J

Provision Effective 2004 2005 2006 2007 2008 2009 2010 201

Conservation Provisions 

A. Residential and Business Property 

1. Credit for residential energy efficient property - 15% 

credit for residential solar hot water and wind (through 12/31/06) and photovoltaics (through 12/31/08), $2,000 maximum; election for credit or depreciation .......................................................................... tyea 12/31/03 -3 -15 -21 -25 -23 -22 --- -

2. Section 45 credit for electricity produced from 

certain sources (facilities placed in service through 12/31/06) .............................................................................. esfqfa DOE -77 -175 -304 -413 -446 -388 -328 -31

3. Tax incentives for fuel cells - 20% credit for 

non-business and business installation of qualifying ea 12/31/03 & fuel cells (sunset 12/31/06) .................................................. ppisa 12/31/03 -3 -9 -10 -6 -1 -1 [1] [

4. Energy efficient improvements to existing homes - 

20% credit, $2,000 maximum; no carryforward (sunset 12/31/06) ................................................................. pia 12/31/03 -23 -117 -117 -94 --- --- --- -

5. Energy efficient new homes - 30% efficiency/ 

$1,000 maximum (10% from envelope) and 50% efficiency/$2,000 maximum (10% from envelope) (sunset 12/31/06) ................................................................. hpa 12/31/03 -46 -96 -139 -90 -31 -6 --- -

6. 10% credit for combined heat and power system 

property - system maximum 15Mw or 2,000 hp, prorated for bagasse systems (sunset 12/31/06) ................ ppisa 12/31/03 -8 -13 -14 -9 -4 -2 [2] [

7. Credit for energy efficient appliances (sunset 

12/31/07) .............................................................................. apa 12/31/03 -40 -73 -63 -46 -23 -8 -2 [2

8. Energy efficient commercial building deduction - 

$1.50/sq ft deduction (sunset 12/31/07) ............................... tyba DOE -18 -47 -69 -86 -29 5 4 

9. Three-year applicable recovery period for 

depreciation of qualified energy management devices (sunset 12/31/07) .................................................... ppisa DOE -8 -28 -51 -65 -46 -4 18 2

10. Credit for electricity produced from advanced 

nuclear power facilities (facilities placed in service through 12/31/20) ................................................................. tyba 12/31/03 --- --- --- --- --- --- --- -

B. Fuels and Alternative Motor Vehicles 

1. Repeal of the 4.3 cent tax on rail diesel fuel and 

inland waterway barge fuels [3] ............................................ 1/1/04 -107 -156 -161 -166 -171 -176 -182 -18

2. Reduced motor fuel excise tax rate for diesel fuel 

blended with water ............................................................... 1/1/04 [4] [4] [4] [4] [4] [4] [4] [4

ESTIMATED BUDGET EFFECTS OF THE CONFERENCE AGREEMENT FOR 

[Millions of Dollars] 

Fiscal Years 2004 - 2013 

THE "ENERGY TAX POLICY ACT OF 2003" 
Page 2

Provision Effective 2004 2005 2006 2007 2008 2009 2010 201

3. Modifications to small ethanol producer credit ..................... tyba 12/31/03 -9 -17 -19 -20 -21 -22 -23 -1

4. Provide income tax credits for biodiesel fuel and 

biodiesel used to produce a qualified fuel mixture ($1.00/gallon for agribiodiesel and $0.50/gallon for 

biodiesel) (sunset 12/31/05) [5] ............................................ fpasoua 12/31/03 

5. Alcohol and biodiesel excise tax credit and 

extension of alcohol fuels income tax credit 

a. Extension of section 40 alcohol fuels income tax 

credit (sunset 12/31/10) .................................................... fsuora 12/31/03 --- --- --- --- -6 -13 -15 -1

b. Provide excise tax credit to certain blenders of 

alcohol fuel mixtures (52 cents per gallon of alcohol 

in 2004, 51 cents per gallon of alcohol after 2004) (sunset 12/31/10) .............................................................. fsuora 12/31/03 

c. Provide excise tax credit for biodiesel used to 

produce a qualified fuel mixture ($1.00/gallon for 

agribiodiesel and $0.50/gallon for biodiesel) (sunset 12/31/05) [5] ...................................................................... fsuora 12/31/03 -26 -41 -12 --- --- --- --- -

6. Nonapplication of export exemption to delivery of fuel 

to motor vehicles removed from the United States .............. soda DOE 

7. Modification of credit for electric vehicles - repeal 

phasedown of the credit under section 30 (sunset 12/31/06) .............................................................................. ppisa DOE 

8. Alternative motor vehicle credit [6] ....................................... ppisa DOE -190 -462 -714 -439 -256 -174 41 1

9. Modification and extension of deduction for refueling 

property through 2008 (through 2011 for hydrogen property) ............................................................................... ppisa DOE 

Total of Conservation Provisions ..................................................................... -558 -1,249 -1,694 -1,459 -1,057 -811 -487 -48Reliability Provisions 

1. Natural gas gathering pipelines treated as 7-year 

property ................................................................................ ppisa DOE --- -2 -3 -2 -2 -2 -1 -

2. Natural gas distribution pipelines treated as 15-year 

property ................................................................................ ppisa DOE -11 -34 -57 -87 -117 -143 -169 -19

3. New electricity transmission property rated 69kV or 

greater treated as 15-year property [7] ................................ ppisa DOE -9 -24 -51 -90 -131 -165 -196 -22

4. Expensing of capital costs incurred for production of 

diesel fuel in complying with Environmental Protection Agency sulfur regulations for small refiners (sunset one year after EPA regulation or 12/31/09) ......................... epoia 12/31/02 -7 -5 -6 -10 -21 -41 -16 

5. Credit for small refiners for production of diesel fuel 

in compliance with Environmental Protection Agency sulfur regulations for small refiners ......................... epoia 12/31/02 

6. Determination of small refiner exception to oil 

depletion deduction - modify definition of independent refiner from daily maximum run less than 50,000 barrels to average daily run less than 67,500 barrels ...................................................................... tyea DOE -9 -12 -12 -13 -13 -13 -14 -1

 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Negligible Revenue Effect - - 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Revenue Effects Included in Item #5

 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Negligible Revenue Effect - - 

 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Revenue Effects Included in Item #

 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Revenue Effects Included in Item #

 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Revenue Effects Included in Item #
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Provision Effective 2004 2005 2006 2007 2008 2009 2010 201

7. Sales or dispositions of transmission property to 

implement Federal Energy Regulatory Commission or State restructuring policy - election to recognize gain from an electric transmission transaction ratably over 8-year period subject to qualified reinvestment (sunset 12/31/06) ........................................... ta DOE -1,691 -1,717 -1,313 184 952 969 980 95

8. Modification to special rules for nuclear 

decommissioning costs - permits transfer of pre-1984 decommissioning costs to qualified fund (seller gets deduction on sale); eliminate cost of service requirement, permit full funding in qualified fund, and clarify treatment of fund transfers; modify 

for fund transfer by tax-exempt entities ................................ tyba 12/31/03 -86 -181 -198 -186 -167 -151 -139 -12

9. Treatment of certain income of electric cooperatives .......... tyba DOE -8 -18 -21 -23 -25 -27 -30 -3

10. Exempt certain prepayments for natural gas from 

tax-exempt bond arbitrage rules .......................................... oia DOE [2] -1 -2 -3 -4 -4 -5 -

Total of Reliability Provisions ........................................................................... -1,821 -1,994 -1,663 -230 472 423 410 34Production Provisions 

A. Oil and Gas Provisions 

1. Credit for marginal domestic oil and natural gas well 

production - 5-year carryback .............................................. pi tyba 12/31/03 

2. Net income limitation on percentage depletion for 

oil and gas property and suspension of limitation based on 65% of taxable income: a. Temporary suspension of limitation based on 65% 

of taxable income (through 12/31/04) ............................... tyba 12/31/03 -112 -60 --- --- --- --- --- -

b. Extension of suspension of 100% of taxable 

income limit with respect to marginal production (through 12/31/04) ............................................................ tyba 12/31/03 -22 -12 --- --- --- --- --- -

3. Amortize all delay rental payments over 2 years ................. apoii tyba DOE 85 11 -64 -62 -35 -9 -1 -4. Amortize all geological and geophysical 

expenditures over 2 years .................................................... apoii tyba DOE 234 -212 -449 -428 -320 -261 -226 -19

5. Extension and modification of section 29 credit for 

producing fuel from a non-conventional source (placed in service through 12/31/06) [8] .............................. fsfqfa 12/31/03 -101 -306 -605 -852 -806 -374 -80 -1

B. Alternative Minimum Tax Provisions 

1. Allow personal energy credits against the alternative 

minimum tax ......................................................................... tyba 12/31/03 -1 -6 -9 -11 -6 -6 --- -

2. Increase tax limitation on use of business energy 

credits [9]: a. Credits for new energy efficient homes, energy 

efficient appliances, low sulfur diesel fuel, and oil and gas from marginal wells ............................................. tyea DOE -47 -32 -8 26 33 19 8 

b. Enhanced oil recovery credit (for 2004 and 2005) .......... tyba 12/31/03 -88 -137 -40 13 13 12 11 1c. All section 40 credits ....................................................... tyba 12/31/03 

3. Temporary repeal of alternative minimum tax 

intangible drilling costs preference (sunset 12/31/05) ......... tyba 12/31/03 -33 -49 -10 9 8 7 7 

 - - - - - - - - - - - - - - - - - - - - - - - - - - - Revenue Effects Included in Conservation

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - No Revenue Effect - - - - - 
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Provision Effective 2004 2005 2006 2007 2008 2009 2010 201

C. Clean Coal Incentives 

1. 15% investment tax credit for clean coal facilities 

subject to 4,000Mw allocation cap (sunset 12/31/13) .......... ppisa DOE -10 -21 -15 -7 1 5 5 

2. Investment credit for advanced clean coal 

technology - 17.5% investment tax credit for advanced clean coal facilities subject to 6,000Mw allocation cap (sunset 12/31/16) .......................................... ppisa DOE -8 -93 -191 -145 -78 -460 -218 2

3. Amortization of pollution control facilities: 

a. 60-month amortization of qualified pollution 

control devices installed in post-1975 plants .................... ppisa DOE -13 -22 -38 -59 -77 -90 -98 -10

b. 36-month amortization of qualified pollution 

control devices installed in pre-1976 plants ..................... ppisa DOE -16 -29 -42 -43 -36 -24 -13 -1

4. Integrated gasification combined-cycle advanced 

clean coal facilities eligible for 5-year MACRS property limited to facilities that receive investment tax credit ............................................................................... ppisa DOE --- -1 -8 -28 -45 -45 -68 -10

D. High Volume Natural Gas Provisions 

1. New high volume natural gas pipelines treated as 

7-year property ..................................................................... ppisa DOE -3 -11 -21 -29 -34 -37 -40 -13

2. Enhanced oil recovery credit for certain 

gas processing facilities ....................................................... cpoii tyba 12/31/03 --- --- --- --- -32 -91 -101 -6

Total of Production Provisions ........................................................................... -135 -980 -1,500 -1,616 -1,414 -1,354 -814 -56Additional Provisions 

1. Extension of tax incentives for energy-related 

business on Indian reservations (through 12/31/05) ........... DOE 1 -65 -117 -45 8 30 47 3

2. Payment of dividends on stock of cooperatives 

without reducing patronage dividends ................................. dmi tyea DOE [4] [4] -1 -1 -1 -1 -2 -

3. Distributions from publicly traded partnerships 

treated as qualifying income for regulated investment companies ......................................................... tyba DOE -1 -3 -4 -5 -6 -6 -6 -

4. Suspension of duties on ceiling fans 

(sunset 12/31/05) [10] .......................................................... DOE -18 -23 -6 --- --- --- --- -

5. Suspension of duties on nuclear steam generators 

(sunset 12/31/08) and nuclear reactor vessel heads (sunset 12/31/07) [10] ............................................... DOE --- -1 -1 -3 -3 -1 --- -

6. Brownfields demonstration program for qualified 

green building and sustainable design projects ($2 billion allocation) (sunset 9/30/09) ....................................... oia DOE -3 -8 -14 -19 -24 -29 -32 -3

Total of Additional Provisions ........................................................................... -21 -100 -143 -73 -26 -7 7 -

 NET TOTAL ............................................................................................................ -2,535 -4,323 -5,000 -3,378 -2,025 -1,749 -884 -70

Joint Committee on Taxation -------------------------------------- NOTE: Details may not add to totals due to rounding. Date of enactment is assumed to be December 1, 2003. 

[Legend and Footnotes for JCX-101-03 appear on the following page]
Page 5

Legend and Footnotes for JCX-101-03: Legend for "Effective" column: 

apoii = amounts paid or incurred in esfqfa = electricity sold from qualifying facilities after 

apa = appliances produced after fpasoua = fuel produced and sold or used after cpoii = costs paid or incurred in fsuora = fuel sold, used, or removed after dmi = distributions made in fsfqfa = fuel sold from qualifying facilities after 

DOE = date of enactment hpa = homes purchased after ea = expenditures after oia = obligation issued after epoia = expenses paid or incurred after pa = production after 

[1] Gain of less than $1 million. [2] Loss of less than $1 million. [3] The Leaking Underground Storage Tank excise tax of 0.1 cents per gallon is retained. [4] Loss of less than $500,000. [5] This provision may also have indirect effects on Federal outlays for certain farm programs. Outlay effects are estimated by the Congressional Budget Office. 

[6] Estimate includes AMT relief for alternative motor vehicles. [7] Estimates include the interaction with non-tax Conference provisions that are intended to increase investment in electric transmission property.

[8] Qualified facilities are given credit for four years of production (five years in the case of refined coal). Placed in service before 1/1/08 for refined coal. 

[9] Estimates of changes related to the section 45 credit and the AMT are reflected in the provision in the table relating to the section 45 credit. 

[10] Estimate is provided by the Congressional Budget Office.