II 

110TH CONGRESS 

2D SESSION S. 3478 

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

the production of energy, to provide transportation and domestic fuel 

security, and to provide incentives for energy conservation and energy 

efficiency, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 11, 2008 

Mr. BAUCUS (for himself and Mr. GRASSLEY) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

incentives for the production of energy, to provide transportation and domestic fuel security, and to provide incentives for energy conservation and energy efficiency, 

and for other purposes. 

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

3 SECTION 1. SHORT TITLE, ETC. 

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

5 ‘‘Energy Independence and Investment Act of 2008’’. 

6 (b) REFERENCE.—Except as otherwise expressly pro7 vided, whenever in this Act an amendment or repeal is 


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1 expressed in terms of an amendment to, or repeal of, a 

2 section or other provision, the reference shall be consid3 ered to be made to a section or other provision of the In4 ternal Revenue Code of 1986. 

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

6 this Act is as follows: 

Sec. 1. Short title, etc. 

TITLE I—ENERGY PRODUCTION INCENTIVES 

Subtitle A—Renewable Energy Incentives 

Sec. 101. Renewable energy credit. 

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

Sec. 103. Energy credit. 

Sec. 104. Credit for residential energy efficient property. 

Sec. 105. New clean renewable energy bonds. 

Sec. 106. Energy credit for small wind property. 

Sec. 107. Energy credit for geothermal heat pump systems. 

Subtitle B—Carbon Mitigation and Coal Provisions 

Sec. 111. Expansion and modification of advanced coal project investment credit. 

Sec. 112. Expansion and modification of coal gasification investment credit. 

Sec. 113. Temporary increase in coal excise tax; funding of Black Lung Disability Trust Fund. 

Sec. 114. Special rules for refund of the coal excise tax to certain coal producers and exporters. 

Sec. 115. Tax credit for carbon dioxide sequestration. 

Sec. 116. Carbon audit of the tax code. 

TITLE II—TRANSPORTATION AND DOMESTIC FUEL SECURITY 

PROVISIONS 

Sec. 201. Inclusion of cellulosic biofuel in bonus depreciation for biomass ethanol plant property. 

Sec. 202. Credits for biodiesel and renewable diesel. 

Sec. 203. Clarification that credits for fuel are designed to provide an incentive 

for United States production. 

Sec. 204. Credit for new qualified plug-in electric drive motor vehicles. 

Sec. 205. Extension and modification of alternative motor vehicle credit. 

Sec. 206. Exclusion from heavy truck tax for idling reduction units and advanced insulation. 

Sec. 207. Extension and modification of alternative fuel credit. 

Sec. 208. Alternative fuel vehicle refueling property credit. 

Sec. 209. Certain income and gains relating to alcohol fuels and mixtures, biodiesel fuels and mixtures, and alternative fuels and mixtures 

treated as qualifying income for publicly traded partnerships. 

Sec. 210. Extension of ethanol production credit. 


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Sec. 211. Credit for producers of fossil free alcohol. 

Sec. 212. Extension and modification of election to expense certain refineries. 

Sec. 213. Extension of suspension of taxable income limit on percentage depletion for oil and natural gas produced from marginal properties. 

TITLE III—ENERGY CONSERVATION AND EFFICIENCY 

PROVISIONS 

Sec. 301. Qualified energy conservation bonds. 

Sec. 302. Credit for nonbusiness energy property. 

Sec. 303. Energy efficient commercial buildings deduction. 

Sec. 304. New energy efficient home credit. 

Sec. 305. Modifications of energy efficient appliance credit for appliances produced after 2007. 

Sec. 306. Accelerated recovery period for depreciation of smart meters and 

smart grid systems. 

Sec. 307. Qualified green building and sustainable design projects. 

Sec. 308. Special depreciation allowance for certain reuse and recycling property. 

TITLE IV—MISCELLANEOUS ENERGY PROVISIONS 

Sec. 401. Special rule to implement FERC and State electric restructuring policy. 

Sec. 402. Modification of credit for production from advanced nuclear power facilities. 

Sec. 403. Income averaging for amounts received in connection with the Exxon 

Valdez litigation. 

TITLE V—REVENUE PROVISIONS 

Sec. 501. Limitation of deduction for income attributable to domestic production of oil, gas, or primary products thereof. 

Sec. 502. Tax on crude oil and natural gas produced from the outer Continental Shelf in the Gulf of Mexico. 

Sec. 503. Elimination of the different treatment of foreign oil and gas extraction income and foreign oil related income for purposes of the 

foreign tax credit. 

Sec. 504. Broker reporting of customer’s basis in securities transactions. 

Sec. 505. Increase and extension of Oil Spill Liability Trust Fund tax. 

TITLE VI—OTHER PROVISIONS 

Sec. 601. Secure rural schools and community self-determination program. 

Sec. 602. Clarification of uniform definition of child. 


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1 TITLE I—ENERGY PRODUCTION 

2 INCENTIVES 

3 Subtitle A—Renewable Energy 

4 Incentives 

5 SEC. 101. RENEWABLE ENERGY CREDIT. 

6 (a) 3-YEAR EXTENSION.—Each of the following pro7 visions of section 45(d) is amended by striking ‘‘January 

8 1, 2009’’ and inserting ‘‘January 1, 2012’’: 

9 (1) Paragraph (1). 

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

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

12 (4) Paragraph (4). 

13 (5) Paragraph (5). 

14 (6) Paragraph (6). 

15 (7) Paragraph (7). 

16 (8) Paragraph (8). 

17 (9) Subparagraphs (A) and (B) of paragraph 

18 (9). 

19 (b) MODIFICATION OF REFINED COAL AS A QUALI20 FIED ENERGY RESOURCE.— 

21 (1) ELIMINATION OF INCREASED MARKET

22 VALUE TEST.—Section 45(c)(7)(A) (defining refined 

23 coal) is amended— 

24 (A) by striking clause (iv), 


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1 (B) by adding ‘‘and’’ at the end of clause 

2 (ii), and 

3 (C) by striking ‘‘, and’’ at the end of 

4 clause (iii) and inserting a period. 

5 (2) INCREASE IN REQUIRED EMISSION REDUC6 TION.—Section 45(c)(7)(B) (defining qualified emis7 sion reduction) is amended by inserting ‘‘at least 40 

8 percent of the emissions of’’ after ‘‘nitrogen oxide 

9 and’’. 

10 (c) TRASH FACILITY CLARIFICATION.—Paragraph 

11 (7) of section 45(d) is amended— 

12 (1) by striking ‘‘facility which burns’’ and in13 serting ‘‘facility (other than a facility described in 

14 paragraph (6)) which uses’’, and 

15 (2) by striking ‘‘COMBUSTION’’. 

16 (d) EXPANSION OF BIOMASS FACILITIES.— 

17 (1) OPEN-LOOP BIOMASS FACILITIES.—Para18 graph (3) of section 45(d) is amended by redesig19 nating subparagraph (B) as subparagraph (C) and 

20 by inserting after subparagraph (A) the following 

21 new subparagraph: 

22 ‘‘(B) EXPANSION OF FACILITY.—Such 

23 term shall include a new unit placed in service 

24 after the date of the enactment of this subpara25 graph in connection with a facility described in 


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

2 increased amount of electricity produced at the 

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

4 (2) CLOSED-LOOP BIOMASS FACILITIES.—Para5 graph (2) of section 45(d) is amended by redesig6 nating subparagraph (B) as subparagraph (C) and 

7 inserting after subparagraph (A) the following new 

8 subparagraph: 

9 ‘‘(B) EXPANSION OF FACILITY.—Such 

10 term shall include a new unit placed in service 

11 after the date of the enactment of this subpara12 graph in connection with a facility described in 

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

14 the increased amount of electricity produced at 

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

16 (e) MODIFICATION OF RULES FOR HYDROPOWER

17 PRODUCTION.—Subparagraph (C) of section 45(c)(8) is 

18 amended to read as follows: 

19 ‘‘(C) NONHYDROELECTRIC DAM.—For pur20 poses of subparagraph (A), a facility is de21 scribed in this subparagraph if— 

22 ‘‘(i) the hydroelectric project installed 

23 on the nonhydroelectric dam is licensed by 

24 the Federal Energy Regulatory Commis25 sion and meets all other applicable environVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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1 mental, licensing, and regulatory require2 ments, 

3 ‘‘(ii) the nonhydroelectric dam was 

4 placed in service before the date of the en5 actment of this paragraph and operated 

6 for flood control, navigation, or water sup7 ply purposes and did not produce hydro8 electric power on the date of the enactment 

9 of this paragraph, and 

10 ‘‘(iii) the hydroelectric project is oper11 ated so that the water surface elevation at 

12 any given location and time that would 

13 have occurred in the absence of the hydro14 electric project is maintained, subject to 

15 any license requirements imposed under 

16 applicable law that change the water sur17 face elevation for the purpose of improving 

18 environmental quality of the affected wa19 terway. 

20 The Secretary, in consultation with the Federal 

21 Energy Regulatory Commission, shall certify if 

22 a hydroelectric project licensed at a nonhydro23 electric dam meets the criteria in clause (iii). 

24 Nothing in this section shall affect the stand25 ards under which the Federal Energy ReguVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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1 latory Commission issues licenses for and regu2 lates hydropower projects under part I of the 

3 Federal Power Act.’’. 

4 (f) EFFECTIVE DATE.— 

5 (1) IN GENERAL.—Except as otherwise pro6 vided in this subsection, the amendments made by 

7 this section shall apply to property originally placed 

8 in service after December 31, 2008. 

9 (2) REFINED COAL.—The amendments made by 

10 subsection (b) shall apply to coal produced and sold 

11 after December 31, 2008. 

12 (3) TRASH FACILITY CLARIFICATION.—The 

13 amendments made by subsection (c) shall apply to 

14 electricity produced and sold after the date of the 

15 enactment of this Act. 

16 (4) EXPANSION OF BIOMASS FACILITIES.—The 

17 amendments made by subsection (d) shall apply to 

18 property placed in service after the date of the en19 actment of this Act. 

20 SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRO21 DUCED FROM MARINE RENEWABLES. 

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

23 amended by striking ‘‘and’’ at the end of subparagraph 

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


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1 (H) and inserting ‘‘, and’’, and by adding at the end the 

2 following new subparagraph: 

3 ‘‘(I) marine and hydrokinetic renewable en4 ergy.’’. 

5 (b) MARINE RENEWABLES.—Subsection (c) of sec6 tion 45 is amended by adding at the end the following 

7 new paragraph: 

8 ‘‘(10) MARINE AND HYDROKINETIC RENEW9 ABLE ENERGY.— 

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

11 hydrokinetic renewable energy’ means energy 

12 derived from— 

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

14 oceans, estuaries, and tidal areas, 

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

16 lakes, and streams, 

17 ‘‘(iii) free flowing water in an irriga18 tion system, canal, or other man-made 

19 channel, including projects that utilize non20 mechanical structures to accelerate the 

21 flow of water for electric power production 

22 purposes, or 

23 ‘‘(iv) differentials in ocean tempera24 ture (ocean thermal energy conversion). 


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

2 include any energy which is derived from any 

3 source which utilizes a dam, diversionary struc4 ture (except as provided in subparagraph 

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

6 production purposes.’’. 

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

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

9 new paragraph: 

10 ‘‘(11) MARINE AND HYDROKINETIC RENEW11 ABLE ENERGY FACILITIES.—In the case of a facility 

12 producing electricity from marine and hydrokinetic 

13 renewable energy, the term ‘qualified facility’ means 

14 any facility owned by the taxpayer— 

15 ‘‘(A) which has a nameplate capacity rat16 ing of at least 150 kilowatts, and 

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

18 on or after the date of the enactment of this 

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

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

21 45(b)(4) is amended by striking ‘‘or (9)’’ and inserting 

22 ‘‘(9), or (11)’’. 

23 (e) COORDINATION WITH SMALL IRRIGATION

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

25 section 101, is amended by striking ‘‘January 1, 2012’’ 


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

2 (11)’’. 

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

4 this section shall apply to electricity produced and sold 

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

6 years ending after such date. 

7 SEC. 103. ENERGY CREDIT. 

8 (a) EXTENSION OF CREDIT.— 

9 (1) SOLAR ENERGY PROPERTY.—Paragraphs 

10 (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) are each 

11 amended by striking ‘‘January 1, 2009’’ and insert12 ing ‘‘January 1, 2017’’. 

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

14 of section 48(c)(1) is amended by striking ‘‘Decem15 ber 31, 2008’’ and inserting ‘‘December 31, 2016’’. 

16 (3) MICROTURBINE PROPERTY.—Subparagraph 

17 (E) of section 48(c)(2) is amended by striking ‘‘De18 cember 31, 2008’’ and inserting ‘‘December 31, 

19 2016’’. 

20 (b) ALLOWANCE OF ENERGY CREDIT AGAINST AL21 TERNATIVE MINIMUM TAX.—Subparagraph (B) of section 

22 38(c)(4), as amended by the Housing Assistance Tax Act 

23 of 2008, is amended by redesignating clauses (v) and (vi) 

24 as clauses (vi) and (vii), respectively, and by inserting 

25 after clause (iv) the following new clause: 


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1 ‘‘(v) the credit determined under sec2 tion 46 to the extent that such credit is at3 tributable to the energy credit determined 

4 under section 48,’’. 

5 (c) ENERGY CREDIT FOR COMBINED HEAT AND

6 POWER SYSTEM PROPERTY.— 

7 (1) IN GENERAL.—Section 48(a)(3)(A) is 

8 amended by striking ‘‘or’’ at the end of clause (iii), 

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

10 adding at the end the following new clause: 

11 ‘‘(v) combined heat and power system 

12 property,’’. 

13 (2) COMBINED HEAT AND POWER SYSTEM

14 PROPERTY.—Subsection (c) of section 48 is amend15 ed— 

16 (A) by striking ‘‘QUALIFIED FUEL CELL

17 PROPERTY; QUALIFIED MICROTURBINE PROP18 ERTY’’ in the heading and inserting ‘‘DEFINI19 TIONS’’, and 

20 (B) by adding at the end the following new 

21 paragraph: 

22 ‘‘(3) COMBINED HEAT AND POWER SYSTEM

23 PROPERTY.— 

24 ‘‘(A) COMBINED HEAT AND POWER SYS25 TEM PROPERTY.—The term ‘combined heat and 


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1 power system property’ means property com2 prising a system— 

3 ‘‘(i) which uses the same energy 

4 source for the simultaneous or sequential 

5 generation of electrical power, mechanical 

6 shaft power, or both, in combination with 

7 the generation of steam or other forms of 

8 useful thermal energy (including heating 

9 and cooling applications), 

10 ‘‘(ii) which produces— 

11 ‘‘(I) at least 20 percent of its 

12 total useful energy in the form of 

13 thermal energy which is not used to 

14 produce electrical or mechanical power 

15 (or combination thereof), and 

16 ‘‘(II) at least 20 percent of its 

17 total useful energy in the form of elec18 trical or mechanical power (or com19 bination thereof), 

20 ‘‘(iii) the energy efficiency percentage 

21 of which exceeds 60 percent, and 

22 ‘‘(iv) which is placed in service before 

23 January 1, 2017. 

24 ‘‘(B) LIMITATION.— 


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1 ‘‘(i) IN GENERAL.—In the case of 

2 combined heat and power system property 

3 with an electrical capacity in excess of the 

4 applicable capacity placed in service during 

5 the taxable year, the credit under sub6 section (a)(1) (determined without regard 

7 to this paragraph) for such year shall be 

8 equal to the amount which bears the same 

9 ratio to such credit as the applicable ca10 pacity bears to the capacity of such prop11 erty. 

12 ‘‘(ii) APPLICABLE CAPACITY.—For 

13 purposes of clause (i), the term ‘applicable 

14 capacity’ means 15 megawatts or a me15 chanical energy capacity of more than 

16 20,000 horsepower or an equivalent com17 bination of electrical and mechanical en18 ergy capacities. 

19 ‘‘(iii) MAXIMUM CAPACITY.—The term 

20 ‘combined heat and power system property’ 

21 shall not include any property comprising a 

22 system if such system has a capacity in ex23 cess of 50 megawatts or a mechanical en24 ergy capacity in excess of 67,000 horseVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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1 power or an equivalent combination of elec2 trical and mechanical energy capacities. 

3 ‘‘(C) SPECIAL RULES.— 

4 ‘‘(i) ENERGY EFFICIENCY PERCENT5 AGE.—For purposes of this paragraph, the 

6 energy efficiency percentage of a system is 

7 the fraction— 

8 ‘‘(I) the numerator of which is 

9 the total useful electrical, thermal, 

10 and mechanical power produced by 

11 the system at normal operating rates, 

12 and expected to be consumed in its 

13 normal application, and 

14 ‘‘(II) the denominator of which is 

15 the lower heating value of the fuel 

16 sources for the system. 

17 ‘‘(ii) DETERMINATIONS MADE ON BTU

18 BASIS.—The energy efficiency percentage 

19 and the percentages under subparagraph 

20 (A)(ii) shall be determined on a Btu basis. 

21 ‘‘(iii) INPUT AND OUTPUT PROPERTY

22 NOT INCLUDED.—The term ‘combined heat 

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1 ergy source to the facility or to distribute 

2 energy produced by the facility. 

3 ‘‘(D) SYSTEMS USING BIOMASS.—If a sys4 tem is designed to use biomass (within the 

5 meaning of paragraphs (2) and (3) of section 

6 45(c) without regard to the last sentence of 

7 paragraph (3)(A)) for at least 90 percent of the 

8 energy source— 

9 ‘‘(i) subparagraph (A)(iii) shall not 

10 apply, but 

11 ‘‘(ii) the amount of credit determined 

12 under subsection (a) with respect to such 

13 system shall not exceed the amount which 

14 bears the same ratio to such amount of 

15 credit (determined without regard to this 

16 subparagraph) as the energy efficiency per17 centage of such system bears to 60 per18 cent.’’. 

19 (d) INCREASE OF CREDIT LIMITATION FOR FUEL

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

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

22 (e) PUBLIC UTILITY PROPERTY TAKEN INTO AC23 COUNT.— 


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

2 48(a) is amended by striking the second sentence 

3 thereof. 

4 (2) CONFORMING AMENDMENTS.— 

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

6 amended by striking subparagraph (D) and re7 designating subparagraph (E) as subparagraph 

8 (D). 

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

10 amended by striking subparagraph (D) and re11 designating subparagraph (E) as subparagraph 

12 (D). 

13 (f) EFFECTIVE DATE.— 

14 (1) IN GENERAL.—Except as otherwise pro15 vided in this subsection, the amendments made by 

16 this section shall take effect on the date of the en17 actment of this Act. 

18 (2) ALLOWANCE AGAINST ALTERNATIVE MIN19 IMUM TAX.—The amendments made by subsection 

20 (b) shall apply to credits determined under section 

21 46 of the Internal Revenue Code of 1986 in taxable 

22 years beginning after the date of the enactment of 

23 this Act and to carrybacks of such credits. 

24 (3) COMBINED HEAT AND POWER AND FUEL

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1 sections (c) and (d) shall apply to periods after the 

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

3 ending after such date, under rules similar to the 

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

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

6 the enactment of the Revenue Reconciliation Act of 

7 1990). 

8 (4) PUBLIC UTILITY PROPERTY.—The amend9 ments made by subsection (e) shall apply to periods 

10 after February 13, 2008, in taxable years ending 

11 after such date, under rules similar to the rules of 

12 section 48(m) of the Internal Revenue Code of 1986 

13 (as in effect on the day before the date of the enact14 ment of the Revenue Reconciliation Act of 1990). 

15 SEC. 104. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT 

16 PROPERTY. 

17 (a) EXTENSION.—Section 25D(g) is amended by 

18 striking ‘‘December 31, 2008’’ and inserting ‘‘December 

19 31, 2016’’. 

20 (b) MAXIMUM CREDIT FOR SOLAR ELECTRIC PROP21 ERTY.— 

22 (1) IN GENERAL.—Section 25D(b)(1)(A) is 

23 amended by striking ‘‘$2,000’’ and inserting 

24 ‘‘$4,000’’. 


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1 (2) CONFORMING AMENDMENT.—Section 

2 25D(e)(4)(A)(i) is amended by striking ‘‘$6,667’’ 

3 and inserting ‘‘$13,333’’. 

4 (c) CREDIT FOR RESIDENTIAL WIND PROPERTY.— 

5 (1) IN GENERAL.—Section 25D(a) is amended 

6 by striking ‘‘and’’ at the end of paragraph (2), by 

7 striking the period at the end of paragraph (3) and 

8 inserting ‘‘, and’’, and by adding at the end the fol9 lowing new paragraph: 

10 ‘‘(4) 30 percent of the qualified small wind en11 ergy property expenditures made by the taxpayer 

12 during such year.’’. 

13 (2) LIMITATION.—Section 25D(b)(1) is amend14 ed by striking ‘‘and’’ at the end of subparagraph 

15 (B), by striking the period at the end of subpara16 graph (C) and inserting ‘‘, and’’, and by adding at 

17 the end the following new subparagraph: 

18 ‘‘(D) $500 with respect to each half kilo19 watt of capacity (not to exceed $4,000) of wind 

20 turbines for which qualified small wind energy 

21 property expenditures are made.’’. 

22 (3) QUALIFIED SMALL WIND ENERGY PROP23 ERTY EXPENDITURES.— 


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1 (A) IN GENERAL.—Section 25D(d) is 

2 amended by adding at the end the following 

3 new paragraph: 

4 ‘‘(4) QUALIFIED SMALL WIND ENERGY PROP5 ERTY EXPENDITURE.—The term ‘qualified small 

6 wind energy property expenditure’ means an expend7 iture for property which uses a wind turbine to gen8 erate electricity for use in connection with a dwelling 

9 unit located in the United States and used as a resi10 dence by the taxpayer.’’. 

11 (B) NO DOUBLE BENEFIT.—Section 

12 45(d)(1) is amended by adding at the end the 

13 following new sentence: ‘‘Such term shall not 

14 include any facility with respect to which any 

15 qualified small wind energy property expendi16 ture (as defined in subsection (d)(4) of section 

17 25D) is taken into account in determining the 

18 credit under such section.’’. 

19 (4) MAXIMUM EXPENDITURES IN CASE OF

20 JOINT OCCUPANCY.—Section 25D(e)(4)(A) is 

21 amended by striking ‘‘and’’ at the end of clause (ii), 

22 by striking the period at the end of clause (iii) and 

23 inserting ‘‘, and’’, and by adding at the end the fol24 lowing new clause: 


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

2 kilowatt of capacity (not to exceed 

3 $13,333) of wind turbines for which quali4 fied small wind energy property expendi5 tures are made.’’. 

6 (d) CREDIT FOR GEOTHERMAL HEAT PUMP SYS7 TEMS.— 

8 (1) IN GENERAL.—Section 25D(a), as amended 

9 by subsection (c), is amended by striking ‘‘and’’ at 

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

11 the end of paragraph (4) and inserting ‘‘, and’’, and 

12 by adding at the end the following new paragraph: 

13 ‘‘(5) 30 percent of the qualified geothermal 

14 heat pump property expenditures made by the tax15 payer during such year.’’. 

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

17 amended by subsection (c), is amended by striking 

18 ‘‘and’’ at the end of subparagraph (C), by striking 

19 the period at the end of subparagraph (D) and in20 serting ‘‘, and’’, and by adding at the end the fol21 lowing new subparagraph: 

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

23 geothermal heat pump property expenditures.’’. 

24 (3) QUALIFIED GEOTHERMAL HEAT PUMP

25 PROPERTY EXPENDITURE.—Section 25D(d), as 


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1 amended by subsection (c), is amended by adding at 

2 the end the following new paragraph: 

3 ‘‘(5) QUALIFIED GEOTHERMAL HEAT PUMP

4 PROPERTY EXPENDITURE.— 

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

6 geothermal heat pump property expenditure’ 

7 means an expenditure for qualified geothermal 

8 heat pump property installed on or in connec9 tion with a dwelling unit located in the United 

10 States and used as a residence by the taxpayer. 

11 ‘‘(B) QUALIFIED GEOTHERMAL HEAT

12 PUMP PROPERTY.—The term ‘qualified geo13 thermal heat pump property’ means any equip14 ment which— 

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

16 as a thermal energy source to heat the 

17 dwelling unit referred to in subparagraph 

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

19 such dwelling unit, and 

20 ‘‘(ii) meets the requirements of the 

21 Energy Star program which are in effect 

22 at the time that the expenditure for such 

23 equipment is made.’’. 

24 (4) MAXIMUM EXPENDITURES IN CASE OF

25 JOINT OCCUPANCY.—Section 25D(e)(4)(A), as 


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1 amended by subsection (c), is amended by striking 

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

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

5 ‘‘(v) $6,667 in the case of any quali6 fied geothermal heat pump property ex7 penditures.’’. 

8 (e) CREDIT ALLOWED AGAINST ALTERNATIVE MIN9 IMUM TAX.— 

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

11 25D is amended to read as follows: 

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

13 CARRYFORWARD OF UNUSED CREDIT.— 

14 ‘‘(1) LIMITATION BASED ON AMOUNT OF

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

16 26(a)(2) does not apply, the credit allowed under 

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

18 the excess of— 

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

20 (as defined in section 26(b)) plus the tax im21 posed by section 55, over 

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

23 under this subpart (other than this section) and 

24 section 27 for the taxable year. 

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


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1 ‘‘(A) RULE FOR YEARS IN WHICH ALL

2 PERSONAL CREDITS ALLOWED AGAINST REG3 ULAR AND ALTERNATIVE MINIMUM TAX.—In 

4 the case of a taxable year to which section 

5 26(a)(2) applies, if the credit allowable under 

6 subsection (a) exceeds the limitation imposed by 

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

8 by the sum of the credits allowable under this 

9 subpart (other than this section), such excess 

10 shall be carried to the succeeding taxable year 

11 and added to the credit allowable under sub12 section (a) for such succeeding taxable year. 

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

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

15 does not apply, if the credit allowable under 

16 subsection (a) exceeds the limitation imposed by 

17 paragraph (1) for such taxable year, such ex18 cess shall be carried to the succeeding taxable 

19 year and added to the credit allowable under 

20 subsection (a) for such succeeding taxable 

21 year.’’. 

22 (2) CONFORMING AMENDMENTS.— 

23 (A) Section 23(b)(4)(B) is amended by in24 serting ‘‘and section 25D’’ after ‘‘this section’’. 


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

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

3 25D’’. 

4 (C) Section 25B(g)(2) is amended by strik5 ing ‘‘section 23’’ and inserting ‘‘sections 23 and 

6 25D’’. 

7 (D) Section 26(a)(1) is amended by strik8 ing ‘‘and 25B’’ and inserting ‘‘25B, and 25D’’. 

9 (f) EFFECTIVE DATE.— 

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

11 this section shall apply to taxable years beginning 

12 after December 31, 2007. 

13 (2) APPLICATION OF EGTRRA SUNSET.—The 

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

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

16 Economic Growth and Tax Relief Reconciliation Act 

17 of 2001 in the same manner as the provisions of 

18 such Act to which such amendments relate. 

19 SEC. 105. NEW CLEAN RENEWABLE ENERGY BONDS. 

20 (a) IN GENERAL.—Subpart I of part IV of sub21 chapter A of chapter 1 is amended by adding at the end 

22 the following new section: 

23 ‘‘SEC. 54C. NEW CLEAN RENEWABLE ENERGY BONDS. 

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

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


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

2 if— 

3 ‘‘(1) 100 percent of the available project pro4 ceeds of such issue are to be used for capital expend5 itures incurred by governmental bodies, public power 

6 providers, or cooperative electric companies for one 

7 or more qualified renewable energy facilities, 

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

9 and 

10 ‘‘(3) the issuer designates such bond for pur11 poses of this section. 

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

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

14 clean renewable energy bond shall be 70 percent of the 

15 amount so determined without regard to this subsection. 

16 ‘‘(c) LIMITATION ON AMOUNT OF BONDS DES17 IGNATED.— 

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

19 face amount of bonds which may be designated 

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

21 the limitation amount allocated under this sub22 section to such issuer. 

23 ‘‘(2) NATIONAL LIMITATION ON AMOUNT OF

24 BONDS DESIGNATED.—There is a national new clean 

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


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1 which shall be allocated by the Secretary as provided 

2 in paragraph (3), except that— 

‘‘(A) not more than 331 3 ⁄3 percent thereof 

4 may be allocated to qualified projects of public 

5 power providers, 

‘‘(B) not more than 331 6 ⁄3 percent thereof 

7 may be allocated to qualified projects of govern8 mental bodies, and 

‘‘(C) not more than 331 9 ⁄3 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 paragraph (2)(A) bears to the 

24 cost of all such projects. 


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1 ‘‘(B) ALLOCATION AMONG GOVERNMENTAL

2 BODIES AND COOPERATIVE ELECTRIC COMPA3 NIES.—The Secretary shall make allocations of 

4 the amount of the national new clean renewable 

5 energy bond limitation described in paragraphs 

6 (2)(B) and (2)(C) among qualified projects of 

7 governmental bodies and cooperative electric 

8 companies, respectively, in such manner as the 

9 Secretary determines appropriate. 

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

11 ‘‘(1) QUALIFIED RENEWABLE ENERGY FACIL12 ITY.—The term ‘qualified renewable energy facility’ 

13 means a qualified facility (as determined under sec14 tion 45(d) without regard to paragraphs (8) and 

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

16 owned by a public power provider, a governmental 

17 body, or a cooperative electric company. 

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

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

20 service obligation, as such terms are defined in sec21 tion 217 of the Federal Power Act (as in effect on 

22 the date of the enactment of this paragraph). 

23 ‘‘(3) GOVERNMENTAL BODY.—The term ‘gov24 ernmental body’ means any State or Indian tribal 

25 government, or any political subdivision thereof. 


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1 ‘‘(4) COOPERATIVE ELECTRIC COMPANY.—The 

2 term ‘cooperative electric company’ means a mutual 

3 or cooperative electric company described in section 

4 501(c)(12) or section 1381(a)(2)(C). 

5 ‘‘(5) CLEAN RENEWABLE ENERGY BOND LEND6 ER.—The term ‘clean renewable energy bond lender’ 

7 means a lender which is a cooperative which is 

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

9 cooperative electric companies and is in existence on 

10 February 1, 2002, and shall include any affiliated 

11 entity which is controlled by such lender. 

12 ‘‘(6) QUALIFIED ISSUER.—The term ‘qualified 

13 issuer’ means a public power provider, a cooperative 

14 electric company, a governmental body, a clean re15 newable energy bond lender, or a not-for-profit elec16 tric utility which has received a loan or loan guar17 antee under the Rural Electrification Act.’’. 

18 (b) CONFORMING AMENDMENTS.— 

19 (1) Paragraph (1) of section 54A(d) is amended 

20 to read as follows: 

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

22 ‘qualified tax credit bond’ means— 

23 ‘‘(A) a qualified forestry conservation 

24 bond, or 

25 ‘‘(B) a new clean renewable energy bond, 


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1 which is part of an issue that meets requirements of 

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

3 (2) Subparagraph (C) of section 54A(d)(2) is 

4 amended to read as follows: 

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

6 of this paragraph, the term ‘qualified purpose’ 

7 means— 

8 ‘‘(i) in the case of a qualified forestry 

9 conservation bond, a purpose specified in 

10 section 54B(e), and 

11 ‘‘(ii) in the case of a new clean renew12 able energy bond, a purpose specified in 

13 section 54C(a)(1).’’. 

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

15 IV of subchapter A of chapter 1 is amended by add16 ing at the end the following new item: 

‘‘Sec. 54C. Qualified clean renewable energy bonds.’’. 

17 (c) EXTENSION FOR CLEAN RENEWABLE ENERGY

18 BONDS.—Subsection (m) of section 54 is amended by 

19 striking ‘‘December 31, 2008’’ and inserting ‘‘December 

20 31, 2009’’. 

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

22 this section shall apply to obligations issued after the date 

23 of the enactment of this Act. 


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1 SEC. 106. ENERGY CREDIT FOR SMALL WIND PROPERTY. 

2 (a) IN GENERAL.—Section 48(a)(3)(A), as amended 

3 by subsection (c), is amended by striking ‘‘or’’ at the end 

4 of clause (iv), by adding ‘‘or’’ at the end of clause (v), 

5 and by inserting after clause (v) the following new clause: 

6 ‘‘(vi) qualified small wind energy 

7 property,’’. 

8 (b) 30 PERCENT CREDIT.—Section 48(a)(2)(A)(i) is 

9 amended by striking ‘‘and’’ at the end of subclause (II) 

10 and by inserting after subclause (III) the following new 

11 subclause: 

12 ‘‘(IV) qualified small wind energy 

13 property, and’’. 

14 (c) QUALIFIED SMALL WIND ENERGY PROPERTY.— 

15 Section 48(c) is amended by adding at the end the fol16 lowing new paragraph: 

17 ‘‘(4) QUALIFIED SMALL WIND ENERGY PROP18 ERTY.— 

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

20 small wind energy property’ means property 

21 which uses a qualifying small wind turbine to 

22 generate electricity. 

23 ‘‘(B) LIMITATION.—In the case of quali24 fied small wind energy property placed in serv25 ice during the taxable year, the credit otherwise 

26 determined under subsection (a)(1) for such 


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1 year with respect to such property shall not ex2 ceed $4,000 with respect to any taxpayer. 

3 ‘‘(C) QUALIFYING SMALL WIND TUR4 BINE.—The term ‘qualifying small wind tur5 bine’ means a wind turbine which— 

6 ‘‘(i) has a nameplate capacity of not 

7 more than 100 kilowatts, and 

8 ‘‘(ii) meets the performance standards 

9 of the American Wind Energy Association. 

10 ‘‘(D) TERMINATION.—The term ‘qualified 

11 small wind energy property’ shall not include 

12 any property for any period after December 31, 

13 2016.’’. 

14 (d) CONFORMING AMENDMENT.—Section 48(a)(1) is 

15 amended by striking ‘‘paragraphs (1)(B) and (2)(B)’’ and 

16 inserting ‘‘paragraphs (1)(B), (2)(B), (3)(B), and 

17 (4)(B)’’. 

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

19 this section shall apply to periods after the date of the 

20 enactment of this Act, in taxable years ending after such 

21 date, under rules similar to the rules of section 48(m) of 

22 the Internal Revenue Code of 1986 (as in effect on the 

23 day before the date of the enactment of the Revenue Rec24 onciliation Act of 1990). 


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1 SEC. 107. ENERGY CREDIT FOR GEOTHERMAL HEAT PUMP 

2 SYSTEMS. 

3 (a) IN GENERAL.—Subparagraph (A) of section 

4 48(a)(3), as amended by this Act, is amended by striking 

5 ‘‘or’’ at the end of clause (v), by inserting ‘‘or’’ at the 

6 end of clause (vi), and by adding at the end the following 

7 new clause: 

8 ‘‘(vii) equipment which uses the 

9 ground or ground water as a thermal en10 ergy source to heat a structure or as a 

11 thermal energy sink to cool a structure, 

12 but only with respect to periods ending be13 fore January 1, 2017,’’. 

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

15 this section shall apply to periods after the date of the 

16 enactment of this Act, in taxable years ending after such 

17 date, under rules similar to the rules of section 48(m) of 

18 the Internal Revenue Code of 1986 (as in effect on the 

19 day before the date of the enactment of the Revenue Rec20 onciliation Act of 1990). 

21 Subtitle B—Carbon Mitigation and 

22 Coal Provisions 

23 SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED 

24 COAL PROJECT INVESTMENT CREDIT. 

25 (a) MODIFICATION OF CREDIT AMOUNT.—Section 

26 48A(a) is amended by striking ‘‘and’’ at the end of paraVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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

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

3 following new paragraph: 

4 ‘‘(3) 30 percent of the qualified investment for 

5 such taxable year in the case of projects described 

6 in clause (iii) of subsection (d)(3)(B).’’. 

7 (b) EXPANSION OF AGGREGATE CREDITS.—Section 

8 48A(d)(3)(A) is amended by striking ‘‘$1,300,000,000’’ 

9 and inserting ‘‘$3,300,000,000’’. 

10 (c) AUTHORIZATION OF ADDITIONAL PROJECTS.— 

11 (1) IN GENERAL.—Subparagraph (B) of section 

12 48A(d)(3) is amended to read as follows: 

13 ‘‘(B) PARTICULAR PROJECTS.—Of the dol14 lar amount in subparagraph (A), the Secretary 

15 is authorized to certify— 

16 ‘‘(i) $800,000,000 for integrated gas17 ification combined cycle projects the appli18 cation for which is submitted during the 

19 period described in paragraph (2)(A)(i), 

20 ‘‘(ii) $500,000,000 for projects which 

21 use other advanced coal-based generation 

22 technologies the application for which is 

23 submitted during the period described in 

24 paragraph (2)(A)(i), and 


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1 ‘‘(iii) $2,000,000,000 for advanced 

2 coal-based generation technology projects 

3 the application for which is submitted dur4 ing the period described in paragraph 

5 (2)(A)(ii).’’. 

6 (2) APPLICATION PERIOD FOR ADDITIONAL

7 PROJECTS.—Subparagraph (A) of section 48A(d)(2) 

8 is amended to read as follows: 

9 ‘‘(A) APPLICATION PERIOD.—Each appli10 cant for certification under this paragraph shall 

11 submit an application meeting the requirements 

12 of subparagraph (B). An applicant may only 

13 submit an application— 

14 ‘‘(i) for an allocation from the dollar 

15 amount specified in clause (i) or (ii) of 

16 paragraph (3)(B) during the 3-year period 

17 beginning on the date the Secretary estab18 lishes the program under paragraph (1), 

19 and 

20 ‘‘(ii) for an allocation from the dollar 

21 amount specified in paragraph (3)(B)(iii) 

22 during the 3-year period beginning at the 

23 earlier of the termination of the period de24 scribed in clause (i) or the date prescribed 

25 by the Secretary.’’. 


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1 (3) CAPTURE AND SEQUESTRATION OF CARBON

2 DIOXIDE EMISSIONS REQUIREMENT.— 

3 (A) IN GENERAL.—Section 48A(e)(1) is 

4 amended by striking ‘‘and’’ at the end of sub5 paragraph (E), by striking the period at the 

6 end of subparagraph (F) and inserting ‘‘; and’’, 

7 and by adding at the end the following new sub8 paragraph: 

9 ‘‘(G) in the case of any project the applica10 tion for which is submitted during the period 

11 described in subsection (d)(2)(A)(ii), the project 

12 includes equipment which separates and seques13 ters at least 65 percent (70 percent in the case 

14 of an application for reallocated credits under 

15 subsection (d)(4)) of such project’s total carbon 

16 dioxide emissions.’’. 

17 (B) HIGHEST PRIORITY FOR PROJECTS

18 WHICH SEQUESTER CARBON DIOXIDE EMIS19 SIONS.—Section 48A(e)(3) is amended by strik20 ing ‘‘and’’ at the end of subparagraph (A)(iii), 

21 by striking the period at the end of subpara22 graph (B)(iii) and inserting ‘‘, and’’, and by 

23 adding at the end the following new subpara24 graph: 


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1 ‘‘(C) give highest priority to projects with 

2 the greatest separation and sequestration per3 centage of total carbon dioxide emissions.’’. 

4 (C) RECAPTURE OF CREDIT FOR FAILURE

5 TO SEQUESTER.—Section 48A is amended by 

6 adding at the end the following new subsection: 

7 ‘‘(i) RECAPTURE OF CREDIT FOR FAILURE TO SE8 QUESTER.—The Secretary shall provide for recapturing 

9 the benefit of any credit allowable under subsection (a) 

10 with respect to any project which fails to attain or main11 tain the separation and sequestration requirements of sub12 section (e)(1)(G).’’. 

13 (4) ADDITIONAL PRIORITY FOR RESEARCH

14 PARTNERSHIPS.—Section 48A(e)(3)(B), as amended 

15 by paragraph (3)(B), is amended— 

16 (A) by striking ‘‘and’’ at the end of clause 

17 (ii), 

18 (B) by redesignating clause (iii) as clause 

19 (iv), and 

20 (C) by inserting after clause (ii) the fol21 lowing new clause: 

22 ‘‘(iii) applicant participants who have 

23 a research partnership with an eligible edu24 cational institution (as defined in section 

25 529(e)(5)), and’’. 


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1 (5) CLERICAL AMENDMENT.—Section 48A(e)(3) 

2 is amended by striking ‘‘INTEGRATED GASIFICATION

3 COMBINED CYCLE’’ in the heading and inserting 

4 ‘‘CERTAIN’’. 

5 (d) DISCLOSURE OF ALLOCATIONS.—Section 48A(d) 

6 is amended by adding at the end the following new para7 graph: 

8 ‘‘(5) DISCLOSURE OF ALLOCATIONS.—The Sec9 retary shall, upon making a certification under this 

10 subsection or section 48B(d), publicly disclose the 

11 identity of the applicant and the amount of the cred12 it certified with respect to such applicant.’’. 

13 (e) EFFECTIVE DATES.— 

14 (1) IN GENERAL.—Except as otherwise pro15 vided in this subsection, the amendments made by 

16 this section shall apply to credits the application for 

17 which is submitted during the period described in 

18 section 48A(d)(2)(A)(ii) of the Internal Revenue 

19 Code of 1986 and which are allocated or reallocated 

20 after the date of the enactment of this Act. 

21 (2) DISCLOSURE OF ALLOCATIONS.—The 

22 amendment made by subsection (d) shall apply to 

23 certifications made after the date of the enactment 

24 of this Act. 


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1 (3) CLERICAL AMENDMENT.—The amendment 

2 made by subsection (c)(5) shall take effect as if in3 cluded in the amendment made by section 1307(b) 

4 of the Energy Tax Incentives Act of 2005. 

5 SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFI6 CATION INVESTMENT CREDIT. 

7 (a) MODIFICATION OF CREDIT AMOUNT.—Section 

8 48B(a) is amended by inserting ‘‘(30 percent in the case 

9 of credits allocated under subsection (d)(1)(B))’’ after ‘‘20 

10 percent’’. 

11 (b) EXPANSION OF AGGREGATE CREDITS.—Section 

12 48B(d)(1) is amended by striking ‘‘shall not exceed 

13 $350,000,000’’ and all that follows and inserting ‘‘shall 

14 not exceed— 

15 ‘‘(A) $350,000,000, plus 

16 ‘‘(B) $500,000,000 for qualifying gasifi17 cation projects that include equipment which 

18 separates and sequesters at least 75 percent of 

19 such project’s total carbon dioxide emissions.’’. 

20 (c) RECAPTURE OF CREDIT FOR FAILURE TO SE21 QUESTER.—Section 48B is amended by adding at the end 

22 the following new subsection: 

23 ‘‘(f) RECAPTURE OF CREDIT FOR FAILURE TO SE24 QUESTER.—The Secretary shall provide for recapturing 

25 the benefit of any credit allowable under subsection (a) 


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1 with respect to any project which fails to attain or main2 tain the separation and sequestration requirements for 

3 such project under subsection (d)(1).’’. 

4 (d) SELECTION PRIORITIES.—Section 48B(d) is 

5 amended by adding at the end the following new para6 graph: 

7 ‘‘(4) SELECTION PRIORITIES.—In determining 

8 which qualifying gasification projects to certify 

9 under this section, the Secretary shall— 

10 ‘‘(A) give highest priority to projects with 

11 the greatest separation and sequestration per12 centage of total carbon dioxide emissions, and 

13 ‘‘(B) give high priority to applicant partici14 pants who have a research partnership with an 

15 eligible educational institution (as defined in 

16 section 529(e)(5)).’’. 

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

18 this section shall apply to credits described in section 

19 48B(d)(1)(B) of the Internal Revenue Code of 1986 which 

20 are allocated or reallocated after the date of the enactment 

21 of this Act. 


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1 SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX; 

2 FUNDING OF BLACK LUNG DISABILITY TRUST 

3 FUND. 

4 (a) EXTENSION OF TEMPORARY INCREASE.—Para5 graph (2) of section 4121(e) is amended— 

6 (1) by striking ‘‘January 1, 2014’’ in subpara7 graph (A) and inserting ‘‘December 31, 2018’’, and 

8 (2) by striking ‘‘January 1 after 1981’’ in sub9 paragraph (B) and inserting ‘‘December 31 after 

10 2007’’. 

11 (b) RESTRUCTURING OF TRUST FUND DEBT.— 

12 (1) DEFINITIONS.—For purposes of this sub13 section— 

14 (A) MARKET VALUE OF THE OUTSTANDING

15 REPAYABLE ADVANCES, PLUS ACCRUED INTER16 EST.—The term ‘‘market value of the out17 standing repayable advances, plus accrued in18 terest’’ means the present value (determined by 

19 the Secretary of the Treasury as of the refi20 nancing date and using the Treasury rate as 

21 the discount rate) of the stream of principal 

22 and interest payments derived assuming that 

23 each repayable advance that is outstanding on 

24 the refinancing date is due on the 30th anniver25 sary of the end of the fiscal year in which the 

26 advance was made to the Trust Fund, and that 


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1 all such principal and interest payments are 

2 made on September 30 of the applicable fiscal 

3 year. 

4 (B) REFINANCING DATE.—The term ‘‘refi5 nancing date’’ means the date occurring 2 days 

6 after the enactment of this Act. 

7 (C) REPAYABLE ADVANCE.—The term ‘‘re8 payable advance’’ means an amount that has 

9 been appropriated to the Trust Fund in order 

10 to make benefit payments and other expendi11 tures that are authorized under section 9501 of 

12 the Internal Revenue Code of 1986 and are re13 quired to be repaid when the Secretary of the 

14 Treasury determines that monies are available 

15 in the Trust Fund for such purpose. 

16 (D) TREASURY RATE.—The term ‘‘Treas17 ury rate’’ means a rate determined by the Sec18 retary of the Treasury, taking into consider19 ation current market yields on outstanding 

20 marketable obligations of the United States of 

21 comparable maturities. 

22 (E) TREASURY 1-YEAR RATE.—The term 

23 ‘‘Treasury 1-year rate’’ means a rate deter24 mined by the Secretary of the Treasury, taking 

25 into consideration current market yields on outVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00042 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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1 standing marketable obligations of the United 

2 States with remaining periods to maturity of 

3 approximately 1 year, to have been in effect as 

4 of the close of business 1 business day prior to 

5 the date on which the Trust Fund issues obliga6 tions to the Secretary of the Treasury under 

7 paragraph (2)(B). 

8 (2) REFINANCING OF OUTSTANDING PRINCIPAL

9 OF REPAYABLE ADVANCES AND UNPAID INTEREST

10 ON SUCH ADVANCES.— 

11 (A) TRANSFER TO GENERAL FUND.—On 

12 the refinancing date, the Trust Fund shall 

13 repay the market value of the outstanding re14 payable advances, plus accrued interest, by 

15 transferring into the general fund of the Treas16 ury the following sums: 

17 (i) The proceeds from obligations that 

18 the Trust Fund shall issue to the Sec19 retary of the Treasury in such amounts as 

20 the Secretaries of Labor and the Treasury 

21 shall determine and bearing interest at the 

22 Treasury rate, and that shall be in such 

23 forms and denominations and be subject to 

24 such other terms and conditions, including 


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1 maturity, as the Secretary of the Treasury 

2 shall prescribe. 

3 (ii) All, or that portion, of the appro4 priation made to the Trust Fund pursuant 

5 to paragraph (3) that is needed to cover 

6 the difference defined in that paragraph. 

7 (B) REPAYMENT OF OBLIGATIONS.—In the 

8 event that the Trust Fund is unable to repay 

9 the obligations that it has issued to the Sec10 retary of the Treasury under subparagraph 

11 (A)(i) and this subparagraph, or is unable to 

12 make benefit payments and other authorized ex13 penditures, the Trust Fund shall issue obliga14 tions to the Secretary of the Treasury in such 

15 amounts as may be necessary to make such re16 payments, payments, and expenditures, with a 

17 maturity of 1 year, and bearing interest at the 

18 Treasury 1-year rate. These obligations shall be 

19 in such forms and denominations and be sub20 ject to such other terms and conditions as the 

21 Secretary of the Treasury shall prescribe. 

22 (C) AUTHORITY TO ISSUE OBLIGATIONS.— 

23 The Trust Fund is authorized to issue obliga24 tions to the Secretary of the Treasury under 

25 subparagraphs (A)(i) and (B). The Secretary of 


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1 the Treasury is authorized to purchase such ob2 ligations of the Trust Fund. For the purposes 

3 of making such purchases, the Secretary of the 

4 Treasury may use as a public debt transaction 

5 the proceeds from the sale of any securities 

6 issued under chapter 31 of title 31, United 

7 States Code, and the purposes for which securi8 ties may be issued under such chapter are ex9 tended to include any purchase of such Trust 

10 Fund obligations under this subparagraph. 

11 (3) ONE-TIME APPROPRIATION.—There is here12 by appropriated to the Trust Fund an amount suffi13 cient to pay to the general fund of the Treasury the 

14 difference between— 

15 (A) the market value of the outstanding 

16 repayable advances, plus accrued interest; and 

17 (B) the proceeds from the obligations 

18 issued by the Trust Fund to the Secretary of 

19 the Treasury under paragraph (2)(A)(i). 

20 (4) PREPAYMENT OF TRUST FUND OBLIGA21 TIONS.—The Trust Fund is authorized to repay any 

22 obligation issued to the Secretary of the Treasury 

23 under subparagraphs (A)(i) and (B) of paragraph 

24 (2) prior to its maturity date by paying a prepay25 ment price that would, if the obligation being preVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00045 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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1 paid (including all unpaid interest accrued thereon 

2 through the date of prepayment) were purchased by 

3 a third party and held to the maturity date of such 

4 obligation, produce a yield to the third-party pur5 chaser for the period from the date of purchase to 

6 the maturity date of such obligation substantially 

7 equal to the Treasury yield on outstanding market8 able obligations of the United States having a com9 parable maturity to this period. 

10 SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EX11 CISE TAX TO CERTAIN COAL PRODUCERS 

12 AND EXPORTERS. 

13 (a) REFUND.— 

14 (1) COAL PRODUCERS.— 

15 (A) IN GENERAL.—Notwithstanding sub16 sections (a)(1) and (c) of section 6416 and sec17 tion 6511 of the Internal Revenue Code of 

18 1986, if— 

19 (i) a coal producer establishes that 

20 such coal producer, or a party related to 

21 such coal producer, exported coal produced 

22 by such coal producer to a foreign country 

23 or shipped coal produced by such coal pro24 ducer to a possession of the United States, 

25 or caused such coal to be exported or 


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1 shipped, the export or shipment of which 

2 was other than through an exporter who 

3 meets the requirements of paragraph (2), 

4 (ii) such coal producer filed an excise 

5 tax return on or after October 1, 1990, 

6 and on or before the date of the enactment 

7 of this Act, and 

8 (iii) such coal producer files a claim 

9 for refund with the Secretary not later 

10 than the close of the 30-day period begin11 ning on the date of the enactment of this 

12 Act, 

13 then the Secretary shall pay to such coal pro14 ducer an amount equal to the tax paid under 

15 section 4121 of such Code on such coal ex16 ported or shipped by the coal producer or a 

17 party related to such coal producer, or caused 

18 by the coal producer or a party related to such 

19 coal producer to be exported or shipped. 

20 (B) SPECIAL RULES FOR CERTAIN TAX21 PAYERS.—For purposes of this section— 

22 (i) IN GENERAL.—If a coal producer 

23 or a party related to a coal producer has 

24 received a judgment described in clause 

25 (iii), such coal producer shall be deemed to 


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1 have established the export of coal to a for2 eign country or shipment of coal to a pos3 session of the United States under sub4 paragraph (A)(i). 

5 (ii) AMOUNT OF PAYMENT.—If a tax6 payer described in clause (i) is entitled to 

7 a payment under subparagraph (A), the 

8 amount of such payment shall be reduced 

9 by any amount paid pursuant to the judg10 ment described in clause (iii). 

11 (iii) JUDGMENT DESCRIBED.—A judg12 ment is described in this subparagraph if 

13 such judgment— 

14 (I) is made by a court of com15 petent jurisdiction within the United 

16 States, 

17 (II) relates to the constitu18 tionality of any tax paid on exported 

19 coal under section 4121 of the Inter20 nal Revenue Code of 1986, and 

21 (III) is in favor of the coal pro22 ducer or the party related to the coal 

23 producer. 

24 (2) EXPORTERS.—Notwithstanding subsections 

25 (a)(1) and (c) of section 6416 and section 6511 of 


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1 the Internal Revenue Code of 1986, and a judgment 

2 described in paragraph (1)(B)(iii) of this subsection, 

3 if— 

4 (A) an exporter establishes that such ex5 porter exported coal to a foreign country or 

6 shipped coal to a possession of the United 

7 States, or caused such coal to be so exported or 

8 shipped, 

9 (B) such exporter filed a tax return on or 

10 after October 1, 1990, and on or before the 

11 date of the enactment of this Act, and 

12 (C) such exporter files a claim for refund 

13 with the Secretary not later than the close of 

14 the 30-day period beginning on the date of the 

15 enactment of this Act, 

16 then the Secretary shall pay to such exporter an 

17 amount equal to $0.825 per ton of such coal ex18 ported by the exporter or caused to be exported or 

19 shipped, or caused to be exported or shipped, by the 

20 exporter. 

21 (b) LIMITATIONS.—Subsection (a) shall not apply 

22 with respect to exported coal if a settlement with the Fed23 eral Government has been made with and accepted by, the 

24 coal producer, a party related to such coal producer, or 

25 the exporter, of such coal, as of the date that the claim 


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1 is filed under this section with respect to such exported 

2 coal. For purposes of this subsection, the term ‘‘settlement 

3 with the Federal Government’’ shall not include any settle4 ment or stipulation entered into as of the date of the en5 actment of this Act, the terms of which contemplate a 

6 judgment concerning which any party has reserved the 

7 right to file an appeal, or has filed an appeal. 

8 (c) SUBSEQUENT REFUND PROHIBITED.—No refund 

9 shall be made under this section to the extent that a credit 

10 or refund of such tax on such exported or shipped coal 

11 has been paid to any person. 

12 (d) DEFINITIONS.—For purposes of this section— 

13 (1) COAL PRODUCER.—The term ‘‘coal pro14 ducer’’ means the person in whom is vested owner15 ship of the coal immediately after the coal is severed 

16 from the ground, without regard to the existence of 

17 any contractual arrangement for the sale or other 

18 disposition of the coal or the payment of any royal19 ties between the producer and third parties. The 

20 term includes any person who extracts coal from 

21 coal waste refuse piles or from the silt waste product 

22 which results from the wet washing (or similar proc23 essing) of coal. 

24 (2) EXPORTER.—The term ‘‘exporter’’ means a 

25 person, other than a coal producer, who does not 


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1 have a contract, fee arrangement, or any other 

2 agreement with a producer or seller of such coal to 

3 export or ship such coal to a third party on behalf 

4 of the producer or seller of such coal and— 

5 (A) is indicated in the shipper’s export 

6 declaration or other documentation as the ex7 porter of record, or 

8 (B) actually exported such coal to a for9 eign country or shipped such coal to a posses10 sion of the United States, or caused such coal 

11 to be so exported or shipped. 

12 (3) RELATED PARTY.—The term ‘‘a party re13 lated to such coal producer’’ means a person who— 

14 (A) is related to such coal producer 

15 through any degree of common management, 

16 stock ownership, or voting control, 

17 (B) is related (within the meaning of sec18 tion 144(a)(3) of the Internal Revenue Code of 

19 1986) to such coal producer, or 

20 (C) has a contract, fee arrangement, or 

21 any other agreement with such coal producer to 

22 sell such coal to a third party on behalf of such 

23 coal producer. 


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1 (4) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of Treasury or the Secretary’s des3 ignee. 

4 (e) TIMING OF REFUND.—With respect to any claim 

5 for refund filed pursuant to this section, the Secretary 

6 shall determine whether the requirements of this section 

7 are met not later than 180 days after such claim is filed. 

8 If the Secretary determines that the requirements of this 

9 section are met, the claim for refund shall be paid not 

10 later than 180 days after the Secretary makes such deter11 mination. 

12 (f) INTEREST.—Any refund paid pursuant to this 

13 section shall be paid by the Secretary with interest from 

14 the date of overpayment determined by using the overpay15 ment rate and method under section 6621 of the Internal 

16 Revenue Code of 1986. 

17 (g) DENIAL OF DOUBLE BENEFIT.—The payment 

18 under subsection (a) with respect to any coal shall not ex19 ceed— 

20 (1) in the case of a payment to a coal producer, 

21 the amount of tax paid under section 4121 of the 

22 Internal Revenue Code of 1986 with respect to such 

23 coal by such coal producer or a party related to such 

24 coal producer, and 


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1 (2) in the case of a payment to an exporter, an 

2 amount equal to $0.825 per ton with respect to such 

3 coal exported by the exporter or caused to be ex4 ported by the exporter. 

5 (h) APPLICATION OF SECTION.—This section applies 

6 only to claims on coal exported or shipped on or after Oc7 tober 1, 1990, through the date of the enactment of this 

8 Act. 

9 (i) STANDING NOT CONFERRED.— 

10 (1) EXPORTERS.—With respect to exporters, 

11 this section shall not confer standing upon an ex12 porter to commence, or intervene in, any judicial or 

13 administrative proceeding concerning a claim for re14 fund by a coal producer of any Federal or State tax, 

15 fee, or royalty paid by the coal producer. 

16 (2) COAL PRODUCERS.—With respect to coal 

17 producers, this section shall not confer standing 

18 upon a coal producer to commence, or intervene in, 

19 any judicial or administrative proceeding concerning 

20 a claim for refund by an exporter of any Federal or 

21 State tax, fee, or royalty paid by the producer and 

22 alleged to have been passed on to an exporter. 


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1 SEC. 115. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRA2 TION. 

3 (a) IN GENERAL.—Subpart D of part IV of sub4 chapter A of chapter 1 (relating to business credits) is 

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

6 ‘‘SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION. 

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

8 the carbon dioxide sequestration credit for any taxable 

9 year is an amount equal to the sum of— 

10 ‘‘(1) $20 per metric ton of qualified carbon di11 oxide which is— 

12 ‘‘(A) captured by the taxpayer at a quali13 fied facility, and 

14 ‘‘(B) disposed of by the taxpayer in secure 

15 geological storage, and 

16 ‘‘(2) $10 per metric ton of qualified carbon di17 oxide which is— 

18 ‘‘(A) captured by the taxpayer at a quali19 fied facility, and 

20 ‘‘(B) used by the taxpayer as a tertiary 

21 injectant in a qualified enhanced oil or natural 

22 gas recovery project. 

23 ‘‘(b) QUALIFIED CARBON DIOXIDE.—For purposes of 

24 this section— 


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1 ‘‘(1) IN GENERAL.—The term ‘qualified carbon 

2 dioxide’ means carbon dioxide captured from an in3 dustrial source which— 

4 ‘‘(A) would otherwise be released into the 

5 atmosphere as industrial emission of green6 house gas, and 

7 ‘‘(B) is measured at the source of capture 

8 and verified at the point of disposal or injec9 tion. 

10 ‘‘(2) RECYCLED CARBON DIOXIDE.—The term 

11 ‘qualified carbon dioxide’ includes the initial deposit 

12 of captured carbon dioxide used as a tertiary 

13 injectant. Such term does not include carbon dioxide 

14 that is re-captured, recycled, and re-injected as part 

15 of the enhanced oil and natural gas recovery process. 

16 ‘‘(c) QUALIFIED FACILITY.—For purposes of this 

17 section, the term ‘qualified facility’ means any industrial 

18 facility— 

19 ‘‘(1) which is owned by the taxpayer, 

20 ‘‘(2) at which carbon capture equipment is 

21 placed in service, and 

22 ‘‘(3) which captures not less than 500,000 met23 ric tons of carbon dioxide during the taxable year. 

24 ‘‘(d) SPECIAL RULES AND OTHER DEFINITIONS.— 

25 For purposes of this section— 


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1 ‘‘(1) ONLY CARBON DIOXIDE CAPTURED AND

2 DISPOSED OF OR USED WITHIN THE UNITED STATES

3 TAKEN INTO ACCOUNT.—The credit under this sec4 tion shall apply only with respect to qualified carbon 

5 dioxide the capture and disposal or use of which is 

6 within— 

7 ‘‘(A) the United States (within the mean8 ing of section 638(1)), or 

9 ‘‘(B) a possession of the United States 

10 (within the meaning of section 638(2)). 

11 ‘‘(2) SECURE GEOLOGICAL STORAGE.—The Sec12 retary, in consultation with the Administrator of the 

13 Environmental Protection Agency, shall establish 

14 regulations for determining adequate security meas15 ures for the geological storage of carbon dioxide 

16 under subsection (a)(1)(B) such that the carbon di17 oxide does not escape into the atmosphere. Such 

18 term shall include storage at deep saline formations 

19 and unminable coal seems under such conditions as 

20 the Secretary may determine under such regulations. 

21 ‘‘(3) TERTIARY INJECTANT.—The term ‘ter22 tiary injectant’ has the same meaning as when used 

23 within section 193(b)(1). 

24 ‘‘(4) QUALIFIED ENHANCED OIL OR NATURAL

25 GAS RECOVERY PROJECT.—The term ‘qualified enVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00056 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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1 hanced oil or natural gas recovery project’ has the 

2 meaning given the term ‘qualified enhanced oil re3 covery project’ by section 43(c)(2), by substituting 

4 ‘crude oil or natural gas’ for ‘crude oil’ in subpara5 graph (A)(i) thereof. 

6 ‘‘(5) CREDIT ATTRIBUTABLE TO TAXPAYER.— 

7 Any credit under this section shall be attributable to 

8 the person that captures and physically or contrac9 tually ensures the disposal of or the use as a tertiary 

10 injectant of the qualified carbon dioxide, except to 

11 the extent provided in regulations prescribed by the 

12 Secretary. 

13 ‘‘(6) RECAPTURE.—The Secretary shall, by reg14 ulations, provide for recapturing the benefit of any 

15 credit allowable under subsection (a) with respect to 

16 any qualified carbon dioxide which ceases to be cap17 tured, disposed of, or used as a tertiary injectant in 

18 a manner consistent with the requirements of this 

19 section. 

20 ‘‘(7) INFLATION ADJUSTMENT.—In the case of 

21 any taxable year beginning in a calendar year after 

22 2009, there shall be substituted for each dollar 

23 amount contained in subsection (a) an amount equal 

24 to the product of— 

25 ‘‘(A) such dollar amount, multiplied by 


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1 ‘‘(B) the inflation adjustment factor for 

2 such calendar year determined under section 

3 43(b)(3)(B) for such calendar year, determined 

4 by substituting ‘2008’ for ‘1990’. 

5 ‘‘(e) APPLICATION OF SECTION.—The credit under 

6 this section shall apply with respect to qualified carbon 

7 dioxide before the end of the calendar year in which the 

8 Secretary, in consultation with the Administrator of the 

9 Environmental Protection Agency, certifies that 

10 75,000,000 metric tons of qualified carbon dioxide have 

11 been captured and disposed of or used as a tertiary 

12 injectant.’’. 

13 (b) CONFORMING AMENDMENT.—Section 38(b) (re14 lating to general business credit) is amended by striking 

15 ‘‘plus’’ at the end of paragraph (32), by striking the period 

16 at the end of paragraph (33) and inserting ‘‘, plus’’, and 

17 by adding at the end of following new paragraph: 

18 ‘‘(34) the carbon dioxide sequestration credit 

19 determined under section 45Q(a).’’. 

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

21 for subpart B of part IV of subchapter A of chapter 1 

22 (relating to other credits) is amended by adding at the 

23 end the following new section: 

‘‘Sec. 45Q. Credit for carbon dioxide sequestration.’’. 


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

2 this section shall apply to carbon dioxide captured after 

3 the date of the enactment of this Act. 

4 SEC. 116. CARBON AUDIT OF THE TAX CODE. 

5 (a) STUDY.—The Secretary of the Treasury shall 

6 enter into an agreement with the National Academy of 

7 Sciences to undertake a comprehensive review of the Inter8 nal Revenue Code of 1986 to identify the types of and 

9 specific tax provisions that have the largest effects on car10 bon and other greenhouse gas emissions and to estimate 

11 the magnitude of those effects. 

12 (b) REPORT.—Not later than 2 years after the date 

13 of enactment of this Act, the National Academy of 

14 Sciences shall submit to Congress a report containing the 

15 results of study authorized under this section. 

16 (c) AUTHORIZATION OF APPROPRIATIONS.—There is 

17 authorized to be appropriated to carry out this section 

18 $1,500,000 for the period of fiscal years 2009 and 2010. 


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1 TITLE II—TRANSPORTATION 

2 AND DOMESTIC FUEL SECU3 RITY PROVISIONS 

4 SEC. 201. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS 

5 DEPRECIATION FOR BIOMASS ETHANOL 

6 PLANT PROPERTY. 

7 (a) IN GENERAL.—Paragraph (3) of section 168(l) 

8 is amended to read as follows: 

9 ‘‘(3) CELLULOSIC BIOFUEL.—The term ‘cel10 lulosic biofuel’ means any liquid fuel which is pro11 duced from any lignocellulosic or hemicellulosic mat12 ter that is available on a renewable or recurring 

13 basis.’’. 

14 (b) CONFORMING AMENDMENTS.—Subsection (l) of 

15 section 168 is amended— 

16 (1) by striking ‘‘cellulosic biomass ethanol’’ 

17 each place it appears and inserting ‘‘cellulosic 

18 biofuel’’, 

19 (2) by striking ‘‘CELLULOSIC BIOMASS ETH20 ANOL’’ in the heading of such subsection and insert21 ing ‘‘CELLULOSIC BIOFUEL’’, and 

22 (3) by striking ‘‘CELLULOSIC BIOMASS ETH23 ANOL’’ in the heading of paragraph (2) thereof and 

24 inserting ‘‘CELLULOSIC BIOFUEL’’. 


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

2 this section shall apply to property placed in service after 

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

4 ending after such date. 

5 SEC. 202. CREDITS FOR BIODIESEL AND RENEWABLE DIE6 SEL. 

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

8 6427(e)(5)(B) are each amended by striking ‘‘December 

9 31, 2008’’ and inserting ‘‘December 31, 2011’’. 

10 (b) INCREASE IN RATE OF CREDIT.— 

11 (1) INCOME TAX CREDIT.—Paragraphs (1)(A) 

12 and (2)(A) of section 40A(b) are each amended by 

13 striking ‘‘50 cents’’ and inserting ‘‘$1.00’’. 

14 (2) EXCISE TAX CREDIT.—Paragraph (2) of 

15 section 6426(c) is amended to read as follows: 

16 ‘‘(2) APPLICABLE AMOUNT.—For purposes of 

17 this subsection, the applicable amount is $1.00.’’. 

18 (3) CONFORMING AMENDMENTS.— 

19 (A) Subsection (b) of section 40A is 

20 amended by striking paragraph (3) and by re21 designating paragraphs (4) and (5) as para22 graphs (3) and (4), respectively. 

23 (B) Paragraph (2) of section 40A(f) is 

24 amended to read as follows: 


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1 ‘‘(2) EXCEPTION.—Subsection (b)(4) shall not 

2 apply with respect to renewable diesel.’’. 

3 (C) Paragraphs (2) and (3) of section 

4 40A(e) are each amended by striking ‘‘sub5 section (b)(5)(C)’’ and inserting ‘‘subsection 

6 (b)(4)(C)’’. 

7 (D) Clause (ii) of section 40A(d)(3)(C) is 

8 amended by striking ‘‘subsection (b)(5)(B)’’ 

9 and inserting ‘‘subsection (b)(4)(B)’’. 

10 (c) UNIFORM TREATMENT OF DIESEL PRODUCED

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

12 amended— 

13 (1) by striking ‘‘diesel fuel’’ and inserting ‘‘liq14 uid fuel’’, 

15 (2) by striking ‘‘using a thermal 

16 depolymerization process’’, and 

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

18 and inserting ‘‘, D396, or other equivalent standard 

19 approved by the Secretary’’. 

20 (d) ELIGIBILITY OF CERTAIN AVIATION FUEL.— 

21 Subsection (f) of section 40A (relating to renewable diesel) 

22 is amended by adding at the end the following new para23 graph: 

24 ‘‘(4) CERTAIN AVIATION FUEL.— 


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

2 the last sentence of paragraph (3), the term ‘re3 newable diesel’ shall include fuel derived from 

4 biomass which meets the requirements of a De5 partment of Defense specification for military 

6 jet fuel or an American Society of Testing and 

7 Materials specification for aviation turbine fuel. 

8 ‘‘(B) APPLICATION OF MIXTURE CRED9 ITS.—In the case of fuel which is treated as re10 newable diesel solely by reason of subparagraph 

11 (A), subsection (b)(1) and section 6426(c) shall 

12 be applied with respect to such fuel by treating 

13 kerosene as though it were diesel fuel.’’. 

14 (e) MODIFICATION OF CREDIT FOR RENEWABLE

15 DIESEL.—Section 40A(f) (relating to renewable diesel), as 

16 amended by subsection (d), is amended by adding at the 

17 end the following new paragraph: 

18 ‘‘(5) SPECIAL RULE FOR CO-PROCESSED RE19 NEWABLE DIESEL.—In the case of a taxpayer which 

20 produces renewable diesel through the co-processing 

21 of biomass and petroleum at any facility, this sub22 section shall not apply to so much of the renewable 

23 diesel produced at such facility and sold or used dur24 ing the taxable year in a qualified biodiesel mixture 

25 as exceeds 60,000,000 gallons.’’. 


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1 (f) EFFECTIVE DATE.— 

2 (1) IN GENERAL.—Except as otherwise pro3 vided in this subsection, the amendments made by 

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

5 used, after December 31, 2008. 

6 (2) COPRODUCTION OF RENEWABLE DIESEL

7 WITH PETROLEUM FEEDSTOCK.—The amendments 

8 made by subsection (e) shall apply to fuel produced, 

9 and sold or used, after the date of the enactment of 

10 this Act. 

11 SEC. 203. CLARIFICATION THAT CREDITS FOR FUEL ARE 

12 DESIGNED TO PROVIDE AN INCENTIVE FOR 

13 UNITED STATES PRODUCTION. 

14 (a) ALCOHOL FUELS CREDIT.—Subsection (d) of 

15 section 40 is amended by adding at the end the following 

16 new paragraph: 

17 ‘‘(7) LIMITATION TO ALCOHOL WITH CONNEC18 TION TO THE UNITED STATES.—No credit shall be 

19 determined under this section with respect to any al20 cohol which is produced outside the United States 

21 for use as a fuel outside the United States. For pur22 poses of this paragraph, the term ‘United States’ in23 cludes any possession of the United States.’’. 


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1 (b) BIODIESEL FUELS CREDIT.—Subsection (d) of 

2 section 40A is amended by adding at the end the following 

3 new paragraph: 

4 ‘‘(5) LIMITATION TO BIODIESEL WITH CONNEC5 TION TO THE UNITED STATES.—No credit shall be 

6 determined under this section with respect to any 

7 biodiesel which is produced outside the United 

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

9 For purposes of this paragraph, the term ‘United 

10 States’ includes any possession of the United 

11 States.’’. 

12 (c) EXCISE TAX CREDIT.— 

13 (1) IN GENERAL.—Section 6426 is amended by 

14 adding at the end the following new subsection: 

15 ‘‘(i) LIMITATION TO FUELS WITH CONNECTION TO

16 THE UNITED STATES.— 

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

18 under this section with respect to any alcohol which 

19 is produced outside the United States for use as a 

20 fuel outside the United States. 

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

22 No credit shall be determined under this section 

23 with respect to any biodiesel or alternative fuel 

24 which is produced outside the United States for use 

25 as a fuel outside the United States. 


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

2 includes any possession of the United States.’’. 

3 (2) CONFORMING AMENDMENT.—Subsection (e) 

4 of section 6427 is amended by redesignating para5 graph (5) as paragraph (6) and by inserting after 

6 paragraph (4) the following new paragraph: 

7 ‘‘(5) LIMITATION TO FUELS WITH CONNECTION

8 TO THE UNITED STATES.—No amount shall be pay9 able under paragraph (1) or (2) with respect to any 

10 mixture or alternative fuel if credit is not allowed 

11 with respect to such mixture or alternative fuel by 

12 reason of section 6426(i).’’. 

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

14 this section shall apply to claims for credit or payment 

15 made on or after May 15, 2008. 

16 SEC. 204. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC 

17 DRIVE MOTOR VEHICLES. 

18 (a) PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE

19 CREDIT.—Subpart B of part IV of subchapter A of chap20 ter 1 (relating to other credits) is amended by adding at 

21 the end the following new section: 

22 ‘‘SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE 

23 MOTOR VEHICLES. 

24 ‘‘(a) ALLOWANCE OF CREDIT.— 


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1 ‘‘(1) IN GENERAL.—There shall be allowed as a 

2 credit against the tax imposed by this chapter for 

3 the taxable year an amount equal to the applicable 

4 amount with respect to each new qualified plug-in 

5 electric drive motor vehicle placed in service by the 

6 taxpayer during the taxable year. 

7 ‘‘(2) APPLICABLE AMOUNT.—For purposes of 

8 paragraph (1), the applicable amount is sum of— 

9 ‘‘(A) $2,500, plus 

10 ‘‘(B) $400 for each kilowatt hour of trac11 tion battery capacity in excess of 6 kilowatt 

12 hours. 

13 ‘‘(b) LIMITATIONS.— 

14 ‘‘(1) LIMITATION BASED ON WEIGHT.—The 

15 amount of the credit allowed under subsection (a) by 

16 reason of subsection (a)(2) shall not exceed— 

17 ‘‘(A) $7,500, in the case of any new quali18 fied plug-in electric drive motor vehicle with a 

19 gross vehicle weight rating of not more than 

20 10,000 pounds, 

21 ‘‘(B) $10,000, in the case of any new 

22 qualified plug-in electric drive motor vehicle 

23 with a gross vehicle weight rating of more than 

24 10,000 pounds but not more than 14,000 

25 pounds, 


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1 ‘‘(C) $12,500, in the case of any new 

2 qualified plug-in electric drive motor vehicle 

3 with a gross vehicle weight rating of more than 

4 14,000 pounds but not more than 26,000 

5 pounds, and 

6 ‘‘(D) $15,000, in the case of any new 

7 qualified plug-in electric drive motor vehicle 

8 with a gross vehicle weight rating of more than 

9 26,000 pounds. 

10 ‘‘(2) LIMITATION ON NUMBER OF PASSENGER

11 VEHICLES AND LIGHT TRUCKS ELIGIBLE FOR CRED12 IT.— 

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

14 qualified plug-in electric drive motor vehicle 

15 sold during the phaseout period, only the appli16 cable percentage of the credit otherwise allow17 able under subsection (a) shall be allowed. 

18 ‘‘(B) PHASEOUT PERIOD.—For purposes 

19 of this subsection, the phaseout period is the 

20 period beginning with the second calendar quar21 ter following the calendar quarter which in22 cludes the first date on which the total number 

23 of such new qualified plug-in electric drive 

24 motor vehicles sold for use in the United States 

25 after December 31, 2007, is at least 250,000. 


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1 ‘‘(C) APPLICABLE PERCENTAGE.—For 

2 purposes of subparagraph (A), the applicable 

3 percentage is— 

4 ‘‘(i) 50 percent for the first 2 cal5 endar quarters of the phaseout period, 

6 ‘‘(ii) 25 percent for the 3d and 4th 

7 calendar quarters of the phaseout period, 

8 and 

9 ‘‘(iii) 0 percent for each calendar 

10 quarter thereafter. 

11 ‘‘(D) CONTROLLED GROUPS.—Rules simi12 lar to the rules of section 30B(f)(4) shall apply 

13 for purposes of this subsection. 

14 ‘‘(c) NEW QUALIFIED PLUG-IN ELECTRIC DRIVE

15 MOTOR VEHICLE.—For purposes of this section, the term 

16 ‘new qualified plug-in electric drive motor vehicle’ means 

17 a motor vehicle— 

18 ‘‘(1) which draws propulsion primarily using a 

19 traction battery with at least 6 kilowatt hours of ca20 pacity, 

21 ‘‘(2) which uses an offboard source of energy to 

22 recharge such battery, 

23 ‘‘(3) which, in the case of a passenger vehicle 

24 or light truck which has a gross vehicle weight rat25 ing of not more than 8,500 pounds, has received a 


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1 certificate of conformity under the Clean Air Act 

2 and meets or exceeds the equivalent qualifying Cali3 fornia low emission vehicle standard under section 

4 243(e)(2) of the Clean Air Act for that make and 

5 model year, and 

6 ‘‘(A) in the case of a vehicle having a gross 

7 vehicle weight rating of 6,000 pounds or less, 

8 the Bin 5 Tier II emission standard established 

9 in regulations prescribed by the Administrator 

10 of the Environmental Protection Agency under 

11 section 202(i) of the Clean Air Act for that 

12 make and model year vehicle, and 

13 ‘‘(B) in the case of a vehicle having a gross 

14 vehicle weight rating of more than 6,000 

15 pounds but not more than 8,500 pounds, the 

16 Bin 8 Tier II emission standard which is so es17 tablished, 

18 ‘‘(4) the original use of which commences with 

19 the taxpayer, 

20 ‘‘(5) which is acquired for use or lease by the 

21 taxpayer and not for resale, and 

22 ‘‘(6) which is made by a manufacturer. 

23 ‘‘(d) APPLICATION WITH OTHER CREDITS.— 

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

25 GENERAL BUSINESS CREDIT.—So much of the credit 


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

2 taxable year (determined without regard to this sub3 section) that is attributable to property of a char4 acter subject to an allowance for depreciation shall 

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

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

7 ‘‘(2) PERSONAL CREDIT.— 

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

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

10 any taxable year (determined after application 

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

12 allowable under subpart A for such taxable 

13 year. 

14 ‘‘(B) LIMITATION BASED ON AMOUNT OF

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

16 section 26(a)(2) does not apply, the credit al17 lowed under subsection (a) for any taxable year 

18 (determined after application of paragraph (1)) 

19 shall not exceed the excess of— 

20 ‘‘(i) the sum of the regular tax liabil21 ity (as defined in section 26(b)) plus the 

22 tax imposed by section 55, over 

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

24 under subpart A (other than this section 


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1 and sections 23 and 25D) and section 27 

2 for the taxable year. 

3 ‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.— 

4 For purposes of this section— 

5 ‘‘(1) MOTOR VEHICLE.—The term ‘motor vehi6 cle’ has the meaning given such term by section 

7 30(c)(2). 

8 ‘‘(2) OTHER TERMS.—The terms ‘passenger 

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

10 the meanings given such terms in regulations pre11 scribed by the Administrator of the Environmental 

12 Protection Agency for purposes of the administra13 tion of title II of the Clean Air Act (42 U.S.C. 7521 

14 et seq.). 

15 ‘‘(3) TRACTION BATTERY CAPACITY.—Traction 

16 battery capacity shall be measured in kilowatt hours 

17 from a 100 percent state of charge to a zero percent 

18 state of charge. 

19 ‘‘(4) REDUCTION IN BASIS.—For purposes of 

20 this subtitle, the basis of any property for which a 

21 credit is allowable under subsection (a) shall be re22 duced by the amount of such credit so allowed. 

23 ‘‘(5) NO DOUBLE BENEFIT.—The amount of 

24 any deduction or other credit allowable under this 

25 chapter for a new qualified plug-in electric drive 


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1 motor vehicle shall be reduced by the amount of 

2 credit allowed under subsection (a) for such vehicle 

3 for the taxable year. 

4 ‘‘(6) PROPERTY USED BY TAX-EXEMPT ENTI5 TY.—In the case of a vehicle the use of which is de6 scribed in paragraph (3) or (4) of section 50(b) and 

7 which is not subject to a lease, the person who sold 

8 such vehicle to the person or entity using such vehi9 cle shall be treated as the taxpayer that placed such 

10 vehicle in service, but only if such person clearly dis11 closes to such person or entity in a document the 

12 amount of any credit allowable under subsection (a) 

13 with respect to such vehicle (determined without re14 gard to subsection (b)(2)). 

15 ‘‘(7) PROPERTY USED OUTSIDE UNITED

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

17 allowable under subsection (a) with respect to any 

18 property referred to in section 50(b)(1) or with re19 spect to the portion of the cost of any property 

20 taken into account under section 179. 

21 ‘‘(8) RECAPTURE.—The Secretary shall, by reg22 ulations, provide for recapturing the benefit of any 

23 credit allowable under subsection (a) with respect to 

24 any property which ceases to be property eligible for 

25 such credit (including recapture in the case of a 


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1 lease period of less than the economic life of a vehi2 cle). 

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

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

5 vehicle if the taxpayer elects not to have this section 

6 apply to such vehicle. 

7 ‘‘(10) INTERACTION WITH AIR QUALITY AND

8 MOTOR VEHICLE SAFETY STANDARDS.—Unless oth9 erwise provided in this section, a motor vehicle shall 

10 not be considered eligible for a credit under this sec11 tion unless such vehicle is in compliance with— 

12 ‘‘(A) the applicable provisions of the Clean 

13 Air Act for the applicable make and model year 

14 of the vehicle (or applicable air quality provi15 sions of State law in the case of a State which 

16 has adopted such provision under a waiver 

17 under section 209(b) of the Clean Air Act), and 

18 ‘‘(B) the motor vehicle safety provisions of 

19 sections 30101 through 30169 of title 49, 

20 United States Code. 

21 ‘‘(f) REGULATIONS.— 

22 ‘‘(1) IN GENERAL.—Except as provided in para23 graph (2), the Secretary shall promulgate such regu24 lations as necessary to carry out the provisions of 

25 this section. 


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1 ‘‘(2) COORDINATION IN PRESCRIPTION OF CER2 TAIN REGULATIONS.—The Secretary of the Treas3 ury, in coordination with the Secretary of Transpor4 tation and the Administrator of the Environmental 

5 Protection Agency, shall prescribe such regulations 

6 as necessary to determine whether a motor vehicle 

7 meets the requirements to be eligible for a credit 

8 under this section. 

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

10 property purchased after December 31, 2014.’’. 

11 (b) COORDINATION WITH ALTERNATIVE MOTOR VE12 HICLE CREDIT.—Section 30B(d)(3) is amended by adding 

13 at the end the following new subparagraph: 

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

15 Any vehicle with respect to which a credit is al16 lowable under section 30D (determined without 

17 regard to subsection (d) thereof) shall not be 

18 taken into account under this section.’’. 

19 (c) CREDIT MADE PART OF GENERAL BUSINESS

20 CREDIT.—Section 38(b) is amended by striking ‘‘plus’’ at 

21 the end of paragraph (33), by striking the period at the 

22 end of paragraph (34) and inserting ‘‘plus’’, and by add23 ing at the end the following new paragraph: 


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1 ‘‘(35) the portion of the new qualified plug-in 

2 electric drive motor vehicle credit to which section 

3 30D(d)(1) applies.’’. 

4 (d) CONFORMING AMENDMENTS.— 

5 (1)(A) Section 24(b)(3)(B), as amended by sec6 tion 104, is amended by striking ‘‘and 25D’’ and in7 serting ‘‘25D, and 30D’’. 

8 (B) Section 25(e)(1)(C)(ii) is amended by in9 serting ‘‘30D,’’ after ‘‘25D,’’. 

10 (C) Section 25B(g)(2), as amended by section 

11 104, is amended by striking ‘‘and 25D’’ and insert12 ing ‘‘, 25D, and 30D’’. 

13 (D) Section 26(a)(1), as amended by section 

14 104, is amended by striking ‘‘and 25D’’ and insert15 ing ‘‘25D, and 30D’’. 

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

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

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

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

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

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

22 paragraph: 

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

24 30D(e)(4).’’. 


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

2 ‘‘30D(e)(9),’’ after ‘‘30C(e)(5),’’. 

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

4 IV of subchapter A of chapter 1 is amended by add5 ing at the end the following new item: 

‘‘Sec. 30D. New qualified plug-in electric drive motor vehicles.’’. 

6 (e) EFFECTIVE DATE.—Except as otherwise provided 

7 in this subsection, the amendments made by this section 

8 shall apply to taxable years beginning after December 31, 

9 2008. 

10 (f) APPLICATION OF EGTRRA SUNSET.—The 

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

12 to title IX of the Economic Growth and Tax Relief Rec13 onciliation Act of 2001 in the same manner as the provi14 sion of such Act to which such amendment relates. 

15 SEC. 205. EXTENSION AND MODIFICATION OF ALTER16 NATIVE MOTOR VEHICLE CREDIT. 

17 (a) EXTENSION.— 

18 (1) NEW ADVANCED LEAN BURN TECHNOLOGY

19 MOTOR VEHICLES AND HEAVY NEW QUALIFIED HY20 BRID MOTOR VEHICLES.—Paragraphs (2) and (3) of 

21 section 30B(j) are amended to read as follows: 

22 ‘‘(2) in the case of a new advanced lean burn 

23 technology motor vehicle (as described in subsection 

24 (c)), December 31, 2011, 

25 ‘‘(3) in the case of— 


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1 ‘‘(A) a new qualified hybrid motor vehicle 

2 (as described in subsection (d)(2)(A)), Decem3 ber 31, 2010, and 

4 ‘‘(B) a new qualified hybrid motor vehicle 

5 (as described in subsection (d)(2)(B)), Decem6 ber 31, 2011, and’’. 

7 (2) NEW QUALIFIED ALTERNATIVE FUEL VEHI8 CLES.—Paragraph (4) of section 30B(j) is amended 

9 by striking ‘‘December 31, 2010’’ and inserting 

10 ‘‘December 31, 2011’’. 

11 (b) INCREASED CREDIT FOR CERTAIN NEW QUALI12 FIED FUEL CELL MOTOR VEHICLES.—Subparagraph (A) 

13 of section 30B(b)(1) is amended by striking ‘‘$4,000’’ and 

14 inserting ‘‘$7,500’’. 

15 (c) PERSONAL CREDIT ALLOWED AGAINST ALTER16 NATIVE MINIMUM TAX.— 

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

18 30B(g) is amended to read as follows: 

19 ‘‘(2) PERSONAL CREDIT.— 

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

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

22 any taxable year (determined after application 

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

24 allowable under subpart A for such taxable 

25 year. 


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1 ‘‘(B) LIMITATION BASED ON AMOUNT OF

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

3 section 26(a)(2) does not apply, the credit al4 lowed under subsection (a) (after the applica5 tion of paragraph (1)) for any taxable year 

6 shall not exceed the excess (if any) of— 

7 ‘‘(i) the sum of the regular tax liabil8 ity (as defined in section 26(b)) plus the 

9 tax imposed by section 55, over 

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

11 under subpart A (other than this section 

12 and sections 23, 25D, and 30D) and sec13 tion 27 for the taxable year.’’. 

14 (2) CONFORMING AMENDMENTS.— 

15 (A)(i) Section 24(b)(3)(B), as amended by 

16 this Act, is amended by striking ‘‘and 30D’’ 

17 and inserting ‘‘30B, and 30D’’. 

18 (ii) Section 25(e)(1)(C)(ii), as amended by 

19 this Act, is amended by inserting ‘‘30B,’’ after 

20 ‘‘25D,’’. 

21 (iii) Section 25B(g)(2), as amended by this 

22 Act, is amended by striking ‘‘and 30D’’ and in23 serting ‘‘, 30B, and 30D’’. 


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1 (iv) Section 26(a)(1), as amended by this 

2 Act, is amended by striking ‘‘and 30D’’ and in3 serting ‘‘30B, and 30D’’. 

4 (v) Section 1400C(d)(2), as amended by 

5 this Act, is amended by striking ‘‘and 30D’’ 

6 and inserting ‘‘30B, and 30D’’. 

7 (B) Subparagraph (A) of section 

8 30C(d)(2) is amended by striking ‘‘sections 27, 

9 30, and 30B’’ and inserting ‘‘sections 27 and 

10 30’’. 

11 (C) Section 55(c)(3) is amended by strik12 ing ‘‘30B(g)(2),’’. 

13 (d) EFFECTIVE DATE.—Except as otherwise pro14 vided in this subsection, the amendments made by this 

15 section shall apply to taxable years beginning after De16 cember 31, 2008. 

17 (e) APPLICATION OF EGTRRA SUNSET.—The 

18 amendment made by subsection (c)(2)(A)(i) shall be sub19 ject to title IX of the Economic Growth and Tax Relief 

20 Reconciliation Act of 2001 in the same manner as the pro21 vision of such Act to which such amendment relates. 


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1 SEC. 206. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING 

2 REDUCTION UNITS AND ADVANCED INSULA3 TION. 

4 (a) IN GENERAL.—Section 4053 is amended by add5 ing at the end the following new paragraphs: 

6 ‘‘(9) IDLING REDUCTION DEVICE.—Any device 

7 or system of devices which— 

8 ‘‘(A) is designed to provide to a vehicle 

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

10 electricity) that would otherwise require the op11 eration of the main drive engine while the vehi12 cle is temporarily parked or remains stationary 

13 using one or more devices affixed to a tractor, 

14 and 

15 ‘‘(B) is determined by the Administrator of 

16 the Environmental Protection Agency, in con17 sultation with the Secretary of Energy and the 

18 Secretary of Transportation, to reduce idling of 

19 such vehicle at a motor vehicle rest stop or 

20 other location where such vehicles are tempo21 rarily parked or remain stationary. 

22 ‘‘(10) ADVANCED INSULATION.—Any insulation 

23 that has an R value of not less than R35 per inch.’’. 

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

25 this section shall apply to sales or installations after the 

26 date of the enactment of this Act. 


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1 SEC. 207. EXTENSION AND MODIFICATION OF ALTER2 NATIVE FUEL CREDIT. 

3 (a) EXTENSION.— 

4 (1) ALTERNATIVE FUEL CREDIT.—Paragraph 

5 (4) of section 6426(d) (relating to alternative fuel 

6 credit) is amended by striking ‘‘September 30, 

7 2009’’ and inserting ‘‘December 31, 2011’’. 

8 (2) ALTERNATIVE FUEL MIXTURE CREDIT.— 

9 Paragraph (3) of section 6426(e) (relating to alter10 native fuel mixture credit) is amended by striking 

11 ‘‘September 30, 2009’’ and inserting ‘‘December 31, 

12 2011’’. 

13 (3) PAYMENTS.—Subparagraph (C) of section 

14 6427(e)(5) (relating to termination) is amended by 

15 striking ‘‘September 30, 2009’’ and inserting ‘‘De16 cember 31, 2011’’. 

17 (b) MODIFICATIONS.— 

18 (1) ALTERNATIVE FUEL TO INCLUDE COM19 PRESSED OR LIQUIFIED BIOMASS GAS.—Paragraph 

20 (2) of section 6426(d) (relating to alternative fuel 

21 credit) is amended by striking ‘‘and’’ at the end of 

22 subparagraph (E), by redesignating subparagraph 

23 (F) as subparagraph (G), and by inserting after sub24 paragraph (E) the following new subparagraph: 

25 ‘‘(F) compressed or liquefied biomass gas, 

26 and’’. 


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1 (2) CREDIT ALLOWED FOR AVIATION USE OF

2 FUEL.—Paragraph (1) of section 6426(d) is amend3 ed by inserting ‘‘sold by the taxpayer for use as a 

4 fuel in aviation,’’ after ‘‘motorboat,’’. 

5 (c) CARBON CAPTURE REQUIREMENT FOR CERTAIN

6 FUELS.— 

7 (1) IN GENERAL.—Subsection (d) of section 

8 6426, as amended by subsection (a), is amended by 

9 redesignating paragraph (4) as paragraph (5) and 

10 by inserting after paragraph (3) the following new 

11 paragraph: 

12 ‘‘(4) CARBON CAPTURE REQUIREMENT.— 

13 ‘‘(A) IN GENERAL.—The requirements of 

14 this paragraph are met if the fuel is certified, 

15 under such procedures as required by the Sec16 retary, as having been derived from coal pro17 duced at a gasification facility which separates 

18 and sequesters not less than the applicable per19 centage of such facility’s total carbon dioxide 

20 emissions. 

21 ‘‘(B) APPLICABLE PERCENTAGE.—For 

22 purposes of subparagraph (A), the applicable 

23 percentage is— 

24 ‘‘(i) 50 percent in the case of fuel pro25 duced after the date of the enactment of 


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1 this paragraph and on or before the earlier 

2 of— 

3 ‘‘(I) the date the Secretary 

4 makes a determination under sub5 paragraph (C), or 

6 ‘‘(II) December 30, 2011, and 

7 ‘‘(ii) 75 percent in the case of fuel 

8 produced after the date on which the appli9 cable percentage under clause (i) ceases to 

10 apply. 

11 ‘‘(C) DETERMINATION TO INCREASE AP12 PLICABLE PERCENTAGE BEFORE DECEMBER 31, 

13 2011.—If the Secretary, after considering the 

14 recommendations of the Carbon Sequestration 

15 Capability Panel, finds that the applicable per16 centage under subparagraph (B) should be 75 

17 percent for fuel produced before December 31, 

18 2011, the Secretary shall make a determination 

19 under this subparagraph. Any determination 

20 made under this subparagraph shall be made 

21 not later than 30 days after the Secretary re22 ceives from the Carbon Sequestration Panel the 

23 report required under section 331(c)(3)(D) of 

24 the Energy Independence and Investment Act 

25 of 2008.’’. 


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1 (2) CONFORMING AMENDMENT.—Subparagraph 

2 (E) of section 6426(d)(2) is amended by inserting 

3 ‘‘which meets the requirements of paragraph (4) and 

4 which is’’ after ‘‘any liquid fuel’’. 

5 (3) CARBON SEQUESTRATION CAPABILITY

6 PANEL.— 

7 (A) ESTABLISHMENT OF PANEL.—There is 

8 established a panel to be known as the ‘‘Carbon 

9 Sequestration Capability Panel’’ (hereafter in 

10 this paragraph referred to as the ‘‘Panel’’). 

11 (B) MEMBERSHIP.—The Panel shall be 

12 composed of— 

13 (i) 1 representative from the National 

14 Academy of Sciences, 

15 (ii) 1 representative from the Univer16 sity of Kentucky Center for Applied En17 ergy Research, and 

18 (iii) 1 individual appointed jointly by 

19 the representatives under clauses (i) and 

20 (ii). 

21 (C) STUDY.—The Panel shall study the 

22 appropriate percentage of carbon dioxide for 

23 separation and sequestration under section 

24 6426(d)(4) of the Internal Revenue Code of 

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1 tion. The panel shall consider whether it is fea2 sible to separate and sequester 75 percent of 

3 the carbon dioxide emissions of a facility, in4 cluding costs and other factors associated with 

5 separating and sequestering such percentage of 

6 carbon dioxide emissions. 

7 (D) REPORT.—Not later than 6 months 

8 after the date of the enactment of this Act, the 

9 Panel shall report to the Secretary of Treasury, 

10 the Committee on Finance of the Senate, and 

11 the Committee on Ways and Means of the 

12 House of Representatives on the study under 

13 subparagraph (C). 

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

15 this section shall apply to fuel sold or used after the date 

16 of the enactment of this Act. 

17 SEC. 208. ALTERNATIVE FUEL VEHICLE REFUELING PROP18 ERTY CREDIT. 

19 (a) EXTENSION OF CREDIT.—Paragraph (2) of sec20 tion 30C(g) is amended by striking ‘‘December 31, 2009’’ 

21 and inserting ‘‘December 31, 2012’’. 

22 (b) INCLUSION OF ELECTRICITY AS A CLEAN-BURN23 ING FUEL.—Section 30C(c)(2) is amended by adding at 

24 the end the following new subparagraph: 

25 ‘‘(C) Electricity.’’. 


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

2 this section shall apply to property placed in service after 

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

4 ending after such date. 

5 SEC. 209. CERTAIN INCOME AND GAINS RELATING TO AL6 COHOL FUELS AND MIXTURES, BIODIESEL 

7 FUELS AND MIXTURES, AND ALTERNATIVE 

8 FUELS AND MIXTURES TREATED AS QUALI9 FYING INCOME FOR PUBLICLY TRADED 

10 PARTNERSHIPS. 

11 (a) IN GENERAL.—Subparagraph (E) of section 

12 7704(d)(1) is amended by inserting ‘‘, or the transpor13 tation or storage of any fuel described in subsection (b), 

14 (c), (d), or (e) of section 6426, or any alcohol fuel defined 

15 in section 6426(b)(4)(A) or any biodiesel fuel as defined 

16 in section 40A(d)(1)’’ after ‘‘timber)’’. 

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

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

19 of this Act, in taxable years ending after such date. 

20 SEC. 210. EXTENSION OF ETHANOL PRODUCTION CREDIT. 

21 (a) CREDIT FOR ALCOHOL USED AS FUEL.—Section 

22 40 is amended— 

23 (1) by striking ‘‘2010’’ each place it appears in 

24 subsections (e)(1)(A) and (h) and inserting ‘‘2011’’, 

25 and 


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1 (2) by striking ‘‘January 1, 2011’’ in subsection 

2 (e)(1)(B) and inserting ‘‘January 1, 2012’’. 

3 (b) EXCISE TAX CREDITS.—Paragraph (6) of section 

4 6426(b) is amended by striking ‘‘2010’’ and inserting 

5 ‘‘2011’’. 

6 (c) PAYMENTS.—Subparagraph (A) of section 

7 6427(e)(5) is amended by striking ‘‘2010’’ and inserting 

8 ‘‘2011’’. 

9 SEC. 211. CREDIT FOR PRODUCERS OF FOSSIL FREE ALCO10 HOL. 

11 (a) IN GENERAL.—Subsection (a) of section 40 (re12 lating to alcohol used as fuel) is amended by striking 

13 ‘‘plus’’ at the end of paragraph (3), by striking the period 

14 at the end of paragraph (4) and inserting ‘‘, plus’’, and 

15 by adding at the end the following new paragraph: 

16 ‘‘(5) the small fossil free alcohol producer cred17 it.’’. 

18 (b) SMALL FOSSIL FREE ALCOHOL PRODUCER

19 CREDIT.—Subsection (b) of section 40 is amended by add20 ing at the end the following new paragraph: 

21 ‘‘(7) SMALL FOSSIL FREE ALCOHOL PRODUCER

22 CREDIT.— 

23 ‘‘(A) IN GENERAL.—In addition to any 

24 other credit allowed under this section, there 

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1 posed by this chapter for the taxable year an 

2 amount equal to 10 cents for each gallon of not 

3 more than 60,000,000 gallons of qualified fossil 

4 free alcohol production. 

5 ‘‘(B) QUALIFIED FOSSIL FREE ALCOHOL

6 PRODUCTION.—For purposes of this section, 

7 the term ‘qualified fossil free alcohol produc8 tion’ means alcohol which is produced by an eli9 gible small fossil free alcohol producer at a fos10 sil free alcohol production facility and which 

11 during the taxable year— 

12 ‘‘(i) is sold by the taxpayer to another 

13 person— 

14 ‘‘(I) for use by such other person 

15 in the production of a qualified alco16 hol mixture in such other person’s 

17 trade or business (other than casual 

18 off-farm production), 

19 ‘‘(II) for use by such other per20 son as a fuel in a trade or business, 

21 or 

22 ‘‘(III) who sells such alcohol at 

23 retail to another person and places 

24 such alcohol in the fuel tank of such 

25 other person, or 


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1 ‘‘(ii) is used or sold by the taxpayer 

2 for any purpose described in clause (i). 

3 ‘‘(C) ADDITIONAL DISTILLATION EX4 CLUDED.—The qualified fossil free alcohol pro5 duction of any taxpayer for any taxable year 

6 shall not include any alcohol which is purchased 

7 by the taxpayer and with respect to which such 

8 producer increases the proof of the alcohol by 

9 additional distillation.’’. 

10 (c) ELIGIBLE SMALL FOSSIL FREE ALCOHOL PRO11 DUCER.—Section 40 is amended by adding at the end the 

12 following new subsection: 

13 ‘‘(i) DEFINITIONS AND SPECIAL RULES FOR SMALL

14 FOSSIL FREE ALCOHOL PRODUCER.—For purposes of 

15 this section— 

16 ‘‘(1) IN GENERAL.—The term ‘eligible small 

17 fossil free alcohol producer’ means a person, who at 

18 all times during the taxable year, has a productive 

19 capacity for alcohol from all fossil free alcohol pro20 duction facilities of the taxpayer which is not in ex21 cess of 60,000,000 gallons. 

22 ‘‘(2) FOSSIL FREE ALCOHOL PRODUCTION FA23 CILITY.—The term ‘fossil free alcohol production fa24 cility’ means any facility at which 90 percent of the 


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1 energy used in the production of alcohol is produced 

2 from biomass (as defined in section 45K(c)(3)). 

3 ‘‘(3) AGGREGATION RULE.—For purposes of 

4 the 60,000,000 gallon limitation under paragraph 

5 (1) and subsection (b)(7)(A), all members of the 

6 same controlled group of corporations (within the 

7 meaning of section 267(f)) and all persons under 

8 common control (within the meaning of section 

9 52(b) but determined by treating an interest of more 

10 than 50 percent as a controlling interest) shall be 

11 treated as 1 person. 

12 ‘‘(4) PARTNERSHIP, S CORPORATIONS, AND

13 OTHER PASS-THRU ENTITIES.—In the case of a 

14 partnership, trust, S corporation, or other pass-thru 

15 entity, the limitation contained in paragraph (1) 

16 shall be applied at the entity level and at the partner 

17 or similar level. 

18 ‘‘(5) ALLOCATION.—For purposes of this sub19 section, in the case of a facility in which more than 

20 1 person has an interest, productive capacity shall 

21 be allocated among such persons in such manner as 

22 the Secretary may prescribe. 

23 ‘‘(6) REGULATIONS.—The Secretary may pre24 scribe such regulations as may be necessary to pre25 vent the credit provided for in subsection (a)(5) 


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1 from directly or indirectly benefitting any person 

2 with a direct or indirect productive capacity of more 

3 than 60,000,000 gallons of alcohol from fossil free 

4 alcohol production facilities during the taxable year. 

5 ‘‘(7) ALLOCATION OF SMALL FOSSIL FREE AL6 COHOL PRODUCER CREDIT TO PATRONS OF COOPER7 ATIVE.—Rules similar to the rules under subsection 

8 (g)(6) shall apply for purposes of this subsection.’’. 

9 (d) ALCOHOL NOT USED AS A FUEL, ETC.— 

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

11 40(d) is amended by redesignating subparagraph 

12 (E) as subparagraph (F) and by inserting after sub13 paragraph (D) the following new subparagraph: 

14 ‘‘(E) SMALL FOSSIL FREE ALCOHOL PRO15 DUCER CREDIT.—If— 

16 ‘‘(i) any credit is allowed under sub17 section (a)(5), and 

18 ‘‘(ii) any person does not use such 

19 fuel for a purpose described in subsection 

20 (b)(7)(B), 

21 then there is hereby imposed on such person a 

22 tax equal to 10 cents for each gallon of such al23 cohol.’’. 

24 (2) CONFORMING AMENDMENT.—Subparagraph 

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1 graph (1) and amended by this Act, is amended by 

2 striking ‘‘or (D)’’ and inserting ‘‘(D), or (E)’’. 

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

4 this section shall apply to fuel produced after December 

5 31, 2008. 

6 SEC. 212. EXTENSION AND MODIFICATION OF ELECTION TO 

7 EXPENSE CERTAIN REFINERIES. 

8 (a) EXTENSION.—Paragraph (1) of section 179C(c) 

9 (relating to qualified refinery property) is amended— 

10 (1) by striking ‘‘January 1, 2012’’ in subpara11 graph (B) and inserting ‘‘January 1, 2014’’, and 

12 (2) by striking ‘‘January 1, 2008’’ each place 

13 it appears in subparagraph (F) and inserting ‘‘Janu14 ary 1, 2010’’. 

15 (b) INCLUSION OF FUEL DERIVED FROM SHALE AND

16 TAR SANDS.— 

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

18 179C is amended by inserting ‘‘, or directly from 

19 shale or tar sands’’ after ‘‘(as defined in section 

20 45K(c))’’. 

21 (2) CONFORMING AMENDMENT.—Paragraph (2) 

22 of section 179C(e) is amended by inserting ‘‘shale, 

23 tar sands, or’’ before ‘‘qualified fuels’’. 


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

2 this section shall apply to property placed in service after 

3 the date of the enactment of this Act. 

4 SEC. 213. EXTENSION OF SUSPENSION OF TAXABLE IN5 COME LIMIT ON PERCENTAGE DEPLETION 

6 FOR OIL AND NATURAL GAS PRODUCED 

7 FROM MARGINAL PROPERTIES. 

8 Subparagraph (H) of section 613A(c)(6) (relating to 

9 oil and gas produced from marginal properties) is amend10 ed by striking ‘‘January 1, 2008’’ and inserting ‘‘January 

11 1, 2011’’. 

12 TITLE III—ENERGY CONSERVA13 TION AND EFFICIENCY PRO14 VISIONS 

15 SEC. 301. QUALIFIED ENERGY CONSERVATION BONDS. 

16 (a) IN GENERAL.—Subpart I of part IV of sub17 chapter A of chapter 1, as amended by section 106, is 

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

19 ‘‘SEC. 54D. QUALIFIED ENERGY CONSERVATION BONDS. 

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

21 For purposes of this subchapter, the term ‘qualified en22 ergy conservation bond’ means any bond issued as part 

23 of an issue if— 


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1 ‘‘(1) 100 percent of the available project pro2 ceeds of such issue are to be used for one or more 

3 qualified conservation purposes, 

4 ‘‘(2) the bond is issued by a State or local gov5 ernment, and 

6 ‘‘(3) the issuer designates such bond for pur7 poses of this section. 

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

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

10 qualified energy conservation bond shall be 70 percent of 

11 the amount so determined without regard to this sub12 section. 

13 ‘‘(c) LIMITATION ON AMOUNT OF BONDS DES14 IGNATED.—The maximum aggregate face amount of 

15 bonds which may be designated under subsection (a) by 

16 any issuer shall not exceed the limitation amount allocated 

17 to such issuer under subsection (e). 

18 ‘‘(d) NATIONAL LIMITATION ON AMOUNT OF BONDS

19 DESIGNATED.—There is a national qualified energy con20 servation bond limitation of $3,000,000,000. 

21 ‘‘(e) ALLOCATIONS.— 

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

23 under subsection (d) shall be allocated by the Sec24 retary among the States in proportion to the popu25 lation of the States. 


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1 ‘‘(2) ALLOCATIONS TO LARGEST LOCAL GOV2 ERNMENTS.— 

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

4 State in which there is a large local govern5 ment, each such local government shall be allo6 cated a portion of such State’s allocation which 

7 bears the same ratio to the State’s allocation 

8 (determined without regard to this subpara9 graph) as the population of such large local 

10 government bears to the population of such 

11 State. 

12 ‘‘(B) ALLOCATION OF UNUSED LIMITATION

13 TO STATE.—The amount allocated under this 

14 subsection to a large local government may be 

15 reallocated by such local government to the 

16 State in which such local government is located. 

17 ‘‘(C) LARGE LOCAL GOVERNMENT.—For 

18 purposes of this section, the term ‘large local 

19 government’ means any municipality or county 

20 if such municipality or county has a population 

21 of 100,000 or more. 

22 ‘‘(3) ALLOCATION TO ISSUERS; RESTRICTION

23 ON PRIVATE ACTIVITY BONDS.—Any allocation 

24 under this subsection to a State or large local gov25 ernment shall be allocated by such State or large 


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1 local government to issuers within the State in a 

2 manner that results in not less than 70 percent of 

3 the allocation to such State or large local govern4 ment being used to designate bonds which are not 

5 private activity bonds. 

6 ‘‘(f) QUALIFIED CONSERVATION PURPOSE.—For 

7 purposes of this section— 

8 ‘‘(1) IN GENERAL.—The term ‘qualified con9 servation purpose’ means any of the following: 

10 ‘‘(A) Capital expenditures incurred for 

11 purposes of— 

12 ‘‘(i) reducing energy consumption in 

13 publicly-owned buildings by at least 20 

14 percent, 

15 ‘‘(ii) implementing green community 

16 programs, 

17 ‘‘(iii) rural development involving the 

18 production of electricity from renewable 

19 energy resources, or 

20 ‘‘(iv) any qualified facility (as deter21 mined under section 45(d) without regard 

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

23 without regard to any placed in service 

24 date). 


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1 ‘‘(B) Expenditures with respect to research 

2 facilities, and research grants, to support re3 search in— 

4 ‘‘(i) development of cellulosic ethanol 

5 or other nonfossil fuels, 

6 ‘‘(ii) technologies for the capture and 

7 sequestration of carbon dioxide produced 

8 through the use of fossil fuels, 

9 ‘‘(iii) increasing the efficiency of exist10 ing technologies for producing nonfossil 

11 fuels, 

12 ‘‘(iv) automobile battery technologies 

13 and other technologies to reduce fossil fuel 

14 consumption in transportation, or 

15 ‘‘(v) technologies to reduce energy use 

16 in buildings. 

17 ‘‘(C) Mass commuting facilities and related 

18 facilities that reduce the consumption of energy, 

19 including expenditures to reduce pollution from 

20 vehicles used for mass commuting. 

21 ‘‘(D) Demonstration projects designed to 

22 promote the commercialization of— 

23 ‘‘(i) green building technology, 


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1 ‘‘(ii) conversion of agricultural waste 

2 for use in the production of fuel or other3 wise, 

4 ‘‘(iii) advanced battery manufacturing 

5 technologies, 

6 ‘‘(iv) technologies to reduce peak use 

7 of electricity, or 

8 ‘‘(v) technologies for the capture and 

9 sequestration of carbon dioxide emitted 

10 from combusting fossil fuels in order to 

11 produce electricity. 

12 ‘‘(E) Public education campaigns to pro13 mote energy efficiency. 

14 ‘‘(2) SPECIAL RULES FOR PRIVATE ACTIVITY

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

16 any private activity bond, the term ‘qualified con17 servation purposes’ shall not include any expenditure 

18 which is not a capital expenditure. 

19 ‘‘(g) POPULATION.— 

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

21 State or local government shall be determined for 

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

23 for the calendar year which includes the date of the 

24 enactment of this section. 


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1 ‘‘(2) SPECIAL RULE FOR COUNTIES.—In deter2 mining the population of any county for purposes of 

3 this section, any population of such county which is 

4 taken into account in determining the population of 

5 any municipality which is a large local government 

6 shall not be taken into account in determining the 

7 population of such county. 

8 ‘‘(h) APPLICATION TO INDIAN TRIBAL GOVERN9 MENTS.—An Indian tribal government shall be treated for 

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

11 local government, except that— 

12 ‘‘(1) an Indian tribal government shall be treat13 ed for purposes of subsection (e) as located within 

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

15 of such government as resides within such State, 

16 and 

17 ‘‘(2) any bond issued by an Indian tribal gov18 ernment shall be treated as a qualified energy con19 servation bond only if issued as part of an issue the 

20 available project proceeds of which are used for pur21 poses for which such Indian tribal government could 

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

23 (b) CONFORMING AMENDMENTS.— 

24 (1) Paragraph (1) of section 54A(d), as amend25 ed by this Act, is amended to read as follows: 


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

2 ‘qualified tax credit bond’ means— 

3 ‘‘(A) a qualified forestry conservation 

4 bond, 

5 ‘‘(B) a new clean renewable energy bond, 

6 or 

7 ‘‘(C) a qualified energy conservation bond, 

8 which is part of an issue that meets requirements of 

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

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

11 amended by this Act, is amended to read as follows: 

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

13 of this paragraph, the term ‘qualified purpose’ 

14 means— 

15 ‘‘(i) in the case of a qualified forestry 

16 conservation bond, a purpose specified in 

17 section 54B(e), 

18 ‘‘(ii) in the case of a new clean renew19 able energy bond, a purpose specified in 

20 section 54C(a)(1), and 

21 ‘‘(iii) in the case of a qualified energy 

22 conservation bond, a purpose specified in 

23 section 54D(a)(1).’’. 

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

25 IV of subchapter A of chapter 1, as amended by this 


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1 Act, is amended by adding at the end the following 

2 new item: 

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

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

4 this section shall apply to obligations issued after the date 

5 of the enactment of this Act. 

6 SEC. 302. CREDIT FOR NONBUSINESS ENERGY PROPERTY. 

7 (a) EXTENSION OF CREDIT.—Section 25C(g) is 

8 amended by striking ‘‘placed in service after December 31, 

9 2007’’ and inserting ‘‘placed in service— 

10 ‘‘(1) after December 31, 2007, and before Jan11 uary 1, 2009, or 

12 ‘‘(2) after December 31, 2011.’’. 

13 (b) QUALIFIED BIOMASS FUEL PROPERTY.— 

14 (1) IN GENERAL.—Section 25C(d)(3) is amend15 ed— 

16 (A) by striking ‘‘and’’ at the end of sub17 paragraph (D), 

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

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

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

21 subparagraph: 

22 ‘‘(F) a stove which uses the burning of bio23 mass fuel to heat a dwelling unit located in the 

24 United States and used as a residence by the 

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


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1 dwelling unit, and which has a thermal effi2 ciency rating of at least 75 percent.’’. 

3 (2) BIOMASS FUEL.—Section 25C(d) is amend4 ed by adding at the end the following new para5 graph: 

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

7 means any plant-derived fuel available on a renew8 able or recurring basis, including agricultural crops 

9 and trees, wood and wood waste and residues (in10 cluding wood pellets), plants (including aquatic 

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

12 (c) MODIFICATION OF WATER HEATER REQUIRE13 MENTS.—Section 25C(d)(3)(E) is amended by inserting 

14 ‘‘or a thermal efficiency of at least 90 percent’’ after 

15 ‘‘0.80’’. 

16 (d) COORDINATION WITH CREDIT FOR QUALIFIED

17 GEOTHERMAL HEAT PUMP PROPERTY EXPENDITURES.— 

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

19 25C(d), as amended by subsections (b) and (c), is 

20 amended by striking subparagraph (C) and by redes21 ignating subparagraphs (D), (E), and (F) as sub22 paragraphs (C), (D), and (E), respectively. 

23 (2) CONFORMING AMENDMENT.—Subparagraph 

24 (C) of section 25C(d)(2) is amended to read as fol25 lows: 


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1 ‘‘(C) REQUIREMENTS AND STANDARDS

2 FOR AIR CONDITIONERS AND HEAT PUMPS.— 

3 The standards and requirements prescribed by 

4 the Secretary under subparagraph (B) with re5 spect to the energy efficiency ratio (EER) for 

6 central air conditioners and electric heat 

7 pumps— 

8 ‘‘(i) shall require measurements to be 

9 based on published data which is tested by 

10 manufacturers at 95 degrees Fahrenheit, 

11 and 

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

13 data of the Air Conditioning and Refrig14 eration Institute that are prepared in part15 nership with the Consortium for Energy 

16 Efficiency.’’. 

17 (e) MODIFICATION OF QUALIFIED ENERGY EFFI18 CIENCY IMPROVEMENTS.— 

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

20 25C(c) is amended by inserting ‘‘, or an asphalt roof 

21 with appropriate cooling granules,’’ before ‘‘which 

22 meet the Energy Star program requirements’’. 

23 (2) BUILDING ENVELOPE COMPONENT.—Sub24 paragraph (D) of section 25C(c)(2) is amended— 


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1 (A) by inserting ‘‘or asphalt roof’’ after 

2 ‘‘metal roof’’, and 

3 (B) by inserting ‘‘or cooling granules’’ 

4 after ‘‘pigmented coatings’’. 

5 (f) EFFECTIVE DATES.— 

6 (1) IN GENERAL.—Except as provided in para7 graph (2), the amendments made this section shall 

8 apply to expenditures made after December 31, 

9 2008. 

10 (2) MODIFICATION OF QUALIFIED ENERGY EF11 FICIENCY IMPROVEMENTS.—The amendments made 

12 by subsection (e) shall apply to property placed in 

13 service after the date of the enactment of this Act. 

14 SEC. 303. ENERGY EFFICIENT COMMERCIAL BUILDINGS DE15 DUCTION. 

16 Subsection (h) of section 179D is amended by strik17 ing ‘‘December 31, 2008’’ and inserting ‘‘December 31, 

18 2013’’. 

19 SEC. 304. NEW ENERGY EFFICIENT HOME CREDIT. 

20 Subsection (g) of section 45L (relating to termi21 nation) is amended by striking ‘‘December 31, 2008’’ and 

22 inserting ‘‘December 31, 2011’’. 


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1 SEC. 305. MODIFICATIONS OF ENERGY EFFICIENT APPLI2 ANCE CREDIT FOR APPLIANCES PRODUCED 

3 AFTER 2007. 

4 (a) IN GENERAL.—Subsection (b) of section 45M is 

5 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, 


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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 


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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 is amend18 ed— 

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’’, 

23 (C) by moving the text of such subsection 

24 in line with the subsection heading, and 


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1 (D) by redesignating subparagraphs (A) 

2 and (B) as paragraphs (1) and (2), respectively, 

3 and by moving such paragraphs 2 ems to the 

4 left. 

5 (2) MODIFICATION OF BASE PERIOD.—Para6 graph (2) of section 45M(c), as amended by para7 graph (1), is amended by striking ‘‘3-calendar year’’ 

8 and inserting ‘‘2-calendar year’’. 

9 (c) TYPES OF ENERGY EFFICIENT APPLIANCES.— 

10 Subsection (d) of section 45M is amended to read as fol11 lows: 

12 ‘‘(d) TYPES OF ENERGY EFFICIENT APPLIANCE.— 

13 For purposes of this section, the types of energy efficient 

14 appliances are— 

15 ‘‘(1) dishwashers described in subsection (b)(1), 

16 ‘‘(2) clothes washers described in subsection 

17 (b)(2), and 

18 ‘‘(3) refrigerators described in subsection 

19 (b)(3).’’. 

20 (d) AGGREGATE CREDIT AMOUNT ALLOWED.— 

21 (1) INCREASE IN LIMIT.—Paragraph (1) of sec22 tion 45M(e) is amended to read as follows: 

23 ‘‘(1) AGGREGATE CREDIT AMOUNT ALLOWED.— 

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1 able year shall not exceed $75,000,000 reduced by 

2 the amount of the credit allowed under subsection 

3 (a) to the taxpayer (or any predecessor) for all prior 

4 taxable years beginning after December 31, 2007.’’. 

5 (2) EXCEPTION FOR CERTAIN REFRIGERATOR

6 AND CLOTHES WASHERS.—Paragraph (2) of section 

7 45M(e) is amended to read as follows: 

8 ‘‘(2) AMOUNT ALLOWED FOR CERTAIN REFRIG9 ERATORS AND CLOTHES WASHERS.—Refrigerators 

10 described in subsection (b)(3)(D) and clothes wash11 ers described in subsection (b)(2)(D) shall not be 

12 taken into account under paragraph (1).’’. 

13 (e) QUALIFIED ENERGY EFFICIENT APPLIANCES.— 

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

15 45M(f) 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).’’. 


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1 (2) CLOTHES WASHER.—Section 45M(f)(3) is 

2 amended by inserting ‘‘commercial’’ before ‘‘residen3 tial’’ the second place it appears. 

4 (3) TOP-LOADING CLOTHES WASHER.—Sub5 section (f) of section 45M is amended by redesig6 nating paragraphs (4), (5), (6), and (7) as para7 graphs (5), (6), (7), and (8), respectively, and by in8 serting after paragraph (3) the following new para9 graph: 

10 ‘‘(4) TOP-LOADING CLOTHES WASHER.—The 

11 term ‘top-loading clothes washer’ means a clothes 

12 washer which has the clothes container compartment 

13 access located on the top of the machine and which 

14 operates on a vertical axis.’’. 

15 (4) REPLACEMENT OF ENERGY FACTOR.—Sec16 tion 45M(f)(6), as redesignated by paragraph (3), is 

17 amended to read as follows: 

18 ‘‘(6) MODIFIED ENERGY FACTOR.—The term 

19 ‘modified energy factor’ means the modified energy 

20 factor established by the Department of Energy for 

21 compliance with the Federal energy conservation 

22 standard.’’. 

23 (5) GALLONS PER CYCLE; WATER CONSUMP24 TION FACTOR.—Section 45M(f), as amended by 


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1 paragraph (3), is amended by adding at the end the 

2 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. 306. ACCELERATED RECOVERY PERIOD FOR DEPRE16 CIATION OF SMART METERS AND SMART 

17 GRID SYSTEMS. 

18 (a) IN GENERAL.—Section 168(e)(3)(C) is amended 

19 by striking ‘‘and’’ at the end of clause (iv), by redesig20 nating clause (v) as clause (vii), and by inserting after 

21 clause (iv) the following new clauses: 

22 ‘‘(v) any qualified smart electric 

23 meter, 

24 ‘‘(vi) any qualified smart electric grid 

25 system, and’’. 


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1 (b) DEFINITIONS.—Section 168(i) is amended by in2 serting at the end the following new paragraph: 

3 ‘‘(18) QUALIFIED SMART ELECTRIC METERS.— 

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

5 smart electric meter’ means any smart electric 

6 meter which is placed in service by a taxpayer 

7 who is a supplier of electric energy or a pro8 vider of electric energy services. 

9 ‘‘(B) SMART ELECTRIC METER.—For pur10 poses of subparagraph (A), the term ‘smart 

11 electric meter’ means any time-based meter and 

12 related communication equipment which is ca13 pable of being used by the taxpayer as part of 

14 a system that— 

15 ‘‘(i) measures and records electricity 

16 usage data on a time-differentiated basis 

17 in at least 24 separate time segments per 

18 day, 

19 ‘‘(ii) provides for the exchange of in20 formation between supplier or provider and 

21 the customer’s electric meter in support of 

22 time-based rates or other forms of demand 

23 response, 

24 ‘‘(iii) provides data to such supplier or 

25 provider so that the supplier or provider 


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1 can provide energy usage information to 

2 customers electronically, and 

3 ‘‘(iv) provides net metering. 

4 ‘‘(19) QUALIFIED SMART ELECTRIC GRID SYS5 TEMS.— 

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

7 smart electric grid system’ means any smart 

8 grid property used as part of a system for elec9 tric distribution grid communications, moni10 toring, and management placed in service by a 

11 taxpayer who is a supplier of electric energy or 

12 a provider of electric energy services. 

13 ‘‘(B) SMART GRID PROPERTY.—For the 

14 purposes of subparagraph (A), the term ‘smart 

15 grid property’ means electronics and related 

16 equipment that is capable of— 

17 ‘‘(i) sensing, collecting, and moni18 toring data of or from all portions of a 

19 utility’s electric distribution grid, 

20 ‘‘(ii) providing real-time, two-way 

21 communications to monitor or manage 

22 such grid, and 

23 ‘‘(iii) providing real time analysis of 

24 and event prediction based upon collected 

25 data that can be used to improve electric 


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1 distribution system reliability, quality, and 

2 performance.’’. 

3 (c) CONTINUED APPLICATION OF 150 PERCENT DE4 CLINING BALANCE METHOD.—Paragraph (2) of section 

5 168(b) is amended by striking ‘‘or’’ at the end of subpara6 graph (B), by redesignating subparagraph (C) as subpara7 graph (D), and by inserting after subparagraph (B) the 

8 following new subparagraph: 

9 ‘‘(C) any property (other than property de10 scribed in paragraph (3)) which is a qualified 

11 smart electric meter or qualified smart electric 

12 grid system, or’’. 

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

14 this section shall apply to property placed in service after 

15 the date of the enactment of this Act. 

16 SEC. 307. QUALIFIED GREEN BUILDING AND SUSTAINABLE 

17 DESIGN PROJECTS. 

18 (a) IN GENERAL.—Paragraph (8) of section 142(l) 

19 is amended by striking ‘‘September 30, 2009’’ and insert20 ing ‘‘September 30, 2012’’. 

21 (b) TREATMENT OF CURRENT REFUNDING

22 BONDS.—Paragraph (9) of section 142(l) is amended by 

23 striking ‘‘October 1, 2009’’ and inserting ‘‘October 1, 

24 2012’’. 


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1 (c) ACCOUNTABILITY.—The second sentence of sec2 tion 701(d) of the American Jobs Creation Act of 2004 

3 is amended by striking ‘‘issuance,’’ and inserting 

4 ‘‘issuance of the last issue with respect to such project,’’. 

5 SEC. 308. SPECIAL DEPRECIATION ALLOWANCE FOR CER6 TAIN REUSE AND RECYCLING PROPERTY. 

7 (a) IN GENERAL.—Section 168 is amended by adding 

8 at the end the following new subsection: 

9 ‘‘(m) SPECIAL ALLOWANCE FOR CERTAIN REUSE

10 AND RECYCLING PROPERTY.— 

11 ‘‘(1) IN GENERAL.—In the case of any qualified 

12 reuse and recycling property— 

13 ‘‘(A) the depreciation deduction provided 

14 by section 167(a) for the taxable year in which 

15 such property is placed in service shall include 

16 an allowance equal to 50 percent of the ad17 justed basis of the qualified reuse and recycling 

18 property, and 

19 ‘‘(B) the adjusted basis of the qualified 

20 reuse and recycling property shall be reduced by 

21 the amount of such deduction before computing 

22 the amount otherwise allowable as a deprecia23 tion deduction under this chapter for such tax24 able year and any subsequent taxable year. 


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1 ‘‘(2) QUALIFIED REUSE AND RECYCLING PROP2 ERTY.—For purposes of this subsection— 

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

4 reuse and recycling property’ means any reuse 

5 and recycling property— 

6 ‘‘(i) to which this section applies, 

7 ‘‘(ii) which has a useful life of at least 

8 5 years, 

9 ‘‘(iii) the original use of which com10 mences with the taxpayer after August 31, 

11 2008, and 

12 ‘‘(iv) which is— 

13 ‘‘(I) acquired by purchase (as de14 fined in section 179(d)(2)) by the tax15 payer after August 31, 2008, but only 

16 if no written binding contract for the 

17 acquisition was in effect before Sep18 tember 1, 2008, or 

19 ‘‘(II) acquired by the taxpayer 

20 pursuant to a written binding contract 

21 which was entered into after August 

22 31, 2008. 

23 ‘‘(B) EXCEPTIONS.— 

24 ‘‘(i) BONUS DEPRECIATION PROPERTY

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1 fied reuse and recycling property’ shall not 

2 include any property to which section 

3 168(k) applies. 

4 ‘‘(ii) ALTERNATIVE DEPRECIATION

5 PROPERTY.—The term ‘qualified reuse and 

6 recycling property’ shall not include any 

7 property to which the alternative deprecia8 tion system under subsection (g) applies, 

9 determined without regard to paragraph 

10 (7) of subsection (g) (relating to election to 

11 have system apply). 

12 ‘‘(iii) ELECTION OUT.—If a taxpayer 

13 makes an election under this clause with 

14 respect to any class of property for any 

15 taxable year, this subsection shall not 

16 apply to all property in such class placed 

17 in service during such taxable year. 

18 ‘‘(C) SPECIAL RULE FOR SELF-CON19 STRUCTED PROPERTY.—In the case of a tax20 payer manufacturing, constructing, or pro21 ducing property for the taxpayer’s own use, the 

22 requirements of clause (iv) of subparagraph (A) 

23 shall be treated as met if the taxpayer begins 

24 manufacturing, constructing, or producing the 

25 property after August 31, 2008. 


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1 ‘‘(D) DEDUCTION ALLOWED IN COM2 PUTING MINIMUM TAX.—For purposes of deter3 mining alternative minimum taxable income 

4 under section 55, the deduction under sub5 section (a) for qualified reuse and recycling 

6 property shall be determined under this section 

7 without regard to any adjustment under section 

8 56. 

9 ‘‘(3) DEFINITIONS.—For purposes of this sub10 section— 

11 ‘‘(A) REUSE AND RECYCLING PROPERTY.— 

12 ‘‘(i) IN GENERAL.—The term ‘reuse 

13 and recycling property’ means any machin14 ery and equipment (not including buildings 

15 or real estate), along with all appur16 tenances thereto, including software nec17 essary to operate such equipment, which is 

18 used exclusively to collect, distribute, or re19 cycle qualified reuse and recyclable mate20 rials. 

21 ‘‘(ii) EXCLUSION.—Such term does 

22 not include rolling stock or other equip23 ment used to transport reuse and recycla24 ble materials. 


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1 ‘‘(B) QUALIFIED REUSE AND RECYCLABLE

2 MATERIALS.— 

3 ‘‘(i) IN GENERAL.—The term ‘quali4 fied reuse and recyclable materials’ means 

5 scrap plastic, scrap glass, scrap textiles, 

6 scrap rubber, scrap packaging, recovered 

7 fiber, scrap ferrous and nonferrous metals, 

8 or electronic scrap generated by an indi9 vidual or business. 

10 ‘‘(ii) ELECTRONIC SCRAP.—For pur11 poses of clause (i), the term ‘electronic 

12 scrap’ means— 

13 ‘‘(I) any cathode ray tube, flat 

14 panel screen, or similar video display 

15 device with a screen size greater than 

16 4 inches measured diagonally, or 

17 ‘‘(II) any central processing unit. 

18 ‘‘(C) RECYCLING OR RECYCLE.—The term 

19 ‘recycling’ or ‘recycle’ means that process (in20 cluding sorting) by which worn or superfluous 

21 materials are manufactured or processed into 

22 specification grade commodities that are suit23 able for use as a replacement or substitute for 

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1 sumer and commercial products, including 

2 packaging.’’. 

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

4 this section shall apply to property placed in service after 

5 August 31, 2008. 

6 TITLE IV—MISCELLANEOUS 

7 ENERGY PROVISIONS 

8 SEC. 401. SPECIAL RULE TO IMPLEMENT FERC AND STATE 

9 ELECTRIC RESTRUCTURING POLICY. 

10 (a) EXTENSION FOR QUALIFIED ELECTRIC UTILI11 TIES.— 

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

13 451(i) is amended by inserting ‘‘(before January 1, 

14 2010, in the case of a qualified electric utility)’’ 

15 after ‘‘January 1, 2008’’. 

16 (2) QUALIFIED ELECTRIC UTILITY.—Subsection 

17 (i) of section 451 is amended by redesignating para18 graphs (6) through (10) as paragraphs (7) through 

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

20 (5) the following new paragraph: 

21 ‘‘(6) QUALIFIED ELECTRIC UTILITY.—For pur22 poses of this subsection, the term ‘qualified electric 

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

24 qualifying electric transmission transaction, is 

25 vertically integrated, in that it is both— 


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

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

3 U.S.C. 796(23))) with respect to the trans4 mission facilities to which the election under 

5 this subsection applies, and 

6 ‘‘(B) an electric utility (as defined in sec7 tion 3(22) of the Federal Power Act (16 U.S.C. 

8 796(22))).’’. 

9 (b) EXTENSION OF PERIOD FOR TRANSFER OF

10 OPERATIONAL CONTROL AUTHORIZED BY FERC.— 

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

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

13 4 years after the close of the taxable year in which the 

14 transaction occurs’’. 

15 (c) PROPERTY LOCATED OUTSIDE THE UNITED

16 STATES NOT TREATED AS EXEMPT UTILITY PROP17 ERTY.—Paragraph (5) of section 451(i) is amended by 

18 adding at the end the following new subparagraph: 

19 ‘‘(C) EXCEPTION FOR PROPERTY LOCATED

20 OUTSIDE THE UNITED STATES.—The term ‘ex21 empt utility property’ shall not include any 

22 property which is located outside the United 

23 States.’’. 

24 (d) EFFECTIVE DATES.— 


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1 (1) EXTENSION.—The amendments made by 

2 subsection (a) shall apply to transactions after De3 cember 31, 2007. 

4 (2) TRANSFERS OF OPERATIONAL CONTROL.— 

5 The amendment made by subsection (b) shall take 

6 effect as if included in section 909 of the American 

7 Jobs Creation Act of 2004. 

8 (3) EXCEPTION FOR PROPERTY LOCATED OUT9 SIDE THE UNITED STATES.—The amendment made 

10 by subsection (c) shall apply to transactions after 

11 the date of the enactment of this Act. 

12 SEC. 402. MODIFICATION OF CREDIT FOR PRODUCTION 

13 FROM ADVANCED NUCLEAR POWER FACILI14 TIES. 

15 (a) IN GENERAL.—Paragraph (2) of section 45J(b) 

16 (relating to national limitation) is amended by striking 

17 ‘‘6,000 megawatts’’ and inserting ‘‘8,000 megawatts’’. 

18 (b) ALLOCATION OF CREDIT TO PRIVATE PARTNERS

19 OF TAX-EXEMPT ENTITIES.— 

20 (1) IN GENERAL.—Section 45J (relating to 

21 credit for production from advanced nuclear power 

22 facilities) is amended— 

23 (A) by redesignating subsection (e) as sub24 section (f), and 


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1 (B) by inserting after subsection (d) the 

2 following new subsection: 

3 ‘‘(e) SPECIAL RULE FOR PUBLIC-PRIVATE PARTNER4 SHIPS.— 

5 ‘‘(1) IN GENERAL.—In the case of an advanced 

6 nuclear power facility which is owned by a public7 private partnership, any qualified public entity which 

8 is a member of such partnership may transfer such 

9 entity’s allocation of the credit under subsection (a) 

10 to any non-public entity which is a member of such 

11 partnership, except that the aggregate allocations of 

12 such credit claimed by such non-public entity shall 

13 be subject to the limitations under subsections (b) 

14 and (c) and section 38(c). 

15 ‘‘(2) QUALIFIED PUBLIC ENTITY.—For pur16 poses of this subsection, the term ‘qualified public 

17 entity’ means a Federal, State, or local government 

18 entity, or any political subdivision thereof, or a coop19 erative organization described in section 1381(a). 

20 ‘‘(3) VERIFICATION OF TRANSFER OF ALLOCA21 TION.—A qualified public entity that makes a trans22 fer under paragraph (1), and a non-public entity 

23 that receives an allocation under such a transfer, 

24 shall provide verification of such transfer in such 


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1 manner and at such time as the Secretary shall pre2 scribe.’’. 

3 (2) COORDINATION WITH GENERAL BUSINESS

4 CREDIT.—Subsection (c) of section 38 (relating to 

5 limitation based on amount of tax) is amended by 

6 adding at the end the following new paragraph: 

7 ‘‘(6) SPECIAL RULE FOR CREDIT FOR PRODUC8 TION FROM ADVANCED NUCLEAR POWER FACILI9 TIES.— 

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

11 credit for production from advanced nuclear 

12 power facilities determined under section 

13 45J(a), paragraph (1) shall not apply with re14 spect to any qualified public entity (as defined 

15 in section 45J(e)(2)) which transfers the enti16 ty’s allocation of such credit to a non-public 

17 partner as provided in section 45J(e)(1). 

18 ‘‘(B) VERIFICATION OF TRANSFER.—Sub19 paragraph (A) shall not apply to any qualified 

20 public entity unless such entity provides 

21 verification of a transfer of credit allocation as 

22 required under section 45J(e)(3).’’. 

23 (c) EFFECTIVE DATE.— 

24 (1) IN GENERAL.—The amendment made by 

25 subsection (a) shall apply to electricity produced in 


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1 taxable years beginning after the date of the enact2 ment of this Act. 

3 (2) ALLOCATION OF CREDIT.—The amend4 ments made by subsection (b) shall apply to taxable 

5 years beginning after the date of the enactment of 

6 this Act. 

7 SEC. 403. INCOME AVERAGING FOR AMOUNTS RECEIVED IN 

8 CONNECTION WITH THE EXXON VALDEZ LITI9 GATION. 

10 (a) INCOME AVERAGING OF AMOUNTS RECEIVED

11 FROM THE EXXON VALDEZ LITIGATION.—For purposes 

12 of section 1301 of the Internal Revenue Code of 1986— 

13 (1) any qualified taxpayer who receives any 

14 qualified settlement income in any taxable year shall 

15 be treated as engaged in a fishing business (deter16 mined without regard to the commercial nature of 

17 the business), and 

18 (2) such qualified settlement income shall be 

19 treated as income attributable to such a fishing busi20 ness for such taxable year. 

21 (b) CONTRIBUTIONS OF AMOUNTS RECEIVED TO RE22 TIREMENT ACCOUNTS.— 

23 (1) IN GENERAL.—Any qualified taxpayer who 

24 receives qualified settlement income during the tax25 able year may, at any time before the end of the taxVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00126 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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1 able year in which such income was received, make 

2 one or more contributions to an eligible retirement 

3 plan of which such qualified taxpayer is a bene4 ficiary in an aggregate amount not to exceed the 

5 lesser of— 

6 (A) $100,000 (reduced by the amount of 

7 qualified settlement income contributed to an 

8 eligible retirement plan in prior taxable years 

9 pursuant to this subsection), or 

10 (B) the amount of qualified settlement in11 come received by the individual during the tax12 able year. 

13 (2) TIME WHEN CONTRIBUTIONS DEEMED

14 MADE.—For purposes of paragraph (1), a qualified 

15 taxpayer shall be deemed to have made a contribu16 tion to an eligible retirement plan on the last day of 

17 the taxable year in which such income is received if 

18 the contribution is made on account of such taxable 

19 year and is made not later than the time prescribed 

20 by law for filing the return for such taxable year 

21 (not including extensions thereof). 

22 (3) TREATMENT OF CONTRIBUTIONS TO ELIGI23 BLE RETIREMENT PLANS.—For purposes of the In24 ternal Revenue Code of 1986, if a contribution is 


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1 made pursuant to paragraph (1) with respect to 

2 qualified settlement income, then— 

3 (A) except as provided in paragraph (4)— 

4 (i) to the extent of such contribution, 

5 the qualified settlement income shall not 

6 be included in taxable income, and 

7 (ii) for purposes of section 72 of such 

8 Code, such contribution shall not be con9 sidered to be investment in the contract, 

10 (B) the qualified taxpayer shall, to the ex11 tent of the amount of the contribution, be treat12 ed— 

13 (i) as having received the qualified 

14 settlement income— 

15 (I) in the case of a contribution 

16 to an individual retirement plan (as 

17 defined under section 7701(a)(37) of 

18 such Code), in a distribution described 

19 in section 408(d)(3) of such Code, 

20 and 

21 (II) in the case of any other eligi22 ble retirement plan, in an eligible roll23 over distribution (as defined under 

24 section 402(f)(2) of such Code), and 


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1 (ii) as having transferred the amount 

2 to the eligible retirement plan in a direct 

3 trustee to trustee transfer within 60 days 

4 of the distribution, 

5 (C) section 408(d)(3)(B) of the Internal 

6 Revenue Code of 1986 shall not apply with re7 spect to amounts treated as a rollover under 

8 this paragraph, and 

9 (D) section 408A(c)(3)(B) of the Internal 

10 Revenue Code of 1986 shall not apply with re11 spect to amounts contributed to a Roth IRA (as 

12 defined under section 408A(b) of such Code) or 

13 a designated Roth contribution to an applicable 

14 retirement plan (within the meaning of section 

15 402A of such Code) under this paragraph. 

16 (4) SPECIAL RULE FOR ROTH IRAS AND ROTH

17 401(k)S.—For purposes of the Internal Revenue 

18 Code of 1986, if a contribution is made pursuant to 

19 paragraph (1) with respect to qualified settlement 

20 income to a Roth IRA (as defined under section 

21 408A(b) of such Code) or as a designated Roth con22 tribution to an applicable retirement plan (within 

23 the meaning of section 402A of such Code), then— 

24 (A) the qualified settlement income shall 

25 be includible in taxable income, and 


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1 (B) for purposes of section 72 of such 

2 Code, such contribution shall be considered to 

3 be investment in the contract. 

4 (5) ELIGIBLE RETIREMENT PLAN.—For pur5 pose of this subsection, the term ‘‘eligible retirement 

6 plan’’ has the meaning given such term under sec7 tion 402(c)(8)(B) of the Internal Revenue Code of 

8 1986. 

9 (c) TREATMENT OF QUALIFIED SETTLEMENT IN10 COME UNDER EMPLOYMENT TAXES.— 

11 (1) SECA.—For purposes of chapter 2 of the 

12 Internal Revenue Code of 1986 and section 211 of 

13 the Social Security Act, no portion of qualified set14 tlement income received by a qualified taxpayer shall 

15 be treated as self-employment income. 

16 (2) FICA.—For purposes of chapter 21 of the 

17 Internal Revenue Code of 1986 and section 209 of 

18 the Social Security Act, no portion of qualified set19 tlement income received by a qualified taxpayer shall 

20 be treated as wages. 

21 (d) QUALIFIED TAXPAYER.—For purposes of this 

22 section, the term ‘‘qualified taxpayer’’ means— 

23 (1) any individual who is a plaintiff in the civil 

24 action In re Exxon Valdez, No. 89–095–CV (HRH) 

25 (Consolidated) (D. Alaska); or 


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1 (2) any individual who is a beneficiary of the 

2 estate of such a plaintiff who— 

3 (A) acquired the right to receive qualified 

4 settlement income from that plaintiff; and 

5 (B) was the spouse or an immediate rel6 ative of that plaintiff. 

7 (e) QUALIFIED SETTLEMENT INCOME.—For pur8 poses of this section, the term ‘‘qualified settlement in9 come’’ means any interest and punitive damage awards 

10 which are— 

11 (1) otherwise includible in taxable income, and 

12 (2) received (whether as lump sums or periodic 

13 payments) in connection with the civil action In re 

14 Exxon Valdez, No. 89–095–CV (HRH) (Consoli15 dated) (D. Alaska) (whether pre- or post-judgment 

16 and whether related to a settlement or judgment). 

17 TITLE V—REVENUE PROVISIONS 

18 SEC. 501. LIMITATION OF DEDUCTION FOR INCOME AT19 TRIBUTABLE TO DOMESTIC PRODUCTION OF 

20 OIL, GAS, OR PRIMARY PRODUCTS THEREOF. 

21 (a) DENIAL OF DEDUCTION FOR MAJOR INTE22 GRATED OIL COMPANIES AND STATE-OWNED OIL COMPA23 NIES FOR INCOME ATTRIBUTABLE TO DOMESTIC PRO24 DUCTION OF OIL, GAS, OR PRIMARY PRODUCTS THERE25 OF.— 


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1 (1) IN GENERAL.—Subparagraph (B) of section 

2 199(c)(4) of the Internal Revenue Code of 1986 (re3 lating to exceptions) is amended by striking ‘‘or’’ at 

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

5 end of clause (iii) and inserting ‘‘, or’’, and by in6 serting after clause (iii) the following new clause: 

7 ‘‘(iv) in the case of any disqualified oil 

8 company, the production, refining, proc9 essing, transportation, or distribution of 

10 oil, gas, or any primary product thereof.’’. 

11 (2) DISQUALIFIED OIL COMPANY.—Section 

12 199(c) of such Code is amended by adding at the 

13 end the following new paragraph: 

14 ‘‘(8) DISQUALIFIED OIL COMPANY.— 

15 ‘‘(A) IN GENERAL.—The term ‘disqualified 

16 oil company’ means— 

17 ‘‘(i) any major integrated oil company 

18 (as defined in section 167(h)(5)(B)) during 

19 any taxable year described in section 

20 167(h)(5)(B), or 

21 ‘‘(ii) any controlled commercial entity 

22 (as defined in section 892(a)(2)(B)) the 

23 commercial activities of which during the 

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1 tion of oil, gas, or any primary product 

2 thereof. 

3 ‘‘(B) PRIMARY PRODUCT.—The term ‘pri4 mary product’ has the same meaning as when 

5 used in section 927(a)(2)(C), as in effect before 

6 its repeal.’’. 

7 (b) LIMITATION ON OIL RELATED QUALIFIED PRO8 DUCTION ACTIVITIES INCOME FOR TAXPAYERS OTHER

9 THAN MAJOR INTEGRATED OIL COMPANIES AND STATE10 OWNED OIL COMPANIES.— 

11 (1) IN GENERAL.—Section 199(d) of the Inter12 nal Revenue Code of 1986 is amended by redesig13 nating paragraph (9) as paragraph (10) and by in14 serting after paragraph (8) the following new para15 graph: 

16 ‘‘(9) SPECIAL RULE FOR TAXPAYERS WITH OIL

17 RELATED QUALIFIED PRODUCTION ACTIVITIES IN18 COME.— 

19 ‘‘(A) IN GENERAL.—If a taxpayer (other 

20 than a disqualified oil company) has oil related 

21 qualified production activities income for any 

22 taxable year beginning after 2009, the amount 

23 otherwise allowable as a deduction under sub24 section (a) shall be reduced by 3 percent of the 

25 least of— 


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1 ‘‘(i) the oil related qualified produc2 tion activities income of the taxpayer for 

3 the taxable year, 

4 ‘‘(ii) the qualified production activities 

5 income of the taxpayer for the taxable 

6 year, or 

7 ‘‘(iii) taxable income (determined 

8 without regard to this section). 

9 ‘‘(B) OIL RELATED QUALIFIED PRODUC10 TION ACTIVITIES INCOME.—The term ‘oil re11 lated qualified production activities income’ 

12 means for any taxable year the qualified pro13 duction activities income which is attributable 

14 to the production, refining, processing, trans15 portation, or distribution of oil, gas, or any pri16 mary product thereof during such taxable 

17 year.’’. 

18 (2) CONFORMING AMENDMENT.—Section 

19 199(d)(2) of such Code (relating to application to 

20 individuals) is amended by striking ‘‘subsection 

21 (a)(1)(B)’’ and inserting ‘‘subsections (a)(1)(B) and 

22 (d)(9)(A)(iii)’’. 

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

24 this section shall apply to taxable years beginning after 

25 December 31, 2008. 


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1 SEC. 502. TAX ON CRUDE OIL AND NATURAL GAS PRO2 DUCED FROM THE OUTER CONTINENTAL 

3 SHELF IN THE GULF OF MEXICO. 

4 (a) IN GENERAL.—Subtitle E (relating to alcohol, to5 bacco, and certain other excise taxes) is amended by add6 ing at the end the following new chapter: 

7 ‘‘CHAPTER 56—TAX ON SEVERANCE OF 

8 CRUDE OIL AND NATURAL GAS FROM 

9 THE OUTER CONTINENTAL SHELF IN 

10 THE GULF OF MEXICO 

‘‘Sec. 5896. Imposition of tax. 

‘‘Sec. 5897. Taxable crude oil or natural gas and removal price. 

‘‘Sec. 5898. Special rules and definitions. 

11 ‘‘SEC. 5896. IMPOSITION OF TAX. 

12 ‘‘(a) IN GENERAL.—In addition to any other tax im13 posed under this title, there is hereby imposed a tax equal 

14 to 13 percent of the removal price of any taxable crude 

15 oil or natural gas removed from the premises during any 

16 taxable period. 

17 ‘‘(b) CREDIT FOR FEDERAL ROYALTIES PAID.— 

18 ‘‘(1) IN GENERAL.—There shall be allowed as a 

19 credit against the tax imposed by subsection (a) with 

20 respect to the production of any taxable crude oil or 

21 natural gas an amount equal to the aggregate 

22 amount of royalties paid under Federal law with re23 spect to such production. 


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1 ‘‘(2) LIMITATION.—The aggregate amount of 

2 credits allowed under paragraph (1) to any taxpayer 

3 for any taxable period shall not exceed the amount 

4 of tax imposed by subsection (a) for such taxable pe5 riod. 

6 ‘‘(c) TAX PAID BY PRODUCER.—The tax imposed by 

7 this section shall be paid by the producer of the taxable 

8 crude oil or natural gas. 

9 ‘‘SEC. 5897. TAXABLE CRUDE OIL OR NATURAL GAS AND RE10 MOVAL PRICE. 

11 ‘‘(a) TAXABLE CRUDE OIL OR NATURAL GAS.—For 

12 purposes of this chapter, the term ‘taxable crude oil or 

13 natural gas’ means crude oil or natural gas which is pro14 duced from Federal submerged lands on the outer Conti15 nental Shelf in the Gulf of Mexico pursuant to a lease 

16 entered into with the United States which authorizes the 

17 production. 

18 ‘‘(b) REMOVAL PRICE.—For purposes of this chap19 ter— 

20 ‘‘(1) IN GENERAL.—Except as otherwise pro21 vided in this subsection, the term ‘removal price’ 

22 means— 

23 ‘‘(A) in the case of taxable crude oil, the 

24 amount for which a barrel of such crude oil is 

25 sold, and 


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1 ‘‘(B) in the case of taxable natural gas, the 

2 amount per 1,000 cubic feet for which such 

3 natural gas is sold. 

4 ‘‘(2) SALES BETWEEN RELATED PERSONS.—In 

5 the case of a sale between related persons, the re6 moval price shall not be less than the constructive 

7 sales price for purposes of determining gross income 

8 from the property under section 613. 

9 ‘‘(3) OIL OR GAS REMOVED FROM PROPERTY

10 BEFORE SALE.—If crude oil or natural gas is re11 moved from the property before it is sold, the re12 moval price shall be the constructive sales price for 

13 purposes of determining gross income from the prop14 erty under section 613. 

15 ‘‘(4) REFINING BEGUN ON PROPERTY.—If the 

16 manufacture or conversion of crude oil into refined 

17 products begins before such oil is removed from the 

18 property— 

19 ‘‘(A) such oil shall be treated as removed 

20 on the day such manufacture or conversion be21 gins, and 

22 ‘‘(B) the removal price shall be the con23 structive sales price for purposes of determining 

24 gross income from the property under section 

25 613. 


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1 ‘‘(5) PROPERTY.—The term ‘property’ has the 

2 meaning given such term by section 614. 

3 ‘‘SEC. 5898. SPECIAL RULES AND DEFINITIONS. 

4 ‘‘(a) ADMINISTRATIVE REQUIREMENTS.— 

5 ‘‘(1) WITHHOLDING AND DEPOSIT OF TAX.— 

6 The Secretary shall provide for the withholding and 

7 deposit of the tax imposed under section 5896 on a 

8 quarterly basis. 

9 ‘‘(2) RECORDS AND INFORMATION.—Each tax10 payer liable for tax under section 5896 shall keep 

11 such records, make such returns, and furnish such 

12 information (to the Secretary and to other persons 

13 having an interest in the taxable crude oil or natural 

14 gas) with respect to such oil as the Secretary may 

15 by regulations prescribe. 

16 ‘‘(3) TAXABLE PERIODS; RETURN OF TAX.— 

17 ‘‘(A) TAXABLE PERIOD.—Except as pro18 vided by the Secretary, each calendar year shall 

19 constitute a taxable period. 

20 ‘‘(B) RETURNS.—The Secretary shall pro21 vide for the filing, and the time for filing, of the 

22 return of the tax imposed under section 5896. 

23 ‘‘(b) DEFINITIONS.—For purposes of this chapter— 


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1 ‘‘(1) PRODUCER.—The term ‘producer’ means 

2 the holder of the economic interest with respect to 

3 the crude oil or natural gas. 

4 ‘‘(2) CRUDE OIL.—The term ‘crude oil’ includes 

5 crude oil condensates and natural gasoline. 

6 ‘‘(3) PREMISES AND CRUDE OIL PRODUCT.— 

7 The terms ‘premises’ and ‘crude oil product’ have 

8 the same meanings as when used for purposes of de9 termining gross income from the property under sec10 tion 613. 

11 ‘‘(c) ADJUSTMENT OF REMOVAL PRICE.—In deter12 mining the removal price of oil or natural gas from a prop13 erty in the case of any transaction, the Secretary may ad14 just the removal price to reflect clearly the fair market 

15 value of oil or natural gas removed. 

16 ‘‘(d) REGULATIONS.—The Secretary shall prescribe 

17 such regulations as may be necessary or appropriate to 

18 carry out the purposes of this chapter.’’. 

19 (b) DEDUCTIBILITY OF TAX.—The first sentence of 

20 section 164(a) (relating to deduction for taxes) is amended 

21 by inserting after paragraph (5) the following new para22 graph: 

23 ‘‘(6) The tax imposed by section 5896(a) (after 

24 application of section 5896(b)) on the severance of 


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1 crude oil or natural gas from the outer Continental 

2 Shelf in the Gulf of Mexico.’’. 

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

4 for subtitle E is amended by adding at the end the fol5 lowing new item: 

‘‘CHAPTER 56. Tax on severance of crude oil and natural gas 

from the outer Continental Shelf in the Gulf of 

Mexico.’’. 

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

7 this section shall apply to crude oil or natural gas removed 

8 after December 31, 2008. 

9 SEC. 503. ELIMINATION OF THE DIFFERENT TREATMENT 

10 OF FOREIGN OIL AND GAS EXTRACTION IN11 COME AND FOREIGN OIL RELATED INCOME 

12 FOR PURPOSES OF THE FOREIGN TAX CRED13 IT. 

14 (a) IN GENERAL.—Subsections (a) and (b) of section 

15 907 (relating to special rules in case of foreign oil and 

16 gas income) are amended to read as follows: 

17 ‘‘(a) REDUCTION IN AMOUNT ALLOWED AS FOREIGN

18 TAX UNDER SECTION 901.—In applying section 901, the 

19 amount of any foreign oil and gas taxes paid or accrued 

20 (or deemed to have been paid) during the taxable year 

21 which would (but for this subsection) be taken into ac22 count for purposes of section 901 shall be reduced by the 

23 amount (if any) by which the amount of such taxes ex24 ceeds the product of— 


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1 ‘‘(1) the amount of the combined foreign oil 

2 and gas income for the taxable year, 

3 ‘‘(2) multiplied by— 

4 ‘‘(A) in the case of a corporation, the per5 centage which is equal to the highest rate of tax 

6 specified under section 11(b), or 

7 ‘‘(B) in the case of an individual, a frac8 tion the numerator of which is the tax against 

9 which the credit under section 901(a) is taken 

10 and the denominator of which is the taxpayer’s 

11 entire taxable income. 

12 ‘‘(b) COMBINED FOREIGN OIL AND GAS INCOME; 

13 FOREIGN OIL AND GAS TAXES.—For purposes of this sec14 tion— 

15 ‘‘(1) COMBINED FOREIGN OIL AND GAS IN16 COME.—The term ‘combined foreign oil and gas in17 come’ means, with respect to any taxable year, the 

18 sum of— 

19 ‘‘(A) foreign oil and gas extraction income, 

20 and 

21 ‘‘(B) foreign oil related income. 

22 ‘‘(2) FOREIGN OIL AND GAS TAXES.—The term 

23 ‘foreign oil and gas taxes’ means, with respect to 

24 any taxable year, the sum of— 

25 ‘‘(A) oil and gas extraction taxes, and 


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1 ‘‘(B) any income, war profits, and excess 

2 profits taxes paid or accrued (or deemed to 

3 have been paid or accrued under section 902 or 

4 960) during the taxable year with respect to 

5 foreign oil related income (determined without 

6 regard to subsection (c)(4)) or loss which would 

7 be taken into account for purposes of section 

8 901 without regard to this section.’’. 

9 (b) RECAPTURE OF FOREIGN OIL AND GAS

10 LOSSES.—Paragraph (4) of section 907(c) (relating to re11 capture of foreign oil and gas extraction losses by re12 characterizing later extraction income) is amended to read 

13 as follows: 

14 ‘‘(4) RECAPTURE OF FOREIGN OIL AND GAS

15 LOSSES BY RECHARACTERIZING LATER COMBINED

16 FOREIGN OIL AND GAS INCOME.— 

17 ‘‘(A) IN GENERAL.—The combined foreign 

18 oil and gas income of a taxpayer for a taxable 

19 year (determined without regard to this para20 graph) shall be reduced— 

21 ‘‘(i) first by the amount determined 

22 under subparagraph (B), and 

23 ‘‘(ii) then by the amount determined 

24 under subparagraph (C). 


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1 The aggregate amount of such reductions shall 

2 be treated as income (from sources without the 

3 United States) which is not combined foreign 

4 oil and gas income. 

5 ‘‘(B) REDUCTION FOR PRE-2009 FOREIGN

6 OIL EXTRACTION LOSSES.—The reduction 

7 under this paragraph shall be equal to the less8 er of— 

9 ‘‘(i) the foreign oil and gas extraction 

10 income of the taxpayer for the taxable year 

11 (determined without regard to this para12 graph), or 

13 ‘‘(ii) the excess of— 

14 ‘‘(I) the aggregate amount of for15 eign oil extraction losses for preceding 

16 taxable years beginning after Decem17 ber 31, 1982, and before January 1, 

18 2009, over 

19 ‘‘(II) so much of such aggregate 

20 amount as was recharacterized under 

21 this paragraph (as in effect before 

22 and after the date of the enactment of 

23 the Energy Independence and Invest24 ment Act of 2008) for preceding taxVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00143 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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1 able years beginning after December 

2 31, 1982. 

3 ‘‘(C) REDUCTION FOR POST-2008 FOREIGN

4 OIL AND GAS LOSSES.—The reduction under 

5 this paragraph shall be equal to the lesser of— 

6 ‘‘(i) the combined foreign oil and gas 

7 income of the taxpayer for the taxable year 

8 (determined without regard to this para9 graph), reduced by an amount equal to the 

10 reduction under subparagraph (A) for the 

11 taxable year, or 

12 ‘‘(ii) the excess of— 

13 ‘‘(I) the aggregate amount of for14 eign oil and gas losses for preceding 

15 taxable years beginning after Decem16 ber 31, 2008, over 

17 ‘‘(II) so much of such aggregate 

18 amount as was recharacterized under 

19 this paragraph for preceding taxable 

20 years beginning after December 31, 

21 2008. 

22 ‘‘(D) FOREIGN OIL AND GAS LOSS DE23 FINED.— 


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1 ‘‘(i) IN GENERAL.—For purposes of 

2 this paragraph, the term ‘foreign oil and 

3 gas loss’ means the amount by which— 

4 ‘‘(I) the gross income for the tax5 able year from sources without the 

6 United States and its possessions 

7 (whether or not the taxpayer chooses 

8 the benefits of this subpart for such 

9 taxable year) taken into account in 

10 determining the combined foreign oil 

11 and gas income for such year, is ex12 ceeded by 

13 ‘‘(II) the sum of the deductions 

14 properly apportioned or allocated 

15 thereto. 

16 ‘‘(ii) NET OPERATING LOSS DEDUC17 TION NOT TAKEN INTO ACCOUNT.—For 

18 purposes of clause (i), the net operating 

19 loss deduction allowable for the taxable 

20 year under section 172(a) shall not be 

21 taken into account. 

22 ‘‘(iii) EXPROPRIATION AND CASUALTY

23 LOSSES NOT TAKEN INTO ACCOUNT.—For 

24 purposes of clause (i), there shall not be 

25 taken into account— 


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1 ‘‘(I) any foreign expropriation 

2 loss (as defined in section 172(h) (as 

3 in effect on the day before the date of 

4 the enactment of the Revenue Rec5 onciliation Act of 1990)) for the tax6 able year, or 

7 ‘‘(II) any loss for the taxable 

8 year which arises from fire, storm, 

9 shipwreck, or other casualty, or from 

10 theft, 

11 to the extent such loss is not compensated 

12 for by insurance or otherwise. 

13 ‘‘(iv) FOREIGN OIL EXTRACTION

14 LOSS.—For purposes of subparagraph 

15 (B)(ii)(I), foreign oil extraction losses shall 

16 be determined under this paragraph as in 

17 effect on the day before the date of the en18 actment of the Energy Independence and 

19 Investment Act of 2008.’’. 

20 (c) CARRYBACK AND CARRYOVER OF DISALLOWED

21 CREDITS.—Section 907(f) (relating to carryback and car22 ryover of disallowed credits) is amended— 

23 (1) by striking ‘‘oil and gas extraction taxes’’ 

24 each place it appears and inserting ‘‘foreign oil and 

25 gas taxes’’, and 


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1 (2) by adding at the end the following new 

2 paragraph: 

3 ‘‘(4) TRANSITION RULES FOR PRE-2009 AND

4 2009 DISALLOWED CREDITS.— 

5 ‘‘(A) PRE-2009 CREDITS.—In the case of 

6 any unused credit year beginning before Janu7 ary 1, 2009, this subsection shall be applied to 

8 any unused oil and gas extraction taxes carried 

9 from such unused credit year to a year begin10 ning after December 31, 2008— 

11 ‘‘(i) by substituting ‘oil and gas ex12 traction taxes’ for ‘foreign oil and gas 

13 taxes’ each place it appears in paragraphs 

14 (1), (2), and (3), and 

15 ‘‘(ii) by computing, for purposes of 

16 paragraph (2)(A), the limitation under 

17 subparagraph (A) for the year to which 

18 such taxes are carried by substituting ‘for19 eign oil and gas extraction income’ for ‘for20 eign oil and gas income’ in subsection (a). 

21 ‘‘(B) 2009 CREDITS.—In the case of any 

22 unused credit year beginning in 2009, the 

23 amendments made to this subsection by the En24 ergy Independence and Investment Act of 2008 

25 shall be treated as being in effect for any preVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00147 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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1 ceding year beginning before January 1, 2009, 

2 solely for purposes of determining how much of 

3 the unused foreign oil and gas taxes for such 

4 unused credit year may be deemed paid or ac5 crued in such preceding year.’’. 

6 (d) CONFORMING AMENDMENT.—Section 6501(i) is 

7 amended by striking ‘‘oil and gas extraction taxes’’ and 

8 inserting ‘‘foreign oil and gas taxes’’. 

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

10 this section shall apply to taxable years beginning after 

11 December 31, 2008. 

12 SEC. 504. BROKER REPORTING OF CUSTOMER’S BASIS IN 

13 SECURITIES TRANSACTIONS. 

14 (a) IN GENERAL.— 

15 (1) BROKER REPORTING FOR SECURITIES

16 TRANSACTIONS.—Section 6045 is amended by add17 ing at the end the following new subsection: 

18 ‘‘(g) ADDITIONAL INFORMATION REQUIRED IN THE

19 CASE OF SECURITIES TRANSACTIONS, ETC.— 

20 ‘‘(1) IN GENERAL.—If a broker is otherwise re21 quired to make a return under subsection (a) with 

22 respect to the gross proceeds of the sale of a covered 

23 security, the broker shall include in such return the 

24 information described in paragraph (2). 

25 ‘‘(2) ADDITIONAL INFORMATION REQUIRED.— 


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1 ‘‘(A) IN GENERAL.—The information re2 quired under paragraph (1) to be shown on a 

3 return with respect to a covered security of a 

4 customer shall include the customer’s adjusted 

5 basis in such security and whether any gain or 

6 loss with respect to such security is long-term 

7 or short-term (within the meaning of section 

8 1222). 

9 ‘‘(B) DETERMINATION OF ADJUSTED

10 BASIS.—For purposes of subparagraph (A)— 

11 ‘‘(i) IN GENERAL.—The customer’s 

12 adjusted basis shall be determined— 

13 ‘‘(I) in the case of any security 

14 (other than any stock for which an av15 erage basis method is permissible 

16 under section 1012), in accordance 

17 with the first-in first-out method un18 less the customer notifies the broker 

19 by means of making an adequate 

20 identification of the stock sold or 

21 transferred, and 

22 ‘‘(II) in the case of any stock for 

23 which an average basis method is per24 missible under section 1012, in ac25 cordance with the broker’s default 


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1 method unless the customer notifies 

2 the broker that he elects another ac3 ceptable method under section 1012 

4 with respect to the account in which 

5 such stock is held. 

6 ‘‘(ii) EXCEPTION FOR WASH SALES.— 

7 Except as otherwise provided by the Sec8 retary, the customer’s adjusted basis shall 

9 be determined without regard to section 

10 1091 (relating to loss from wash sales of 

11 stock or securities) unless the transactions 

12 occur in the same account with respect to 

13 identical securities. 

14 ‘‘(3) COVERED SECURITY.—For purposes of 

15 this subsection— 

16 ‘‘(A) IN GENERAL.—The term ‘covered se17 curity’ means any specified security acquired on 

18 or after the applicable date if such security— 

19 ‘‘(i) was acquired through a trans20 action in the account in which such secu21 rity is held, or 

22 ‘‘(ii) was transferred to such account 

23 from an account in which such security 

24 was a covered security, but only if the 


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1 broker received a statement under section 

2 6045A with respect to the transfer. 

3 ‘‘(B) SPECIFIED SECURITY.—The term 

4 ‘specified security’ means— 

5 ‘‘(i) any share of stock in a corpora6 tion, 

7 ‘‘(ii) any note, bond, debenture, or 

8 other evidence of indebtedness, 

9 ‘‘(iii) any commodity, or contract or 

10 derivative with respect to such commodity, 

11 if the Secretary determines that adjusted 

12 basis reporting is appropriate for purposes 

13 of this subsection, and 

14 ‘‘(iv) any other financial instrument 

15 with respect to which the Secretary deter16 mines that adjusted basis reporting is ap17 propriate for purposes of this subsection. 

18 ‘‘(C) APPLICABLE DATE.—The term ‘appli19 cable date’ means— 

20 ‘‘(i) January 1, 2010, in the case of 

21 any specified security which is stock in a 

22 corporation (other than any stock de23 scribed in clause (ii)), 


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1 ‘‘(ii) January 1, 2011, in the case of 

2 any stock for which an average basis meth3 od is permissible under section 1012, and 

4 ‘‘(iii) January 1, 2012, or such later 

5 date determined by the Secretary in the 

6 case of any other specified security. 

7 ‘‘(4) TREATMENT OF S CORPORATIONS.—In the 

8 case of the sale of a covered security acquired by an 

9 S corporation (other than a financial institution) 

10 after December 31, 2011, such S corporation shall 

11 be treated in the same manner as a partnership for 

12 purposes of this section. 

13 ‘‘(5) SPECIAL RULES FOR SHORT SALES.—In 

14 the case of a short sale, reporting under this section 

15 shall be made for the year in which such sale is 

16 closed.’’. 

17 (2) BROKER INFORMATION REQUIRED WITH RE18 SPECT TO OPTIONS.—Section 6045, as amended by 

19 subsection (a), is amended by adding at the end the 

20 following new subsection: 

21 ‘‘(h) APPLICATION TO OPTIONS ON SECURITIES.— 

22 ‘‘(1) EXERCISE OF OPTION.—For purposes of 

23 this section, if a covered security is acquired or dis24 posed of pursuant to the exercise of an option that 

25 was granted or acquired in the same account as the 


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1 covered security, the amount received with respect to 

2 the grant or paid with respect to the acquisition of 

3 such option shall be treated as an adjustment to 

4 gross proceeds or as an adjustment to basis, as the 

5 case may be. 

6 ‘‘(2) LAPSE OR CLOSING TRANSACTION.—In the 

7 case of the lapse (or closing transaction (as defined 

8 in section 1234(b)(2)(A))) of an option on a speci9 fied security or the exercise of a cash-settled option 

10 on a specified security, reporting under subsections 

11 (a) and (g) with respect to such option shall be 

12 made for the calendar year which includes the date 

13 of such lapse, closing transaction, or exercise. 

14 ‘‘(3) PROSPECTIVE APPLICATION.—Paragraphs 

15 (1) and (2) shall not apply to any option which is 

16 granted or acquired before January 1, 2012. 

17 ‘‘(4) DEFINITIONS.—For purposes of this sub18 section, the terms ‘covered security’ and ‘specified 

19 security’ shall have the meanings given such terms 

20 in subsection (g)(3).’’. 

21 (3) EXTENSION OF PERIOD FOR STATEMENTS

22 SENT TO CUSTOMERS.— 

23 (A) IN GENERAL.—Subsection (b) of sec24 tion 6045 is amended by striking ‘‘January 31’’ 

25 and inserting ‘‘February 15’’. 


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1 (B) STATEMENTS RELATED TO SUB2 STITUTE PAYMENTS.—Subsection (d) of section 

3 6045 is amended— 

4 (i) by striking ‘‘at such time and’’, 

5 and 

6 (ii) by inserting after ‘‘other item.’’ 

7 the following new sentence: ‘‘The written 

8 statement required under the preceding 

9 sentence shall be furnished on or before 

10 February 15 of the year following the cal11 endar year in which the payment was 

12 made.’’. 

13 (C) OTHER STATEMENTS.—Subsection (b) 

14 of section 6045 is amended by adding at the 

15 end the following: ‘‘In the case of a consolidated 

16 reporting statement (as defined in regulations) 

17 with respect to any account, any statement 

18 which would otherwise be required to be fur19 nished on or before January 31 of a calendar 

20 year with respect to any item reportable to the 

21 taxpayer shall instead be required to be fur22 nished on or before February 15 of such cal23 endar year if furnished with such consolidated 

24 reporting statement.’’. 


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1 (b) DETERMINATION OF BASIS OF CERTAIN SECURI2 TIES ON ACCOUNT BY ACCOUNT OR AVERAGE BASIS

3 METHOD.—Section 1012 is amended— 

4 (1) by striking ‘‘The basis of property’’ and in5 serting the following: 

6 ‘‘(a) IN GENERAL.—The basis of property’’, 

7 (2) by striking ‘‘The cost of real property’’ and 

8 inserting the following: 

9 ‘‘(b) SPECIAL RULE FOR APPORTIONED REAL ES10 TATE TAXES.—The cost of real property’’, and 

11 (3) by adding at the end the following new sub12 sections: 

13 ‘‘(c) DETERMINATIONS BY ACCOUNT.— 

14 ‘‘(1) IN GENERAL.—In the case of the sale, ex15 change, or other disposition of a specified security 

16 on or after the applicable date, the conventions pre17 scribed by regulations under this section shall be ap18 plied on an account by account basis. 

19 ‘‘(2) APPLICATION TO OPEN-END FUNDS.— 

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

21 subparagraph (B), any stock in an open-end 

22 fund acquired before January 1, 2011, shall be 

23 treated as a separate account from any such 

24 stock acquired on or after such date. 


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1 ‘‘(B) ELECTION BY OPEN-END FUND FOR

2 TREATMENT AS SINGLE ACCOUNT.—If an open3 end fund elects to have this subparagraph apply 

4 with respect to one or more of its stock5 holders— 

6 ‘‘(i) subparagraph (A) shall not apply 

7 with respect to any stock in such fund held 

8 by such stockholders, and 

9 ‘‘(ii) all stock in such fund which is 

10 held by such stockholders shall be treated 

11 as covered securities described in section 

12 6045(g)(3) without regard to the date of 

13 the acquisition of such stock. 

14 A rule similar to the rule of the preceding sen15 tence shall apply with respect to a broker hold16 ing stock in an open-end fund as a nominee. 

17 ‘‘(3) DEFINITIONS.—For purposes of this sec18 tion— 

19 ‘‘(A) OPEN-END FUND.—The term ‘open20 end fund’ means a regulated investment com21 pany (as defined in section 851) which is offer22 ing for sale or has outstanding any redeemable 

23 security of which it is the issuer. Any stock 

24 which is traded on an established securities exVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00156 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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1 change shall not be treated as stock in an open2 end fund. 

3 ‘‘(B) SPECIFIED SECURITY; APPLICABLE

4 DATE.—The terms ‘specified security’ and ‘ap5 plicable date’ shall have the meaning given such 

6 terms in section 6045(g). 

7 ‘‘(d) AVERAGE BASIS FOR STOCK ACQUIRED PURSU8 ANT TO A DIVIDEND REINVESTMENT PLAN.— 

9 ‘‘(1) IN GENERAL.—In the case of any stock ac10 quired after December 31, 2010, in connection with 

11 a dividend reinvestment plan, the basis of such stock 

12 while held as part of such plan shall be determined 

13 using one of the methods which may be used for de14 termining the basis of stock in an open-end fund. 

15 ‘‘(2) TREATMENT AFTER TRANSFER.—In the 

16 case of the transfer to another account of stock to 

17 which paragraph (1) applies, such stock shall have 

18 a cost basis in such other account equal to its basis 

19 in the dividend reinvestment plan immediately before 

20 such transfer (properly adjusted for any fees or 

21 other charges taken into account in connection with 

22 such transfer). 

23 ‘‘(3) SEPARATE ACCOUNTS; ELECTION FOR

24 TREATMENT AS SINGLE ACCOUNT.—Rules similar to 


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1 the rules of subsection (c)(2) shall apply for pur2 poses of this subsection. 

3 ‘‘(4) DIVIDEND REINVESTMENT PLAN.—For 

4 purposes of this subsection— 

5 ‘‘(A) IN GENERAL.—The term ‘dividend re6 investment plan’ means any arrangement under 

7 which dividends on any stock are reinvested in 

8 stock identical to the stock with respect to 

9 which the dividends are paid. 

10 ‘‘(B) INITIAL STOCK ACQUISITION TREAT11 ED AS ACQUIRED IN CONNECTION WITH

12 PLAN.—Stock shall be treated as acquired in 

13 connection with a dividend reinvestment plan if 

14 such stock is acquired pursuant to such plan or 

15 if the dividends paid on such stock are subject 

16 to such plan.’’. 

17 (c) INFORMATION BY TRANSFERORS TO AID BRO18 KERS.— 

19 (1) IN GENERAL.—Subpart B of part III of 

20 subchapter A of chapter 61 is amended by inserting 

21 after section 6045 the following new section: 


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1 ‘‘SEC. 6045A. INFORMATION REQUIRED IN CONNECTION 

2 WITH TRANSFERS OF COVERED SECURITIES 

3 TO BROKERS. 

4 ‘‘(a) FURNISHING OF INFORMATION.—Every applica5 ble person which transfers to a broker (as defined in sec6 tion 6045(c)(1)) a security which is a covered security (as 

7 defined in section 6045(g)(3)) in the hands of such appli8 cable person shall furnish to such broker a written state9 ment in such manner and setting forth such information 

10 as the Secretary may by regulations prescribe for purposes 

11 of enabling such broker to meet the requirements of sec12 tion 6045(g). 

13 ‘‘(b) APPLICABLE PERSON.—For purposes of sub14 section (a), the term ‘applicable person’ means— 

15 ‘‘(1) any broker (as defined in section 

16 6045(c)(1)), and 

17 ‘‘(2) any other person as provided by the Sec18 retary in regulations. 

19 ‘‘(c) TIME FOR FURNISHING STATEMENT.—Except 

20 as otherwise provided by the Secretary, any statement re21 quired by subsection (a) shall be furnished not later than 

22 15 days after the date of the transfer described in such 

23 subsection.’’. 

24 (2) ASSESSABLE PENALTIES.—Paragraph (2) 

25 of section 6724(d), as amended by the Housing As26 sistance Tax Act of 2008, is amended by redesigVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00159 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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1 nating subparagraphs (I) through (DD) as subpara2 graphs (J) through (EE), respectively, and by in3 serting after subparagraph (H) the following new 

4 subparagraph: 

5 ‘‘(I) section 6045A (relating to information 

6 required in connection with transfers of covered 

7 securities to brokers),’’. 

8 (3) CLERICAL AMENDMENT.—The table of sec9 tions for subpart B of part III of subchapter A of 

10 chapter 61 is amended by inserting after the item 

11 relating to section 6045 the following new item: 

‘‘Sec. 6045A. Information required in connection with transfers of covered securities to brokers.’’. 

12 (d) ADDITIONAL ISSUER INFORMATION TO AID BRO13 KERS.— 

14 (1) IN GENERAL.—Subpart B of part III of 

15 subchapter A of chapter 61, as amended by sub16 section (b), is amended by inserting after section 

17 6045A the following new section: 

18 ‘‘SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING 

19 BASIS OF SPECIFIED SECURITIES. 

20 ‘‘(a) IN GENERAL.—According to the forms or regu21 lations prescribed by the Secretary, any issuer of a speci22 fied security shall make a return setting forth— 


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1 ‘‘(1) a description of any organizational action 

2 which affects the basis of such specified security of 

3 such issuer, 

4 ‘‘(2) the quantitative effect on the basis of such 

5 specified security resulting from such action, and 

6 ‘‘(3) such other information as the Secretary 

7 may prescribe. 

8 ‘‘(b) TIME FOR FILING RETURN.—Any return re9 quired by subsection (a) shall be filed not later than the 

10 earlier of— 

11 ‘‘(1) 45 days after the date of the action de12 scribed in subsection (a), or 

13 ‘‘(2) January 15 of the year following the cal14 endar year during which such action occurred. 

15 ‘‘(c) STATEMENTS TO BE FURNISHED TO HOLDERS

16 OF SPECIFIED SECURITIES OR THEIR NOMINEES.—Ac17 cording to the forms or regulations prescribed by the Sec18 retary, every person required to make a return under sub19 section (a) with respect to a specified security shall furnish 

20 to the nominee with respect to the specified security (or 

21 certificate holder if there is no nominee) a written state22 ment showing— 

23 ‘‘(1) the name, address, and phone number of 

24 the information contact of the person required to 

25 make such return, 


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1 ‘‘(2) the information required to be shown on 

2 such return with respect to such security, and 

3 ‘‘(3) such other information as the Secretary 

4 may prescribe. 

5 The written statement required under the preceding sen6 tence shall be furnished to the holder on or before January 

7 15 of the year following the calendar year during which 

8 the action described in subsection (a) occurred. 

9 ‘‘(d) SPECIFIED SECURITY.—For purposes of this 

10 section, the term ‘specified security’ has the meaning given 

11 such term by section 6045(g)(3)(B). No return shall be 

12 required under this section with respect to actions de13 scribed in subsection (a) with respect to a specified secu14 rity which occur before the applicable date (as defined in 

15 section 6045(g)(3)(C)) with respect to such security. 

16 ‘‘(e) PUBLIC REPORTING IN LIEU OF RETURN.—The 

17 Secretary may waive the requirements under subsections 

18 (a) and (c) with respect to a specified security, if the per19 son required to make the return under subsection (a) 

20 makes publicly available, in such form and manner as the 

21 Secretary determines necessary to carry out the purposes 

22 of this section— 

23 ‘‘(1) the name, address, phone number, and 

24 email address of the information contact of such 

25 person, and 


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1 ‘‘(2) the information described in paragraphs 

2 (1), (2), and (3) of subsection (a).’’. 

3 (2) ASSESSABLE PENALTIES.— 

4 (A) Subparagraph (B) of section 

5 6724(d)(1), as amended by the Housing Assist6 ance Tax Act of 2008, is amended by redesig7 nating clause (iv) and each of the clauses which 

8 follow as clauses (v) through (xxiii), respec9 tively, and by inserting after clause (iii) the fol10 lowing new clause: 

11 ‘‘(iv) section 6045B(a) (relating to re12 turns relating to actions affecting basis of 

13 specified securities),’’. 

14 (B) Paragraph (2) of section 6724(d), as 

15 amended by the Housing Assistance Tax Act of 

16 2008 and by subsection (c)(2), is amended by 

17 redesignating subparagraphs (J) through (EE) 

18 as subparagraphs (K) through (FF), respec19 tively, and by inserting after subparagraph (I) 

20 the following new subparagraph: 

21 ‘‘(J) subsections (c) and (e) of section 

22 6045B (relating to returns relating to actions 

23 affecting basis of specified securities),’’. 

24 (3) CLERICAL AMENDMENT.—The table of sec25 tions for subpart B of part III of subchapter A of 


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1 chapter 61, as amended by subsection (b)(3), is 

2 amended by inserting after the item relating to sec3 tion 6045A the following new item: 

‘‘Sec. 6045B. Returns relating to actions affecting basis of specified securities.’’. 

4 (e) EFFECTIVE DATE.— 

5 (1) IN GENERAL.—Except as otherwise pro6 vided in this subsection, the amendments made by 

7 this section shall take effect on January 1, 2010. 

8 (2) EXTENSION OF PERIOD FOR STATEMENTS

9 SENT TO CUSTOMERS.—The amendments made by 

10 subsection (a)(3) shall apply to statements required 

11 to be furnished after December 31, 2008. 

12 SEC. 505. INCREASE AND EXTENSION OF OIL SPILL LIABIL13 ITY TRUST FUND TAX. 

14 (a) INCREASE IN RATE.— 

15 (1) IN GENERAL.—Section 4611(c)(2)(B) (re16 lating to rates) is amended by striking ‘‘5 cents’’ 

17 and inserting ‘‘12 cents’’. 

18 (2) EFFECTIVE DATE.—The amendment made 

19 by this subsection shall apply on and after the first 

20 day of the first calendar quarter beginning more 

21 than 60 days after the date of the enactment of this 

22 Act. 

23 (b) EXTENSION.— 


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1 (1) IN GENERAL.—Section 4611(f) (relating to 

2 application of Oil Spill Liability Trust Fund financ3 ing rate) is amended by striking paragraphs (2) and 

4 (3) and inserting the following new paragraph: 

5 ‘‘(2) TERMINATION.—The Oil Spill Liability 

6 Trust Fund financing rate shall not apply after De7 cember 31, 2017.’’. 

8 (2) CONFORMING AMENDMENT.—Section 

9 4611(f)(1) is amended by striking ‘‘paragraphs (2) 

10 and (3)’’ and inserting ‘‘paragraph (2)’’. 

11 (3) EFFECTIVE DATE.—The amendments made 

12 by this subsection shall take effect on the date of the 

13 enactment of this Act. 

14 TITLE VI—OTHER PROVISIONS 

15 SEC. 601. SECURE RURAL SCHOOLS AND COMMUNITY SELF16 DETERMINATION PROGRAM. 

17 (a) REAUTHORIZATION OF THE SECURE RURAL

18 SCHOOLS AND COMMUNITY SELF-DETERMINATION ACT

19 OF 2000.—The Secure Rural Schools and Community 

20 Self-Determination Act of 2000 (16 U.S.C. 500 note; Pub21 lic Law 106–393) is amended by striking sections 1 

22 through 403 and inserting the following: 

23 ‘‘SECTION 1. SHORT TITLE. 

24 ‘‘This Act may be cited as the ‘Secure Rural Schools 

25 and Community Self-Determination Act of 2000’. 


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1 ‘‘SEC. 2. PURPOSES. 

2 ‘‘The purposes of this Act are— 

3 ‘‘(1) to stabilize and transition payments to 

4 counties to provide funding for schools and roads 

5 that supplements other available funds; 

6 ‘‘(2) to make additional investments in, and 

7 create additional employment opportunities through, 

8 projects that— 

9 ‘‘(A)(i) improve the maintenance of exist10 ing infrastructure; 

11 ‘‘(ii) implement stewardship objectives that 

12 enhance forest ecosystems; and 

13 ‘‘(iii) restore and improve land health and 

14 water quality; 

15 ‘‘(B) enjoy broad-based support; and 

16 ‘‘(C) have objectives that may include— 

17 ‘‘(i) road, trail, and infrastructure 

18 maintenance or obliteration; 

19 ‘‘(ii) soil productivity improvement; 

20 ‘‘(iii) improvements in forest eco21 system health; 

22 ‘‘(iv) watershed restoration and main23 tenance; 

24 ‘‘(v) the restoration, maintenance, and 

25 improvement of wildlife and fish habitat; 


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1 ‘‘(vi) the control of noxious and exotic 

2 weeds; and 

3 ‘‘(vii) the reestablishment of native 

4 species; and 

5 ‘‘(3) to improve cooperative relationships 

6 among— 

7 ‘‘(A) the people that use and care for Fed8 eral land; and 

9 ‘‘(B) the agencies that manage the Federal 

10 land. 

11 ‘‘SEC. 3. DEFINITIONS. 

12 ‘‘In this Act: 

13 ‘‘(1) ADJUSTED SHARE.—The term ‘adjusted 

14 share’ means the number equal to the quotient ob15 tained by dividing— 

16 ‘‘(A) the number equal to the quotient ob17 tained by dividing— 

18 ‘‘(i) the base share for the eligible 

19 county; by 

20 ‘‘(ii) the income adjustment for the el21 igible county; by 

22 ‘‘(B) the number equal to the sum of the 

23 quotients obtained under subparagraph (A) and 

24 paragraph (8)(A) for all eligible counties. 


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1 ‘‘(2) BASE SHARE.—The term ‘base share’ 

2 means the number equal to the average of— 

3 ‘‘(A) the quotient obtained by dividing— 

4 ‘‘(i) the number of acres of Federal 

5 land described in paragraph (7)(A) in each 

6 eligible county; by 

7 ‘‘(ii) the total number acres of Fed8 eral land in all eligible counties in all eligi9 ble States; and 

10 ‘‘(B) the quotient obtained by dividing— 

11 ‘‘(i) the amount equal to the average 

12 of the 3 highest 25-percent payments and 

13 safety net payments made to each eligible 

14 State for each eligible county during the 

15 eligibility period; by 

16 ‘‘(ii) the amount equal to the sum of 

17 the amounts calculated under clause (i) 

18 and paragraph (9)(B)(i) for all eligible 

19 counties in all eligible States during the 

20 eligibility period. 

21 ‘‘(3) COUNTY PAYMENT.—The term ‘county 

22 payment’ means the payment for an eligible county 

23 calculated under section 101(b). 

24 ‘‘(4) ELIGIBLE COUNTY.—The term ‘eligible 

25 county’ means any county that— 


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1 ‘‘(A) contains Federal land (as defined in 

2 paragraph (7)); and 

3 ‘‘(B) elects to receive a share of the State 

4 payment or the county payment under section 

5 102(b). 

6 ‘‘(5) ELIGIBILITY PERIOD.—The term ‘eligi7 bility period’ means fiscal year 1986 through fiscal 

8 year 1999. 

9 ‘‘(6) ELIGIBLE STATE.—The term ‘eligible 

10 State’ means a State or territory of the United 

11 States that received a 25-percent payment for 1 or 

12 more fiscal years of the eligibility period. 

13 ‘‘(7) FEDERAL LAND.—The term ‘Federal land’ 

14 means— 

15 ‘‘(A) land within the National Forest Sys16 tem, as defined in section 11(a) of the Forest 

17 and Rangeland Renewable Resources Planning 

18 Act of 1974 (16 U.S.C. 1609(a)) exclusive of 

19 the National Grasslands and land utilization 

20 projects designated as National Grasslands ad21 ministered pursuant to the Act of July 22, 

22 1937 (7 U.S.C. 1010–1012); and 

23 ‘‘(B) such portions of the revested Oregon 

24 and California Railroad and reconveyed Coos 

25 Bay Wagon Road grant land as are or may 


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1 hereafter come under the jurisdiction of the De2 partment of the Interior, which have heretofore 

3 or may hereafter be classified as timberlands, 

4 and power-site land valuable for timber, that 

5 shall be managed, except as provided in the 

6 former section 3 of the Act of August 28, 1937 

7 (50 Stat. 875; 43 U.S.C. 1181c), for permanent 

8 forest production. 

9 ‘‘(8) 50-PERCENT ADJUSTED SHARE.—The 

10 term ‘50-percent adjusted share’ means the number 

11 equal to the quotient obtained by dividing— 

12 ‘‘(A) the number equal to the quotient ob13 tained by dividing— 

14 ‘‘(i) the 50-percent base share for the 

15 eligible county; by 

16 ‘‘(ii) the income adjustment for the el17 igible county; by 

18 ‘‘(B) the number equal to the sum of the 

19 quotients obtained under subparagraph (A) and 

20 paragraph (1)(A) for all eligible counties. 

21 ‘‘(9) 50-PERCENT BASE SHARE.—The term ‘50- 

22 percent base share’ means the number equal to the 

23 average of— 

24 ‘‘(A) the quotient obtained by dividing— 


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1 ‘‘(i) the number of acres of Federal 

2 land described in paragraph (7)(B) in each 

3 eligible county; by 

4 ‘‘(ii) the total number acres of Fed5 eral land in all eligible counties in all eligi6 ble States; and 

7 ‘‘(B) the quotient obtained by dividing— 

8 ‘‘(i) the amount equal to the average 

9 of the 3 highest 50-percent payments made 

10 to each eligible county during the eligibility 

11 period; by 

12 ‘‘(ii) the amount equal to the sum of 

13 the amounts calculated under clause (i) 

14 and paragraph (2)(B)(i) for all eligible 

15 counties in all eligible States during the 

16 eligibility period. 

17 ‘‘(10) 50-PERCENT PAYMENT.—The term ‘50- 

18 percent payment’ means the payment that is the 

19 sum of the 50-percent share otherwise paid to a 

20 county pursuant to title II of the Act of August 28, 

21 1937 (chapter 876; 50 Stat. 875; 43 U.S.C. 1181f), 

22 and the payment made to a county pursuant to the 

23 Act of May 24, 1939 (chapter 144; 53 Stat. 753; 43 

24 U.S.C. 1181f–1 et seq.). 


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1 ‘‘(11) FULL FUNDING AMOUNT.—The term ‘full 

2 funding amount’ means— 

3 ‘‘(A) $500,000,000 for fiscal year 2008; 

4 and 

5 ‘‘(B) for fiscal year 2009 and each fiscal 

6 year thereafter, the amount that is equal to 90 

7 percent of the full funding amount for the pre8 ceding fiscal year. 

9 ‘‘(12) INCOME ADJUSTMENT.—The term ‘in10 come adjustment’ means the square of the quotient 

11 obtained by dividing— 

12 ‘‘(A) the per capita personal income for 

13 each eligible county; by 

14 ‘‘(B) the median per capita personal in15 come of all eligible counties. 

16 ‘‘(13) PER CAPITA PERSONAL INCOME.—The 

17 term ‘per capita personal income’ means the most 

18 recent per capita personal income data, as deter19 mined by the Bureau of Economic Analysis. 

20 ‘‘(14) SAFETY NET PAYMENTS.—The term 

21 ‘safety net payments’ means the special payment 

22 amounts paid to States and counties required by 

23 section 13982 or 13983 of the Omnibus Budget 

24 Reconciliation Act of 1993 (Public Law 103–66; 16 

25 U.S.C. 500 note; 43 U.S.C. 1181f note). 


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1 ‘‘(15) SECRETARY CONCERNED.—The term 

2 ‘Secretary concerned’ means— 

3 ‘‘(A) the Secretary of Agriculture or the 

4 designee of the Secretary of Agriculture with 

5 respect to the Federal land described in para6 graph (7)(A); and 

7 ‘‘(B) the Secretary of the Interior or the 

8 designee of the Secretary of the Interior with 

9 respect to the Federal land described in para10 graph (7)(B). 

11 ‘‘(16) STATE PAYMENT.—The term ‘State pay12 ment’ means the payment for an eligible State cal13 culated under section 101(a). 

14 ‘‘(17) 25-PERCENT PAYMENT.—The term ‘25- 

15 percent payment’ means the payment to States re16 quired by the sixth paragraph under the heading of 

17 ‘FOREST SERVICE’ in the Act of May 23, 1908 

18 (35 Stat. 260; 16 U.S.C. 500), and section 13 of the 

19 Act of March 1, 1911 (36 Stat. 963; 16 U.S.C. 

20 500). 


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1 ‘‘TITLE I—SECURE PAYMENTS 

2 FOR STATES AND COUNTIES 

3 CONTAINING FEDERAL LAND 

4 ‘‘SEC. 101. SECURE PAYMENTS FOR STATES CONTAINING 

5 FEDERAL LAND. 

6 ‘‘(a) STATE PAYMENT.—For each of fiscal years 

7 2008 through 2011, the Secretary of Agriculture shall cal8 culate for each eligible State an amount equal to the sum 

9 of the products obtained by multiplying— 

10 ‘‘(1) the adjusted share for each eligible county 

11 within the eligible State; by 

12 ‘‘(2) the full funding amount for the fiscal year. 

13 ‘‘(b) COUNTY PAYMENT.—For each of fiscal years 

14 2008 through 2011, the Secretary of the Interior shall cal15 culate for each eligible county that received a 50-percent 

16 payment during the eligibility period an amount equal to 

17 the product obtained by multiplying— 

18 ‘‘(1) the 50-percent adjusted share for the eligi19 ble county; by 

20 ‘‘(2) the full funding amount for the fiscal year. 

21 ‘‘SEC. 102. PAYMENTS TO STATES AND COUNTIES. 

22 ‘‘(a) PAYMENT AMOUNTS.—Except as provided in 

23 section 103, the Secretary of the Treasury shall pay to— 

24 ‘‘(1) a State or territory of the United States 

25 an amount equal to the sum of the amounts elected 


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1 under subsection (b) by each county within the State 

2 or territory for— 

3 ‘‘(A) if the county is eligible for the 25- 

4 percent payment, the share of the 25-percent 

5 payment; or 

6 ‘‘(B) the share of the State payment of the 

7 eligible county; and 

8 ‘‘(2) a county an amount equal to the amount 

9 elected under subsection (b) by each county for— 

10 ‘‘(A) if the county is eligible for the 50- 

11 percent payment, the 50-percent payment; or 

12 ‘‘(B) the county payment for the eligible 

13 county. 

14 ‘‘(b) ELECTION TO RECEIVE PAYMENT AMOUNT.— 

15 ‘‘(1) ELECTION; SUBMISSION OF RESULTS.— 

16 ‘‘(A) IN GENERAL.—The election to receive 

17 a share of the State payment, the county pay18 ment, a share of the State payment and the 

19 county payment, a share of the 25-percent pay20 ment, the 50-percent payment, or a share of the 

21 25-percent payment and the 50-percent pay22 ment, as applicable, shall be made at the discre23 tion of each affected county by August 1, 2008 

24 (or as soon thereafter as the Secretary con25 cerned determines is practicable), and August 1 


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1 of each second fiscal year thereafter, in accord2 ance with paragraph (2), and transmitted to 

3 the Secretary concerned by the Governor of 

4 each eligible State. 

5 ‘‘(B) FAILURE TO TRANSMIT.—If an elec6 tion for an affected county is not transmitted to 

7 the Secretary concerned by the date specified 

8 under subparagraph (A), the affected county 

9 shall be considered to have elected to receive a 

10 share of the State payment, the county pay11 ment, or a share of the State payment and the 

12 county payment, as applicable. 

13 ‘‘(2) DURATION OF ELECTION.— 

14 ‘‘(A) IN GENERAL.—A county election to 

15 receive a share of the 25-percent payment or 

16 50-percent payment, as applicable, shall be ef17 fective for 2 fiscal years. 

18 ‘‘(B) FULL FUNDING AMOUNT.—If a coun19 ty elects to receive a share of the State payment 

20 or the county payment, the election shall be ef21 fective for all subsequent fiscal years through 

22 fiscal year 2011. 

23 ‘‘(3) SOURCE OF PAYMENT AMOUNTS.—The 

24 payment to an eligible State or eligible county under 

25 this section for a fiscal year shall be derived from— 


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1 ‘‘(A) any amounts that are appropriated to 

2 carry out this Act; 

3 ‘‘(B) any revenues, fees, penalties, or mis4 cellaneous receipts, exclusive of deposits to any 

5 relevant trust fund, special account, or perma6 nent operating funds, received by the Federal 

7 Government from activities by the Bureau of 

8 Land Management or the Forest Service on the 

9 applicable Federal land; and 

10 ‘‘(C) to the extent of any shortfall, out of 

11 any amounts in the Treasury of the United 

12 States not otherwise appropriated. 

13 ‘‘(c) DISTRIBUTION AND EXPENDITURE OF PAY14 MENTS.— 

15 ‘‘(1) DISTRIBUTION METHOD.—A State that re16 ceives a payment under subsection (a) for Federal 

17 land described in section 3(7)(A) shall distribute the 

18 appropriate payment amount among the appropriate 

19 counties in the State in accordance with— 

20 ‘‘(A) the Act of May 23, 1908 (16 U.S.C. 

21 500); and 

22 ‘‘(B) section 13 of the Act of March 1, 

23 1911 (36 Stat. 963; 16 U.S.C. 500). 

24 ‘‘(2) EXPENDITURE PURPOSES.—Subject to 

25 subsection (d), payments received by a State under 


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1 subsection (a) and distributed to counties in accord2 ance with paragraph (1) shall be expended as re3 quired by the laws referred to in paragraph (1). 

4 ‘‘(d) EXPENDITURE RULES FOR ELIGIBLE COUN5 TIES.— 

6 ‘‘(1) ALLOCATIONS.— 

7 ‘‘(A) USE OF PORTION IN SAME MANNER

8 AS 25-PERCENT PAYMENT OR 50-PERCENT PAY9 MENT, AS APPLICABLE.—Except as provided in 

10 paragraph (3)(B), if an eligible county elects to 

11 receive its share of the State payment or the 

12 county payment, not less than 80 percent, but 

13 not more than 85 percent, of the funds shall be 

14 expended in the same manner in which the 25- 

15 percent payments or 50-percent payment, as 

16 applicable, are required to be expended. 

17 ‘‘(B) ELECTION AS TO USE OF BAL18 ANCE.—Except as provided in subparagraph 

19 (C), an eligible county shall elect to do 1 or 

20 more of the following with the balance of any 

21 funds not expended pursuant to subparagraph 

22 (A): 

23 ‘‘(i) Reserve any portion of the bal24 ance for projects in accordance with title 

25 II. 


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1 ‘‘(ii) Reserve not more than 7 percent 

2 of the total share for the eligible county of 

3 the State payment or the county payment 

4 for projects in accordance with title III. 

5 ‘‘(iii) Return the portion of the bal6 ance not reserved under clauses (i) and (ii) 

7 to the Treasury of the United States. 

8 ‘‘(C) COUNTIES WITH MODEST DISTRIBU9 TIONS.—In the case of each eligible county to 

10 which more than $100,000, but less than 

11 $350,000, is distributed for any fiscal year pur12 suant to either or both of paragraphs (1)(B) 

13 and (2)(B) of subsection (a), the eligible coun14 ty, with respect to the balance of any funds not 

15 expended pursuant to subparagraph (A) for 

16 that fiscal year, shall— 

17 ‘‘(i) reserve any portion of the balance 

18 for— 

19 ‘‘(I) carrying out projects under 

20 title II; 

21 ‘‘(II) carrying out projects under 

22 title III; or 

23 ‘‘(III) a combination of the pur24 poses described in subclauses (I) and 

25 (II); or 


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1 ‘‘(ii) return the portion of the balance 

2 not reserved under clause (i) to the Treas3 ury of the United States. 

4 ‘‘(2) DISTRIBUTION OF FUNDS.— 

5 ‘‘(A) IN GENERAL.—Funds reserved by an 

6 eligible county under subparagraph (B)(i) or 

7 (C)(i) of paragraph (1) for carrying out 

8 projects under title II shall be deposited in a 

9 special account in the Treasury of the United 

10 States. 

11 ‘‘(B) AVAILABILITY.—Amounts deposited 

12 under subparagraph (A) shall— 

13 ‘‘(i) be available for expenditure by 

14 the Secretary concerned, without further 

15 appropriation; and 

16 ‘‘(ii) remain available until expended 

17 in accordance with title II. 

18 ‘‘(3) ELECTION.— 

19 ‘‘(A) NOTIFICATION.— 

20 ‘‘(i) IN GENERAL.—An eligible county 

21 shall notify the Secretary concerned of an 

22 election by the eligible county under this 

23 subsection not later than September 30, 

24 2008 (or as soon thereafter as the Sec25 retary concerned determines is pracVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00180 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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1 ticable), and September 30 of each fiscal 

2 year thereafter. 

3 ‘‘(ii) FAILURE TO ELECT.—Except as 

4 provided in subparagraph (B), if the eligi5 ble county fails to make an election by the 

6 date specified in clause (i), the eligible 

7 county shall— 

8 ‘‘(I) be considered to have elected 

9 to expend 85 percent of the funds in 

10 accordance with paragraph (1)(A); 

11 and 

12 ‘‘(II) return the balance to the 

13 Treasury of the United States. 

14 ‘‘(B) COUNTIES WITH MINOR DISTRIBU15 TIONS.—In the case of each eligible county to 

16 which less than $100,000 is distributed for any 

17 fiscal year pursuant to either or both of para18 graphs (1)(B) and (2)(B) of subsection (a), the 

19 eligible county may elect to expend all the funds 

20 in the same manner in which the 25-percent 

21 payments or 50-percent payments, as applica22 ble, are required to be expended. 

23 ‘‘(e) TIME FOR PAYMENT.—The payments required 

24 under this section for a fiscal year shall be made as soon 

25 as practicable after the end of that fiscal year. 


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1 ‘‘SEC. 103. TRANSITION PAYMENTS TO STATES. 

2 ‘‘(a) DEFINITIONS.—In this section: 

3 ‘‘(1) ADJUSTED AMOUNT.—The term ‘adjusted 

4 amount’ means, with respect to a covered State— 

5 ‘‘(A) for fiscal year 2008, 90 percent of— 

6 ‘‘(i) the sum of the amounts paid for 

7 fiscal year 2006 under section 102(a)(2) 

8 (as in effect on September 29, 2006) for 

9 the eligible counties in the covered State 

10 that have elected under section 102(b) to 

11 receive a share of the State payment for 

12 fiscal year 2008; and 

13 ‘‘(ii) the sum of the amounts paid for 

14 fiscal year 2006 under section 103(a)(2) 

15 (as in effect on September 29, 2006) for 

16 the eligible counties in the State of Oregon 

17 that have elected under section 102(b) to 

18 receive the county payment for fiscal year 

19 2008; 

20 ‘‘(B) for fiscal year 2009, 76 percent of— 

21 ‘‘(i) the sum of the amounts paid for 

22 fiscal year 2006 under section 102(a)(2) 

23 (as in effect on September 29, 2006) for 

24 the eligible counties in the covered State 

25 that have elected under section 102(b) to 


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1 receive a share of the State payment for 

2 fiscal year 2009; and 

3 ‘‘(ii) the sum of the amounts paid for 

4 fiscal year 2006 under section 103(a)(2) 

5 (as in effect on September 29, 2006) for 

6 the eligible counties in the State of Oregon 

7 that have elected under section 102(b) to 

8 receive the county payment for fiscal year 

9 2009; and 

10 ‘‘(C) for fiscal year 2010, 65 percent of— 

11 ‘‘(i) the sum of the amounts paid for 

12 fiscal year 2006 under section 102(a)(2) 

13 (as in effect on September 29, 2006) for 

14 the eligible counties in the covered State 

15 that have elected under section 102(b) to 

16 receive a share of the State payment for 

17 fiscal year 2010; and 

18 ‘‘(ii) the sum of the amounts paid for 

19 fiscal year 2006 under section 103(a)(2) 

20 (as in effect on September 29, 2006) for 

21 the eligible counties in the State of Oregon 

22 that have elected under section 102(b) to 

23 receive the county payment for fiscal year 

24 2010. 


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1 ‘‘(2) COVERED STATE.—The term ‘covered 

2 State’ means each of the States of California, Lou3 isiana, Oregon, Pennsylvania, South Carolina, South 

4 Dakota, Texas, and Washington. 

5 ‘‘(b) TRANSITION PAYMENTS.—For each of fiscal 

6 years 2008 through 2010, in lieu of the payment amounts 

7 that otherwise would have been made under paragraphs 

8 (1)(B) and (2)(B) of section 102(a), the Secretary of the 

9 Treasury shall pay the adjusted amount to each covered 

10 State and the eligible counties within the covered State, 

11 as applicable. 

12 ‘‘(c) DISTRIBUTION OF ADJUSTED AMOUNT.—Ex13 cept as provided in subsection (d), it is the intent of Con14 gress that the method of distributing the payments under 

15 subsection (b) among the counties in the covered States 

16 for each of fiscal years 2008 through 2010 be in the same 

17 proportion that the payments were distributed to the eligi18 ble counties in fiscal year 2006. 

19 ‘‘(d) DISTRIBUTION OF PAYMENTS IN CALI20 FORNIA.—The following payments shall be distributed 

21 among the eligible counties in the State of California in 

22 the same proportion that payments under section 

23 102(a)(2) (as in effect on September 29, 2006) were dis24 tributed to the eligible counties for fiscal year 2006: 


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1 ‘‘(1) Payments to the State of California under 

2 subsection (b). 

3 ‘‘(2) The shares of the eligible counties of the 

4 State payment for California under section 102 for 

5 fiscal year 2011. 

6 ‘‘(e) TREATMENT OF PAYMENTS.—For purposes of 

7 this Act, any payment made under subsection (b) shall be 

8 considered to be a payment made under section 102(a). 

9 ‘‘TITLE II—SPECIAL PROJECTS 

10 ON FEDERAL LAND 

11 ‘‘SEC. 201. DEFINITIONS. 

12 ‘‘In this title: 

13 ‘‘(1) PARTICIPATING COUNTY.—The term ‘par14 ticipating county’ means an eligible county that 

15 elects under section 102(d) to expend a portion of 

16 the Federal funds received under section 102 in ac17 cordance with this title. 

18 ‘‘(2) PROJECT FUNDS.—The term ‘project 

19 funds’ means all funds an eligible county elects 

20 under section 102(d) to reserve for expenditure in 

21 accordance with this title. 

22 ‘‘(3) RESOURCE ADVISORY COMMITTEE.—The 

23 term ‘resource advisory committee’ means— 

24 ‘‘(A) an advisory committee established by 

25 the Secretary concerned under section 205; or 


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1 ‘‘(B) an advisory committee determined by 

2 the Secretary concerned to meet the require3 ments of section 205. 

4 ‘‘(4) RESOURCE MANAGEMENT PLAN.—The 

5 term ‘resource management plan’ means— 

6 ‘‘(A) a land use plan prepared by the Bu7 reau of Land Management for units of the Fed8 eral land described in section 3(7)(B) pursuant 

9 to section 202 of the Federal Land Policy and 

10 Management Act of 1976 (43 U.S.C. 1712); or 

11 ‘‘(B) a land and resource management 

12 plan prepared by the Forest Service for units of 

13 the National Forest System pursuant to section 

14 6 of the Forest and Rangeland Renewable Re15 sources Planning Act of 1974 (16 U.S.C. 

16 1604). 

17 ‘‘SEC. 202. GENERAL LIMITATION ON USE OF PROJECT 

18 FUNDS. 

19 ‘‘(a) LIMITATION.—Project funds shall be expended 

20 solely on projects that meet the requirements of this title. 

21 ‘‘(b) AUTHORIZED USES.—Project funds may be 

22 used by the Secretary concerned for the purpose of enter23 ing into and implementing cooperative agreements with 

24 willing Federal agencies, State and local governments, pri25 vate and nonprofit entities, and landowners for protection, 


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1 restoration, and enhancement of fish and wildlife habitat, 

2 and other resource objectives consistent with the purposes 

3 of this Act on Federal land and on non-Federal land where 

4 projects would benefit the resources on Federal land. 

5 ‘‘SEC. 203. SUBMISSION OF PROJECT PROPOSALS. 

6 ‘‘(a) SUBMISSION OF PROJECT PROPOSALS TO SEC7 RETARY CONCERNED.— 

8 ‘‘(1) PROJECTS FUNDED USING PROJECT

9 FUNDS.—Not later than September 30 for fiscal 

10 year 2008 (or as soon thereafter as the Secretary 

11 concerned determines is practicable), and each Sep12 tember 30 thereafter for each succeeding fiscal year 

13 through fiscal year 2011, each resource advisory 

14 committee shall submit to the Secretary concerned a 

15 description of any projects that the resource advi16 sory committee proposes the Secretary undertake 

17 using any project funds reserved by eligible counties 

18 in the area in which the resource advisory committee 

19 has geographic jurisdiction. 

20 ‘‘(2) PROJECTS FUNDED USING OTHER

21 FUNDS.—A resource advisory committee may submit 

22 to the Secretary concerned a description of any 

23 projects that the committee proposes the Secretary 

24 undertake using funds from State or local govern25 ments, or from the private sector, other than project 


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1 funds and funds appropriated and otherwise avail2 able to do similar work. 

3 ‘‘(3) JOINT PROJECTS.—Participating counties 

4 or other persons may propose to pool project funds 

5 or other funds, described in paragraph (2), and 

6 jointly propose a project or group of projects to a re7 source advisory committee established under section 

8 205. 

9 ‘‘(b) REQUIRED DESCRIPTION OF PROJECTS.—In 

10 submitting proposed projects to the Secretary concerned 

11 under subsection (a), a resource advisory committee shall 

12 include in the description of each proposed project the fol13 lowing information: 

14 ‘‘(1) The purpose of the project and a descrip15 tion of how the project will meet the purposes of this 

16 title. 

17 ‘‘(2) The anticipated duration of the project. 

18 ‘‘(3) The anticipated cost of the project. 

19 ‘‘(4) The proposed source of funding for the 

20 project, whether project funds or other funds. 

21 ‘‘(5)(A) Expected outcomes, including how the 

22 project will meet or exceed desired ecological condi23 tions, maintenance objectives, or stewardship objec24 tives. 


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1 ‘‘(B) An estimate of the amount of any timber, 

2 forage, and other commodities and other economic 

3 activity, including jobs generated, if any, anticipated 

4 as part of the project. 

5 ‘‘(6) A detailed monitoring plan, including 

6 funding needs and sources, that— 

7 ‘‘(A) tracks and identifies the positive or 

8 negative impacts of the project, implementation, 

9 and provides for validation monitoring; and 

10 ‘‘(B) includes an assessment of the fol11 lowing: 

12 ‘‘(i) Whether or not the project met or 

13 exceeded desired ecological conditions; cre14 ated local employment or training opportu15 nities, including summer youth jobs pro16 grams such as the Youth Conservation 

17 Corps where appropriate. 

18 ‘‘(ii) Whether the project improved 

19 the use of, or added value to, any products 

20 removed from land consistent with the pur21 poses of this title. 

22 ‘‘(7) An assessment that the project is to be in 

23 the public interest. 

24 ‘‘(c) AUTHORIZED PROJECTS.—Projects proposed 

25 under subsection (a) shall be consistent with section 2. 


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1 ‘‘SEC. 204. EVALUATION AND APPROVAL OF PROJECTS BY 

2 SECRETARY CONCERNED. 

3 ‘‘(a) CONDITIONS FOR APPROVAL OF PROPOSED

4 PROJECT.—The Secretary concerned may make a decision 

5 to approve a project submitted by a resource advisory com6 mittee under section 203 only if the proposed project satis7 fies each of the following conditions: 

8 ‘‘(1) The project complies with all applicable 

9 Federal laws (including regulations). 

10 ‘‘(2) The project is consistent with the applica11 ble resource management plan and with any water12 shed or subsequent plan developed pursuant to the 

13 resource management plan and approved by the Sec14 retary concerned. 

15 ‘‘(3) The project has been approved by the re16 source advisory committee in accordance with sec17 tion 205, including the procedures issued under sub18 section (e) of that section. 

19 ‘‘(4) A project description has been submitted 

20 by the resource advisory committee to the Secretary 

21 concerned in accordance with section 203. 

22 ‘‘(5) The project will improve the maintenance 

23 of existing infrastructure, implement stewardship ob24 jectives that enhance forest ecosystems, and restore 

25 and improve land health and water quality. 

26 ‘‘(b) ENVIRONMENTAL REVIEWS.— 


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1 ‘‘(1) REQUEST FOR PAYMENT BY COUNTY.— 

2 The Secretary concerned may request the resource 

3 advisory committee submitting a proposed project to 

4 agree to the use of project funds to pay for any envi5 ronmental review, consultation, or compliance with 

6 applicable environmental laws required in connection 

7 with the project. 

8 ‘‘(2) CONDUCT OF ENVIRONMENTAL REVIEW.— 

9 If a payment is requested under paragraph (1) and 

10 the resource advisory committee agrees to the ex11 penditure of funds for this purpose, the Secretary 

12 concerned shall conduct environmental review, con13 sultation, or other compliance responsibilities in ac14 cordance with Federal laws (including regulations). 

15 ‘‘(3) EFFECT OF REFUSAL TO PAY.— 

16 ‘‘(A) IN GENERAL.—If a resource advisory 

17 committee does not agree to the expenditure of 

18 funds under paragraph (1), the project shall be 

19 deemed withdrawn from further consideration 

20 by the Secretary concerned pursuant to this 

21 title. 

22 ‘‘(B) EFFECT OF WITHDRAWAL.—A with23 drawal under subparagraph (A) shall be deemed 

24 to be a rejection of the project for purposes of 

25 section 207(c). 


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1 ‘‘(c) DECISIONS OF SECRETARY CONCERNED.— 

2 ‘‘(1) REJECTION OF PROJECTS.— 

3 ‘‘(A) IN GENERAL.—A decision by the Sec4 retary concerned to reject a proposed project 

5 shall be at the sole discretion of the Secretary 

6 concerned. 

7 ‘‘(B) NO ADMINISTRATIVE APPEAL OR JU8 DICIAL REVIEW.—Notwithstanding any other 

9 provision of law, a decision by the Secretary 

10 concerned to reject a proposed project shall not 

11 be subject to administrative appeal or judicial 

12 review. 

13 ‘‘(C) NOTICE OF REJECTION.—Not later 

14 than 30 days after the date on which the Sec15 retary concerned makes the rejection decision, 

16 the Secretary concerned shall notify in writing 

17 the resource advisory committee that submitted 

18 the proposed project of the rejection and the 

19 reasons for rejection. 

20 ‘‘(2) NOTICE OF PROJECT APPROVAL.—The 

21 Secretary concerned shall publish in the Federal 

22 Register notice of each project approved under sub23 section (a) if the notice would be required had the 

24 project originated with the Secretary. 


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1 ‘‘(d) SOURCE AND CONDUCT OF PROJECT.—Once the 

2 Secretary concerned accepts a project for review under 

3 section 203, the acceptance shall be deemed a Federal ac4 tion for all purposes. 

5 ‘‘(e) IMPLEMENTATION OF APPROVED PROJECTS.— 

6 ‘‘(1) COOPERATION.—Notwithstanding chapter 

7 63 of title 31, United States Code, using project 

8 funds the Secretary concerned may enter into con9 tracts, grants, and cooperative agreements with 

10 States and local governments, private and nonprofit 

11 entities, and landowners and other persons to assist 

12 the Secretary in carrying out an approved project. 

13 ‘‘(2) BEST VALUE CONTRACTING.— 

14 ‘‘(A) IN GENERAL.—For any project in15 volving a contract authorized by paragraph (1) 

16 the Secretary concerned may elect a source for 

17 performance of the contract on a best value 

18 basis. 

19 ‘‘(B) FACTORS.—The Secretary concerned 

20 shall determine best value based on such factors 

21 as— 

22 ‘‘(i) the technical demands and com23 plexity of the work to be done; 

24 ‘‘(ii)(I) the ecological objectives of the 

25 project; and 


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1 ‘‘(II) the sensitivity of the resources 

2 being treated; 

3 ‘‘(iii) the past experience by the con4 tractor with the type of work being done, 

5 using the type of equipment proposed for 

6 the project, and meeting or exceeding de7 sired ecological conditions; and 

8 ‘‘(iv) the commitment of the con9 tractor to hiring highly qualified workers 

10 and local residents. 

11 ‘‘(3) MERCHANTABLE TIMBER CONTRACTING

12 PILOT PROGRAM.— 

13 ‘‘(A) ESTABLISHMENT.—The Secretary 

14 concerned shall establish a pilot program to im15 plement a certain percentage of approved 

16 projects involving the sale of merchantable tim17 ber using separate contracts for— 

18 ‘‘(i) the harvesting or collection of 

19 merchantable timber; and 

20 ‘‘(ii) the sale of the timber. 

21 ‘‘(B) ANNUAL PERCENTAGES.—Under the 

22 pilot program, the Secretary concerned shall en23 sure that, on a nationwide basis, not less than 

24 the following percentage of all approved projects 


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1 involving the sale of merchantable timber are 

2 implemented using separate contracts: 

3 ‘‘(i) For fiscal year 2008, 35 percent. 

4 ‘‘(ii) For fiscal year 2009, 45 percent. 

5 ‘‘(iii) For each of fiscal years 2010 

6 and 2011, 50 percent. 

7 ‘‘(C) INCLUSION IN PILOT PROGRAM.—The 

8 decision whether to use separate contracts to 

9 implement a project involving the sale of mer10 chantable timber shall be made by the Sec11 retary concerned after the approval of the 

12 project under this title. 

13 ‘‘(D) ASSISTANCE.— 

14 ‘‘(i) IN GENERAL.—The Secretary 

15 concerned may use funds from any appro16 priated account available to the Secretary 

17 for the Federal land to assist in the ad18 ministration of projects conducted under 

19 the pilot program. 

20 ‘‘(ii) MAXIMUM AMOUNT OF ASSIST21 ANCE.—The total amount obligated under 

22 this subparagraph may not exceed 

23 $1,000,000 for any fiscal year during 

24 which the pilot program is in effect. 

25 ‘‘(E) REVIEW AND REPORT.— 


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1 ‘‘(i) INITIAL REPORT.—Not later than 

2 September 30, 2010, the Comptroller Gen3 eral shall submit to the Committees on Ag4 riculture, Nutrition, and Forestry and En5 ergy and Natural Resources of the Senate 

6 and the Committees on Agriculture and 

7 Natural Resources of the House of Rep8 resentatives a report assessing the pilot 

9 program. 

10 ‘‘(ii) ANNUAL REPORT.—The Sec11 retary concerned shall submit to the Com12 mittees on Agriculture, Nutrition, and For13 estry and Energy and Natural Resources 

14 of the Senate and the Committees on Agri15 culture and Natural Resources of the 

16 House of Representatives an annual report 

17 describing the results of the pilot program. 

18 ‘‘(f) REQUIREMENTS FOR PROJECT FUNDS.—The 

19 Secretary shall ensure that at least 50 percent of all 

20 project funds be used for projects that are primarily dedi21 cated— 

22 ‘‘(1) to road maintenance, decommissioning, or 

23 obliteration; or 

24 ‘‘(2) to restoration of streams and watersheds. 


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1 ‘‘SEC. 205. RESOURCE ADVISORY COMMITTEES. 

2 ‘‘(a) ESTABLISHMENT AND PURPOSE OF RESOURCE

3 ADVISORY COMMITTEES.— 

4 ‘‘(1) ESTABLISHMENT.—The Secretary con5 cerned shall establish and maintain resource advi6 sory committees to perform the duties in subsection 

7 (b), except as provided in paragraph (4). 

8 ‘‘(2) PURPOSE.—The purpose of a resource ad9 visory committee shall be— 

10 ‘‘(A) to improve collaborative relationships; 

11 and 

12 ‘‘(B) to provide advice and recommenda13 tions to the land management agencies con14 sistent with the purposes of this title. 

15 ‘‘(3) ACCESS TO RESOURCE ADVISORY COMMIT16 TEES.—To ensure that each unit of Federal land 

17 has access to a resource advisory committee, and 

18 that there is sufficient interest in participation on a 

19 committee to ensure that membership can be bal20 anced in terms of the points of view represented and 

21 the functions to be performed, the Secretary con22 cerned may, establish resource advisory committees 

23 for part of, or 1 or more, units of Federal land. 

24 ‘‘(4) EXISTING ADVISORY COMMITTEES.— 

25 ‘‘(A) IN GENERAL.—An advisory com26 mittee that meets the requirements of this secVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00197 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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1 tion, a resource advisory committee established 

2 before September 29, 2006, or an advisory com3 mittee determined by the Secretary concerned 

4 before September 29, 2006, to meet the re5 quirements of this section may be deemed by 

6 the Secretary concerned to be a resource advi7 sory committee for the purposes of this title. 

8 ‘‘(B) CHARTER.—A charter for a com9 mittee described in subparagraph (A) that was 

10 filed on or before September 29, 2006, shall be 

11 considered to be filed for purposes of this Act. 

12 ‘‘(C) BUREAU OF LAND MANAGEMENT AD13 VISORY COMMITTEES.—The Secretary of the In14 terior may deem a resource advisory committee 

15 meeting the requirements of subpart 1784 of 

16 part 1780 of title 43, Code of Federal Regula17 tions, as a resource advisory committee for the 

18 purposes of this title. 

19 ‘‘(b) DUTIES.—A resource advisory committee 

20 shall— 

21 ‘‘(1) review projects proposed under this title by 

22 participating counties and other persons; 

23 ‘‘(2) propose projects and funding to the Sec24 retary concerned under section 203; 


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1 ‘‘(3) provide early and continuous coordination 

2 with appropriate land management agency officials 

3 in recommending projects consistent with purposes 

4 of this Act under this title; 

5 ‘‘(4) provide frequent opportunities for citizens, 

6 organizations, tribes, land management agencies, 

7 and other interested parties to participate openly 

8 and meaningfully, beginning at the early stages of 

9 the project development process under this title; 

10 ‘‘(5)(A) monitor projects that have been ap11 proved under section 204; and 

12 ‘‘(B) advise the designated Federal official on 

13 the progress of the monitoring efforts under sub14 paragraph (A); and 

15 ‘‘(6) make recommendations to the Secretary 

16 concerned for any appropriate changes or adjust17 ments to the projects being monitored by the re18 source advisory committee. 

19 ‘‘(c) APPOINTMENT BY THE SECRETARY.— 

20 ‘‘(1) APPOINTMENT AND TERM.— 

21 ‘‘(A) IN GENERAL.—The Secretary con22 cerned, shall appoint the members of resource 

23 advisory committees for a term of 4 years be24 ginning on the date of appointment. 


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1 ‘‘(B) REAPPOINTMENT.—The Secretary 

2 concerned may reappoint members to subse3 quent 4-year terms. 

4 ‘‘(2) BASIC REQUIREMENTS.—The Secretary 

5 concerned shall ensure that each resource advisory 

6 committee established meets the requirements of 

7 subsection (d). 

8 ‘‘(3) INITIAL APPOINTMENT.—Not later than 

9 180 days after the date of the enactment of this Act, 

10 the Secretary concerned shall make initial appoint11 ments to the resource advisory committees. 

12 ‘‘(4) VACANCIES.—The Secretary concerned 

13 shall make appointments to fill vacancies on any re14 source advisory committee as soon as practicable 

15 after the vacancy has occurred. 

16 ‘‘(5) COMPENSATION.—Members of the re17 source advisory committees shall not receive any 

18 compensation. 

19 ‘‘(d) COMPOSITION OF ADVISORY COMMITTEE.— 

20 ‘‘(1) NUMBER.—Each resource advisory com21 mittee shall be comprised of 15 members. 

22 ‘‘(2) COMMUNITY INTERESTS REPRESENTED.— 

23 Committee members shall be representative of the 

24 interests of the following 3 categories: 

25 ‘‘(A) 5 persons that— 


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1 ‘‘(i) represent organized labor or non2 timber forest product harvester groups; 

3 ‘‘(ii) represent developed outdoor 

4 recreation, off highway vehicle users, or 

5 commercial recreation activities; 

6 ‘‘(iii) represent— 

7 ‘‘(I) energy and mineral develop8 ment interests; or 

9 ‘‘(II) commercial or recreational 

10 fishing interests; 

11 ‘‘(iv) represent the commercial timber 

12 industry; or 

13 ‘‘(v) hold Federal grazing or other 

14 land use permits, or represent nonindus15 trial private forest land owners, within the 

16 area for which the committee is organized. 

17 ‘‘(B) 5 persons that represent— 

18 ‘‘(i) nationally recognized environ19 mental organizations; 

20 ‘‘(ii) regionally or locally recognized 

21 environmental organizations; 

22 ‘‘(iii) dispersed recreational activities; 

23 ‘‘(iv) archaeological and historical in24 terests; or 


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1 ‘‘(v) nationally or regionally recog2 nized wild horse and burro interest groups, 

3 wildlife or hunting organizations, or water4 shed associations. 

5 ‘‘(C) 5 persons that— 

6 ‘‘(i) hold State elected office (or a 

7 designee); 

8 ‘‘(ii) hold county or local elected of9 fice; 

10 ‘‘(iii) represent American Indian 

11 tribes within or adjacent to the area for 

12 which the committee is organized; 

13 ‘‘(iv) are school officials or teachers; 

14 or 

15 ‘‘(v) represent the affected public at 

16 large. 

17 ‘‘(3) BALANCED REPRESENTATION.—In ap18 pointing committee members from the 3 categories 

19 in paragraph (2), the Secretary concerned shall pro20 vide for balanced and broad representation from 

21 within each category. 

22 ‘‘(4) GEOGRAPHIC DISTRIBUTION.—The mem23 bers of a resource advisory committee shall reside 

24 within the State in which the committee has juris25 diction and, to extent practicable, the Secretary conVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00202 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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1 cerned shall ensure local representation in each cat2 egory in paragraph (2). 

3 ‘‘(5) CHAIRPERSON.—A majority on each re4 source advisory committee shall select the chair5 person of the committee. 

6 ‘‘(e) APPROVAL PROCEDURES.— 

7 ‘‘(1) IN GENERAL.—Subject to paragraph (3), 

8 each resource advisory committee shall establish pro9 cedures for proposing projects to the Secretary con10 cerned under this title. 

11 ‘‘(2) QUORUM.—A quorum must be present to 

12 constitute an official meeting of the committee. 

13 ‘‘(3) APPROVAL BY MAJORITY OF MEMBERS.— 

14 A project may be proposed by a resource advisory 

15 committee to the Secretary concerned under section 

16 203(a), if the project has been approved by a major17 ity of members of the committee from each of the 

18 3 categories in subsection (d)(2). 

19 ‘‘(f) OTHER COMMITTEE AUTHORITIES AND RE20 QUIREMENTS.— 

21 ‘‘(1) STAFF ASSISTANCE.—A resource advisory 

22 committee may submit to the Secretary concerned a 

23 request for periodic staff assistance from Federal 

24 employees under the jurisdiction of the Secretary. 


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1 ‘‘(2) MEETINGS.—All meetings of a resource 

2 advisory committee shall be announced at least 1 

3 week in advance in a local newspaper of record and 

4 shall be open to the public. 

5 ‘‘(3) RECORDS.—A resource advisory committee 

6 shall maintain records of the meetings of the com7 mittee and make the records available for public in8 spection. 

9 ‘‘SEC. 206. USE OF PROJECT FUNDS. 

10 ‘‘(a) AGREEMENT REGARDING SCHEDULE AND COST

11 OF PROJECT.— 

12 ‘‘(1) AGREEMENT BETWEEN PARTIES.—The 

13 Secretary concerned may carry out a project sub14 mitted by a resource advisory committee under sec15 tion 203(a) using project funds or other funds de16 scribed in section 203(a)(2), if, as soon as prac17 ticable after the issuance of a decision document for 

18 the project and the exhaustion of all administrative 

19 appeals and judicial review of the project decision, 

20 the Secretary concerned and the resource advisory 

21 committee enter into an agreement addressing, at a 

22 minimum, the following: 

23 ‘‘(A) The schedule for completing the 

24 project. 


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1 ‘‘(B) The total cost of the project, includ2 ing the level of agency overhead to be assessed 

3 against the project. 

4 ‘‘(C) For a multiyear project, the esti5 mated cost of the project for each of the fiscal 

6 years in which it will be carried out. 

7 ‘‘(D) The remedies for failure of the Sec8 retary concerned to comply with the terms of 

9 the agreement consistent with current Federal 

10 law. 

11 ‘‘(2) LIMITED USE OF FEDERAL FUNDS.—The 

12 Secretary concerned may decide, at the sole discre13 tion of the Secretary concerned, to cover the costs 

14 of a portion of an approved project using Federal 

15 funds appropriated or otherwise available to the Sec16 retary for the same purposes as the project. 

17 ‘‘(b) TRANSFER OF PROJECT FUNDS.— 

18 ‘‘(1) INITIAL TRANSFER REQUIRED.—As soon 

19 as practicable after the agreement is reached under 

20 subsection (a) with regard to a project to be funded 

21 in whole or in part using project funds, or other 

22 funds described in section 203(a)(2), the Secretary 

23 concerned shall transfer to the applicable unit of Na24 tional Forest System land or Bureau of Land ManVerDate Aug 31 2005 04:55 Sep 12, 2008 Jkt 069200 PO 00000 Frm 00205 Fmt 6652 Sfmt 6201 E:\BILLS\S3478.IS S3478

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1 agement District an amount of project funds equal 

2 to— 

3 ‘‘(A) in the case of a project to be com4 pleted in a single fiscal year, the total amount 

5 specified in the agreement to be paid using 

6 project funds, or other funds described in sec7 tion 203(a)(2); or 

8 ‘‘(B) in the case of a multiyear project, the 

9 amount specified in the agreement to be paid 

10 using project funds, or other funds described in 

11 section 203(a)(2) for the first fiscal year. 

12 ‘‘(2) CONDITION ON PROJECT COMMENCE13 MENT.—The unit of National Forest System land or 

14 Bureau of Land Management District concerned, 

15 shall not commence a project until the project funds, 

16 or other funds described in section 203(a)(2) re17 quired to be transferred under paragraph (1) for the 

18 project, have been made available by the Secretary 

19 concerned. 

20 ‘‘(3) SUBSEQUENT TRANSFERS FOR MULTIYEAR

21 PROJECTS.— 

22 ‘‘(A) IN GENERAL.—For the second and 

23 subsequent fiscal years of a multiyear project to 

24 be funded in whole or in part using project 

25 funds, the unit of National Forest System land 


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1 or Bureau of Land Management District con2 cerned shall use the amount of project funds re3 quired to continue the project in that fiscal year 

4 according to the agreement entered into under 

5 subsection (a). 

6 ‘‘(B) SUSPENSION OF WORK.—The Sec7 retary concerned shall suspend work on the 

8 project if the project funds required by the 

9 agreement in the second and subsequent fiscal 

10 years are not available. 

11 ‘‘SEC. 207. AVAILABILITY OF PROJECT FUNDS. 

12 ‘‘(a) SUBMISSION OF PROPOSED PROJECTS TO OBLI13 GATE FUNDS.—By September 30, 2008 (or as soon there14 after as the Secretary concerned determines is prac15 ticable), and each September 30 thereafter for each suc16 ceeding fiscal year through fiscal year 2011, a resource 

17 advisory committee shall submit to the Secretary con18 cerned pursuant to section 203(a)(1) a sufficient number 

19 of project proposals that, if approved, would result in the 

20 obligation of at least the full amount of the project funds 

21 reserved by the participating county in the preceding fiscal 

22 year. 

23 ‘‘(b) USE OR TRANSFER OF UNOBLIGATED

24 FUNDS.—Subject to section 208, if a resource advisory 

25 committee fails to comply with subsection (a) for a fiscal 


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1 year, any project funds reserved by the participating coun2 ty in the preceding fiscal year and remaining unobligated 

3 shall be available for use as part of the project submissions 

4 in the next fiscal year. 

5 ‘‘(c) EFFECT OF REJECTION OF PROJECTS.—Subject 

6 to section 208, any project funds reserved by a partici7 pating county in the preceding fiscal year that are unobli8 gated at the end of a fiscal year because the Secretary 

9 concerned has rejected one or more proposed projects shall 

10 be available for use as part of the project submissions in 

11 the next fiscal year. 

12 ‘‘(d) EFFECT OF COURT ORDERS.— 

13 ‘‘(1) IN GENERAL.—If an approved project 

14 under this Act is enjoined or prohibited by a Federal 

15 court, the Secretary concerned shall return the un16 obligated project funds related to the project to the 

17 participating county or counties that reserved the 

18 funds. 

19 ‘‘(2) EXPENDITURE OF FUNDS.—The returned 

20 funds shall be available for the county to expend in 

21 the same manner as the funds reserved by the coun22 ty under subparagraph (B) or (C)(i) of section 

23 102(d)(1). 


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1 ‘‘SEC. 208. TERMINATION OF AUTHORITY. 

2 ‘‘(a) IN GENERAL.—The authority to initiate projects 

3 under this title shall terminate on September 30, 2011. 

4 ‘‘(b) DEPOSITS IN TREASURY.—Any project funds 

5 not obligated by September 30, 2012, shall be deposited 

6 in the Treasury of the United States. 

7 ‘‘TITLE III—COUNTY FUNDS 

8 ‘‘SEC. 301. DEFINITIONS. 

9 ‘‘In this title: 

10 ‘‘(1) COUNTY FUNDS.—The term ‘county funds’ 

11 means all funds an eligible county elects under sec12 tion 102(d) to reserve for expenditure in accordance 

13 with this title. 

14 ‘‘(2) PARTICIPATING COUNTY.—The term ‘par15 ticipating county’ means an eligible county that 

16 elects under section 102(d) to expend a portion of 

17 the Federal funds received under section 102 in ac18 cordance with this title. 

19 ‘‘SEC. 302. USE. 

20 ‘‘(a) AUTHORIZED USES.—A participating county, 

21 including any applicable agencies of the participating 

22 county, shall use county funds, in accordance with this 

23 title, only— 

24 ‘‘(1) to carry out activities under the Firewise 

25 Communities program to provide to homeowners in 

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1 ance with implementing, techniques in home siting, 

2 home construction, and home landscaping that can 

3 increase the protection of people and property from 

4 wildfires; 

5 ‘‘(2) to reimburse the participating county for 

6 search and rescue and other emergency services, in7 cluding firefighting, that are— 

8 ‘‘(A) performed on Federal land after the 

9 date on which the use was approved under sub10 section (b); 

11 ‘‘(B) paid for by the participating county; 

12 and 

13 ‘‘(3) to develop community wildfire protection 

14 plans in coordination with the appropriate Secretary 

15 concerned. 

16 ‘‘(b) PROPOSALS.—A participating county shall use 

17 county funds for a use described in subsection (a) only 

18 after a 45-day public comment period, at the beginning 

19 of which the participating county shall— 

20 ‘‘(1) publish in any publications of local record 

21 a proposal that describes the proposed use of the 

22 county funds; and 

23 ‘‘(2) submit the proposal to any resource advi24 sory committee established under section 205 for the 

25 participating county. 


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1 ‘‘SEC. 303. CERTIFICATION. 

2 ‘‘(a) IN GENERAL.—Not later than February 1 of the 

3 year after the year in which any county funds were ex4 pended by a participating county, the appropriate official 

5 of the participating county shall submit to the Secretary 

6 concerned a certification that the county funds expended 

7 in the applicable year have been used for the uses author8 ized under section 302(a), including a description of the 

9 amounts expended and the uses for which the amounts 

10 were expended. 

11 ‘‘(b) REVIEW.—The Secretary concerned shall review 

12 the certifications submitted under subsection (a) as the 

13 Secretary concerned determines to be appropriate. 

14 ‘‘SEC. 304. TERMINATION OF AUTHORITY. 

15 ‘‘(a) IN GENERAL.—The authority to initiate projects 

16 under this title terminates on September 30, 2011. 

17 ‘‘(b) AVAILABILITY.—Any county funds not obligated 

18 by September 30, 2012, shall be returned to the Treasury 

19 of the United States. 

20 ‘‘TITLE IV—MISCELLANEOUS 

21 PROVISIONS 

22 ‘‘SEC. 401. REGULATIONS. 

23 ‘‘The Secretary of Agriculture and the Secretary of 

24 the Interior shall issue regulations to carry out the pur25 poses of this Act. 


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1 ‘‘SEC. 402. AUTHORIZATION OF APPROPRIATIONS. 

2 ‘‘There are authorized to be appropriated such sums 

3 as are necessary to carry out this Act for each of fiscal 

4 years 2008 through 2011. 

5 ‘‘SEC. 403. TREATMENT OF FUNDS AND REVENUES. 

6 ‘‘(a) RELATION TO OTHER APPROPRIATIONS.— 

7 Funds made available under section 402 and funds made 

8 available to a Secretary concerned under section 206 shall 

9 be in addition to any other annual appropriations for the 

10 Forest Service and the Bureau of Land Management. 

11 ‘‘(b) DEPOSIT OF REVENUES AND OTHER FUNDS.— 

12 All revenues generated from projects pursuant to title II, 

13 including any interest accrued from the revenues, shall be 

14 deposited in the Treasury of the United States.’’. 

15 (b) FOREST RECEIPT PAYMENTS TO ELIGIBLE

16 STATES AND COUNTIES.— 

17 (1) ACT OF MAY 23, 1908.—The sixth paragraph 

18 under the heading ‘‘FOREST SERVICE’’ in the Act 

19 of May 23, 1908 (16 U.S.C. 500) is amended in the 

20 first sentence by striking ‘‘twenty-five percentum’’ 

21 and all that follows through ‘‘shall be paid’’ and in22 serting the following: ‘‘an amount equal to the an23 nual average of 25 percent of all amounts received 

24 for the applicable fiscal year and each of the pre25 ceding 6 fiscal years from each national forest shall 

26 be paid’’. 


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1 (2) WEEKS LAW.—Section 13 of the Act of 

2 March 1, 1911 (commonly known as the ‘‘Weeks 

3 Law’’) (16 U.S.C. 500) is amended in the first sen4 tence by striking ‘‘twenty-five percentum’’ and all 

5 that follows through ‘‘shall be paid’’ and inserting 

6 the following: ‘‘an amount equal to the annual aver7 age of 25 percent of all amounts received for the ap8 plicable fiscal year and each of the preceding 6 fiscal 

9 years from each national forest shall be paid’’. 

10 (c) PAYMENTS IN LIEU OF TAXES.— 

11 (1) IN GENERAL.—Section 6906 of title 31, 

12 United States Code, is amended to read as follows: 

13 ‘‘§ 6906. Funding 

14 ‘‘For each of fiscal years 2008 through 2012— 

15 ‘‘(1) each county or other eligible unit of local 

16 government shall be entitled to payment under this 

17 chapter; and 

18 ‘‘(2) sums shall be made available to the Sec19 retary of the Interior for obligation or expenditure in 

20 accordance with this chapter.’’. 

21 (2) CONFORMING AMENDMENT.—The table of 

22 sections for chapter 69 of title 31, United States 

23 Code, is amended by striking the item relating to 

24 section 6906 and inserting the following: 

‘‘6906. Funding.’’. 

25 (3) BUDGET SCOREKEEPING.— 


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1 (A) IN GENERAL.—Notwithstanding the 

2 Budget Scorekeeping Guidelines and the accom3 panying list of programs and accounts set forth 

4 in the joint explanatory statement of the com5 mittee of conference accompanying Conference 

6 Report 105–217, the section in this title re7 garding Payments in Lieu of Taxes shall be 

8 treated in the baseline for purposes of section 

9 257 of the Balanced Budget and Emergency 

10 Deficit Control Act of 1985 (as in effect prior 

11 to September 30, 2002), and by the Chairmen 

12 of the House and Senate Budget Committees, 

13 as appropriate, for purposes of budget enforce14 ment in the House and Senate, and under the 

15 Congressional Budget Act of 1974 as if Pay16 ment in Lieu of Taxes (14–1114–0–1–806) 

17 were an account designated as Appropriated 

18 Entitlements and Mandatories for Fiscal Year 

19 1997 in the joint explanatory statement of the 

20 committee of conference accompanying Con21 ference Report 105–217. 

22 (B) EFFECTIVE DATE.—This paragraph 

23 shall remain in effect for the fiscal years to 

24 which the entitlement in section 6906 of title 


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1 31, United States Code (as amended by para2 graph (1)), applies. 

3 SEC. 602. CLARIFICATION OF UNIFORM DEFINITION OF 

4 CHILD. 

5 (a) CHILD MUST BE YOUNGER THAN CLAIMANT.— 

6 Section 152(c)(3)(A) is amended by inserting ‘‘is younger 

7 than the taxpayer claiming such individual as a qualifying 

8 child and’’ after ‘‘such individual’’. 

9 (b) CHILD MUST BE UNMARRIED.—Section 

10 152(c)(1) is amended by striking ‘‘and’’ at the end of sub11 paragraph (C), by striking the period at the end of sub12 paragraph (D) and inserting ‘‘, and’’, and by adding at 

13 the end the following new subparagraph: 

14 ‘‘(E) who has not filed a joint return 

15 (other than only for a claim of refund) with the 

16 individual’s spouse under section 6013 for the 

17 taxable year beginning in the calendar year in 

18 which the taxable year of the taxpayer begins.’’. 

19 (c) RESTRICT QUALIFYING CHILD TAX BENEFITS TO

20 CHILD’S PARENT.— 

21 (1) CHILD TAX CREDIT.—Subsection (a) of sec22 tion 24 is amended by inserting ‘‘for which the tax23 payer is allowed a deduction under section 151’’ 

24 after ‘‘of the taxpayer’’. 


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1 (2) PERSONS OTHER THAN PARENTS CLAIMING

2 QUALIFYING CHILD.— 

3 (A) IN GENERAL.—Paragraph (4) of sec4 tion 152(c) is amended by adding at the end 

5 the following new subparagraph: 

6 ‘‘(C) NO PARENT CLAIMING QUALIFYING

7 CHILD.—If the parents of an individual may 

8 claim such individual as a qualifying child but 

9 no parent so claims the individual, such indi10 vidual may be claimed as the qualifying child of 

11 another taxpayer but only if the adjusted gross 

12 income of such taxpayer is higher than the 

13 highest adjusted gross income of any parent of 

14 the individual.’’. 

15 (B) CONFORMING AMENDMENTS.— 

16 (i) Subparagraph (A) of section 

17 152(c)(4) is amended by striking ‘‘Except’’ 

18 through ‘‘2 or more taxpayers’’ and insert19 ing ‘‘Except as provided in subparagraphs 

20 (B) and (C), if (but for this paragraph) an 

21 individual may be claimed as a qualifying 

22 child by 2 or more taxpayers’’. 

23 (ii) The heading for paragraph (4) of 

24 section 152(c) is amended by striking 


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1 ‘‘CLAIMING’’ and inserting ‘‘WHO CAN

2 CLAIM THE SAME’’. 

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

4 this section shall apply to taxable years beginning after 

5 December 31, 2008. 

Æ 


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