110TH CONGRESS 

2D SESSION H. R. 5351 

AN ACT 

To amend the Internal Revenue Code of 1986 to provide 

tax incentives for the production of renewable energy 

and energy conservation. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
2 

•HR 5351 EH

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

2 TABLE OF CONTENTS. 

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

4 ‘‘Renewable Energy and Energy Conservation Tax Act of 

5 2008’’. 

6 (b) AMENDMENT OF 1986 CODE.—Except as other7 wise expressly provided, whenever in this Act an amend8 ment or repeal is expressed in terms of an amendment 

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

10 shall be considered to be made to a section or other provi11 sion of the Internal Revenue Code of 1986. 

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

13 this Act is as follows: 

Sec. 1. Short title; amendment of 1986 Code; table of contents. 

TITLE I—PRODUCTION INCENTIVES 

Sec. 101. Extension and modification of renewable energy credit. 

Sec. 102. Production credit for electricity produced from marine renewables. 

Sec. 103. Extension and modification of energy credit. 

Sec. 104. New clean renewable energy bonds. 

Sec. 105. Extension and modification of special rule to implement FERC and 

State electric restructuring policy. 

Sec. 106. Extension and modification of credit for residential energy efficient 

property. 

TITLE II—CONSERVATION 

Subtitle A—Transportation 

PART 1—VEHICLES

Sec. 201. Credit for plug-in hybrid vehicles. 

Sec. 202. Extension and modification of alternative fuel vehicle refueling property credit. 

Sec. 203. Modification of limitation on automobile depreciation. 

PART 2—FUELS

Sec. 211. Extension and modification of credits for biodiesel and renewable diesel. 
3 

•HR 5351 EH

Sec. 212. Clarification that credits for fuel are designed to provide an incentive 

for United States production. 

Sec. 213. Credit for production of cellulosic alcohol. 

PART 3—OTHER TRANSPORTATION INCENTIVES

Sec. 221. Extension of transportation fringe benefit to bicycle commuters. 

Sec. 222. Restructuring of New York Liberty Zone tax credits. 

Subtitle B—Other Conservation Provisions 

Sec. 231. Qualified energy conservation bonds. 

Sec. 232. Extension and modification of credit for nonbusiness energy property. 

Sec. 233. Extension of energy efficient commercial buildings deduction. 

Sec. 234. Modifications of energy efficient appliance credit for appliances produced after 2007. 

Sec. 235. Five-year applicable recovery period for depreciation of qualified energy management devices. 

TITLE III—REVENUE PROVISIONS 

Sec. 301. Limitation of deduction for income attributable to domestic production of oil, gas, or primary products thereof. 

Sec. 302. Clarification of determination of foreign oil and gas extraction income. 

Sec. 303. Time for payment of corporate estimated taxes. 

TITLE IV—OTHER PROVISIONS 

Subtitle A—Studies 

Sec. 401. Carbon audit of the tax code. 

Sec. 402. Comprehensive study of biofuels. 

Subtitle B—Application of Certain Labor Standards on Projects Financed 

Under Tax Credit Bonds 

Sec. 411. Application of certain labor standards on projects financed under tax 

credit bonds. 

1 TITLE I—PRODUCTION 

2 INCENTIVES 

3 SEC. 101. EXTENSION AND MODIFICATION OF RENEWABLE 

4 ENERGY CREDIT. 

5 (a) EXTENSION OF CREDIT.—Each of the following 

6 provisions of section 45(d) (relating to qualified facilities) 

7 is amended by striking ‘‘January 1, 2009’’ and inserting 

8 ‘‘January 1, 2012’’: 
4 

•HR 5351 EH

1 (1) Paragraph (1). 

2 (2) Clauses (i) and (ii) of paragraph (2)(A). 

3 (3) Clauses (i)(I) and (ii) of paragraph (3)(A). 

4 (4) Paragraph (4). 

5 (5) Paragraph (5). 

6 (6) Paragraph (6). 

7 (7) Paragraph (7). 

8 (8) Subparagraphs (A) and (B) of paragraph 

9 (9). 

10 (b) MODIFICATION OF CREDIT PHASEOUT.— 

11 (1) REPEAL OF PHASEOUT.—Subsection (b) of 

12 section 45 is amended— 

13 (A) by striking paragraph (1), and 

14 (B) by striking ‘‘the 8 cent amount in 

15 paragraph (1),’’ in paragraph (2) thereof. 

16 (2) LIMITATION BASED ON INVESTMENT IN FA17 CILITY.—Subsection (b) of section 45 is amended by 

18 inserting before paragraph (2) the following new 

19 paragraph: 

20 ‘‘(1) LIMITATION BASED ON INVESTMENT IN

21 FACILITY.— 

22 ‘‘(A) IN GENERAL.—In the case of any 

23 qualified facility originally placed in service 

24 after December 31, 2009, the amount of the 

25 credit determined under subsection (a) for any 
5 

•HR 5351 EH

1 taxable year with respect to electricity produced 

2 at such facility shall not exceed the product 

3 of— 

4 ‘‘(i) the applicable percentage with re5 spect to such facility, multiplied by 

6 ‘‘(ii) the eligible basis of such facility. 

7 ‘‘(B) CARRYFORWARD OF UNUSED LIMITA8 TION AND EXCESS CREDIT.— 

9 ‘‘(i) UNUSED LIMITATION.—If the 

10 limitation imposed under subparagraph (A) 

11 with respect to any facility for any taxable 

12 year exceeds the prelimitation credit for 

13 such facility for such taxable year, the lim14 itation imposed under subparagraph (A) 

15 with respect to such facility for the suc16 ceeding taxable year shall be increased by 

17 the amount of such excess. 

18 ‘‘(ii) EXCESS CREDIT.—If the 

19 prelimitation credit with respect to any fa20 cility for any taxable year exceeds the limi21 tation imposed under subparagraph (A) 

22 with respect to such facility for such tax23 able year, the credit determined under sub24 section (a) with respect to such facility for 

25 the succeeding taxable year (determined 
6 

•HR 5351 EH

1 before the application of subparagraph (A) 

2 for such succeeding taxable year) shall be 

3 increased by the amount of such excess. 

4 With respect to any facility, no amount 

5 may be carried forward under this clause 

6 to any taxable year beginning after the 10- 

7 year period described in subsection 

8 (a)(2)(A)(ii) with respect to such facility. 

9 ‘‘(iii) PRELIMITATION CREDIT.—The 

10 term ‘prelimitation credit’ with respect to 

11 any facility for a taxable year means the 

12 credit determined under subsection (a) 

13 with respect to such facility for such tax14 able year, determined without regard to 

15 subparagraph (A) and after taking into ac16 count any increase for such taxable year 

17 under clause (ii). 

18 ‘‘(C) APPLICABLE PERCENTAGE.—For 

19 purposes of this paragraph— 

20 ‘‘(i) IN GENERAL.—The term ‘applica21 ble percentage’ means, with respect to any 

22 facility, the appropriate percentage pre23 scribed by the Secretary for the month in 

24 which such facility is originally placed in 

25 service. 
7 

•HR 5351 EH

1 ‘‘(ii) METHOD OF PRESCRIBING AP2 PLICABLE PERCENTAGES.—The applicable 

3 percentages prescribed by the Secretary for 

4 any month under clause (i) shall be per5 centages which yield over a 10-year period 

6 amounts of limitation under subparagraph 

7 (A) which have a present value equal to 35 

8 percent of the eligible basis of the facility. 

9 ‘‘(iii) METHOD OF DISCOUNTING.— 

10 The present value under clause (ii) shall be 

11 determined— 

12 ‘‘(I) as of the last day of the 1st 

13 year of the 10-year period referred to 

14 in clause (ii), 

15 ‘‘(II) by using a discount rate 

16 equal to the greater of 110 percent of 

17 the Federal long-term rate as in effect 

18 under section 1274(d) for the month 

19 preceding the month for which the ap20 plicable percentage is being pre21 scribed, or 4.5 percent, and 

22 ‘‘(III) by taking into account the 

23 limitation under subparagraph (A) for 

24 any year on the last day of such year. 
8 

•HR 5351 EH

1 ‘‘(D) ELIGIBLE BASIS.—For purposes of 

2 this paragraph— 

3 ‘‘(i) IN GENERAL.—The term ‘eligible 

4 basis’ means, with respect to any facility, 

5 the sum of— 

6 ‘‘(I) the basis of such facility de7 termined as of the time that such fa8 cility is originally placed in service, 

9 and 

10 ‘‘(II) the portion of the basis of 

11 any shared qualified property which is 

12 properly allocable to such facility 

13 under clause (ii). 

14 ‘‘(ii) RULES FOR ALLOCATION.—For 

15 purposes of subclause (II) of clause (i), the 

16 basis of shared qualified property shall be 

17 allocated among all qualified facilities 

18 which are projected to be placed in service 

19 and which require utilization of such prop20 erty in proportion to projected generation 

21 from such facilities. 

22 ‘‘(iii) SHARED QUALIFIED PROP23 ERTY.—For purposes of this paragraph, 

24 the term ‘shared qualified property’ means, 
9 

•HR 5351 EH

1 with respect to any facility, any property 

2 described in section 168(e)(3)(B)(vi)— 

3 ‘‘(I) which a qualified facility will 

4 require for utilization of such facility, 

5 and 

6 ‘‘(II) which is not a qualified fa7 cility. 

8 ‘‘(iv) SPECIAL RULE RELATING TO

9 GEOTHERMAL FACILITIES.—In the case of 

10 any qualified facility using geothermal en11 ergy to produce electricity, the basis of 

12 such facility for purposes of this paragraph 

13 shall be determined as though intangible 

14 drilling and development costs described in 

15 section 263(c) were capitalized rather than 

16 expensed. 

17 ‘‘(E) SPECIAL RULE FOR FIRST AND LAST

18 YEAR OF CREDIT PERIOD.—In the case of any 

19 taxable year any portion of which is not within 

20 the 10-year period described in subsection 

21 (a)(2)(A)(ii) with respect to any facility, the 

22 amount of the limitation under subparagraph 

23 (A) with respect to such facility shall be re24 duced by an amount which bears the same ratio 

25 to the amount of such limitation (determined 
10 

•HR 5351 EH

1 without regard to this subparagraph) as such 

2 portion of the taxable year which is not within 

3 such period bears to the entire taxable year. 

4 ‘‘(F) ELECTION TO TREAT ALL FACILITIES

5 PLACED IN SERVICE IN A YEAR AS 1 FACIL6 ITY.—At the election of the taxpayer, all quali7 fied facilities which are part of the same project 

8 and which are placed in service during the same 

9 calendar year shall be treated for purposes of 

10 this section as 1 facility which is placed in serv11 ice at the mid-point of such year or the first 

12 day of the following calendar year.’’. 

13 (c) TRASH FACILITY CLARIFICATION.—Paragraph 

14 (7) of section 45(d) is amended— 

15 (1) by striking ‘‘facility which burns’’ and in16 serting ‘‘facility (other than a facility described in 

17 paragraph (6)) which uses’’, and 

18 (2) by striking ‘‘COMBUSTION’’. 

19 (d) EXPANSION OF BIOMASS FACILITIES.— 

20 (1) OPEN-LOOP BIOMASS FACILITIES.—Para21 graph (3) of section 45(d) is amended by redesig22 nating subparagraph (B) as subparagraph (C) and 

23 by inserting after subparagraph (A) the following 

24 new subparagraph: 
11 

•HR 5351 EH

1 ‘‘(B) EXPANSION OF FACILITY.—Such 

2 term shall include a new unit placed in service 

3 after the date of the enactment of this subpara4 graph in connection with a facility described in 

5 subparagraph (A), but only to the extent of the 

6 increased amount of electricity produced at the 

7 facility by reason of such new unit.’’. 

8 (2) CLOSED-LOOP BIOMASS FACILITIES.—Para9 graph (2) of section 45(d) is amended by redesig10 nating subparagraph (B) as subparagraph (C) and 

11 inserting after subparagraph (A) the following new 

12 subparagraph: 

13 ‘‘(B) EXPANSION OF FACILITY.—Such 

14 term shall include a new unit placed in service 

15 after the date of the enactment of this subpara16 graph in connection with a facility described in 

17 subparagraph (A)(i), but only to the extent of 

18 the increased amount of electricity produced at 

19 the facility by reason of such new unit.’’. 

20 (e) EFFECTIVE DATE.— 

21 (1) IN GENERAL.—Except as otherwise pro22 vided in this subsection, the amendments made by 

23 this section shall apply to property originally placed 

24 in service after December 31, 2008. 
12 

•HR 5351 EH

1 (2) REPEAL OF CREDIT PHASEOUT.—The 

2 amendments made by subsection (b)(1) shall apply 

3 to taxable years ending after December 31, 2008. 

4 (3) LIMITATION BASED ON INVESTMENT IN FA5 CILITY.—The amendment made by subsection (b)(2) 

6 shall apply to property originally placed in service 

7 after December 31, 2009. 

8 (4) TRASH FACILITY CLARIFICATION.—The 

9 amendments made by subsection (c) shall apply to 

10 electricity produced and sold after the date of the 

11 enactment of this Act. 

12 (5) EXPANSION OF BIOMASS FACILITIES.—The 

13 amendments made by subsection (d) shall apply to 

14 property placed in service after the date of the en15 actment of this Act. 

16 SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRO17 DUCED FROM MARINE RENEWABLES. 

18 (a) IN GENERAL.—Paragraph (1) of section 45(c) 

19 (relating to resources) is amended by striking ‘‘and’’ at 

20 the end of subparagraph (G), by striking the period at 

21 the end of subparagraph (H) and inserting ‘‘, and’’, and 

22 by adding at the end the following new subparagraph: 

23 ‘‘(I) marine and hydrokinetic renewable en24 ergy.’’. 
13 

•HR 5351 EH

1 (b) MARINE RENEWABLES.—Subsection (c) of sec2 tion 45 is amended by adding at the end the following 

3 new paragraph: 

4 ‘‘(10) MARINE AND HYDROKINETIC RENEW5 ABLE ENERGY.— 

6 ‘‘(A) IN GENERAL.—The term ‘marine and 

7 hydrokinetic renewable energy’ means energy 

8 derived from— 

9 ‘‘(i) waves, tides, and currents in 

10 oceans, estuaries, and tidal areas, 

11 ‘‘(ii) free flowing water in rivers, 

12 lakes, and streams, 

13 ‘‘(iii) free flowing water in an irriga14 tion system, canal, or other man-made 

15 channel, including projects that utilize non16 mechanical structures to accelerate the 

17 flow of water for electric power production 

18 purposes, or 

19 ‘‘(iv) differentials in ocean tempera20 ture (ocean thermal energy conversion). 

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

22 include any energy which is derived from any 

23 source which utilizes a dam, diversionary struc24 ture (except as provided in subparagraph 
14 

•HR 5351 EH

1 (A)(iii)), or impoundment for electric power 

2 production purposes.’’. 

3 (c) DEFINITION OF FACILITY.—Subsection (d) of 

4 section 45 is amended by adding at the end the following 

5 new paragraph: 

6 ‘‘(11) MARINE AND HYDROKINETIC RENEW7 ABLE ENERGY FACILITIES.—In the case of a facility 

8 producing electricity from marine and hydrokinetic 

9 renewable energy, the term ‘qualified facility’ means 

10 any facility owned by the taxpayer— 

11 ‘‘(A) which has a nameplate capacity rat12 ing of at least 150 kilowatts, and 

13 ‘‘(B) which is originally placed in service 

14 on or after the date of the enactment of this 

15 paragraph and before January 1, 2012.’’. 

16 (d) CREDIT RATE.—Subparagraph (A) of section 

17 45(b)(4) is amended by striking ‘‘or (9)’’ and inserting 

18 ‘‘(9), or (11)’’. 

19 (e) COORDINATION WITH SMALL IRRIGATION

20 POWER.—Paragraph (5) of section 45(d), as amended by 

21 section 101(a), is amended by striking ‘‘January 1, 2012’’ 

22 and inserting ‘‘the date of the enactment of paragraph 

23 (11)’’. 

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

25 this section shall apply to electricity produced and sold 
15 

•HR 5351 EH

1 after the date of the enactment of this Act, in taxable 

2 years ending after such date. 

3 SEC. 103. EXTENSION AND MODIFICATION OF ENERGY 

4 CREDIT. 

5 (a) EXTENSION OF CREDIT.— 

6 (1) SOLAR ENERGY PROPERTY.—Paragraphs 

7 (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) (relating 

8 to energy credit) are each amended by striking 

9 ‘‘January 1, 2009’’ and inserting ‘‘January 1, 

10 2017’’. 

11 (2) FUEL CELL PROPERTY.—Subparagraph (E) 

12 of section 48(c)(1) (relating to qualified fuel cell 

13 property) is amended by striking ‘‘December 31, 

14 2008’’ and inserting ‘‘December 31, 2016’’. 

15 (b) ALLOWANCE OF ENERGY CREDIT AGAINST AL16 TERNATIVE MINIMUM TAX.—Subparagraph (B) of section 

17 38(c)(4) (relating to specified credits) is amended by strik18 ing ‘‘and’’ at the end of clause (iii), by striking the period 

19 at the end of clause (iv) and inserting ‘‘, and’’, and by 

20 adding at the end the following new clause: 

21 ‘‘(v) the credit determined under sec22 tion 46 to the extent that such credit is at23 tributable to the energy credit determined 

24 under section 48.’’. 
16 

•HR 5351 EH

1 (c) INCREASE OF CREDIT LIMITATION FOR FUEL

2 CELL PROPERTY.—Subparagraph (B) of section 48(c)(1) 

3 is amended by striking ‘‘$500’’ and inserting ‘‘$1,500’’. 

4 (d) PUBLIC ELECTRIC UTILITY PROPERTY TAKEN

5 INTO ACCOUNT.— 

6 (1) IN GENERAL.—Paragraph (3) of section 

7 48(a) is amended by striking the second sentence 

8 thereof. 

9 (2) CONFORMING AMENDMENTS.— 

10 (A) Paragraph (1) of section 48(c) is 

11 amended by striking subparagraph (D) and re12 designating subparagraph (E) as subparagraph 

13 (D). 

14 (B) Paragraph (2) of section 48(c) is 

15 amended by striking subparagraph (D) and re16 designating subparagraph (E) as subparagraph 

17 (D). 

18 (e) EFFECTIVE DATE.— 

19 (1) IN GENERAL.—Except as otherwise pro20 vided in this subsection, the amendments made by 

21 this section shall take effect on the date of the en22 actment of this Act. 

23 (2) ALLOWANCE AGAINST ALTERNATIVE MIN24 IMUM TAX.—The amendments made by subsection 

25 (b) shall apply to credits determined under section 
17 

•HR 5351 EH

1 46 of the Internal Revenue Code of 1986 in taxable 

2 years beginning after the date of the enactment of 

3 this Act and to carrybacks of such credits. 

4 (3) INCREASE IN LIMITATION FOR FUEL CELL

5 PROPERTY.—The amendment made by subsection 

6 (c) shall apply to periods after the date of the enact7 ment of this Act, in taxable years ending after such 

8 date, under rules similar to the rules of section 

9 48(m) of the Internal Revenue Code of 1986 (as in 

10 effect on the day before the date of the enactment 

11 of the Revenue Reconciliation Act of 1990). 

12 (4) PUBLIC ELECTRIC UTILITY PROPERTY.— 

13 The amendments made by subsection (d) shall apply 

14 to periods after February 13, 2008, in taxable years 

15 ending after such date, under rules similar to the 

16 rules of section 48(m) of the Internal Revenue Code 

17 of 1986 (as in effect on the day before the date of 

18 the enactment of the Revenue Reconciliation Act of 

19 1990). 

20 SEC. 104. NEW CLEAN RENEWABLE ENERGY BONDS. 

21 (a) IN GENERAL.—Part IV of subchapter A of chap22 ter 1 (relating to credits against tax) is amended by add23 ing at the end the following new subpart: 

24 ‘‘Subpart I—Qualified Tax Credit Bonds 

‘‘Sec. 54A. Credit to holders of qualified tax credit bonds. 

‘‘Sec. 54B. New clean renewable energy bonds. 
18 

•HR 5351 EH

1 ‘‘SEC. 54A. CREDIT TO HOLDERS OF QUALIFIED TAX CRED2 IT BONDS. 

3 ‘‘(a) ALLOWANCE OF CREDIT.—If a taxpayer holds 

4 a qualified tax credit bond on one or more credit allowance 

5 dates of the bond during any taxable year, there shall be 

6 allowed as a credit against the tax imposed by this chapter 

7 for the taxable year an amount equal to the sum of the 

8 credits determined under subsection (b) with respect to 

9 such dates. 

10 ‘‘(b) AMOUNT OF CREDIT.— 

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

12 determined under this subsection with respect to any 

13 credit allowance date for a qualified tax credit bond 

14 is 25 percent of the annual credit determined with 

15 respect to such bond. 

16 ‘‘(2) ANNUAL CREDIT.—The annual credit de17 termined with respect to any qualified tax credit 

18 bond is the product of— 

19 ‘‘(A) the applicable credit rate, multiplied 

20 by 

21 ‘‘(B) the outstanding face amount of the 

22 bond. 

23 ‘‘(3) APPLICABLE CREDIT RATE.—For purposes 

24 of paragraph (2), the applicable credit rate is the 

25 rate which the Secretary estimates will permit the 

26 issuance of qualified tax credit bonds with a speci-
19 

•HR 5351 EH

1 fied maturity or redemption date without discount 

2 and without interest cost to the qualified issuer. The 

3 applicable credit rate with respect to any qualified 

4 tax credit bond shall be determined as of the first 

5 day on which there is a binding, written contract for 

6 the sale or exchange of the bond. 

7 ‘‘(4) SPECIAL RULE FOR ISSUANCE AND RE8 DEMPTION.—In the case of a bond which is issued 

9 during the 3-month period ending on a credit allow10 ance date, the amount of the credit determined 

11 under this subsection with respect to such credit al12 lowance date shall be a ratable portion of the credit 

13 otherwise determined based on the portion of the 3- 

14 month period during which the bond is outstanding. 

15 A similar rule shall apply when the bond is redeemed 

16 or matures. 

17 ‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.— 

18 ‘‘(1) IN GENERAL.—The credit allowed under 

19 subsection (a) for any taxable year shall not exceed 

20 the excess of— 

21 ‘‘(A) the sum of the regular tax liability 

22 (as defined in section 26(b)) plus the tax im23 posed by section 55, over 
20 

•HR 5351 EH

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

2 under this part (other than subpart C and this 

3 subpart). 

4 ‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 

5 credit allowable under subsection (a) exceeds the 

6 limitation imposed by paragraph (1) for such taxable 

7 year, such excess shall be carried to the succeeding 

8 taxable year and added to the credit allowable under 

9 subsection (a) for such taxable year (determined be10 fore the application of paragraph (1) for such suc11 ceeding taxable year). 

12 ‘‘(d) QUALIFIED TAX CREDIT BOND.—For purposes 

13 of this section— 

14 ‘‘(1) QUALIFIED TAX CREDIT BOND.—The term 

15 ‘qualified tax credit bond’ means a new clean renew16 able energy bond which is part of an issue that 

17 meets the requirements of paragraphs (2), (3), (4), 

18 (5), and (6). 

19 ‘‘(2) SPECIAL RULES RELATING TO EXPENDI20 TURES.— 

21 ‘‘(A) IN GENERAL.—An issue shall be 

22 treated as meeting the requirements of this 

23 paragraph if, as of the date of issuance, the 

24 issuer reasonably expects— 
21 

•HR 5351 EH

1 ‘‘(i) 100 percent or more of the avail2 able project proceeds to be spent for 1 or 

3 more qualified purposes within the 3-year 

4 period beginning on such date of issuance, 

5 and 

6 ‘‘(ii) a binding commitment with a 

7 third party to spend at least 10 percent of 

8 such available project proceeds will be in9 curred within the 6-month period begin10 ning on such date of issuance. 

11 ‘‘(B) FAILURE TO SPEND REQUIRED

12 AMOUNT OF BOND PROCEEDS WITHIN 3

13 YEARS.— 

14 ‘‘(i) IN GENERAL.—To the extent that 

15 less than 100 percent of the available 

16 project proceeds of the issue are expended 

17 by the close of the expenditure period for 

18 1 or more qualified purposes, the issuer 

19 shall redeem all of the nonqualified bonds 

20 within 90 days after the end of such pe21 riod. For purposes of this paragraph, the 

22 amount of the nonqualified bonds required 

23 to be redeemed shall be determined in the 

24 same manner as under section 142. 
22 

•HR 5351 EH

1 ‘‘(ii) EXPENDITURE PERIOD.—For 

2 purposes of this subpart, the term ‘expend3 iture period’ means, with respect to any 

4 issue, the 3-year period beginning on the 

5 date of issuance. Such term shall include 

6 any extension of such period under clause 

7 (iii). 

8 ‘‘(iii) EXTENSION OF PERIOD.—Upon 

9 submission of a request prior to the expira10 tion of the expenditure period (determined 

11 without regard to any extension under this 

12 clause), the Secretary may extend such pe13 riod if the issuer establishes that the fail14 ure to expend the proceeds within the 

15 original expenditure period is due to rea16 sonable cause and the expenditures for 

17 qualified purposes will continue to proceed 

18 with due diligence. 

19 ‘‘(C) QUALIFIED PURPOSE.—For purposes 

20 of this paragraph, the term ‘qualified purpose’ 

21 means a purpose specified in section 54B(a)(1). 

22 ‘‘(D) REIMBURSEMENT.—For purposes of 

23 this subtitle, available project proceeds of an 

24 issue shall be treated as spent for a qualified 

25 purpose if such proceeds are used to reimburse 
23 

•HR 5351 EH

1 the issuer for amounts paid for a qualified pur2 pose after the date that the Secretary makes an 

3 allocation of bond limitation with respect to 

4 such issue, but only if— 

5 ‘‘(i) prior to the payment of the origi6 nal expenditure, the issuer declared its in7 tent to reimburse such expenditure with 

8 the proceeds of a qualified tax credit bond, 

9 ‘‘(ii) not later than 60 days after pay10 ment of the original expenditure, the issuer 

11 adopts an official intent to reimburse the 

12 original expenditure with such proceeds, 

13 and 

14 ‘‘(iii) the reimbursement is made not 

15 later than 18 months after the date the 

16 original expenditure is paid. 

17 ‘‘(3) REPORTING.—An issue shall be treated as 

18 meeting the requirements of this paragraph if the 

19 issuer of qualified tax credit bonds submits reports 

20 similar to the reports required under section 149(e). 

21 ‘‘(4) SPECIAL RULES RELATING TO ARBI22 TRAGE.— 

23 ‘‘(A) IN GENERAL.—An issue shall be 

24 treated as meeting the requirements of this 

25 paragraph if the issuer satisfies the require-
24 

•HR 5351 EH

1 ments of section 148 with respect to the pro2 ceeds of the issue. 

3 ‘‘(B) SPECIAL RULE FOR INVESTMENTS

4 DURING EXPENDITURE PERIOD.—An issue shall 

5 not be treated as failing to meet the require6 ments of subparagraph (A) by reason of any in7 vestment of available project proceeds during 

8 the expenditure period. 

9 ‘‘(C) SPECIAL RULE FOR RESERVE

10 FUNDS.—An issue shall not be treated as fail11 ing to meet the requirements of subparagraph 

12 (A) by reason of any fund which is expected to 

13 be used to repay such issue if— 

14 ‘‘(i) such fund is funded at a rate not 

15 more rapid than equal annual installments, 

16 ‘‘(ii) such fund is funded in a manner 

17 reasonably expected to result in an amount 

18 not greater than an amount necessary to 

19 repay the issue, and 

20 ‘‘(iii) the yield on such fund is not 

21 greater than the discount rate determined 

22 under paragraph (5)(B) with respect to the 

23 issue. 

24 ‘‘(5) MATURITY LIMITATION.— 
25 

•HR 5351 EH

1 ‘‘(A) IN GENERAL.—An issue shall not be 

2 treated as meeting the requirements of this 

3 paragraph if the maturity of any bond which is 

4 part of such issue exceeds the maximum term 

5 determined by the Secretary under subpara6 graph (B). 

7 ‘‘(B) MAXIMUM TERM.—During each cal8 endar month, the Secretary shall determine the 

9 maximum term permitted under this paragraph 

10 for bonds issued during the following calendar 

11 month. Such maximum term shall be the term 

12 which the Secretary estimates will result in the 

13 present value of the obligation to repay the 

14 principal on the bond being equal to 50 percent 

15 of the face amount of such bond. Such present 

16 value shall be determined using as a discount 

17 rate the average annual interest rate of tax-ex18 empt obligations having a term of 10 years or 

19 more which are issued during the month. If the 

20 term as so determined is not a multiple of a 

21 whole year, such term shall be rounded to the 

22 next highest whole year. 

23 ‘‘(6) PROHIBITION ON FINANCIAL CONFLICTS

24 OF INTEREST.—An issue shall be treated as meeting 
26 

•HR 5351 EH

1 the requirements of this paragraph if the issuer cer2 tifies that— 

3 ‘‘(A) applicable State and local law re4 quirements governing conflicts of interest are 

5 satisfied with respect to such issue, and 

6 ‘‘(B) if the Secretary prescribes additional 

7 conflicts of interest rules governing the appro8 priate Members of Congress, Federal, State, 

9 and local officials, and their spouses, such addi10 tional rules are satisfied with respect to such 

11 issue. 

12 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 

13 subchapter— 

14 ‘‘(1) CREDIT ALLOWANCE DATE.—The term 

15 ‘credit allowance date’ means— 

16 ‘‘(A) March 15, 

17 ‘‘(B) June 15, 

18 ‘‘(C) September 15, and 

19 ‘‘(D) December 15. 

20 Such term includes the last day on which the bond 

21 is outstanding. 

22 ‘‘(2) BOND.—The term ‘bond’ includes any ob23 ligation. 
27 

•HR 5351 EH

1 ‘‘(3) STATE.—The term ‘State’ includes the 

2 District of Columbia and any possession of the 

3 United States. 

4 ‘‘(4) AVAILABLE PROJECT PROCEEDS.—The 

5 term ‘available project proceeds’ means— 

6 ‘‘(A) the excess of— 

7 ‘‘(i) the proceeds from the sale of an 

8 issue, over 

9 ‘‘(ii) the issuance costs financed by 

10 the issue (to the extent that such costs do 

11 not exceed 2 percent of such proceeds), 

12 and 

13 ‘‘(B) the proceeds from any investment of 

14 the excess described in subparagraph (A). 

15 ‘‘(f) CREDIT TREATED AS INTEREST.—For purposes 

16 of this subtitle, the credit determined under subsection (a) 

17 shall be treated as interest which is includible in gross in18 come. 

19 ‘‘(g) S CORPORATIONS AND PARTNERSHIPS.—In the 

20 case of a tax credit bond held by an S corporation or part21 nership, the allocation of the credit allowed by this section 

22 to the shareholders of such corporation or partners of such 

23 partnership shall be treated as a distribution. 

24 ‘‘(h) BONDS HELD BY REGULATED INVESTMENT

25 COMPANIES AND REAL ESTATE INVESTMENT TRUSTS.— 
28 

•HR 5351 EH

1 If any qualified tax credit bond is held by a regulated in2 vestment company or a real estate investment trust, the 

3 credit determined under subsection (a) shall be allowed to 

4 shareholders of such company or beneficiaries of such 

5 trust (and any gross income included under subsection (f) 

6 with respect to such credit shall be treated as distributed 

7 to such shareholders or beneficiaries) under procedures 

8 prescribed by the Secretary. 

9 ‘‘(i) CREDITS MAY BE STRIPPED.—Under regula10 tions prescribed by the Secretary— 

11 ‘‘(1) IN GENERAL.—There may be a separation 

12 (including at issuance) of the ownership of a quali13 fied tax credit bond and the entitlement to the credit 

14 under this section with respect to such bond. In case 

15 of any such separation, the credit under this section 

16 shall be allowed to the person who on the credit al17 lowance date holds the instrument evidencing the en18 titlement to the credit and not to the holder of the 

19 bond. 

20 ‘‘(2) CERTAIN RULES TO APPLY.—In the case 

21 of a separation described in paragraph (1), the rules 

22 of section 1286 shall apply to the qualified tax credit 

23 bond as if it were a stripped bond and to the credit 

24 under this section as if it were a stripped coupon. 
29 

•HR 5351 EH

1 ‘‘SEC. 54B. NEW CLEAN RENEWABLE ENERGY BONDS. 

2 ‘‘(a) NEW CLEAN RENEWABLE ENERGY BOND.—For 

3 purposes of this subpart, the term ‘new clean renewable 

4 energy bond’ means any bond issued as part of an issue 

5 if— 

6 ‘‘(1) 100 percent of the available project pro7 ceeds of such issue are to be used for capital expend8 itures incurred by public power providers or coopera9 tive electric companies for one or more qualified re10 newable energy facilities, 

11 ‘‘(2) the bond is issued by a qualified issuer, 

12 and 

13 ‘‘(3) the issuer designates such bond for pur14 poses of this section. 

15 ‘‘(b) REDUCED CREDIT AMOUNT.—The annual credit 

16 determined under section 54A(b) with respect to any new 

17 clean renewable energy bond shall be 70 percent of the 

18 amount so determined without regard to this subsection. 

19 ‘‘(c) LIMITATION ON AMOUNT OF BONDS DES20 IGNATED.— 

21 ‘‘(1) IN GENERAL.—The maximum aggregate 

22 face amount of bonds which may be designated 

23 under subsection (a) by any issuer shall not exceed 

24 the limitation amount allocated under this sub25 section to such issuer. 
30 

•HR 5351 EH

1 ‘‘(2) NATIONAL LIMITATION ON AMOUNT OF

2 BONDS DESIGNATED.—There is a national new clean 

3 renewable energy bond limitation of $2,000,000,000 

4 which shall be allocated by the Secretary as provided 

5 in paragraph (3), except that— 

6 ‘‘(A) not more than 60 percent thereof 

7 may be allocated to qualified projects of public 

8 power providers, and 

9 ‘‘(B) not more than 40 percent thereof 

10 may be allocated to qualified projects of cooper11 ative electric companies. 

12 ‘‘(3) METHOD OF ALLOCATION.— 

13 ‘‘(A) ALLOCATION AMONG PUBLIC POWER

14 PROVIDERS.—After the Secretary determines 

15 the qualified projects of public power providers 

16 which are appropriate for receiving an alloca17 tion of the national new clean renewable energy 

18 bond limitation, the Secretary shall, to the max19 imum extent practicable, make allocations 

20 among such projects in such manner that the 

21 amount allocated to each such project bears the 

22 same ratio to the cost of such project as the 

23 limitation under subparagraph (2)(A) bears to 

24 the cost of all such projects. 
31 

•HR 5351 EH

1 ‘‘(B) ALLOCATION AMONG COOPERATIVE

2 ELECTRIC COMPANIES.—The Secretary shall 

3 make allocations of the amount of the national 

4 new clean renewable energy bond limitation de5 scribed in paragraph (2)(B) among qualified 

6 projects of cooperative electric companies in 

7 such manner as the Secretary determines ap8 propriate. 

9 ‘‘(d) DEFINITIONS.—For purposes of this section— 

10 ‘‘(1) QUALIFIED RENEWABLE ENERGY FACIL11 ITY.—The term ‘qualified renewable energy facility’ 

12 means a qualified facility (as determined under sec13 tion 45(d) without regard to paragraphs (8) and 

14 (10) thereof and to any placed in service date) 

15 owned by a public power provider or a cooperative 

16 electric company. 

17 ‘‘(2) PUBLIC POWER PROVIDER.—The term 

18 ‘public power provider’ means a State utility with a 

19 service obligation, as such terms are defined in sec20 tion 217 of the Federal Power Act (as in effect on 

21 the date of the enactment of this paragraph). 

22 ‘‘(3) COOPERATIVE ELECTRIC COMPANY.—The 

23 term ‘cooperative electric company’ means a mutual 

24 or cooperative electric company described in section 

25 501(c)(12) or section 1381(a)(2)(C). 
32 

•HR 5351 EH

1 ‘‘(4) CLEAN RENEWABLE ENERGY BOND LEND2 ER.—The term ‘clean renewable energy bond lender’ 

3 means a lender which is a cooperative which is 

4 owned by, or has outstanding loans to, 100 or more 

5 cooperative electric companies and is in existence on 

6 February 1, 2002, and shall include any affiliated 

7 entity which is controlled by such lender. 

8 ‘‘(5) QUALIFIED ISSUER.—The term ‘qualified 

9 issuer’ means a public power provider, a cooperative 

10 electric company, a clean renewable energy bond 

11 lender, or a not-for-profit electric utility which has 

12 received a loan or loan guarantee under the Rural 

13 Electrification Act.’’. 

14 (b) REPORTING.—Subsection (d) of section 6049 (re15 lating to returns regarding payments of interest) is 

16 amended by adding at the end the following new para17 graph: 

18 ‘‘(9) REPORTING OF CREDIT ON QUALIFIED

19 TAX CREDIT BONDS.— 

20 ‘‘(A) IN GENERAL.—For purposes of sub21 section (a), the term ‘interest’ includes amounts 

22 includible in gross income under section 54A 

23 and such amounts shall be treated as paid on 

24 the credit allowance date (as defined in section 

25 54A(e)(1)). 
33 

•HR 5351 EH

1 ‘‘(B) REPORTING TO CORPORATIONS, 

2 ETC.—Except as otherwise provided in regula3 tions, in the case of any interest described in 

4 subparagraph (A) of this paragraph, subsection 

5 (b)(4) of this section shall be applied without 

6 regard to subparagraphs (A), (H), (I), (J), (K), 

7 and (L)(i). 

8 ‘‘(C) REGULATORY AUTHORITY.—The Sec9 retary may prescribe such regulations as are 

10 necessary or appropriate to carry out the pur11 poses of this paragraph, including regulations 

12 which require more frequent or more detailed 

13 reporting.’’. 

14 (c) CONFORMING AMENDMENTS.— 

15 (1) Sections 54(c)(2) and 1400N(l)(3)(B) are 

16 each amended by striking ‘‘subpart C’’ and inserting 

17 ‘‘subparts C and I’’. 

18 (2) Section 1397E(c)(2) is amended by striking 

19 ‘‘subpart H’’ and inserting ‘‘subparts H and I’’. 

20 (3) Section 6401(b)(1) is amended by striking 

21 ‘‘and H’’ and inserting ‘‘H, and I’’. 

22 (4) The heading of subpart H of part IV of 

23 subchapter A of chapter 1 is amended by striking 

24 ‘‘Certain Bonds’’ and inserting ‘‘Clean Re25 newable Energy Bonds’’. 
34 

•HR 5351 EH

1 (5) The table of subparts for part IV of sub2 chapter A of chapter 1 is amended by striking the 

3 item relating to subpart H and inserting the fol4 lowing new items: 

‘‘SUBPART H. NONREFUNDABLE CREDIT TO HOLDERS OF CLEAN RENEWABLE

ENERGY BONDS. 

‘‘SUBPART I. QUALIFIED TAX CREDIT BONDS.’’. 

5 (d) EFFECTIVE DATES.—The amendments made by 

6 this section shall apply to obligations issued after the date 

7 of the enactment of this Act. 

8 SEC. 105. EXTENSION AND MODIFICATION OF SPECIAL 

9 RULE TO IMPLEMENT FERC AND STATE 

10 ELECTRIC RESTRUCTURING POLICY. 

11 (a) EXTENSION FOR QUALIFIED ELECTRIC UTILI12 TIES.— 

13 (1) IN GENERAL.—Paragraph (3) of section 

14 451(i) (relating to special rule for sales or disposi15 tions to implement Federal Energy Regulatory Com16 mission or State electric restructuring policy) is 

17 amended by inserting ‘‘(before January 1, 2010, in 

18 the case of a qualified electric utility)’’ after ‘‘Janu19 ary 1, 2008’’. 

20 (2) QUALIFIED ELECTRIC UTILITY.—Subsection 

21 (i) of section 451 is amended by redesignating para22 graphs (6) through (10) as paragraphs (7) through 
35 

•HR 5351 EH

1 (11), respectively, and by inserting after paragraph 

2 (5) the following new paragraph: 

3 ‘‘(6) QUALIFIED ELECTRIC UTILITY.—For pur4 poses of this subsection, the term ‘qualified electric 

5 utility’ means a person that, as of the date of the 

6 qualifying electric transmission transaction, is 

7 vertically integrated, in that it is both— 

8 ‘‘(A) a transmitting utility (as defined in 

9 section 3(23) of the Federal Power Act (16 

10 U.S.C. 796(23))) with respect to the trans11 mission facilities to which the election under 

12 this subsection applies, and 

13 ‘‘(B) an electric utility (as defined in sec14 tion 3(22) of the Federal Power Act (16 U.S.C. 

15 796(22))).’’. 

16 (b) EXTENSION OF PERIOD FOR TRANSFER OF

17 OPERATIONAL CONTROL AUTHORIZED BY FERC.— 

18 Clause (ii) of section 451(i)(4)(B) is amended by striking 

19 ‘‘December 31, 2007’’ and inserting ‘‘the date which is 

20 4 years after the close of the taxable year in which the 

21 transaction occurs’’. 

22 (c) PROPERTY LOCATED OUTSIDE THE UNITED

23 STATES NOT TREATED AS EXEMPT UTILITY PROP24 ERTY.—Paragraph (5) of section 451(i) is amended by 

25 adding at the end the following new subparagraph: 
36 

•HR 5351 EH

1 ‘‘(C) EXCEPTION FOR PROPERTY LOCATED

2 OUTSIDE THE UNITED STATES.—The term ‘ex3 empt utility property’ shall not include any 

4 property which is located outside the United 

5 States.’’. 

6 (d) EFFECTIVE DATES.— 

7 (1) EXTENSION.—The amendments made by 

8 subsection (a) shall apply to transactions after De9 cember 31, 2007. 

10 (2) TRANSFERS OF OPERATIONAL CONTROL.— 

11 The amendment made by subsection (b) shall take 

12 effect as if included in section 909 of the American 

13 Jobs Creation Act of 2004. 

14 (3) EXCEPTION FOR PROPERTY LOCATED OUT15 SIDE THE UNITED STATES.—The amendment made 

16 by subsection (c) shall apply to transactions after 

17 the date of the enactment of this Act. 

18 SEC. 106. EXTENSION AND MODIFICATION OF CREDIT FOR 

19 RESIDENTIAL ENERGY EFFICIENT PROP20 ERTY. 

21 (a) EXTENSION.—Section 25D(g) (relating to termi22 nation) is amended by striking ‘‘December 31, 2008’’ and 

23 inserting ‘‘December 31, 2014’’. 

24 (b) MAXIMUM CREDIT FOR SOLAR ELECTRIC PROP25 ERTY.— 
37 

•HR 5351 EH

1 (1) IN GENERAL.—Section 25D(b)(1)(A) (relat2 ing to maximum credit) is amended by striking 

3 ‘‘$2,000’’ and inserting ‘‘$4,000’’. 

4 (2) CONFORMING AMENDMENT.—Section 

5 25D(e)(4)(A)(i) is amended by striking ‘‘$6,667’’ 

6 and inserting ‘‘$13,333’’. 

7 (c) CREDIT FOR RESIDENTIAL WIND PROPERTY.— 

8 (1) IN GENERAL.—Section 25D(a) (relating to 

9 allowance of credit) is amended by striking ‘‘and’’ at 

10 the end of paragraph (2), by striking the period at 

11 the end of paragraph (3) and inserting ‘‘, and’’, and 

12 by adding at the end the following new paragraph: 

13 ‘‘(4) 30 percent of the qualified small wind en14 ergy property expenditures made by the taxpayer 

15 during such year.’’. 

16 (2) LIMITATION.—Section 25D(b)(1) (relating 

17 to maximum credit) is amended by striking ‘‘and’’ at 

18 the end of subparagraph (B), by striking the period 

19 at the end of subparagraph (C) and inserting ‘‘, 

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

21 subparagraph: 

22 ‘‘(D) $500 with respect to each half kilo23 watt of capacity (not to exceed $4,000) of wind 

24 turbines for which qualified small wind energy 

25 property expenditures are made.’’. 
38 

•HR 5351 EH

1 (3) QUALIFIED SMALL WIND ENERGY PROP2 ERTY EXPENDITURES.— 

3 (A) IN GENERAL.—Section 25D(d) (relat4 ing to definitions) is amended by adding at the 

5 end the following new paragraph: 

6 ‘‘(4) QUALIFIED SMALL WIND ENERGY PROP7 ERTY EXPENDITURE.—The term ‘qualified small 

8 wind energy property expenditure’ means an expend9 iture for property which uses a wind turbine to gen10 erate electricity for use in connection with a dwelling 

11 unit located in the United States and used as a resi12 dence by the taxpayer.’’. 

13 (B) NO DOUBLE BENEFIT.—Section 

14 45(d)(1) (relating to wind facility) is amended 

15 by adding at the end the following new sen16 tence: ‘‘Such term shall not include any facility 

17 with respect to which any qualified small wind 

18 energy property expenditure (as defined in sub19 section (d)(4) of section 25D) is taken into ac20 count in determining the credit under such sec21 tion.’’. 

22 (4) MAXIMUM EXPENDITURES IN CASE OF

23 JOINT OCCUPANCY.—Section 25D(e)(4)(A) (relating 

24 to maximum expenditures) is amended by striking 

25 ‘‘and’’ at the end of clause (ii), by striking the pe-
39 

•HR 5351 EH

1 riod at the end of clause (iii) and inserting ‘‘, and’’, 

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

3 ‘‘(iv) $1,667 in the case of each half 

4 kilowatt of capacity (not to exceed 

5 $13,333) of wind turbines for which quali6 fied small wind energy property expendi7 tures are made.’’. 

8 (d) CREDIT FOR GEOTHERMAL HEAT PUMP SYS9 TEMS.— 

10 (1) IN GENERAL.—Section 25D(a) (relating to 

11 allowance of credit), as amended by subsection (c), 

12 is amended by striking ‘‘and’’ at the end of para13 graph (3), by striking the period at the end of para14 graph (4) and inserting ‘‘, and’’, and by adding at 

15 the end the following new paragraph: 

16 ‘‘(5) 30 percent of the qualified geothermal 

17 heat pump property expenditures made by the tax18 payer during such year.’’. 

19 (2) LIMITATION.—Section 25D(b)(1) (relating 

20 to maximum credit), as amended by subsection (c), 

21 is amended by striking ‘‘and’’ at the end of subpara22 graph (C), by striking the period at the end of sub23 paragraph (D) and inserting ‘‘, and’’, and by adding 

24 at the end the following new subparagraph: 
40 

•HR 5351 EH

1 ‘‘(E) $2,000 with respect to any qualified 

2 geothermal heat pump property expenditures.’’. 

3 (3) QUALIFIED GEOTHERMAL HEAT PUMP

4 PROPERTY EXPENDITURE.—Section 25D(d) (relat5 ing to definitions), as amended by subsection (c), is 

6 amended by adding at the end the following new 

7 paragraph: 

8 ‘‘(5) QUALIFIED GEOTHERMAL HEAT PUMP

9 PROPERTY EXPENDITURE.— 

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

11 geothermal heat pump property expenditure’ 

12 means an expenditure for qualified geothermal 

13 heat pump property installed on or in connec14 tion with a dwelling unit located in the United 

15 States and used as a residence by the taxpayer. 

16 ‘‘(B) QUALIFIED GEOTHERMAL HEAT

17 PUMP PROPERTY.—The term ‘qualified geo18 thermal heat pump property’ means any equip19 ment which— 

20 ‘‘(i) uses the ground or ground water 

21 as a thermal energy source to heat the 

22 dwelling unit referred to in subparagraph 

23 (A) or as a thermal energy sink to cool 

24 such dwelling unit, and 
41 

•HR 5351 EH

1 ‘‘(ii) meets the requirements of the 

2 Energy Star program which are in effect 

3 at the time that the expenditure for such 

4 equipment is made.’’. 

5 (4) MAXIMUM EXPENDITURES IN CASE OF

6 JOINT OCCUPANCY.—Section 25D(e)(4)(A) (relating 

7 to maximum expenditures), as amended by sub8 section (c), is amended by striking ‘‘and’’ at the end 

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

10 clause (iv) and inserting ‘‘, and’’, and by adding at 

11 the end the following new clause: 

12 ‘‘(v) $6,667 in the case of any quali13 fied geothermal heat pump property ex14 penditures.’’. 

15 (e) CREDIT ALLOWED AGAINST ALTERNATIVE MIN16 IMUM TAX.— 

17 (1) IN GENERAL.—Subsection (c) of section 

18 25D is amended to read as follows: 

19 ‘‘(c) LIMITATION BASED ON AMOUNT OF TAX; 

20 CARRYFORWARD OF UNUSED CREDIT.— 

21 ‘‘(1) LIMITATION BASED ON AMOUNT OF

22 TAX.—In the case of a taxable year to which section 

23 26(a)(2) does not apply, the credit allowed under 

24 subsection (a) for the taxable year shall not exceed 

25 the excess of— 
42 

•HR 5351 EH

1 ‘‘(A) the sum of the regular tax liability 

2 (as defined in section 26(b)) plus the tax im3 posed by section 55, over 

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

5 under this subpart (other than this section) and 

6 section 27 for the taxable year. 

7 ‘‘(2) CARRYFORWARD OF UNUSED CREDIT.— 

8 ‘‘(A) RULE FOR YEARS IN WHICH ALL

9 PERSONAL CREDITS ALLOWED AGAINST REG10 ULAR AND ALTERNATIVE MINIMUM TAX.—In 

11 the case of a taxable year to which section 

12 26(a)(2) applies, if the credit allowable under 

13 subsection (a) exceeds the limitation imposed by 

14 section 26(a)(2) for such taxable year reduced 

15 by the sum of the credits allowable under this 

16 subpart (other than this section), such excess 

17 shall be carried to the succeeding taxable year 

18 and added to the credit allowable under sub19 section (a) for such succeeding taxable year. 

20 ‘‘(B) RULE FOR OTHER YEARS.—In the 

21 case of a taxable year to which section 26(a)(2) 

22 does not apply, if the credit allowable under 

23 subsection (a) exceeds the limitation imposed by 

24 paragraph (1) for such taxable year, such ex25 cess shall be carried to the succeeding taxable 
43 

•HR 5351 EH

1 year and added to the credit allowable under 

2 subsection (a) for such succeeding taxable 

3 year.’’. 

4 (2) CONFORMING AMENDMENTS.— 

5 (A) Section 23(b)(4)(B) is amended by in6 serting ‘‘and section 25D’’ after ‘‘this section’’. 

7 (B) Section 24(b)(3)(B) is amended by 

8 striking ‘‘and 25B’’ and inserting ‘‘, 25B, and 

9 25D’’. 

10 (C) Section 25B(g)(2) is amended by strik11 ing ‘‘section 23’’ and inserting ‘‘sections 23 and 

12 25D’’. 

13 (D) Section 26(a)(1) is amended by strik14 ing ‘‘and 25B’’ and inserting ‘‘25B, and 25D’’. 

15 (f) EFFECTIVE DATE.— 

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

17 this section shall apply to taxable years beginning 

18 after December 31, 2007. 

19 (2) APPLICATION OF EGTRRA SUNSET.—The 

20 amendments made by subparagraphs (A) and (B) of 

21 subsection (e)(2) shall be subject to title IX of the 

22 Economic Growth and Tax Relief Reconciliation Act 

23 of 2001 in the same manner as the provisions of 

24 such Act to which such amendments relate. 
44 

•HR 5351 EH

1 TITLE II—CONSERVATION 

2 Subtitle A—Transportation 

3 PART 1—VEHICLES 

4 SEC. 201. CREDIT FOR PLUG-IN HYBRID VEHICLES. 

5 (a) IN GENERAL.—Subpart B of part IV of sub6 chapter A of chapter 1 (relating to other credits) is 

7 amended by adding at the end the following new section: 

8 ‘‘SEC. 30D. PLUG-IN HYBRID VEHICLES. 

9 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al10 lowed as a credit against the tax imposed by this chapter 

11 for the taxable year an amount equal to the sum of the 

12 credit amounts determined under subsection (b) with re13 spect to each qualified plug-in hybrid vehicle placed in 

14 service by the taxpayer during the taxable year. 

15 ‘‘(b) PER VEHICLE DOLLAR LIMITATION.— 

16 ‘‘(1) IN GENERAL.—The amount determined 

17 under this subsection with respect to any qualified 

18 plug-in hybrid vehicle is the sum of the amounts de19 termined under paragraphs (2) and (3) with respect 

20 to such vehicle. 

21 ‘‘(2) BASE AMOUNT.—The amount determined 

22 under this paragraph is $4,000. 

23 ‘‘(3) BATTERY CAPACITY.—In the case of vehi24 cle which draws propulsion energy from a battery 

25 with not less than 5 kilowatt hours of capacity, the 
45 

•HR 5351 EH

1 amount determined under this paragraph is $200, 

2 plus $200 for each kilowatt hour of capacity in ex3 cess of 5 kilowatt hours. The amount determined 

4 under this paragraph shall not exceed $2,000. 

5 ‘‘(c) APPLICATION WITH OTHER CREDITS.— 

6 ‘‘(1) BUSINESS CREDIT TREATED AS PART OF

7 GENERAL BUSINESS CREDIT.—So much of the credit 

8 which would be allowed under subsection (a) for any 

9 taxable year (determined without regard to this sub10 section) that is attributable to property of a char11 acter subject to an allowance for depreciation shall 

12 be treated as a credit listed in section 38(b) for such 

13 taxable year (and not allowed under subsection (a)). 

14 ‘‘(2) PERSONAL CREDIT.— 

15 ‘‘(A) IN GENERAL.—For purposes of this 

16 title, the credit allowed under subsection (a) for 

17 any taxable year (determined after application 

18 of paragraph (1)) shall be treated as a credit 

19 allowable under subpart A for such taxable 

20 year. 

21 ‘‘(B) LIMITATION BASED ON AMOUNT OF

22 TAX.—In the case of a taxable year to which 

23 section 26(a)(2) does not apply, the credit al24 lowed under subsection (a) for any taxable year 
46 

•HR 5351 EH

1 (determined after application of paragraph (1)) 

2 shall not exceed the excess of— 

3 ‘‘(i) the sum of the regular tax liabil4 ity (as defined in section 26(b)) plus the 

5 tax imposed by section 55, over 

6 ‘‘(ii) the sum of the credits allowable 

7 under subpart A (other than this section 

8 and sections 23 and 25D) and section 27 

9 for the taxable year. 

10 ‘‘(d) QUALIFIED PLUG-IN HYBRID VEHICLE.—For 

11 purposes of this section— 

12 ‘‘(1) IN GENERAL.—The term ‘qualified plug-in 

13 hybrid vehicle’ means a motor vehicle (as defined in 

14 section 30(c)(2))— 

15 ‘‘(A) the original use of which commences 

16 with the taxpayer, 

17 ‘‘(B) which is acquired for use or lease by 

18 the taxpayer and not for resale, 

19 ‘‘(C) which is made by a manufacturer, 

20 ‘‘(D) which has a gross vehicle weight rat21 ing of less than 14,000 pounds, 

22 ‘‘(E) which has received a certificate of 

23 conformity under the Clean Air Act and meets 

24 or exceeds the Bin 5 Tier II emission standard 

25 established in regulations prescribed by the Ad-
47 

•HR 5351 EH

1 ministrator of the Environmental Protection 

2 Agency under section 202(i) of the Clean Air 

3 Act for that make and model year vehicle, 

4 ‘‘(F) which is propelled to a significant ex5 tent by an electric motor which draws electricity 

6 from a battery which— 

7 ‘‘(i) has a capacity of not less than 4 

8 kilowatt hours, and 

9 ‘‘(ii) is capable of being recharged 

10 from an external source of electricity, and 

11 ‘‘(G) which either— 

12 ‘‘(i) is also propelled to a significant 

13 extent by other than an electric motor, or 

14 ‘‘(ii) has a significant onboard source 

15 of electricity which also recharges the bat16 tery referred to in subparagraph (F). 

17 ‘‘(2) EXCEPTION.—The term ‘qualified plug-in 

18 hybrid vehicle’ shall not include any vehicle which is 

19 not a passenger automobile or light truck if such ve20 hicle has a gross vehicle weight rating of less than 

21 8,500 pounds. 

22 ‘‘(3) OTHER TERMS.—The terms ‘passenger 

23 automobile’, ‘light truck’, and ‘manufacturer’ have 

24 the meanings given such terms in regulations pre25 scribed by the Administrator of the Environmental 
48 

•HR 5351 EH

1 Protection Agency for purposes of the administra2 tion of title II of the Clean Air Act (42 U.S.C. 7521 

3 et seq.). 

4 ‘‘(4) BATTERY CAPACITY.—The term ‘capacity’ 

5 means, with respect to any battery, the quantity of 

6 electricity which the battery is capable of storing, ex7 pressed in kilowatt hours, as measured from a 100 

8 percent state of charge to a 0 percent state of 

9 charge. 

10 ‘‘(e) LIMITATION ON NUMBER OF QUALIFIED PLUG11 IN HYBRID VEHICLES ELIGIBLE FOR CREDIT.— 

12 ‘‘(1) IN GENERAL.—In the case of a qualified 

13 plug-in hybrid vehicle sold during the phaseout pe14 riod, only the applicable percentage of the credit oth15 erwise allowable under subsection (a) shall be al16 lowed. 

17 ‘‘(2) PHASEOUT PERIOD.—For purposes of this 

18 subsection, the phaseout period is the period begin19 ning with the second calendar quarter following the 

20 calendar quarter which includes the first date on 

21 which the number of qualified plug-in hybrid vehicles 

22 manufactured by the manufacturer of the vehicle re23 ferred to in paragraph (1) sold for use in the United 

24 States after the date of the enactment of this sec25 tion, is at least 60,000. 
49 

•HR 5351 EH

1 ‘‘(3) APPLICABLE PERCENTAGE.—For purposes 

2 of paragraph (1), the applicable percentage is— 

3 ‘‘(A) 50 percent for the first 2 calendar 

4 quarters of the phaseout period, 

5 ‘‘(B) 25 percent for the 3d and 4th cal6 endar quarters of the phaseout period, and 

7 ‘‘(C) 0 percent for each calendar quarter 

8 thereafter. 

9 ‘‘(4) CONTROLLED GROUPS.—Rules similar to 

10 the rules of section 30B(f)(4) shall apply for pur11 poses of this subsection. 

12 ‘‘(f) SPECIAL RULES.— 

13 ‘‘(1) BASIS REDUCTION.—The basis of any 

14 property for which a credit is allowable under sub15 section (a) shall be reduced by the amount of such 

16 credit (determined without regard to subsection (c)). 

17 ‘‘(2) RECAPTURE.—The Secretary shall, by reg18 ulations, provide for recapturing the benefit of any 

19 credit allowable under subsection (a) with respect to 

20 any property which ceases to be property eligible for 

21 such credit. 

22 ‘‘(3) PROPERTY USED OUTSIDE UNITED

23 STATES, ETC., NOT QUALIFIED.—No credit shall be 

24 allowed under subsection (a) with respect to any 

25 property referred to in section 50(b)(1) or with re-
50 

•HR 5351 EH

1 spect to the portion of the cost of any property 

2 taken into account under section 179. 

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

4 credit shall be allowed under subsection (a) for any 

5 vehicle if the taxpayer elects to not have this section 

6 apply to such vehicle. 

7 ‘‘(5) PROPERTY USED BY TAX-EXEMPT ENTITY; 

8 INTERACTION WITH AIR QUALITY AND MOTOR VEHI9 CLE SAFETY STANDARDS.—Rules similar to the rules 

10 of paragraphs (6) and (10) of section 30B(h) shall 

11 apply for purposes of this section.’’. 

12 (b) PLUG-IN VEHICLES NOT TREATED AS NEW

13 QUALIFIED HYBRID VEHICLES.—Section 30B(d)(3) is 

14 amended by adding at the end the following new subpara15 graph: 

16 ‘‘(D) EXCLUSION OF PLUG-IN VEHICLES.— 

17 Any vehicle with respect to which a credit is al18 lowable under section 30D (determined without 

19 regard to subsection (c) thereof) shall not be 

20 taken into account under this section.’’. 

21 (c) CREDIT MADE PART OF GENERAL BUSINESS

22 CREDIT.—Section 38(b) is amended— 

23 (1) by striking ‘‘and’’ each place it appears at 

24 the end of any paragraph, 
51 

•HR 5351 EH

1 (2) by striking ‘‘plus’’ each place it appears at 

2 the end of any paragraph, 

3 (3) by striking the period at the end of para4 graph (31) and inserting ‘‘, plus’’, and 

5 (4) by adding at the end the following new 

6 paragraph: 

7 ‘‘(32) the portion of the plug-in hybrid vehicle 

8 credit to which section 30D(c)(1) applies.’’. 

9 (d) CONFORMING AMENDMENTS.— 

10 (1)(A) Section 24(b)(3)(B), as amended by this 

11 Act, is amended by striking ‘‘and 25D’’ and insert12 ing ‘‘25D, and 30D’’. 

13 (B) Section 25(e)(1)(C)(ii) is amended by in14 serting ‘‘30D,’’ after ‘‘25D,’’. 

15 (C) Section 25B(g)(2), as amended by this Act, 

16 is amended by striking ‘‘and 25D’’ and inserting ‘‘, 

17 25D, and 30D’’. 

18 (D) Section 26(a)(1), as amended by this Act, 

19 is amended by striking ‘‘and 25D’’ and inserting 

20 ‘‘25D, and 30D’’. 

21 (E) Section 1400C(d)(2) is amended by striking 

22 ‘‘and 25D’’ and inserting ‘‘25D, and 30D’’. 

23 (2) Section 1016(a) is amended by striking 

24 ‘‘and’’ at the end of paragraph (35), by striking the 

25 period at the end of paragraph (36) and inserting ‘‘, 
52 

•HR 5351 EH

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

2 paragraph: 

3 ‘‘(37) to the extent provided in section 

4 30D(f)(1).’’. 

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

6 ‘‘30D(f)(4),’’ after ‘‘30C(e)(5),’’. 

7 (4) The table of sections for subpart B of part 

8 IV of subchapter A of chapter 1 is amended by add9 ing at the end the following new item: 

‘‘Sec. 30D. Plug-in hybrid vehicles.’’. 

10 (e) TREATMENT OF ALTERNATIVE MOTOR VEHICLE

11 CREDIT AS A PERSONAL CREDIT.— 

12 (1) IN GENERAL.—Paragraph (2) of section 

13 30B(g) is amended to read as follows: 

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

15 under subsection (a) for any taxable year (after ap16 plication of paragraph (1)) shall be treated as a 

17 credit allowable under subpart A for such taxable 

18 year.’’. 

19 (2) CONFORMING AMENDMENTS.— 

20 (A) Subparagraph (A) of section 30C(d)(2) 

21 is amended by striking ‘‘sections 27, 30, and 

22 30B’’ and inserting ‘‘sections 27 and 30’’. 

23 (B) Paragraph (3) of section 55(c) is 

24 amended by striking ‘‘30B(g)(2),’’. 

25 (f) EFFECTIVE DATE.— 
53 

•HR 5351 EH

1 (1) IN GENERAL.—Except as otherwise pro2 vided in this subsection, the amendments made by 

3 this section shall apply to taxable years beginning 

4 after December 31, 2008. 

5 (2) TREATMENT OF ALTERNATIVE MOTOR VE6 HICLE CREDIT AS PERSONAL CREDIT.—The amend7 ments made by subsection (e) shall apply to taxable 

8 years beginning after December 31, 2007. 

9 (g) APPLICATION OF EGTRRA SUNSET.—The 

10 amendment made by subsection (d)(1)(A) shall be subject 

11 to title IX of the Economic Growth and Tax Relief Rec12 onciliation Act of 2001 in the same manner as the provi13 sion of such Act to which such amendment relates. 

14 SEC. 202. EXTENSION AND MODIFICATION OF ALTER15 NATIVE FUEL VEHICLE REFUELING PROP16 ERTY CREDIT. 

17 (a) INCREASE IN CREDIT AMOUNT.—Section 30C 

18 (relating to alternative fuel vehicle refueling property cred19 it) is amended— 

20 (1) by striking ‘‘30 percent’’ in subsection (a) 

21 and inserting ‘‘50 percent’’, and 

22 (2) by striking ‘‘$30,000’’ in subsection (b)(1) 

23 and inserting ‘‘$50,000’’. 

24 (b) EXTENSION OF CREDIT.—Paragraph (2) of sec25 tion 30C(g) (relating to termination) is amended by strik-
54 

•HR 5351 EH

1 ing ‘‘December 31, 2009’’ and inserting ‘‘December 31, 

2 2010’’. 

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

4 this section shall apply to property placed in service after 

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

6 ending after such date. 

7 SEC. 203. MODIFICATION OF LIMITATION ON AUTOMOBILE 

8 DEPRECIATION. 

9 (a) IN GENERAL.—Paragraph (5) of section 280F(d) 

10 (defining passenger automobile) is amended to read as fol11 lows: 

12 ‘‘(5) PASSENGER AUTOMOBILE.— 

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

14 subparagraph (B), the term ‘passenger auto15 mobile’ means any 4-wheeled vehicle— 

16 ‘‘(i) which is primarily designed or 

17 which can be used to carry passengers over 

18 public streets, roads, or highways (except 

19 any vehicle operated exclusively on a rail or 

20 rails), and 

21 ‘‘(ii) which is rated at not more than 

22 14,000 pounds gross vehicle weight. 

23 ‘‘(B) EXCEPTIONS.—The term ‘passenger 

24 automobile’ shall not include— 

25 ‘‘(i) any exempt-design vehicle, and 
55 

•HR 5351 EH

1 ‘‘(ii) any exempt-use vehicle. 

2 ‘‘(C) EXEMPT-DESIGN VEHICLE.—The 

3 term ‘exempt-design vehicle’ means— 

4 ‘‘(i) any vehicle which, by reason of its 

5 nature or design, is not likely to be used 

6 more than a de minimis amount for per7 sonal purposes, and 

8 ‘‘(ii) any vehicle— 

9 ‘‘(I) which is designed to have a 

10 seating capacity of more than 9 per11 sons behind the driver’s seat, 

12 ‘‘(II) which is equipped with a 

13 cargo area of at least 5 feet in interior 

14 length which is an open area or is de15 signed for use as an open area but is 

16 enclosed by a cap and is not readily 

17 accessible directly from the passenger 

18 compartment, or 

19 ‘‘(III) has an integral enclosure, 

20 fully enclosing the driver compartment 

21 and load carrying device, does not 

22 have seating rearward of the driver’s 

23 seat, and has no body section pro24 truding more than 30 inches ahead of 

25 the leading edge of the windshield. 
56 

•HR 5351 EH

1 ‘‘(D) EXEMPT-USE VEHICLE.—The term 

2 ‘exempt-use vehicle’ means— 

3 ‘‘(i) any ambulance, hearse, or com4 bination ambulance-hearse used by the tax5 payer directly in a trade or business, 

6 ‘‘(ii) any vehicle used by the taxpayer 

7 directly in the trade or business of trans8 porting persons or property for compensa9 tion or hire, and 

10 ‘‘(iii) any truck or van if substantially 

11 all of the use of such vehicle by the tax12 payer is directly in— 

13 ‘‘(I) a farming business (within 

14 the meaning of section 263A(e)(4)), 

15 ‘‘(II) the transportation of a sub16 stantial amount of equipment, sup17 plies, or inventory, or 

18 ‘‘(III) the moving or delivery of 

19 property which requires substantial 

20 cargo capacity. 

21 ‘‘(E) RECAPTURE.—In the case of any ve22 hicle which is not a passenger automobile by 

23 reason of being an exempt-use vehicle, if such 

24 vehicle ceases to be an exempt-use vehicle in 

25 any taxable year after the taxable year in which 
57 

•HR 5351 EH

1 such vehicle is placed in service, a rule similar 

2 to the rule of subsection (b) shall apply.’’. 

3 (b) CONFORMING AMENDMENT.—Section 179(b) (re4 lating to limitations) is amended by striking paragraph 

5 (6). 

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

7 this section shall apply to property placed in service after 

8 the date of the enactment of this Act. 

9 PART 2—FUELS 

10 SEC. 211. EXTENSION AND MODIFICATION OF CREDITS FOR 

11 BIODIESEL AND RENEWABLE DIESEL. 

12 (a) IN GENERAL.—Sections 40A(g), 6426(c)(6), and 

13 6427(e)(5)(B) are each amended by striking ‘‘December 

14 31, 2008’’ and inserting ‘‘December 31, 2010’’. 

15 (b) UNIFORM TREATMENT OF DIESEL PRODUCED

16 FROM BIOMASS.—Paragraph (3) of section 40A(f) is 

17 amended— 

18 (1) by striking ‘‘diesel fuel’’ and inserting ‘‘liq19 uid fuel’’, 

20 (2) by striking ‘‘using a thermal 

21 depolymerization process’’, and 

22 (3) by striking ‘‘or D396’’ in subparagraph (B) 

23 and inserting ‘‘or other equivalent standard ap24 proved by the Secretary for fuels to be used in die25 sel-powered highway vehicles’’. 
58 

•HR 5351 EH

1 (c) COPRODUCTION OF RENEWABLE DIESEL WITH

2 PETROLEUM FEEDSTOCK.— 

3 (1) IN GENERAL.—Paragraph (3) of section 

4 40A(f) (defining renewable diesel) is amended by 

5 adding at the end the following flush sentence: 

6 ‘‘Such term does not include any fuel derived from 

7 coprocessing biomass with a feedstock which is not 

8 biomass. For purposes of this paragraph, the term 

9 ‘biomass’ has the meaning given such term by sec10 tion 45K(c)(3).’’. 

11 (2) CONFORMING AMENDMENT.—Paragraph (3) 

12 of section 40A(f) is amended by striking ‘‘(as de13 fined in section 45K(c)(3))’’. 

14 (d) EFFECTIVE DATE.— 

15 (1) IN GENERAL.—Except as otherwise pro16 vided in this subsection, the amendments made by 

17 this section shall apply to fuel produced, and sold or 

18 used, after December 31, 2008. 

19 (2) COPRODUCTION OF RENEWABLE DIESEL

20 WITH PETROLEUM FEEDSTOCK.—The amendments 

21 made by subsection (c) shall apply to fuel produced, 

22 and sold or used, after February 13, 2008. 
59 

•HR 5351 EH

1 SEC. 212. CLARIFICATION THAT CREDITS FOR FUEL ARE 

2 DESIGNED TO PROVIDE AN INCENTIVE FOR 

3 UNITED STATES PRODUCTION. 

4 (a) BIODIESEL FUELS CREDIT.—Paragraph (5) of 

5 section 40A(d), as added by subsection (c), is amended 

6 to read as follows: 

7 ‘‘(5) LIMITATION TO BIODIESEL WITH CONNEC8 TION TO THE UNITED STATES.—No credit shall be 

9 determined under this section with respect to any 

10 biodiesel unless— 

11 ‘‘(A) such biodiesel is produced in the 

12 United States for use as a fuel in the United 

13 States, and 

14 ‘‘(B) the taxpayer obtains a certification 

15 (in such form and manner as prescribed by the 

16 Secretary) from the producer of the biodiesel 

17 which identifies the product produced and the 

18 location of such production. 

19 For purposes of this paragraph, the term ‘United 

20 States’ includes any possession of the United 

21 States.’’. 

22 (b) EXCISE TAX CREDIT.—Paragraph (2) of section 

23 6426(h), as added by subsection (c), is amended to read 

24 as follows: 

25 ‘‘(2) BIODIESEL AND ALTERNATIVE FUELS.— 

26 No credit shall be determined under this section 
60 

•HR 5351 EH

1 with respect to any biodiesel or alternative fuel un2 less— 

3 ‘‘(A) such biodiesel or alternative fuel is 

4 produced in the United States for use as a fuel 

5 in the United States, and 

6 ‘‘(B) the taxpayer obtains a certification 

7 (in such form and manner as prescribed by the 

8 Secretary) from the producer of such biodiesel 

9 or alternative fuel which identifies the product 

10 produced and the location of such production.’’. 

11 (c) PROVISIONS CLARIFYING TREATMENT OF FUELS

12 WITH NO NEXUS TO THE UNITED STATES.— 

13 (1) ALCOHOL FUELS CREDIT.—Subsection (d) 

14 of section 40 is amended by adding at the end the 

15 following new paragraph: 

16 ‘‘(6) LIMITATION TO ALCOHOL WITH CONNEC17 TION TO THE UNITED STATES.—No credit shall be 

18 determined under this section with respect to any al19 cohol which is produced outside the United States 

20 for use as a fuel outside the United States. For pur21 poses of this paragraph, the term ‘United States’ in22 cludes any possession of the United States.’’. 

23 (2) BIODIESEL FUELS CREDIT.—Subsection (d) 

24 of section 40A is amended by adding at the end the 

25 following new paragraph: 
61 

•HR 5351 EH

1 ‘‘(5) LIMITATION TO BIODIESEL WITH CONNEC2 TION TO THE UNITED STATES.—No credit shall be 

3 determined under this section with respect to any 

4 biodiesel which is produced outside the United 

5 States for use as a fuel outside the United States. 

6 For purposes of this paragraph, the term ‘United 

7 States’ includes any possession of the United 

8 States.’’. 

9 (3) EXCISE TAX CREDIT.— 

10 (A) IN GENERAL.—Section 6426 is amend11 ed by adding at the end the following new sub12 section: 

13 ‘‘(h) LIMITATION TO FUELS WITH CONNECTION TO

14 THE UNITED STATES.— 

15 ‘‘(1) ALCOHOL.—No credit shall be determined 

16 under this section with respect to any alcohol which 

17 is produced outside the United States for use as a 

18 fuel outside the United States. 

19 ‘‘(2) BIODIESEL AND ALTERNATIVE FUELS.— 

20 No credit shall be determined under this section 

21 with respect to any biodiesel or alternative fuel 

22 which is produced outside the United States for use 

23 as a fuel outside the United States. 

24 For purposes of this subsection, the term ‘United States’ 

25 includes any possession of the United States.’’. 
62 

•HR 5351 EH

1 (B) CONFORMING AMENDMENT.—Sub2 section (e) of section 6427 is amended by redes3 ignating paragraph (5) as paragraph (6) and by 

4 inserting after paragraph (4) the following new 

5 paragraph: 

6 ‘‘(5) LIMITATION TO FUELS WITH CONNECTION

7 TO THE UNITED STATES.—No amount shall be pay8 able under paragraph (1) or (2) with respect to any 

9 mixture or alternative fuel if credit is not allowed 

10 with respect to such mixture or alternative fuel by 

11 reason of section 6426(h).’’. 

12 (d) EFFECTIVE DATE.— 

13 (1) IN GENERAL.—Except as provided in para14 graph (2), the amendments made by this section 

15 shall apply to fuel produced, and sold or used, after 

16 December 31, 2008. 

17 (2) PROVISIONS CLARIFYING TREATMENT OF

18 FUELS WITH NO NEXUS TO THE UNITED STATES.— 

19 (A) IN GENERAL.—Except as otherwise 

20 provided in this paragraph, the amendments 

21 made by subsection (c) shall take effect as if in22 cluded in section 301 of the American Jobs 

23 Creation Act of 2004. 

24 (B) ALTERNATIVE FUEL CREDITS.—So 

25 much of the amendments made by subsection 
63 

•HR 5351 EH

1 (c) as relate to the alternative fuel credit or the 

2 alternative fuel mixture credit shall take effect 

3 as if included in section 11113 of the Safe, Ac4 countable, Flexible, Efficient Transportation 

5 Equity Act: A Legacy for Users. 

6 (C) RENEWABLE DIESEL.—So much of the 

7 amendments made by subsection (c) as relate to 

8 renewable diesel shall take effect as if included 

9 in section 1346 of the Energy Policy Act of 

10 2005. 

11 SEC. 213. CREDIT FOR PRODUCTION OF CELLULOSIC ALCO12 HOL. 

13 (a) IN GENERAL.—Subsection (b) of section 40 is 

14 amended by redesignating paragraph (5) as paragraph (6) 

15 and by inserting after paragraph (4) the following new 

16 paragraph: 

17 ‘‘(5) CELLULOSIC ALCOHOL FUEL PRODUCER

18 CREDIT.— 

19 ‘‘(A) IN GENERAL.—The cellulosic alcohol 

20 fuel producer credit of any cellulosic alcohol fuel 

21 producer for any taxable year is 50 cents for 

22 each gallon of qualified cellulosic fuel produc23 tion of such producer. 

24 ‘‘(B) QUALIFIED CELLULOSIC FUEL PRO25 DUCTION.—For purposes of this paragraph, the 
64 

•HR 5351 EH

1 term ‘qualified cellulosic fuel production’ means 

2 any cellulosic alcohol which is produced by a 

3 cellulosic alcohol fuel producer, and which dur4 ing the taxable year— 

5 ‘‘(i) is sold by such producer to an6 other person— 

7 ‘‘(I) for use by such other person 

8 in the production of a qualified mix9 ture in such other person’s trade or 

10 business (other than casual off-farm 

11 production), 

12 ‘‘(II) for use by such other per13 son as a fuel in a trade or business, 

14 or 

15 ‘‘(III) who sells such alcohol at 

16 retail to another person and places 

17 such alcohol in the fuel tank of such 

18 other person, or 

19 ‘‘(ii) is used or sold by such producer 

20 for any purpose described in clause (i). 

21 ‘‘(C) CELLULOSIC ALCOHOL.—For pur22 poses of this paragraph, the term ‘cellulosic al23 cohol’ means any alcohol which— 

24 ‘‘(i) is produced in the United States 

25 for use as a fuel in the United States, and 
65 

•HR 5351 EH

1 ‘‘(ii) is derived from any 

2 lignocellulosic or hemicellulosic matter that 

3 is available on a renewable or recurring 

4 basis. 

5 For purposes of this subparagraph, the term 

6 ‘United States’ includes any possession of the 

7 United States. 

8 ‘‘(D) CELLULOSIC ALCOHOL FUEL PRO9 DUCER.—For purposes of this paragraph, the 

10 term ‘cellulosic alcohol fuel producer’ means 

11 any person who produces cellulosic alcohol in a 

12 trade or business and is registered with the 

13 Secretary as a cellulosic alcohol fuel producer. 

14 ‘‘(E) ADDITIONAL DISTILLATION EX15 CLUDED.—The qualified cellulosic fuel produc16 tion of any producer for any taxable year shall 

17 not include any alcohol which is purchased by 

18 the producer and with respect to which such 

19 producer increases the proof of the alcohol by 

20 additional distillation.’’. 

21 (b) CONFORMING AMENDMENTS.— 

22 (1) Subsection (a) of section 40 is amended by 

23 striking ‘‘plus’’ at the end of paragraph (1), by 

24 striking ‘‘plus’’ at the end of paragraph (2), by 

25 striking the period at the end of paragraph (3) and 
66 

•HR 5351 EH

1 inserting ‘‘, plus’’, and by adding at the end the fol2 lowing new paragraph: 

3 ‘‘(4) in the case of a cellulosic alcohol fuel pro4 ducer, the cellulosic alcohol fuel producer credit.’’. 

5 (2) Clause (ii) of section 40(d)(3)(C) is amend6 ed by striking ‘‘subsection (b)(4)(B)’’ and inserting 

7 ‘‘paragraph (4)(B) or (5)(B) of subsection (b)’’. 

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

9 this section shall apply to alcohol produced after December 

10 31, 2008. 

11 PART 3—OTHER TRANSPORTATION INCENTIVES 

12 SEC. 221. EXTENSION OF TRANSPORTATION FRINGE BEN13 EFIT TO BICYCLE COMMUTERS. 

14 (a) IN GENERAL.—Paragraph (1) of section 132(f) 

15 (relating to general rule for qualified transportation 

16 fringe) is amended by adding at the end the following: 

17 ‘‘(D) Any qualified bicycle commuting re18 imbursement.’’. 

19 (b) LIMITATION ON EXCLUSION.—Paragraph (2) of 

20 section 132(f) is amended by striking ‘‘and’’ at the end 

21 of subparagraph (A), by striking the period at the end 

22 of subparagraph (B) and inserting ‘‘, and’’, and by adding 

23 at the end the following new subparagraph: 
67 

•HR 5351 EH

1 ‘‘(C) the applicable annual limitation in 

2 the case of any qualified bicycle commuting re3 imbursement.’’. 

4 (c) DEFINITIONS.—Paragraph (5) of section 132(f) 

5 (relating to definitions) is amended by adding at the end 

6 the following: 

7 ‘‘(F) DEFINITIONS RELATED TO BICYCLE

8 COMMUTING REIMBURSEMENT.— 

9 ‘‘(i) QUALIFIED BICYCLE COMMUTING

10 REIMBURSEMENT.—The term ‘qualified bi11 cycle commuting reimbursement’ means, 

12 with respect to any calendar year, any em13 ployer reimbursement during the 15-month 

14 period beginning with the first day of such 

15 calendar year for reasonable expenses in16 curred by the employee during such cal17 endar year for the purchase of a bicycle 

18 and bicycle improvements, repair, and stor19 age, if such bicycle is regularly used for 

20 travel between the employee’s residence 

21 and place of employment. 

22 ‘‘(ii) APPLICABLE ANNUAL LIMITA23 TION.—The term ‘applicable annual limita24 tion’ means, with respect to any employee 

25 for any calendar year, the product of $20 
68 

•HR 5351 EH

1 multiplied by the number of qualified bicy2 cle commuting months during such year. 

3 ‘‘(iii) QUALIFIED BICYCLE COM4 MUTING MONTH.—The term ‘qualified bi5 cycle commuting month’ means, with re6 spect to any employee, any month during 

7 which such employee— 

8 ‘‘(I) regularly uses the bicycle for 

9 a substantial portion of the travel be10 tween the employee’s residence and 

11 place of employment, and 

12 ‘‘(II) does not receive any benefit 

13 described in subparagraph (A), (B), 

14 or (C) of paragraph (1).’’. 

15 (d) CONSTRUCTIVE RECEIPT OF BENEFIT.—Para16 graph (4) of section 132(f) is amended by inserting 

17 ‘‘(other than a qualified bicycle commuting reimburse18 ment)’’ after ‘‘qualified transportation fringe’’. 

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

20 this section shall apply to taxable years beginning after 

21 December 31, 2008. 
69 

•HR 5351 EH

1 SEC. 222. RESTRUCTURING OF NEW YORK LIBERTY ZONE 

2 TAX CREDITS. 

3 (a) IN GENERAL.—Part I of subchapter Y of chapter 

4 1 is amended by redesignating section 1400L as section 

5 1400K and by adding at the end the following new section: 

6 ‘‘SEC. 1400L. NEW YORK LIBERTY ZONE TAX CREDITS. 

7 ‘‘(a) IN GENERAL.—In the case of a New York Lib8 erty Zone governmental unit, there shall be allowed as a 

9 credit against any taxes imposed for any payroll period 

10 by section 3402 for which such governmental unit is liable 

11 under section 3403 an amount equal to so much of the 

12 portion of the qualifying project expenditure amount allo13 cated under subsection (b)(3) to such governmental unit 

14 for the calendar year as is allocated by such governmental 

15 unit to such period under subsection (b)(4). 

16 ‘‘(b) QUALIFYING PROJECT EXPENDITURE

17 AMOUNT.—For purposes of this section— 

18 ‘‘(1) IN GENERAL.—The term ‘qualifying 

19 project expenditure amount’ means, with respect to 

20 any calendar year, the sum of— 

21 ‘‘(A) the total expenditures paid or in22 curred during such calendar year by all New 

23 York Liberty Zone governmental units and the 

24 Port Authority of New York and New Jersey 

25 for any portion of qualifying projects located 
70 

•HR 5351 EH

1 wholly within the City of New York, New York, 

2 and 

3 ‘‘(B) any such expenditures— 

4 ‘‘(i) paid or incurred in any preceding 

5 calendar year which begins after the date 

6 of enactment of this section, and 

7 ‘‘(ii) not previously allocated under 

8 paragraph (3). 

9 ‘‘(2) QUALIFYING PROJECT.—The term ‘quali10 fying project’ means any transportation infrastruc11 ture project, including highways, mass transit sys12 tems, railroads, airports, ports, and waterways, in or 

13 connecting with the New York Liberty Zone (as de14 fined in section 1400K(h)), which is designated as a 

15 qualifying project under this section jointly by the 

16 Governor of the State of New York and the Mayor 

17 of the City of New York, New York. 

18 ‘‘(3) GENERAL ALLOCATION.— 

19 ‘‘(A) IN GENERAL.—The Governor of the 

20 State of New York and the Mayor of the City 

21 of New York, New York, shall jointly allocate to 

22 each New York Liberty Zone governmental unit 

23 the portion of the qualifying project expenditure 

24 amount which may be taken into account by 
71 

•HR 5351 EH

1 such governmental unit under subsection (a) for 

2 any calendar year in the credit period. 

3 ‘‘(B) AGGREGATE LIMIT.—The aggregate 

4 amount which may be allocated under subpara5 graph (A) for all calendar years in the credit 

6 period shall not exceed $2,000,000,000. 

7 ‘‘(C) ANNUAL LIMIT.—The aggregate 

8 amount which may be allocated under subpara9 graph (A) for any calendar year in the credit 

10 period shall not exceed the sum of— 

11 ‘‘(i) $169,000,000, plus 

12 ‘‘(ii) the aggregate amount authorized 

13 to be allocated under this paragraph for all 

14 preceding calendar years in the credit pe15 riod which was not so allocated. 

16 ‘‘(D) UNALLOCATED AMOUNTS AT END OF

17 CREDIT PERIOD.—If, as of the close of the cred18 it period, the amount under subparagraph (B) 

19 exceeds the aggregate amount allocated under 

20 subparagraph (A) for all calendar years in the 

21 credit period, the Governor of the State of New 

22 York and the Mayor of the City of New York, 

23 New York, may jointly allocate to New York 

24 Liberty Zone governmental units for any cal-
72 

•HR 5351 EH

1 endar year in the 5-year period following the 

2 credit period an amount equal to— 

3 ‘‘(i) the lesser of— 

4 ‘‘(I) such excess, or 

5 ‘‘(II) the qualifying project ex6 penditure amount for such calendar 

7 year, reduced by 

8 ‘‘(ii) the aggregate amount allocated 

9 under this subparagraph for all preceding 

10 calendar years. 

11 ‘‘(4) ALLOCATION TO PAYROLL PERIODS.— 

12 Each New York Liberty Zone governmental unit 

13 which has been allocated a portion of the qualifying 

14 project expenditure amount under paragraph (3) for 

15 a calendar year may allocate such portion to payroll 

16 periods beginning in such calendar year as such gov17 ernmental unit determines appropriate. 

18 ‘‘(c) CARRYOVER OF UNUSED ALLOCATIONS.— 

19 ‘‘(1) IN GENERAL.—Except as provided in para20 graph (2), if the amount allocated under subsection 

21 (b)(3) to a New York Liberty Zone governmental 

22 unit for any calendar year exceeds the aggregate 

23 taxes imposed by section 3402 for which such gov24 ernmental unit is liable under section 3403 for peri25 ods beginning in such year, such excess shall be car-
73 

•HR 5351 EH

1 ried to the succeeding calendar year and added to 

2 the allocation of such governmental unit for such 

3 succeeding calendar year. 

4 ‘‘(2) REALLOCATION.—If a New York Liberty 

5 Zone governmental unit does not use an amount al6 located to it under subsection (b)(3) within the time 

7 prescribed by the Governor of the State of New York 

8 and the Mayor of the City of New York, New York, 

9 then such amount shall after such time be treated 

10 for purposes of subsection (b)(3) in the same man11 ner as if it had never been allocated. 

12 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur13 poses of this section— 

14 ‘‘(1) CREDIT PERIOD.—The term ‘credit period’ 

15 means the 12-year period beginning on January 1, 

16 2008. 

17 ‘‘(2) NEW YORK LIBERTY ZONE GOVERN18 MENTAL UNIT.—The term ‘New York Liberty Zone 

19 governmental unit’ means— 

20 ‘‘(A) the State of New York, 

21 ‘‘(B) the City of New York, New York, and 

22 ‘‘(C) any agency or instrumentality of such 

23 State or City. 

24 ‘‘(3) TREATMENT OF FUNDS.—Any expenditure 

25 for a qualifying project taken into account for pur-
74 

•HR 5351 EH

1 poses of the credit under this section shall be consid2 ered State and local funds for the purpose of any 

3 Federal program. 

4 ‘‘(4) TREATMENT OF CREDIT AMOUNTS FOR

5 PURPOSES OF WITHHOLDING TAXES.—For purposes 

6 of this title, a New York Liberty Zone governmental 

7 unit shall be treated as having paid to the Secretary, 

8 on the day on which wages are paid to employees, 

9 an amount equal to the amount of the credit allowed 

10 to such entity under subsection (a) with respect to 

11 such wages, but only if such governmental unit de12 ducts and withholds wages for such payroll period 

13 under section 3401 (relating to wage withholding). 

14 ‘‘(e) REPORTING.—The Governor of the State of New 

15 York and the Mayor of the City of New York, New York, 

16 shall jointly submit to the Secretary an annual report— 

17 ‘‘(1) which certifies— 

18 ‘‘(A) the qualifying project expenditure 

19 amount for the calendar year, and 

20 ‘‘(B) the amount allocated to each New 

21 York Liberty Zone governmental unit under 

22 subsection (b)(3) for the calendar year, and 

23 ‘‘(2) includes such other information as the 

24 Secretary may require to carry out this section. 
75 

•HR 5351 EH

1 ‘‘(f) GUIDANCE.—The Secretary may prescribe such 

2 guidance as may be necessary or appropriate to ensure 

3 compliance with the purposes of this section.’’. 

4 (b) TERMINATION OF SPECIAL ALLOWANCE AND EX5 PENSING.—Subparagraph (A) of section 1400K(b)(2), as 

6 redesignated by subsection (a), is amended by striking the 

7 parenthetical in the flush language after clause (v) thereof 

8 and inserting ‘‘(in the case of nonresidential real property 

9 and residential rental property, the date of the enactment 

10 of the Renewable Energy and Energy Conservation Tax 

11 Act of 2008 or, if acquired pursuant to a binding contract 

12 in effect on such enactment date, December 31, 2009)’’. 

13 (c) CONFORMING AMENDMENTS.— 

14 (1) Section 38(c)(3)(B) is amended by striking 

15 ‘‘section 1400L(a)’’ and inserting ‘‘section 

16 1400K(a)’’. 

17 (2) Section 168(k)(2)(D)(ii) is amended by 

18 striking ‘‘section 1400L(c)(2)’’ and inserting ‘‘sec19 tion 1400K(c)(2)’’. 

20 (3) The table of sections for part I of sub21 chapter Y of chapter 1 is amended by redesignating 

22 the item relating to section 1400L as an item relat23 ing to section 1400K and by inserting after such 

24 item the following new item: 

‘‘Sec. 1400L. New York Liberty Zone tax credits.’’. 
76 

•HR 5351 EH

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

2 this section shall take effect on the date of the enactment 

3 of this Act. 

4 Subtitle B—Other Conservation 

5 Provisions 

6 SEC. 231. QUALIFIED ENERGY CONSERVATION BONDS. 

7 (a) IN GENERAL.—Subpart I of part IV of sub8 chapter A of chapter 1, as added by section 104, is amend9 ed by adding at the end the following new section: 

10 ‘‘SEC. 54C. QUALIFIED ENERGY CONSERVATION BONDS. 

11 ‘‘(a) QUALIFIED ENERGY CONSERVATION BOND.— 

12 For purposes of this subchapter, the term ‘qualified en13 ergy conservation bond’ means any bond issued as part 

14 of an issue if— 

15 ‘‘(1) 100 percent of the available project pro16 ceeds of such issue are to be used for one or more 

17 qualified conservation purposes, 

18 ‘‘(2) the bond is issued by a State or local gov19 ernment, and 

20 ‘‘(3) the issuer designates such bond for pur21 poses of this section. 

22 ‘‘(b) LIMITATION ON AMOUNT OF BONDS DES23 IGNATED.—The maximum aggregate face amount of 

24 bonds which may be designated under subsection (a) by 
77 

•HR 5351 EH

1 any issuer shall not exceed the limitation amount allocated 

2 to such issuer under subsection (d). 

3 ‘‘(c) NATIONAL LIMITATION ON AMOUNT OF BONDS

4 DESIGNATED.—There is a national qualified energy con5 servation bond limitation of $3,600,000,000. 

6 ‘‘(d) ALLOCATIONS.— 

7 ‘‘(1) IN GENERAL.—The limitation applicable 

8 under subsection (c) shall be allocated by the Sec9 retary among the States in proportion to the popu10 lation of the States. 

11 ‘‘(2) ALLOCATIONS TO LARGEST LOCAL GOV12 ERNMENTS.— 

13 ‘‘(A) IN GENERAL.—In the case of any 

14 State in which there is a large local govern15 ment, each such local government shall be allo16 cated a portion of such State’s allocation which 

17 bears the same ratio to the State’s allocation 

18 (determined without regard to this subpara19 graph) as the population of such large local 

20 government bears to the population of such 

21 State. 

22 ‘‘(B) ALLOCATION OF UNUSED LIMITATION

23 TO STATE.—The amount allocated under this 

24 subsection to a large local government may be 
78 

•HR 5351 EH

1 reallocated by such local government to the 

2 State in which such local government is located. 

3 ‘‘(C) LARGE LOCAL GOVERNMENT.—For 

4 purposes of this section, the term ‘large local 

5 government’ means any municipality or county 

6 if such municipality or county has a population 

7 of 100,000 or more. 

8 ‘‘(3) ALLOCATION TO ISSUERS; RESTRICTION

9 ON PRIVATE ACTIVITY BONDS.—Any allocation 

10 under this subsection to a State or large local gov11 ernment shall be allocated by such State or large 

12 local government to issuers within the State in a 

13 manner that results in not less than 70 percent of 

14 the allocation to such State or large local govern15 ment being used to designate bonds which are not 

16 private activity bonds. 

17 ‘‘(e) QUALIFIED CONSERVATION PURPOSE.—For 

18 purposes of this section— 

19 ‘‘(1) IN GENERAL.—The term ‘qualified con20 servation purpose’ means any of the following: 

21 ‘‘(A) Capital expenditures incurred for 

22 purposes of— 

23 ‘‘(i) reducing energy consumption in 

24 publicly-owned buildings by at least 20 

25 percent, 
79 

•HR 5351 EH

1 ‘‘(ii) implementing green community 

2 programs, 

3 ‘‘(iii) rural development involving the 

4 production of electricity from renewable 

5 energy resources, or 

6 ‘‘(iv) any qualified facility (as deter7 mined under section 45(d) without regard 

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

9 without regard to any placed in service 

10 date). 

11 ‘‘(B) Expenditures with respect to research 

12 facilities, and research grants, to support re13 search in— 

14 ‘‘(i) development of cellulosic ethanol 

15 or other nonfossil fuels, 

16 ‘‘(ii) technologies for the capture and 

17 sequestration of carbon dioxide produced 

18 through the use of fossil fuels, 

19 ‘‘(iii) increasing the efficiency of exist20 ing technologies for producing nonfossil 

21 fuels, 

22 ‘‘(iv) automobile battery technologies 

23 and other technologies to reduce fossil fuel 

24 consumption in transportation, or 
80 

•HR 5351 EH

1 ‘‘(v) technologies to reduce energy use 

2 in buildings. 

3 ‘‘(C) Mass commuting facilities and related 

4 facilities that reduce the consumption of energy, 

5 including expenditures to reduce pollution from 

6 vehicles used for mass commuting. 

7 ‘‘(D) Demonstration projects designed to 

8 promote the commercialization of— 

9 ‘‘(i) green building technology, 

10 ‘‘(ii) conversion of agricultural waste 

11 for use in the production of fuel or other12 wise, 

13 ‘‘(iii) advanced battery manufacturing 

14 technologies, 

15 ‘‘(iv) technologies to reduce peak use 

16 of electricity, or 

17 ‘‘(v) technologies for the capture and 

18 sequestration of carbon dioxide emitted 

19 from combusting fossil fuels in order to 

20 produce electricity. 

21 ‘‘(E) Public education campaigns to pro22 mote energy efficiency. 

23 ‘‘(2) SPECIAL RULES FOR PRIVATE ACTIVITY

24 BONDS.—For purposes of this section, in the case of 

25 any private activity bond, the term ‘qualified con-
81 

•HR 5351 EH

1 servation purposes’ shall not include any expenditure 

2 which is not a capital expenditure. 

3 ‘‘(f) POPULATION.— 

4 ‘‘(1) IN GENERAL.—The population of any 

5 State or local government shall be determined for 

6 purposes of this section as provided in section 146(j) 

7 for the calendar year which includes the date of the 

8 enactment of this section. 

9 ‘‘(2) SPECIAL RULE FOR COUNTIES.—In deter10 mining the population of any county for purposes of 

11 this section, any population of such county which is 

12 taken into account in determining the population of 

13 any municipality which is a large local government 

14 shall not be taken into account in determining the 

15 population of such county. 

16 ‘‘(g) APPLICATION TO INDIAN TRIBAL GOVERN17 MENTS.—An Indian tribal government shall be treated for 

18 purposes of this section in the same manner as a large 

19 local government, except that— 

20 ‘‘(1) an Indian tribal government shall be treat21 ed for purposes of subsection (d) as located within 

22 a State to the extent of so much of the population 

23 of such government as resides within such State, 

24 and 
82 

•HR 5351 EH

1 ‘‘(2) any bond issued by an Indian tribal gov2 ernment shall be treated as a qualified energy con3 servation bond only if issued as part of an issue the 

4 available project proceeds of which are used for pur5 poses for which such Indian tribal government could 

6 issue bonds to which section 103(a) applies.’’. 

7 (b) CONFORMING AMENDMENTS.— 

8 (1) Paragraph (1) of section 54A(d), as added 

9 by section 104, is amended to read as follows: 

10 ‘‘(1) QUALIFIED TAX CREDIT BOND.—The term 

11 ‘qualified tax credit bond’ means— 

12 ‘‘(A) a new clean renewable energy bond, 

13 or 

14 ‘‘(B) a qualified energy conservation bond, 

15 which is part of an issue that meets requirements of 

16 paragraphs (2), (3), (4), (5), and (6).’’. 

17 (2) Subparagraph (C) of section 54A(d)(2), as 

18 added by section 104, is amended to read as follows: 

19 ‘‘(C) QUALIFIED PURPOSE.—For purposes 

20 of this paragraph, the term ‘qualified purpose’ 

21 means— 

22 ‘‘(i) in the case of a new clean renew23 able energy bond, a purpose specified in 

24 section 54B(a)(1), and 
83 

•HR 5351 EH

1 ‘‘(ii) in the case of a qualified energy 

2 conservation bond, a purpose specified in 

3 section 54C(a)(1).’’. 

4 (3) The table of sections for subpart I of part 

5 IV of subchapter A of chapter 1 is amended by add6 ing at the end the following new item: 

‘‘Sec. 54C. Qualified energy conservation bonds.’’. 

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

8 this section shall apply to obligations issued after the date 

9 of the enactment of this Act. 

10 SEC. 232. EXTENSION AND MODIFICATION OF CREDIT FOR 

11 NONBUSINESS ENERGY PROPERTY. 

12 (a) EXTENSION OF CREDIT.—Section 25C(g) (relat13 ing to termination) is amended by striking ‘‘December 31, 

14 2007’’ and inserting ‘‘December 31, 2009’’. 

15 (b) QUALIFIED BIOMASS FUEL PROPERTY.— 

16 (1) IN GENERAL.—Section 25C(d)(3) is amend17 ed— 

18 (A) by striking ‘‘and’’ at the end of sub19 paragraph (D), 

20 (B) by striking the period at the end of 

21 subparagraph (E) and inserting ‘‘, and’’, and 

22 (C) by adding at the end the following new 

23 subparagraph: 

24 ‘‘(F) a stove which uses the burning of bio25 mass fuel to heat a dwelling unit located in the 
84 

•HR 5351 EH

1 United States and used as a residence by the 

2 taxpayer, or to heat water for use in such a 

3 dwelling unit, and which has a thermal effi4 ciency rating of at least 75 percent.’’. 

5 (2) BIOMASS FUEL.—Section 25C(d) (relating 

6 to residential energy property expenditures) is 

7 amended by adding at the end the following new 

8 paragraph: 

9 ‘‘(6) BIOMASS FUEL.—The term ‘biomass fuel’ 

10 means any plant-derived fuel available on a renew11 able or recurring basis, including agricultural crops 

12 and trees, wood and wood waste and residues (in13 cluding wood pellets), plants (including aquatic 

14 plants), grasses, residues, and fibers.’’. 

15 (c) COORDINATION WITH CREDIT FOR QUALIFIED

16 GEOTHERMAL HEAT PUMP PROPERTY EXPENDITURES.— 

17 (1) IN GENERAL.—Paragraph (3) of section 

18 25C(d) is amended by striking subparagraph (C) 

19 and by redesignating subparagraphs (D) and (E) as 

20 subparagraphs (C) and (D), respectively. 

21 (2) CONFORMING AMENDMENT.—Subparagraph 

22 (C) of section 25C(d)(2) is amended to read as fol23 lows: 

24 ‘‘(C) REQUIREMENTS AND STANDARDS

25 FOR AIR CONDITIONERS AND HEAT PUMPS.— 
85 

•HR 5351 EH

1 The standards and requirements prescribed by 

2 the Secretary under subparagraph (B) with re3 spect to the energy efficiency ratio (EER) for 

4 central air conditioners and electric heat 

5 pumps— 

6 ‘‘(i) shall require measurements to be 

7 based on published data which is tested by 

8 manufacturers at 95 degrees Fahrenheit, 

9 and 

10 ‘‘(ii) may be based on the certified 

11 data of the Air Conditioning and Refrig12 eration Institute that are prepared in part13 nership with the Consortium for Energy 

14 Efficiency.’’. 

15 (d) EFFECTIVE DATE.—The amendments made this 

16 section shall apply to expenditures made after December 

17 31, 2007. 

18 SEC. 233. EXTENSION OF ENERGY EFFICIENT COMMERCIAL 

19 BUILDINGS DEDUCTION. 

20 Subsection (h) of section 179D (relating to termi21 nation) is amended by striking ‘‘December 31, 2008’’ and 

22 inserting ‘‘December 31, 2013’’. 
86 

•HR 5351 EH

1 SEC. 234. MODIFICATIONS OF ENERGY EFFICIENT APPLI2 ANCE CREDIT FOR APPLIANCES PRODUCED 

3 AFTER 2007. 

4 (a) IN GENERAL.—Subsection (b) of section 45M (re5 lating to applicable amount) is amended to read as follows: 

6 ‘‘(b) APPLICABLE AMOUNT.—For purposes of sub7 section (a)— 

8 ‘‘(1) DISHWASHERS.—The applicable amount 

9 is— 

10 ‘‘(A) $45 in the case of a dishwasher which 

11 is manufactured in calendar year 2008 or 2009 

12 and which uses no more than 324 kilowatt 

13 hours per year and 5.8 gallons per cycle, and 

14 ‘‘(B) $75 in the case of a dishwasher 

15 which is manufactured in calendar year 2008, 

16 2009, or 2010 and which uses no more than 

17 307 kilowatt hours per year and 5.0 gallons per 

18 cycle (5.5 gallons per cycle for dishwashers de19 signed for greater than 12 place settings). 

20 ‘‘(2) CLOTHES WASHERS.—The applicable 

21 amount is— 

22 ‘‘(A) $75 in the case of a residential top23 loading clothes washer manufactured in cal24 endar year 2008 which meets or exceeds a 1.72 

25 modified energy factor and does not exceed a 

26 8.0 water consumption factor, 
87 

•HR 5351 EH

1 ‘‘(B) $125 in the case of a residential top2 loading clothes washer manufactured in cal3 endar year 2008 or 2009 which meets or ex4 ceeds a 1.8 modified energy factor and does not 

5 exceed a 7.5 water consumption factor, 

6 ‘‘(C) $150 in the case of a residential or 

7 commercial clothes washer manufactured in cal8 endar year 2008, 2009, or 2010 which meets or 

9 exceeds 2.0 modified energy factor and does not 

10 exceed a 6.0 water consumption factor, and 

11 ‘‘(D) $250 in the case of a residential or 

12 commercial clothes washer manufactured in cal13 endar year 2008, 2009, or 2010 which meets or 

14 exceeds 2.2 modified energy factor and does not 

15 exceed a 4.5 water consumption factor. 

16 ‘‘(3) REFRIGERATORS.—The applicable amount 

17 is— 

18 ‘‘(A) $50 in the case of a refrigerator 

19 which is manufactured in calendar year 2008, 

20 and consumes at least 20 percent but not more 

21 than 22.9 percent less kilowatt hours per year 

22 than the 2001 energy conservation standards, 

23 ‘‘(B) $75 in the case of a refrigerator 

24 which is manufactured in calendar year 2008 or 

25 2009, and consumes at least 23 percent but no 
88 

•HR 5351 EH

1 more than 24.9 percent less kilowatt hours per 

2 year than the 2001 energy conservation stand3 ards, 

4 ‘‘(C) $100 in the case of a refrigerator 

5 which is manufactured in calendar year 2008, 

6 2009, or 2010, and consumes at least 25 per7 cent but not more than 29.9 percent less kilo8 watt hours per year than the 2001 energy con9 servation standards, and 

10 ‘‘(D) $200 in the case of a refrigerator 

11 manufactured in calendar year 2008, 2009, or 

12 2010 and which consumes at least 30 percent 

13 less energy than the 2001 energy conservation 

14 standards.’’. 

15 (b) ELIGIBLE PRODUCTION.— 

16 (1) SIMILAR TREATMENT FOR ALL APPLI17 ANCES.—Subsection (c) of section 45M (relating to 

18 eligible production) is amended— 

19 (A) by striking paragraph (2), 

20 (B) by striking ‘‘(1) IN GENERAL’’ and all 

21 that follows through ‘‘the eligible’’ and inserting 

22 ‘‘The eligible’’, and 

23 (C) by moving the text of such subsection 

24 in line with the subsection heading and redesig-
89 

•HR 5351 EH

1 nating subparagraphs (A) and (B) as para2 graphs (1) and (2), respectively. 

3 (2) MODIFICATION OF BASE PERIOD.—Para4 graph (2) of section 45M(c), as amended by para5 graph (1) of this section, is amended by striking ‘‘3- 

6 calendar year’’ and inserting ‘‘2-calendar year’’. 

7 (c) TYPES OF ENERGY EFFICIENT APPLIANCES.— 

8 Subsection (d) of section 45M (defining types of energy 

9 efficient appliances) is amended to read as follows: 

10 ‘‘(d) TYPES OF ENERGY EFFICIENT APPLIANCE.— 

11 For purposes of this section, the types of energy efficient 

12 appliances are— 

13 ‘‘(1) dishwashers described in subsection (b)(1), 

14 ‘‘(2) clothes washers described in subsection 

15 (b)(2), and 

16 ‘‘(3) refrigerators described in subsection 

17 (b)(3).’’. 

18 (d) AGGREGATE CREDIT AMOUNT ALLOWED.— 

19 (1) INCREASE IN LIMIT.—Paragraph (1) of sec20 tion 45M(e) (relating to aggregate credit amount al21 lowed) is amended to read as follows: 

22 ‘‘(1) AGGREGATE CREDIT AMOUNT ALLOWED.— 

23 The aggregate amount of credit allowed under sub24 section (a) with respect to a taxpayer for any tax25 able year shall not exceed $75,000,000 reduced by 
90 

•HR 5351 EH

1 the amount of the credit allowed under subsection 

2 (a) to the taxpayer (or any predecessor) for all prior 

3 taxable years beginning after December 31, 2007.’’. 

4 (2) EXCEPTION FOR CERTAIN REFRIGERATOR

5 AND CLOTHES WASHERS.—Paragraph (2) of section 

6 45M(e) is amended to read as follows: 

7 ‘‘(2) AMOUNT ALLOWED FOR CERTAIN REFRIG8 ERATORS AND CLOTHES WASHERS.—Refrigerators 

9 described in subsection (b)(3)(D) and clothes wash10 ers described in subsection (b)(2)(D) shall not be 

11 taken into account under paragraph (1).’’. 

12 (e) QUALIFIED ENERGY EFFICIENT APPLIANCES.— 

13 (1) IN GENERAL.—Paragraph (1) of section 

14 45M(f) (defining qualified energy efficient appliance) 

15 is amended to read as follows: 

16 ‘‘(1) QUALIFIED ENERGY EFFICIENT APPLI17 ANCE.—The term ‘qualified energy efficient appli18 ance’ means— 

19 ‘‘(A) any dishwasher described in sub20 section (b)(1), 

21 ‘‘(B) any clothes washer described in sub22 section (b)(2), and 

23 ‘‘(C) any refrigerator described in sub24 section (b)(3).’’. 
91 

•HR 5351 EH

1 (2) CLOTHES WASHER.—Section 45M(f)(3) (de2 fining clothes washer) is amended by inserting 

3 ‘‘commercial’’ before ‘‘residential’’ the second place 

4 it appears. 

5 (3) TOP-LOADING CLOTHES WASHER.—Sub6 section (f) of section 45M (relating to definitions) is 

7 amended by redesignating paragraphs (4), (5), (6), 

8 and (7) as paragraphs (5), (6), (7), and (8), respec9 tively, and by inserting after paragraph (3) the fol10 lowing new paragraph: 

11 ‘‘(4) TOP-LOADING CLOTHES WASHER.—The 

12 term ‘top-loading clothes washer’ means a clothes 

13 washer which has the clothes container compartment 

14 access located on the top of the machine and which 

15 operates on a vertical axis.’’. 

16 (4) REPLACEMENT OF ENERGY FACTOR.—Sec17 tion 45M(f)(6), as redesignated by paragraph (3), is 

18 amended to read as follows: 

19 ‘‘(6) MODIFIED ENERGY FACTOR.—The term 

20 ‘modified energy factor’ means the modified energy 

21 factor established by the Department of Energy for 

22 compliance with the Federal energy conservation 

23 standard.’’. 

24 (5) GALLONS PER CYCLE; WATER CONSUMP25 TION FACTOR.—Section 45M(f) (relating to defini-
92 

•HR 5351 EH

1 tions), as amended by paragraph (3), is amended by 

2 adding at the end the following: 

3 ‘‘(9) GALLONS PER CYCLE.—The term ‘gallons 

4 per cycle’ means, with respect to a dishwasher, the 

5 amount of water, expressed in gallons, required to 

6 complete a normal cycle of a dishwasher. 

7 ‘‘(10) WATER CONSUMPTION FACTOR.—The 

8 term ‘water consumption factor’ means, with respect 

9 to a clothes washer, the quotient of the total weight10 ed per-cycle water consumption divided by the cubic 

11 foot (or liter) capacity of the clothes washer.’’. 

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

13 this section shall apply to appliances produced after De14 cember 31, 2007. 

15 SEC. 235. FIVE-YEAR APPLICABLE RECOVERY PERIOD FOR 

16 DEPRECIATION OF QUALIFIED ENERGY MAN17 AGEMENT DEVICES. 

18 (a) IN GENERAL.—Section 168(e)(3)(B) (relating to 

19 5-year property) is amended by striking ‘‘and’’ at the end 

20 of clause (v), by striking the period at the end of clause 

21 (vi) and inserting ‘‘, and’’, and by inserting after clause 

22 (vi) the following new clause: 

23 ‘‘(vii) any qualified energy manage24 ment device.’’. 
93 

•HR 5351 EH

1 (b) DEFINITION OF QUALIFIED ENERGY MANAGE2 MENT DEVICE.—Section 168(i) (relating to definitions 

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

4 following new paragraph: 

5 ‘‘(18) QUALIFIED ENERGY MANAGEMENT DE6 VICE.— 

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

8 energy management device’ means any energy 

9 management device which is installed on real 

10 property of a customer of the taxpayer and is 

11 placed in service by a taxpayer who— 

12 ‘‘(i) is a supplier of electric energy or 

13 a provider of electric energy services, and 

14 ‘‘(ii) provides all commercial and resi15 dential customers of such supplier or pro16 vider with net metering upon the request 

17 of such customer. 

18 ‘‘(B) ENERGY MANAGEMENT DEVICE.— 

19 For purposes of subparagraph (A), the term 

20 ‘energy management device’ means any time21 based meter and related communication equip22 ment which is capable of being used by the tax23 payer as part of a system that— 

24 ‘‘(i) measures and records electricity 

25 usage data on a time-differentiated basis 
94 

•HR 5351 EH

1 in at least 24 separate time segments per 

2 day, 

3 ‘‘(ii) provides for the exchange of in4 formation between supplier or provider and 

5 the customer’s energy management device 

6 in support of time-based rates or other 

7 forms of demand response, and 

8 ‘‘(iii) provides data to such supplier or 

9 provider so that the supplier or provider 

10 can provide energy usage information to 

11 customers electronically. 

12 ‘‘(C) NET METERING.—For purposes of 

13 subparagraph (A), the term ‘net metering’ 

14 means allowing customers a credit for providing 

15 electricity to the supplier or provider.’’. 

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

17 this section shall apply to property placed in service after 

18 the date of the enactment of this Act. 

19 TITLE III—REVENUE 

20 PROVISIONS 

21 SEC. 301. LIMITATION OF DEDUCTION FOR INCOME AT22 TRIBUTABLE TO DOMESTIC PRODUCTION OF 

23 OIL, GAS, OR PRIMARY PRODUCTS THEREOF. 

24 (a) DENIAL OF DEDUCTION FOR MAJOR INTE25 GRATED OIL COMPANIES FOR INCOME ATTRIBUTABLE TO
95 

•HR 5351 EH

1 DOMESTIC PRODUCTION OF OIL, GAS, OR PRIMARY

2 PRODUCTS THEREOF.— 

3 (1) IN GENERAL.—Subparagraph (B) of section 

4 199(c)(4) (relating to exceptions) is amended by 

5 striking ‘‘or’’ at the end of clause (ii), by striking 

6 the period at the end of clause (iii) and inserting ‘‘, 

7 or’’, and by inserting after clause (iii) the following 

8 new clause: 

9 ‘‘(iv) in the case of any major inte10 grated oil company (as defined in section 

11 167(h)(5)(B)), the production, refining, 

12 processing, transportation, or distribution 

13 of oil, gas, or any primary product thereof 

14 during any taxable year described in sec15 tion 167(h)(5)(B).’’. 

16 (2) PRIMARY PRODUCT.—Section 199(c)(4)(B) 

17 is amended by adding at the end the following flush 

18 sentence: 

19 ‘‘For purposes of clause (iv), the term ‘primary 

20 product’ has the same meaning as when used in 

21 section 927(a)(2)(C), as in effect before its re22 peal.’’. 

23 (b) LIMITATION ON OIL RELATED QUALIFIED PRO24 DUCTION ACTIVITIES INCOME FOR TAXPAYERS OTHER

25 THAN MAJOR INTEGRATED OIL COMPANIES.— 
96 

•HR 5351 EH

1 (1) IN GENERAL.—Section 199(d) is amended 

2 by redesignating paragraph (9) as paragraph (10) 

3 and by inserting after paragraph (8) the following 

4 new paragraph: 

5 ‘‘(9) SPECIAL RULE FOR TAXPAYERS WITH OIL

6 RELATED QUALIFIED PRODUCTION ACTIVITIES IN7 COME.— 

8 ‘‘(A) IN GENERAL.—If a taxpayer (other 

9 than a major integrated oil company (as defined 

10 in section 167(h)(5)(B))) has oil related quali11 fied production activities income for any taxable 

12 year beginning after 2009, the amount of the 

13 deduction under subsection (a) shall be reduced 

14 by 3 percent of the least of— 

15 ‘‘(i) the oil related qualified produc16 tion activities income of the taxpayer for 

17 the taxable year, 

18 ‘‘(ii) the qualified production activities 

19 income of the taxpayer for the taxable 

20 year, or 

21 ‘‘(iii) taxable income (determined 

22 without regard to this section). 

23 ‘‘(B) OIL RELATED QUALIFIED PRODUC24 TION ACTIVITIES INCOME.—The term ‘oil re25 lated qualified production activities income’ 
97 

•HR 5351 EH

1 means for any taxable year the qualified pro2 duction activities income which is attributable 

3 to the production, refining, processing, trans4 portation, or distribution of oil, gas, or any pri5 mary product thereof during such taxable 

6 year.’’. 

7 (2) CONFORMING AMENDMENT.—Section 

8 199(d)(2) (relating to application to individuals) is 

9 amended by striking ‘‘subsection (a)(1)(B)’’ and in10 serting ‘‘subsections (a)(1)(B) and (d)(9)(A)(iii)’’. 

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

12 this section shall apply to taxable years beginning after 

13 December 31, 2008. 

14 SEC. 302. CLARIFICATION OF DETERMINATION OF FOREIGN 

15 OIL AND GAS EXTRACTION INCOME. 

16 (a) IN GENERAL.—Paragraph (1) of section 907(c) 

17 is amended by redesignating subparagraph (B) as sub18 paragraph (C), by striking ‘‘or’’ at the end of subpara19 graph (A), and by inserting after subparagraph (A) the 

20 following new subparagraph: 

21 ‘‘(B) so much of any transportation of 

22 such minerals as occurs before the fair market 

23 value event, or’’. 
98 

•HR 5351 EH

1 (b) FAIR MARKET VALUE EVENT.—Subsection (c) of 

2 section 907 is amended by adding at the end the following 

3 new paragraph: 

4 ‘‘(6) FAIR MARKET VALUE EVENT.—For pur5 poses of this section, the term ‘fair market value 

6 event’ means, with respect to any mineral, the first 

7 point in time at which such mineral— 

8 ‘‘(A) has a fair market value which can be 

9 determined on the basis of a transfer, which is 

10 an arm’s length transaction, of such mineral 

11 from the taxpayer to a person who is not re12 lated (within the meaning of section 482) to 

13 such taxpayer, or 

14 ‘‘(B) is at a location at which the fair mar15 ket value is readily ascertainable by reason of 

16 transactions among unrelated third parties with 

17 respect to the same mineral (taking into ac18 count source, location, quality, and chemical 

19 composition).’’. 

20 (c) SPECIAL RULE FOR CERTAIN PETROLEUM

21 TAXES.—Subsection (c) of section 907, as amended by 

22 subsection (b), is amended to by adding at the end the 

23 following new paragraph: 

24 ‘‘(7) OIL AND GAS TAXES.—In the case of any 

25 tax imposed by a foreign country which is limited in 
99 

•HR 5351 EH

1 its application to taxpayers engaged in oil or gas ac2 tivities— 

3 ‘‘(A) the term ‘oil and gas extraction taxes’ 

4 shall include such tax, 

5 ‘‘(B) the term ‘foreign oil and gas extrac6 tion income’ shall include any taxable income 

7 which is taken into account in determining such 

8 tax (or is directly attributable to the activity to 

9 which such tax relates), and 

10 ‘‘(C) the term ‘foreign oil related income’ 

11 shall not include any taxable income which is 

12 treated as foreign oil and gas extraction income 

13 under subparagraph (B).’’. 

14 (d) CONFORMING AMENDMENTS.— 

15 (1) Subparagraph (C) of section 907(c)(1), as 

16 redesignated by this section, is amended by inserting 

17 ‘‘or used by the taxpayer in the activity described in 

18 subparagraph (B)’’ before the period at the end. 

19 (2) Subparagraph (B) of section 907(c)(2) is 

20 amended to read as follows: 

21 ‘‘(B) so much of the transportation of such 

22 minerals or primary products as is not taken 

23 into account under paragraph (1)(B),’’. 
100 

•HR 5351 EH

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

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

4 SEC. 303. TIME FOR PAYMENT OF CORPORATE ESTIMATED 

5 TAXES. 

6 The percentage under subparagraph (C) of section 

7 401(1) of the Tax Increase Prevention and Reconciliation 

8 Act of 2005 in effect on the date of the enactment of this 

9 Act is increased by 3.00 percentage points. 

10 TITLE IV—OTHER PROVISIONS 

11 Subtitle A—Studies 

12 SEC. 401. CARBON AUDIT OF THE TAX CODE. 

13 (a) STUDY.—The Secretary of the Treasury shall 

14 enter into an agreement with the National Academy of 

15 Sciences to undertake a comprehensive review of the Inter16 nal Revenue Code of 1986 to identify the types of and 

17 specific tax provisions that have the largest effects on car18 bon and other greenhouse gas emissions and to estimate 

19 the magnitude of those effects. 

20 (b) REPORT.—Not later than 2 years after the date 

21 of enactment of this Act, the National Academy of 

22 Sciences shall submit to Congress a report containing the 

23 results of study authorized under this section. 
101 

•HR 5351 EH

1 (c) AUTHORIZATION OF APPROPRIATIONS.—There is 

2 authorized to be appropriated to carry out this section 

3 $1,500,000 for the period of fiscal years 2008 and 2009. 

4 SEC. 402. COMPREHENSIVE STUDY OF BIOFUELS. 

5 (a) STUDY.—The Secretary of the Treasury, in con6 sultation with the Secretary of Agriculture, the Secretary 

7 of Energy, and the Administrator of the Environmental 

8 Protection Agency, shall enter into an agreement with the 

9 National Academy of Sciences to produce an analysis of 

10 current scientific findings to determine— 

11 (1) current biofuels production, as well as pro12 jections for future production, 

13 (2) the maximum amount of biofuels production 

14 capable on United States farmland, 

15 (3) the domestic effects of a dramatic increase 

16 in biofuels production on, for example— 

17 (A) the price of fuel, 

18 (B) the price of land in rural and subur19 ban communities, 

20 (C) crop acreage and other land use, 

21 (D) the environment, due to changes in 

22 crop acreage, fertilizer use, runoff, water use, 

23 emissions from vehicles utilizing biofuels, and 

24 other factors, 

25 (E) the price of feed, 
102 

•HR 5351 EH

1 (F) the selling price of grain crops, 

2 (G) exports and imports of grains, 

3 (H) taxpayers, through cost or savings to 

4 commodity crop payments, and 

5 (I) the expansion of refinery capacity, 

6 (4) the ability to convert corn ethanol plants for 

7 other uses, such as cellulosic ethanol or biodiesel, 

8 (5) a comparative analysis of corn ethanol 

9 versus other biofuels and renewable energy sources, 

10 considering cost, energy output, and ease of imple11 mentation, and 

12 (6) the need for additional scientific inquiry, 

13 and specific areas of interest for future research. 

14 (b) REPORT.—The National Academy of Sciences 

15 shall submit an initial report of the findings of the report 

16 required under subsection (a) to the Congress not later 

17 than 3 months after the date of the enactment of this Act, 

18 and a final report not later than 6 months after such date 

19 of enactment. 
103 

•HR 5351 EH

1 Subtitle B—Application of Certain 

2 Labor Standards on Projects Fi3 nanced Under Tax Credit Bonds 

4 SEC. 411. APPLICATION OF CERTAIN LABOR STANDARDS 

5 ON PROJECTS FINANCED UNDER TAX CREDIT 

6 BONDS. 

7 Subchapter IV of chapter 31 of title 40, United 

8 States Code, shall apply to projects financed with the pro9 ceeds of any tax credit bond (as defined in section 54A 

10 of the Internal Revenue Code of 1986). 

Passed the House of Representatives February 27, 

2008. 

Attest: 

Clerk. 
110TH CONGRESS 

2D SESSION H. R. 5351 

AN ACT 

To amend the Internal Revenue Code of 1986 to 

newable energy and energy conservation. provide tax incentives for the production of re-