom,
       ``(C) services of employees as volunteer mentors,
       ``(D) internships, field trips, or other educational 
     opportunities outside the academy for students, or
       ``(E) any other property or service specified by the 
     eligible local education agency.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 54A(d), as amended by sections 
     106 and 141, is amended by striking ``or'' at the end of 
     subparagraph (A), by inserting ``or'' at the end of 
     subparagraph (B), and by inserting after subparagraph (B) the 
     following new subparagraph:
       ``(C) a qualified zone academy bond,''.
       (2) Subparagraph (C) of section 54A(d)(2), as amended by 
     sections 106 and 141, is amended by striking ``and'' at the 
     end of clause (i), by striking the period at the end of 
     clause (ii) and inserting ``, and'', and by adding at the end 
     the following new clause:
       ``(iii) in the case of a qualified zone academy bond, a 
     purpose specified in section 54D(a)(1).''.
       (3) Section 1397E is amended by adding at the end the 
     following new subsection:
       ``(m) Termination.--This section shall not apply to any 
     obligation issued after the date of the enactment of this 
     Act.''.
       (4) The table of sections for subpart I of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

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

     SEC. 232. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF 
                   COLUMBIA.

       (a) Designation of Zone.--
       (1) In general.--Subsection (f) of section 1400 is amended 
     by striking ``2007'' both places it appears and inserting 
     ``2008''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to periods beginning after December 31, 2007.
       (b) Tax-Exempt Economic Development Bonds.--
       (1) In general.--Subsection (b) of section 1400A is amended 
     by striking ``2007'' and inserting ``2008''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to bonds issued after December 31, 2007.
       (c) Zero Percent Capital Gains Rate.--
       (1) In general.--Subsection (b) of section 1400B is amended 
     by striking ``2008'' each place it appears and inserting 
     ``2009''.
       (2) Conforming amendments.--
       (A) Section 1400B(e)(2) is amended--
       (i) by striking ``2012'' and inserting ``2013'', and
       (ii) by striking ``2012'' in the heading thereof and 
     inserting ``2013''.
       (B) Section 1400B(g)(2) is amended by striking ``2012'' and 
     inserting ``2013''.
       (C) Section 1400F(d) is amended by striking ``2012'' and 
     inserting ``2013''.
       (3) Effective dates.--
       (A) Extension.--The amendments made by paragraph (1) shall 
     apply to acquisitions after December 31, 2007.
       (B) Conforming amendments.--The amendments made by 
     paragraph (2) shall take effect on the date of the enactment 
     of this Act.
       (d) First-Time Homebuyer Credit.--
       (1) In general.--Subsection (i) of section 1400C is amended 
     by striking ``2008'' and inserting ``2009''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property purchased after December 31, 2007.

     SEC. 233. ECONOMIC DEVELOPMENT CREDIT FOR AMERICAN SAMOA.

       (a) In General.--Subsection (d) of section 119 of division 
     A of the Tax Relief and Health Care Act of 2006 is amended--
       (1) by striking ``first two taxable years'' and inserting 
     ``first 3 taxable years'', and
       (2) by striking ``January 1, 2008'' and inserting ``January 
     1, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 234. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF 
                   FOOD INVENTORY.

       (a) In General.--Clause (iv) of section 170(e)(3)(C) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after December 31, 2007.

     SEC. 235. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF 
                   BOOK INVENTORY TO PUBLIC SCHOOLS.

       (a) In General.--Clause (iv) of section 170(e)(3)(D) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after December 31, 2007.

     SEC. 236. ENHANCED DEDUCTION FOR QUALIFIED COMPUTER 
                   CONTRIBUTIONS.

       (a) In General.--Subparagraph (G) of section 170(e)(6) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made during taxable years 
     beginning after December 31, 2007.

[[Page 10255]]



     SEC. 237. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING 
                   CHARITABLE CONTRIBUTIONS OF PROPERTY.

       (a) In General.--The last sentence of section 1367(a)(2) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2007.

     SEC. 238. WORK OPPORTUNITY TAX CREDIT FOR HURRICANE KATRINA 
                   EMPLOYEES.

       (a) In General.--Paragraph (1) of section 201(b) of the 
     Katrina Emergency Tax Relief Act of 2005 is amended by 
     striking ``2-year'' and inserting ``3-year''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to individuals hired after August 27, 2007.

     SEC. 239. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME.

       (a) Exempt Insurance Income.--Paragraph (10) of section 
     953(e) (relating to application) is amended--
       (1) by striking ``January 1, 2009'' and inserting ``January 
     1, 2010'', and
       (2) by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) Exception to Treatment as Foreign Personal Holding 
     Company Income.--Paragraph (9) of section 954(h) (relating to 
     application) is amended by striking ``January 1, 2009'' and 
     inserting ``January 1, 2010''.

     SEC. 240. LOOK-THRU RULE FOR RELATED CONTROLLED FOREIGN 
                   CORPORATIONS.

       (a) In General.--Subparagraph (C) of section 954(c)(6) 
     (relating to application) is amended by striking ``January 1, 
     2009'' and inserting ``January 1, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years of foreign corporations 
     beginning after December 31, 2008, and to taxable years of 
     United States shareholders with or within which such taxable 
     years of foreign corporations end.

     SEC. 241. EXPENSING FOR CERTAIN QUALIFIED FILM AND TELEVISION 
                   PRODUCTIONS.

       (a) In General.--Subsection (f) of section 181 is amended 
     by striking ``December 31, 2008'' and inserting ``December 
     31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to productions commencing after December 31, 
     2008.

                      Subtitle C--Other Extensions

     SEC. 251. AUTHORITY TO DISCLOSE INFORMATION RELATED TO 
                   TERRORIST ACTIVITIES MADE PERMANENT.

       (a) In General.--Subparagraph (C) of section 6103(i)(3) is 
     amended by striking clause (iv).
       (b) Disclosure on Request.--Paragraph (7) of section 
     6103(i) is amended by striking subparagraph (E).
       (c) Effective Date.--The amendments made by this section 
     shall apply to disclosures after the date of the enactment of 
     this Act.

     SEC. 252. AUTHORITY FOR UNDERCOVER OPERATIONS MADE PERMANENT.

       (a) In General.--Subsection (c) of section 7608 is amended 
     by striking paragraph (6).
       (b) Effective Date.--The amendment made by this section 
     shall take effect on January 1, 2008.

     SEC. 253. AUTHORITY TO DISCLOSE RETURN INFORMATION FOR 
                   CERTAIN VETERANS PROGRAMS MADE PERMANENT.

       (a) In General.--Paragraph (7) of section 6103(l) is 
     amended by striking the last sentence thereof.
       (b) Conforming Amendment.--Section 6103(l)(7)(D)(viii)(III) 
     is amended by striking ``sections 1710(a)(1)(I), 1710(a)(2), 
     1710(b), and 1712(a)(2)(B)'' and inserting ``sections 
     1710(a)(2)(G), 1710(a)(3), and 1710(b)''.
       (c) Effective Date.--The amendment made by subsection (a) 
     shall apply to requests made after September 30, 2008.

     SEC. 254. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX 
                   TO PUERTO RICO AND THE VIRGIN ISLANDS.

       (a) In General.--Paragraph (1) of section 7652(f) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distilled spirits brought into the United 
     States after December 31, 2007.

     SEC. 255. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO 
                   MENTAL HEALTH BENEFITS.

       Subsection (f) of section 9812 is amended--
       (1) by striking ``and'' at the end of paragraph (2), and
       (2) by striking paragraph (3) and inserting the following 
     new paragraphs:
       ``(3) on or after January 1, 2008, and before the date of 
     the enactment of the Renewable Energy and Job Creation Act of 
     2008, and
       ``(4) after December 31, 2008.''.

                    TITLE III--ADDITIONAL TAX RELIEF

                   Subtitle A--Individual Tax Relief

     SEC. 301. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY 
                   TAXES FOR NONITEMIZERS.

       (a) In General.--Section 63(c)(1) (defining standard 
     deduction) is amended by striking ``and'' at the end of 
     subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(C) in the case of any taxable year beginning in 2008, 
     the real property tax deduction.''.
       (b) Definition.--Section 63(c) is amended by adding at the 
     end the following new paragraph:
       ``(7) Real property tax deduction.--For purposes of 
     paragraph (1), the real property tax deduction is the lesser 
     of--
       ``(A) the amount allowable as a deduction under this 
     chapter for State and local taxes described in section 
     164(a)(1), or
       ``(B) $350 ($700 in the case of a joint return).
     Any taxes taken into account under section 62(a) shall not be 
     taken into account under this paragraph.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 302. REFUNDABLE CHILD CREDIT.

       (a) Modification of Threshold Amount.--Clause (i) of 
     section 24(d)(1)(B) is amended by inserting ``($8,500 in the 
     case of taxable years beginning in 2008)'' after ``$10,000''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 303. INCREASE OF AMT REFUNDABLE CREDIT AMOUNT FOR 
                   INDIVIDUALS WITH LONG-TERM UNUSED CREDITS FOR 
                   PRIOR YEAR MINIMUM TAX LIABILITY, ETC.

       (a) In General.--Paragraph (2) of section 53(e) is amended 
     to read as follows:
       ``(2) AMT refundable credit amount.--For purposes of 
     paragraph (1), the term `AMT refundable credit amount' means, 
     with respect to any taxable year, the amount (not in excess 
     of the long-term unused minimum tax credit for such taxable 
     year) equal to the greater of--
       ``(A) 50 percent of the long-term unused minimum tax credit 
     for such taxable year, or
       ``(B) the amount (if any) of the AMT refundable credit 
     amount for the taxpayer's preceding taxable year (determined 
     without regard to subsection (f)(2)).''.
       (b) Treatment of Certain Underpayments, Interest, and 
     Penalties Attributable to the Treatment of Incentive Stock 
     Options.--Section 53 is amended by adding at the end the 
     following new subsection:
       ``(f) Treatment of Certain Underpayments, Interest, and 
     Penalties Attributable to the Treatment of Incentive Stock 
     Options.--
       ``(1) Abatement.--Any underpayment of tax outstanding on 
     the date of the enactment of this subsection which is 
     attributable to the application of section 56(b)(3) for any 
     taxable year ending before January 1, 2008 (and any interest 
     or penalty with respect to such underpayment which is 
     outstanding on such date of enactment), is hereby abated. The 
     amount determined under subsection (b)(1) shall not include 
     any tax abated under the preceding sentence.
       ``(2) Increase in credit for certain interest and penalties 
     already paid.--The AMT refundable credit amount, and the 
     minimum tax credit determined under subsection (b), for the 
     taxpayer's first 2 taxable years beginning after December 31, 
     2007, shall each be increased by 50 percent of the aggregate 
     amount of the interest and penalties which were paid by the 
     taxpayer before the date of the enactment of this subsection 
     and which would (but for such payment) have been abated under 
     paragraph (1).''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendment made by this section shall apply to taxable years 
     beginning after December 31, 2007.
       (2) Abatement.--Section 53(f)(1) of the Internal Revenue 
     Code of 1986, as added by subsection (b), shall take effect 
     on the date of the enactment of this Act.

                Subtitle B--Business Related Provisions

     SEC. 311. UNIFORM TREATMENT OF ATTORNEY-ADVANCED EXPENSES AND 
                   COURT COSTS IN CONTINGENCY FEE CASES.

       (a) In General.--Section 162 is amended by redesignating 
     subsection (q) as subsection (r) and by inserting after 
     subsection (p) the following new subsection:
       ``(q) Attorney-Advanced Expenses and Court Costs in 
     Contingency Fee Cases.--In the case of any expense or court 
     cost which is paid or incurred in the course of the trade or 
     business of practicing law and the repayment of which is 
     contingent on a recovery by judgment or settlement in the 
     action to which such expense or cost relates, the deduction 
     under subsection (a) shall be determined as if such expense 
     or cost was not subject to repayment.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenses and costs paid or incurred in taxable 
     years beginning after the date of the enactment of this Act.

     SEC. 312. PROVISIONS RELATED TO FILM AND TELEVISION 
                   PRODUCTIONS.

       (a) Modification of Limitation on Expensing.--Subparagraph 
     (A) of section 181(a)(2) is amended to read as follows:
       ``(A) In general.--Paragraph (1) shall not apply to so much 
     of the aggregate cost of any qualified film or television 
     production as exceeds $15,000,000.''.
       (b) Modifications to Deduction for Domestic Activities.--
       (1) Determination of w-2 wages.--Paragraph (2) of section 
     199(b) is amended by adding at the end the following new 
     subparagraph:
       ``(D) Special rule for qualified film.--In the case of a 
     qualified film, such term shall include compensation for 
     services performed in the United States by actors, production 
     personnel, directors, and producers.''.
       (2) Definition of qualified film.--Paragraph (6) of section 
     199(c) is amended by adding at the end the following: ``A 
     qualified film shall include any copyrights, trademarks, or 
     other intangibles with respect to such film. The methods and 
     means of distributing a qualified film shall not affect the 
     availability of the deduction under this section.''.

[[Page 10256]]

       (3) Partnerships.--Subparagraph (A) of section 199(d)(1) is 
     amended by striking ``and'' at the end of clause (ii), by 
     striking the period at the end of clause (iii) and inserting 
     ``, and'', and by adding at the end the following new clause:
       ``(iv) in the case of each partner of a partnership, or 
     shareholder of an S corporation, who owns (directly or 
     indirectly) at least 20 percent of the capital interests in 
     such partnership or of the stock of such S corporation--

       ``(I) such partner or shareholder shall be treated as 
     having engaged directly in any film produced by such 
     partnership or S corporation, and
       ``(II) such partnership or S corporation shall be treated 
     as having engaged directly in any film produced by such 
     partner or shareholder.''.

       (c) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to taxable years beginning after December 31, 2007.
       (2) Expensing.--The amendments made by subsection (a) shall 
     apply to qualified film and television productions commencing 
     after December 31, 2007.

  Subtitle C--Modification of Penalty on Understatement of Taxpayer's 
                    Liability by Tax Return Preparer

     SEC. 321. MODIFICATION OF PENALTY ON UNDERSTATEMENT OF 
                   TAXPAYER'S LIABILITY BY TAX RETURN PREPARER.

       (a) In General.--Subsection (a) of section 6694 (relating 
     to understatement due to unreasonable positions) is amended 
     to read as follows:
       ``(a) Understatement Due to Unreasonable Positions.--
       ``(1) In general.--If a tax return preparer--
       ``(A) prepares any return or claim of refund with respect 
     to which any part of an understatement of liability is due to 
     a position described in paragraph (2), and
       ``(B) knew (or reasonably should have known) of the 
     position,
     such tax return preparer shall pay a penalty with respect to 
     each such return or claim in an amount equal to the greater 
     of $1,000 or 50 percent of the income derived (or to be 
     derived) by the tax return preparer with respect to the 
     return or claim.
       ``(2) Unreasonable position.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, a position is described in this paragraph unless 
     there is or was substantial authority for the position.
       ``(B) Disclosed positions.--If the position was disclosed 
     as provided in section 6662(d)(2)(B)(ii)(I) and is not a 
     position to which subparagraph (C) applies, the position is 
     described in this paragraph unless there is a reasonable 
     basis for the position.
       ``(C) Tax shelters and reportable transactions.--If the 
     position is with respect to a tax shelter (as defined in 
     section 6662(d)(2)(C)(ii)) or a reportable transaction to 
     which section 6662A applies, the position is described in 
     this paragraph unless it is reasonable to believe that the 
     position would more likely than not be sustained on its 
     merits.
       ``(3) Reasonable cause exception.--No penalty shall be 
     imposed under this subsection if it is shown that there is 
     reasonable cause for the understatement and the tax return 
     preparer acted in good faith.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply--
       (1) in the case of a position other than a position 
     described in subparagraph (C) of section 6694(a)(2) of the 
     Internal Revenue Code of 1986 (as amended by this section), 
     to returns prepared after May 25, 2007, and
       (2) in the case of a position described in such 
     subparagraph (C), to returns prepared for taxable years 
     ending after the date of the enactment of this Act.

   Subtitle D--Extension and Expansion of Certain GO Zone Incentives

     SEC. 331. CERTAIN GO ZONE INCENTIVES.

       (a) Use of Amended Income Tax Returns To Take Into Account 
     Receipt of Certain Hurricane-Related Casualty Loss Grants by 
     Disallowing Previously Taken Casualty Loss Deductions.--
       (1) In general.--Notwithstanding any other provision of the 
     Internal Revenue Code of 1986, if a taxpayer claims a 
     deduction for any taxable year with respect to a casualty 
     loss to a principal residence (within the meaning of section 
     121 of such Code) resulting from Hurricane Katrina, Hurricane 
     Rita, or Hurricane Wilma and in a subsequent taxable year 
     receives a grant under Public Law 109-148, 109-234, or 110-
     116 as reimbursement for such loss, such taxpayer may elect 
     to file an amended income tax return for the taxable year in 
     which such deduction was allowed (and for any taxable year to 
     which such deduction is carried) and reduce (but not below 
     zero) the amount of such deduction by the amount of such 
     reimbursement.
       (2) Time of filing amended return.--Paragraph (1) shall 
     apply with respect to any grant only if any amended income 
     tax returns with respect to such grant are filed not later 
     than the later of--
       (A) the due date for filing the tax return for the taxable 
     year in which the taxpayer receives such grant, or
       (B) the date which is 1 year after the date of the 
     enactment of this Act.
       (3) Waiver of penalties and interest.--Any underpayment of 
     tax resulting from the reduction under paragraph (1) of the 
     amount otherwise allowable as a deduction shall not be 
     subject to any penalty or interest under such Code if such 
     tax is paid not later than 1 year after the filing of the 
     amended return to which such reduction relates.
       (b) Waiver of Deadline on Construction of GO Zone Property 
     Eligible for Bonus Depreciation.--
       (1) In general.--Subparagraph (B) of section 1400N(d)(3) is 
     amended to read as follows:
       ``(B) without regard to `and before January 1, 2009' in 
     clause (i) thereof, and''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property placed in service after December 31, 
     2007.
       (c) Inclusion of Certain Counties in Gulf Opportunity Zone 
     for Purposes of Tax-Exempt Bond Financing.--
       (1) In general.--Subsection (a) of section 1400N is amended 
     by adding at the end the following new paragraph:
       ``(8) Inclusion of certain counties.--For purposes of this 
     subsection, the Gulf Opportunity Zone includes Colbert 
     County, Alabama and Dallas County, Alabama.''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the provisions of the 
     Gulf Opportunity Zone Act of 2005 to which it relates.

                      TITLE IV--REVENUE PROVISIONS

     SEC. 401. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX 
                   INDIFFERENT PARTIES.

       (a) In General.--Subpart B of part II of subchapter E of 
     chapter 1 is amended by inserting after section 457 the 
     following new section:

     ``SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN 
                   TAX INDIFFERENT PARTIES.

       ``(a) In General.--Any compensation which is deferred under 
     a nonqualified deferred compensation plan of a nonqualified 
     entity shall be includible in gross income when there is no 
     substantial risk of forfeiture of the rights to such 
     compensation.
       ``(b) Nonqualified Entity.--For purposes of this section, 
     the term `nonqualified entity' means--
       ``(1) any foreign corporation unless substantially all of 
     its income is--
       ``(A) effectively connected with the conduct of a trade or 
     business in the United States, or
       ``(B) subject to a comprehensive foreign income tax, and
       ``(2) any partnership unless substantially all of its 
     income is allocated to persons other than--
       ``(A) foreign persons with respect to whom such income is 
     not subject to a comprehensive foreign income tax, and
       ``(B) organizations which are exempt from tax under this 
     title.
       ``(c) Determinability of Amounts of Compensation.--
       ``(1) In general.--If the amount of any compensation is not 
     determinable at the time that such compensation is otherwise 
     includible in gross income under subsection (a)--
       ``(A) such amount shall be so includible in gross income 
     when determinable, and
       ``(B) the tax imposed under this chapter for the taxable 
     year in which such compensation is includible in gross income 
     shall be increased by the sum of--
       ``(i) the amount of interest determined under paragraph 
     (2), and
       ``(ii) an amount equal to 20 percent of the amount of such 
     compensation.
       ``(2) Interest.--For purposes of paragraph (1)(B)(i), the 
     interest determined under this paragraph for any taxable year 
     is the amount of interest at the underpayment rate under 
     section 6621 plus 1 percentage point on the underpayments 
     that would have occurred had the deferred compensation been 
     includible in gross income for the taxable year in which 
     first deferred or, if later, the first taxable year in which 
     such deferred compensation is not subject to a substantial 
     risk of forfeiture.
       ``(d) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Substantial risk of forfeiture.--
       ``(A) In general.--The rights of a person to compensation 
     shall be treated as subject to a substantial risk of 
     forfeiture only if such person's rights to such compensation 
     are conditioned upon the future performance of substantial 
     services by any individual.
       ``(B) Exception for compensation based on gain recognized 
     on an investment asset.--
       ``(i) In general.--To the extent provided in regulations 
     prescribed by the Secretary, if compensation is determined 
     solely by reference to the amount of gain recognized on the 
     disposition of an investment asset, such compensation shall 
     be treated as subject to a substantial risk of forfeiture 
     until the date of such disposition.
       ``(ii) Investment asset.--For purposes of clause (i), the 
     term `investment asset' means any single asset (other than an 
     investment fund or similar entity)--

       ``(I) acquired directly by an investment fund or similar 
     entity,
       ``(II) with respect to which such entity does not (nor does 
     any person related to such entity) participate in the active 
     management of such asset (or if such asset is an interest in 
     an entity, in the active management of the activities of such 
     entity), and
       ``(III) substantially all of any gain on the disposition of 
     which (other than such deferred compensation) is allocated to 
     investors in such entity.

       ``(iii) Coordination with special rule.--Paragraph (3)(B) 
     shall not apply to any compensation to which clause (i) 
     applies.
       ``(2) Comprehensive foreign income tax.--The term 
     `comprehensive foreign income tax' means, with respect to any 
     foreign person, the income tax of a foreign country if--

[[Page 10257]]

       ``(A) such person is eligible for the benefits of a 
     comprehensive income tax treaty between such foreign country 
     and the United States, or
       ``(B) such person demonstrates to the satisfaction of the 
     Secretary that such foreign country has a comprehensive 
     income tax.
       ``(3) Nonqualified deferred compensation plan.--
       ``(A) In general.--The term `nonqualified deferred 
     compensation plan' has the meaning given such term under 
     section 409A(d), except that such term shall include any plan 
     that provides a right to compensation based on the 
     appreciation in value of a specified number of equity units 
     of the service recipient.
       ``(B) Exception.--Compensation shall not be treated as 
     deferred for purposes of this section if the service provider 
     receives payment of such compensation not later than 12 
     months after the end of the taxable year of the service 
     recipient during which the right to the payment of such 
     compensation is no longer subject to a substantial risk of 
     forfeiture.
       ``(4) Exception for certain compensation with respect to 
     effectively connected income.--In the case a foreign 
     corporation with income which is taxable under section 882, 
     this section shall not apply to compensation which, had such 
     compensation had been paid in cash on the date that such 
     compensation ceased to be subject to a substantial risk of 
     forfeiture, would have been deductible by such foreign 
     corporation against such income.
       ``(5) Application of rules.--Rules similar to the rules of 
     paragraphs (5) and (6) of section 409A(d) shall apply.
       ``(e) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section, including regulations 
     disregarding a substantial risk of forfeiture in cases where 
     necessary to carry out the purposes of this section.''.
       (b) Conforming Amendment.--Section 26(b)(2) is amended by 
     striking ``and'' at the end of subparagraph (U), by striking 
     the period at the end of subparagraph (V) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(W) section 457A(c)(1)(B) (relating to determinability of 
     amounts of compensation).''.
       (c) Clerical Amendment.--The table of sections of subpart B 
     of part II of subchapter E of chapter 1 is amended by 
     inserting after the item relating to section 457 the 
     following new item:

``Sec. 457A. Nonqualified deferred compensation from certain tax 
              indifferent parties.''.
       (d) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to amounts deferred which are attributable to services 
     performed after December 31, 2008.
       (2) Application to existing deferrals.--In the case of any 
     amount deferred to which the amendments made by this section 
     do not apply solely by reason of the fact that the amount is 
     attributable to services performed before January 1, 2009, to 
     the extent such amount is not includible in gross income in a 
     taxable year beginning before 2018, such amounts shall be 
     includible in gross income in the later of--
       (A) the last taxable year beginning before 2018, or
       (B) the taxable year in which there is no substantial risk 
     of forfeiture of the rights to such compensation (determined 
     in the same manner as determined for purposes of section 457A 
     of the Internal Revenue Code of 1986, as added by this 
     section).
       (3) Charitable contributions of existing deferrals 
     permitted.--
       (A) In general.--Subsection (b) of section 170 of the 
     Internal Revenue Code of 1986 shall not apply to (and 
     subsections (b) and (d) of such section shall be applied 
     without regard to) so much of the taxpayer's qualified 
     contributions made during the taxpayer's last taxable year 
     beginning before 2018 as does not exceed the taxpayer's 
     qualified inclusion amount. For purposes of subsection (b) of 
     section 170 of such Code, the taxpayer's contribution base 
     for such last taxable year shall be reduced by the amount of 
     the taxpayer's qualified contributions to which such 
     subsection does not apply by reason the preceding sentence.
       (B) Qualified contributions.--For purposes of this 
     paragraph, the term ``qualified contributions'' means the 
     aggregate charitable contributions (as defined in section 
     170(c) of such Code) paid in cash by the taxpayer to 
     organizations described in section 170(b)(1)(A) of such Code 
     (other than any organization described in section 509(a)(3) 
     of such Code or any fund or account described in section 
     4966(d)(2) of such Code).
       (C) Qualified inclusion amount.--For purposes of this 
     paragraph, the term ``qualified inclusion amount'' means the 
     amount includible in the taxpayer's gross income for the last 
     taxable year beginning before 2018 by reason of paragraph 
     (2).
       (4) Accelerated payments.--No later than 120 days after the 
     date of the enactment of this Act, the Secretary shall issue 
     guidance providing a limited period of time during which a 
     nonqualified deferred compensation arrangement attributable 
     to services performed on or before December 31, 2008, may, 
     without violating the requirements of section 409A(a) of the 
     Internal Revenue Code of 1986, be amended to conform the date 
     of distribution to the date the amounts are required to be 
     included in income.
       (5) Certain back-to-back arrangements.--If the taxpayer is 
     also a service recipient and maintains one or more 
     nonqualified deferred compensation arrangements for its 
     service providers under which any amount is attributable to 
     services performed on or before December 31, 2008, the 
     guidance issued under paragraph (4) shall permit such 
     arrangements to be amended to conform the dates of 
     distribution under such arrangement to the date amounts are 
     required to be included in the income of such taxpayer under 
     this subsection.
       (6) Accelerated payment not treated as material 
     modification.--Any amendment to a nonqualified deferred 
     compensation arrangement made pursuant to paragraph (4) or 
     (5) shall not be treated as a material modification of the 
     arrangement for purposes of section 409A of the Internal 
     Revenue Code of 1986.

     SEC. 402. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF 
                   INTEREST.

       (a) In General.--Paragraphs (5)(D) and (6) of section 
     864(f) are each amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2018''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 403. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

       (a) Repeal of Adjustment for 2012.--Subparagraph (B) of 
     section 401(1) of the Tax Increase Prevention and 
     Reconciliation Act of 2005 is amended by striking the 
     percentage contained therein and inserting ``100 percent''.
       (b) Modification of Adjustment for 2013.--The percentage 
     under subparagraph (C) of section 401(1) of the Tax Increase 
     Prevention and Reconciliation Act of 2005 in effect on the 
     date of the enactment of this Act is increased by 37.75 
     percentage points.

  The SPEAKER pro tempore. The gentleman from New York (Mr. Rangel) and 
the gentleman from Louisiana (Mr. McCrery) each will control 30 
minutes.
  The Chair recognizes the gentleman from New York.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  My friends and colleagues, we now have an opportunity to reverse the 
trend that this great Nation has bound itself to, and that is, the 
addiction to oil as well as the lack of will to do something about it.
  This great country has faced up to many crises, and the oil shortage 
just happens to be one. The question is do we have the will to look and 
to research and to find alternative means in which to meet the needs of 
this great Nation.
  Under the leadership of Speaker Pelosi, I think today is the day that 
all of us are going to be proud of the initiatives that we have taken, 
the opportunities that are going to be given, the jobs that are going 
to be created, and the excitement in being able to say that the United 
States need not look to any Nation because of their vast resources in 
oil because we have the ingenuity and the ability to find alternatives.
  It is endless the possibilities that this will pursue in encouraging 
the production of electricity from renewable sources, using the wind, 
solar, biomass, geothermal, hydropower, landfill gas and solid waste.

                              {time}  1400

  We even go as far as to have coal electricity plants.
  It is a great opportunity for us and the world to explore these new 
areas that we just were too lazy or found no need to do, encouraging 
energy efficient products such as plug-in hybrid cars and incentives 
for conservation of energy in our buildings, whether they're 
residential or whether they're commercial. And I find it very exciting 
that we allow local government, that knows their communities better 
than we ever could, to issue tax credit bonds to further explore how we 
can conserve energy.
  I think this is merely a beginning, but it is an historic beginning 
that defies party lines. I do hope that we thank the Speaker and the 
chairman of the committee, the staffs who came together after working 
years on this project, to come together with a bill that's the 
beginning of the one that could be a new day for America, a new day for 
the world as we release our addiction and dependency on fossil fuel.
  There is another part of this bill that I come to you with mixed 
feelings and yet ask your support. It's called the extenders. What are 
the extenders, for the new Members? It's when people want bills passed, 
but they put expiration dates on them in order to hide the real cost of 
the bill.
  I think that the ranking member of the Committee on Ways and Means 
and I agree that we have so much garbage

[[Page 10258]]

in this bill that soon I hope someone would have the courage to take a 
look at the tax bill that we have and strip it of the preferential 
treatment and get down to making the bills that we want permanent, and 
those that should not be permanent, just to kick them out.
  I think it's a disgrace that we have a stimulus package and we have 
to target the middle class in order to be given handouts because they 
don't have enough money under our tax system to put food on the table, 
to provide tuition for their kids and put clothes on their back. We 
target them as being people who cannot afford to save and plan for the 
future. I think it is a disgrace for the Congress to have a tax system 
that way.
  But because we make commitments and because some of these laws are 
good and efficient and because we don't have the money at this point in 
time to make it permanent, we come to you and ask you to support the 
extenders. These extenders include research and development, standard 
deduction for property taxes for non-itemizers. We have provisions in 
here to help Katrina. Expanded child credits. We make it more equitable 
how attorneys can write off their investments before the end of a case. 
We also make it equitable for the moving picture industry to get the 
same benefits that other industries get as relates to job credit.
  This is one heck of an opportunity, I think, for us to move this 
forward in a short way. It's only a 1-year extension, which means that 
the next administration hopefully will be more progressive in terms of 
cleaning up the code and making permanent what should be made 
permanent. It is not paid in controversial taxes. We remove preferences 
for income that is made overseas and avoid tax liability, as well as 
tax benefits yet to be received. So there is no pain there.
  I ask unanimous consent at this time to yield the remainder of my 
time to the gentleman from Washington, Dr. McDermott, for purposes of 
managing the bill, and to thank him and so many others on the Ways and 
Means Committee for their leadership, their patience, and being able to 
bring this bill to the floor. I'm fairly confident that we will have 
very little problem in the Senate and have this passed into law.
  So remember the date. It's historic in nature. And remember the role 
that you played in supporting this revolutionary approach to avoid the 
dependency on fossil fuel for our great Nation.
  The SPEAKER pro tempore. Without objection, the gentleman from 
Washington will control the time.
  There was no objection.
  Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in opposition to the legislation before us today 
and urge all of my colleagues to vote against it today.
  Most critically, the bill claims to be a package of tax extenders, 
but fails to deal with the biggest and most pressing extender in the 
code, the AMT patch, the alternative minimum tax patch. This is a 
missed opportunity. We should have included that in this bill of other 
expiring provisions in the code.
  The majority's failure to extend this patch for 2008 would mean an 
additional 21 million--mostly middle class--individuals and families 
would be ensnared by the alternative minimum tax. As a result, affected 
families will pay an additional $61.5 billion in taxes for this year. 
This oversight--this neglect, I think--is the single largest flaw in 
the bill.
  The majority, I'm sure, will claim during today's debate, just as 
they did during committee markup, that they will address the AMT before 
adjourning this year, just not now. Surely our experience from 2007, 
when the AMT patch wasn't enacted until the day after Christmas, 
suggests that maybe we ought to begin acting on this now and not just 
run down the shot clock. Mr. Speaker, it simply does not make sense to 
vote to extend dozens of tax provisions, some for several years, 
without also dealing with the biggest and most far-reaching expiring 
provision, the AMT patch.
  The bill also clings to the mistaken view that the House's PAYGO 
rules require us to raise taxes in order to prevent tax increases. I 
was pleased last year that, when the House finally did pass the AMT 
patch, we recognized the foolishness of applying PAYGO to expiring tax 
provisions, and I'm disappointed that that bipartisan approach is not 
being followed here today.
  Simply put, we shouldn't have to pay to extend current law. This is 
not paying for a new tax cut in the main. Most of this bill is 
extending current law.
  As we stare at the prospect of a more than $3.5 trillion tax increase 
baked into the budget by the majority's misguided PAYGO rules, I think 
it will become even more obvious in the years to come why Congress 
should not have to raise taxes to prevent a tax increase.
  If the majority was ever willing to offset tax provisions with 
spending cuts, I might view this a little differently. But this bill 
shows once again that the only tool the majority has to meet its PAYGO 
requirements is the hammer of tax increases. It's little wonder, then, 
that to them every problem looks like a nail.
  As I documented many times last year and during our committee markup 
last week, Washington doesn't have a revenue problem. We're getting 
enough revenues. We're already collecting more in taxes as a percent of 
our GDP than the historical average of revenues coming into Washington. 
That's not the problem. The problem is spending. So how many times have 
we had PAYGO rules be adopted and followed in this House using spending 
cuts to pay for extending current tax law? Zero.
  Mr. Speaker, the continued use of tax increases to pay for extending 
current law is unacceptable to this ranking member of the Ways and 
Means Committee, and I hope will be objectionable to a majority of the 
Members of this House. In fact, this bill not only contains tax cuts, 
it actually does increase spending. There are items in this bill that 
score as spending--expanding refundable tax credits, the New York 
Liberty Zone project. Those score as spending. So we're increasing 
spending in this bill, and we're paying for that with tax increases.
  In addition to those two provisions, the bill contains numerous other 
new temporary and permanent provisions, undermining the claim that the 
bill is merely extending current law. Some of the new provisions might 
be meritorious, but a few of those I think deserve closer examination.
  For example, some of my colleagues may be surprised to know that 
there is a nearly $1.6 billion special tax break for trial lawyers in 
this bill. The provision overrides developing case law and lets lawyers 
using certain types of contingency fee arrangements to deduct sooner 
their expenses. CBO's Joint Tax Committee scores this as costing the 
taxpayers $1.6 billion over the next 10 years. Now, this provision was 
not the subject, that I'm aware of, of any hearings or examination by 
the committee, and yet it's in this bill today.
  I would hope that before we make such a significant change in tax law 
costing taxpayers $1.6 billion, all going to one very narrow set of 
people in this country, trial lawyers, that we would want to have a 
hearing on that and flesh it out to see if maybe it could be crafted 
better, or whether, in fact, it's of any value at all to the country.
  This bill also revisits the ``green pork'' tax credit bonds that were 
much discussed during the energy debate in 2007. These are the same 
bond proceeds, remember, that could be used for all sorts of dubious 
projects, maybe hybrid snowmobiles in Aspen, or maybe a new Wal-Mart 
with a couple of solar panels out front.
  State and local governments using the bond proceeds don't even have 
to certify that the projects will reduce fossil fuel consumption or 
greenhouse gas emissions. Unfortunately, the majority rejected a 
sensible fix for this oversight when this was offered last year.
  We know how this is all going to end. It will end with the passage of 
an AMT patch without offsets, like last year, and probably many 
extenders being approved without tax increases. More than 40 Senators 
have signed a letter pledging to oppose a package such as the one 
before the House today. And

[[Page 10259]]

even if it somehow squeaks by the Senate, the President has indicated 
he would veto this bill.
  Mr. Speaker, it's unfortunate that the majority has chosen against 
moving a bill on expiring provisions that could have had bipartisan 
support and instead have opted for the measure before us.
  Given that its fate has already been sealed--it won't become law--I 
am comforted to know that we will have another chance to consider this 
legislation this year. I hope it's sooner rather than later so that 
we're not here in December once again scrambling to deal with these 
issues.
  We can do better than what's before us today. Let's get rid of this, 
start over, and bring a good bill back.
  Mr. Speaker, I reserve the balance of my time.


                             General Leave

  Mr. McDERMOTT. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days in which to revise and extend their remarks 
and include extraneous material on H.R. 6049.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Washington?
  There was no objection.
  Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentleman from 
New Jersey (Mr. Pascrell).
  Mr. PASCRELL. Mr. Speaker, I have a great deal of affection and I 
have a great deal of respect for the ranking member on the other side, 
but you are dead wrong on this.
  First of all, you talk about this side of the aisle not being able to 
pass AMT. We did pass legislation, and your side sunk it. The 
alternative minimum tax would be gone, it would be abolished, there 
would be nada there, but you decided, for whatever reason, that you 
didn't want to pay for it. That's the problem.
  Now, my friends on the other side of the aisle are determined not to 
support this legislation. It should be noted that entities such as 
Goldman Sachs--I mean, these are not, most of the time, our friends--
Bank of America, Caterpillar, Ford, Deere, and Prudential disagree with 
you, and they publicly support the legislation.
  Connect the dots here. After all, a number of important provisions, 
such as the critical research and development credit, the election to 
deduct State and local general sales tax, the 15-year straight-line 
cost recovery for qualified leasehold improvements, and the election to 
expense brownfields environmental remediation costs have already 
expired. These provisions are so important to American businesses and 
consumers, and the time to renew them is now.
  There are a wide array of important provisions here, from renewable 
energy incentives to middle class tax cuts. I want to add how grateful 
we should all be to Chairman Rangel for his decision to include a 1-
year extension on the active financing rules critical to global 
competitiveness of U.S. financial services and companies. Those 
companies in this country that export are at a tremendous disadvantage. 
We are not playing on a level playing field. Active financing rules 
provide American companies with the level playing field necessary to 
compete in the global marketplace. Most other countries don't try to 
extract any taxes on its companies' foreign-based operations.
  The SPEAKER pro tempore (Mr. Ross). The time of the gentleman from 
New Jersey has expired.
  Mr. McDERMOTT. I yield the gentleman an additional 10 seconds.
  Mr. PASCRELL. Subjecting our businesses to both foreign and American 
corporate taxes puts them at a competitive disadvantage.
  I would add this, in conclusion, these are the kind of actions that 
will help create fair trade in America. You cannot be against that, in 
all fairness.
  Mr. McCRERY. Mr. Speaker, in fact, I agree with much of what the 
gentleman just said. I'm happy to hear him endorse many provisions that 
we, I think wisely, put into the Jobs bill several years ago when we 
were in the majority. So it's not those provisions that I oppose, it's 
the tax increases in the bill to pay for just extending current law 
that I'm opposed to. And I want to make that clear. I like the 
provisions the gentleman mentioned.

                              {time}  1415

  At this time, Mr. Speaker, I would yield 2 minutes to the ranking 
member of the Trade Subcommittee of the Ways and Means Committee, the 
gentleman from California (Mr. Herger).
  Mr. HERGER. Mr. Speaker, like many of my colleagues, I want to 
express my support for the tax relief included in today's legislation, 
provisions such as the research and development tax credit and the 
active financing exception that help our employers stay competitive and 
the extension of the renewable energy tax incentives.
  However, I cannot support this bill as written. First, it continues 
the negative trend the Democrat majority has followed by permanently 
increasing taxes to pay for temporary extensions of existing tax law. 
Given the wide-ranging tax relief that is set to expire in the coming 
years, the Democrats' PAYGO logic would require us to raise taxes by 
more than $3.5 trillion between now and 2018.
  Secondly, the bill ``dodges'' extending the middle class alternative 
minimum tax patch, without which 24 million taxpayers will pay an 
average of $2,400 in AMT taxes in 2008 alone. We waited until the 11th 
hour to extend this relief in 2007. We cannot do so again.
  Tragically, the House Democrats refuse to work on these issues on a 
bipartisan basis. Their tax increase approach has been tried and tried 
again, and for what we have seen in the other body and from what the 
White House has said, it will fail again. The longer we delay passing a 
realistic extenders bill, the longer American employers and taxpayers 
go without this critical tax relief.
  Mr. Speaker, I urge a ``no'' vote on this legislation.
  Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentleman from 
Massachusetts (Mr. Neal).
  Mr. NEAL of Massachusetts. I thank the gentleman for yielding the 
time.
  Mr. Speaker, this legislation is pro-environment, it's business 
friendly, and it's paid for.
  I don't know how anybody on the other side can mention the words 
``alternative minimum tax'' with a straight face. They had sufficient 
opportunity in the last session of the Congress to vote for a 
responsible alternative minimum tax repeal. I know. I authored the 
legislation. They all voted against it.
  I want to thank Charlie Rangel today for his hard work. There are a 
number of business and individual tax incentives that lapsed in January 
of this year. There was urgency to getting it done, and we did 
precisely that. In my home State of Massachusetts this means that 
94,000 teachers will get a deduction for out-of-pocket expenses for 
classroom supplies. It means that a thousand businesses in 
Massachusetts will get some credit for the millions they spend on 
research here in the United States. Without this bill 121,000 families 
in Massachusetts cannot take deduction for college tuition expenses.
  This bill provides significant and real tax relief to millions of 
families nationwide and for some very low income families it will 
provide a new benefit. There are 111,000 children in Massachusetts 
whose families will get a higher tax credit because of this bill.
  There are an additional 32,000 children and families in Massachusetts 
who are currently shut out of the child tax credit because of the 
threshold for earnings that must exceed rises each year for inflation. 
They're simply too poor for the tax credit. This bill lowers the 
threshold so that these working families can benefit from the child tax 
credit just like other families.
  These are well-crafted positions, and we don't have time to mention 
them all. But I want to tell you in the 20 years I have been in this 
House, this is one of the best pieces of legislation that I have been 
associated with. It provides tax relief, but at the same time it's pro-
environment.
  I hope that Members of this House on both sides will support this 
legislation.
  Mr. McCRERY. Mr. Speaker, I yield 3 minutes to the distinguished 
gentleman from Michigan (Mr. Camp), the ranking member of the Health 
Subcommittee on the Ways and Means Committee.

[[Page 10260]]


  Mr. CAMP of Michigan. I thank the gentleman for yielding.
  Mr. Speaker, it's surprising how well the Democrat majority can turn 
good ideas like the extension of tax relief into bad legislation. Now, 
we have seen it before and it usually ends in gridlock. And, frankly, 
the American people are tired of the majority party's record of 
stalemate and zero accomplishment. But here we go again with another 
bill that is headed nowhere.
  This bill could have easily passed the Ways and Means Committee and 
passed on the floor with an overwhelming bipartisan majority of votes. 
It failed to get a majority of Republican votes in committee and will 
likely fail to get a Republican majority here today on the floor.
  Interestingly, a lot of what is in this package was written when 
Republicans were in the majority. The Republican bill was devoted to 
tax incentives; the Democrat bill focuses on tax increase. This is a 
fundamental difference between our two parties.
  It is a real missed opportunity not to deal with the alternative 
minimum tax, which means higher taxes for more and more Americans. 
That's why you're seeing key groups oppose this bill like the National 
Taxpayers Union, Citizens Against Government Waste, Americans for Tax 
Reform, Alliance for Worker Freedom, Americans for Prosperity, and Club 
for Growth.
  So what the Democrats give with one hand they take with the other. 
They'll use words like ``PAYGO'' and ``revenue raisers,'' but the fact 
of the matter is those innocent-sounding words really mean tax 
increases. Permanently increasing taxes to pay for temporary tax 
incentives is a losing deal for the American people.
  Congress will be confronted with many more expiring tax provisions in 
the coming years, and if the Democrats continue with this flawed logic, 
taxpayers will be hit with more than $3.5 trillion in tax increases 
between now and 2018 simply to maintain current law. With $3 and 
possibly $4 of gas and higher grocery bills, a sluggish economy, and a 
downturn in the housing market, the American public cannot afford 
higher taxes.
  We don't need a fortune teller to tell us that, just like many of the 
other bills House Democrats have passed that included tax increases, 
this bill again is dead on arrival in the United States Senate. So we 
will be back here again at some point debating this bill again. So 
after we get through with today's exercise, hopefully we can get down 
to business and write a bill that will gain a majority of bipartisan 
support.
  I urge my colleagues to reject increasing taxes and vote ``no'' on 
this legislation.
  Mr. McDERMOTT. Mr. Speaker, I understand from my distinguished 
colleague from Michigan that this bill is headed for nowhere.
  Are you talking about the White House?
  Mr. CAMP of Michigan. Will the gentleman yield?
  Mr. McDERMOTT. No, I'm going to let the gentleman from Michigan (Mr. 
Levin) have 2 minutes.
  Mr. LEVIN. Mr. Speaker, this legislation has vital energy provisions. 
Vital. It has important tax provisions, including the R&D tax credit.
  So here we hear the Republicans opposing it. They did not know how to 
govern effectively when they were in the majority, and they're showing 
today they don't know how to oppose effectively when they're in the 
minority.
  They criticize PAYGO. Their creed is ``pay-no.'' They don't want to 
pay for anything. They oppose a tax provision to close a loophole, an 
egregious one, and they call that a tax increase. They say this is 
their principle: Don't pay for extending current tax law, even though 
the reason it meets its end is because they didn't want to extend it a 
few years ago and increase the deficit. What illogic.
  They say do further with the extenders, but they don't want to pay 
for it. They say do more right now on the AMT but don't pay for it.
  We're going to keep working on the AMT. We're going to keep trying to 
pay for it. The reason this may not succeed in the Senate is because of 
the minority Republicans and in the White House.
  I think the public is tired of this blockade. We will keep moving 
ahead and I hope with success. It's time to act. I hope there will be 
some minority support for this bill.
  Mr. McCRERY. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Brady), a distinguished member of the Ways and Means 
Committee.
  Mr. BRADY of Texas. Mr. Speaker, I don't know what's being sold 
around here today, but there is nothing revolutionary about this bill. 
There are some good things in it, no question. But it is dangerously 
incomplete and it is tainted.
  It includes a last-minute special interest provision that no one in 
America has ever had a chance to look at or consider. It is not 
revolutionary because it includes extensions of what's already law in 
America today, the research and development tax credit, that's so 
important to innovation America. The State and local sales tax 
deduction, important for families to deduct what they pay in sales 
taxes from what they owe Uncle Sam because sales taxes really add up 
fast, especially for younger families. Energy provisions, which are 
important for us to do renewable alternative fuels. All that is very 
good. Everyone supports it.
  This bill is dangerously incomplete because it does not address a 
huge looming tax increase on most of middle class America. The 
alternative minimum tax, the second tax, that families find when they 
do their taxes or do their software for taxes, and they're okay, they 
don't owe Uncle Sam anything. We catch them with a second tax. And we 
said over the years that we'll do away with that. Republicans did do 
away with that second tax. Unfortunately, President Clinton vetoed it, 
and we live with it today.
  This bill does nothing to stop the alternative minimum tax, the 
second tax, on American families, and we need to act now, not later to 
do that.
  It is tainted because it includes a provision, $1.6 billion, a new 
tax break, for one special interest group, plaintiffs' attorneys with 
contingency fees. The wealthiest 1 percent of attorneys in America will 
receive $1.5 billion more of your money.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. McCRERY. I yield the gentleman an additional 30 seconds.
  Mr. BRADY of Texas. Mr. Speaker, the wealthiest 1 percent of 
attorneys in America will receive a tax break courtesy of you, the 
taxpayers. Yet we won't do more to help the refundable child tax 
credit. Those are single parents who are usually raising one or two 
kids and working several jobs. We offered the amendment. Instead of 
helping a trial lawyer buy a second private jet, why don't we help a 
waitress who's trying to raise her kids? Wouldn't that be a fair use of 
help and dollars?
  So I oppose this bill. I believe we ought to do these extensions, and 
I believe this bill does not deserve support.
  Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentleman from 
North Dakota (Mr. Pomeroy).
  Mr. POMEROY. I thank the gentleman for yielding.
  Mr. Speaker, I'm surprised to hear my Republican friends talk about 
their dismay that AMT is not in this package. AMT was not in the 
President's budget, not one nickel, not one cent. I never heard one 
word in the Ways and Means Committee, not a word that I can recall, of 
dismay from my Republicans that the President didn't address AMT.
  This bill before us is to address a number of expiring provisions 
including energy. Good gosh, with oil approaching $130 a barrel, you 
would think we could bust out an energy portion and make an immediate 
response. The American people deserve no less.
  Just take, for example, one provision: The wind production tax credit 
expires at the end of the year. But to be effective, a wind power plant 
has to be invested, constructed, and turning energy in order to qualify 
under the 2008 provision for the production tax credit. What that means 
in real terms is that already activity is being placed at risk. 
Financing packages are being denied for growing wind power in this 
country.

[[Page 10261]]



                              {time}  1430

  Our upside potential on harnessing power for wind is immense. But 
even the, I'd say paltry, 1-year extension under the bill, because this 
industry deserves much more than 1 year, is placed at risk now by 
Republican opposition.
  Fundamentally, we believe if we are going to extend these tax 
provisions, we need to find revenue offsets so that we don't drive the 
deficit deeper. I think what this debate is really about is a very 
different vision. They're happy to just run up the debt even deeper by 
extending these provisions without the pay-fors. We refuse to do that. 
As important as these provisions are, we are not going to let our kids 
pay for them. We will pay for them right here and now by finding the 
appropriate offsets.
  So for the interest of the people in this country in getting 
renewable energy sources, especially wind power, let's advance this 
legislation.
  Mr. McCRERY. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Indiana (Mr. Burton).
  Mr. BURTON of Indiana. I thank the gentleman for yielding.
  I listened to my good friend, Charlie Rangel, the Chairman of the 
Ways and Means Committee, from New York, a while ago, and he was 
talking about all these areas where we are going to get additional 
energy. There were some great ideas there. The problem is many of them 
are going to take a long, long time before we get the job done.
  Right now, people in this country are paying close to $4 a gallon for 
gasoline, and the issue is we have a supply of oil in this country that 
will take care of most of the problem. We can drill in the ANWR and get 
a million to 2 million barrels of oil a day. That is three-and-a-half 
times the size of Texas, Alaska is, and we can't do it because they say 
it's environmentally dangerous. We can drill off the Continental Shelf 
and get a million to 2 million barrels of oil a day. They won't let us 
drill off the Continental Shelf, and yet Cuba is going to drill within 
50 miles of the United States and give the oil to China.
  They are using all these environmentally questionable issues to keep 
us from drilling for oil in this country to be energy independent. We 
have been talking about energy independence for 30, 40 years, and we 
haven't done a darn thing about it. The Speaker said here not long ago, 
about 2 years ago, they were going to do something about skyrocketing 
gas prices when it was $2.33 gallon. Now it's approaching $4 a gallon 
and we can't even drill for oil that's in our country to reduce the 
cost of gasoline.
  The American people want solutions. They want Democrats and 
Republicans to come together and do what is necessary to help them with 
their energy problems. They want us to work together. We need to have 
some balance between environmental concerns and the cost that we need 
to deal with regarding this economy, and that means we need to lower 
the price of energy, especially gasoline, so people can get to and from 
work and deal with the problems they face on a daily basis. There's no 
question about that. Gasoline should not be $4 a gallon, and we can 
lower it if we drill for oil in our country.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. McCRERY. Mr. Speaker, I yield the gentleman an additional 30 
seconds.
  Mr. BURTON of Indiana. While we are talking about the long-term 
problems of energy and dealing with new technologies, and we are all 
for that, we have to deal with the immediate problem, and the immediate 
problem is drill for oil in this country, build more refineries so we 
can get that oil to market and lower the gas prices like the Americans 
want it be to lowered back down to around $2 a gallon or less.
  We can do it. But we will never do it unless we work together, 
Democrats and Republicans. All I hear from the other side of the aisle 
is, No; we have to worry about the environment. There has to be a 
balance between environment and economic concerns, and we are not doing 
it.
  Mr. McDERMOTT. Mr. Speaker, I yield myself such time as I may 
consume.
  Today, we are going to approve a plan that will produce significant 
new energy resources for the American people. We have passed this bill 
four times. Mr. Brady is right. There is nothing new here. We keep 
passing it and passing it and the oil companies keep killing it.
  What you're hearing today, just the last speaker says, let's drill in 
the Arctic National Wildlife Refuge or go hat in hand to OPEC and say, 
Please produce more oil. Or let's have some more secret meetings down 
in the White House with the Vice President and design a new tax policy 
that will get our oil prices even higher. They met in the first months 
in the White House and decided how to drive up the oil prices for the 
oil companies.
  We are going to implement a tax plan that uses the Tax Code to 
produce renewable energy to put us on a path to providing our children 
with an energy-independent future. The plan creates incentives for 
America to apply technology and use practices to use energy more 
efficiently than the way we are presently doing.
  There was a time a long time ago when the United States led in 
alternative energy. But now Denmark, Japan and Germany are far ahead of 
us because of 8 years of this present administration and their 
attitudes toward alternative energy.
  With this legislation, we'll take a big step toward regaining our 
leadership in the manufacture and deployment of renewable energy. This 
legislation will not only create jobs in what may be the world's 
largest emerging industry, but it will be a blueprint for the energy 
policy for the 21st century.
  We need to end our addiction to oil, and that's what this bill is 
about. I urge my colleagues to support it this time.
  I reserve the balance of my time.
  Mr. McCRERY. Mr. Speaker, I yield 3 minutes to the distinguished 
minority whip, the gentleman from Missouri (Mr. Blunt).
  Mr. BLUNT. I thank the gentleman for yielding me the time.
  We are for extending these good tax policies on research and 
development, we are for extending these good tax policies on energy 
research particularly. As Republicans, as conservatives, as people who 
actually brought these tax policies to the table to start with, of 
course we are for them.
  Now a 1-year extension is not the right amount of time. We can debate 
that. I hope we have time to because this is not the last day we are 
going to see this bill. If you're really serious about energy research, 
try to go to borrow money with a 1-year plan. You can't borrow money 
with a 1-year plan. You can't take a chance with a 1-year plan. You 
can't hire people with a 1-year plan. Surely, everybody here knows 
that.
  If we were really serious about extending these policies, we would be 
sending signals that we are committed to these policies for a long 
time. But we are for the policies that we are talking about in current 
law. We are not nearly as excited about the new things that are added; 
the tax breaks for lawyers who have taken a case on contingency and now 
want taxpayers to subsidize their dealing with that case by these new 
ideas in the Tax Code. But we are for the continuation of good 
policies. But we are not for believing that to continue good tax 
policies, you have to pay for those by taxing other people.
  If these tax policies are good enough for now, they are good enough 
to continue to be the policies of the future. This House decided last 
year on the alternative minimum tax that, well, we don't want more 
people to slip into that bad tax situation so we are going to move 
forward without having taxes that replace what would happen if we 
didn't try to maintain the current status of taxes.
  That is what we are for, maintaining current policies, giving them as 
much life as possible, and not assuming that other taxpayers have to 
suffer in an economy that we need to be sending signs of growth and 
productivity to,

[[Page 10262]]

not signs of more ideas for the Federal Government to increase taxes.
  I hope we can come back to a bill that extends good policy, that does 
it for a longer period of time, and doesn't seem to feel it's necessary 
to tax other people to extend policies that are working in the Tax Code 
today.
  Mr. McDERMOTT. Mr. Speaker, I would remind the gentleman from 
Missouri that during the 6 years that the Bush administration had a 
rubber-stamp Congress up here, they put it out 1 year at a time. Now 
you want us to make it long. We will see.
  I yield 2 minutes to the gentleman from Illinois (Mr. Emanuel).
  Mr. EMANUEL. The prior speaker said you can't have a plan for 1 year. 
What he didn't mention is that the Bush administration and the 
Republican Congress hadn't had a plan for 7 years, and look where it's 
gotten us.
  The fact is a lot of people want to talk about you have to have a 
balanced approach. That's true. You do have to have some drilling. 
There are 9,300 permits owned by the oil companies here in the United 
States for drilling that they do not use. Close to 72 percent. They 
don't use. They are not drilling. Could alleviate today. They are 
waiting for the price to increase before they drill. Those permits have 
been issued. So that is part of a plan.
  What we are talking about today is seizing future energy sources, be 
that wind, solar, biomass. In fact, today, the Wall Street Journal, 
lead story, the Pentagon knows and it is launching, according to the 
headline, an alternative fuels strategy. The Pentagon knows that. 
Corporate America is investing in alternative energy sources. They know 
that. The American consumer knows you have got to have a different 
strategy than the one that depends only on oil. The only people that 
don't know that you need to have a diverse energy policy is the White 
House and sometimes I believe some of the Republican Members of 
Congress here.
  We need an energy policy so it begins to invest in 21st century 
energy sources, like wind and solar, and stop subsidizing 20th century 
energy sources, which is only oil. This gives us an agenda, a strategy 
to look to the future, build new technologies, new industries that will 
employ hundreds of thousands of people, and invest and give America its 
energy independence.
  Second, it does not cost the American taxpayer. This is a paid-for 
piece of legislation by closing offshore deferrals where a lot of 
people hide their income in offshore deferrals. In fact, Congressman 
McCrery and Senator Grassley both acknowledge it is a decent way to pay 
for something. Whether they agree for this, they do agree it's a 
legitimate pay-for.
  Third, there's a lot of talk about middle class and the suffering in 
the middle class. This legislation provides property tax relief for 
middle class families.
  Remember that this is the first step toward energy independence and 
making sure that we build on the progress we have made, such as CAFE 
standards for cars.
  Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
  I assure the gentleman from Illinois that despite the fact there 
might be 9,300 permits to drill out there that aren't being utilized, I 
am sure there are good reasons for not utilizing those permits. I can 
assure the gentleman that if we opened up ANWR, if we opened up the 
Continental Shelf and more parts of the Gulf of Mexico, we would have 
domestic oil companies taking advantage and drilling to produce.
  Mr. EMANUEL. Will my colleague yield?
  Mr. McCRERY. I would be happy to yield.
  Mr. EMANUEL. We can have a legitimate debate about Alaska. We have 
had 20 years of it. What I am suggesting, and you would agree that 
Alaska is 10 years down the road.
  Mr. McCRERY. I don't agree with that.
  Mr. EMANUEL. Alaska is not today. There are 9,300 permits that have 
been issued today for onshore drilling not being exercised by the oil 
companies.
  Mr. McCRERY. Reclaiming my time, I don't quarrel that that may be 
correct. But it's beside the point. There may be legitimate reasons why 
those particular permits are not being utilized. But the fact is, by 
law our companies cannot drill in ANWR, they cannot drill in the Outer 
Continental Shelf beyond a few areas in the Gulf of Mexico. And that is 
wrong.
  Look, my 14-year-old son this morning, I am driving him to school and 
the radio report came on that oil hit $130 a barrel, and my son says, 
Dad, why don't we just tell OPEC to produce more oil? Well, he's a 
pretty smart kid. That would help. But I said, Son, if we told OPEC to 
drill for more oil and then they turned it around and said, Well, why 
doesn't the United States drill for more oil.
  Mr. EMANUEL. Would the gentleman yield?
  Mr. McCRERY. No, I've already given you some time.
  The SPEAKER pro tempore. The gentleman from Louisiana controls the 
time.
  Mr. McCRERY. What if they told us, Why doesn't the United States 
drill for more oil, what would our answer be? We don't know, because 
Democrats for years have blocked every sensible environmentally sound 
plan to explore and develop known resources here in this country, and 
that is a shame. We ought to have a balanced energy policy. Yes, 
alternative sources that we Republicans put in legislation several 
years ago, passed the bill, I believe, in 2005, and began a lot of 
these credits that we are extending today. We agree with that.
  Mr. EMANUEL. Will you yield for a second?
  Mr. McCRERY. Let us develop the resources we know we have, the proper 
fuel resources that can help immediately.
  Mr. EMANUEL. Just one second.
  The SPEAKER pro tempore. The gentleman from Louisiana controls the 
time.
  Mr. McCRERY. Thank you, Mr. Speaker.
  I yield 2 minutes to the gentleman from Nebraska (Mr. Terry).

                              {time}  1445

  Mr. TERRY. Mr. Speaker, I really believe that we need to have our own 
American-made energy, and we have the resources here. I have been a 
leading advocate in Energy and Commerce on alternative energies, on 
wind, solar, geothermal, closed-loop biomass and cellulosic ethanol, 
and these tax credits, I think, are important in that process. We need 
to have a complete portfolio that includes alternatives, these types of 
alternatives. But I have to say that I am disappointed greatly in the 
fact that we are extending these for 1 year.
  I have sat down with the leading folks in especially wind energy. 
And, by the way, let's not confuse these sources that generate 
electricity with putting fuel in our cars. Most of these generate 
electricity, like wind. We need it. But they can't take their business 
plan to the bank on a 1-year tax credit. They said they need at least a 
5-year, and prefer a 10-year.
  If we are very serious about making alternatives part of our energy 
portfolio, we need a 5- to 10-year plan to extend these tax credits. 
Otherwise, we are just simply perpetrating a hoax upon the American 
public that is looking towards Congress to find a way to alleviate the 
pressures of high gas costs. It is about what they are paying when they 
pull up to the pumps. So if we are serious about it, let's do a long-
term tax credit bill that is actually going to be usable by the folks 
that want to invest in these alternatives.
  Yes, we do a little bit better job on solar. I am surprised that they 
pulled one out and treated that so specially, when all the others are 
just so meritorious. And, by the way, I am not sure we have gotten to 
the technology yet where we can have wind panels and solar panels 
operating our cars for us. They can generate electricity if we want to 
do a plug-in, but even that we are not doing a long-term plan for.
  Mr. McDERMOTT. Mr. Speaker, could I inquire how much time remains on 
both sides.
  The SPEAKER pro tempore. The gentleman from Washington has 12\1/2\ 
minutes remaining. The gentleman from Louisiana has 4\1/2\ minutes 
remaining.

[[Page 10263]]


  Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentleman from 
Connecticut (Mr. Larson).
  Mr. LARSON of Connecticut. Mr. Speaker, I thank the gentleman from 
Washington State.
  I want to commend Mr. Rangel and Mr. Neal for an outstanding piece of 
legislation that they have put before us. I am particularly pleased 
with the extension of credits as it relates to fuel cell and geothermal 
technology, but wind and solar as well. To extend these credits in a 
manner that will allow us to become energy independent is something 
that is long overdue for this Nation. Let us hope that our colleagues 
on the other side are able to join us in making sure that we take a 
positive step forward for the future of energy independence.
  What seems apparently is the stumbling block on the other side is 
that we are providing that we pay for this, and that we are doing so 
by, well, taxing a group of people who otherwise go untaxed and yet 
reap all the benefits of this great Nation. But those poor hedge fund 
guys who sequester their funds offshore and are making millions of 
dollars, to subjugate them to a tax, oh, just the thought of it sends a 
shudder up the spines of our dear friends on the other side. Imagine 
the people back home, the people that they talk about, that Mr. Burton 
said need this relief immediately. But to do so by taxing offshore 
hedge funds? Well, we can't have a part of that.
  It is time for this country to get serious about energy independence. 
It is time for us to step up to the plate and for Americans to 
understand that people who are making funds offshore paying no taxes 
ought to contribute to making sure that we are able to move this Nation 
forward in the direction of energy independence.
  I commend Chairman Rangel and Richard Neal for this fine proposal.
  Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, if my good friend Mr. Larson's description of the tax 
increase in the bill were correct, I wouldn't have any quarrel with it. 
However, the provision affects more than just offshore hedge fund 
managers. It affects any employee working for a company based offshore 
in any business. So it is much broader than the gentleman described, 
and that is the main reason that I oppose that provision in its current 
form.
  Mr. Speaker, I reserve the balance of my time.
  Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Ohio (Mrs. Jones).
  Mrs. JONES of Ohio. Mr. Speaker, I would like to thank our Chair, Mr. 
Rangel; Mr. Neal, our subcommittee Chair; Mr. McDermott; and all the 
members of this committee for this great piece of legislation around 
energy and tax extenders.
  I know my colleagues have done a great job talking about the energy 
portion of the bill, so I am going to move straight to a couple of 
areas that are important specifically to people who reside in my 
congressional district.
  In my role as the Chair of the Congressional Philanthropic Caucus, I 
am especially pleased to see the inclusion of the IRA rollover 
provision, which has become an important fund-raising and development 
tool in the philanthropic community. More and more today we are calling 
upon the philanthropic organizations to do the job that others have 
stepped away from.
  In addition, the extension of the active finance exemption sends a 
message to corporate America that this Congress has their interests at 
heart because this provision, along with the subpart F look-through, 
allows them to remain competitive and keep jobs here and not abroad. 
The tenets of sound tax policy begin with the notion of equity, 
efficiency and simplicity. Relying on the traditional framework, I am 
certain that we are driving towards a rational consensus.
  It is in this environment or within this context I am pleased to 
support this piece of legislation, and encourage my colleagues 
throughout the Congress to join us in passing this legislation that 
will impact energy and other extenders in the Tax Code.

                                 The Procter & Gamble Company,

                                     Cincinnati, OH, May 20, 2008.
     Hon. Stephanie Tubbs-Jones,
     U.S. Representative, Longworth House Office Building, 
         Washington, DC.
       Dear Representative Tubbs-Jones: I want to take this 
     opportunity to thank you for your leadership in the Ways & 
     Means Committee's consideration of H.R. 6049, the Renewable 
     Energy and Job Creation Act. House passage of H.R. 6049, 
     including the so-called CFC Look-through rule, is very 
     important for us to remain competitive in markets around the 
     world.
       Your efforts to include the extension, the so-called CFC 
     Look-through rule in H.R. 6049, were critical to the ability 
     of P&G, and many other American companies, to serve our 
     customers and consumers around the world. We look forward to 
     working with you as this legislation moves through the House 
     of Representatives.
           Sincerely,
                                               Robert A. McDonald,
                                          Chief Operating Officer.

  Mr. McCRERY. Mr. Speaker, since the majority has so much more time 
left than the minority, I would reserve the balance of my time.
  Mr. McDERMOTT. Mr. Speaker, I yield 2 minutes to the gentleman from 
Oregon (Mr. Blumenauer).
  Mr. BLUMENAUER. I appreciate the gentleman's courtesy.
  There have been some stark differences in the debate here today, but 
there is one thing that is clear: There is a clear record of failed 
fiscal discipline on the part of our friends on the Republican side of 
the aisle; 12 years of failure to deal with the alternative minimum 
tax, including 6 years of that time when they controlled the entire 
process, their failure to cut spending while they borrowed money on our 
children's credit card to give tax benefits to those who need it the 
least, and for 12 years they refused to fix the AMT.
  There is going to be a new era in Washington in 242 days where we 
will be able to deal comprehensively with tax reform, and I look 
forward to it. But, in the meantime, it is critical to give Americans 
more energy choices, and this legislation does precisely that.
  In particular, it would extend the investment tax credit that deals 
with renewable energy. When the PTC for wind energy expired at the end 
of 2003, the installation of new wind capacity dropped 77 percent in 
the next year. A recent analysis by our friends in the wind and solar 
industries suggest that we are looking at $19 billion of lost 
investment and 116,000 lost job opportunities if we fail to act on the 
extension. This will set us back not just in terms of the challenge of 
wind and solar energy today, but we are going to lose ground to our 
competitors overseas.
  I strongly urge that we focus on the need to provide more energy 
choices for Americans today. Extending these credits is a way to make a 
difference this year. Failure to do so is going to cause unnecessary 
disruption, not just in terms of energy, but economically as well.
  I would hope that this is one area where we ought to be able to work 
together, agree with these responsible provisions, and enact it into 
law.
  Mr. McCRERY. Mr. Speaker, I reserve the balance of my time.
  Mr. McDERMOTT. Mr. Speaker, I yield 1 minute to the Speaker, the 
gentlewoman from California (Ms. Pelosi).
  Ms. PELOSI. Mr. Speaker, I proudly rise in support of the Renewable 
Energy and Job Creation Act. I am enthusiastic about it because it will 
cut taxes for millions of middle-income families and grow the U.S. 
economy, it will invest in renewable energy technologies to create 
high-paying green jobs, it will make us more energy independent, and it 
will remove incentives in the Tax Code that encourage shipping jobs and 
investments overseas.
  I would like to acknowledge the extraordinary leadership of the 
chairman of the Ways and Means Committee, Mr. Charlie Rangel. He has 
brought a bill to the floor that makes key investments in our families 
and our future. And I thank the gentleman from Washington State, Mr. 
McDermott, for his leadership and for yielding me time.
  This is how the bill will cut taxes. Here are seven reasons why 
everybody in this Congress should vote for this bill. Any one of them 
should be enough.
  First, it provides 30 million homeowners with property tax relief.
  Secondly, it helps 13 million children by expanding the child tax 
credit.

[[Page 10264]]

  Third, it benefits 11 million families through the State and local 
sales tax deduction.
  Fourth, it helps 4.5 million families better afford college with 
tuition deductions.
  Next, it saves 3.4 million teachers money with a deduction for 
classroom expenses. Imagine now when our teachers go into classrooms 
that are not fully equipped. They have to pay for that equipment 
themselves. This at least says if you do that, you will get a tax 
deduction.
  It provides more than 22,000 military families with tax relief under 
the earned income tax credit.
  And it ensures U.S. competitiveness by expanding the research and 
development tax credit.
  That is how it cuts taxes. There are seven reasons right there, any 
one of which I think is sufficient to vote for this bill.
  When it comes to gas prices, Mr. Speaker, as we debate this 
legislation American families are paying record prices at the pump. 
Yesterday the cost of a barrel of oil passed $129 for the first time in 
history. Today I believe it went past $130. This legislation invests in 
the future and the ingenuity of the American people to create and 
deploy cutting-edge renewable technologies that will reduce our 
dependence on foreign oil, and this is how it does that.
  It strengthens and extends the production tax credit which will spur 
the deployment of wind, biomass, geothermal, hydropower, tidal and 
landfill gas.
  Next, it transitions biofuel beyond corn by creating a new tax credit 
to promote the production of cellulosic biofuels.
  Next, it expands and extends the solar and fuel cell investment tax 
credit and offers tax incentives for residential, solar, wind and 
geothermal technologies. It provides tax incentives for coal 
electricity plants that capture and sequester carbon dioxide. It 
includes incentives to encourage energy efficient products, such as 
plug-in hybrid cars and incentives for energy conservation, both in 
commercial buildings and residential structures. And it creates a new 
category of tax credit bonds to fund local initiatives to promote the 
deployment of green technologies.
  This is a comprehensive approach, the missing part of the energy bill 
that we passed last year because it did not have the tax credits. Now 
we do. This industry can take off. We can have private sector 
initiatives to grow our economy, create good-paying jobs here at home, 
green jobs, and have the green economic revolution that is so important 
to our future.
  And this is all being done in a fiscally sound way. No new deficit 
spending. It is paid for. This forward-looking legislation invests in 
renewable energy, creates hundreds of thousands of good-paying green 
jobs, spurs American innovation, and cuts taxes, cuts taxes, for 
millions of Americans. And it does so, as I mentioned, in a fiscally 
responsible way.
  To invest in our future, this bill closes loopholes allowing 
corporations and executives to avoid paying certain taxes by shipping 
jobs and investments overseas. The New Direction Congress thinks we 
should focus tax benefits on creating jobs and encouraging investments 
here at home.
  Despite the strong case for rescinding taxpayer subsidies for big oil 
companies making record profits, opposition by the Senate Republicans 
to these offsets makes their inclusion untenable for the bill being 
debated today. But we will come back to that.

                              {time}  1500

  Today's bill represents a concerted effort to enact a bill into law 
promptly, and thus relies on revenue offsets that enjoy strong 
bipartisan support.
  I urge my colleagues to join Mr. Rangel and members of the Ways and 
Means Committee and Members of our House on both sides of the aisle who 
care about an energy future for America that reduces our dependence on 
foreign oil. It is a national security issue, it is an economic issue, 
it is an environmental and health issue, it is an energy issue, it is a 
moral issue for us to preserve God's beautiful creation, this planet, 
and to pass it on to the next generation in a responsible way.
  I urge my colleagues to support the Renewable Energy and Job Creation 
Act.
  Mr. McCRERY. May I inquire as to the remaining time.
  The SPEAKER pro tempore. The gentleman from Louisiana has 4 minutes 
remaining. The gentleman from Washington has 6 minutes remaining.
  Mr. McDERMOTT. Mr. Speaker, I would like to enter into the Record a 
letter from the managing director of Credit Suisse that says, ``I am 
writing in support of H.R. 6049. We fully support your efforts to use 
the revised deferred compensation measure as a revenue raiser.''

                           Credit Suisse Securities (USA) LLC,

                                       New York, NY, May 15, 2008.
     Chairman Charles Rangel,
     Committee on Ways and Means, House of Representatives, 
         Washington, DC.
       Dear Chairman Rangel: On behalf of Credit Suisse, I am 
     writing to express our support for H.R. 6049 the Energy and 
     Tax Extenders Act of 2008. The bill's deferred compensation 
     provision is of particular interest to us and we very much 
     appreciate the efforts of you and your staff to ensure that 
     this measure does not create any unintended consequences.
       We are aware that issues have been raised regarding the 
     need to offset the bill and with the deferred compensation 
     provision specifically. As you are aware,'we are generally 
     cautious as it pertains to revenue raisers and always look to 
     work with the Committee to guard against unintended 
     consequences. However, in this instance we fully support your 
     efforts to use the revised deferred compensation measure as a 
     revenue raiser in H.R. 60491 Given the House rules on pay-go, 
     we recognize that without offsets the bill is not likely to 
     be enacted this year, thereby causing a series of tax 
     provisions to expire which in our opinion would not be a good 
     overall outcome.
       I reiterate our support for the measure and thank you again 
     for your willingness to work with us on the deferred 
     compensation provision. I look forward to working with you 
     again in the future and please let us know if we can be of 
     any assistance.
           Sincerely,
                                                   Thomas Prevost,
                                                Managing Director.
  I yield 1 minute to the gentlelady from Nevada (Ms. Berkley).
  Ms. BERKLEY. Mr. Speaker, I would like to thank Chairman Rangel and 
Congressman Neal for bringing forward this wonderful piece of 
legislation, which I proudly support. And I support this bill to 
provide incentives for clean domestic renewable energy production. It 
will improve our energy security, extend vital tax provisions, and 
provide tax relief to parents and teachers, college students, 
homeowners, small businesses, and millions of other middle-income 
Americans. Closer to home, this legislation is needed to ensure that 
Nevada residents, who do not pay a State income tax, will be able to 
deduct State and local sales taxes from their Federal income taxes.
  Currently, some families who could benefit the most from the $1,000 
refund and for a child tax credit actually make too little to qualify. 
This bill ensures that more hardworking parents will be able to benefit 
from this credit.
  The bill extends the investment tax credit for solar energy property 
for 6 years, while doubling the annual credit cap for residential 
properties to $4,000.
  The SPEAKER pro tempore. The time of the gentlewoman from Nevada has 
expired.
  Mr. McDERMOTT. I yield the gentlewoman 15 seconds.
  Ms. BERKLEY. This important provision not only increases clean energy 
production, but it will also create new green collar jobs in Nevada.
  While I strongly believe the alternative minimum tax should be 
eliminated and I remain committed to protecting the 130,000 Nevadans 
who will be hit by this tax, this bill is paid for. I recommend 
everyone support it.
  Mr. McCRERY. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Texas (Mr. Hensarling).
  Mr. HENSARLING. I thank the gentleman for yielding.
  I listened to the Speaker of the House who spoke so eloquently about 
the pain Americans are feeling at the gas pump. She and her party 
should know a lot about it. They helped cause it.
  Since the Democrats have been in control here for almost a year and a

[[Page 10265]]

half, we have seen prices at the pump go up about $1.50 a gallon. A 
barrel of oil is at the highest price we have ever seen. They have 
tried to sue their way into lower gas prices. Now they are trying to 
tax their way into lower gas prices. Yet they never think about 
producing American energy in America.
  So now we have the so-called tax extender bills, Mr. Speaker. Well, 
isn't that an interesting concept. Why is it that spending is forever 
and grows exponentially, and yet tax relief to hardworking middle-
income families is somehow temporary? It just kind of disappears. But 
the Speaker of the House tells us that this is somehow fiscally 
responsible.
  If you read the front page of USA Today 2 days ago, it tells you that 
under the Democrats' watch we have an extra $2.7 trillion of unfunded 
obligations that are put upon our children.
  Apparently the majority leader thinks that is a laughing matter. As 
the father of a 6-year-old and the father of a 4-year-old, I don't find 
it too funny.
  What we have here is we are going to preserve tax relief for some by 
increasing taxes for others. Again, what an interesting concept. The 
bottom line is the job creation mechanism of America is taxed, taxed 
again when people's paychecks are shrinking. This isn't fair.
  Now some people say, well, these particular provisions need reform. I 
am happy to reform the Tax Code. I have cosponsored the Taxpayer Choice 
Act of 2008. I invite my Democrat colleagues to cosponsor it so that we 
can present a two-tier flat tax system to the American people. But the 
bottom line is Washington is spending too much, and we don't need 
another tax increase bill.
  Mr. McDERMOTT. Mr. Speaker, I yield 1 minute to the gentleman from 
Maryland (Mr. Van Hollen).
  Mr. VAN HOLLEN. I thank the gentleman.
  This bill continues the new Congress' steadfast commitment to driving 
a clean energy revolution in our country and stimulating near-term 
growth in our struggling economy.
  Gas prices are up around $4 a gallon. Climate change is a clear and 
present danger. We need to wean ourselves off of largely imported 
foreign sources of fossil fuel. This bill charts that new course, the 
right course. It provides critical incentives for accelerated energy 
production from wind, geothermal, and hydropower sources. It includes 
investment tax credits for solar and fuel cell properties and a number 
of other factors.
  To give our economy a boost, the legislation extends pro-growth 
policies like the R&D tax credit, and cuts taxes for millions of middle 
class families through a host of provisions including the expanded 
child tax credit. Mr. Speaker, this is a pro-growth, pro-environment, 
forward-looking and fully paid for package that helps move our country 
in a new direction.
  Our colleagues on the other side of the aisle continue to resist 
change. They had a monopoly on power in Washington for 6 years and did 
nothing. Now they have become the party of ``no,'' veto, and the status 
quo. Let's move in a new direction.
  Mr. McCRERY. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Georgia, Dr. Price.
  Mr. PRICE of Georgia. Mr. Speaker, I include at this point in the 
Record excerpts of a memo written to Bill Dauster of the Senate Finance 
Committee from Ed Kleinbard, Chief of Staff at the Senate Joint 
Committee on Taxation.


                               Conclusion

       While we recognize that colorable arguments can be made in 
     support of the contrary conclusion, we believe that Rule 
     XLIV's disclosure requirement for limited tax benefits is 
     applicable to Section 301.

  Mr. Speaker, this new majority is all politics all the time.
  Now, the Speaker gave seven reasons to vote for this bill. Funny, she 
didn't include the tax boondoggle for trial lawyers. That is right, a 
tax break for trial lawyers.
  The bill allows plaintiffs' trial lawyers to take deductions for the 
payment of contingency fees. I ask you, under current economic 
conditions, should we be using the Tax Code to give the plaintiffs bar 
possible financial incentives to bring more and costlier lawsuits 
against American business?
  Second, by definition, in the rules of this House this bill contains 
earmarks and pork. The restructuring of the New York Liberty Zone tax 
credits provide pork, a limited tax benefit of over $1 billion to New 
York City.
  Pork for powerful Members of Congress. Pork for trial lawyers. Mr. 
Speaker, two good reasons to vote ``no'' on this bill.
  Mr. McDERMOTT. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Pennsylvania (Ms. Schwartz).
  Ms. SCHWARTZ. Mr. Speaker, as a member of the Ways and Means 
Committee, I rise in strong support of this legislation.
  This package encourages the innovation and entrepreneurship needed to 
advance America's energy independence. It promotes economic growth, 
enhances the ability of American businesses to compete internationally, 
and provides much needed relief to American families. This proposal 
extends the research and development credit that encourages innovation 
and creates new green jobs; the higher education expense deduction that 
enables Americans to afford to go to college and to be able to compete 
in the new technology jobs. And the provisions that are included 
encourage renewable energy development and conservation, including a 
provision that I championed which incentivizes more energy efficient 
commercial buildings.
  This is not the first time that we have passed these energy 
provisions in this House. Past efforts have been opposed by the 
Republicans and by the President both on substance and on how it is 
paid for. But this bill passed the committee with a bipartisan vote.
  With a strong bipartisan vote today, we can send a strong message 
that we are ready for a new energy policy in this country and should be 
passed this afternoon with bipartisan effort.
  Mr. McCRERY. Mr. Speaker, I have no further requests for time, and I 
would reserve the balance of my time to close on our side.
  Mr. McDERMOTT. Mr. Speaker, I yield 1 minute to the gentleman from 
Alabama (Mr. Davis).
  Mr. DAVIS of Alabama. Mr. Speaker, let me address the contingency fee 
provision that has come up several times.
  Mr. McCrery, I agree with you that contingency fee lawyers are a 
very, very narrow class of people. They are the only major business in 
America that gets paid solely based on how effective they are. If they 
earn nothing for their client, they get nothing in the way of 
compensation.
  Another fact for my friends on the minority: Contingency fee lawyers 
are small business owners who run up expenses, like every other small 
business in America. Simple tax fairness says they ought to be able to 
take the expenses when the expenses occur. That is how we grow 
businesses in America, we give people a chance to use the Tax Code to 
grow. And if every other business in America can take a deduction for 
expenses in the year in which you incur the expense, how dare we single 
out one class of small business owners and treat them differently.
  This provision is a simple clear matter of tax equity.
  Mr. McDERMOTT. Mr. Speaker, I would reserve the balance of my time to 
close, using the majority leader.
  Mr. McCRERY. Mr. Speaker, let me close today by simply saying that we 
don't object to the main body of the bill, the extensions of the 
expiring provisions of the Tax Code. After all, those were provisions 
that we put in the Tax Code when we were in the majority. That is not 
the point.
  The point is that if we follow the PAYGO rules that require these 
existing provisions of law to be paid for if they are extended just 
amounts to a built-in tax increase. If we are already bringing in to 
the Federal Government more money as a percent of GDP than we 
historically have with all these provisions in place, what sense does 
it make to raise taxes just to keep them in place? It doesn't make 
sense, unless you simply want to raise more revenue

[[Page 10266]]

for the central government in this country, grow the government even 
more.
  So, Mr. Speaker, with all due respect to those who have spoken so 
eloquently on the merits of the expiring tax provisions, I agree with 
that. But to hold to the PAYGO provisions that require the offsets in 
this bill would lead us to a huge tax increase over the next 10 years.
  Mr. McDERMOTT. Mr. Speaker, I yield the remainder of my time to the 
gentleman from Maryland, the majority leader to close the debate.
  Mr. HOYER. I thank the gentleman for yielding.
  Again, I want to say how much respect I have for Mr. McCrery. I think 
he is one of the most positive Members of this body. I think he has 
worked productively with Chairman Rangel, and I have great respect for 
my colleague. He will be leaving, and that will be a loss for the 
Congress. I wanted to say that before I begin.
  Let me say that we have disagreements. However, and on the overall 
issue that he raised in closing about paying for this, he is accurate. 
Now, some of these extenders even pre-date the time when the 
Republicans were in the majority in 1995 and through 2006. But I think 
there is consensus on extending them. The difference is, should we pay 
for them? There are only a number of options, a few options available 
to us. We can pay for them, or our children can pay for them. Somebody 
will pay for them. There is not a free lunch.
  My view is this supply side economics pretends there is somewhere out 
there where the tooth fairy is going to deliver the money. There is not 
a tooth fairy. It is the parent who delivers the money under the pillow 
when the tooth is lost. But we are the parents, and we need to act as 
adults. We need to pay for what we buy. And if what we buy is giving 
somebody a tax incentive because we believe that they will do something 
good that will advantage our community and our country, then that is 
fine. I am supportive of that. But we ought to pay for it, because that 
is our decision.

                              {time}  1515

  One of the gentlemen spoke about his two children. I have three 
children. I have three grandchildren, and I have one great-
granddaughter. I'm equally concerned. I'm concerned about the $4 
trillion in debt that we've added over the last 6-plus years, and now 
some $400 billion this year alone. But that is the general philosophy.
  The specific philosophy here is we need to be energy independent. We 
need to be sure that our policies that we pursue do not continue to 
make us hostage to those who have petroleum products.
  Mr. Speaker, I first want to commend Chairman Charlie Rangel and all 
of the members of the Ways and Means Committee for their hard work on 
this very important, farsighted legislation, the Renewable Energy and 
Job Creation Act.
  This week the American people are paying, on average, $3.79 per 
gallon for gasoline. Mr. Hensarling observed that I was laughing when 
he said the Democrats have been in charge and look what's happened to 
gas prices. I was laughing because the absurdity is rejected by the 
American public, that somehow policies that we've adopted over the last 
year, when the President vetoes anything he doesn't want, has affected 
those gasoline prices to me is patently absurd and clearly rejected by 
the American people. It was, I thought then and think now, a laughable 
proposition to make.
  Motorists are paying $4 per gallon, more than $2.50 per gallon more 
than they were paying when the current administration took office.
  To show you the difference, when Bill Clinton was President from 1993 
to 2001, gas prices rose from $1.06 to $1.46, 40 cents, or a nickel a 
year, a nickel a year during those 8 years. During this President's 
administration, prices are rising a nickel a week.
  There is no doubt that this explosion in gasoline prices is squeezing 
hardworking families who live in every one of our districts who also 
are coping with the rising costs of food and groceries, health care and 
education.
  This legislation is not a panacea to those immediate concerns. Would 
that we had one. But it does represent an important step in our 
continuing effort to reduce our dependence on foreign oil.
  Among other things, the bill will establish a new tax credit of $1.01 
per gallon for cellulosic biofuel production from now through 2015, so 
that we can rely on the Middle West and perhaps other parts of our 
country, rather than the Middle East. It will extend this $1 per gallon 
biodiesel tax credit, and makes it available to all potential sources 
of diesel that can be made without petroleum. And it allows jet fuel 
produced from biomass to qualify for the credit as well.
  Furthermore, this legislation will reduce our dependence on imported 
fuel for our electricity sector by extending and expanding tax 
incentive for sources of renewable energy including wind, solar and 
biomass.
  It also will encourage the use of plug-in hybrid cars and provide 
incentives for energy conservation in residential homes, commercial 
buildings and appliances; all of which, I think, the American public 
applauds.
  Additionally, this bill will help create hundreds of thousands of 
``green jobs.'' It will spur American innovation and business 
investment, which will strengthen our economy today and in the future. 
And it will provide tax relief for millions of Americans, expanding the 
child tax credit for the families of 13 million children, helping 4.5 
million families better afford college through a tuition deduction, and 
saving 3.4 million teachers money with a deduction for classroom 
expenses, so when they buy something for their classroom, like a 
business expense, they'll be able to deduct it.
  Now, many on the Republican side object to this bill because the 
Democratic majority, in keeping with our commitment to fiscal 
responsibility and pay as you go budget rules, insists that this 
legislation be paid for and not add to the national debt.
  That's a fundamental difference between our two sides. One believes 
that tax cuts somehow pay for themselves. Mr. Bernanke doesn't believe 
that, Mr. Greenspan doesn't believe that, but our Republican colleagues 
clearly believe it, and they've pursued that policy, which has, as I 
said, put us over $3 trillion in additional debt over the last 82 
months.
  To them I simply say: It is long past time that the Members here 
insist that our Nation pay for the things it buys. To not do so takes 
the discipline out of the democratic process, because if we can simply 
charge that which we buy, there will be no discipline on the part of 
the electorate to say no, we don't want to be taxed to buy that. And I 
guarantee the system would stop buying it. But if there is no 
discipline, if we're not paying, my grandchildren will not be able to 
vote and exercise that discipline.
  History, I suggest to my colleagues, is littered with the stories of 
formerly great nations that began their demise through fiscal 
profligacy. It is within our power to ensure that the United States of 
America is never added to that list.
  The method by which Chairman Rangel and the committee have paid for 
the cost of this bill is laudable. Important. This legislation closes 
loopholes that allow corporations and executives to avoid U.S. taxes by 
shipping jobs and investments overseas. And because our obligations do 
not stop, average working Americans, therefore, must pay more if the 
wealthiest among us who can seek tax havens do not pay their fair 
share.
  This legislation is the right thing to do. Mr. Speaker, this is an 
excellent bill that will help reduce our dependence on foreign oil and 
protect our environment, create thousands of jobs and strengthen our 
economy, and provide tax relief to millions of hardworking Americans.
  I commend Mr. Rangel, Mr. McDermott, the members of the committee, 
and I commend Mr. McCrery for his responsible stewardship as the 
ranking member and his working to try to bring consensus. We have not 
reached it in this instance, but I do commend him for his efforts.

[[Page 10267]]

  And I urge my colleagues, support this important legislation which 
moves us towards energy independence and a fair and equitable tax 
system.
  Mr. CARSON of Indiana. Mr. Speaker, I rise today in strong support of 
H.R. 6049, The Renewable Energy and Job Creation Act of 2008. This is a 
fiscally responsible and progressive piece of legislation. H.R. 6049 
responds to the concerns we consistently hear from our constituents 
about energy prices, property taxes and the needs of our brave men and 
women in uniform.
  H.R. 6049 recognizes that the need for renewable energy is greater 
than ever. Oil companies reap higher and higher profits but consumers 
are struggling to keep up the rising cost of gas. Our dependence on 
foreign oil continues to pose a serious risk to our national security. 
Further, we know our current energy sources are contributing heavily to 
global climate change. I applaud H.R. 6049 for including a $20 billion 
dollar investment in renewable energy research and production to find 
environmentally sound alternate energy supplies.
  In my home state of Indiana, families are struggling to keep up with 
sky-high property taxes. My colleague Baron Hill has worked to bring 
about relief for homeowners and introduced H.R. 3726 the Property Tax 
Relief Act of 2007, a bill I am proud cosponsor. I was pleased to note 
the bill we are discussing today provides an additional standard 
deduction for State and local real property taxes paid for 2008, a 
provision very similar to H.R. 3726.
  This bill also provides assistance to our veterans and active duty 
service men and women. H.R. 6049 includes provisions allowing members 
of the armed services to include combat pay in order to qualify for the 
earned income tax credit and rules to allow veterans to qualify for 
mortgage revenue bonds. These programs offer critical assistance to 
lower income individuals.
  H.R. 6049 helps American families by extending the deduction for 
qualified tuition and related education expenses and increasing the 
eligibility for the refundable child tax credit for 2008. Further, it 
rejects President Bush's attempts to cut down Medicare and Medicaid 
benefits, the budget for the Centers for Disease Control and 
Prevention, the Environmental Protection Agency and several key law 
enforcement programs. Having spent my career in law enforcement, I was 
especially concerned to hear that the President proposed eliminating 
the Byrne Memorial Justice Assistance Grants and cops. I am pleased 
this bill continues to support these important programs.
  I commend Chairman Rangel for his leadership on this important bill.
  Mr. UDALL of Colorado. Mr. Speaker, I strongly support this 
legislation that will extend critical tax credits for renewable energy 
and for American families while not adding to the federal deficit.
  As co-chair of the Renewable Energy and Energy Efficiency Caucus, I 
am especially pleased to see the House take action on needed tax 
credits for renewable energy. The Production Tax Credit (PTC) in 
particular has been instrumental in promoting the creation of a 
renewable energy industry. An extended PTC will provide more market 
certainty and we must have an extension of this key tax credit before 
the current credit expires at the end of 2008.
  I must add that, while I am pleased that the bill provides a 3-year 
extension of the PTC for most renewable energy sources, I am concerned 
that it only provides a 1-year extension for wind energy. Wind is a 
very promising renewable energy source and a 1-year extension will not 
be as helpful for the industry. I will continue to lead the fight to 
extend the PTC for more than 1 year.
  The bill also extends the Investment Tax Credit (ITC) for solar 
energy, qualified fuel cells, and microturbines through the end of 
2014. The ITC will help companies with initial investment costs in 
expanding these renewable energy sources across the country.
  The bill also authorizes $2 billion of new clean renewable energy 
bonds (CREBS) for public power providers and electric cooperatives. 
This is a critical tool, especially for Colorado's rural co-ops and 
municipal utilities.
  This bill would also benefit families who want to invest in renewable 
energy. It would extend the credit for residential solar property for 6 
years and increase the annual credit cap, currently capped at $2,000, 
to $4,000. And it would expand the definition to include residential 
small wind equipment and geothermal heat pumps so that consumers have 
more options.
  Rising gas prices are forcing many Coloradans to dip into their 
savings just to make ends meet. This bill will help families reduce 
their fuel bills by providing $3000 in tax credits toward the purchase 
of fuel-efficient, plug-in hybrid vehicles. It will also help address 
long-term fuel cost concerns by expanding production of homegrown 
fuels, including creating a new production tax credit for cellulosic 
biofuels besides ethanol, as well as an extension of the tax credits 
for biodiesel and renewable diesel.
  I supported the energy bill that the House passed last year which 
included many of these important tax provisions, as well as the 
Renewable Energy and Energy Conservation Tax Act of 2008 that the House 
passed earlier this year. But, for the lack of support in the Senate, 
these provisions have not yet made it to the President's desk to be 
signed into law.
  And this bill will also help Colorado businesses stay competitive by 
extending the research and development tax credit for 1 year. While 
again I would like to see this key tax credit extended for more than 1 
year, this is a step in the right direction.
  To help with the hard economic times that Coloradans are facing, this 
bill includes several other key tax credits, including expanding the 
child tax credit for some of our neediest families, allowing teachers 
to take a deduction for purchasing classroom supplies out of their own 
pockets, and providing additional support for families paying for 
college education.
  I hope today we can move this bill forward and promote positive 
change that will benefit our families and rural communities, save 
consumers money, reduce air pollution, and increase reliability and 
energy security.
  I strongly encourage my colleagues in the House to vote for this 
needed legislation, and also encourage quick action in the Senate so 
that we may move it to the President's desk.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise today in strong support 
of H.R. 6049, Renewable Energy and Job Creation Act of 2008. I would 
like to thank my colleague the Chairman of Ways and Means, Congressman 
Charles Rangel for bringing this energy legislation forward .
  The bill extends dozens of expired or expiring tax provisions, and 
extends and creates new energy-related tax incentives for the 
production of wind and other renewable energy and for homeowners' 
investment in solar and fuel cell equipment.
  Texas has invested in the production of wind and is looking to come 
up with more ways to aid us in energy conservation and harnessing our 
natural resources in a way that does not damage the environment.
  There is an undeniable consensus on the importance of America 
achieving energy independence in the 21st century. It is critical that 
we terminate our dependence on foreign sources of oil, the majority of 
which are located in regions of the world which are unstable and in 
most circumstances, opposed to our interests. Accordingly, there is no 
issue more essential to our economic and national security than energy 
independence.
  By investing in renewable energy and increasing access to potential 
sources of energy, I believe we can be partners with responsible 
members of America's energy producing community in our collective goal 
of reaching energy independence.
  Houston, Texas, is the energy capital of the world, for the past 12 
years I have been the Chair of the Energy Braintrust of the 
Congressional Black Caucus. During this time, I have hosted a variety 
of Energy Braintrusts designed to bring in all of the relevant players 
ranging from environmentalists to producers of energy from a variety of 
sectors including coal, electric, natural gas, nuclear, oil, and 
alternative energy sources as well as energy producers from West 
Africa.
  My Energy Braintrusts were designed to be a call of action to all of 
the sectors that comprise the American and international energy 
industry, to the African American community, and to the nation as a 
whole.
  Energy is the lifeblood of every economy, especially ours. Producing 
more of it leads to more good jobs, cheaper goods, lower fuel prices, 
and greater economic and national security. Bringing together 
thoughtful yet distinct voices to engage each other on the issue of 
energy independence has resulted in the beginning of a transformative 
dialectic which can ultimately result in reforming our energy industry 
to the extent that we as a nation achieve energy security and energy 
independence.
  Because I represent the city of Houston, the energy capital of the 
world, I realize that many oil and gas companies provide many jobs for 
many of my constituents and serve a valuable need. The energy industry 
in Houston exemplifies the stakeholders who must be instrumental in 
devising a pragmatic strategy for resolving our national energy crisis.
  Mr. Speaker, this legislation will aid Americans as we seek to wean 
ourselves from our foreign oil dependence. I urge my colleagues to 
support H.R. 6049.
  Mr. CONYERS. Mr. Speaker, I rise today in support of this common 
sense piece of legislation offered by my dear friend, Representative

[[Page 10268]]

Charlie Rangel, the Chairman of the Ways and Means Committee. If 
enacted, his bill will marshal the tremendous economic power of our 
Nation's physical and human capital and direct it towards solving the 
twin challenges of energy dependence and global warming. Through $20 
billion investment in renewable energy tax incentives, carbon 
mitigation provisions, transportation efficiency tax credits, and 
energy efficiency incentives, this bill offers a comprehensive strategy 
that empowers both individual citizens and the private sector.
  The bill empowers everyday Americans by providing tax credits to 
green citizens who add energy-efficient improvements to their homes and 
businesses and purchase plug-in electric cars. The bill helps the 
private sector push the limits of research and development by 
encouraging the building of carbon capture and sequestration 
demonstration projects. The bill also creates incentives for the energy 
production sector to invest in nontraditional cutting edge energy 
production methods. I am particularly excited that this bill will, for 
the first time, incentivize investment in technologies that will 
harness the power of the waves and tides found in our Nation's Great 
Lakes and oceans.
  I am also proud of this body's recent efforts to address the global 
climate change crisis. This bill is a logical and important next step 
toward this end. For too long, our country lagged behind the rest of 
the industrialized world in recognizing and taking action to address 
the climate change crisis. Global warming endangers all of us, but 
threatens to have the most devastating impact on the poorest and the 
most vulnerable. By encouraging our Nation's citizens and businesses to 
act in a carbon-conscious way, we protect not only ourselves, but show 
compassion for our brothers and sisters around the world. At a time 
when global public opinion regarding our Nation is at an all-time low, 
the important positive impact this bill will have on our country's 
public diplomacy efforts should not be downplayed.
  Lastly, I believe that this bill serves as a powerful example of the 
tax policy differences between the 110th Congress and past Congresses. 
Instead of using the tax code to promote inequality and corporate 
largess, the American people now know that the tax code can be used to 
promote personal responsibility, national security, compassion, and 
global sustainability. I am proud to join with my colleagues here today 
as we continue to establish a progressive tax policy for the 21st 
century.
  Mr. ETHERIDGE. Mr. Speaker, I rise in support of H.R. 6049, Renewable 
Energy and Job Creation Act of 2008. This bill provides tax relief for 
millions of Americans while spurring business investment and innovation 
in renewable energy.
  I am pleased to note that H.R. 6049 will benefit the families of 
millions of children by expanding the child tax credit to those earning 
$8,500 a year. This bill will also provide tax relief by extending the 
State and local sales tax deduction, provide property tax relief for 30 
million homeowners, and help families afford college with the tuition 
deduction. As the only former school superintendent serving in 
Congress, I am especially pleased to note that this bill is supported 
by the National Education Association because it includes an extension 
of the tax deduction for educators who help supply their classrooms, 
and an extension of the Quality Zone Academy Bonds school modernization 
program that helps school districts address renovation and repair 
needs.
  H.R. 6049 includes important tax relief provisions for businesses as 
well as individuals and families. This bill extends the Research and 
Development Tax Credit for over 27,000 businesses, the 15-year 
straight-line cost recovery for leasehold improvements and qualified 
restaurant improvements, and the tax credit for the environmental 
remediation of brownfields areas. We need to strengthen our economy by 
helping to spur American innovation with investment in American 
businesses.
  Developing alternative energy sources and ending our dependence on 
foreign oil is one of the most critical challenges facing our nation. 
H.R. 6049 includes several provisions that will spur innovation in this 
area such as an extension of investment and production tax credits for 
solar energy, wind energy, and energy derived from biomass, geothermal, 
hydropower, and solid waste. In addition, H.R. 6049 includes incentives 
that promote the production of homegrown renewable fuels, like 
biodiesel, for the installation of more E-85 pumps, and a $3,000 tax 
credit for the purchase of fuel-efficient plug-in hybrid vehicles. 
These provisions will create and preserve thousands of ``green collar 
jobs'' as well as provide relief for Americans who continue to see gas 
prices rise to historic records across the country.
  I support the passage of H.R. 6049, Renewable Energy and Job Creation 
Act of 2008, and I urge my colleagues to join me.
  Mr. MARKEY. Mr. Speaker, for nearly eight years, this 
Administration's backwards energy policy has lined the pockets of oil 
company executives while hurting American consumers, the economy, and 
the planet. This bill encourages production of clean alternative fuels 
and renewable energy while creating jobs. It transfers Oil Executive 
Power to Blue Collar Renewable Power.
  Last week the House passed legislation on the Strategic Petroleum 
Reserve to give hurting Americans an immediate break at the pump. But 
the energy crisis demands long term action, breaking our addiction to 
oil and transitioning our economy to clean renewable energy sources 
once and for all.
  Last week immediate relief with SPR, this week we put our nation on a 
path to a clean renewable future.
  President Bush and Senate Republicans have been given opportunity 
after opportunity to pass tax credit extensions for renewable energy. 
They have sided with Big Oil each time, even as oil prices have blown 
past $100 a barrel and many Americans are now paying $4 per gallon for 
gas. This morning oil reached $130 a barrel.
  This bill finds alternative revenue raisers which I do support. But 
let's not forget what this Administration fought to protect. ExxonMobil 
had $40 billion in profit last year. Do you know how the largest 
corporate profit in history was used in 2007?
  It repurchased $31.8 billion worth of stock.
  It increased compensation for top executives by 170 percent since 
2001.
  It financed a $100 million public relations campaign to try to 
deflect blame from angry consumers.
  It invested around $10 million in renewable energy alternatives. That 
is less than one tenth of one percent of their profits.
  These and other findings are being released today in a report by the 
Select Committee that analyzes where Big Oil's profits are going. Let's 
hope President Bush's love for the oil industry doesn't extend to hedge 
fund managers and corporate CEOs using offshore tax havens.
  Today, because of this Administration's misguided policies, the 
renewable energy industry has its back against the wall. Solar and wind 
companies are delaying projects because of investment uncertainty. 
There is no more time to delay.
  The other side likes to tell America that wind and solar and biomass 
cannot be real solutions to our energy challenge. They tell us that 
drilling in our most pristine natural areas and building nuclear power 
plants with taxpayer support are the only things that can solve this 
problem.
  No. Last year the United States installed 5,244 megawatts of wind 
power, 30 percent of all the new capacity installed nationwide in 2007. 
Solar photovoltaic installations in the U.S. also grew an incredible 80 
percent. This was the start of the renewable energy revolution.
  Last week, the Department of Energy produced a study detailing what 
it would take for America to meet 20 percent of its electricity needs 
with wind power in 2030. The way the industry has grown over the last 
decade--about 30 percent a year--we can meet this target ahead of time.
  This bill also provides valuable incentives for carbon capture and 
sequestration, plug-in hybrid cars, and renewable fuels. The American 
entrepreneur will rise to the energy and climate challenge if Congress 
puts the right incentives in place.
  Passing H.R. 6049 will give renewable energy the support it needs, 
drive economic expansion and job growth in this country and put America 
on a greener path towards realizing long-term solutions to global 
warming. I urge an ``aye'' vote on the rule and on the underlying bill.
  Mr. KIND. Mr. Speaker, I rise today in support of H.R. 6049, the 
Renewable Energy and Job Creation Act of 2008. As a member of the Ways 
& Means Committee, I am proud to have helped craft this very important 
tax bill that will give much needed relief to millions of American 
taxpayers while also moving forward on our agenda to reduce greenhouse 
gas emissions and stimulate our economy.
  Unfortunately, over the last several years we have seen tax bills 
pushed through Congress and signed by the President under the guise of 
``relief' for the middle class and the poorest in the country. I think 
many in this chamber have now come to recognize that many of these 
measures presented as tax relief for the middle class were in fact more 
tax breaks for the richest in society. Today we finally have before us 
a bill that will give real relief to millions of taxpayers, many of 
whom are hardworking middle class families struggling with rising 
energy and food bills.

[[Page 10269]]

  First, H.R. 6049 addresses the need for more clean energy production 
in our country by providing long-term extensions of the renewable 
energy production tax credit and the solar energy and fuel cell 
investment tax credit, while amending them to increase accessibility. 
These long-term extensions will give utilities and investors the 
predictability they need to move forward with new generation projects 
in the years to come. The bill also addresses energy use and carbon 
emissions by extending multiple energy-efficient credits for homes and 
businesses, creating incentives for carbon capture and sequestration 
demonstration projects, and calling for carbon audit of the tax code to 
determine what policies are encouraging wasteful energy use and 
unnecessary carbon emissions. The Act also addresses our dependence on 
dirty foreign oil by extending and improving tax credits for the 
production of cellulosic biofuels and plug-in electric vehicles.
  Most exciting of all, however, are the innovative qualified energy 
conservation bonds this bill creates. The qualified energy conservation 
bonds give states and local governments the resources needed to invest 
in green programs designed to reduce greenhouse gas emissions. Giving 
local authorities the power to choose what green energies to implement 
in their backyard is good public policy, because I know the energy 
needs of western Wisconsin are vastly different than those of Queens. 
By not picking the winners and losers in Washington, we are allowing 
exciting technological changes, advancements, and the market--not 
Congress--drive the green energy revolution.
  In the area of tax relief, H.R. 6049 extends several popular expiring 
tax provisions. In particular, the bill will provide property tax 
relief for 30 million Americans, help for more than 12 million children 
through an expanded child tax credit, tax relief for more than 11 
million families through state and local sales tax deduction, help for 
more than 4.5 million families to cover the cost of education through 
the tuition deduction, and relief for more than 3.5 million teachers 
who will be reimbursed for out-of-pocket expenses for their classrooms.
  Finally, this bill is fully offset and complies with pay-go rules. 
Under the leadership of Chairman Rangel and Speaker Pelosi, we are 
demonstrating that we can provide tax relief without sending the debt 
on to our children. After years of fiscal recklessness--deficit-
financed tax cuts for the wealthy and out-of-control government 
spending--this bill sets a precedent of fiscally responsible tax 
reform.
  Again, .Mr. Speaker, I am happy to support this sensible and fair tax 
bill before us today. Offering some tax relief in uncertain economic 
times and meeting the challenge of climate change with innovative and 
constructive solutions are exactly the issues this Congress should be 
focused on. I urge my colleagues to support H.R. 6049.
  Ms. McCOLLUM of Minnesota. Mr. Speaker, I rise in support of the 
Renewable Energy and Job Creation Act and congratulate Speaker Pelosi 
and Chairman Rangel for putting forward legislation that will make a 
real difference for American families.
  H.R. 6049 extends and expands tax incentives for renewable energy and 
encourages energy efficiency. At a time when families are facing 
record-breaking gas prices, this bill will help to reduce our 
dependence on foreign oil and lower energy bills. These tax incentives 
will also create and preserve good-paying ``green collar'' jobs such as 
those in the wind and solar industries.
  The Renewable Energy and Job Creation Act also furthers our nation's 
innovation efforts by extending the research and development tax credit 
for 27,000 companies. It is critical for our global competitiveness 
that we encourage and support entrepeneurs and new ideas.
  For families struggling to make ends meet in this difficult economy, 
this bill provides 30 million homeowners with property tax relief, 
expands the child tax credit, and extends the state and local sales tax 
deduction. It also helps students afford higher education with a 
tuition deduction and provides our teachers a tax deduction for 
classroom expenses. Finally, this legislation provides additional tax 
relief under the Earned Income Tax Credit for 22,000 troops in combat.
  Mr. Speaker, to ensure that our children and grandchildren are not 
burdened with additional debt, this bill is fully paid for by closing a 
tax loophole for offshore companies and delaying a tax break for U.S. 
multinational companies. These changes not only ensure this bill 
follows pay-go, they also improve the fairness of our tax code.
  H.R. 6049 is critical to our long term energy policy and to family 
budgets. I urge my colleagues to join me in supporting this important 
bill.
  Mrs. BOYDA of Kansas. Mr. Speaker, this past fall, this House passed 
H.R. 3997, which included a provision to permanently extend the 
military eligibility for the earned income tax credit (EITC). However, 
we are back here again while our men and women in uniform still wait 
for a permanent solution. We provided a 1-year extension, but our 
military deserve a permanent fix.
  Without action today, hundreds of thousands of troops could find 
their EITC eligibility slashed. It would be a tax borne solely by our 
soldiers and our military families. We call it a soldier tax.
  Our military continues to serve our country with honor and 
distinction. The last thing we need is for our soldiers and their 
families to have to worry about paying higher taxes next year. That is 
why I authored the Tax Relief for Armed Combat Families Act for 2007. 
It will permanently end the soldier tax. Our military families should 
not have to worry from year to year what funds are going to be 
available to take care of their families.
  I thank Chairman Rangel for working my language into today's 
legislation, and I call on my colleagues to pass this important 
legislation. Let's permanently end the soldier tax.
  Mrs. MALONEY of New York. Mr. Speaker, I rise in support of H.R. 
6049, the Renewable Energy and Job Creation Act. This legislation will 
extend and expand tax incentives for renewable energy and create 
hundreds of thousands of green jobs, along with providing critical tax 
relief to families as they face rising gas and food costs.
  With soaring gas prices hitting our constituents hard in the pocket 
book, we need to reduce our dependence on foreign oil, while protecting 
the environment. H.R. 6049 does this by increasing production of 
renewable fuels and renewable electricity, and encouraging greater 
energy efficiency. Specifically, the 6-year extension of the investment 
tax credit for solar energy, the 3-year extension of the production tax 
credit for biomass-, geothermal-, and hydropower-generated energy, and 
the 1-year extension of the production tax credit for energy derived 
from wind set us on the right path for decreasing our dependence on 
foreign oil.
  This bill would also provide critical tax relief to families at a 
time when they are paying more at the pump and in the grocery store. 
When passed, this bill would provide this relief through the ability to 
deduct State and local sales tax, tuition and other education expenses 
including the out-of-pocket expenses by teachers, the deduction of 
property taxes for non-itemizers and probably most importantly, relief 
for more than 12 million children through an expansion of the 
refundable child taxpayers earning $8,500 a year. These are commonsense 
items directed towards those who are in the most need of relief. It is 
no secret that the cost of living is increasing and wages are stagnant. 
These provisions will help the average American family receive some 
relief.
  Mr. Speaker, I am pleased to support the Renewable Energy and Job 
Creation Act and I urge my colleagues to do the same.
  Mr. GENE GREEN of Texas. Mr. Speaker, I stand in strong support of 
H.R. 6049, the Renewable Energy and Job Creation Act of 2008.
  I have always believed that as a Nation we should wean ourselves from 
our dependence on fossil fuels and invest in the energy of the future.
  After several attempts, the House of Representatives has finally 
found an appropriate balance to promote the technologies of tomorrow in 
a way that will benefit our long term energy security.
  This legislation has much to be proud of.
  It will extend the tax credit for producing electricity from 
renewable sources of energy which will enable Texas--the Nation's 
number one producer of wind energy--to continue adding clean energy and 
jobs to our economy.
  It also extends the investment tax credits for solar energy, fuel 
cells, and energy-efficient appliances for the home, and it creates new 
tax credits for plug-in hybrid vehicles and renewable energy tax-credit 
bonds.
  And after learning of the unintended consequences that corn-based 
ethanol has had on our environment and global food prices, this 
legislation rightly includes a six-cent reduction in the ethanol tax 
credit and creates a new credit for the production of cellulosic 
biofuels.
  Aside from energy provisions, I am pleased this legislation includes 
several sections extending benefits for members of the military and 
veterans.
  Extension of the rules allowing military personnel to treat their 
combat pay as earned income, extending specialized mortgage bond rules 
for veterans, as well as a provision allowing reservists to make 
penalty free withdrawals from the retirement accounts if called to 
active duty for 180 days or more will benefit those who have served our 
country, and provide added financial options for their families if 
necessary.

[[Page 10270]]

  Finally, H.R. 6069 will extend the state and local sales tax 
deduction which assists taxpayers in Texas who do not pay a state 
income tax, and it provides almost $10 billion of additional tax relief 
for individuals through an expansion of the refundable child tax credit 
and a new standard deduction for property taxes.
  Mr. Speaker, I want to thank my good friend and colleague, Chairman 
Rangel, for producing a bill that enhances our energy and job security 
and that has support from both sides of the aisle.
  I urge my colleagues to support this legislation.
  Mrs. LOWEY. Mr. Speaker, I rise today in strong support of H.R. 6049, 
the Renewable Energy and Job Creation Act. This important legislation 
would provide critical tax relief to families coping with increased 
costs of gas and food, while continuing our national investment in 
renewable energy and conservation programs to reduce our dependence on 
foreign oil. I am particularly pleased that this legislation includes 
$3 billion in energy conservation bonds to help States reduce 
greenhouse gases.
  Protecting the environment for future generations is a collective 
responsibility. We must each do our part to leave a better, cleaner 
world than the one we inherited. That has been a guiding principle for 
my efforts in Congress, and it is our mutual obligation.
  Recently, both Rockland County and Westchester County in my district 
in New York have joined communities nationwide moving to reduce our 
dependence on foreign oil by passing plastic bag recycling laws.
  We know that the production of plastic bags and film plastic 
worldwide uses over 12 million barrels of oil per year, accounting for 
more than 4 percent of the world's total oil production. We also know 
the disturbing truth that in the United States we use more than 1 
bilIion plastic bags a year, and less than 1 percent of those bags are 
recycled. Even more troubling, the Environmental Protection Agency 
estimates the average plastic bag takes up to 1,000 years to 
decompose--in the process breaking down into smaller pieces that 
contaminate our soil and waterways and cause injury, illness or death 
to marine and animal life.
  I recently introduced H. Res. 1161 to honor retailers and those State 
and local governments throughout the nation that have taken similar 
proactive steps to tackle this critical energy and environmental 
challenge. In the coming weeks I will also be introducing legislation 
to establish a national program promoting plastic bag recycling at our 
retail outlets, and I look forward to working with the members of the 
Ways and Means Committee, the Energy and Commerce Committee, and the 
Select Committee on Energy Independence and Global Warming to tackle 
this issue.
  Thank you again to Chairman Rangel for your leadership on these 
critically important issues, and I urge my colleagues to support H.R. 
6049.
  Ms. SOLIS. Mr. Speaker, I strongly support H.R. 6049, the Renewable 
Energy and Job Creation Act. This legislation will extend and expand 
important tax incentives for renewable energy, will spur business 
investments, cut taxes for millions of Americans, and retain and create 
hundreds of thousands of green jobs.
  The Renewable Energy and Job Creation Act includes $18 billion in tax 
incentives to spur green jobs and energy independence. I am pleased 
that it includes a six-year extension of the investment tax credit for 
solar energy, and between one and three year extensions of the 
production tax credit for addition sources of renewable energy. It also 
provides tax credits of $3,000 or more to purchase fuel-efficient, 
plug-in hybrid vehicles and includes important incentives for energy 
conservation in commercial buildings, residential structures, and 
energy efficient appliance. This bill also includes $3 billion in tax 
credit bonds for State and local governments to make energy 
conservation investments in public infrastructure, investments which I 
hope can be targeted toward low-income communities and our schools.
  Without these energy tax extensions, our nation could lose an 
additional 116,000 jobs this year. with additional long-term 
repercussions in the growth of an industry which has enormous potential 
at in an otherwise uncertain economic time.
  This legislation also invests $37 billion to spur job creation and 
cut taxes for millions of middle-class families. It will help the 
families of more than 13 million children by expanding the child tax 
credit to those earning $8,500 a year, saves 3.4 million teachers money 
by providing a deduction for classroom expenses, extends tax relief 
under the Earned Income Tax Credit to 22,000 American servicemen and 
woman in combat, and would help more than 4.5 million families better 
afford college.
  At a time when families are struggling in a slowing economy and oil 
prices reached yet another record on the world market, this bill is a 
much needed step toward securing our energy and economic future. I hope 
my colleagues and the President will join us in enacting this important 
legislation which makes needed investments without increasing the 
national debt.
  Mr. MARKEY. Mr. Speaker, oil prices have now reached $135 a barrel 
and regular gasoline averages $3.81 per gallon around the country. 
Meanwhile, the big five oil companies are reaping the rewards of record 
prices. The major oil companies recorded more than $123 billion in 
profits in 2007. However, rather than reinvesting the bulk of those 
profits to advance a strategy that vigorously incorporates renewable 
energy alternatives, oil company profits have been spent largely to 
fund huge increases in stock buybacks designed to prop up stock prices. 
ExxonMobil--the largest of the major oil companies--recorded $40 
billion in profit in 2007 and spent $31.8 billion repurchasing shares 
of its own stock. Meanwhile ExxonMobil only spent $10 million investing 
in renewable energy in 2007.
  The oil industry in the past 5 years has undertaken one of the 
largest stock buybacks in the history of capitalism. Spending on share 
buybacks for the five major oil companies went from under $10 billion a 
year in 2003 to nearly $60 billion a year in 2007. Big Oil has 
increased spending on stock repurchases from $7.9 billion in 2003 to 
$57.7 billion in 2007--an increase of 630 percent. The increase in Big 
Oil's spending on stock buybacks in recent years has been so 
remarkable, and indeed unprecedented, that Exxon spent more 
repurchasing its own shares in the first quarter of 2008--$8 billion--
than all the major oil companies spent on stock buybacks for all of 
2003.
  The money being invested by Big Oil in all types of production still 
pales in comparison to the value being returned to shareholders in the 
form of dividends and stock buy-backs. While ExxonMobil has increased 
capital investment in drilling and exploration from $12 billion in 2003 
to $15.7 billion in 2007--an increase of roughly 30 percent--ExxonMobil 
has increased spending on stock buybacks from $5.9 billion in 2003 to 
$31.8 billion in 2007--a five-fold increase.
  The legislation that I am introducing today, the Renewable Investment 
and Consumer Protection Act or 2008, would impose a 10 percent fee on 
all stock buyback transactions entered into by major oil companies and 
redirect that revenue to fund investment in renewable energy and low-
income energy assistance programs. If the oil companies refuse to help 
American families by finding alternatives to $4 gasoline, then it is 
time for Congress to ensure that we invest in renewable technologies 
such as solar, wind and biofuels that can help American consumers, our 
economy and our planet.
  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 1212, the previous question is ordered 
on the bill, as amended.
  The question is on the engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


               Motion to Recommit Offered by Mr. Mc Crery

  Mr. McCRERY. Mr. Speaker, I have a motion to recommit at the desk.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. Mc CRERY. I am in its current form.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mr. McCrery moves to recommit the bill H.R. 6049 to the 
     Committee on Ways and Means with instructions to report the 
     same back to the House promptly with the following amendment:
       Strike all after the enacting clause and insert the 
     following:

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

       (a) Short Title.--This Act may be cited as the 
     ``Alternative Minimum Tax and Extenders Tax Relief Act of 
     2008''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents of this Act 
     is as follows:
Sec. 1. Short title; amendment of 1986 Code; table of contents.

                TITLE I--ALTERNATIVE MINIMUM TAX RELIEF

Sec. 101. Extension of alternative minimum tax relief for nonrefundable 
              personal credits.

[[Page 10271]]

Sec. 102. Extension of increased alternative minimum tax exemption 
              amount.

                  TITLE II--INDIVIDUAL TAX PROVISIONS

Sec. 201. Election to include combat pay as earned income for purposes 
              of the earned income credit.
Sec. 202. Distributions from retirement plans to individuals called to 
              active duty.
Sec. 203. Deduction for State and local sales taxes.
Sec. 204. Deduction of qualified tuition and related expenses.
Sec. 205. Deduction for certain expenses of elementary and secondary 
              school teachers.
Sec. 206. Modification of mortgage revenue bonds for veterans.
Sec. 207. Tax-free distributions from individual retirement plans for 
              charitable purposes.
Sec. 208. Treatment of certain dividends of regulated investment 
              companies.
Sec. 209. Stock in RIC for purposes of determining estates of 
              nonresidents not citizens.
Sec. 210. Qualified investment entities.
Sec. 211. Qualified conservation contributions.

                   TITLE III--BUSINESS TAX PROVISIONS

Sec. 301. Extension of research credit.
Sec. 302. New markets tax credit.
Sec. 303. Subpart F exception for active financing income.
Sec. 304. Extension of look-thru rule for related controlled foreign 
              corporations.
Sec. 305. Extension of 15-year straight-line cost recovery for 
              qualified leasehold improvements and qualified restaurant 
              improvements.
Sec. 306. Enhanced charitable deduction for contributions of food 
              inventory.
Sec. 307. Extension of enhanced charitable deduction for contributions 
              of book inventory.
Sec. 308. Modification of tax treatment of certain payments to 
              controlling exempt organizations.
Sec. 309. Basis adjustment to stock of S corporations making charitable 
              contributions of property.
Sec. 310. Increase in limit on cover over of rum excise tax to Puerto 
              Rico and the Virgin Islands.
Sec. 311. Parity in the application of certain limits to mental health 
              benefits.
Sec. 312. Extension of economic development credit for American Samoa.
Sec. 313. Extension of mine rescue team training credit.
Sec. 314. Extension of election to expense advanced mine safety 
              equipment.
Sec. 315. Extension of expensing rules for qualified film and 
              television productions.
Sec. 316. Deduction allowable with respect to income attributable to 
              domestic production activities in Puerto Rico.
Sec. 317. Extension of qualified zone academy bonds.
Sec. 318. Indian employment credit.
Sec. 319. Accelerated depreciation for business property on Indian 
              reservation.
Sec. 320. Railroad track maintenance.
Sec. 321. Seven-year cost recovery period for motorsports racing track 
              facility.
Sec. 322. Expensing of environmental remediation costs.
Sec. 323. Extension of work opportunity tax credit for Hurricane 
              Katrina employees.
Sec. 324. Enhanced deduction for qualified computer contributions.
Sec. 325. Tax incentives for investment in the District of Columbia.

               TITLE IV--EXTENSIONS OF ENERGY PROVISIONS

Sec. 401. Extension of credit for energy efficient appliances.
Sec. 402. Extension of credit for nonbusiness energy property.
Sec. 403. Extension of credit for residential energy efficient 
              property.
Sec. 404. Extension of renewable electricity, refined coal, and Indian 
              coal production credit.
Sec. 405. Extension of new energy efficient home credit.
Sec. 406. Extension of energy credit.
Sec. 407. Extension and modification of credit for clean renewable 
              energy bonds.
Sec. 408. Extension of energy efficient commercial buildings deduction.
Sec. 409. Extension of special rule to implement FERC and State 
              electric restructuring policy.
Sec. 410. Suspension of taxable income limit with respect to marginal 
              production.
Sec. 411. Extension of credits for biodiesel and renewable diesel.

                      TITLE V--TAX ADMINISTRATION

Sec. 501. Permanent authority for undercover operations.
Sec. 502. Permanent disclosures of certain tax return information.
Sec. 503. Disclosure of information relating to terrorist activities.

                TITLE I--ALTERNATIVE MINIMUM TAX RELIEF

     SEC. 101. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR 
                   NONREFUNDABLE PERSONAL CREDITS.

       (a) In General.--Paragraph (2) of section 26(a) (relating 
     to special rule for taxable years 2000 through 2007) is 
     amended--
       (1) by striking ``or 2007'' and inserting ``2007, or 
     2008'', and
       (2) by striking ``2007'' in the heading thereof and 
     inserting ``2008''.
       (b)  Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 102. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX 
                   EXEMPTION AMOUNT.

       (a) In General.--Paragraph (1) of section 55(d) (relating 
     to exemption amount) is amended--
       (1) by striking ``($66,250 in the case of taxable years 
     beginning in 2007)'' in subparagraph (A) and inserting 
     ``($69,950 in the case of taxable years beginning in 2008)'', 
     and
       (2) by striking ``($44,350 in the case of taxable years 
     beginning in 2007)'' in subparagraph (B) and inserting 
     ``($46,200 in the case of taxable years beginning in 2008)''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

                  TITLE II--INDIVIDUAL TAX PROVISIONS

     SEC. 201. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR 
                   PURPOSES OF THE EARNED INCOME CREDIT.

       (a) In General.--Subclause (II) of section 32(c)(2)(B)(vi) 
     (defining earned income) is amended by striking ``January 1, 
     2008'' and inserting ``January 1, 2014''.
       (b) Conforming Amendment.--Paragraph (4) of section 6428, 
     as amended by the Economic Stimulus Act of 2008, is amended 
     to read as follows:
       ``(4) Earned income.--The term `earned income' has the 
     meaning set forth in section 32(c)(2) except that such term 
     shall not include net earnings from self-employment which are 
     not taken into account in computing taxable income.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after December 31, 2007.

     SEC. 202. DISTRIBUTIONS FROM RETIREMENT PLANS TO INDIVIDUALS 
                   CALLED TO ACTIVE DUTY.

       (a) In General.--Clause (iv) of section 72(t)(2)(G) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``January 1, 2014''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to individuals ordered or called to active duty 
     on or after December 31, 2007.

     SEC. 203. DEDUCTION FOR STATE AND LOCAL SALES TAXES.

       (a) In General.--Subparagraph (I) of section 164(b)(5) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2014''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 204. DEDUCTION OF QUALIFIED TUITION AND RELATED 
                   EXPENSES.

       (a) In General.--Subsection (e) of section 222 (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 205. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND 
                   SECONDARY SCHOOL TEACHERS.

       (a) In General.--Subparagraph (D) of section 62(a)(2) 
     (relating to certain expenses of elementary and secondary 
     school teachers) is amended by striking ``or 2007'' and 
     inserting ``2007, 2008, 2009, 2010, 2011, 2012, or 2013''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 206. MODIFICATION OF MORTGAGE REVENUE BONDS FOR 
                   VETERANS.

       (a) Qualified Mortgage Bonds Used To Finance Residences for 
     Veterans Without Regard to First-Time Homebuyer 
     Requirement.--Subparagraph (D) of section 143(d)(2) (relating 
     to exceptions) is amended by inserting ``and after the date 
     of the enactment of the Alternative Minimum Tax and Extenders 
     Tax Relief Act of 2008 and before January 1, 2014'' after 
     ``January 1, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 207. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT 
                   PLANS FOR CHARITABLE PURPOSES.

       (a) In General.--Subparagraph (F) of section 408(d)(8) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distributions made in taxable years beginning 
     after December 31, 2007.

     SEC. 208. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED 
                   INVESTMENT COMPANIES.

       (a) Interest-Related Dividends.--Subparagraph (C) of 
     section 871(k)(1) (defining

[[Page 10272]]

     interest-related dividend) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2013''.
       (b) Short-Term Capital Gain Dividends.--Subparagraph (C) of 
     section 871(k)(2) (defining short-term capital gain dividend) 
     is amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2013''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to dividends with respect to taxable years of 
     regulated investment companies beginning after December 31, 
     2007.

     SEC. 209. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES OF 
                   NONRESIDENTS NOT CITIZENS.

       (a) In General.--Paragraph (3) of section 2105(d) (relating 
     to stock in a RIC) is amended by striking ``December 31, 
     2007'' and inserting ``December 31, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to decedents dying after December 31, 2007.

     SEC. 210. QUALIFIED INVESTMENT ENTITIES.

       (a) In General.--Clause (ii) of section 897(h)(4)(A) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2013''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on January 1, 2008.

     SEC. 211. QUALIFIED CONSERVATION CONTRIBUTIONS.

       (a) In General.--Clause (vi) of section 170(b)(1)(E) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2013''.
       (b) Contributions by Corporate Farmers and Ranchers.--
     Clause (iii) of section 170(b)(2)(B) (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2013''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2007.

                   TITLE III--BUSINESS TAX PROVISIONS

     SEC. 301. EXTENSION OF RESEARCH CREDIT.

       (a) Extension.--Subparagraph (B) of section 41(h)(1) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2013''.
       (b) Conforming Amendment.--Subparagraph (D) of section 
     45C(b)(1) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2013''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after December 31, 
     2007.

     SEC. 302. NEW MARKETS TAX CREDIT.

       Subparagraph (D) of section 45D(f)(1) (relating to national 
     limitation on amount of investments designated) is amended by 
     striking ``and 2008'' and inserting ``2008, 2009, 2010, 2011, 
     2012, and 2013''.

     SEC. 303. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME.

       (a) Exempt Insurance Income.--Paragraph (10) of section 
     953(e) (relating to application) is amended--
       (1) by striking ``January 1, 2009'' and inserting ``January 
     1, 2014'', and
       (2) by striking ``December 31, 2008'' and inserting 
     ``December 31, 2013''.
       (b) Exception to Treatment as Foreign Personal Holding 
     Company Income.--Paragraph (9) of section 954(h) (relating to 
     application) is amended by striking ``January 1, 2009'' and 
     inserting ``January 1, 2014''.

     SEC. 304. EXTENSION OF LOOK-THRU RULE FOR RELATED CONTROLLED 
                   FOREIGN CORPORATIONS.

       (a) In General.--Subparagraph (B) of section 954(c)(6) 
     (relating to application) is amended by striking ``January 1, 
     2009'' and inserting ``January 1, 2014''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years of foreign corporations 
     beginning after December 31, 2007, and to taxable years of 
     United States shareholders with or within which such taxable 
     years of foreign corporations end.

     SEC. 305. EXTENSION OF 15-YEAR STRAIGHT-LINE COST RECOVERY 
                   FOR QUALIFIED LEASEHOLD IMPROVEMENTS AND 
                   QUALIFIED RESTAURANT IMPROVEMENTS.

       (a) In General.--Clauses (iv) and (v) of section 
     168(e)(3)(E) (relating to 15-year property) are each amended 
     by striking ``January 1, 2008'' and inserting ``January 1, 
     2014''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 306. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF 
                   FOOD INVENTORY.

       (a) In General.--Clause (iv) of section 170(e)(3)(C) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after December 31, 2007.

     SEC. 307. EXTENSION OF ENHANCED CHARITABLE DEDUCTION FOR 
                   CONTRIBUTIONS OF BOOK INVENTORY.

       (a) Extension.--Clause (iv) of section 170(e)(3)(D) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2013''.
       (b) Clerical Amendment.--Clause (iii) of section 
     170(e)(3)(D) (relating to certification by donee) is amended 
     by inserting ``of books'' after ``to any contribution''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to contributions made after December 31, 2007.

     SEC. 308. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS 
                   TO CONTROLLING EXEMPT ORGANIZATIONS.

       (a) In General.--Clause (iv) of section 512(b)(13)(E) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments received or accrued after December 
     31, 2007.

     SEC. 309. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING 
                   CHARITABLE CONTRIBUTIONS OF PROPERTY.

       (a) In General.--The last sentence of section 1367(a)(2) 
     (relating to decreases in basis) is amended by striking 
     ``December 31, 2007'' and inserting ``December 31, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2007.

     SEC. 310. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX 
                   TO PUERTO RICO AND THE VIRGIN ISLANDS.

       (a) In General.--Paragraph (1) of section 7652(f) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2014''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distilled spirits brought into the United 
     States after December 31, 2007.

     SEC. 311. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO 
                   MENTAL HEALTH BENEFITS.

       (a) In General.--Subsection (f) of section 9812 (relating 
     to application of section) is amended--
       (1) by striking ``and'' at the end of paragraph (2),
       (2) by striking the period at the end of paragraph (3) and 
     inserting ``, and before the date of the enactment of the 
     Alternative Minimum Tax and Extenders Tax Relief Act of 2008, 
     and'', and
       (3) by adding at the end the following new paragraph:
       ``(4) after December 31, 2013.''.
       (b) Amendment to the Employee Retirement Income Security 
     Act of 1974.--Section 712(f) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1185a(f)) is amended 
     by inserting ``, and before the date of the enactment of the 
     Alternative Minimum Tax and Extenders Tax Relief Act of 2008, 
     and after December 31, 2013'' after ``December 31, 2007''.
       (c) Amendment to the Public Health Service Act.--Section 
     2705(f) of the Public Health Service Act (42 U.S.C. 300gg-
     5(f)) is amended by inserting ``, and before the date of the 
     enactment of the Alternative Minimum Tax and Extenders Tax 
     Relief Act of 2008, and after December 31, 2013'' after 
     ``December 31, 2007''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to benefits for services furnished on or after 
     the date of the enactment of this Act.

     SEC. 312. EXTENSION OF ECONOMIC DEVELOPMENT CREDIT FOR 
                   AMERICAN SAMOA.

       (a) In General.--Subsection (d) of section 119 of division 
     A of the Tax Relief and Health Care Act of 2006 is amended--
       (1) by striking ``first two taxable years'' and inserting 
     ``first 8 taxable years'', and
       (2) by striking ``January 1, 2008'' and inserting ``January 
     1, 2014''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 313. EXTENSION OF MINE RESCUE TEAM TRAINING CREDIT.

       Section 45N(e) (relating to termination) is amended by 
     striking ``December 31, 2008'' and inserting ``December 31, 
     2013''.

     SEC. 314. EXTENSION OF ELECTION TO EXPENSE ADVANCED MINE 
                   SAFETY EQUIPMENT.

       Section 179E(g) (relating to termination) is amended by 
     striking ``December 31, 2008'' and inserting ``December 31, 
     2013''.

     SEC. 315. EXTENSION OF EXPENSING RULES FOR QUALIFIED FILM AND 
                   TELEVISION PRODUCTIONS.

       Section 181(f) (relating to termination) is amended by 
     striking ``December 31, 2008'' and inserting ``December 31, 
     2013''.

     SEC. 316. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME 
                   ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES 
                   IN PUERTO RICO.

       (a) In General.--Subparagraph (C) of section 199(d)(8) 
     (relating to termination) is amended--
       (1) by striking ``first 2 taxable years'' and inserting 
     ``first 8 taxable years'', and
       (2) by striking ``January 1, 2008'' and inserting ``January 
     1, 2014''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 317. EXTENSION OF QUALIFIED ZONE ACADEMY BONDS.

       (a) In General.--Paragraph (1) of section 1397E(e) is 
     amended by striking ``and 2007'' and inserting ``2007, 2008, 
     2009, 2010, 2011, 2012, and 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 318. INDIAN EMPLOYMENT CREDIT.

       (a) In General.--Subsection (f) of section 45A (relating to 
     termination) is amended by

[[Page 10273]]

     striking ``December 31, 2007'' and inserting ``December 31, 
     2013''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 319. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON 
                   INDIAN RESERVATION.

       (a) In General.--Paragraph (8) of section 168(j) (relating 
     to termination) is amended by striking ``December 31, 2007'' 
     and inserting ``December 31, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 320. RAILROAD TRACK MAINTENANCE.

       (a) In General.--Subsection (f) of section 45G (relating to 
     application of section) is amended by striking ``January 1, 
     2008'' and inserting ``January 1, 2014''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred during taxable 
     years beginning after December 31, 2007.

     SEC. 321. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS 
                   RACING TRACK FACILITY.

       (a) In General.--Subparagraph (D) of section 168(i)(15) 
     (relating to termination) is amended to read as follows:
       ``(D) Application of paragraph.--Such term shall apply to 
     property placed in service after the date of the enactment of 
     the Alternative Minimum Tax and Extenders Tax Relief Act of 
     2008 and before January 1, 2014.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 322. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.

       (a) In General.--Subsection (h) of section 198 (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred after December 
     31, 2007.

     SEC. 323. EXTENSION OF WORK OPPORTUNITY TAX CREDIT FOR 
                   HURRICANE KATRINA EMPLOYEES.

       (a) In General.--Paragraph (1) of section 201(b) of the 
     Katrina Emergency Tax Relief Act of 2005 is amended by 
     striking ``2-year'' and inserting ``8-year''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to individuals hired after August 27, 2007.

     SEC. 324. ENHANCED DEDUCTION FOR QUALIFIED COMPUTER 
                   CONTRIBUTIONS.

       (a) In General.--Subparagraph (G) of section 170(e)(6) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made during taxable years 
     beginning after December 31, 2007.

     SEC. 325. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF 
                   COLUMBIA.

       (a) Designation of Zone.--
       (1) In general.--Subsection (f) of section 1400 is amended 
     by striking ``2007'' both places it appears and inserting 
     ``2013''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to periods beginning after December 31, 2007.
       (b) Tax-Exempt Economic Development Bonds.--
       (1) In general.--Subsection (b) of section 1400A is amended 
     by striking ``2007'' and inserting ``2013''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to bonds issued after December 31, 2007.
       (c) Zero Percent Capital Gains Rate.--
       (1) In general.--Subsection (b) of section 1400B is amended 
     by striking ``2008'' each place it appears and inserting 
     ``2014''.
       (2) Conforming amendments.--
       (A) Section 1400B(e)(2) is amended--
       (i) by striking ``2012'' and inserting ``2018'', and
       (ii) by striking ``2012'' in the heading thereof and 
     inserting ``2018''.
       (B) Section 1400B(g)(2) is amended by striking ``2012'' and 
     inserting ``2018''.
       (C) Section 1400F(d) is amended by striking ``2012'' and 
     inserting ``2018''.
       (3) Effective dates.--
       (A) Extension.--The amendments made by paragraph (1) shall 
     apply to acquisitions after December 31, 2007.
       (B) Conforming amendments.--The amendments made by 
     paragraph (2) shall take effect on the date of the enactment 
     of this Act.
       (d) First-Time Homebuyer Credit.--
       (1) In general.--Subsection (i) of section 1400C is amended 
     by striking ``2008'' and inserting ``2013''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property purchased after December 31, 2007.

               TITLE IV--EXTENSIONS OF ENERGY PROVISIONS

     SEC. 401. EXTENSION OF CREDIT FOR ENERGY EFFICIENT 
                   APPLIANCES.

       (a) In General.--Subsection (b) of section 45M (relating to 
     applicable amount) is amended by striking ``calendar year 
     2006 or 2007'' each place it appears in paragraphs (1)(A)(i), 
     (1)(B)(i), (1)(C)(ii)(I), and (1)(C)(iii)(I), and inserting 
     ``calendar year 2006, 2007, 2008, 2009, 2010, 2011, 2012, or 
     2013''.
       (b) Restart of Credit Limitation.--Paragraph (1) of section 
     45M(e) (relating to aggregate credit amount allowed) is 
     amended by inserting ``beginning after December 31, 2007'' 
     after ``for all prior taxable years''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to appliances produced after December 31, 2007.

     SEC. 402. EXTENSION OF CREDIT FOR NONBUSINESS ENERGY 
                   PROPERTY.

       (a) In General.--Section 25C(g) (relating to termination) 
     is amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2013''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. 403. EXTENSION OF CREDIT FOR RESIDENTIAL ENERGY 
                   EFFICIENT PROPERTY.

       Section 25D(g) (relating to termination) is amended by 
     striking ``December 31, 2008'' and inserting ``December 31, 
     2013''.

     SEC. 404. EXTENSION OF RENEWABLE ELECTRICITY, REFINED COAL, 
                   AND INDIAN COAL PRODUCTION CREDIT.

       Section 45(d) (relating to qualified facilities) is amended 
     by striking ``January 1, 2009'' each place it appears in 
     paragraphs (1), (2), (3), (4), (5), (6), (7), (8), (9), and 
     (10) and inserting ``January 1, 2014''.

     SEC. 405. EXTENSION OF NEW ENERGY EFFICIENT HOME CREDIT.

       Subsection (g) of section 45L (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2013''.

     SEC. 406. EXTENSION OF ENERGY CREDIT.

       (a) Solar Energy Property.--Paragraphs (2)(A)(i)(II) and 
     (3)(A)(ii) of section 48(a) (relating to energy credit) are 
     each amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2014''.
       (b) Fuel Cell Property.--Subparagraph (E) of section 
     48(c)(1) (relating to qualified fuel cell property) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2013''.
       (c) Microturbine Property.--Subparagraph (E) of section 
     48(c)(2) (relating to qualified microturbine property) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2013''.

     SEC. 407. EXTENSION AND MODIFICATION OF CREDIT FOR CLEAN 
                   RENEWABLE ENERGY BONDS.

       (a) Extension.--Section 54(m) (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2013''.
       (b) Increase in National Limitation.--Section 54(f) 
     (relating to limitation on amount of bonds designated) is 
     amended--
       (1) by striking ``$1,200,000,000'' in paragraph (1) and 
     inserting ``$1,600,000,000'', and
       (2) by striking ``$750,000,000'' in paragraph (2) and 
     inserting ``$1,000,000,000''.
       (c) Modification of Ratable Principal Amortization 
     Requirement.--
       (1) In general.--Paragraph (5) of section 54(l) is amended 
     to read as follows:
       ``(5) Ratable principal amortization required.--A bond 
     shall not be treated as a clean renewable energy bond unless 
     it is part of an issue which provides for an equal amount of 
     principal to be paid by the qualified issuer during each 12-
     month period that the issue is outstanding (other than the 
     first 12-month period).''.
       (2) Technical amendment.--The third sentence of section 
     54(e)(2) is amended by striking ``subsection (l)(6)'' and 
     inserting ``subsection (l)(5)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 408. EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDINGS 
                   DEDUCTION.

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

     SEC. 409. EXTENSION OF SPECIAL RULE TO IMPLEMENT FERC AND 
                   STATE ELECTRIC RESTRUCTURING POLICY.

       (a) In General.--Paragraph (3) of section 451(i) is amended 
     by striking ``January 1, 2008'' and inserting ``January 1, 
     2014''.
       (b) Extension of Period for Transfer of Operational Control 
     Authorized by FERC.--Clause (ii) of section 451(i)(4)(B) is 
     amended by striking ``December 31, 2007'' and inserting ``the 
     date which is 4 years after the close of the taxable year in 
     which the transaction occurs''.
       (c) Effective Dates.--
       (1) Extension.--The amendments made by subsection (a) shall 
     apply to transactions after December 31, 2007.
       (2) Transfers of operational control.--The amendment made 
     by subsection (b) shall take effect as if included in section 
     909 of the American Jobs Creation Act of 2004.

     SEC. 410. SUSPENSION OF TAXABLE INCOME LIMIT WITH RESPECT TO 
                   MARGINAL PRODUCTION.

       (a) In General.--Subparagraph (H) of section 613A(c)(6) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2014''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 411. EXTENSION OF CREDITS FOR BIODIESEL AND RENEWABLE 
                   DIESEL.

       (a) In General.--Sections 40A(g), 6426(c)(6), and 
     6427(e)(5)(B) are each amended by striking ``December 31, 
     2008'' and inserting ``December 31, 2013''.

[[Page 10274]]

       (b) Effective Date.--The amendments made by this section 
     shall apply to fuel produced, and sold or used, after 
     December 31, 2008.

                      TITLE V--TAX ADMINISTRATION

     SEC. 501. PERMANENT AUTHORITY FOR UNDERCOVER OPERATIONS.

       (a) In General.--Section 7608(c) (relating to rules 
     relating to undercover operations) is amended by striking 
     paragraph (6).
       (b) Effective Date.--The amendment made by this section 
     shall apply to operations conducted after the date of the 
     enactment of this Act.

     SEC. 502. PERMANENT DISCLOSURES OF CERTAIN TAX RETURN 
                   INFORMATION.

       (a) Disclosures To Facilitate Combined Employment Tax 
     Reporting.--
       (1) In general.--Section 6103(d)(5) (relating to disclosure 
     for combined employment tax reporting) is amended--
       (A) by striking ``reporting'' in the heading thereof and 
     all that follows through ``The Secretary'' in subparagraph 
     (A) and inserting ``reporting.--The Secretary'', and
       (B) by striking subparagraph (B).
       (2) Effective date.--The amendments made by this subsection 
     shall apply to disclosures after the date of the enactment of 
     this Act.
       (b) Disclosures Relating to Certain Programs Administered 
     by the Department of Veterans Affairs.--
       (1) In general.--Section 6103(l)(7)(D) (relating to 
     programs to which rule applies) is amended by striking the 
     last sentence.
       (2) Technical amendment.--Section 6103(l)(7)(D)(viii)(III) 
     is amended by striking ``sections 1710(a)(1)(I), 1710(a)(2), 
     1710(b), and 1712(a)(2)(B)'' and inserting ``sections 
     1710(a)(2)(G), 1710(a)(3), and 1710(b)''.

     SEC. 503. DISCLOSURE OF INFORMATION RELATING TO TERRORIST 
                   ACTIVITIES.

       (a) Disclosure of Return Information to Apprise Appropriate 
     Officials of Terrorist Activities.--Clause (iv) of section 
     6103(i)(3)(C) (relating to termination) is amended by 
     striking ``December 31, 2007'' and inserting ``December 31, 
     2013''.
       (b) Disclosure Upon Request of Information Relating to 
     Terrorist Activities.--Subparagraph (E) of section 6103(i)(7) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2013''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to disclosures after the date of the enactment of 
     this Act.

  Mr. McCRERY (during the reading). Mr. Speaker, I ask unanimous 
consent to dispense with the reading of the motion.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Louisiana?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Louisiana is recognized for 5 minutes in support of his motion.
  Mr. McCRERY. Mr. Speaker, this is a straightforward motion that 
offers Members of this House a simple choice. Are you in favor of long-
term extensions of these expiring tax provisions and extending the all-
important AMT patch, without raising taxes?
  As we have discussed at length here today, the majority's bill 
unwisely adheres to their ill-advised PAYGO rules. Thus, they have once 
again found themselves boxed in a corner, scouring the Tax Code for 
ways to fuel their agenda. Whether that agenda involves additional 
spending, new tax incentives, or even just extensions of the low-tax 
policies that Republicans originally enacted during our time in the 
majority, the Democrat solution seems to always be the same: tax, tax, 
tax.
  Today's bill is no different. While there is virtually no 
disagreement in this House that the expiring tax reductions contained 
in the underlying legislation need to be renewed, the two parties seem 
to have a major disagreement about whether revenue-raisers should be 
necessary to pay for them. The majority's bill represents a clear 
choice in favor of higher taxes. Our motion to recommit, on the other 
hand, represents a clear choice in favor of extending current tax 
relief, without offsetting tax increases.
  Unlike the bill brought forward today by the majority, Mr. Speaker, 
which contains $55.5 billion in revenue-raisers, our motion contains 
no--repeat, no--tax increases. Democrats were wrong to propose these 
sorts of offsetting tax hikes last year, and they're wrong again today. 
If they stick with their misguided PAYGO rules, they'll be wrong again 
in 2010 as well, when a huge number of critically important tax 
policies, ranging from the expanded $1,000 child credit to the lower 
rates on dividends and capital gains and lower individual rates will 
expire. And the majority's PAYGO logic will then require more than a 
$3.5 trillion tax increase simply to maintain current law. But that's 
where PAYGO will take us.
  This motion to recommit offers us a different path, Mr. Speaker. Not 
only does our motion reject the majority's tax hikes, it extends the 
bill's positive provisions for considerably longer than the underlying 
bill does. Indeed, our motion extends the package of expiring 
provisions, including all the expiring energy tax provisions, through 
2013.
  So if you support the deduction for State and local sales taxes, 
here's your chance to extend it for 6 years, not just 1. If you support 
the research and development tax credit, here's your chance to extend 
it for 6 years, not just 1.
  In short, if you want to extend all of the important low-tax policies 
that expired last year--as well as the energy extenders that are set to 
expire just months from now--on a long-term basis, here's your chance.
  This motion also gives Members the opportunity to extend one final 
crucial provision that has gone completely unaddressed by the majority: 
the AMT patch. As we've highlighted throughout today's debate, the 
majority's legislation is deafeningly silent on the urgently needed AMT 
patch. Their bill's failure to patch the AMT for 2008 means that more 
than 25 million middle class individuals and families are in line for a 
$61.5 billion tax hike next April, an average tax increase for those 
families of more than $2,400 per taxpayer.
  Our motion does what everyone knows must be done. It patches the AMT 
for 2008, and it does so early in the year to help ensure that we avoid 
a repeat performance of the legislative meltdown engineered by the 
majority last year, which prevented the 2007 patch from being enacted 
until the day after Christmas. We need to patch the AMT and we need to 
patch it now. This motion gives us that opportunity.
  I will close, Mr. Speaker, with just a word about process. I suspect 
that we'll hear from our friends on the other side that this motion 
will kill the bill. Well, Mr. Speaker, I would submit to you that you 
can't kill a bill that's already dead. This bill is dead on arrival in 
the other body, Mr. Speaker. Forty-one Senators signed a letter last 
month pledging to oppose tax bills that contain revenue-raising 
offsets.
  On the very same day that our committee, the Ways and Means 
Committee, reported out this bill last week, our colleagues across the 
Capitol passed a motion on the Senate floor instructing Senate 
conferees on the budget resolution to reject the House's plan to raise 
$110 billion in taxes in order to pay for the extension of expiring 
provisions, including the AMT patch.
  And, Mr. Speaker, even if this legislation somehow got through the 
Senate, the President has indicated he would veto the bill.
  You can't kill a bill that's already dead, Mr. Speaker. So let's use 
this motion to recommit to revive this bill, send it back to committee 
so that we can do our work in a bipartisan way, and get a bill passed 
and to the President that he will sign.
  Mr. RANGEL. Mr. Speaker, I rise in outrageous opposition to the 
motion to recommit that has been offered to this House.
  The SPEAKER pro tempore. The gentleman from New York is recognized 
for 5 minutes.
  Mr. RANGEL. One, the outrage concerns my love for the Congress and 
the Constitution. And to think that this great House and the committee 
which I'm proud to chair would even have to consider what they're 
thinking, if they're thinking at all on the other side, to decide what 
we're going to legislate outrages me.

                              {time}  1530

  Two, whatever the President says he's going to do or may do--we 
understand that he's addicted to veto, but that shouldn't stop us from 
doing the right thing.
  And why do I think basically it's the right thing? Well, it has to be 
if you

[[Page 10275]]

want to extend it for 5 years. So your vote on this, after the motion 
to recommit dies on this floor, is going to be very interesting as to 
if you want it for 5, why wouldn't you want to extend it at least for 
1?
  Lastly, I wish that I had some time to share with my friend, whom 
I've enjoyed working with as the ranking member of the Ways and Means 
Committee, to ask him how much money do you think they have in Japan 
and China to loan us? There must be some limit to their capacity.
  Our bill costs about $125 billion altogether, I think. $54 billion 
for the energy provisions as well as for this. So I assume that you 
want to add another $200 billion to that. And I don't remember you 
using the creative language that you used when you and the Senate--that 
you and the other body, whatever they call themselves--decided that you 
don't have to pay for the alternative minimum tax.
  First of all, if I understood that, I'll take it home to my wife and 
explain that there are ways that you can lose revenue and not renew it 
and still not change your lifestyle. And if it works at home, I will 
come here, and at least for the next Congress, ask Mr. McCrery, if he 
can't stay over there, come on our side and explain how, if the 
President puts in the budget that we should be expecting money from 
these 25 million hostages that shouldn't have to pay the tax, that we 
don't have to make up for the money.
  So I assume that you have now extended this to cover the extenders. 
And I hope really that you would stick around a little while so that 
you will be able to work with me and the next President, not to explain 
why in the last 8 years we haven't reformed this doggone tax system. 
Most of this stuff shouldn't be in the Tax Code. You know it and I know 
it. And the things that should be in the Tax Code should be made 
permanent. The stuff that shouldn't be in there should be taken out.
  So in 8 years, the President is now talking about vetoing. Why didn't 
he take enough time to say, Let's straighten out the code, let's 
attempt to balance the budget, let's do the right thing for energy and 
whatever has to be in an extender that expires, help us to get rid of 
it without being charged with raising taxes. Any extender that expires, 
we would say that it raises taxes.
  I know and Secretary Paulson knows, and we'll be hearing more from 
him probably after he leaves the administration, that this House has 
the responsibility of having a Tax Code that is simple, that is 
economically inspiring, and is something that can be confident and 
things shouldn't expire. If they expire, they shouldn't be in there in 
the first place. If it is good, it should stay in the Tax Code so 
there's reliability.
  And if you're going to say that we're not going to get revenues as a 
result of extending this, we say for 1 year, we will raise the money, 
we will do it the right way, we will be proud of it, and in a small way 
attempt to stop this deficit.
  But be kind to the people in Japan. Be kind to the people in China. 
They can't forever support everything that the Republicans want.
  We're going to have to make sacrifices if we want to make changes. So 
this war is one against ignorance and not having the research and 
development. It's one in trying to have research and development for 
our corporations, but, more importantly, to find alternatives to this 
addiction that we have.
  So you have been there for 8 years. Please don't try to change the 
things in 10 minutes here. Join with us. Let's work together in a 
bipartisan way, and let's mark down this day that is a day that House 
Democrats and Republicans said, stop the addiction, move to the 
alternatives, and dedicate ourselves to having a reformed Tax Code, if 
not this year then certainly next year.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore. Members are reminded to address their 
remarks to the Chair.
  Without objection, the previous question is ordered on the motion to 
recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. McCRERY. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  Pursuant to clause 8 and clause 9 of rule XX, this 15-minute vote on 
the motion to recommit will be followed by 5-minute votes on passage of 
H.R. 6049 and motions to suspend the rules on H.R. 1771 and H.R. 4841.
  The vote was taken by electronic device, and there were--yeas 201, 
nays 220, not voting 13, as follows:

                             [Roll No. 343]

                               YEAS--201

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

                               NAYS--220

     Abercrombie
     Ackerman
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boren
     Boswell
     Boucher
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Butterfield
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Carson
     Cazayoux
     Chandler
     Childers
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Conyers
     Cooper
     Costello
     Courtney
     Cramer
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Lincoln
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Doyle
     Edwards
     Ellison
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Foster
     Frank (MA)
     Giffords
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Johnson, E. B.
     Jones (OH)
     Kagen
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick
     Kind
     Klein (FL)
     Kucinich
     Langevin
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski

[[Page 10276]]


     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McDermott
     McGovern
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller (NC)
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Perlmutter
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Richardson
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shea-Porter
     Sherman
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Space
     Speier
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Tsongas
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wilson (OH)
     Woolsey
     Wu
     Yarmuth

                             NOT VOTING--13

     Brown, Corrine
     Carter
     Castor
     Coble
     Costa
     Crenshaw
     Gillibrand
     Kennedy
     Rush
     Sensenbrenner
     Tiahrt
     Wexler
     Wynn

                              {time}  1600

  Messrs. BERRY, KUCINICH, SPRATT, BUTTERFIELD, KLEIN of Florida, 
ALTMIRE, DICKS, LANGEVIN, OLVER, GEORGE MILLER of California, 
RUPPERSBERGER, REYES and SHERMAN changed their vote from ``yea'' to 
``nay.''
  Messrs. McKEON, WALSH of New York, BURGESS, McINTYRE and MITCHELL 
changed their vote from ``nay'' to ``yea.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  Stated for:
  Mr. COBLE. Mr. Speaker, on rollcall No. 343, I was attending the 
graduation ceremony at the United States Coast Guard Academy. Had I 
been present, I would have voted ``yea.''
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Mr. HERGER. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 263, 
noes 160, not voting 12, as follows:

                             [Roll No. 344]

                               AYES--263

     Abercrombie
     Ackerman
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boren
     Boswell
     Boucher
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown-Waite, Ginny
     Buchanan
     Butterfield
     Capito
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Carson
     Castle
     Cazayoux
     Chandler
     Childers
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Conyers
     Cooper
     Costa
     Costello
     Courtney
     Cramer
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Lincoln
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Donnelly
     Doyle
     Duncan
     Edwards
     Ehlers
     Ellison
     Ellsworth
     Emanuel
     Engel
     English (PA)
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Foster
     Frank (MA)
     Gerlach
     Giffords
     Gilchrest
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     Hayes
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hobson
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Johnson, E. B.
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Kagen
     Kanjorski
     Kaptur
     Kildee
     Kilpatrick
     Kind
     Klein (FL)
     Kucinich
     LaHood
     Langevin
     Larsen (WA)
     Larson (CT)
     Latham
     LaTourette
     Lee
     Levin
     Lewis (GA)
     Lipinski
     LoBiondo
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McDermott
     McGovern
     McHugh
     McIntyre
     McNerney
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller (MI)
     Miller (NC)
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (KS)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murphy, Tim
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Perlmutter
     Peterson (MN)
     Platts
     Pomeroy
     Porter
     Price (NC)
     Pryce (OH)
     Rahall
     Rangel
     Regula
     Reyes
     Richardson
     Rodriguez
     Rogers (AL)
     Ros-Lehtinen
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shays
     Shea-Porter
     Sherman
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder
     Solis
     Souder
     Space
     Speier
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tiberi
     Tierney
     Towns
     Tsongas
     Udall (CO)
     Udall (NM)
     Upton
     Van Hollen
     Velazquez
     Visclosky
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wilson (OH)
     Woolsey
     Wu
     Yarmuth

                               NOES--160

     Aderholt
     Akin
     Alexander
     Bachmann
     Bachus
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono Mack
     Boozman
     Boustany
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Chabot
     Cole (OK)
     Conaway
     Cubin
     Culberson
     Davis (KY)
     Davis, David
     Davis, Tom
     Deal (GA)
     Doolittle
     Drake
     Dreier
     Emerson
     Everett
     Fallin
     Feeney
     Ferguson
     Flake
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Hall (TX)
     Hastings (WA)
     Heller
     Hensarling
     Herger
     Hoekstra
     Hulshof
     Hunter
     Inglis (SC)
     Issa
     Johnson (IL)
     Jordan
     Keller
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline (MN)
     Knollenberg
     Kuhl (NY)
     Lamborn
     Lampson
     Latta
     Lewis (CA)
     Lewis (KY)
     Linder
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCarthy (CA)
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McKeon
     McMorris Rodgers
     Mica
     Miller (FL)
     Miller, Gary
     Musgrave
     Myrick
     Neugebauer
     Nunes
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Poe
     Price (GA)
     Putnam
     Radanovich
     Ramstad
     Rehberg
     Reichert
     Renzi
     Reynolds
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Roskam
     Royce
     Ryan (WI)
     Sali
     Saxton
     Scalise
     Schmidt
     Sessions
     Shadegg
     Shimkus
     Shuster
     Simpson
     Smith (NE)
     Smith (TX)
     Stearns
     Sullivan
     Tancredo
     Terry
     Thornberry
     Turner
     Walberg
     Walden (OR)
     Walsh (NY)
     Wamp
     Weldon (FL)
     Weller
     Westmoreland
     Whitfield (KY)
     Wilson (NM)
     Wilson (SC)
     Wittman (VA)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--12

     Brown, Corrine
     Carter
     Castor
     Coble
     Crenshaw
     Gillibrand
     Kennedy
     Rush
     Sensenbrenner
     Tiahrt
     Wexler
     Wynn


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are reminded there 
are 2 minutes remaining on this vote.

                              {time}  1608

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated against:
  Mr. COBLE. Mr. Speaker, on rollcall No. 344, I was attending the 
graduation ceremony at the United States Coast Guard Academy. Had I 
been present, I would have voted ``no.''

                          ____________________