I 

110TH CONGRESS 

1ST SESSION H. R. 1821 

To amend the Internal Revenue Code of 1986 to modify the rules relating 

to clean energy renewable bonds. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 29, 2007 

Mr. MCDERMOTT (for himself and Mr. RAMSTAD) introduced the following 

bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to modify 

the rules relating to clean energy renewable bonds. 

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. 

4 This Act may be cited as the ‘‘Clean Renewable En5 ergy for Public Power Act of 2007’’. 

6 SEC. 2. MODIFICATIONS RELATING TO CLEAN RENEWABLE 

7 ENERGY BONDS. 

8 (a) CLEAN RENEWABLE ENERGY BOND.—Paragraph 

9 (1) of section 54(d) of the Internal Revenue Code of 1986 

10 (defining clean renewable energy bond) is amended— 


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1 (1) in subparagraph (A) by striking ‘‘pursuant’’ 

2 and all that follows through ‘‘subsection (f)(2)’’, 

3 (2) in subparagraph (B) by striking ‘‘95 per4 cent or more of the proceeds’’ and inserting ‘‘90 per5 cent or more of the net proceeds’’, and 

6 (3) in subparagraph (D) by striking ‘‘subsection 

7 (h)’’ and inserting ‘‘subsection (g)’’. 

8 (b) QUALIFIED PROJECT.—Subparagraph (A) of sec9 tion 54(d)(2) of such Code (defining qualified project) is 

10 amended to read as follows: 

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

12 project’ means any qualified facility (as deter13 mined under section 45(d) without regard to 

14 paragraphs (8) and (10) thereof and to any 

15 placed in service requirement) owned by a 

16 qualified borrower and also without regard to 

17 the following— 

18 ‘‘(i) in the case of a qualified facility 

19 described in section 45(d)(9) (regarding in20 cremental hydropower production), any de21 termination of incremental hydropower 

22 production and related calculations shall be 

23 determined by the qualified borrower based 

24 on a methodology that meets Federal EnVerDate Aug 31 2005 05:52 Apr 05, 2007 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1821.IH H1821

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1 ergy Regulatory Commission standards; 

2 and 

3 ‘‘(ii) in the case of a qualified facility 

4 described in section 45(d)(9) (regarding 

5 non-hydropower production), the facility 

6 need not be licensed by the Federal Energy 

7 Regulation Commission if the facility, 

8 when constructed, will meet Federal En9 ergy Regulatory Commission licensing re10 quirements and other applicable environ11 mental, licensing, and regulatory require12 ments.’’. 

13 (c) REIMBURSEMENT.—Subparagraph (C) of section 

14 54(d)(2) of such Code (relating to reimbursement) is 

15 amended to read as follows: 

16 ‘‘(C) REIMBURSEMENT.—For purposes of 

17 paragraph (1)(B), proceeds of a clean renew18 able energy bond may be issued to reimburse a 

19 qualified borrower for amounts paid after the 

20 date of the enactment of this section in the 

21 same manner as proceeds of State and local 

22 government obligations the interest upon which 

23 is exempt from tax under section 103.’’. 


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1 (d) CHANGE IN USE.—Subparagraph (D) of section 

2 54(d)(2) of such Code (relating to treatment of changes 

3 in use) is amended by striking ‘‘or qualified issuer’’. 

4 (e) MAXIMUM TERM.—Paragraph (2) of section 

5 54(e) of such Code (relating to maximum term) is amend6 ed by striking ‘‘without regard to the requirements of sub7 section (1)(6) and’’. 

8 (f) REPEAL OF LIMITATION ON AMOUNT OF BONDS

9 DESIGNATED.—Section 54 of such Code is amended by 

10 striking subsection (f) (relating to repeal of limitation on 

11 amount of bonds designated). 

12 (g) SPECIAL RULES RELATING TO EXPENDI13 TURES.—Subsection (h) of section 54 of such Code (relat14 ing to special rules relating to expenditures) is amended— 

15 (1) in paragraph (1)(A) by striking ‘‘95 percent 

16 of the proceeds’’ and inserting ‘‘90 percent of the 

17 net proceeds’’, 

18 (2) in paragraph (1)(B)— 

19 (A) by striking ‘‘10 percent of the pro20 ceeds’’ and inserting ‘‘5 percent of the net pro21 ceeds’’, and 

22 (B) by striking ‘‘the 6-month period begin23 ning on’’ both places it appears and inserting 

24 ‘‘1 year of’’, and 


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1 (3) in paragraph (1)(C) by inserting ‘‘net’’ be2 fore ‘‘proceeds’’, 

3 (4) in paragraph (3) by striking ‘‘95 percent of 

4 the proceeds’’ and inserting ‘‘90 percent of the net 

5 proceeds’’. 

6 (h) REPEAL OF SPECIAL RULES RELATING TO ARBI7 TRAGE.—Section 54 of such Code is amended by striking 

8 subsection (i) (relating to repeal of special rules relating 

9 to arbitrage). 

10 (i) PUBLIC POWER ENTITY.—Subsection (j) of sec11 tion 54 of such Code (defining Cooperative electric com12 pany; qualified energy tax credit bond lender; govern13 mental body; qualified borrower) is amended— 

14 (1) by redesignating paragraphs (4) and (5) as 

15 paragraph (5) and (6) and by inserting after para16 graph (3) the following new paragraph: 

17 ‘‘(4) PUBLIC POWER ENTITY.—The term ‘public 

18 power entity’ means a State utility with a service ob19 ligation, as such terms are defined in section 217 of 

20 the Federal Power Act (as in effect on the date of 

21 enactment of this paragraph).’’, 

22 (2) in paragraph (5), as so redesignated, by 

23 striking ‘‘or’’ at the end of subparagraph (B), by 

24 striking the period at the end of subparagraph (C) 


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1 and inserting ‘‘, or’’, and by adding at the end the 

2 following: 

3 ‘‘(D) a public power entity.’’, and 

4 (3) in paragraph (6), as so redesignated, by 

5 striking ‘‘or’’ at the end of subparagraph (A), by 

6 striking the period at the end of subparagraph (B) 

7 and inserting ‘‘, or’’, and by adding at the end the 

8 following: 

9 ‘‘(C) a public power entity.’’. 

10 (j) REPEAL OF RATABLE PRINCIPAL AMORTIZATION

11 REQUIREMENT.—Subsection (l) of section 54 of such 

12 Code (relating to other definitions and special rules) is 

13 amended by striking paragraph (5) and redesignating 

14 paragraph (6) as paragraph (5). 

15 (k) NET PROCEEDS.—Subsection (i) of section 54 of 

16 such Code (relating to other definitions and special rules), 

17 as amended by subsection (j), is amended by redesignating 

18 paragraphs (2), (3), (4), and (5) as paragraphs (4), (5), 

19 (6), and (7), respectively, and by inserting after paragraph 

20 (1) the following new paragraphs: 

21 ‘‘(2) NET PROCEEDS.—The term ‘net proceeds’ 

22 means, with respect to an issue, the proceeds of such 

23 issue reduced by amounts in a reasonably required 

24 reserve or replacement fund. 


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1 ‘‘(3) LIMITATION ON AMOUNT IN RESERVE OR

2 REPLACEMENT FUND WHICH MAY BE FINANCED BY

3 ISSUE.—A bond issued as part of an issue shall not 

4 be treated as a clean renewable energy bond if the 

5 amount of the proceeds from the sale of such issue 

6 which is part of any reserve or replacement fund ex7 ceeds 10 percent of the proceeds of the issue (or 

8 such higher amount which the issuer establishes is 

9 necessary to the satisfaction of the Secretary).’’. 

10 (l) OTHER SPECIAL RULES.—Subsection (i) of sec11 tion 54 of such Code ((relating to other definitions and 

12 special rules), as amended by subsections (j) and (k)) is 

13 amended by adding at the end the following new para14 graphs: 

15 ‘‘(8) CREDITS MAY BE SEPARATED.—There 

16 may be a separation (including at issuance) of the 

17 ownership of a clean renewable energy bond and the 

18 entitlement to the credit under this section with re19 spect to such bond. In case of any such separation, 

20 the credit under this section shall be allowed to the 

21 person who on the credit allowance date holds the 

22 instrument evidencing the entitlement to the credit 

23 and not to the holder of the bond. 

24 ‘‘(9) TREATMENT FOR ESTIMATED TAX PUR25 POSES.—Solely for the purposes of sections 6654 


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1 and 6655, the credit allowed by this section to a tax2 payer by reason of holding a qualified energy tax 

3 credit bond on a credit allowance date (or the credit 

4 in the case of a separation as provided in paragraph 

5 (8)) shall be treated as if it were a payment of esti6 mated tax made by the taxpayer on such date. 

7 ‘‘(10) CARRYBACK AND CARRYFORWARD OF UN8 USED CREDITS.—If the sum of the credit exceeds 

9 the limitation imposed by subsection (c) for any tax10 able year, any credits may be applied in a manner 

11 similar to the rules set forth in section 39.’’. 

12 (m) TERMINATION.—Subsection (m) of section 54 of 

13 such Code (relating to termination) is amended by striking 

14 ‘‘2008’’ and inserting ‘‘2013’’. 

15 (n) CLERICAL REDESIGNATIONS.—Section 54 of such 

16 Code, as amended by the preceding provisions of this sec17 tion, is amended by redesignating subsections (g), (h), (j), 

18 (k), (l), and (m) as subsections (f), (g), (h), (i), (j), and 

19 (k), respectively. 

20 (o) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to obligations issued after the date 

22 of the enactment of this Act. 

Æ 


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