II 

109TH CONGRESS 

1ST SESSION S. 1203 

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

for the investment in greenhouse gas intensity reduction projects, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 8, 2005 

Mr. HAGEL (for himself, Mr. PRYOR, Mr. ALEXANDER, Mr. CRAIG, Mrs. 

DOLE, and Ms. MURKOWSKI) 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 for the investment in greenhouse gas intensity reduction projects, 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. 

4 (a) SHORT TITLE.—This title may be cited as the 

5 ‘‘Climate Change Technology Tax Incentives Act of 

6 2005’’. 

7 (b) AMENDMENT OF CODE.—Except as otherwise ex8 pressly provided, whenever in this title an amendment or 

9 repeal is expressed in terms of an amendment to, or repeal 
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1 of, a section or other provision, the reference shall be con2 sidered to be made to a section or other provision of the 

3 Internal Revenue Code of 1986. 

4 TITLE I—GREENHOUSE GAS IN5 TENSITY REDUCTION TAX IN6 CENTIVES 

7 SEC. 101. GREENHOUSE GAS INTENSITY REDUCTION IN8 VESTMENT TAX CREDIT. 

9 (a) IN GENERAL.—Subpart D of part IV of sub10 chapter A of chapter 1 (relating to business-related cred11 its) is amended by adding at the end the following new 

12 section: 

13 ‘‘SEC. 45J. GREENHOUSE GAS INTENSITY REDUCTION IN14 VESTMENT CREDIT. 

15 ‘‘(a) ALLOWANCE OF CREDIT.— 

16 ‘‘(1) IN GENERAL.—For purposes of section 38, 

17 in the case of a taxpayer’s investment in a green18 house gas intensity reduction project approved by 

19 the accreditation panel, the greenhouse gas intensity 

20 reduction investment credit determined under this 

21 section for the taxable year is an amount equal to— 

22 ‘‘(A) percentage reduction in greenhouse 

23 gas intensity certified for such project for such 

24 year by the accreditation panel, multiplied by 
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1 ‘‘(B) the investment in such project during 

2 such year which is attributable, directly or indi3 rectly, to the taxpayer, as determined by the ac4 creditation panel. 

5 ‘‘(2) AGGREGATE DOLLAR LIMITATION.—The 

6 credit determined under paragraph (1) for any tax7 able year, when added to any credit allowed to the 

8 taxpayer with respect to the such project in any pre9 ceding taxable year, shall not exceed 50 percent of 

10 the investment attributable to the taxpayer with re11 spect to such project through such taxable year. 

12 ‘‘(b) LIMITATION ON AGGREGATE CREDIT ALLOW13 ABLE.— 

14 ‘‘(1) IN GENERAL.—The amount of the green15 house gas intensity reduction investment credit de16 termined under subsection (a) for any project, when 

17 added to all such credits allowed to all taxpayers 

18 with respect to the such project shall not exceed the 

19 credit dollar amount allocated to such project under 

20 this subsection by the accreditation panel from the 

21 greenhouse gas intensity reduction investment credit 

22 limitation for the calendar year in which such alloca23 tion is made. 

24 ‘‘(2) TIME FOR MAKING ALLOCATION.—An allo25 cation shall be taken into account under paragraph 
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1 (1) only if it is made not later than the close of the 

2 calendar year in which the greenhouse gas intensity 

3 reduction project proposal with respect to such 

4 project is approved by the accreditation panel. 

5 ‘‘(3) OVERALL LIMITATION ON AGGREGATE

6 CREDIT ALLOWABLE.—The accreditation panel may 

7 allocate the aggregate credit dollar amount to any 

8 such project for a period not to exceed a 10-year pe9 riod beginning with the calendar year described in 

10 paragraph (2). 

11 ‘‘(c) LIMITATION ON AMOUNT OF CREDITS ALLO12 CATED.— 

13 ‘‘(1) IN GENERAL.—There is a greenhouse gas 

14 intensity reduction investment credit limitation 

15 amount for each calendar year. Such limitation 

16 amount is— 

17 ‘‘(A) $400,000,000 for 2006, 

18 ‘‘(B) $300,000,000 for 2007, 

19 ‘‘(C) $300,000,000 for 2008, 

20 ‘‘(D) $300,000,000 for 2009, 

21 ‘‘(E) $300,000,000 for 2010, and 

22 ‘‘(F) except as provided in paragraph (2), 

23 zero thereafter. 

24 ‘‘(2) CARRYOVER OF UNUSED ISSUANCE LIMI25 TATION.—If for any calendar year the limitation 
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1 amount imposed by paragraph (1) exceeds the 

2 amount of greenhouse gas intensity reduction invest3 ment credits allocated during such year, such excess 

4 shall be carried forward to the succeeding calendar 

5 year as an addition to the limitation imposed by 

6 paragraph (1). 

7 ‘‘(d) GREENHOUSE GAS INTENSITY REDUCTION

8 PROJECT; GREENHOUSE GAS INTENSITY; ACCREDITA9 TION PANEL.—For purposes of this section— 

10 ‘‘(1) GREENHOUSE GAS INTENSITY REDUCTION

11 PROJECT.—The term ‘greenhouse gas intensity re12 duction project’ means any project approved under 

13 this section by the accreditation panel. Such ap14 proval shall be based on the following criteria: 

15 ‘‘(A) The extent of the reduction in green16 house gas intensity proposed for the project. 

17 ‘‘(B) Improvements in system efficiency. 

18 ‘‘(C) In the case of projects located outside 

19 the United States, the extent of technology 

20 transfer. 

21 ‘‘(D) The existence and nature of agree22 ments for sharing project benefits and liability 

23 between the taxpayer and any host government. 

24 ‘‘(2) GREENHOUSE GAS INTENSITY.—The 

25 greenhouse gas intensity for any period is equal to 
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1 the volume of emissions divided by the economic out2 put associated with a project as compared to a 

3 greenhouse gas intensity baseline established after 

4 the date of the enactment of this section. The com5 parison to such baseline may be made by geographic 

6 regions, industry segments, or on a taxpayer basis. 

7 ‘‘(3) ACCREDITATION PANEL.—The term ‘ac8 creditation panel’ means a panel jointly certified by 

9 the Secretary and the Secretary of Commerce. 

10 ‘‘(e) RECAPTURE OF CREDIT IN CERTAIN CASES.— 

11 ‘‘(1) IN GENERAL.—If, at any time during the 

12 20-year period of a greenhouse gas intensity reduc13 tion project, there is a recapture event with respect 

14 to such project, then the tax imposed by this chapter 

15 for the taxable year in which such event occurs shall 

16 be increased by the credit recapture amount. 

17 ‘‘(2) CREDIT RECAPTURE AMOUNT.—For pur18 poses of paragraph (1)— 

19 ‘‘(A) IN GENERAL.—The credit recapture 

20 amount is an amount equal to the recapture 

21 percentage of all greenhouse gas intensity re22 duction investment credits previously allowable 

23 to a taxpayer with respect to any investment in 

24 such project that is attributable to such tax25 payer. 
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1 ‘‘(B) RECAPTURE PERCENTAGE.—The re2 capture percentage shall be 100 percent if the 

3 recapture event occurs during the first 5 years 

4 of the project, 75 percent if the recapture event 

5 occurs during the second 5 years of the project, 

6 50 percent if the recapture event occurs during 

7 the third 5 years of the project, 25 percent if 

8 the recapture event occurs during the fourth 5 

9 years of the project, and 0 percent if the recap10 ture event occurs at any time after the 20th 

11 year of the project. 

12 ‘‘(3) RECAPTURE EVENT.—For purposes of 

13 paragraph (1), there is a recapture event with re14 spect to a greenhouse gas intensity reduction project 

15 if— 

16 ‘‘(A) the taxpayer violates a term or condi17 tion of the approval of the project by the ac18 creditation panel at any time, 

19 ‘‘(B) the taxpayer adopts a practice which 

20 the accreditation panel has specified in its ap21 proval of the project as a practice which would 

22 tend to defeat the purposes of the program, or 

23 ‘‘(C) the taxpayer disposes of any owner24 ship interest arising out of its investment that 

25 the accreditation panel has determined is attrib-
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1 utable to the project, unless the accreditation 

2 panel determines that such disposition will not 

3 have any adverse effect on the greenhouse gas 

4 intensity reduction project. 

5 If an event which otherwise would be a recapture 

6 event is outside the control of the taxpayer, as deter7 mined by the accreditation panel, such event shall 

8 not be treated as a recapture event with respect to 

9 such taxpayer. 

10 ‘‘(4) SPECIAL RULES.— 

11 ‘‘(A) TAX BENEFIT RULE.—The tax for 

12 the taxable year shall be increased under para13 graph (1) only with respect to credits allowed 

14 by reason of this section which were used to re15 duce tax liability. In the case of credits not so 

16 used to reduce tax liability, the carryforwards 

17 and carrybacks under section 39 shall be appro18 priately adjusted. 

19 ‘‘(B) NO CREDITS AGAINST TAX.—Any in20 crease in tax under this subsection shall not be 

21 treated as a tax imposed by this chapter for 

22 purposes of determining the amount of any 

23 credit under this chapter or for purposes of sec24 tion 55. 

25 ‘‘(f) DISALLOWANCE OF DOUBLE BENEFIT.— 
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1 ‘‘(1) BASIS REDUCTION.—The basis of any in2 vestment in a greenhouse gas intensity reduction 

3 project shall be reduced by the amount of any credit 

4 determined under this section with respect to such 

5 investment. 

6 ‘‘(2) CHARITABLE DEDUCTION DISALLOWED.—

7 No deduction shall be allowed to a taxpayer under 

8 section 170 with respect to any contribution which 

9 the accreditation panel certifies to the Secretary con10 stitutes an investment in a greenhouse gas intensity 

11 reduction project that is attributable to such tax12 payer. 

13 ‘‘(g) CERTIFICATION TO SECRETARY.—The accredi14 tation panel shall certify to the Secretary before January 

15 31 of each year with respect to each taxpayer which has 

16 made an investment in a greenhouse gas intensity reduc17 tion project— 

18 ‘‘(1) the amount of the greenhouse gas intensity 

19 reduction investment credit allowable to such tax20 payer for the preceding calendar year, 

21 ‘‘(2) whether a recapture event occurred with 

22 respect to such taxpayer during the preceding cal23 endar year, and 
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1 ‘‘(3) the credit recapture amount, if any, with 

2 respect to such taxpayer for the preceding calendar 

3 year. 

4 ‘‘(h) REGULATIONS.—The Secretary shall prescribe 

5 such regulations as may be appropriate to carry out this 

6 section, including regulations— 

7 ‘‘(1) which limit the credit for investments 

8 which are directly or indirectly subsidized by other 

9 Federal benefits, 

10 ‘‘(2) which prevent the abuse of the provisions 

11 of this section through the use of related parties, 

12 and 

13 ‘‘(3) which impose appropriate reporting re14 quirements.’’. 

15 (b) CREDIT MADE PART OF GENERAL BUSINESS

16 CREDIT.—Subsection (b) of section 38 is amended by 

17 striking ‘‘plus’’ at the end of paragraph (18), by striking 

18 the period at the end of paragraph (19) and inserting ‘‘, 

19 plus’’, and by adding at the end the following new para20 graph: 

21 ‘‘(20) the greenhouse gas intensity reduction in22 vestment credit determined under section 45J(a).’’. 

23 (c) DEDUCTION FOR UNUSED CREDIT.—Subsection 

24 (c) of section 196 is amended by striking ‘‘and’’ at the 

25 end of paragraph (11), by striking the period at the end 
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1 of paragraph (12) and inserting ‘‘, and’’, and by adding 

2 at the end the following new paragraph: 

3 ‘‘(13) the greenhouse gas intensity reduction in4 vestment credit determined under section 45J(a).’’. 

5 (d) CLERICAL AMENDMENT.—The table of sections 

6 for subpart D of part IV of subchapter A of chapter 1 

7 is amended by adding at the end the following new item:

‘‘Sec. 45J. Greenhouse gas intensity reduction investment credit.’’.

8 (e) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to investments made after Decem10 ber 31, 2005. 

11 TITLE II—ENERGY EFFICIENCY 

12 PROVISIONS 

13 Subtitle A—Renewable Energy 

14 SEC. 201. SENSE OF THE SENATE REGARDING EXTENSION 

15 OF RENEWABLE ENERGY CREDIT. 

16 It is the sense of the Senate that the income tax cred17 it for electricity produced from certain renewable re18 sources under section 45 of the Internal Revenue Code 

19 of 1986 should be extended through 2010. 

20 Subtitle B—Nuclear Power 

21 SEC. 211. CREDIT FOR PRODUCTION FROM ADVANCED NU22 CLEAR POWER FACILITIES. 

23 (a) IN GENERAL.—Subpart D of part IV of sub24 chapter A of chapter 1 (relating to business related cred-
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1 its), as amended by this Act, is amended by adding at 

2 the end the following new section: 

3 ‘‘SEC. 45K. CREDIT FOR PRODUCTION FROM ADVANCED NU4 CLEAR POWER FACILITIES. 

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

6 the advanced nuclear power facility production credit of 

7 any taxpayer for any taxable year is equal to the product 

8 of— 

9 ‘‘(1) 0.6 cent, multiplied by 

10 ‘‘(2) the kilowatt hours of electricity— 

11 ‘‘(A) produced by the taxpayer at an ad12 vanced nuclear power facility during the 10-

13 year period beginning on the date the facility 

14 was originally placed in service, and 

15 ‘‘(B) sold by the taxpayer to an unrelated 

16 person during the taxable year. 

17 ‘‘(b) NATIONAL LIMITATION.— 

18 ‘‘(1) IN GENERAL.—The amount of credit 

19 which would (but for this subsection and subsection 

20 (c)) be allowed with respect to any facility for any 

21 taxable year shall not exceed the amount which 

22 bears the same ratio to such amount of credit as— 

23 ‘‘(A) the national megawatt capacity limi24 tation allocated to the facility, bears to 
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1 ‘‘(B) the total megawatt nameplate capac2 ity of such facility. 

3 ‘‘(2) AMOUNT OF NATIONAL LIMITATION.—The 

4 national megawatt capacity limitation shall be 8,000 

5 megawatts. 

6 ‘‘(3) ALLOCATION OF LIMITATION.—The Sec7 retary shall allocate the national megawatt capacity 

8 limitation in such manner as the Secretary may pre9 scribe. 

10 ‘‘(4) REGULATIONS.—Not later than 6 months 

11 after the date of the enactment of this section, the 

12 Secretary shall prescribe such regulations as may be 

13 necessary or appropriate to carry out the purposes 

14 of this subsection. Such regulations shall provide a 

15 certification process under which the Secretary, after 

16 consultation with the Secretary of Energy, shall ap17 prove and allocate the national megawatt capacity 

18 limitation. 

19 ‘‘(c) OTHER LIMITATIONS.— 

20 ‘‘(1) ANNUAL LIMITATION.—The amount of the 

21 credit allowable under subsection (a) (after the ap22 plication of subsection (b)) for any taxable year with 

23 respect to any facility shall not exceed an amount 

24 which bears the same ratio to $125,000,000 as— 
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1 ‘‘(A) the national megawatt capacity limi2 tation allocated under subsection (b) to the fa3 cility, bears to 

4 ‘‘(B) 1000. 

5 ‘‘(2) OTHER LIMITATIONS.—Rules similar to 

6 the rules of section 45(b) shall apply for purposes of 

7 this section, except that paragraph (2) thereof shall 

8 not apply to the 0.6 cent under subsection (a)(1). 

9 ‘‘(d) ADVANCED NUCLEAR POWER FACILITY.—For 

10 purposes of this section, the term ‘advanced nuclear power 

11 facility’ means any advanced nuclear facility— 

12 ‘‘(1) which is owned by the taxpayer and which 

13 uses nuclear energy to produce electricity, and 

14 ‘‘(2) which is originally placed in service after 

15 the date of the enactment of this paragraph and be16 fore January 1, 2010. 

17 ‘‘(e) OTHER RULES TO APPLY.—Rules similar to the 

18 rules of paragraphs (1), (2), (3), (4), and (5) of section 

19 45(e) shall apply for purposes of this section.’’ 

20 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec21 tion 38(b), as amended by this Act, is amended by striking 

22 ‘‘plus’’ at the end of paragraph (19), by striking the period 

23 at the end of paragraph (20) and inserting ‘‘, plus’’, and 

24 by adding at the end the following new paragraph: 
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1 ‘‘(21) the advanced nuclear power facility pro2 duction credit determined under section 45K(a).’’. 

3 (c) CLERICAL AMENDMENT.—The table of sections 

4 for subpart D of part IV of subchapter A of chapter 1, 

5 as amended by this Act, is amended by adding at the end 

6 the following new item:

‘‘Sec. 45K. Credit for production from advanced nuclear power facilities.’’.

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

8 this section shall apply to production in taxable years end9 ing after the date of the enactment of this Act. 

10 SEC. 212. INVESTMENT TAX CREDIT FOR INVESTMENTS IN 

11 NUCLEAR POWER FACILITIES. 

12 (a) NEW CREDIT FOR NUCLEAR POWER FACILI13 TIES.—Section 46 is amended by— 

14 (1) striking ‘‘and’’ at the end of paragraph (1), 

15 (2) striking the period at the end of paragraph 

16 (2) and inserting ‘‘, and’’, and 

17 (3) inserting after paragraph (2) the following 

18 new paragraph: 

19 ‘‘(3) the nuclear power facility construction 

20 credit.’’. 

21 (b) NUCLEAR POWER FACILITY CONSTRUCTION

22 CREDIT.—Subpart E of part IV of subchapter A of chap23 ter 1 is amended by inserting after section 48 the fol24 lowing new section: 
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1 ‘‘SEC. 48A. NUCLEAR POWER FACILITY CONSTRUCTION 

2 CREDIT. 

3 ‘‘(a) IN GENERAL.—For purposes of section 46, the 

4 nuclear power facility construction credit for any taxable 

5 year is 10 percent of so much of the qualified nuclear 

6 power facility expenditures paid or incurred by the tax7 payer with respect to a qualified nuclear power facility. 

8 ‘‘(b) WHEN EXPENDITURES TAKEN INTO AC9 COUNT.— 

10 ‘‘(1) IN GENERAL.—Qualified nuclear power fa11 cility expenditures shall be taken into account for 

12 the taxable year in which the qualified nuclear power 

13 facility is placed in service. 

14 ‘‘(2) COORDINATION WITH SUBSECTION (c).—

15 The amount which would (but for this paragraph) be 

16 taken into account under paragraph (1) with respect 

17 to any qualified nuclear power facility shall be re18 duced (but not below zero) by any amount of quali19 fied nuclear power facility expenditures taken into 

20 account under subsection (c) by the taxpayer or a 

21 predecessor of the taxpayer (or, in the case of a sale 

22 and leaseback described in section 50(a)(2)(C), by 

23 the lessee), to the extent any amount so taken into 

24 account has not been required to be recaptured 

25 under section 50(a). 

26 ‘‘(c) PROGRESS EXPENDITURES.— 
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1 ‘‘(1) IN GENERAL.—A taxpayer may elect to 

2 take into account qualified nuclear power facility ex3 penditures. 

4 ‘‘(A) SELF-CONSTRUCTED PROPERTY.—In 

5 the case of a qualified nuclear power facility 

6 which is a self-constructed facility, in the tax7 able year for which such expenditures are prop8 erly chargeable to capital account with respect 

9 to such facility. 

10 ‘‘(B) ACQUIRED FACILITY.—In the case of 

11 a qualified nuclear facility which is not self-con12 structed property, in the taxable year in which 

13 such expenditures are paid. 

14 ‘‘(2) SPECIAL RULES FOR APPLYING PARA15 GRAPH (1).—For purposes of paragraph (1)— 

16 ‘‘(A) COMPONENT PARTS, ETC.—Property 

17 which is not self-constructed property and 

18 which is to be a component part of, or is other19 wise to be included in, any facility to which this 

20 subsection applies shall be taken into account in 

21 accordance with paragraph (1)(B). 

22 ‘‘(B) CERTAIN BORROWING DIS23 REGARDED.—Any amount borrowed directly or 

24 indirectly by the taxpayer on a nonrecourse 

25 basis from the person constructing the facility 
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1 for the taxpayer shall not be treated as an 

2 amount expended for such facility. 

3 ‘‘(C) LIMITATION FOR FACILITIES OR COM4 PONENTS WHICH ARE NOT SELF-CON5 STRUCTED.— 

6 ‘‘(i) IN GENERAL.—In the case of a 

7 facility or a component of a facility which 

8 is not self-constructed, the amount taken 

9 into account under paragraph (1)(B) for 

10 any taxable year shall not exceed the 

11 amount which represents the portion of the 

12 overall cost to the taxpayer of the facility 

13 or component of a facility which is prop14 erly attributable to the portion of the facil15 ity or component which is completed dur16 ing such taxable year. 

17 ‘‘(ii) CARRY-OVER OF CERTAIN

18 AMOUNTS.—In the case of a facility or 

19 component of a facility which is not self20 constructed, if for the taxable year— 

21 ‘‘(I) the amount which (but for 

22 clause (i)) would have been taken into 

23 account under paragraph (1)(B) ex24 ceeds the limitation of clause (i), then 

25 the amount of such excess shall be 
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1 taken into account under paragraph 

2 (1)(B) for the succeeding taxable 

3 year, or 

4 ‘‘(II) the limitation of clause (i) 

5 exceeds the amount taken into ac6 count under paragraph (1)(B), then 

7 the amount of such excess shall in8 crease the limitation of clause (i) for 

9 the succeeding taxable year. 

10 ‘‘(D) DETERMINATION OF PERCENTAGE OF

11 COMPLETION.—The determination under sub12 paragraph (C)(i) of the portion of the overall 

13 cost to the taxpayer of the construction which 

14 is properly attributable to construction com15 pleted during any taxable year shall be made on 

16 the basis of engineering or architectural esti17 mates or on the basis of cost accounting 

18 records. Unless the taxpayer establishes other19 wise by clear and convincing evidence, the con20 struction shall be deemed to be completed not 

21 more rapidly than ratably over the normal con22 struction period. 

23 ‘‘(E) NO PROGRESS EXPENDITURES FOR

24 CERTAIN PRIOR PERIODS.—No qualified nuclear 

25 facility expenditures shall be taken into account 
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1 under this subsection for any period before the 

2 first day of the first taxable year to which an 

3 election under this subsection applies. 

4 ‘‘(F) NO PROGRESS EXPENDITURES FOR

5 PROPERTY FOR YEAR IT IS PLACED IN SERVICE, 

6 ETC.—In the case of any qualified nuclear facil7 ity, no qualified nuclear facility expenditures 

8 shall be taken into account under this sub9 section for the earlier of— 

10 ‘‘(i) the taxable year in which the fa11 cility is placed in service, or 

12 ‘‘(ii) the first taxable year for which 

13 recapture is required under section 

14 50(a)(2) with respect to such facility, or 

15 for any taxable year thereafter. 

16 ‘‘(3) SELF-CONSTRUCTED.—For purposes of 

17 this subsection— 

18 ‘‘(A) the term ‘self-constructed facility’ 

19 means any facility if it is reasonable to believe 

20 that more than half of the qualified nuclear fa21 cility expenditures for such facility will be made 

22 directly by the taxpayer, and 

23 ‘‘(B) a component of a facility shall be 

24 treated as not self-constructed if the cost of the 

25 component is at least 5 percent of the expected 
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1 cost of the facility and the component is ac2 quired by the taxpayer. 

3 ‘‘(4) ELECTION.—An election shall be made 

4 under this section for a qualified nuclear power facil5 ity by claiming the nuclear power facility construc6 tion credit for expenditures described in paragraph 

7 (1) on a tax return filed by the due date for such 

8 return (taking into account extensions). Such an 

9 election shall apply to the taxable year for which 

10 made and all subsequent taxable years. Such an 

11 election, once made, may be revoked only with the 

12 consent of the Secretary. 

13 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur14 poses of this section— 

15 ‘‘(1) QUALIFIED NUCLEAR POWER FACILITY.—

16 The term ‘qualified nuclear power facility’ means a 

17 nuclear power facility, as defined in section 

18 168(e)(8), the construction of which was approved 

19 by the Nuclear Regulatory Commission on or before 

20 December 31, 2014, and begun on or before Decem21 ber 31, 2020. 

22 ‘‘(2) QUALIFIED NUCLEAR POWER FACILITY

23 EXPENDITURES.— 

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

25 nuclear power facility expenditures’ means any 
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1 amount properly chargeable to capital ac2 count— 

3 ‘‘(i) with respect to a qualified nuclear 

4 power facility, 

5 ‘‘(ii) for which depreciation is allow6 able under section 168, and 

7 ‘‘(iii) which are incurred before the 

8 qualified nuclear power facility is placed in 

9 service or in connection with the placement 

10 of such facility in service. 

11 ‘‘(B) LIMITATION PER FACILITY.—The 

12 amount of qualified nuclear power facility ex13 penditures which may be taken into account 

14 under subsection (a) with respect to any quali15 fied nuclear power facility shall not exceed 

16 $10,000,000. 

17 ‘‘(C) PRE-EFFECTIVE DATE EXPENDI18 TURES.—Qualified nuclear power facility ex19 penditures do not include any expenditures in20 curred by the taxpayer before January 1, 2008, 

21 unless such expenditures constitute less than 20 

22 percent of the total qualified nuclear power fa23 cility expenditures (determined without regard 

24 to this subparagraph) for the qualified nuclear 

25 power facility. 
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1 ‘‘(3) DELAYS AND SUSPENSION OF CONSTRUC2 TION.— 

3 ‘‘(A) IN GENERAL.—For purposes of ap4 plying this section and section 50, a nuclear 

5 power facility that is under construction shall 

6 cease to be treated as a facility that will be a 

7 qualified nuclear power facility as of the earlier 

8 of— 

9 ‘‘(i) the date on which the taxpayer 

10 decides to terminate construction of the fa11 cility, or 

12 ‘‘(ii) the last day of any 24 month pe13 riod in which the taxpayer has failed to 

14 incur qualified nuclear power facility ex15 penditures totaling at least 20 percent of 

16 the expected total cost of the nuclear 

17 power facility. 

18 ‘‘(B) AUTHORITY TO WAIVE.—The Sec19 retary may waive the application of clause (ii) 

20 of subparagraph (A) if the Secretary deter21 mines that the taxpayer intended to continue 

22 the construction of the qualified nuclear power 

23 facility and the expenditures were not incurred 

24 for reasons outside the control of the taxpayer. 
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1 ‘‘(C) RESUMPTION OF CONSTRUCTION.—If 

2 a nuclear power facility that is under construc3 tion ceases to be a qualified nuclear power facil4 ity by reason of paragraph (2) and work is sub5 sequently resumed on the construction of such 

6 facility— 

7 ‘‘(i) the date work is subsequently re8 sumed shall be treated as the date that 

9 construction began for purposes of para10 graph (1), and 

11 ‘‘(ii) if the facility is a qualified nu12 clear power facility, the qualified nuclear 

13 power facility expenditures shall be deter14 mined without regard to any delay or tem15 porary termination of construction of the 

16 facility.’’. 

17 (c) PROVISIONS RELATING TO CREDIT RECAP18 TURE.— 

19 (1) PROGRESS EXPENDITURE RECAPTURE

20 RULES.— 

21 (A) BASIC RULES.—Subparagraph (A) of 

22 section 50(a)(2) is amended to read as follows: 

23 ‘‘(A) IN GENERAL.—If during any taxable 

24 year any building to which section 47(d) applied 

25 or any facility to which section 48A(c) applied 
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1 ceases (by reason of sale or other disposition, 

2 cancellation or abandonment of contract, or 

3 otherwise) to be, with respect to the taxpayer, 

4 property which, when placed in service, will be 

5 a qualified rehabilitated building or a qualified 

6 nuclear power facility, then the tax under this 

7 chapter for such taxable year shall be increased 

8 by an amount equal to the aggregate decrease 

9 in the credits allowed under section 38 for all 

10 prior taxable years which would have resulted 

11 solely from reducing to zero the credit deter12 mined under this subpart with respect to such 

13 building or facility.’’. 

14 (B) AMENDMENT TO EXCESS CREDIT RE15 CAPTURE RULE.—Subparagraph (B) of section 

16 50(a)(2) is amended— 

17 (i) by inserting ‘‘or paragraph (2) of 

18 section 48A(b)’’ after ‘‘paragraph (2) of 

19 section 47(b)’’, 

20 (ii) by inserting ‘‘or section 

21 48A(b)(1)’’ after ‘‘section 47(b)(1)’’, and 

22 (iii) by inserting ‘‘or facility’’ after 

23 ‘‘building’’. 
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1 (C) AMENDMENT OF SALE AND LEASE2 BACK RULE.—Subparagraph (C) of section 

3 50(a)(2) is amended— 

4 (i) by inserting ‘‘or section 48A(c)’’ 

5 after ‘‘section 47(d)’’, and 

6 (ii) by inserting ‘‘or qualified nuclear 

7 power facility expenditures’’ after ‘‘quali8 fied rehabilitation expenditures’’. 

9 (D) CONFORMING AMENDMENT.—Sub10 paragraph (D) of section 50(a)(2) is amended 

11 by inserting ‘‘or section 48A(c)’’ after ‘‘section 

12 47(d)’’. 

13 (d) NO BASIS ADJUSTMENT.—Section 50(c) is 

14 amended by inserting at the end the following new para15 graph: 

16 ‘‘(6) NUCLEAR POWER FACILITY CONSTRUC17 TION CREDIT.—Paragraphs (1) and (2) shall not 

18 apply to the nuclear power facility construction cred19 it.’’. 

20 (e) TECHNICAL AMENDMENTS.—The table of sec21 tions for subpart E of part IV of subchapter A of chapter 

22 1 is amended by inserting after the item for section 48 

23 the following new item:

‘‘Sec. 48A. Nuclear power facility construction credit.’’.

24 (f) EFFECTIVE DATE.—The amendments made by 

25 this section of this Act shall apply to expenditures in-
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1 curred in taxable years beginning after December 31, 

2 2007. 

3 SEC. 213. TAX-EXEMPT FINANCING OF NUCLEAR POWER FA4 CILITIES. 

5 (a) IN GENERAL.—Subsection (a) of section 142 is 

6 amended— 

7 (1) by striking ‘‘or’’ at the end of paragraph 

8 (13), 

9 (2) by striking the period at the end of para10 graph (14) and inserting ‘‘, or’’, and 

11 (3) by inserting at the end the following new 

12 paragraph: 

13 ‘‘(15) nuclear power facility.’’. 

14 (b) DEFINITION.—Section 142 is amended by insert15 ing at the end the following new subsection: 

16 ‘‘(m) NUCLEAR POWER FACILITY.—For purposes of 

17 subsection (a)(15), the term ‘nuclear power facility’ means 

18 a nuclear power facility (within the meaning of section 

19 168(e)(8)) and any nuclear fuel assemblies (within the 

20 meaning of section 168(e)(8)(B)) initially included in any 

21 such facility.’’. 

22 (c) EXEMPTION FROM VOLUME CAP.—Paragraph 

23 (3) of section 146(g) (exempting certain exempt facility 

24 bonds from the state volume caps) is amended— 
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1 (1) by striking ‘‘or (14)’’ and inserting ‘‘(14), 

2 or (15)’’, and 

3 (2) by striking ‘‘and qualified green building 

4 and sustainable design projects’’ and inserting 

5 ‘‘qualified green building and sustainable design 

6 projects and nuclear power facilities’’. 

7 (d) EXEMPTION FROM ALTERNATIVE DEPRECIA8 TION.—Paragraph (5) of section 168(g) is amended by in9 serting at the end the following new subparagraph: 

10 ‘‘(D) NUCLEAR POWER FACILITY.—The 

11 term ‘tax-exempt bond financed property’ does 

12 not include any nuclear power facility that is fi13 nanced with bonds described in section 

14 142(a)(15).’’. 

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

16 this section of this Act shall apply with respect to bonds 

17 issued on or after January 1, 2006, and before January 

18 1, 2011. 

19 TITLE III—RESEARCH CREDITS 

20 SEC. 301. SENSE OF THE SENATE REGARDING PERMANENT 

21 EXTENSION OF RESEARCH CREDIT. 

22 It is the sense of the Senate that the income tax cred23 it for increasing research activities under section 41 of the 

24 Internal Revenue Code of 1986 should be permanently ex25 tended, the rates of the alternative incremental credit 
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1 under such section should be increased, and an alternative 

2 simplified credit for qualified research expenses should be 

3 instituted. 

4 TITLE IV—SUNSET 

5 SEC. 401. SUNSET. 

6 (a) IN GENERAL.—All provisions of, and amend7 ments made by, this Act shall not apply to taxable years 

8 beginning after December 31, 2010. 

9 (b) APPLICATION OF CERTAIN LAWS.—The Internal 

10 Revenue Code of 1986 shall be applied and administered 

11 to taxable years beginning after December 31, 2010, as 

12 if the provisions and amendments described in subsection 

13 (a) had never been enacted.

Æ