II 

109TH CONGRESS 

2D SESSION S. 2748 

To amend the Internal Revenue Code of 1986 to provide tax incentives 

to promote energy production and conservation, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 4, 2006 

Mr. BINGAMAN (for himself, Mr. BAYH, Mr. COLEMAN, Mr. LIEBERMAN, Mr. 

LUGAR, Ms. CANTWELL, Ms. COLLINS, Mr. SALAZAR, Mr. KERRY, Mrs. 

CLINTON, and Mr. NELSON of Florida) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

tax incentives to promote energy production and conservation, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; AMENDMENT OF CODE; TABLE 

4 OF CONTENTS. 

5 (a) SHORT TITLE.—This Act may be cited as the 

6 ‘‘Enhanced Energy Security Tax Incentives Act of 2006’’. 

7 (b) AMENDMENT OF 1986 CODE.—Except as other8 wise expressly provided, whenever in this Act an amend9 ment or repeal is expressed in terms of an amendment 


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1 to, or repeal of, a section or other provision, the reference 

2 shall be considered to be made to a section or other provi3 sion of the Internal Revenue Code of 1986. 

4 (c) TABLE OF CONTENTS.—The table of contents for 

5 this Act is as follows: 

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

TITLE I—EXTENSION OF INCENTIVES 

Sec. 101. Extension of credit for electricity produced from certain renewable resources. 

Sec. 102. Extension and expansion of credit to holders of clean renewable energy bonds. 

Sec. 103. Extension of energy efficient commercial buildings deduction. 

Sec. 104. Extension and expansion of new energy efficient home credit. 

Sec. 105. Extension of nonbusiness energy property credit. 

Sec. 106. Extension of residential energy efficient property credit. 

Sec. 107. Extension of credit for business installation of qualified fuel cells and 

stationary microturbine power plants. 

Sec. 108. Extension of business solar investment tax credit. 

Sec. 109. Extension of alternative fuel excise tax provisions, income tax credits, 

and tariff duties. 

Sec. 110. Extension of full credit for qualified electric vehicles. 

TITLE II—INCENTIVES FOR ALTERNATIVE FUEL VEHICLES 

Sec. 201. Consumer incentives to purchase advanced technology vehicles. 

Sec. 202. Advanced technology motor vehicles manufacturing credit. 

Sec. 203. Tax incentives for private fleets. 

Sec. 204. Modification of alternative vehicle refueling property credit. 

Sec. 205. Inclusion of heavy vehicles in limitation on depreciation of certain 

luxury automobiles. 

Sec. 206. Idling reduction tax credit. 

TITLE III—ADDITIONAL INCENTIVES 

Sec. 301. Energy credit for combined heat and power system property. 

Sec. 302. Three-year applicable recovery period for depreciation of qualified energy management devices. 

Sec. 303. Three-year applicable recovery period for depreciation of qualified 

water submetering devices. 

TITLE IV—REVENUE PROVISIONS 

Sec. 401. Revaluation of LIFO inventories of large integrated oil companies. 

Sec. 402. Elimination of amortization of geological and geophysical expenditures for major integrated oil companies. 

Sec. 403. Modifications of foreign tax credit rules applicable to large integrated 

oil companies which are dual capacity taxpayers. 


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1 TITLE I—EXTENSION OF 

2 INCENTIVES 

3 SEC. 101. EXTENSION OF CREDIT FOR ELECTRICITY PRO4 DUCED FROM CERTAIN RENEWABLE RE5 SOURCES. 

6 Section 45(d) (relating to qualified facilities) is 

7 amended by striking ‘‘2008’’ each place it appears and 

8 inserting ‘‘2011’’. 

9 SEC. 102. EXTENSION AND EXPANSION OF CREDIT TO 

10 HOLDERS OF CLEAN RENEWABLE ENERGY 

11 BONDS. 

12 (a) IN GENERAL.—Section 54(m) (relating to termi13 nation) is amended by striking ‘‘2007’’ and inserting 

14 ‘‘2010’’. 

15 (b) ANNUAL VOLUME CAP FOR BONDS ISSUED DUR16 ING EXTENSION PERIOD.—Paragraph (1) of section 54(f) 

17 (relating to limitation on amount of bonds designated) is 

18 amended to read as follows: 

19 ‘‘(1) NATIONAL LIMITATION.— 

20 ‘‘(A) INITIAL NATIONAL LIMITATION.— 

21 With respect to bonds issued after December 

22 31, 2005, and before January 1, 2008, there is 

23 a national clean renewable energy bond limita24 tion of $800,000,000. 


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1 ‘‘(B) ANNUAL NATIONAL LIMITATION.— 

2 With respect to bonds issued after December 

3 31, 2007, and before January 1, 2011, there is 

4 a national clean renewable energy bond limita5 tion for each calendar year of $800,000,000.’’. 

6 (c) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to bonds issued after the date of 

8 the enactment of this Act. 

9 SEC. 103. EXTENSION OF ENERGY EFFICIENT COMMERCIAL 

10 BUILDINGS DEDUCTION. 

11 Section 179D(h) (relating to termination) is amended 

12 by striking ‘‘2007’’ and inserting ‘‘2010’’. 

13 SEC. 104. EXTENSION AND EXPANSION OF NEW ENERGY EF14 FICIENT HOME CREDIT. 

15 (a) EXTENSION.—Section 45L(g) (relating to termi16 nation) is amended by striking ‘‘2007’’ and inserting 

17 ‘‘2010’’. 

18 (b) INCLUSION OF 30 PERCENT HOMES.— 

19 (1) IN GENERAL.—Section 45L(c) (relating to 

20 energy saving requirements) is amended— 

21 (A) by striking ‘‘or’’ at the end of para22 graph (2), 

23 (B) by redesignating paragraph (3) as 

24 paragraph (4), and 


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1 (C) by inserting after paragraph (2) the 

2 following new paragraph: 

3 ‘‘(3) certified— 

4 ‘‘(A) to have a level of annual heating and 

5 cooling energy consumption which is at least 30 

6 percent below the annual level described in 

7 paragraph (1), and 

8 ‘‘(B) to have building envelope component 

improvements account for at least 1 9 ⁄3 of such 

10 30 percent, or’’. 

11 (2) APPLICABLE AMOUNT OF CREDIT.—Section 

12 45L(a)(2) is amended by striking ‘‘paragraph (3)’’ 

13 and inserting ‘‘paragraph (3) or (4)’’. 

14 (3) EFFECTIVE DATE.—The amendments made 

15 by this subsection shall apply to qualified new en16 ergy efficient homes acquired after the date of the 

17 enactment of this Act. 

18 SEC. 105. EXTENSION OF NONBUSINESS ENERGY PROP19 ERTY CREDIT. 

20 Section 25C(g) (relating to termination) is amended 

21 by striking ‘‘2007’’ and inserting ‘‘2010’’. 

22 SEC. 106. EXTENSION OF RESIDENTIAL ENERGY EFFICIENT 

23 PROPERTY CREDIT. 

24 Section 25D(g) (relating to termination) is amended 

25 by striking ‘‘2007’’ and inserting ‘‘2010’’. 


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1 SEC. 107. EXTENSION OF CREDIT FOR BUSINESS INSTALLA2 TION OF QUALIFIED FUEL CELLS AND STA3 TIONARY MICROTURBINE POWER PLANTS. 

4 Sections 48(c)(1)(E) and 48(c)(2)(E) (relating to ter5 mination) are each amended by striking ‘‘2007’’ and in6 serting ‘‘2010’’. 

7 SEC. 108. EXTENSION OF BUSINESS SOLAR INVESTMENT 

8 TAX CREDIT. 

9 Sections 48(a)(2)(A)(i)(II) and 48(a)(3)(A)(ii) (relat10 ing to termination) are each amended by striking ‘‘2008’’ 

11 and inserting ‘‘2011’’. 

12 SEC. 109. EXTENSION OF ALTERNATIVE FUEL EXCISE TAX 

13 PROVISIONS, INCOME TAX CREDITS, AND 

14 TARIFF DUTIES. 

15 (a) BIODIESEL.—Sections 40A(g), 6426(c)(6), and 

16 6427(e)(5)(B) are each amended by striking ‘‘2008’’ and 

17 inserting ‘‘2010’’. 

18 (b) ALTERNATIVE FUEL.— 

19 (1) FUELS.—Sections 6426(d)(4) and 

20 6427(e)(5)(C) are each amended by striking ‘‘Sep21 tember 30, 2009’’ and inserting ‘‘December 31, 

22 2010’’. 

23 (2) REFUELING PROPERTY.—Section 30C(g) is 

24 amended by striking ‘‘2009’’ and inserting ‘‘2010’’. 

25 (c) ETHANOL TARIFF SCHEDULE.—Headings 

26 9901.00.50 and 9901.00.52 of the Harmonized Tariff 


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1 Schedule of the United States (19 U.S.C. 3007) are each 

2 amended in the effective period column by striking ‘‘10/ 

3 1/2007’’ each place it appears and inserting ‘‘1/1/2011’’. 

4 (d) EFFECTIVE DATE.—The amendments made by 

5 this section shall take effect on January 1, 2007. 

6 SEC. 110. EXTENSION OF FULL CREDIT FOR QUALIFIED 

7 ELECTRIC VEHICLES. 

8 (a) IN GENERAL.—Section 30(e) is amended by strik9 ing ‘‘2006’’ and inserting ‘‘2010’’. 

10 (b) REPEAL OF PHASEOUT.—Section 30(b) (relating 

11 to limitations) is amended by striking paragraph (2) and 

12 by redesignating paragraph (3) as paragraph (2). 

13 (c) CREDIT ALLOWABLE AGAINST ALTERNATIVE

14 MINIMUM TAX.—Paragraph (2) of section 30(b), as redes15 ignated by subsection (b), is amended to read as follows: 

16 ‘‘(2) APPLICATION WITH OTHER CREDITS.— 

17 The credit allowed by subsection (a) for any taxable 

18 year shall not exceed the excess (if any) of— 

19 ‘‘(A) the sum of the regular tax for the 

20 taxable year plus the tax imposed by section 55, 

21 over 

22 ‘‘(B) the sum of the credits allowable 

23 under subpart A and section 27.’’. 


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2005. 

4 TITLE II—INCENTIVES FOR 

5 ALTERNATIVE FUEL VEHICLES 

6 SEC. 201. CONSUMER INCENTIVES TO PURCHASE AD7 VANCED TECHNOLOGY VEHICLES. 

8 (a) ELIMINATION ON NUMBER OF NEW QUALIFIED

9 HYBRID AND ADVANCED LEAN BURN TECHNOLOGY VE10 HICLES ELIGIBLE FOR ALTERNATIVE MOTOR VEHICLE

11 CREDIT.— 

12 (1) IN GENERAL.—Section 30B is amended by 

13 striking subsection (f) and by redesignating sub14 sections (g) through (j) as subsections (f) through 

15 (i), respectively. 

16 (2) CONFORMING AMENDMENTS.— 

17 (A) Paragraphs (4) and (6) of section 

18 30B(h) are each amended by striking ‘‘(deter19 mined without regard to subsection (g))’’ and 

20 inserting ‘‘determined without regard to sub21 section (f))’’. 

22 (B) Section 38(b)(25) is amended by strik23 ing ‘‘section 30B(g)(1)’’ and inserting ‘‘section 

24 30B(f)(1)’’. 


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1 (C) Section 55(c)(2) is amended by strik2 ing ‘‘section 30B(g)(2)’’ and inserting ‘‘section 

3 30B(f)(2)’’. 

4 (D) Section 1016(a)(36) is amended by 

5 striking ‘‘section 30B(h)(4)’’ and inserting 

6 ‘‘section 30B(g)(4)’’. 

7 (E) Section 6501(m) is amended by strik8 ing ‘‘section 30B(h)(9)’’ and inserting ‘‘section 

9 30B(g)(9)’’. 

10 (b) EXTENSION OF ALTERNATIVE VEHICLE CREDIT

11 FOR NEW QUALIFIED HYBRID MOTOR VEHICLES.—Para12 graph (3) of section 30B(i) (as redesignated by subsection 

13 (a)) is amended by striking ‘‘December 31, 2009’’ and in14 serting ‘‘December 31, 2010’’. 

15 (c) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to property placed in service after 

17 December 31, 2005, in taxable years ending after such 

18 date. 

19 SEC. 202. ADVANCED TECHNOLOGY MOTOR VEHICLES MAN20 UFACTURING CREDIT. 

21 (a) IN GENERAL.—Subpart B of part IV of sub22 chapter A of chapter 1 (relating to foreign tax credit, etc.) 

23 is amended by adding at the end the following new section: 


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1 ‘‘SEC. 30D. ADVANCED TECHNOLOGY MOTOR VEHICLES 

2 MANUFACTURING CREDIT. 

3 ‘‘(a) CREDIT ALLOWED.—There shall be allowed as 

4 a credit against the tax imposed by this chapter for the 

5 taxable year an amount equal to 35 percent of so much 

6 of the qualified investment of an eligible taxpayer for such 

7 taxable year as does not exceed $75,000,000. 

8 ‘‘(b) QUALIFIED INVESTMENT.—For purposes of this 

9 section— 

10 ‘‘(1) IN GENERAL.—The qualified investment 

11 for any taxable year is equal to the incremental costs 

12 incurred during such taxable year— 

13 ‘‘(A) to re-equip, expand, or establish any 

14 manufacturing facility in the United States of 

15 the eligible taxpayer to produce advanced tech16 nology motor vehicles or to produce eligible 

17 components, 

18 ‘‘(B) for engineering integration performed 

19 in the United States of such vehicles and com20 ponents as described in subsection (d), 

21 ‘‘(C) for research and development per22 formed in the United States related to advanced 

23 technology motor vehicles and eligible compo24 nents, and 

25 ‘‘(D) for employee retraining with respect 

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1 nents (determined without regard to wages or 

2 salaries of such retrained employees). 

3 ‘‘(2) ATTRIBUTION RULES.—In the event a fa4 cility of the eligible taxpayer produces both advanced 

5 technology motor vehicles and conventional motor 

6 vehicles, or eligible and non-eligible components, only 

7 the qualified investment attributable to production 

8 of advanced technology motor vehicles and eligible 

9 components shall be taken into account. 

10 ‘‘(c) ADVANCED TECHNOLOGY MOTOR VEHICLES

11 AND ELIGIBLE COMPONENTS.—For purposes of this sec12 tion— 

13 ‘‘(1) ADVANCED TECHNOLOGY MOTOR VEHI14 CLE.—The term ‘advanced technology motor vehicle’ 

15 means— 

16 ‘‘(A) any qualified electric vehicle (as de17 fined in section 30(c)(1)), 

18 ‘‘(B) any new qualified fuel cell motor ve19 hicle (as defined in section 30B(b)(3)), 

20 ‘‘(C) any new advanced lean burn tech21 nology motor vehicle (as defined in section 

22 30B(c)(3)), 

23 ‘‘(D) any new qualified hybrid motor vehi24 cle (as defined in section 30B(d)(2)(A) and deVerDate Aug 31 2005 02:10 May 09, 2006 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2748.IS S2748

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1 termined without regard to any gross vehicle 

2 weight rating), 

3 ‘‘(E) any new qualified alternative fuel 

4 motor vehicle (as defined in section 30B(e)(4), 

5 including any mixed-fuel vehicle (as defined in 

6 section 30B(e)(5)(B)), and 

7 ‘‘(F) any other motor vehicle using electric 

8 drive transportation technology (as defined in 

9 paragraph (3)). 

10 ‘‘(2) ELIGIBLE COMPONENTS.—The term ‘eligi11 ble component’ means any component inherent to 

12 any advanced technology motor vehicle, including— 

13 ‘‘(A) with respect to any gasoline or diesel14 electric new qualified hybrid motor vehicle— 

15 ‘‘(i) electric motor or generator, 

16 ‘‘(ii) power split device, 

17 ‘‘(iii) power control unit, 

18 ‘‘(iv) power controls, 

19 ‘‘(v) integrated starter generator, or 

20 ‘‘(vi) battery, 

21 ‘‘(B) with respect to any hydraulic new 

22 qualified hybrid motor vehicle— 

23 ‘‘(i) hydraulic accumulator vessel, 

24 ‘‘(ii) hydraulic pump, or 

25 ‘‘(iii) hydraulic pump-motor assembly, 


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1 ‘‘(C) with respect to any new advanced 

2 lean burn technology motor vehicle— 

3 ‘‘(i) diesel engine, 

4 ‘‘(ii) turbocharger, 

5 ‘‘(iii) fuel injection system, or 

6 ‘‘(iv) after-treatment system, such as 

7 a particle filter or NOx absorber, and 

8 ‘‘(D) with respect to any advanced tech9 nology motor vehicle, any other component sub10 mitted for approval by the Secretary. 

11 ‘‘(3) ELECTRIC DRIVE TRANSPORTATION TECH12 NOLOGY.—The term ‘electric drive transportation 

13 technology’ means technology used by vehicles that 

14 use an electric motor for all or part of their motive 

15 power and that may or may not use off-board elec16 tricity, such as battery electric vehicles, fuel cell ve17 hicles, engine dominant hybrid electric vehicles, plug18 in hybrid electric vehicles, and plug-in hybrid fuel 

19 cell vehicles. 

20 ‘‘(d) ENGINEERING INTEGRATION COSTS.—For pur21 poses of subsection (b)(1)(B), costs for engineering inte22 gration are costs incurred prior to the market introduction 

23 of advanced technology vehicles for engineering tasks re24 lated to— 


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1 ‘‘(1) establishing functional, structural, and 

2 performance requirements for component and sub3 systems to meet overall vehicle objectives for a spe4 cific application, 

5 ‘‘(2) designing interfaces for components and 

6 subsystems with mating systems within a specific ve7 hicle application, 

8 ‘‘(3) designing cost effective, efficient, and reli9 able manufacturing processes to produce components 

10 and subsystems for a specific vehicle application, 

11 and 

12 ‘‘(4) validating functionality and performance of 

13 components and subsystems for a specific vehicle ap14 plication. 

15 ‘‘(e) ELIGIBLE TAXPAYER.—For purposes of this sec16 tion, the term ‘eligible taxpayer’ means any taxpayer if 

17 more than 50 percent of its gross receipts for the taxable 

18 year is derived from the manufacture of motor vehicles 

19 or any component parts of such vehicles. 

20 ‘‘(f) LIMITATION BASED ON AMOUNT OF TAX.—The 

21 credit allowed under subsection (a) for the taxable year 

22 shall not exceed the excess of— 

23 ‘‘(1) the sum of— 

24 ‘‘(A) the regular tax liability (as defined in 

25 section 26(b)) for such taxable year, plus 


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1 ‘‘(B) the tax imposed by section 55 for 

2 such taxable year and any prior taxable year 

3 beginning after 1986 and not taken into ac4 count under section 53 for any prior taxable 

5 year, over 

6 ‘‘(2) the sum of the credits allowable under sub7 part A and sections 27, 30, and 30B for the taxable 

8 year. 

9 ‘‘(g) REDUCTION IN BASIS.—For purposes of this 

10 subtitle, if a credit is allowed under this section for any 

11 expenditure with respect to any property, the increase in 

12 the basis of such property which would (but for this para13 graph) result from such expenditure shall be reduced by 

14 the amount of the credit so allowed. 

15 ‘‘(h) NO DOUBLE BENEFIT.— 

16 ‘‘(1) COORDINATION WITH OTHER DEDUCTIONS

17 AND CREDITS.—Except as provided in paragraph 

18 (2), the amount of any deduction or other credit al19 lowable under this chapter for any cost taken into 

20 account in determining the amount of the credit 

21 under subsection (a) shall be reduced by the amount 

22 of such credit attributable to such cost. 

23 ‘‘(2) RESEARCH AND DEVELOPMENT COSTS.— 

24 ‘‘(A) IN GENERAL.—Except as provided in 

25 subparagraph (B), any amount described in 


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1 subsection (b)(1)(C) taken into account in de2 termining the amount of the credit under sub3 section (a) for any taxable year shall not be 

4 taken into account for purposes of determining 

5 the credit under section 41 for such taxable 

6 year. 

7 ‘‘(B) COSTS TAKEN INTO ACCOUNT IN DE8 TERMINING BASE PERIOD RESEARCH EX9 PENSES.—Any amounts described in subsection 

10 (b)(1)(C) taken into account in determining the 

11 amount of the credit under subsection (a) for 

12 any taxable year which are qualified research 

13 expenses (within the meaning of section 41(b)) 

14 shall be taken into account in determining base 

15 period research expenses for purposes of apply16 ing section 41 to subsequent taxable years. 

17 ‘‘(i) BUSINESS CARRYOVERS ALLOWED.—If the cred18 it allowable under subsection (a) for a taxable year exceeds 

19 the limitation under subsection (f) for such taxable year, 

20 such excess (to the extent of the credit allowable with re21 spect to property subject to the allowance for depreciation) 

22 shall be allowed as a credit carryback and carryforward 

23 under rules similar to the rules of section 39. 


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1 ‘‘(j) SPECIAL RULES.—For purposes of this section, 

2 rules similar to the rules of section 179A(e)(4) and para3 graphs (1) and (2) of section 41(f) shall apply 

4 ‘‘(k) ELECTION NOT TO TAKE CREDIT.—No credit 

5 shall be allowed under subsection (a) for any property if 

6 the taxpayer elects not to have this section apply to such 

7 property. 

8 ‘‘(l) REGULATIONS.—The Secretary shall prescribe 

9 such regulations as necessary to carry out the provisions 

10 of this section. 

11 ‘‘(m) TERMINATION.—This section shall not apply to 

12 any qualified investment after December 31, 2010.’’. 

13 (b) CONFORMING AMENDMENTS.— 

14 (1) Section 1016(a) is amended by striking 

15 ‘‘and’’ at the end of paragraph (36), by striking the 

16 period at the end of paragraph (37) and inserting ‘‘, 

17 and’’, and by adding at the end the following new 

18 paragraph: 

19 ‘‘(38) to the extent provided in section 

20 30D(g).’’. 

21 (2) Section 6501(m) is amended by inserting 

22 ‘‘30D(k),’’ after ‘‘30C(e)(5),’’. 

23 (3) The table of sections for subpart B of part 

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1 serting after the item relating to section 30C the fol2 lowing new item: 

‘‘Sec. 30D. Advanced technology motor vehicles manufacturing credit.’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to amounts incurred in taxable 

5 years beginning after December 31, 2005. 

6 SEC. 203. TAX INCENTIVES FOR PRIVATE FLEETS. 

7 (a) IN GENERAL.—Subpart E of part IV of sub8 chapter A of chapter 1 is amended by inserting after sec9 tion 48B the following new section: 

10 ‘‘SEC. 48C. FUEL-EFFICIENT FLEET CREDIT. 

11 ‘‘(a) GENERAL RULE.—For purposes of section 46, 

12 the fuel-efficient fleet credit for any taxable year is 15 per13 cent of the qualified fuel-efficient vehicle investment 

14 amount of an eligible taxpayer for such taxable year. 

15 ‘‘(b) VEHICLE PURCHASE REQUIREMENT.—In the 

16 case of any eligible taxpayer which places less than 10 

17 qualified fuel-efficient vehicles in service during the tax18 able year, the qualified fuel-efficient vehicle investment 

19 amount shall be zero. 

20 ‘‘(c) QUALIFIED FUEL-EFFICIENT VEHICLE INVEST21 MENT AMOUNT.—For purposes of this section— 

22 ‘‘(1) IN GENERAL.—The term ‘qualified fuel-ef23 ficient vehicle investment amount’ means the basis 

24 of any qualified fuel-efficient vehicle placed in serv25 ice by an eligible taxpayer during the taxable year. 


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1 ‘‘(2) QUALIFIED FUEL-EFFICIENT VEHICLE.— 

2 The term ‘qualified fuel-efficient vehicle’ means an 

3 automobile which has a fuel economy which is at 

4 least 125 percent greater than the average fuel econ5 omy standard for an automobile of the same class 

6 and model year. 

7 ‘‘(3) OTHER TERMS.—The terms ‘automobile’, 

8 ‘average fuel economy standard’, ‘fuel economy’, and 

9 ‘model year’ have the meanings given to such terms 

10 under section 32901 of title 49, United States Code. 

11 ‘‘(d) ELIGIBLE TAXPAYER.—The term ‘eligible tax12 payer’ means, with respect to any taxable year, a taxpayer 

13 who owns a fleet of 100 or more vehicles which are used 

14 in the trade or business of the taxpayer on the first day 

15 of such taxable year. 

16 ‘‘(e) TERMINATION.—This section shall not apply to 

17 any vehicle placed in service after December 31, 2010.’’. 

18 (b) CREDIT TREATED AS PART OF INVESTMENT

19 CREDIT.—Section 46 is amended by striking ‘‘and’’ at the 

20 end of paragraph (3), by striking the period at the end 

21 of paragraph (4) and inserting ‘‘, and’’, and by adding 

22 at the end the following new paragraph: 

23 ‘‘(5) the fuel-efficient fleet credit.’’. 

24 (c) CONFORMING AMENDMENTS.— 


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1 (1) Section 49(a)(1)(C) is amended by striking 

2 ‘‘and’’ at the end of clause (iii), by striking the pe3 riod at the end of clause (iv) and inserting ‘‘, and’’, 

4 and by adding at the end the following new clause: 

5 ‘‘(v) the basis of any qualified fuel-ef6 ficient vehicle which is taken into account 

7 under section 48C.’’. 

8 (2) The table of sections for subpart E of part 

9 IV of subchapter A of chapter 1 is amended by in10 serting after the item relating to section 48 the fol11 lowing new item: 

‘‘Sec. 48C. Fuel-efficient fleet credit.’’. 

12 (d) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to periods after December 31, 

14 2005, in taxable years ending after such date, under rules 

15 similar to the rules of section 48(m) of the Internal Rev16 enue Code of 1986 (as in effect on the day before the date 

17 of the enactment of the Revenue Reconciliation Act of 

18 1990). 

19 SEC. 204. MODIFICATION OF ALTERNATIVE VEHICLE RE20 FUELING PROPERTY CREDIT. 

21 (a) INCREASE IN CREDIT AMOUNT.—Subsection (a) 

22 of section 30C is amended by striking ‘‘30 percent’’ and 

23 inserting ‘‘50 percent’’. 


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1 (b) CREDIT ALLOWABLE AGAINST ALTERNATIVE

2 MINIMUM TAX.—Paragraph (2) of section 30C is amend3 ed to read as follows: 

4 ‘‘(2) PERSONAL CREDIT.—The credit allowed 

5 under subsection (a) (after the application of para6 graph (1)) for any taxable year shall not exceed the 

7 excess (if any) of— 

8 ‘‘(A) the sum of the regular tax for the 

9 taxable year plus the tax imposed by section 55, 

10 over 

11 ‘‘(B) the sum of the credits allowable 

12 under subpart A and sections 27, 30, and 

13 30B.’’. 

14 (c) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to taxable years beginning after 

16 December 31, 2005. 

17 SEC. 205. INCLUSION OF HEAVY VEHICLES IN LIMITATION 

18 ON DEPRECIATION OF CERTAIN LUXURY 

19 AUTOMOBILES. 

20 (a) IN GENERAL.—Section 280F(d)(5)(A) (defining 

21 passenger automobile) is amended— 

22 (1) by striking clause (ii) and inserting the fol23 lowing new clause: 


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1 ‘‘(ii)(I) which is rated at 6,000 

2 pounds unloaded gross vehicle weight or 

3 less, or 

4 ‘‘(II) which is rated at more than 

5 6,000 pounds but not more than 14,000 

6 pounds gross vehicle weight.’’, 

7 (2) by striking ‘‘clause (ii)’’ in the second sen8 tence and inserting ‘‘clause (ii)(I)’’. 

9 (b) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to property placed in service after 

11 the date of the enactment of this Act. 

12 SEC. 206. IDLING REDUCTION TAX CREDIT. 

13 (a) IN GENERAL.—Subpart D of part IV of sub14 chapter A of chapter 1 (relating to business-related cred15 its) is amended by adding at the end the following new 

16 section: 

17 ‘‘SEC. 45N. IDLING REDUCTION CREDIT. 

18 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

19 the idling reduction tax credit determined under this sec20 tion for the taxable year is an amount equal to 25 percent 

21 of the amount paid or incurred for each qualifying idling 

22 reduction device placed in service by the taxpayer during 

23 the taxable year. 


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1 ‘‘(b) LIMITATION.—The maximum amount allowed as 

2 a credit under subsection (a) shall not exceed $1,000 per 

3 device. 

4 ‘‘(c) DEFINITIONS.—For purposes of subsection 

5 (a)— 

6 ‘‘(1) QUALIFYING IDLING REDUCTION DE7 VICE.—The term ‘qualifying idling reduction device’ 

8 means any device or system of devices that— 

9 ‘‘(A) is installed on a heavy-duty diesel10 powered on-highway vehicle, 

11 ‘‘(B) is designed to provide to such vehicle 

12 those services (such as heat, air conditioning, or 

13 electricity) that would otherwise require the op14 eration of the main drive engine while the vehi15 cle is temporarily parked or remains stationary, 

16 ‘‘(C) the original use of which commences 

17 with the taxpayer, 

18 ‘‘(D) is acquired for use by the taxpayer 

19 and not for resale, and 

20 ‘‘(E) is certified by the Secretary of En21 ergy, in consultation with the Administrator of 

22 the Environmental Protection Agency and the 

23 Secretary of Transportation, to reduce long-du24 ration idling of such vehicle at a motor vehicle 


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1 rest stop or other location where such vehicles 

2 are temporarily parked or remain stationary. 

3 ‘‘(2) HEAVY-DUTY DIESEL-POWERED ON-HIGH4 WAY VEHICLE.—The term ‘heavy-duty diesel-pow5 ered on-highway vehicle’ means any vehicle, ma6 chine, tractor, trailer, or semi-trailer propelled or 

7 drawn by mechanical power and used upon the high8 ways in the transportation of passengers or prop9 erty, or any combination thereof determined by the 

10 Federal Highway Administration. 

11 ‘‘(3) LONG-DURATION IDLING.—The term ‘long12 duration idling’ means the operation of a main drive 

13 engine, for a period greater than 15 consecutive 

14 minutes, where the main drive engine is not engaged 

15 in gear. Such term does not apply to routine stop16 pages associated with traffic movement or conges17 tion. 

18 ‘‘(d) NO DOUBLE BENEFIT.—For purposes of this 

19 section— 

20 ‘‘(1) REDUCTION IN BASIS.—If a credit is de21 termined under this section with respect to any 

22 property by reason of expenditures described in sub23 section (a), the basis of such property shall be re24 duced by the amount of the credit so determined. 


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1 ‘‘(2) OTHER DEDUCTIONS AND CREDITS.—No 

2 deduction or credit shall be allowed under any other 

3 provision of this chapter with respect to the amount 

4 of the credit determined under this section. 

5 ‘‘(e) ELECTION NOT TO CLAIM CREDIT.—This sec6 tion shall not apply to a taxpayer for any taxable year 

7 if such taxpayer elects to have this section not apply for 

8 such taxable year. 

9 ‘‘(f) TERMINATION.—This section shall not apply to 

10 any property placed in service after December 31, 2010.’’. 

11 (b) CREDIT TO BE PART OF GENERAL BUSINESS

12 CREDIT.—Subsection (b) of section 38 (relating to general 

13 business credit) is amended by striking ‘‘and’’ at the end 

14 of paragraph (29), by striking the period at the end of 

15 paragraph (30) and inserting ‘‘, plus’’ , and by adding 

16 at the end the following new paragraph: 

17 ‘‘(31) the idling reduction tax credit determined 

18 under section 45N(a).’’. 

19 (c) CONFORMING AMENDMENTS.— 

20 (1) The table of sections for subpart D of part 

21 IV of subchapter A of chapter 1 is amended by in22 serting after the item relating to section 45M the 

23 following new item: 

‘‘Sec. 45N. Idling reduction credit.’’. 

24 (2) Section 1016(a), as amended by this Act, is 

25 amended by striking ‘‘and’’ at the end of paragraph 


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1 (37), by striking the period at the end of paragraph 

2 (38) and inserting ‘‘, and’’, and by adding at the 

3 end the following: 

4 ‘‘(39) in the case of a facility with respect to 

5 which a credit was allowed under section 45N, to the 

6 extent provided in section 45N(d)(A).’’. 

7 (3) Section 6501(m) is amended by inserting 

8 ‘‘45N(e),’’ after ‘‘45D(c)(4),’’. 

9 (d) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to taxable years beginning after 

11 December 31, 2006. 

12 (e) DETERMINATION OF CERTIFICATION STANDARDS

13 BY SECRETARY OF ENERGY FOR CERTIFYING IDLING RE14 DUCTION DEVICES.—Not later than 6 months after the 

15 date of the enactment of this Act and in order to reduce 

16 air pollution and fuel consumption, the Secretary of En17 ergy, in consultation with the Administrator of the Envi18 ronmental Protection Agency and the Secretary of Trans19 portation, shall publish the standards under which the 

20 Secretary, in consultation with the Administrator of the 

21 Environmental Protection Agency and the Secretary of 

22 Transportation, will, for purposes of section 45N of the 

23 Internal Revenue Code of 1986 (as added by this section), 

24 certify the idling reduction devices which will reduce long25 duration idling of vehicles at motor vehicle rest stops or 


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1 other locations where such vehicles are temporarily parked 

2 or remain stationary in order to reduce air pollution and 

3 fuel consumption. 

4 TITLE III—ADDITIONAL 

5 INCENTIVES 

6 SEC. 301. ENERGY CREDIT FOR COMBINED HEAT AND 

7 POWER SYSTEM PROPERTY. 

8 (a) IN GENERAL.—Section 48(a)(3)(A) (defining en9 ergy property) is by striking ‘‘or’’ at the end of clause 

10 (iii), by inserting ‘‘or’’ at the end of clause (iv), and by 

11 adding at the end the following new clause: 

12 ‘‘(v) combined heat and power system 

13 property,’’. 

14 (b) COMBINED HEAT AND POWER SYSTEM PROP15 ERTY.—Section 48 is amended by adding at the end the 

16 following new subsection: 

17 ‘‘(d) COMBINED HEAT AND POWER SYSTEM PROP18 ERTY.—For purposes of subsection (a)(3)(A)(v)— 

19 ‘‘(1) COMBINED HEAT AND POWER SYSTEM

20 PROPERTY.—The term ‘combined heat and power 

21 system property’ means property comprising a sys22 tem— 

23 ‘‘(A) which uses the same energy source 

24 for the simultaneous or sequential generation of 

25 electrical power, mechanical shaft power, or 


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1 both, in combination with the generation of 

2 steam or other forms of useful thermal energy 

3 (including heating and cooling applications), 

4 ‘‘(B) which has an electrical capacity of 

5 not more than 15 megawatts or a mechanical 

6 energy capacity of not more than 2,000 horse7 power or an equivalent combination of electrical 

8 and mechanical energy capacities, 

9 ‘‘(C) which produces— 

10 ‘‘(i) at least 20 percent of its total 

11 useful energy in the form of thermal en12 ergy which is not used to produce electrical 

13 or mechanical power (or combination 

14 thereof), and 

15 ‘‘(ii) at least 20 percent of its total 

16 useful energy in the form of electrical or 

17 mechanical power (or combination thereof), 

18 ‘‘(D) the energy efficiency percentage of 

19 which exceeds 60 percent, and 

20 ‘‘(E) which is placed in service before Jan21 uary 1, 2011. 

22 ‘‘(2) SPECIAL RULES.— 

23 ‘‘(A) ENERGY EFFICIENCY PERCENT24 AGE.—For purposes of this subsection, the enVerDate Aug 31 2005 02:10 May 09, 2006 Jkt 049200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S2748.IS S2748

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1 ergy efficiency percentage of a system is the 

2 fraction— 

3 ‘‘(i) the numerator of which is the 

4 total useful electrical, thermal, and me5 chanical power produced by the system at 

6 normal operating rates, and expected to be 

7 consumed in its normal application, and 

8 ‘‘(ii) the denominator of which is the 

9 higher heating value of the primary fuel 

10 sources for the system. 

11 ‘‘(B) DETERMINATIONS MADE ON BTU

12 BASIS.—The energy efficiency percentage and 

13 the percentages under paragraph (1)(C) shall 

14 be determined on a Btu basis. 

15 ‘‘(C) INPUT AND OUTPUT PROPERTY NOT

16 INCLUDED.—The term ‘combined heat and 

17 power system property’ does not include prop18 erty used to transport the energy source to the 

19 facility or to distribute energy produced by the 

20 facility. 

21 ‘‘(D) CERTAIN EXCEPTION NOT TO

22 APPLY.—The first sentence of the matter in 

23 subsection (a)(3) which follows subparagraph 

24 (D) thereof shall not apply to combined heat 

25 and power system property. 


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1 ‘‘(3) SYSTEMS USING BAGASSE.—If a system is 

2 designed to use bagasse for at least 90 percent of 

3 the energy source— 

4 ‘‘(A) paragraph (1)(D) shall not apply, but 

5 ‘‘(B) the amount of credit determined 

6 under subsection (a) with respect to such sys7 tem shall not exceed the amount which bears 

8 the same ratio to such amount of credit (deter9 mined without regard to this paragraph) as the 

10 energy efficiency percentage of such system 

11 bears to 60 percent. 

12 ‘‘(4) NONAPPLICATION OF CERTAIN RULES.— 

13 For purposes of determining if the term ‘combined 

14 heat and power system property’ includes tech15 nologies which generate electricity or mechanical 

16 power using back-pressure steam turbines in place of 

17 existing pressure-reducing valves or which make use 

18 of waste heat from industrial processes such as by 

19 using organic rankin, stirling, or kalina heat engine 

20 systems, paragraph (1) shall be applied without re21 gard to subparagraphs (C) and (D) thereof .’’. 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to periods after December 31, 

24 2006, in taxable years ending after such date, under rules 

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1 enue Code of 1986 (as in effect on the day before the date 

2 of the enactment of the Revenue Reconciliation Act of 

3 1990). 

4 SEC. 302. THREE-YEAR APPLICABLE RECOVERY PERIOD 

5 FOR DEPRECIATION OF QUALIFIED ENERGY 

6 MANAGEMENT DEVICES. 

7 (a) IN GENERAL.—Section 168(e)(3)(A) (defining 3- 

8 year property) is amended by striking ‘‘and’’ at the end 

9 of clause (ii), by striking the period at the end of clause 

10 (iii) and inserting ‘‘, and’’, and by adding at the end the 

11 following new clause: 

12 ‘‘(iv) any qualified energy manage13 ment device.’’. 

14 (b) DEFINITION OF QUALIFIED ENERGY MANAGE15 MENT DEVICE.—Section 168(i) (relating to definitions 

16 and special rules) is amended by inserting at the end the 

17 following new paragraph: 

18 ‘‘(18) QUALIFIED ENERGY MANAGEMENT DE19 VICE.— 

20 ‘‘(A) IN GENERAL.—The term ‘qualified 

21 energy management device’ means any energy 

22 management device which is placed in service 

23 before January 1, 2011, by a taxpayer who is 

24 a supplier of electric energy or a provider of 

25 electric energy services. 


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1 ‘‘(B) ENERGY MANAGEMENT DEVICE.— 

2 For purposes of subparagraph (A), the term 

3 ‘energy management device’ means any meter 

4 or metering device which is used by the tax5 payer— 

6 ‘‘(i) to measure and record electricity 

7 usage data on a time-differentiated basis 

8 in at least 4 separate time segments per 

9 day, and 

10 ‘‘(ii) to provide such data on at least 

11 a monthly basis to both consumers and the 

12 taxpayer.’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to property placed in service after 

15 the date of the enactment of this Act, in taxable years 

16 ending after such date. 

17 SEC. 303. THREE-YEAR APPLICABLE RECOVERY PERIOD 

18 FOR DEPRECIATION OF QUALIFIED WATER 

19 SUBMETERING DEVICES. 

20 (a) IN GENERAL.—Section 168(e)(3)(A) (defining 3- 

21 year property), as amended by this Act, is amended by 

22 striking ‘‘and’’ at the end of clause (iii), by striking the 

23 period at the end of clause (iv) and inserting ‘‘, and’’, and 

24 by adding at the end the following new clause: 


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1 ‘‘(v) any qualified water submetering 

2 device.’’. 

3 (b) DEFINITION OF QUALIFIED WATER SUB4 METERING DEVICE.—Section 168(i) (relating to defini5 tions and special rules), as amended by this Act, is amend6 ed by inserting at the end the following new paragraph: 

7 ‘‘(19) QUALIFIED WATER SUBMETERING DE8 VICE.— 

9 ‘‘(A) IN GENERAL.—The term ‘qualified 

10 water submetering device’ means any water 

11 submetering device which is placed in service 

12 before January 1, 2011, by a taxpayer who is 

13 an eligible resupplier with respect to the unit 

14 for which the device is placed in service. 

15 ‘‘(B) WATER SUBMETERING DEVICE.—For 

16 purposes of this paragraph, the term ‘water 

17 submetering device’ means any submetering de18 vice which is used by the taxpayer— 

19 ‘‘(i) to measure and record water 

20 usage data, and 

21 ‘‘(ii) to provide such data on at least 

22 a monthly basis to both consumers and the 

23 taxpayer. 

24 ‘‘(C) ELIGIBLE RESUPPLIER.—For pur25 poses of subparagraph (A), the term ‘eligible reVerDate Aug 31 2005 02:10 May 09, 2006 Jkt 049200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S2748.IS S2748

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1 supplier’ means any taxpayer who purchases 

2 and installs qualified water submetering devices 

3 in every unit in any multi-unit property.’’. 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to property placed in service after 

6 the date of the enactment of this Act, in taxable years 

7 ending after such date. 

8 TITLE IV—REVENUE 

9 PROVISIONS 

10 SEC. 401. REVALUATION OF LIFO INVENTORIES OF LARGE 

11 INTEGRATED OIL COMPANIES. 

12 (a) GENERAL RULE.—Notwithstanding any other 

13 provision of law, if a taxpayer is an applicable integrated 

14 oil company for its last taxable year ending in calendar 

15 year 2005, the taxpayer shall— 

16 (1) increase, effective as of the close of such 

17 taxable year, the value of each historic LIFO layer 

18 of inventories of crude oil, natural gas, or any other 

19 petroleum product (within the meaning of section 

20 4611) by the layer adjustment amount, and 

21 (2) decrease its cost of goods sold for such tax22 able year by the aggregate amount of the increases 

23 under paragraph (1). 

24 If the aggregate amount of the increases under paragraph 

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1 able year, the taxpayer’s gross income for such taxable 

2 year shall be increased by the amount of such excess. 

3 (b) LAYER ADJUSTMENT AMOUNT.—For purposes of 

4 this section— 

5 (1) IN GENERAL.—The term ‘‘layer adjustment 

6 amount’’ means, with respect to any historic LIFO 

7 layer, the product of— 

8 (A) $18.75, and 

9 (B) the number of barrels of crude oil (or 

10 in the case of natural gas or other petroleum 

11 products, the number of barrel-of-oil equiva12 lents) represented by the layer. 

13 (2) BARREL-OF-OIL EQUIVALENT.—The term 

14 ‘‘barrel-of-oil equivalent’’ has the meaning given 

15 such term by section 29(d)(5) (as in effect before its 

16 redesignation by the Energy Tax Incentives Act of 

17 2005). 

18 (c) APPLICATION OF REQUIREMENT.— 

19 (1) NO CHANGE IN METHOD OF ACCOUNTING.— 

20 Any adjustment required by this section shall not be 

21 treated as a change in method of accounting. 

22 (2) UNDERPAYMENTS OF ESTIMATED TAX.—No 

23 addition to the tax shall be made under section 6655 

24 of the Internal Revenue Code of 1986 (relating to 

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1 spect to any underpayment of an installment re2 quired to be paid with respect to the taxable year 

3 described in subsection (a) to the extent such under4 payment was created or increased by this section. 

5 (d) APPLICABLE INTEGRATED OIL COMPANY.—For 

6 purposes of this section, the term ‘‘applicable integrated 

7 oil company’’ means an integrated oil company (as defined 

8 in section 291(b)(4) of the Internal Revenue Code of 

9 1986) which has an average daily worldwide production 

10 of crude oil of at least 500,000 barrels for the taxable 

11 year and which had gross receipts in excess of 

12 $1,000,000,000 for its last taxable year ending during cal13 endar year 2005. For purposes of this subsection all per14 sons treated as a single employer under subsections (a) 

15 and (b) of section 52 of the Internal Revenue Code of 

16 1986 shall be treated as 1 person and, in the case of a 

17 short taxable year, the rule under section 448(c)(3)(B) 

18 shall apply. 

19 SEC. 402. ELIMINATION OF AMORTIZATION OF GEOLOGI20 CAL AND GEOPHYSICAL EXPENDITURES FOR 

21 MAJOR INTEGRATED OIL COMPANIES. 

22 (a) IN GENERAL.—Section 167(h) is amended by 

23 adding at the end the following new paragraph: 

24 ‘‘(5) NONAPPLICATION TO MAJOR INTEGRATED

25 OIL COMPANIES.—This subsection shall not apply 


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1 with respect to any expenses paid or incurred for 

2 any taxable year by any integrated oil company (as 

3 defined in section 291(b)(4)) which has an average 

4 daily worldwide production of crude oil of at least 

5 500,000 barrels for such taxable year.’’. 

6 (b) EFFECTIVE DATE.—The amendment made by 

7 this section shall take effect as if included in the amend8 ment made by section 1329(a) of the Energy Policy Act 

9 of 2005. 

10 SEC. 403. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 

11 APPLICABLE TO LARGE INTEGRATED OIL 

12 COMPANIES WHICH ARE DUAL CAPACITY 

13 TAXPAYERS. 

14 (a) IN GENERAL.—Section 901 (relating to credit for 

15 taxes of foreign countries and of possessions of the United 

16 States) is amended by redesignating subsection (m) as (n) 

17 and by inserting after subsection (l) the following new sub18 section: 

19 ‘‘(m) SPECIAL RULES RELATING TO LARGE INTE20 GRATED OIL COMPANIES WHICH ARE DUAL CAPACITY

21 TAXPAYERS.— 

22 ‘‘(1) GENERAL RULE.—Notwithstanding any 

23 other provision of this chapter, any amount paid or 

24 accrued by a dual capacity taxpayer which is a large 

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1 session of the United States for any period shall not 

2 be considered a tax— 

3 ‘‘(A) if, for such period, the foreign coun4 try or possession does not impose a generally 

5 applicable income tax, or 

6 ‘‘(B) to the extent such amount exceeds 

7 the amount (determined in accordance with reg8 ulations) which— 

9 ‘‘(i) is paid by such dual capacity tax10 payer pursuant to the generally applicable 

11 income tax imposed by the country or pos12 session, or 

13 ‘‘(ii) would be paid if the generally ap14 plicable income tax imposed by the country 

15 or possession were applicable to such dual 

16 capacity taxpayer. 

17 Nothing in this paragraph shall be construed to 

18 imply the proper treatment of any such amount 

19 not in excess of the amount determined under 

20 subparagraph (B). 

21 ‘‘(2) DUAL CAPACITY TAXPAYER.—For pur22 poses of this subsection, the term ‘dual capacity tax23 payer’ means, with respect to any foreign country or 

24 possession of the United States, a person who— 


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1 ‘‘(A) is subject to a levy of such country or 

2 possession, and 

3 ‘‘(B) receives (or will receive) directly or 

4 indirectly a specific economic benefit (as deter5 mined in accordance with regulations) from 

6 such country or possession. 

7 ‘‘(3) GENERALLY APPLICABLE INCOME TAX.— 

8 For purposes of this subsection— 

9 ‘‘(A) IN GENERAL.—The term ‘generally 

10 applicable income tax’ means an income tax (or 

11 a series of income taxes) which is generally im12 posed under the laws of a foreign country or 

13 possession on income derived from the conduct 

14 of a trade or business within such country or 

15 possession. 

16 ‘‘(B) EXCEPTIONS.—Such term shall not 

17 include a tax unless it has substantial applica18 tion, by its terms and in practice, to— 

19 ‘‘(i) persons who are not dual capacity 

20 taxpayers, and 

21 ‘‘(ii) persons who are citizens or resi22 dents of the foreign country or possession. 

23 ‘‘(4) LARGE INTEGRATED OIL COMPANY.—For 

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1 able year, an integrated oil company (as defined in 

2 section 291(b)(4)) which— 

3 ‘‘(A) had gross receipts in excess of 

4 $1,000,000,000 for such taxable year, and 

5 ‘‘(B) has an average daily worldwide pro6 duction of crude oil of at least 500,000 barrels 

7 for such taxable year.’’ 

8 (b) EFFECTIVE DATE.— 

9 (1) IN GENERAL.—The amendments made by 

10 this section shall apply to taxes paid or accrued in 

11 taxable years beginning after the date of the enact12 ment of this Act. 

13 (2) CONTRARY TREATY OBLIGATIONS

14 UPHELD.—The amendments made by this section 

15 shall not apply to the extent contrary to any treaty 

16 obligation of the United States. 

Æ 


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