II 

110TH CONGRESS 

2D SESSION S. 3125 

To amend the Internal Revenue Code of 1986 to extend certain expiring 

provisions, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 12, 2008 

Mr. BAUCUS 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 extend 

certain expiring provisions, 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 Tax Relief Act of 2008’’. 

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

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

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1 ered to be made to a section or other provision of the In2 ternal Revenue Code of 1986. 

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

4 this Act is as follows: 

Sec. 1. Short title, etc. 

TITLE I—ENERGY TAX INCENTIVES 

Subtitle A—Energy Production Incentives 

PART I—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. Special rule to implement FERC and State electric restructuring policy. 

Sec. 106. New clean renewable energy bonds. 

PART II—CARBON MITIGATION 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. 

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

Sec. 115. Carbon audit of the tax code. 

Subtitle B—Transportation and Domestic Fuel Security Provisions 

Sec. 121. Inclusion of cellulosic biofuel in bonus depreciation for biomass ethanol plant property. 

Sec. 122. Credits for biodiesel and renewable diesel. 

Sec. 123. Clarification that credits for fuel are designed to provide an incentive 

for United States production. 

Sec. 124. Credit for new qualified plug-in electric drive motor vehicles. 

Sec. 125. Exclusion from heavy truck tax for idling reduction units and advanced insulation. 

Sec. 126. Restructuring of New York Liberty Zone tax credits. 

Sec. 127. Transportation fringe benefit to bicycle commuters. 

Sec. 128. Alternative fuel vehicle refueling property credit. 

Subtitle C—Energy Conservation and Efficiency Provisions 

Sec. 141. Qualified energy conservation bonds. 

Sec. 142. Credit for nonbusiness energy property. 

Sec. 143. Energy efficient commercial buildings deduction. 

Sec. 144. Modifications of energy efficient appliance credit for appliances produced after 2007. 

Sec. 145. Accelerated recovery period for depreciation of smart meters and 

smart grid systems. 


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Sec. 146. Qualified green building and sustainable design projects. 

TITLE II—ONE-YEAR EXTENSION OF TEMPORARY PROVISIONS 

Subtitle A—Alternative Minimum Tax 

Sec. 201. Extension of alternative minimum tax relief for nonrefundable personal credits. 

Sec. 202. Extension of increased alternative minimum tax exemption amount. 

Sec. 203. Increase of AMT refundable credit amount for individuals with longterm unused credits for prior year minimum tax liability, etc. 

Subtitle B—Extensions Primarily Affecting Individuals 

Sec. 211. Deduction for State and local sales taxes. 

Sec. 212. Deduction of qualified tuition and related expenses. 

Sec. 213. Treatment of certain dividends of regulated investment companies. 

Sec. 214. Tax-free distributions from individual retirement plans for charitable 

purposes. 

Sec. 215. Deduction for certain expenses of elementary and secondary school 

teachers. 

Sec. 216. Stock in RIC for purposes of determining estates of nonresidents not 

citizens. 

Sec. 217. Qualified investment entities. 

Sec. 218. Exclusion of amounts received under qualified group legal services 

plans. 

Subtitle C—Extensions Primarily Affecting Businesses 

Sec. 221. Extension and modification of research credit. 

Sec. 222. Indian employment credit. 

Sec. 223. New markets tax credit. 

Sec. 224. Railroad track maintenance. 

Sec. 225. Extension of mine rescue team training credit. 

Sec. 226. Extension of 15-year straight-line cost recovery for qualified leasehold 

improvements and qualified restaurant improvements; 15-year 

straight-line cost recovery for certain improvements to retail 

space. 

Sec. 227. Seven-year cost recovery period for motorsports racing track facility. 

Sec. 228. Accelerated depreciation for business property on Indian reservation. 

Sec. 229. Extension of election to expense advanced mine safety equipment. 

Sec. 230. Expensing of environmental remediation costs. 

Sec. 231. Deduction allowable with respect to income attributable to domestic 

production activities in Puerto Rico. 

Sec. 232. Modification of tax treatment of certain payments to controlling exempt organizations. 

Sec. 233. Qualified zone academy bonds. 

Sec. 234. Tax incentives for investment in the District of Columbia. 

Sec. 235. Economic development credit for American Samoa. 

Sec. 236. Enhanced charitable deduction for contributions of food inventory. 

Sec. 237. Enhanced charitable deduction for contributions of book inventory to 

public schools. 

Sec. 238. Enhanced deduction for qualified computer contributions. 

Sec. 239. Basis adjustment to stock of S corporations making charitable contributions of property. 

Sec. 240. Work opportunity tax credit for Hurricane Katrina employees. 

Sec. 241. Subpart F exception for active financing income. 


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Sec. 242. Look-thru rule for related controlled foreign corporations. 

Sec. 243. Expensing for certain qualified film and television productions. 

Sec. 244. Extension and modification of duty suspension on wool products; wool 

research fund; wool duty refunds. 

Subtitle D—Other Extensions 

Sec. 251. Authority to disclose information related to terrorist activities made 

permanent. 

Sec. 252. Authority for undercover operations made permanent. 

Sec. 253. Increase in limit on cover over of rum excise tax to Puerto Rico and 

the Virgin Islands. 

TITLE III—ADDITIONAL RELIEF 

Subtitle A—Individual Tax Relief 

Sec. 301. Additional standard deduction for real property taxes for nonitemizers. 

Sec. 302. $10,000 income threshold used to calculate refundable portion of 

child tax credit. 

Sec. 303. Income averaging for amounts received in connection with the Exxon 

Valdez litigation. 

Subtitle B—Business Related Provisions 

Sec. 311. Uniform treatment of attorney-advanced expenses and court costs in 

contingency fee cases. 

Sec. 312. Provisions related to film and television productions. 

Sec. 313. Modification of rate of excise tax on certain wooden arrows designed 

for use by children. 

Subtitle C—Modification of Penalty on Understatement of Taxpayer’s 

Liability by Tax Return Preparer 

Sec. 321. Modification of penalty on understatement of taxpayer’s liability by 

tax return preparer. 

Subtitle D—Extension and Expansion of Certain GO Zone Incentives 

Sec. 331. Certain GO Zone incentives. 

Subtitle E—Other Provisions 

Sec. 341. Secure rural schools and community self-determination program. 

Sec. 342. Clarification of uniform definition of child. 

TITLE IV—REVENUE PROVISIONS 

Sec. 401. Nonqualified deferred compensation from certain tax indifferent parties. 

Sec. 402. Delay in application of worldwide allocation of interest. 

Sec. 403. Time for payment of corporate estimated taxes. 


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1 TITLE I—ENERGY TAX 

2 INCENTIVES 

3 Subtitle A—Energy Production 

4 Incentives 

5 PART I—RENEWABLE ENERGY INCENTIVES 

6 SEC. 101. RENEWABLE ENERGY CREDIT. 

7 (a) EXTENSION OF CREDIT.— 

8 (1) 1-YEAR EXTENSION FOR WIND FACILI9 TIES.—Paragraph (1) of section 45(d) is amended 

10 by striking ‘‘January 1, 2009’’ and inserting ‘‘Janu11 ary 1, 2010’’. 

12 (2) 3-YEAR EXTENSION FOR CERTAIN OTHER

13 FACILITIES.—Each of the following provisions of 

14 section 45(d) is amended by striking ‘‘January 1, 

15 2009’’ and inserting ‘‘January 1, 2012’’: 

16 (A) Clauses (i) and (ii) of paragraph 

17 (2)(A). 

18 (B) Clauses (i)(I) and (ii) of paragraph 

19 (3)(A). 

20 (C) Paragraph (4). 

21 (D) Paragraph (5). 

22 (E) Paragraph (6). 

23 (F) Paragraph (7). 

24 (G) Subparagraphs (A) and (B) of para25 graph (9). 


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1 (b) MODIFICATION OF CREDIT PHASEOUT.— 

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

3 section 45 is amended— 

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

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

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

7 (2) LIMITATION BASED ON INVESTMENT IN FA8 CILITY.—Subsection (b) of section 45 is amended by 

9 inserting before paragraph (2) the following new 

10 paragraph: 

11 ‘‘(1) LIMITATION BASED ON INVESTMENT IN

12 FACILITY.— 

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

14 qualified facility originally placed in service 

15 after December 31, 2009, the amount of the 

16 credit determined under subsection (a) for any 

17 taxable year with respect to electricity produced 

18 at such facility shall not exceed the product 

19 of— 

20 ‘‘(i) the applicable percentage with re21 spect to such facility, multiplied by 

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

23 ‘‘(B) CARRYFORWARD OF UNUSED LIMITA24 TION AND EXCESS CREDIT.— 


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1 ‘‘(i) UNUSED LIMITATION.—If the 

2 limitation imposed under subparagraph (A) 

3 with respect to any facility for any taxable 

4 year exceeds the prelimitation credit for 

5 such facility for such taxable year, the lim6 itation imposed under subparagraph (A) 

7 with respect to such facility for the suc8 ceeding taxable year shall be increased by 

9 the amount of such excess. 

10 ‘‘(ii) EXCESS CREDIT.—If the 

11 prelimitation credit with respect to any fa12 cility for any taxable year exceeds the limi13 tation imposed under subparagraph (A) 

14 with respect to such facility for such tax15 able year, the credit determined under sub16 section (a) with respect to such facility for 

17 the succeeding taxable year (determined 

18 before the application of subparagraph (A) 

19 for such succeeding taxable year) shall be 

20 increased by the amount of such excess. 

21 With respect to any facility, no amount 

22 may be carried forward under this clause 

23 to any taxable year beginning after the 10- 

24 year period described in subsection 

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


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1 ‘‘(iii) PRELIMITATION CREDIT.—The 

2 term ‘prelimitation credit’ with respect to 

3 any facility for a taxable year means the 

4 credit determined under subsection (a) 

5 with respect to such facility for such tax6 able year, determined without regard to 

7 subparagraph (A) and after taking into ac8 count any increase for such taxable year 

9 under clause (ii). 

10 ‘‘(C) APPLICABLE PERCENTAGE.—For 

11 purposes of this paragraph— 

12 ‘‘(i) IN GENERAL.—The term ‘applica13 ble percentage’ means, with respect to any 

14 facility, the appropriate percentage pre15 scribed by the Secretary for the month in 

16 which such facility is originally placed in 

17 service. 

18 ‘‘(ii) METHOD OF PRESCRIBING AP19 PLICABLE PERCENTAGES.—The applicable 

20 percentages prescribed by the Secretary for 

21 any month under clause (i) shall be per22 centages which yield over a 10-year period 

23 amounts of limitation under subparagraph 

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

25 percent of the eligible basis of the facility. 


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1 ‘‘(iii) METHOD OF DISCOUNTING.— 

2 The present value under clause (ii) shall be 

3 determined— 

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

5 year of the 10-year period referred to 

6 in clause (ii), 

7 ‘‘(II) by using a discount rate 

8 equal to the greater of 110 percent of 

9 the Federal long-term rate as in effect 

10 under section 1274(d) for the month 

11 preceding the month for which the ap12 plicable percentage is being pre13 scribed, or 4.5 percent, and 

14 ‘‘(III) by taking into account the 

15 limitation under subparagraph (A) for 

16 any year on the last day of such year. 

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

18 this paragraph— 

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

20 basis’ means, with respect to any facility, 

21 the sum of— 

22 ‘‘(I) the basis of such facility de23 termined as of the time that such fa24 cility is originally placed in service, 

25 and 


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1 ‘‘(II) the portion of the basis of 

2 any shared qualified property which is 

3 properly allocable to such facility 

4 under clause (ii). 

5 ‘‘(ii) RULES FOR ALLOCATION.—For 

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

7 basis of shared qualified property shall be 

8 allocated among all qualified facilities 

9 which are projected to be placed in service 

10 and which require utilization of such prop11 erty in proportion to projected generation 

12 from such facilities. 

13 ‘‘(iii) SHARED QUALIFIED PROP14 ERTY.—For purposes of this paragraph, 

15 the term ‘shared qualified property’ means, 

16 with respect to any facility, any property 

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

18 ‘‘(I) which a qualified facility will 

19 require for utilization of such facility, 

20 and 

21 ‘‘(II) which is not a qualified fa22 cility. 

23 ‘‘(iv) SPECIAL RULE RELATING TO

24 GEOTHERMAL FACILITIES.—In the case of 

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1 ergy to produce electricity, the basis of 

2 such facility for purposes of this paragraph 

3 shall be determined as though intangible 

4 drilling and development costs described in 

5 section 263(c) were capitalized rather than 

6 expensed. 

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

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

9 taxable year any portion of which is not within 

10 the 10-year period described in subsection 

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

12 amount of the limitation under subparagraph 

13 (A) with respect to such facility shall be re14 duced by an amount which bears the same ratio 

15 to the amount of such limitation (determined 

16 without regard to this subparagraph) as such 

17 portion of the taxable year which is not within 

18 such period bears to the entire taxable year. 

19 ‘‘(F) ELECTION TO TREAT ALL FACILITIES

20 PLACED IN SERVICE IN A YEAR AS 1 FACIL21 ITY.—At the election of the taxpayer, all quali22 fied facilities which are part of the same project 

23 and which are placed in service during the same 

24 calendar year shall be treated for purposes of 

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1 ice at the mid-point of such year or the first 

2 day of the following calendar year.’’. 

3 (c) TRASH FACILITY CLARIFICATION.—Paragraph 

4 (7) of section 45(d) is amended— 

5 (1) by striking ‘‘facility which burns’’ and in6 serting ‘‘facility (other than a facility described in 

7 paragraph (6)) which uses’’, and 

8 (2) by striking ‘‘COMBUSTION’’. 

9 (d) EXPANSION OF BIOMASS FACILITIES.— 

10 (1) OPEN-LOOP BIOMASS FACILITIES.—Para11 graph (3) of section 45(d) is amended by redesig12 nating subparagraph (B) as subparagraph (C) and 

13 by inserting after subparagraph (A) the following 

14 new subparagraph: 

15 ‘‘(B) EXPANSION OF FACILITY.—Such 

16 term shall include a new unit placed in service 

17 after the date of the enactment of this subpara18 graph in connection with a facility described in 

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

20 increased amount of electricity produced at the 

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

22 (2) CLOSED-LOOP BIOMASS FACILITIES.—Para23 graph (2) of section 45(d) is amended by redesig24 nating subparagraph (B) as subparagraph (C) and 


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1 inserting after subparagraph (A) the following new 

2 subparagraph: 

3 ‘‘(B) EXPANSION OF FACILITY.—Such 

4 term shall include a new unit placed in service 

5 after the date of the enactment of this subpara6 graph in connection with a facility described in 

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

8 the increased amount of electricity produced at 

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

10 (e) SALES OF NET ELECTRICITY TO REGULATED

11 PUBLIC UTILITIES TREATED AS SALES TO UNRELATED

12 PERSONS.—Paragraph (4) of section 45(e) is amended by 

13 adding at the end the following new sentence: ‘‘The net 

14 amount of electricity sold by any taxpayer to a regulated 

15 public utility (as defined in section 7701(a)(33)) shall be 

16 treated as sold to an unrelated person.’’. 

17 (f) MODIFICATION OF RULES FOR HYDROPOWER

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

19 amended to read as follows: 

20 ‘‘(C) NONHYDROELECTRIC DAM.—For pur21 poses of subparagraph (A), a facility is de22 scribed in this subparagraph if— 

23 ‘‘(i) the hydroelectric project installed 

24 on the nonhydroelectric dam is licensed by 

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1 sion and meets all other applicable environ2 mental, licensing, and regulatory require3 ments, 

4 ‘‘(ii) the nonhydroelectric dam was 

5 placed in service before the date of the en6 actment of this paragraph and operated 

7 for flood control, navigation, or water sup8 ply purposes and did not produce hydro9 electric power on the date of the enactment 

10 of this paragraph, and 

11 ‘‘(iii) the hydroelectric project is oper12 ated so that the water surface elevation at 

13 any given location and time that would 

14 have occurred in the absence of the hydro15 electric project is maintained, subject to 

16 any license requirements imposed under 

17 applicable law that change the water sur18 face elevation for the purpose of improving 

19 environmental quality of the affected wa20 terway. 

21 The Secretary, in consultation with the Federal 

22 Energy Regulatory Commission, shall certify if 

23 a hydroelectric project licensed at a nonhydro24 electric dam meets the criteria in clause (iii). 

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1 ards under which the Federal Energy Regu2 latory Commission issues licenses for and regu3 lates hydropower projects under part I of the 

4 Federal Power Act.’’. 

5 (g) EFFECTIVE DATE.— 

6 (1) IN GENERAL.—Except as otherwise pro7 vided in this subsection, the amendments made by 

8 this section shall apply to property originally placed 

9 in service after December 31, 2008. 

10 (2) REPEAL OF CREDIT PHASEOUT.—The 

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

12 to taxable years ending after December 31, 2008. 

13 (3) LIMITATION BASED ON INVESTMENT IN FA14 CILITY.—The amendment made by subsection (b)(2) 

15 shall apply to property originally placed in service 

16 after December 31, 2009. 

17 (4) TRASH FACILITY CLARIFICATION; SALES TO

18 RELATED REGULATED PUBLIC UTILITIES.—The 

19 amendments made by subsections (c) and (e) shall 

20 apply to electricity produced and sold after the date 

21 of the enactment of this Act. 

22 (5) EXPANSION OF BIOMASS FACILITIES.—The 

23 amendments made by subsection (d) shall apply to 

24 property placed in service after the date of the en25 actment of this Act. 


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1 SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRO2 DUCED FROM MARINE RENEWABLES. 

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

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

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

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

7 following new subparagraph: 

8 ‘‘(I) marine and hydrokinetic renewable en9 ergy.’’. 

10 (b) MARINE RENEWABLES.—Subsection (c) of sec11 tion 45 is amended by adding at the end the following 

12 new paragraph: 

13 ‘‘(10) MARINE AND HYDROKINETIC RENEW14 ABLE ENERGY.— 

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

16 hydrokinetic renewable energy’ means energy 

17 derived from— 

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

19 oceans, estuaries, and tidal areas, 

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

21 lakes, and streams, 

22 ‘‘(iii) free flowing water in an irriga23 tion system, canal, or other man-made 

24 channel, including projects that utilize non25 mechanical structures to accelerate the 


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1 flow of water for electric power production 

2 purposes, or 

3 ‘‘(iv) differentials in ocean tempera4 ture (ocean thermal energy conversion). 

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

6 include any energy which is derived from any 

7 source which utilizes a dam, diversionary struc8 ture (except as provided in subparagraph 

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

10 production purposes.’’. 

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

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

13 new paragraph: 

14 ‘‘(11) MARINE AND HYDROKINETIC RENEW15 ABLE ENERGY FACILITIES.—In the case of a facility 

16 producing electricity from marine and hydrokinetic 

17 renewable energy, the term ‘qualified facility’ means 

18 any facility owned by the taxpayer— 

19 ‘‘(A) which has a nameplate capacity rat20 ing of at least 150 kilowatts, and 

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

22 on or after the date of the enactment of this 

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


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

2 45(b)(4) is amended by striking ‘‘or (9)’’ and inserting 

3 ‘‘(9), or (11)’’. 

4 (e) COORDINATION WITH SMALL IRRIGATION

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

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

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

8 (11)’’. 

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

10 this section shall apply to electricity produced and sold 

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

12 years ending after such date. 

13 SEC. 103. ENERGY CREDIT. 

14 (a) EXTENSION OF CREDIT.— 

15 (1) SOLAR ENERGY PROPERTY.—Paragraphs 

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

17 amended by striking ‘‘January 1, 2009’’ and insert18 ing ‘‘January 1, 2015’’. 

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

20 of section 48(c)(1) is amended by striking ‘‘Decem21 ber 31, 2008’’ and inserting ‘‘December 31, 2014’’. 

22 (3) MICROTURBINE PROPERTY.—Subparagraph 

23 (E) of section 48(c)(2) is amended by striking ‘‘De24 cember 31, 2008’’ and inserting ‘‘December 31, 

25 2014’’. 


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1 (b) ALLOWANCE OF ENERGY CREDIT AGAINST AL2 TERNATIVE MINIMUM TAX.—Subparagraph (B) of section 

3 38(c)(4) is amended by striking ‘‘and’’ at the end of clause 

4 (iii), by redesignating clause (iv) as clause (v), and by in5 serting after clause (iii) the following new clause: 

6 ‘‘(iv) the credit determined under sec7 tion 46 to the extent that such credit is at8 tributable to the energy credit determined 

9 under section 48, and’’. 

10 (c) ENERGY CREDIT FOR COMBINED HEAT AND

11 POWER SYSTEM PROPERTY.— 

12 (1) IN GENERAL.—Section 48(a)(3)(A) (defin13 ing energy property) is amended by striking ‘‘or’’ at 

14 the end of clause (iii), by inserting ‘‘or’’ at the end 

15 of clause (iv), and by adding at the end the following 

16 new clause: 

17 ‘‘(v) combined heat and power system 

18 property,’’. 

19 (2) COMBINED HEAT AND POWER SYSTEM

20 PROPERTY.—Section 48 is amended by adding at 

21 the end the following new subsection: 

22 ‘‘(d) COMBINED HEAT AND POWER SYSTEM PROP23 ERTY.—For purposes of subsection (a)(3)(A)(v)— 

24 ‘‘(1) COMBINED HEAT AND POWER SYSTEM

25 PROPERTY.—The term ‘combined heat and power 


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1 system property’ means property comprising a sys2 tem— 

3 ‘‘(A) which uses the same energy source 

4 for the simultaneous or sequential generation of 

5 electrical power, mechanical shaft power, or 

6 both, in combination with the generation of 

7 steam or other forms of useful thermal energy 

8 (including heating and cooling applications), 

9 ‘‘(B) which produces— 

10 ‘‘(i) at least 20 percent of its total 

11 useful energy in the form of thermal en12 ergy which is not used to produce electrical 

13 or mechanical power (or combination 

14 thereof), and 

15 ‘‘(ii) at least 20 percent of its total 

16 useful energy in the form of electrical or 

17 mechanical power (or combination thereof), 

18 ‘‘(C) the energy efficiency percentage of 

19 which exceeds 60 percent, and 

20 ‘‘(D) which is placed in service before Jan21 uary 1, 2015. 

22 ‘‘(2) LIMITATION.— 

23 ‘‘(A) IN GENERAL.—In the case of com24 bined heat and power system property with an 

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1 pacity placed in service during the taxable year, 

2 the credit under subsection (a)(1) (determined 

3 without regard to this paragraph) for such year 

4 shall be equal to the amount which bears the 

5 same ratio to such credit as the applicable ca6 pacity bears to the capacity of such property. 

7 ‘‘(B) APPLICABLE CAPACITY.—For pur8 poses of subparagraph (A), the term ‘applicable 

9 capacity’ means 15 megawatts or a mechanical 

10 energy capacity of more than 20,000 horse11 power or an equivalent combination of electrical 

12 and mechanical energy capacities. 

13 ‘‘(C) MAXIMUM CAPACITY.—The term 

14 ‘combined heat and power system property’ 

15 shall not include any property comprising a sys16 tem if such system has a capacity in excess of 

17 50 megawatts or a mechanical energy capacity 

18 in excess of 67,000 horsepower or an equivalent 

19 combination of electrical and mechanical energy 

20 capacities. 

21 ‘‘(3) SPECIAL RULES.— 

22 ‘‘(A) ENERGY EFFICIENCY PERCENT23 AGE.—For purposes of this subsection, the en24 ergy efficiency percentage of a system is the 

25 fraction— 


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1 ‘‘(i) the numerator of which is the 

2 total useful electrical, thermal, and me3 chanical power produced by the system at 

4 normal operating rates, and expected to be 

5 consumed in its normal application, and 

6 ‘‘(ii) the denominator of which is the 

7 lower heating value of the fuel sources for 

8 the system. 

9 ‘‘(B) DETERMINATIONS MADE ON BTU

10 BASIS.—The energy efficiency percentage and 

11 the percentages under paragraph (1)(B) shall 

12 be determined on a Btu basis. 

13 ‘‘(C) INPUT AND OUTPUT PROPERTY NOT

14 INCLUDED.—The term ‘combined heat and 

15 power system property’ does not include prop16 erty used to transport the energy source to the 

17 facility or to distribute energy produced by the 

18 facility. 

19 ‘‘(4) SYSTEMS USING BIOMASS.—If a system is 

20 designed to use biomass (within the meaning of 

21 paragraphs (2) and (3) of section 45(c) without re22 gard to the last sentence of paragraph (3)(A)) for at 

23 least 90 percent of the energy source— 

24 ‘‘(A) paragraph (1)(C) shall not apply, but 


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1 ‘‘(B) the amount of credit determined 

2 under subsection (a) with respect to such sys3 tem shall not exceed the amount which bears 

4 the same ratio to such amount of credit (deter5 mined without regard to this paragraph) as the 

6 energy efficiency percentage of such system 

7 bears to 60 percent.’’. 

8 (d) INCREASE OF CREDIT LIMITATION FOR FUEL

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

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

11 (e) PUBLIC UTILITY PROPERTY TAKEN INTO AC12 COUNT.— 

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

14 48(a) is amended by striking the second sentence 

15 thereof. 

16 (2) CONFORMING AMENDMENTS.— 

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

18 amended by striking subparagraph (D) and re19 designating subparagraph (E) as subparagraph 

20 (D). 

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

22 amended by striking subparagraph (D) and re23 designating subparagraph (E) as subparagraph 

24 (D). 

25 (f) EFFECTIVE DATE.— 


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

3 this section shall take effect on the date of the en4 actment of this Act. 

5 (2) ALLOWANCE AGAINST ALTERNATIVE MIN6 IMUM TAX.—The amendments made by subsection 

7 (b) shall apply to credits determined under section 

8 46 of the Internal Revenue Code of 1986 in taxable 

9 years beginning after the date of the enactment of 

10 this Act and to carrybacks of such credits. 

11 (3) COMBINED HEAT AND POWER AND FUEL

12 CELL PROPERTY.—The amendments made by sub13 sections (c) and (d) shall apply to periods after the 

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

15 ending after such date, under rules similar to the 

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

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

18 the enactment of the Revenue Reconciliation Act of 

19 1990). 

20 (4) PUBLIC UTILITY PROPERTY.—The amend21 ments made by subsection (e) shall apply to periods 

22 after February 13, 2008, in taxable years ending 

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

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


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1 (as in effect on the day before the date of the enact2 ment of the Revenue Reconciliation Act of 1990). 

3 SEC. 104. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT 

4 PROPERTY. 

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

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

7 31, 2014’’. 

8 (b) MAXIMUM CREDIT FOR SOLAR ELECTRIC PROP9 ERTY.— 

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

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

12 ‘‘$4,000’’. 

13 (2) CONFORMING AMENDMENT.—Section 

14 25D(e)(4)(A)(i) is amended by striking ‘‘$6,667’’ 

15 and inserting ‘‘$13,333’’. 

16 (c) CREDIT FOR RESIDENTIAL WIND PROPERTY.— 

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

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

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

20 inserting ‘‘, and’’, and by adding at the end the fol21 lowing new paragraph: 

22 ‘‘(4) 30 percent of the qualified small wind en23 ergy property expenditures made by the taxpayer 

24 during such year.’’. 


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1 (2) LIMITATION.—Section 25D(b)(1) is amend2 ed by striking ‘‘and’’ at the end of subparagraph 

3 (B), by striking the period at the end of subpara4 graph (C) and inserting ‘‘, and’’, and by adding at 

5 the end the following new subparagraph: 

6 ‘‘(D) $500 with respect to each half kilo7 watt of capacity (not to exceed $4,000) of wind 

8 turbines for which qualified small wind energy 

9 property expenditures are made.’’. 

10 (3) QUALIFIED SMALL WIND ENERGY PROP11 ERTY EXPENDITURES.— 

12 (A) IN GENERAL.—Section 25D(d) is 

13 amended by adding at the end the following 

14 new paragraph: 

15 ‘‘(4) QUALIFIED SMALL WIND ENERGY PROP16 ERTY EXPENDITURE.—The term ‘qualified small 

17 wind energy property expenditure’ means an expend18 iture for property which uses a wind turbine to gen19 erate electricity for use in connection with a dwelling 

20 unit located in the United States and used as a resi21 dence by the taxpayer.’’. 

22 (B) NO DOUBLE BENEFIT.—Section 

23 45(d)(1) is amended by adding at the end the 

24 following new sentence: ‘‘Such term shall not 

25 include any facility with respect to which any 


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1 qualified small wind energy property expendi2 ture (as defined in subsection (d)(4) of section 

3 25D) is taken into account in determining the 

4 credit under such section.’’. 

5 (4) MAXIMUM EXPENDITURES IN CASE OF

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

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

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

9 inserting ‘‘, and’’, and by adding at the end the fol10 lowing new clause: 

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

12 kilowatt of capacity (not to exceed 

13 $13,333) of wind turbines for which quali14 fied small wind energy property expendi15 tures are made.’’. 

16 (d) CREDIT FOR GEOTHERMAL HEAT PUMP SYS17 TEMS.— 

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

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

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

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

22 by adding at the end the following new paragraph: 

23 ‘‘(5) 30 percent of the qualified geothermal 

24 heat pump property expenditures made by the tax25 payer during such year.’’. 


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

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

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

4 the period at the end of subparagraph (D) and in5 serting ‘‘, and’’, and by adding at the end the fol6 lowing new subparagraph: 

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

8 geothermal heat pump property expenditures.’’. 

9 (3) QUALIFIED GEOTHERMAL HEAT PUMP

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

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

12 the end the following new paragraph: 

13 ‘‘(5) QUALIFIED GEOTHERMAL HEAT PUMP

14 PROPERTY EXPENDITURE.— 

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

16 geothermal heat pump property expenditure’ 

17 means an expenditure for qualified geothermal 

18 heat pump property installed on or in connec19 tion with a dwelling unit located in the United 

20 States and used as a residence by the taxpayer. 

21 ‘‘(B) QUALIFIED GEOTHERMAL HEAT

22 PUMP PROPERTY.—The term ‘qualified geo23 thermal heat pump property’ means any equip24 ment which— 


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

2 as a thermal energy source to heat the 

3 dwelling unit referred to in subparagraph 

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

5 such dwelling unit, and 

6 ‘‘(ii) meets the requirements of the 

7 Energy Star program which are in effect 

8 at the time that the expenditure for such 

9 equipment is made.’’. 

10 (4) MAXIMUM EXPENDITURES IN CASE OF

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

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

13 ‘‘and’’ at the end of clause (iii), by striking the pe14 riod at the end of clause (iv) and inserting ‘‘, and’’, 

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

16 ‘‘(v) $6,667 in the case of any quali17 fied geothermal heat pump property ex18 penditures.’’. 

19 (e) CREDIT ALLOWED AGAINST ALTERNATIVE MIN20 IMUM TAX.— 

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

22 25D is amended to read as follows: 

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

24 CARRYFORWARD OF UNUSED CREDIT.— 


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1 ‘‘(1) LIMITATION BASED ON AMOUNT OF

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

3 26(a)(2) does not apply, the credit allowed under 

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

5 the excess of— 

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

7 (as defined in section 26(b)) plus the tax im8 posed by section 55, over 

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

10 under this subpart (other than this section) and 

11 section 27 for the taxable year. 

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

13 ‘‘(A) RULE FOR YEARS IN WHICH ALL

14 PERSONAL CREDITS ALLOWED AGAINST REG15 ULAR AND ALTERNATIVE MINIMUM TAX.—In 

16 the case of a taxable year to which section 

17 26(a)(2) applies, if the credit allowable under 

18 subsection (a) exceeds the limitation imposed by 

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

20 by the sum of the credits allowable under this 

21 subpart (other than this section), such excess 

22 shall be carried to the succeeding taxable year 

23 and added to the credit allowable under sub24 section (a) for such succeeding taxable year. 


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1 ‘‘(B) RULE FOR OTHER YEARS.—In the 

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

3 does not apply, if the credit allowable under 

4 subsection (a) exceeds the limitation imposed by 

5 paragraph (1) for such taxable year, such ex6 cess shall be carried to the succeeding taxable 

7 year and added to the credit allowable under 

8 subsection (a) for such succeeding taxable 

9 year.’’. 

10 (2) CONFORMING AMENDMENTS.— 

11 (A) Section 23(b)(4)(B) is amended by in12 serting ‘‘and section 25D’’ after ‘‘this section’’. 

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

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

15 25D’’. 

16 (C) Section 25B(g)(2) is amended by strik17 ing ‘‘section 23’’ and inserting ‘‘sections 23 and 

18 25D’’. 

19 (D) Section 26(a)(1) is amended by strik20 ing ‘‘and 25B’’ and inserting ‘‘25B, and 25D’’. 

21 (f) EFFECTIVE DATE.— 

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

23 this section shall apply to taxable years beginning 

24 after December 31, 2007. 


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1 (2) APPLICATION OF EGTRRA SUNSET.—The 

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

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

4 Economic Growth and Tax Relief Reconciliation Act 

5 of 2001 in the same manner as the provisions of 

6 such Act to which such amendments relate. 

7 SEC. 105. SPECIAL RULE TO IMPLEMENT FERC AND STATE 

8 ELECTRIC RESTRUCTURING POLICY. 

9 (a) EXTENSION FOR QUALIFIED ELECTRIC UTILI10 TIES.— 

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

12 451(i) is amended by inserting ‘‘(before January 1, 

13 2010, in the case of a qualified electric utility)’’ 

14 after ‘‘January 1, 2008’’. 

15 (2) QUALIFIED ELECTRIC UTILITY.—Subsection 

16 (i) of section 451 is amended by redesignating para17 graphs (6) through (10) as paragraphs (7) through 

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

19 (5) the following new paragraph: 

20 ‘‘(6) QUALIFIED ELECTRIC UTILITY.—For pur21 poses of this subsection, the term ‘qualified electric 

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

23 qualifying electric transmission transaction, is 

24 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. 106. NEW CLEAN RENEWABLE ENERGY BONDS. 

13 (a) IN GENERAL.—Subpart I of part IV of sub14 chapter A of chapter 1 is amended by adding at the end 

15 the following new section: 

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

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

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

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

20 if— 

21 ‘‘(1) 100 percent of the available project pro22 ceeds of such issue are to be used for capital expend23 itures incurred by governmental bodies, public power 

24 providers, or cooperative electric companies for one 

25 or more qualified renewable energy facilities, 


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

2 and 

3 ‘‘(3) the issuer designates such bond for pur4 poses of this section. 

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

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

7 clean renewable energy bond shall be 70 percent of the 

8 amount so determined without regard to this subsection. 

9 ‘‘(c) LIMITATION ON AMOUNT OF BONDS DES10 IGNATED.— 

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

12 face amount of bonds which may be designated 

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

14 the limitation amount allocated under this sub15 section to such issuer. 

16 ‘‘(2) NATIONAL LIMITATION ON AMOUNT OF

17 BONDS DESIGNATED.—There is a national new clean 

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

19 which shall be allocated by the Secretary as provided 

20 in paragraph (3), except that— 

‘‘(A) not more than 331 21 ⁄3 percent thereof 

22 may be allocated to qualified projects of public 

23 power providers, 


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‘‘(B) not more than 331 1 ⁄3 percent thereof 

2 may be allocated to qualified projects of govern3 mental bodies, and 

‘‘(C) not more than 331 4 ⁄3 percent thereof 

5 may be allocated to qualified projects of cooper6 ative electric companies. 

7 ‘‘(3) METHOD OF ALLOCATION.— 

8 ‘‘(A) ALLOCATION AMONG PUBLIC POWER

9 PROVIDERS.—After the Secretary determines 

10 the qualified projects of public power providers 

11 which are appropriate for receiving an alloca12 tion of the national new clean renewable energy 

13 bond limitation, the Secretary shall, to the max14 imum extent practicable, make allocations 

15 among such projects in such manner that the 

16 amount allocated to each such project bears the 

17 same ratio to the cost of such project as the 

18 limitation under paragraph (2)(A) bears to the 

19 cost of all such projects. 

20 ‘‘(B) ALLOCATION AMONG GOVERNMENTAL

21 BODIES AND COOPERATIVE ELECTRIC COMPA22 NIES.—The Secretary shall make allocations of 

23 the amount of the national new clean renewable 

24 energy bond limitation described in paragraphs 

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


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1 governmental bodies and cooperative electric 

2 companies, respectively, in such manner as the 

3 Secretary determines appropriate. 

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

5 ‘‘(1) QUALIFIED RENEWABLE ENERGY FACIL6 ITY.—The term ‘qualified renewable energy facility’ 

7 means a qualified facility (as determined under sec8 tion 45(d) without regard to paragraphs (8) and 

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

10 owned by a public power provider, a governmental 

11 body, or a cooperative electric company. 

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

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

14 service obligation, as such terms are defined in sec15 tion 217 of the Federal Power Act (as in effect on 

16 the date of the enactment of this paragraph). 

17 ‘‘(3) GOVERNMENTAL BODY.—The term ‘gov18 ernmental body’ means any State or Indian tribal 

19 government, or any political subdivision thereof. 

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

21 term ‘cooperative electric company’ means a mutual 

22 or cooperative electric company described in section 

23 501(c)(12) or section 1381(a)(2)(C). 

24 ‘‘(5) CLEAN RENEWABLE ENERGY BOND LEND25 ER.—The term ‘clean renewable energy bond lender’ 


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1 means a lender which is a cooperative which is 

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

3 cooperative electric companies and is in existence on 

4 February 1, 2002, and shall include any affiliated 

5 entity which is controlled by such lender. 

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

7 issuer’ means a public power provider, a cooperative 

8 electric company, a governmental body, a clean re9 newable energy bond lender, or a not-for-profit elec10 tric utility which has received a loan or loan guar11 antee under the Rural Electrification Act.’’. 

12 (b) CONFORMING AMENDMENTS.— 

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

14 to read as follows: 

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

16 ‘qualified tax credit bond’ means— 

17 ‘‘(A) a qualified forestry conservation 

18 bond, or 

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

20 which is part of an issue that meets requirements of 

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

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

23 amended to read as follows: 


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

2 of this paragraph, the term ‘qualified purpose’ 

3 means— 

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

5 conservation bond, a purpose specified in 

6 section 54B(e), and 

7 ‘‘(ii) in the case of a new clean renew8 able energy bond, a purpose specified in 

9 section 54C(a)(1).’’. 

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

11 IV of subchapter A of chapter 1 is amended by add12 ing at the end the following new item: 

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

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

14 this section shall apply to obligations issued after the date 

15 of the enactment of this Act. 

16 PART II—CARBON MITIGATION PROVISIONS 

17 SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED 

18 COAL PROJECT INVESTMENT CREDIT. 

19 (a) MODIFICATION OF CREDIT AMOUNT.—Section 

20 48A(a) is amended by striking ‘‘and’’ at the end of para21 graph (1), by striking the period at the end of paragraph 

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

23 following new paragraph: 


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1 ‘‘(3) 30 percent of the qualified investment for 

2 such taxable year in the case of projects described 

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

4 (b) EXPANSION OF AGGREGATE CREDITS.—Section 

5 48A(d)(3)(A) is amended by striking ‘‘$1,300,000,000’’ 

6 and inserting ‘‘$2,550,000,000’’. 

7 (c) AUTHORIZATION OF ADDITIONAL PROJECTS.— 

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

9 48A(d)(3) is amended to read as follows: 

10 ‘‘(B) PARTICULAR PROJECTS.—Of the dol11 lar amount in subparagraph (A), the Secretary 

12 is authorized to certify— 

13 ‘‘(i) $800,000,000 for integrated gas14 ification combined cycle projects the appli15 cation for which is submitted during the 

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

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

18 use other advanced coal-based generation 

19 technologies the application for which is 

20 submitted during the period described in 

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

22 ‘‘(iii) $1,250,000,000 for advanced 

23 coal-based generation technology projects 

24 the application for which is submitted durVerDate Aug 31 2005 22:16 Jun 13, 2008 Jkt 069200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\S3125.IS S3125

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1 ing the period described in paragraph 

2 (2)(A)(ii).’’. 

3 (2) APPLICATION PERIOD FOR ADDITIONAL

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

5 is amended to read as follows: 

6 ‘‘(A) APPLICATION PERIOD.—Each appli7 cant for certification under this paragraph shall 

8 submit an application meeting the requirements 

9 of subparagraph (B). An applicant may only 

10 submit an application— 

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

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

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

14 beginning on the date the Secretary estab15 lishes the program under paragraph (1), 

16 and 

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

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

19 during the 3-year period beginning at the 

20 earlier of the termination of the period de21 scribed in clause (i) or the date prescribed 

22 by the Secretary.’’. 

23 (3) CAPTURE AND SEQUESTRATION OF CARBON

24 DIOXIDE EMISSIONS REQUIREMENT.— 


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

2 amended by striking ‘‘and’’ at the end of sub3 paragraph (E), by striking the period at the 

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

5 and by adding at the end the following new sub6 paragraph: 

7 ‘‘(G) in the case of any project the applica8 tion for which is submitted during the period 

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

10 includes equipment which separates and seques11 ters at least 65 percent (70 percent in the case 

12 of an application for reallocated credits under 

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

14 dioxide emissions.’’. 

15 (B) HIGHEST PRIORITY FOR PROJECTS

16 WHICH SEQUESTER CARBON DIOXIDE EMIS17 SIONS.—Section 48A(e)(3) is amended by strik18 ing ‘‘and’’ at the end of subparagraph (A)(iii), 

19 by striking the period at the end of subpara20 graph (B)(iii) and inserting ‘‘, and’’, and by 

21 adding at the end the following new subpara22 graph: 

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

24 the greatest separation and sequestration per25 centage of total carbon dioxide emissions.’’. 


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1 (C) RECAPTURE OF CREDIT FOR FAILURE

2 TO SEQUESTER.—Section 48A is amended by 

3 adding at the end the following new subsection: 

4 ‘‘(i) RECAPTURE OF CREDIT FOR FAILURE TO SE5 QUESTER.—The Secretary shall provide for recapturing 

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

7 with respect to any project which fails to attain or main8 tain the separation and sequestration requirements of sub9 section (e)(1)(G).’’. 

10 (4) ADDITIONAL PRIORITY FOR RESEARCH

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

12 by paragraph (3)(B), is amended— 

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

14 (ii), 

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

16 (iv), and 

17 (C) by inserting after clause (ii) the fol18 lowing new clause: 

19 ‘‘(iii) applicant participants who have 

20 a research partnership with an eligible edu21 cational institution (as defined in section 

22 529(e)(5)), and’’. 

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

24 is amended by striking ‘‘INTEGRATED GASIFICATION


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1 COMBINED CYCLE’’ in the heading and inserting 

2 ‘‘CERTAIN’’. 

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

4 is amended by adding at the end the following new para5 graph: 

6 ‘‘(5) DISCLOSURE OF ALLOCATIONS.—The Sec7 retary shall, upon making a certification under this 

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

9 identity of the applicant and the amount of the cred10 it certified with respect to such applicant.’’. 

11 (e) EFFECTIVE DATES.— 

12 (1) IN GENERAL.—Except as otherwise pro13 vided in this subsection, the amendments made by 

14 this section shall apply to credits the application for 

15 which is submitted during the period described in 

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

17 Code of 1986 and which are allocated or reallocated 

18 after the date of the enactment of this Act. 

19 (2) DISCLOSURE OF ALLOCATIONS.—The 

20 amendment made by subsection (d) shall apply to 

21 certifications made after the date of the enactment 

22 of this Act. 

23 (3) CLERICAL AMENDMENT.—The amendment 

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1 cluded in the amendment made by section 1307(b) 

2 of the Energy Tax Incentives Act of 2005. 

3 SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFI4 CATION INVESTMENT CREDIT. 

5 (a) MODIFICATION OF CREDIT AMOUNT.—Section 

6 48B(a) is amended by inserting ‘‘(30 percent in the case 

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

8 percent’’. 

9 (b) EXPANSION OF AGGREGATE CREDITS.—Section 

10 48B(d)(1) is amended by striking ‘‘shall not exceed 

11 $350,000,000’’ and all that follows and inserting ‘‘shall 

12 not exceed— 

13 ‘‘(A) $350,000,000, plus 

14 ‘‘(B) $250,000,000 for qualifying gasifi15 cation projects that include equipment which 

16 separates and sequesters at least 75 percent of 

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

18 (c) RECAPTURE OF CREDIT FOR FAILURE TO SE19 QUESTER.—Section 48B is amended by adding at the end 

20 the following new subsection: 

21 ‘‘(f) RECAPTURE OF CREDIT FOR FAILURE TO SE22 QUESTER.—The Secretary shall provide for recapturing 

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

24 with respect to any project which fails to attain or mainVerDate Aug 31 2005 22:16 Jun 13, 2008 Jkt 069200 PO 00000 Frm 00045 Fmt 6652 Sfmt 6201 E:\BILLS\S3125.IS S3125

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1 tain the separation and sequestration requirements for 

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

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

4 amended by adding at the end the following new para5 graph: 

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

7 which qualifying gasification projects to certify 

8 under this section, the Secretary shall— 

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

10 the greatest separation and sequestration per11 centage of total carbon dioxide emissions, and 

12 ‘‘(B) give high priority to applicant partici13 pants who have a research partnership with an 

14 eligible educational institution (as defined in 

15 section 529(e)(5)).’’. 

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

17 this section shall apply to credits described in section 

18 48B(d)(1)(B) of the Internal Revenue Code of 1986 which 

19 are allocated or reallocated after the date of the enactment 

20 of this Act. 

21 SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX. 

22 Paragraph (2) of section 4121(e) is amended— 

23 (1) by striking ‘‘January 1, 2014’’ in subpara24 graph (A) and inserting ‘‘December 31, 2018’’, and 


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1 (2) by striking ‘‘January 1 after 1981’’ in sub2 paragraph (B) and inserting ‘‘December 31 after 

3 2007’’. 

4 SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EX5 CISE TAX TO CERTAIN COAL PRODUCERS 

6 AND EXPORTERS. 

7 (a) REFUND.— 

8 (1) COAL PRODUCERS.— 

9 (A) IN GENERAL.—Notwithstanding sub10 sections (a)(1) and (c) of section 6416 and sec11 tion 6511 of the Internal Revenue Code of 

12 1986, if— 

13 (i) a coal producer establishes that 

14 such coal producer, or a party related to 

15 such coal producer, exported coal produced 

16 by such coal producer to a foreign country 

17 or shipped coal produced by such coal pro18 ducer to a possession of the United States, 

19 or caused such coal to be exported or 

20 shipped, the export or shipment of which 

21 was other than through an exporter who 

22 meets the requirements of paragraph (2), 

23 (ii) such coal producer filed an excise 

24 tax return on or after October 1, 1990, 


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1 and on or before the date of the enactment 

2 of this Act, and 

3 (iii) such coal producer files a claim 

4 for refund with the Secretary not later 

5 than the close of the 30-day period begin6 ning on the date of the enactment of this 

7 Act, 

8 then the Secretary shall pay to such coal pro9 ducer an amount equal to the tax paid under 

10 section 4121 of such Code on such coal ex11 ported or shipped by the coal producer or a 

12 party related to such coal producer, or caused 

13 by the coal producer or a party related to such 

14 coal producer to be exported or shipped. 

15 (B) SPECIAL RULES FOR CERTAIN TAX16 PAYERS.—For purposes of this section— 

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

18 or a party related to a coal producer has 

19 received a judgment described in clause 

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

21 have established the export of coal to a for22 eign country or shipment of coal to a pos23 session of the United States under sub24 paragraph (A)(i). 


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1 (ii) AMOUNT OF PAYMENT.—If a tax2 payer described in clause (i) is entitled to 

3 a payment under subparagraph (A), the 

4 amount of such payment shall be reduced 

5 by any amount paid pursuant to the judg6 ment described in clause (iii). 

7 (iii) JUDGMENT DESCRIBED.—A judg8 ment is described in this subparagraph if 

9 such judgment— 

10 (I) is made by a court of com11 petent jurisdiction within the United 

12 States, 

13 (II) relates to the constitu14 tionality of any tax paid on exported 

15 coal under section 4121 of the Inter16 nal Revenue Code of 1986, and 

17 (III) is in favor of the coal pro18 ducer or the party related to the coal 

19 producer. 

20 (2) EXPORTERS.—Notwithstanding subsections 

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

22 the Internal Revenue Code of 1986, and a judgment 

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

24 if— 


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1 (A) an exporter establishes that such ex2 porter exported coal to a foreign country or 

3 shipped coal to a possession of the United 

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

5 shipped, 

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

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

8 date of the enactment of this Act, and 

9 (C) such exporter files a claim for refund 

10 with the Secretary not later than the close of 

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

12 enactment of this Act, 

13 then the Secretary shall pay to such exporter an 

14 amount equal to $0.825 per ton of such coal ex15 ported by the exporter or caused to be exported or 

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

17 exporter. 

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

19 with respect to exported coal if a settlement with the Fed20 eral Government has been made with and accepted by, the 

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

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

23 is filed under this section with respect to such exported 

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

25 with the Federal Government’’ shall not include any settleVerDate Aug 31 2005 22:16 Jun 13, 2008 Jkt 069200 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 E:\BILLS\S3125.IS S3125

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1 ment or stipulation entered into as of the date of the en2 actment of this Act, the terms of which contemplate a 

3 judgment concerning which any party has reserved the 

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

5 (c) SUBSEQUENT REFUND PROHIBITED.—No refund 

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

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

8 has been paid to any person. 

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

10 (1) COAL PRODUCER.—The term ‘‘coal pro11 ducer’’ means the person in whom is vested owner12 ship of the coal immediately after the coal is severed 

13 from the ground, without regard to the existence of 

14 any contractual arrangement for the sale or other 

15 disposition of the coal or the payment of any royal16 ties between the producer and third parties. The 

17 term includes any person who extracts coal from 

18 coal waste refuse piles or from the silt waste product 

19 which results from the wet washing (or similar proc20 essing) of coal. 

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

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

23 have a contract, fee arrangement, or any other 

24 agreement with a producer or seller of such coal to 


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

2 of the producer or seller of such coal and— 

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

4 declaration or other documentation as the ex5 porter of record, or 

6 (B) actually exported such coal to a for7 eign country or shipped such coal to a posses8 sion of the United States, or caused such coal 

9 to be so exported or shipped. 

10 (3) RELATED PARTY.—The term ‘‘a party re11 lated to such coal producer’’ means a person who— 

12 (A) is related to such coal producer 

13 through any degree of common management, 

14 stock ownership, or voting control, 

15 (B) is related (within the meaning of sec16 tion 144(a)(3) of the Internal Revenue Code of 

17 1986) to such coal producer, or 

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

19 any other agreement with such coal producer to 

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

21 coal producer. 

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

23 the Secretary of Treasury or the Secretary’s des24 ignee. 


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

2 for refund filed pursuant to this section, the Secretary 

3 shall determine whether the requirements of this section 

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

5 If the Secretary determines that the requirements of this 

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

7 later than 180 days after the Secretary makes such deter8 mination. 

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

10 section shall be paid by the Secretary with interest from 

11 the date of overpayment determined by using the overpay12 ment rate and method under section 6621 of the Internal 

13 Revenue Code of 1986. 

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

15 under subsection (a) with respect to any coal shall not ex16 ceed— 

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

18 the amount of tax paid under section 4121 of the 

19 Internal Revenue Code of 1986 with respect to such 

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

21 coal producer, and 

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

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

24 coal exported by the exporter or caused to be ex25 ported by the exporter. 


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

2 only to claims on coal exported or shipped on or after Oc3 tober 1, 1990, through the date of the enactment of this 

4 Act. 

5 (i) STANDING NOT CONFERRED.— 

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

7 this section shall not confer standing upon an ex8 porter to commence, or intervene in, any judicial or 

9 administrative proceeding concerning a claim for re10 fund by a coal producer of any Federal or State tax, 

11 fee, or royalty paid by the coal producer. 

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

13 producers, this section shall not confer standing 

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

15 any judicial or administrative proceeding concerning 

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

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

18 alleged to have been passed on to an exporter. 

19 SEC. 115. CARBON AUDIT OF THE TAX CODE. 

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

21 enter into an agreement with the National Academy of 

22 Sciences to undertake a comprehensive review of the Inter23 nal Revenue Code of 1986 to identify the types of and 

24 specific tax provisions that have the largest effects on carVerDate Aug 31 2005 22:16 Jun 13, 2008 Jkt 069200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 E:\BILLS\S3125.IS S3125

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1 bon and other greenhouse gas emissions and to estimate 

2 the magnitude of those effects. 

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

4 of enactment of this Act, the National Academy of 

5 Sciences shall submit to Congress a report containing the 

6 results of study authorized under this section. 

7 (c) AUTHORIZATION OF APPROPRIATIONS.—There is 

8 authorized to be appropriated to carry out this section 

9 $1,500,000 for the period of fiscal years 2008 and 2009. 

10 Subtitle B—Transportation and 

11 Domestic Fuel Security Provisions 

12 SEC. 121. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS 

13 DEPRECIATION FOR BIOMASS ETHANOL 

14 PLANT PROPERTY. 

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

16 is amended to read as follows: 

17 ‘‘(3) CELLULOSIC BIOFUEL.—The term ‘cel18 lulosic biofuel’ means any liquid fuel which is pro19 duced from any lignocellulosic or hemicellulosic mat20 ter that is available on a renewable or recurring 

21 basis.’’. 

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

23 section 168 is amended— 


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

2 each place it appears and inserting ‘‘cellulosic 

3 biofuel’’, 

4 (2) by striking ‘‘CELLULOSIC BIOMASS ETH5 ANOL’’ in the heading of such subsection and insert6 ing ‘‘CELLULOSIC BIOFUEL’’, and 

7 (3) by striking ‘‘CELLULOSIC BIOMASS ETH8 ANOL’’ in the heading of paragraph (2) thereof and 

9 inserting ‘‘CELLULOSIC BIOFUEL’’. 

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

11 this section shall apply to property placed in service after 

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

13 ending after such date. 

14 SEC. 122. CREDITS FOR BIODIESEL AND RENEWABLE DIE15 SEL. 

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

17 6427(e)(5)(B) are each amended by striking ‘‘December 

18 31, 2008’’ and inserting ‘‘December 31, 2009’’. 

19 (b) INCREASE IN RATE OF CREDIT.— 

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

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

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

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

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


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

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

3 (3) CONFORMING AMENDMENTS.— 

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

5 amended by striking paragraph (3) and by re6 designating paragraphs (4) and (5) as para7 graphs (3) and (4), respectively. 

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

9 amended to read as follows: 

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

11 apply with respect to renewable diesel.’’. 

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

13 40A(e) are each amended by striking ‘‘sub14 section (b)(5)(C)’’ and inserting ‘‘subsection 

15 (b)(4)(C)’’. 

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

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

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

19 (c) UNIFORM TREATMENT OF DIESEL PRODUCED

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

21 amended— 

22 (1) by striking ‘‘diesel fuel’’ and inserting ‘‘liq23 uid fuel’’, 

24 (2) by striking ‘‘using a thermal 

25 depolymerization process’’, and 


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

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

3 approved by the Secretary’’. 

4 (d) COPRODUCTION OF RENEWABLE DIESEL WITH

5 PETROLEUM FEEDSTOCK.— 

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

7 40A(f) (defining renewable diesel) is amended by 

8 adding at the end the following new sentence: ‘‘Such 

9 term does not include any fuel derived from coproc10 essing biomass with a feedstock which is not bio11 mass. For purposes of this paragraph, the term ‘bio12 mass’ has the meaning given such term by section 

13 45K(c)(3).’’. 

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

15 of section 40A(f) is amended by striking ‘‘(as de16 fined in section 45K(c)(3))’’. 

17 (e) ELIGIBILITY OF CERTAIN AVIATION FUEL.— 

18 Paragraph (3) of section 40A(f) (defining renewable die19 sel) is amended by adding at the end the following: ‘‘The 

20 term ‘renewable diesel’ also means fuel derived from bio21 mass which meets the requirements of a Department of 

22 Defense specification for military jet fuel or an American 

23 Society of Testing and Materials specification for aviation 

24 turbine fuel.’’. 

25 (f) EFFECTIVE DATE.— 


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

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

4 used, after December 31, 2008. 

5 (2) COPRODUCTION OF RENEWABLE DIESEL

6 WITH PETROLEUM FEEDSTOCK.—The amendments 

7 made by subsection (d) shall apply to fuel produced, 

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

9 this Act. 

10 SEC. 123. CLARIFICATION THAT CREDITS FOR FUEL ARE 

11 DESIGNED TO PROVIDE AN INCENTIVE FOR 

12 UNITED STATES PRODUCTION. 

13 (a) ALCOHOL FUELS CREDIT.—Paragraph (6) of sec14 tion 40(d) is amended to read as follows: 

15 ‘‘(6) LIMITATION TO ALCOHOL WITH CONNEC16 TION TO THE UNITED STATES.—No credit shall be 

17 determined under this section with respect to any al18 cohol which is produced outside the United States 

19 for use as a fuel outside the United States. For pur20 poses of this paragraph, the term ‘United States’ in21 cludes any possession of the United States.’’. 

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

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

24 new paragraph: 


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

3 determined under this section with respect to any 

4 biodiesel which is produced outside the United 

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

6 For purposes of this paragraph, the term ‘United 

7 States’ includes any possession of the United 

8 States.’’. 

9 (c) EXCISE TAX CREDIT.— 

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

11 adding at the end the following new subsection: 

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

13 THE UNITED STATES.— 

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

15 under this section with respect to any alcohol which 

16 is produced outside the United States for use as a 

17 fuel outside the United States. 

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

19 No credit shall be determined under this section 

20 with respect to any biodiesel or alternative fuel 

21 which is produced outside the United States for use 

22 as a fuel outside the United States. 

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

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


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

2 of section 6427 is amended by redesignating para3 graph (5) as paragraph (6) and by inserting after 

4 paragraph (4) the following new paragraph: 

5 ‘‘(5) LIMITATION TO FUELS WITH CONNECTION

6 TO THE UNITED STATES.—No amount shall be pay7 able under paragraph (1) or (2) with respect to any 

8 mixture or alternative fuel if credit is not allowed 

9 with respect to such mixture or alternative fuel by 

10 reason of section 6426(i).’’. 

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

12 this section shall apply to claims for credit or payment 

13 made on or after May 15, 2008. 

14 SEC. 124. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC 

15 DRIVE MOTOR VEHICLES. 

16 (a) IN GENERAL.—Subpart B of part IV of sub17 chapter A of chapter 1 is amended by adding at the end 

18 the following new section: 

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

20 MOTOR VEHICLES. 

21 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al22 lowed as a credit against the tax imposed by this chapter 

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

24 credit amounts determined under subsection (b) with re25 spect to each new qualified plug-in electric drive motor veVerDate Aug 31 2005 22:16 Jun 13, 2008 Jkt 069200 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 E:\BILLS\S3125.IS S3125

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1 hicle placed in service by the taxpayer during the taxable 

2 year. 

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

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

5 under this subsection with respect to any new quali6 fied plug-in electric drive motor vehicle is the sum 

7 of the amounts determined under paragraphs (2) 

8 and (3) with respect to such vehicle. 

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

10 under this paragraph is $3,000. 

11 ‘‘(3) BATTERY CAPACITY.—In the case of a ve12 hicle which draws propulsion energy from a battery 

13 with not less than 5 kilowatt hours of capacity, the 

14 amount determined under this paragraph is $200, 

15 plus $200 for each kilowatt hour of capacity in ex16 cess of 5 kilowatt hours. The amount determined 

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

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

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

20 GENERAL BUSINESS CREDIT.—So much of the credit 

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

22 taxable year (determined without regard to this sub23 section) that is attributable to property of a char24 acter subject to an allowance for depreciation shall 


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

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

3 ‘‘(2) PERSONAL CREDIT.— 

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

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

6 any taxable year (determined after application 

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

8 allowable under subpart A for such taxable 

9 year. 

10 ‘‘(B) LIMITATION BASED ON AMOUNT OF

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

12 section 26(a)(2) does not apply, the credit al13 lowed under subsection (a) for any taxable year 

14 (determined after application of paragraph (1)) 

15 shall not exceed the excess of— 

16 ‘‘(i) the sum of the regular tax liabil17 ity (as defined in section 26(b)) plus the 

18 tax imposed by section 55, over 

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

20 under subpart A (other than this section 

21 and sections 23 and 25D) and section 27 

22 for the taxable year. 

23 ‘‘(d) NEW QUALIFIED PLUG-IN ELECTRIC DRIVE

24 MOTOR VEHICLE.—For purposes of this section— 


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

2 plug-in electric drive motor vehicle’ means a motor 

3 vehicle (as defined in section 30(c)(2))— 

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

5 with the taxpayer, 

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

7 the taxpayer and not for resale, 

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

9 ‘‘(D) which has a gross vehicle weight rat10 ing of less than 14,000 pounds, 

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

12 conformity under the Clean Air Act and meets 

13 or exceeds the Bin 5 Tier II emission standard 

14 established in regulations prescribed by the Ad15 ministrator of the Environmental Protection 

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

17 Act for that make and model year vehicle, and 

18 ‘‘(F) which is propelled to a significant ex19 tent by an electric motor which draws electricity 

20 from a battery which— 

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

22 kilowatt hours, and 

23 ‘‘(ii) is capable of being recharged 

24 from an external source of electricity. 


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1 ‘‘(2) EXCEPTION.—The term ‘new qualified 

2 plug-in electric drive motor vehicle’ shall not include 

3 any vehicle which is not a passenger automobile or 

4 light truck if such vehicle has a gross vehicle weight 

5 rating of less than 8,500 pounds. 

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

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

8 the meanings given such terms in regulations pre9 scribed by the Administrator of the Environmental 

10 Protection Agency for purposes of the administra11 tion of title II of the Clean Air Act (42 U.S.C. 7521 

12 et seq.). 

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

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

15 electricity which the battery is capable of storing, ex16 pressed in kilowatt hours, as measured from a 100 

17 percent state of charge to a 0 percent state of 

18 charge. 

19 ‘‘(e) LIMITATION ON NUMBER OF NEW QUALIFIED

20 PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES ELIGIBLE

21 FOR CREDIT.— 

22 ‘‘(1) IN GENERAL.—In the case of a new quali23 fied plug-in electric drive motor vehicle sold during 

24 the phaseout period, only the applicable percentage 


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1 of the credit otherwise allowable under subsection 

2 (a) shall be allowed. 

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

4 subsection, the phaseout period is the period begin5 ning with the second calendar quarter following the 

6 calendar quarter which includes the first date on 

7 which the number of new qualified plug-in electric 

8 drive motor vehicles manufactured by the manufac9 turer of the vehicle referred to in paragraph (1) sold 

10 for use in the United States after the date of the en11 actment of this section, is at least 60,000. 

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

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

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

15 quarters of the phaseout period, 

16 ‘‘(B) 25 percent for the 3d and 4th cal17 endar quarters of the phaseout period, and 

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

19 thereafter. 

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

21 the rules of section 30B(f)(4) shall apply for pur22 poses of this subsection. 

23 ‘‘(f) SPECIAL RULES.— 

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

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1 section (a) shall be reduced by the amount of such 

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

3 ‘‘(2) RECAPTURE.—The Secretary shall, by reg4 ulations, provide for recapturing the benefit of any 

5 credit allowable under subsection (a) with respect to 

6 any property which ceases to be property eligible for 

7 such credit. 

8 ‘‘(3) PROPERTY USED OUTSIDE UNITED

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

10 allowed under subsection (a) with respect to any 

11 property referred to in section 50(b)(1) or with re12 spect to the portion of the cost of any property 

13 taken into account under section 179. 

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

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

16 vehicle if the taxpayer elects to not have this section 

17 apply to such vehicle. 

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

19 INTERACTION WITH AIR QUALITY AND MOTOR VEHI20 CLE SAFETY STANDARDS.—Rules similar to the rules 

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

22 apply for purposes of this section.’’. 

23 (b) COORDINATION WITH ALTERNATIVE MOTOR VE24 HICLE CREDIT.—Section 30B(d)(3) is amended by adding 

25 at the end the following new subparagraph: 


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

2 Any vehicle with respect to which a credit is al3 lowable under section 30D (determined without 

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

5 taken into account under this section.’’. 

6 (c) CREDIT MADE PART OF GENERAL BUSINESS

7 CREDIT.—Section 38(b) is amended— 

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

9 the end of any paragraph, 

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

11 the end of any paragraph, 

12 (3) by striking the period at the end of para13 graph (32) and inserting ‘‘, plus’’, and 

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

15 paragraph: 

16 ‘‘(33) the portion of the new qualified plug-in 

17 electric drive motor vehicle credit to which section 

18 30D(c)(1) applies.’’. 

19 (d) CONFORMING AMENDMENTS.— 

20 (1)(A) Section 24(b)(3)(B), as amended by sec21 tion 104, is amended by striking ‘‘and 25D’’ and in22 serting ‘‘25D, and 30D’’. 

23 (B) Section 25(e)(1)(C)(ii) is amended by in24 serting ‘‘30D,’’ after ‘‘25D,’’. 


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

2 104, is amended by striking ‘‘and 25D’’ and insert3 ing ‘‘, 25D, and 30D’’. 

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

5 104, is amended by striking ‘‘and 25D’’ and insert6 ing ‘‘25D, and 30D’’. 

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

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

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

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

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

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

13 paragraph: 

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

15 30D(f)(1).’’. 

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

17 ‘‘30D(f)(4),’’ after ‘‘30C(e)(5),’’. 

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

19 IV of subchapter A of chapter 1 is amended by add20 ing at the end the following new item: 

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

21 (e) TREATMENT OF ALTERNATIVE MOTOR VEHICLE

22 CREDIT AS A PERSONAL CREDIT.— 

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

24 30B(g) is amended to read as follows: 


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

2 under subsection (a) for any taxable year (after ap3 plication of paragraph (1)) shall be treated as a 

4 credit allowable under subpart A for such taxable 

5 year.’’. 

6 (2) CONFORMING AMENDMENTS.— 

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

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

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

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

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

12 (f) EFFECTIVE DATE.— 

13 (1) IN GENERAL.—Except as otherwise pro14 vided in this subsection, the amendments made by 

15 this section shall apply to taxable years beginning 

16 after December 31, 2008. 

17 (2) TREATMENT OF ALTERNATIVE MOTOR VE18 HICLE CREDIT AS PERSONAL CREDIT.—The amend19 ments made by subsection (e) shall apply to taxable 

20 years beginning after December 31, 2007. 

21 (g) APPLICATION OF EGTRRA SUNSET.—The 

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

23 to title IX of the Economic Growth and Tax Relief Rec24 onciliation Act of 2001 in the same manner as the provi25 sion of such Act to which such amendment relates. 


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1 SEC. 125. 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. 126. RESTRUCTURING OF NEW YORK LIBERTY ZONE 

2 TAX CREDITS. 

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

4 1 is amended by redesignating section 1400L as section 

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

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

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

9 credit against any taxes imposed for any payroll period 

10 by section 3402 for which such governmental unit is liable 

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

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

14 for the calendar year as is allocated by such governmental 

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

16 ‘‘(b) QUALIFYING PROJECT EXPENDITURE

17 AMOUNT.—For purposes of this section— 

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

19 project expenditure amount’ means, with respect to 

20 any calendar year, the sum of— 

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

23 York Liberty Zone governmental units and the 

24 Port Authority of New York and New Jersey 

25 for any portion of qualifying projects located 


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

2 and 

3 ‘‘(B) any such expenditures— 

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

5 calendar year which begins after the date 

6 of enactment of this section, and 

7 ‘‘(ii) not previously allocated under 

8 paragraph (3). 

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

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

15 qualifying project under this section jointly by the 

16 Governor of the State of New York and the Mayor 

17 of the City of New York, New York. 

18 ‘‘(3) GENERAL ALLOCATION.— 

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

20 State of New York and the Mayor of the City 

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

22 each New York Liberty Zone governmental unit 

23 the portion of the qualifying project expenditure 

24 amount which may be taken into account by 


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1 such governmental unit under subsection (a) for 

2 any calendar year in the credit period. 

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

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

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

7 ‘‘(C) ANNUAL LIMIT.—The aggregate 

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

10 period shall not exceed the sum of— 

11 ‘‘(i) $115,000,000 ($425,000,000 in 

12 the case of the last 2 years in the credit 

13 period), plus 

14 ‘‘(ii) the aggregate amount authorized 

15 to be allocated under this paragraph for all 

16 preceding calendar years in the credit pe17 riod which was not so allocated. 

18 ‘‘(D) UNALLOCATED AMOUNTS AT END OF

19 CREDIT PERIOD.—If, as of the close of the cred20 it period, the amount under subparagraph (B) 

21 exceeds the aggregate amount allocated under 

22 subparagraph (A) for all calendar years in the 

23 credit period, the Governor of the State of New 

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

25 New York, may jointly allocate to New York 


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1 Liberty Zone governmental units for any cal2 endar year in the 5-year period following the 

3 credit period an amount equal to— 

4 ‘‘(i) the lesser of— 

5 ‘‘(I) such excess, or 

6 ‘‘(II) the qualifying project ex7 penditure amount for such calendar 

8 year, reduced by 

9 ‘‘(ii) the aggregate amount allocated 

10 under this subparagraph for all preceding 

11 calendar years. 

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

13 Each New York Liberty Zone governmental unit 

14 which has been allocated a portion of the qualifying 

15 project expenditure amount under paragraph (3) for 

16 a calendar year may allocate such portion to payroll 

17 periods beginning in such calendar year as such gov18 ernmental unit determines appropriate. 

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

20 ‘‘(1) IN GENERAL.—Except as provided in para21 graph (2), if the amount allocated under subsection 

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

23 unit for any calendar year exceeds the aggregate 

24 taxes imposed by section 3402 for which such gov25 ernmental unit is liable under section 3403 for periVerDate Aug 31 2005 22:16 Jun 13, 2008 Jkt 069200 PO 00000 Frm 00075 Fmt 6652 Sfmt 6201 E:\BILLS\S3125.IS S3125

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1 ods beginning in such year, such excess shall be car2 ried to the succeeding calendar year and added to 

3 the allocation of such governmental unit for such 

4 succeeding calendar year. 

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

6 Zone governmental unit does not use an amount al7 located to it under subsection (b)(3) within the time 

8 prescribed by the Governor of the State of New York 

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

10 then such amount shall after such time be treated 

11 for purposes of subsection (b)(3) in the same man12 ner as if it had never been allocated. 

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

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

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

17 2009. 

18 ‘‘(2) NEW YORK LIBERTY ZONE GOVERN19 MENTAL UNIT.—The term ‘New York Liberty Zone 

20 governmental unit’ means— 

21 ‘‘(A) the State of New York, 

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

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

24 State or City. 


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

2 for a qualifying project taken into account for pur3 poses of the credit under this section shall be consid4 ered State and local funds for the purpose of any 

5 Federal program. 

6 ‘‘(4) TREATMENT OF CREDIT AMOUNTS FOR

7 PURPOSES OF WITHHOLDING TAXES.—For purposes 

8 of this title, a New York Liberty Zone governmental 

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

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

11 an amount equal to the amount of the credit allowed 

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

13 such wages, but only if such governmental unit de14 ducts and withholds wages for such payroll period 

15 under section 3401 (relating to wage withholding). 

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

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

18 shall jointly submit to the Secretary an annual report— 

19 ‘‘(1) which certifies— 

20 ‘‘(A) the qualifying project expenditure 

21 amount for the calendar year, and 

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

23 York Liberty Zone governmental unit under 

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


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

2 Secretary may require to carry out this section. 

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

4 guidance as may be necessary or appropriate to ensure 

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

6 (b) TERMINATION OF SPECIAL ALLOWANCE AND EX7 PENSING.—Subparagraph (A) of section 1400K(b)(2), as 

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

9 parenthetical therein and inserting ‘‘(in the case of non10 residential real property and residential rental property, 

11 the date of the enactment of the Energy Independence and 

12 Tax Relief Act of 2008 or, if acquired pursuant to a bind13 ing contract in effect on such enactment date, December 

14 31, 2009)’’. 

15 (c) CONFORMING AMENDMENTS.— 

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

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

18 1400K(a)’’. 

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

20 striking ‘‘section 1400L(c)(2)’’ and inserting ‘‘sec21 tion 1400K(c)(2)’’. 

22 (3) The table of sections for part I of sub23 chapter Y of chapter 1 is amended by redesignating 

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1 ing to section 1400K and by inserting after such 

2 item the following new item: 

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

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

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

5 of this Act. 

6 SEC. 127. TRANSPORTATION FRINGE BENEFIT TO BICYCLE 

7 COMMUTERS. 

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

9 is amended by adding at the end the following: 

10 ‘‘(D) Any qualified bicycle commuting re11 imbursement.’’. 

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

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

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

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

16 at the end the following new subparagraph: 

17 ‘‘(C) the applicable annual limitation in 

18 the case of any qualified bicycle commuting re19 imbursement.’’. 

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

21 is amended by adding at the end the following: 

22 ‘‘(F) DEFINITIONS RELATED TO BICYCLE

23 COMMUTING REIMBURSEMENT.— 

24 ‘‘(i) QUALIFIED BICYCLE COMMUTING

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1 cycle commuting reimbursement’ means, 

2 with respect to any calendar year, any em3 ployer reimbursement during the 15-month 

4 period beginning with the first day of such 

5 calendar year for reasonable expenses in6 curred by the employee during such cal7 endar year for the purchase of a bicycle 

8 and bicycle improvements, repair, and stor9 age, if such bicycle is regularly used for 

10 travel between the employee’s residence 

11 and place of employment. 

12 ‘‘(ii) APPLICABLE ANNUAL LIMITA13 TION.—The term ‘applicable annual limita14 tion’ means, with respect to any employee 

15 for any calendar year, the product of $20 

16 multiplied by the number of qualified bicy17 cle commuting months during such year. 

18 ‘‘(iii) QUALIFIED BICYCLE COM19 MUTING MONTH.—The term ‘qualified bi20 cycle commuting month’ means, with re21 spect to any employee, any month during 

22 which such employee— 

23 ‘‘(I) regularly uses the bicycle for 

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1 tween the employee’s residence and 

2 place of employment, and 

3 ‘‘(II) does not receive any benefit 

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

5 or (C) of paragraph (1).’’. 

6 (d) CONSTRUCTIVE RECEIPT OF BENEFIT.—Para7 graph (4) of section 132(f) is amended by inserting 

8 ‘‘(other than a qualified bicycle commuting reimburse9 ment)’’ after ‘‘qualified transportation fringe’’. 

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

11 this section shall apply to taxable years beginning after 

12 December 31, 2008. 

13 SEC. 128. ALTERNATIVE FUEL VEHICLE REFUELING PROP14 ERTY CREDIT. 

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

16 amended— 

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

18 and inserting ‘‘50 percent’’, and 

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

20 and inserting ‘‘$50,000’’. 

21 (b) EXTENSION OF CREDIT.—Paragraph (2) of sec22 tion 30C(g) is amended by striking ‘‘December 31, 2009’’ 

23 and inserting ‘‘December 31, 2010’’. 

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

25 this section shall apply to property placed in service after 


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

2 ending after such date. 

3 Subtitle C—Energy Conservation 

4 and Efficiency Provisions 

5 SEC. 141. QUALIFIED ENERGY CONSERVATION BONDS. 

6 (a) IN GENERAL.—Subpart I of part IV of sub7 chapter A of chapter 1, as amended by section 106, is 

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

9 ‘‘SEC. 54D. QUALIFIED ENERGY CONSERVATION BONDS. 

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

11 For purposes of this subchapter, the term ‘qualified en12 ergy conservation bond’ means any bond issued as part 

13 of an issue if— 

14 ‘‘(1) 100 percent of the available project pro15 ceeds of such issue are to be used for one or more 

16 qualified conservation purposes, 

17 ‘‘(2) the bond is issued by a State or local gov18 ernment, and 

19 ‘‘(3) the issuer designates such bond for pur20 poses of this section. 

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

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

23 qualified energy conservation bond shall be 70 percent of 

24 the amount so determined without regard to this sub25 section. 


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1 ‘‘(c) LIMITATION ON AMOUNT OF BONDS DES2 IGNATED.—The maximum aggregate face amount of 

3 bonds which may be designated under subsection (a) by 

4 any issuer shall not exceed the limitation amount allocated 

5 to such issuer under subsection (e). 

6 ‘‘(d) NATIONAL LIMITATION ON AMOUNT OF BONDS

7 DESIGNATED.—There is a national qualified energy con8 servation bond limitation of $3,000,000,000. 

9 ‘‘(e) ALLOCATIONS.— 

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

11 under subsection (d) shall be allocated by the Sec12 retary among the States in proportion to the popu13 lation of the States. 

14 ‘‘(2) ALLOCATIONS TO LARGEST LOCAL GOV15 ERNMENTS.— 

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

17 State in which there is a large local govern18 ment, each such local government shall be allo19 cated a portion of such State’s allocation which 

20 bears the same ratio to the State’s allocation 

21 (determined without regard to this subpara22 graph) as the population of such large local 

23 government bears to the population of such 

24 State. 


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1 ‘‘(B) ALLOCATION OF UNUSED LIMITATION

2 TO STATE.—The amount allocated under this 

3 subsection to a large local government may be 

4 reallocated by such local government to the 

5 State in which such local government is located. 

6 ‘‘(C) LARGE LOCAL GOVERNMENT.—For 

7 purposes of this section, the term ‘large local 

8 government’ means any municipality or county 

9 if such municipality or county has a population 

10 of 100,000 or more. 

11 ‘‘(3) ALLOCATION TO ISSUERS; RESTRICTION

12 ON PRIVATE ACTIVITY BONDS.—Any allocation 

13 under this subsection to a State or large local gov14 ernment shall be allocated by such State or large 

15 local government to issuers within the State in a 

16 manner that results in not less than 70 percent of 

17 the allocation to such State or large local govern18 ment being used to designate bonds which are not 

19 private activity bonds. 

20 ‘‘(f) QUALIFIED CONSERVATION PURPOSE.—For 

21 purposes of this section— 

22 ‘‘(1) IN GENERAL.—The term ‘qualified con23 servation purpose’ means any of the following: 

24 ‘‘(A) Capital expenditures incurred for 

25 purposes of— 


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1 ‘‘(i) reducing energy consumption in 

2 publicly-owned buildings by at least 20 

3 percent, 

4 ‘‘(ii) implementing green community 

5 programs, 

6 ‘‘(iii) rural development involving the 

7 production of electricity from renewable 

8 energy resources, or 

9 ‘‘(iv) any qualified facility (as deter10 mined under section 45(d) without regard 

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

12 without regard to any placed in service 

13 date). 

14 ‘‘(B) Expenditures with respect to research 

15 facilities, and research grants, to support re16 search in— 

17 ‘‘(i) development of cellulosic ethanol 

18 or other nonfossil fuels, 

19 ‘‘(ii) technologies for the capture and 

20 sequestration of carbon dioxide produced 

21 through the use of fossil fuels, 

22 ‘‘(iii) increasing the efficiency of exist23 ing technologies for producing nonfossil 

24 fuels, 


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1 ‘‘(iv) automobile battery technologies 

2 and other technologies to reduce fossil fuel 

3 consumption in transportation, or 

4 ‘‘(v) technologies to reduce energy use 

5 in buildings. 

6 ‘‘(C) Mass commuting facilities and related 

7 facilities that reduce the consumption of energy, 

8 including expenditures to reduce pollution from 

9 vehicles used for mass commuting. 

10 ‘‘(D) Demonstration projects designed to 

11 promote the commercialization of— 

12 ‘‘(i) green building technology, 

13 ‘‘(ii) conversion of agricultural waste 

14 for use in the production of fuel or other15 wise, 

16 ‘‘(iii) advanced battery manufacturing 

17 technologies, 

18 ‘‘(iv) technologies to reduce peak use 

19 of electricity, or 

20 ‘‘(v) technologies for the capture and 

21 sequestration of carbon dioxide emitted 

22 from combusting fossil fuels in order to 

23 produce electricity. 

24 ‘‘(E) Public education campaigns to pro25 mote energy efficiency. 


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1 ‘‘(2) SPECIAL RULES FOR PRIVATE ACTIVITY

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

3 any private activity bond, the term ‘qualified con4 servation purposes’ shall not include any expenditure 

5 which is not a capital expenditure. 

6 ‘‘(g) POPULATION.— 

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

8 State or local government shall be determined for 

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

10 for the calendar year which includes the date of the 

11 enactment of this section. 

12 ‘‘(2) SPECIAL RULE FOR COUNTIES.—In deter13 mining the population of any county for purposes of 

14 this section, any population of such county which is 

15 taken into account in determining the population of 

16 any municipality which is a large local government 

17 shall not be taken into account in determining the 

18 population of such county. 

19 ‘‘(h) APPLICATION TO INDIAN TRIBAL GOVERN20 MENTS.—An Indian tribal government shall be treated for 

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

22 local government, except that— 

23 ‘‘(1) an Indian tribal government shall be treat24 ed for purposes of subsection (e) as located within 

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


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1 of such government as resides within such State, 

2 and 

3 ‘‘(2) any bond issued by an Indian tribal gov4 ernment shall be treated as a qualified energy con5 servation bond only if issued as part of an issue the 

6 available project proceeds of which are used for pur7 poses for which such Indian tribal government could 

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

9 (b) CONFORMING AMENDMENTS.— 

10 (1) Paragraph (1) of section 54A(d), as amend11 ed by section 106, is amended to read as follows: 

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

13 ‘qualified tax credit bond’ means— 

14 ‘‘(A) a qualified forestry conservation 

15 bond, 

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

17 or 

18 ‘‘(C) a qualified energy conservation bond, 

19 which is part of an issue that meets requirements of 

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

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

22 amended by section 106, is amended to read as fol23 lows: 


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

2 of this paragraph, the term ‘qualified purpose’ 

3 means— 

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

5 conservation bond, a purpose specified in 

6 section 54B(e), 

7 ‘‘(ii) in the case of a new clean renew8 able energy bond, a purpose specified in 

9 section 54C(a)(1), and 

10 ‘‘(iii) in the case of a qualified energy 

11 conservation bond, a purpose specified in 

12 section 54D(a)(1).’’. 

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

14 IV of subchapter A of chapter 1 is amended by add15 ing at the end the following new item: 

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

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

17 this section shall apply to obligations issued after the date 

18 of the enactment of this Act. 

19 SEC. 142. CREDIT FOR NONBUSINESS ENERGY PROPERTY. 

20 (a) EXTENSION OF CREDIT.—Section 25C(g) is 

21 amended by striking ‘‘December 31, 2007’’ and inserting 

22 ‘‘December 31, 2008’’. 

23 (b) QUALIFIED BIOMASS FUEL PROPERTY.— 

24 (1) IN GENERAL.—Section 25C(d)(3) is amend25 ed— 


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1 (A) by striking ‘‘and’’ at the end of sub2 paragraph (D), 

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

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

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

6 subparagraph: 

7 ‘‘(F) a stove which uses the burning of bio8 mass fuel to heat a dwelling unit located in the 

9 United States and used as a residence by the 

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

11 dwelling unit, and which has a thermal effi12 ciency rating of at least 75 percent.’’. 

13 (2) BIOMASS FUEL.—Section 25C(d) is amend14 ed by adding at the end the following new para15 graph: 

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

17 means any plant-derived fuel available on a renew18 able or recurring basis, including agricultural crops 

19 and trees, wood and wood waste and residues (in20 cluding wood pellets), plants (including aquatic 

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

22 (c) COORDINATION WITH CREDIT FOR QUALIFIED

23 GEOTHERMAL HEAT PUMP PROPERTY EXPENDITURES.— 

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

25 25C(d), as amended by subsection (b), is amended 


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1 by striking subparagraph (C) and by redesignating 

2 subparagraphs (D), (E), and (F) as subparagraphs 

3 (C), (D), and (E), respectively. 

4 (2) CONFORMING AMENDMENT.—Subparagraph 

5 (C) of section 25C(d)(2) is amended to read as fol6 lows: 

7 ‘‘(C) REQUIREMENTS AND STANDARDS

8 FOR AIR CONDITIONERS AND HEAT PUMPS.— 

9 The standards and requirements prescribed by 

10 the Secretary under subparagraph (B) with re11 spect to the energy efficiency ratio (EER) for 

12 central air conditioners and electric heat 

13 pumps— 

14 ‘‘(i) shall require measurements to be 

15 based on published data which is tested by 

16 manufacturers at 95 degrees Fahrenheit, 

17 and 

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

19 data of the Air Conditioning and Refrig20 eration Institute that are prepared in part21 nership with the Consortium for Energy 

22 Efficiency.’’. 

23 (d) MODIFICATION OF QUALIFIED ENERGY EFFI24 CIENCY IMPROVEMENTS.— 


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

2 25C(c) is amended by inserting ‘‘, or an asphalt roof 

3 with appropriate cooling granules,’’ before ‘‘which 

4 meet the Energy Star program requirements’’. 

5 (2) BUILDING ENVELOPE COMPONENT.—Sub6 paragraph (D) of section 25C(c)(2) is amended— 

7 (A) by inserting ‘‘or asphalt roof’’ after 

8 ‘‘metal roof’’, and 

9 (B) by inserting ‘‘or cooling granules’’ 

10 after ‘‘pigmented coatings’’. 

11 (e) EFFECTIVE DATES.— 

12 (1) IN GENERAL.—Except as provided in para13 graph (2), the amendments made this section shall 

14 apply to expenditures made after December 31, 

15 2007. 

16 (2) MODIFICATION OF QUALIFIED ENERGY EF17 FICIENCY IMPROVEMENTS.—The amendments made 

18 by subsection (d) shall apply to property placed in 

19 service after the date of the enactment of this Act. 

20 SEC. 143. ENERGY EFFICIENT COMMERCIAL BUILDINGS DE21 DUCTION. 

22 Subsection (h) of section 179D is amended by strik23 ing ‘‘December 31, 2008’’ and inserting ‘‘December 31, 

24 2013’’. 


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1 SEC. 144. 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 (defining types of energy 

11 efficient appliances) is amended to read as follows: 

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.— 

24 The aggregate amount of credit allowed under sub25 section (a) with respect to a taxpayer for any taxVerDate Aug 31 2005 22:16 Jun 13, 2008 Jkt 069200 PO 00000 Frm 00096 Fmt 6652 Sfmt 6201 E:\BILLS\S3125.IS S3125

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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) (defining qualified energy efficient appliance) 

16 is amended to read as follows: 

17 ‘‘(1) QUALIFIED ENERGY EFFICIENT APPLI18 ANCE.—The term ‘qualified energy efficient appli19 ance’ means— 

20 ‘‘(A) any dishwasher described in sub21 section (b)(1), 

22 ‘‘(B) any clothes washer described in sub23 section (b)(2), and 

24 ‘‘(C) any refrigerator described in sub25 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. 145. ACCELERATED RECOVERY PERIOD FOR DEPRE16 CIATION OF SMART METERS AND SMART 

17 GRID SYSTEMS. 

18 (a) IN GENERAL.—Section 168(e)(3)(D) is amended 

19 by striking ‘‘and’’ at the end of clause (i), by striking the 

20 period at the end of clause (ii) and inserting a comma, 

21 and by inserting after clause (ii) the following new clauses: 

22 ‘‘(iii) any qualified smart electric 

23 meter, and 

24 ‘‘(iv) any qualified smart electric grid 

25 system.’’. 


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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. 146. 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 TITLE II—ONE-YEAR EXTENSION 

6 OF TEMPORARY PROVISIONS 

7 Subtitle A—Alternative Minimum 

8 Tax 

9 SEC. 201. EXTENSION OF ALTERNATIVE MINIMUM TAX RE10 LIEF FOR NONREFUNDABLE PERSONAL 

11 CREDITS. 

12 (a) IN GENERAL.—Paragraph (2) of section 26(a) 

13 (relating to special rule for taxable years 2000 through 

14 2007) is amended— 

15 (1) by striking ‘‘or 2007’’ and inserting ‘‘2007, 

16 or 2008’’, and 

17 (2) by striking ‘‘2007’’ in the heading thereof 

18 and inserting ‘‘2008’’. 

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

20 this section shall apply to taxable years beginning after 

21 December 31, 2007. 

22 SEC. 202. EXTENSION OF INCREASED ALTERNATIVE MIN23 IMUM TAX EXEMPTION AMOUNT. 

24 (a) IN GENERAL.—Paragraph (1) of section 55(d) 

25 (relating to exemption amount) is amended— 


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1 (1) by striking ‘‘($66,250 in the case of taxable 

2 years beginning in 2007)’’ in subparagraph (A) and 

3 inserting ‘‘($69,950 in the case of taxable years be4 ginning in 2008)’’, and 

5 (2) by striking ‘‘($44,350 in the case of taxable 

6 years beginning in 2007)’’ in subparagraph (B) and 

7 inserting ‘‘($46,200 in the case of taxable years be8 ginning in 2008)’’. 

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

10 this section shall apply to taxable years beginning after 

11 December 31, 2007. 

12 SEC. 203. INCREASE OF AMT REFUNDABLE CREDIT 

13 AMOUNT FOR INDIVIDUALS WITH LONG14 TERM UNUSED CREDITS FOR PRIOR YEAR 

15 MINIMUM TAX LIABILITY, ETC. 

16 (a) IN GENERAL.—Paragraph (2) of section 53(e) is 

17 amended to read as follows: 

18 ‘‘(2) AMT REFUNDABLE CREDIT AMOUNT.— 

19 For purposes of paragraph (1), the term ‘AMT re20 fundable credit amount’ means, with respect to any 

21 taxable year, the amount (not in excess of the long22 term unused minimum tax credit for such taxable 

23 year) equal to the greater of— 

24 ‘‘(A) 50 percent of the long-term unused 

25 minimum tax credit for such taxable year, or 


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1 ‘‘(B) the amount (if any) of the AMT re2 fundable credit amount for the taxpayer’s pre3 ceding taxable year (determined without regard 

4 to subsection (f)(2)).’’. 

5 (b) TREATMENT OF CERTAIN UNDERPAYMENTS, IN6 TEREST, AND PENALTIES ATTRIBUTABLE TO THE TREAT7 MENT OF INCENTIVE STOCK OPTIONS.—Section 53 is 

8 amended by adding at the end the following new sub9 section: 

10 ‘‘(f) TREATMENT OF CERTAIN UNDERPAYMENTS, IN11 TEREST, AND PENALTIES ATTRIBUTABLE TO THE TREAT12 MENT OF INCENTIVE STOCK OPTIONS.— 

13 ‘‘(1) ABATEMENT.—Any underpayment of tax 

14 outstanding on the date of the enactment of this 

15 subsection which is attributable to the application of 

16 section 56(b)(3) for any taxable year ending before 

17 January 1, 2008 (and any interest or penalty with 

18 respect to such underpayment which is outstanding 

19 on such date of enactment), is hereby abated. The 

20 amount determined under subsection (b)(1) shall not 

21 include any tax abated under the preceding sentence. 

22 ‘‘(2) INCREASE IN CREDIT FOR CERTAIN INTER23 EST AND PENALTIES ALREADY PAID.—The AMT re24 fundable credit amount, and the minimum tax credit 

25 determined under subsection (b), for the taxpayer’s 


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1 first 2 taxable years beginning after December 31, 

2 2007, shall each be increased by 50 percent of the 

3 aggregate amount of the interest and penalties 

4 which were paid by the taxpayer before the date of 

5 the enactment of this subsection and which would 

6 (but for such payment) have been abated under 

7 paragraph (1).’’. 

8 (c) EFFECTIVE DATE.— 

9 (1) IN GENERAL.—Except as provided in para10 graph (2), the amendment made by this section shall 

11 apply to taxable years beginning after December 31, 

12 2007. 

13 (2) ABATEMENT.—Section 53(f)(1) of the In14 ternal Revenue Code of 1986, as added by sub15 section (b), shall take effect on the date of the en16 actment of this Act. 

17 Subtitle B—Extensions Primarily 

18 Affecting Individuals 

19 SEC. 211. DEDUCTION FOR STATE AND LOCAL SALES 

20 TAXES. 

21 (a) IN GENERAL.—Subparagraph (I) of section 

22 164(b)(5) is amended by striking ‘‘January 1, 2008’’ and 

23 inserting ‘‘January 1, 2009’’. 


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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2007. 

4 SEC. 212. DEDUCTION OF QUALIFIED TUITION AND RE5 LATED EXPENSES. 

6 (a) IN GENERAL.—Subsection (e) of section 222 is 

7 amended by striking ‘‘December 31, 2007’’ and inserting 

8 ‘‘December 31, 2008’’. 

9 (b) EFFECTIVE DATE.—The amendment made by 

10 this section shall apply to taxable years beginning after 

11 December 31, 2007. 

12 SEC. 213. TREATMENT OF CERTAIN DIVIDENDS OF REGU13 LATED INVESTMENT COMPANIES. 

14 (a) INTEREST-RELATED DIVIDENDS.—Subpara15 graph (C) of section 871(k)(1) (defining interest-related 

16 dividend) is amended by striking ‘‘December 31, 2007’’ 

17 and inserting ‘‘December 31, 2008’’. 

18 (b) SHORT-TERM CAPITAL GAIN DIVIDENDS.—Sub19 paragraph (C) of section 871(k)(2) (defining short-term 

20 capital gain dividend) is amended by striking ‘‘December 

21 31, 2007’’ and inserting ‘‘December 31, 2008’’. 

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

23 this section shall apply to dividends with respect to taxable 

24 years of regulated investment companies beginning after 

25 December 31, 2007. 


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1 SEC. 214. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RE2 TIREMENT PLANS FOR CHARITABLE PUR3 POSES. 

4 (a) IN GENERAL.—Subparagraph (F) of section 

5 408(d)(8) is amended by striking ‘‘December 31, 2007’’ 

6 and inserting ‘‘December 31, 2008’’. 

7 (b) EFFECTIVE DATE.—The amendment made by 

8 this section shall apply to distributions made in taxable 

9 years beginning after December 31, 2007. 

10 SEC. 215. DEDUCTION FOR CERTAIN EXPENSES OF ELE11 MENTARY AND SECONDARY SCHOOL TEACH12 ERS. 

13 (a) IN GENERAL.—Subparagraph (D) of section 

14 62(a)(2) is amended by striking ‘‘or 2007’’ and inserting 

15 ‘‘2007, or 2008’’. 

16 (b) EFFECTIVE DATE.—The amendment made by 

17 subsection (a) shall apply to taxable years beginning after 

18 December 31, 2007. 

19 SEC. 216. STOCK IN RIC FOR PURPOSES OF DETERMINING 

20 ESTATES OF NONRESIDENTS NOT CITIZENS. 

21 (a) IN GENERAL.—Paragraph (3) of section 2105(d) 

22 is amended by striking ‘‘December 31, 2007’’ and insert23 ing ‘‘December 31, 2008’’. 

24 (b) EFFECTIVE DATE.—The amendment made by 

25 this section shall apply to decedents dying after December 

26 31, 2007. 


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1 SEC. 217. QUALIFIED INVESTMENT ENTITIES. 

2 (a) IN GENERAL.—Clause (ii) of section 

3 897(h)(4)(A) is amended by striking ‘‘December 31, 

4 2007’’ and inserting ‘‘December 31, 2008’’. 

5 (b) EFFECTIVE DATE.—The amendment made by 

6 subsection (a) shall take effect on January 1, 2008, except 

7 that such amendment shall not apply to the application 

8 of withholding requirements with respect to any payment 

9 made on or before the date of the enactment of this Act. 

10 SEC. 218. EXCLUSION OF AMOUNTS RECEIVED UNDER 

11 QUALIFIED GROUP LEGAL SERVICES PLANS. 

12 (a) IN GENERAL.—Subsection (e) of section 120 is 

13 amended by striking ‘‘shall not apply to taxable years be14 ginning after June 30, 1992’’ and inserting ‘‘shall apply 

15 to taxable years beginning after December 31, 2007, and 

16 before January 1, 2009’’. 

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

18 this section shall apply to taxable years beginning after 

19 December 31, 2007. 

20 Subtitle C—Extensions Primarily 

21 Affecting Businesses 

22 SEC. 221. EXTENSION AND MODIFICATION OF RESEARCH 

23 CREDIT. 

24 (a) EXTENSION.—Section 41(h) (relating to termi25 nation) is amended— 


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1 (1) by striking ‘‘December 31, 2007’’ and in2 serting ‘‘December 31, 2008’’ in paragraph (1)(B), 

3 (2) by redesignating paragraph (2) as para4 graph (3), and 

5 (3) by inserting after paragraph (1) the fol6 lowing new paragraph: 

7 ‘‘(2) TERMINATION OF ALTERNATIVE INCRE8 MENTAL CREDIT.—No election under subsection 

9 (c)(4) shall apply to amounts paid or incurred after 

10 December 31, 2007.’’. 

11 (b) MODIFICATION OF ALTERNATIVE SIMPLIFIED

12 CREDIT.—Paragraph (5)(A) of section 41(c) (relating to 

13 election of alternative simplified credit) is amended to read 

14 as follows: 

15 ‘‘(A) IN GENERAL.—At the election of the 

16 taxpayer, the credit determined under sub17 section (a)(1) shall be equal to 14 percent of so 

18 much of the qualified research expenses for the 

19 taxable year as exceeds 50 percent of the aver20 age qualified research expenses for the 3 tax21 able years preceding the taxable year for which 

22 the credit is being determined.’’. 

23 (c) CONFORMING AMENDMENT.—Subparagraph (D) 

24 of section 45C(b)(1) (relating to special rule) is amended 


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1 by striking ‘‘December 31, 2007’’ and inserting ‘‘Decem2 ber 31, 2008’’. 

3 (d) TECHNICAL CORRECTION.—Paragraph (3) of sec4 tion 41(h) is amended to read as follows: 

5 ‘‘(2) COMPUTATION FOR TAXABLE YEAR IN

6 WHICH CREDIT TERMINATES.—In the case of any 

7 taxable year with respect to which this section ap8 plies to a number of days which is less than the total 

9 number of days in such taxable year— 

10 ‘‘(A) the amount determined under sub11 section (c)(1)(B) with respect to such taxable 

12 year shall be the amount which bears the same 

13 ratio to such amount (determined without re14 gard to this paragraph) as the number of days 

15 in such taxable year to which this section ap16 plies bears to the total number of days in such 

17 taxable year, and 

18 ‘‘(B) for purposes of subsection (c)(5), the 

19 average qualified research expenses for the pre20 ceding 3 taxable years shall be the amount 

21 which bears the same ratio to such average 

22 qualified research expenses (determined without 

23 regard to this paragraph) as the number of 

24 days in such taxable year to which this section 


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1 applies bears to the total number of days in 

2 such taxable year.’’. 

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

4 this section shall apply to amounts paid or incurred after 

5 December 31, 2007. 

6 SEC. 222. INDIAN EMPLOYMENT CREDIT. 

7 (a) IN GENERAL.—Subsection (f) of section 45A is 

8 amended by striking ‘‘December 31, 2007’’ and inserting 

9 ‘‘December 31, 2008’’. 

10 (b) EFFECTIVE DATE.—The amendment made by 

11 this section shall apply to taxable years beginning after 

12 December 31, 2007. 

13 SEC. 223. NEW MARKETS TAX CREDIT. 

14 Subparagraph (D) of section 45D(f)(1) is amended 

15 by striking ‘‘and 2008’’ and inserting ‘‘2008, and 2009’’. 

16 SEC. 224. RAILROAD TRACK MAINTENANCE. 

17 (a) IN GENERAL.—Subsection (f) of section 45G (re18 lating to application of section) is amended by striking 

19 ‘‘January 1, 2008’’ and inserting ‘‘January 1, 2009’’. 

20 (b) CREDIT ALLOWED AGAINST ALTERNATIVE MIN21 IMUM TAX.—Subparagraph (B) of section 38(c)(4) (relat22 ing to specified credits), as amended by section 103, is 

23 amended— 

24 (1) by redesignating clauses (iv) and (v) as 

25 clauses (v) and (vi), respectively, and 


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1 (2) by inserting after clause (iii) the following 

2 new clause: 

3 ‘‘(iv) the credit determined under sec4 tion 45G,’’. 

5 (c) EFFECTIVE DATES.— 

6 (1) The amendment made by subsection (a) 

7 shall apply to expenditures paid or incurred during 

8 taxable years beginning after December 31, 2007. 

9 (2) The amendments made by subsection (b) 

10 shall apply to credits determined under section 45G 

11 in taxable years beginning after December 31, 2007, 

12 and to carrybacks of such credits. 

13 SEC. 225. EXTENSION OF MINE RESCUE TEAM TRAINING 

14 CREDIT. 

15 Section 45N(e) (relating to termination) is amended 

16 by striking ‘‘December 31, 2008’’ and inserting ‘‘Decem17 ber 31, 2009’’. 

18 SEC. 226. EXTENSION OF 15-YEAR STRAIGHT-LINE COST RE19 COVERY FOR QUALIFIED LEASEHOLD IM20 PROVEMENTS AND QUALIFIED RESTAURANT 

21 IMPROVEMENTS; 15-YEAR STRAIGHT-LINE 

22 COST RECOVERY FOR CERTAIN IMPROVE23 MENTS TO RETAIL SPACE. 

24 (a) EXTENSION OF LEASEHOLD AND RESTAURANT

25 IMPROVEMENTS.— 


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1 (1) IN GENERAL.—Clauses (iv) and (v) of sec2 tion 168(e)(3)(E) (relating to 15-year property) are 

3 each amended by striking ‘‘January 1, 2008’’ and 

4 inserting ‘‘January 1, 2009’’. 

5 (2) EFFECTIVE DATE.—The amendments made 

6 by this subsection shall apply to property placed in 

7 service after December 31, 2007. 

8 (b) TREATMENT TO INCLUDE NEW CONSTRUC9 TION.— 

10 (1) IN GENERAL.—Paragraph (7) of section 

11 168(e) (relating to classification of property) is 

12 amended to read as follows: 

13 ‘‘(7) QUALIFIED RESTAURANT PROPERTY.—The 

14 term ‘qualified restaurant property’ means any sec15 tion 1250 property which is a building or an im16 provement to a building if more than 50 percent of 

17 the building’s square footage is devoted to prepara18 tion of, and seating for on-premises consumption of, 

19 prepared meals.’’. 

20 (2) EFFECTIVE DATE.—The amendments made 

21 by this subsection shall apply to property placed in 

22 service after the date of the enactment of this Act. 

23 (c) RECOVERY PERIOD FOR DEPRECIATION OF CER24 TAIN IMPROVEMENTS TO RETAIL SPACE.— 


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1 (1) 15-YEAR RECOVERY PERIOD.—Section 

2 168(e)(3)(E) (relating to 15-year property) is 

3 amended by striking ‘‘and’’ at the end of clause 

4 (vii), by striking the period at the end of clause (viii) 

5 and inserting ‘‘, and’’, and by adding at the end the 

6 following new clause: 

7 ‘‘(ix) any qualified retail improvement 

8 property placed in service before January 

9 1, 2009.’’. 

10 (2) QUALIFIED RETAIL IMPROVEMENT PROP11 ERTY.—Section 168(e) is amended by adding at the 

12 end the following new paragraph: 

13 ‘‘(8) QUALIFIED RETAIL IMPROVEMENT PROP14 ERTY.— 

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

16 retail improvement property’ means any im17 provement to an interior portion of a building 

18 which is nonresidential real property if— 

19 ‘‘(i) such portion is open to the gen20 eral public and is used in the retail trade 

21 or business of selling tangible personal 

22 property to the general public, and 

23 ‘‘(ii) such improvement is placed in 

24 service more than 3 years after the date 

25 the building was first placed in service. 


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1 ‘‘(B) IMPROVEMENTS MADE BY OWNER.— 

2 In the case of an improvement made by the 

3 owner of such improvement, such improvement 

4 shall be qualified retail improvement property 

5 (if at all) only so long as such improvement is 

6 held by such owner. Rules similar to the rules 

7 under paragraph (6)(B) shall apply for pur8 poses of the preceding sentence. 

9 ‘‘(C) CERTAIN IMPROVEMENTS NOT IN10 CLUDED.—Such term shall not include any im11 provement for which the expenditure is attrib12 utable to— 

13 ‘‘(i) the enlargement of the building, 

14 ‘‘(ii) any elevator or escalator, 

15 ‘‘(iii) any structural component bene16 fitting a common area, or 

17 ‘‘(iv) the internal structural frame18 work of the building.’’. 

19 (3) REQUIREMENT TO USE STRAIGHT LINE

20 METHOD.—Section 168(b)(3) is amended by adding 

21 at the end the following new subparagraph: 

22 ‘‘(I) Qualified retail improvement property 

23 described in subsection (e)(8).’’. 

24 (4) ALTERNATIVE SYSTEM.—The table con25 tained in section 168(g)(3)(B) is amended by insertVerDate Aug 31 2005 22:16 Jun 13, 2008 Jkt 069200 PO 00000 Frm 00116 Fmt 6652 Sfmt 6201 E:\BILLS\S3125.IS S3125

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1 ing after the item relating to subparagraph (E)(viii) 

2 the following new item: 

‘‘(E)(ix) ........................................................................................... 39’’. 

3 (5) EFFECTIVE DATE.—The amendments made 

4 by this subsection shall apply to property placed in 

5 service after the date of the enactment of this Act. 

6 SEC. 227. SEVEN-YEAR COST RECOVERY PERIOD FOR MO7 TORSPORTS RACING TRACK FACILITY. 

8 (a) IN GENERAL.—Subparagraph (D) of section 

9 168(i)(15) is amended by striking ‘‘December 31, 2007’’ 

10 and inserting ‘‘December 31, 2008’’. 

11 (b) EFFECTIVE DATE.—The amendment made by 

12 this section shall apply to property placed in service after 

13 December 31, 2007. 

14 SEC. 228. ACCELERATED DEPRECIATION FOR BUSINESS 

15 PROPERTY ON INDIAN RESERVATION. 

16 (a) IN GENERAL.—Paragraph (8) of section 168(j) 

17 is amended by striking ‘‘December 31, 2007’’ and insert18 ing ‘‘December 31, 2008’’. 

19 (b) EFFECTIVE DATE.—The amendment made by 

20 this section shall apply to property placed in service after 

21 December 31, 2007. 


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1 SEC. 229. EXTENSION OF ELECTION TO EXPENSE AD2 VANCED MINE SAFETY EQUIPMENT. 

3 Section 179E(g) (relating to termination) is amended 

4 by striking ‘‘December 31, 2008’’ and inserting ‘‘Decem5 ber 31, 2009’’. 

6 SEC. 230. EXPENSING OF ENVIRONMENTAL REMEDIATION 

7 COSTS. 

8 (a) IN GENERAL.—Subsection (h) of section 198 is 

9 amended by striking ‘‘December 31, 2007’’ and inserting 

10 ‘‘December 31, 2008’’. 

11 (b) EFFECTIVE DATE.—The amendment made by 

12 this section shall apply to expenditures paid or incurred 

13 after December 31, 2007. 

14 SEC. 231. DEDUCTION ALLOWABLE WITH RESPECT TO IN15 COME ATTRIBUTABLE TO DOMESTIC PRO16 DUCTION ACTIVITIES IN PUERTO RICO. 

17 (a) IN GENERAL.—Subparagraph (C) of section 

18 199(d)(8) is amended— 

19 (1) by striking ‘‘first 2 taxable years’’ and in20 serting ‘‘first 3 taxable years’’, and 

21 (2) by striking ‘‘January 1, 2008’’ and insert22 ing ‘‘January 1, 2009’’. 

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

24 this section shall apply to taxable years beginning after 

25 December 31, 2007. 


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1 SEC. 232. MODIFICATION OF TAX TREATMENT OF CERTAIN 

2 PAYMENTS TO CONTROLLING EXEMPT ORGA3 NIZATIONS. 

4 (a) IN GENERAL.—Clause (iv) of section 

5 512(b)(13)(E) is amended by striking ‘‘December 31, 

6 2007’’ and inserting ‘‘December 31, 2008’’. 

7 (b) EFFECTIVE DATE.—The amendment made by 

8 this section shall apply to payments received or accrued 

9 after December 31, 2007. 

10 SEC. 233. QUALIFIED ZONE ACADEMY BONDS. 

11 (a) IN GENERAL.—Subpart I of part IV of sub12 chapter A of chapter 1, as amended by sections 106 and 

13 141, is amended by adding at the end the following new 

14 section: 

15 ‘‘SEC. 54E. QUALIFIED ZONE ACADEMY BONDS. 

16 ‘‘(a) QUALIFIED ZONE ACADEMY BONDS.—For pur17 poses of this subchapter, the term ‘qualified zone academy 

18 bond’ means any bond issued as part of an issue if— 

19 ‘‘(1) 100 percent of the available project pro20 ceeds of such issue are to be used for a qualified 

21 purpose with respect to a qualified zone academy es22 tablished by an eligible local education agency, 

23 ‘‘(2) the bond is issued by a State or local gov24 ernment within the jurisdiction of which such acad25 emy is located, and 

26 ‘‘(3) the issuer— 


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1 ‘‘(A) designates such bond for purposes of 

2 this section, 

3 ‘‘(B) certifies that it has written assur4 ances that the private business contribution re5 quirement of subsection (b) will be met with re6 spect to such academy, and 

7 ‘‘(C) certifies that it has the written ap8 proval of the eligible local education agency for 

9 such bond issuance. 

10 ‘‘(b) PRIVATE BUSINESS CONTRIBUTION REQUIRE11 MENT.—For purposes of subsection (a), the private busi12 ness contribution requirement of this subsection is met 

13 with respect to any issue if the eligible local education 

14 agency that established the qualified zone academy has 

15 written commitments from private entities to make quali16 fied contributions having a present value (as of the date 

17 of issuance of the issue) of not less than 10 percent of 

18 the proceeds of the issue. 

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

21 ‘‘(1) NATIONAL LIMITATION.—There is a na22 tional zone academy bond limitation for each cal23 endar year. Such limitation is $400,000,000 for 

24 2008, and, except as provided in paragraph (4), zero 

25 thereafter. 


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1 ‘‘(2) ALLOCATION OF LIMITATION.—The na2 tional zone academy bond limitation for a calendar 

3 year shall be allocated by the Secretary among the 

4 States on the basis of their respective populations of 

5 individuals below the poverty line (as defined by the 

6 Office of Management and Budget). The limitation 

7 amount allocated to a State under the preceding 

8 sentence shall be allocated by the State education 

9 agency to qualified zone academies within such 

10 State. 

11 ‘‘(3) DESIGNATION SUBJECT TO LIMITATION

12 AMOUNT.—The maximum aggregate face amount of 

13 bonds issued during any calendar year which may be 

14 designated under subsection (a) with respect to any 

15 qualified zone academy shall not exceed the limita16 tion amount allocated to such academy under para17 graph (2) for such calendar year. 

18 ‘‘(4) CARRYOVER OF UNUSED LIMITATION.— 

19 ‘‘(A) IN GENERAL.—If for any calendar 

20 year— 

21 ‘‘(i) the limitation amount for any 

22 State, exceeds 

23 ‘‘(ii) the amount of bonds issued dur24 ing such year which are designated under 


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1 subsection (a) with respect to qualified 

2 zone academies within such State, 

3 the limitation amount for such State for the fol4 lowing calendar year shall be increased by the 

5 amount of such excess. 

6 ‘‘(B) LIMITATION ON CARRYOVER.—Any 

7 carryforward of a limitation amount may be 

8 carried only to the first 2 years following the 

9 unused limitation year. For purposes of the pre10 ceding sentence, a limitation amount shall be 

11 treated as used on a first-in first-out basis. 

12 ‘‘(C) COORDINATION WITH SECTION

13 1397E.—Any carryover determined under sec14 tion 1397E(e)(4) (relating to carryover of un15 used limitation) with respect to any State to 

16 calendar year 2008 shall be treated for pur17 poses of this section as a carryover with respect 

18 to such State for such calendar year under sub19 paragraph (A), and the limitation of subpara20 graph (B) shall apply to such carryover taking 

21 into account the calendar years to which such 

22 carryover relates. 

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

24 ‘‘(1) QUALIFIED ZONE ACADEMY.—The term 

25 ‘qualified zone academy’ means any public school (or 


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1 academic program within a public school) which is 

2 established by and operated under the supervision of 

3 an eligible local education agency to provide edu4 cation or training below the postsecondary level if— 

5 ‘‘(A) such public school or program (as the 

6 case may be) is designed in cooperation with 

7 business to enhance the academic curriculum, 

8 increase graduation and employment rates, and 

9 better prepare students for the rigors of college 

10 and the increasingly complex workforce, 

11 ‘‘(B) students in such public school or pro12 gram (as the case may be) will be subject to the 

13 same academic standards and assessments as 

14 other students educated by the eligible local 

15 education agency, 

16 ‘‘(C) the comprehensive education plan of 

17 such public school or program is approved by 

18 the eligible local education agency, and 

19 ‘‘(D)(i) such public school is located in an 

20 empowerment zone or enterprise community 

21 (including any such zone or community des22 ignated after the date of the enactment of this 

23 section), or 

24 ‘‘(ii) there is a reasonable expectation (as 

25 of the date of issuance of the bonds) that at 


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1 least 35 percent of the students attending such 

2 school or participating in such program (as the 

3 case may be) will be eligible for free or reduced4 cost lunches under the school lunch program es5 tablished under the National School Lunch Act. 

6 ‘‘(2) ELIGIBLE LOCAL EDUCATION AGENCY.— 

7 For purposes of this section, the term ‘eligible local 

8 education agency’ means any local educational agen9 cy as defined in section 9101 of the Elementary and 

10 Secondary Education Act of 1965. 

11 ‘‘(3) QUALIFIED PURPOSE.—The term ‘quali12 fied purpose’ means, with respect to any qualified 

13 zone academy— 

14 ‘‘(A) rehabilitating or repairing the public 

15 school facility in which the academy is estab16 lished, 

17 ‘‘(B) providing equipment for use at such 

18 academy, 

19 ‘‘(C) developing course materials for edu20 cation to be provided at such academy, and 

21 ‘‘(D) training teachers and other school 

22 personnel in such academy. 

23 ‘‘(4) QUALIFIED CONTRIBUTIONS.—The term 

24 ‘qualified contribution’ means any contribution (of a 


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1 type and quality acceptable to the eligible local edu2 cation agency) of— 

3 ‘‘(A) equipment for use in the qualified 

4 zone academy (including state-of-the-art tech5 nology and vocational equipment), 

6 ‘‘(B) technical assistance in developing 

7 curriculum or in training teachers in order to 

8 promote appropriate market driven technology 

9 in the classroom, 

10 ‘‘(C) services of employees as volunteer 

11 mentors, 

12 ‘‘(D) internships, field trips, or other edu13 cational opportunities outside the academy for 

14 students, or 

15 ‘‘(E) any other property or service speci16 fied by the eligible local education agency.’’. 

17 (b) CONFORMING AMENDMENTS.— 

18 (1) Paragraph (1) of section 54A(d), as amend19 ed by sections 106 and 141, is amended by striking 

20 ‘‘or’’ at the end of subparagraph (B), by inserting 

21 ‘‘or’’ at the end of subparagraph (C), and by insert22 ing after subparagraph (C) the following new sub23 paragraph: 

24 ‘‘(D) a qualified zone academy bond,’’. 


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

2 amended by sections 106 and 141, is amended by 

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

4 the period at the end of clause (iii) and inserting ‘‘, 

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

6 clause: 

7 ‘‘(iv) in the case of a qualified zone 

8 academy bond, a purpose specified in sec9 tion 54E(a)(1).’’. 

10 (3) Section 1397E is amended by adding at the 

11 end the following new subsection: 

12 ‘‘(m) TERMINATION.—This section shall not apply to 

13 any obligation issued after the date of the enactment of 

14 this Act.’’. 

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

16 IV of subchapter A of chapter 1 is amended by add17 ing at the end the following new item: 

‘‘Sec. 54E. Qualified zone academy bonds.’’. 

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

19 this section shall apply to obligations issued after the date 

20 of the enactment of this Act. 

21 SEC. 234. TAX INCENTIVES FOR INVESTMENT IN THE DIS22 TRICT OF COLUMBIA. 

23 (a) DESIGNATION OF ZONE.— 


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•S 3125 IS

1 (1) IN GENERAL.—Subsection (f) of section 

2 1400 is amended by striking ‘‘2007’’ both places it 

3 appears and inserting ‘‘2008’’. 

4 (2) EFFECTIVE DATE.—The amendments made 

5 by this subsection shall apply to periods beginning 

6 after December 31, 2007. 

7 (b) TAX-EXEMPT ECONOMIC DEVELOPMENT

8 BONDS.— 

9 (1) IN GENERAL.—Subsection (b) of section 

10 1400A is amended by striking ‘‘2007’’ and inserting 

11 ‘‘2008’’. 

12 (2) EFFECTIVE DATE.—The amendment made 

13 by this subsection shall apply to bonds issued after 

14 December 31, 2007. 

15 (c) ZERO PERCENT CAPITAL GAINS RATE.— 

16 (1) IN GENERAL.—Subsection (b) of section 

17 1400B is amended by striking ‘‘2008’’ each place it 

18 appears and inserting ‘‘2009’’. 

19 (2) CONFORMING AMENDMENTS.— 

20 (A) Section 1400B(e)(2) is amended— 

21 (i) by striking ‘‘2012’’ and inserting 

22 ‘‘2013’’, and 

23 (ii) by striking ‘‘2012’’ in the heading 

24 thereof and inserting ‘‘2013’’. 


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1 (B) Section 1400B(g)(2) is amended by 

2 striking ‘‘2012’’ and inserting ‘‘2013’’. 

3 (C) Section 1400F(d) is amended by strik4 ing ‘‘2012’’ and inserting ‘‘2013’’. 

5 (3) EFFECTIVE DATES.— 

6 (A) EXTENSION.—The amendments made 

7 by paragraph (1) shall apply to acquisitions 

8 after December 31, 2007. 

9 (B) CONFORMING AMENDMENTS.—The 

10 amendments made by paragraph (2) shall take 

11 effect on the date of the enactment of this Act. 

12 (d) FIRST-TIME HOMEBUYER CREDIT.— 

13 (1) IN GENERAL.—Subsection (i) of section 

14 1400C is amended by striking ‘‘2008’’ and inserting 

15 ‘‘2009’’. 

16 (2) EFFECTIVE DATE.—The amendment made 

17 by this subsection shall apply to property purchased 

18 after December 31, 2007. 

19 SEC. 235. ECONOMIC DEVELOPMENT CREDIT FOR AMER20 ICAN SAMOA. 

21 (a) IN GENERAL.—Subsection (d) of section 119 of 

22 division A of the Tax Relief and Health Care Act of 2006 

23 is amended— 

24 (1) by striking ‘‘first two taxable years’’ and in25 serting ‘‘first 3 taxable years’’, and 


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•S 3125 IS

1 (2) by striking ‘‘January 1, 2008’’ and insert2 ing ‘‘January 1, 2009’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 this section shall apply to taxable years beginning after 

5 December 31, 2007. 

6 SEC. 236. ENHANCED CHARITABLE DEDUCTION FOR CON7 TRIBUTIONS OF FOOD INVENTORY. 

8 (a) IN GENERAL.—Clause (iv) of section 

9 170(e)(3)(C) is amended by striking ‘‘December 31, 

10 2007’’ and inserting ‘‘December 31, 2008’’. 

11 (b) EFFECTIVE DATE.—The amendment made by 

12 this section shall apply to contributions made after De13 cember 31, 2007. 

14 SEC. 237. ENHANCED CHARITABLE DEDUCTION FOR CON15 TRIBUTIONS OF BOOK INVENTORY TO PUB16 LIC SCHOOLS. 

17 (a) IN GENERAL.—Clause (iv) of section 

18 170(e)(3)(D) is amended by striking ‘‘December 31, 

19 2007’’ and inserting ‘‘December 31, 2008’’. 

20 (b) EFFECTIVE DATE.—The amendment made by 

21 this section shall apply to contributions made after De22 cember 31, 2007. 


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1 SEC. 238. ENHANCED DEDUCTION FOR QUALIFIED COM2 PUTER CONTRIBUTIONS. 

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

4 170(e)(6) is amended by striking ‘‘December 31, 2007’’ 

5 and inserting ‘‘December 31, 2008’’. 

6 (b) EFFECTIVE DATE.—The amendment made by 

7 this section shall apply to contributions made during tax8 able years beginning after December 31, 2007. 

9 SEC. 239. BASIS ADJUSTMENT TO STOCK OF S CORPORA10 TIONS MAKING CHARITABLE CONTRIBU11 TIONS OF PROPERTY. 

12 (a) IN GENERAL.—The last sentence of section 

13 1367(a)(2) is amended by striking ‘‘December 31, 2007’’ 

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

15 (b) EFFECTIVE DATE.—The amendment made by 

16 this section shall apply to contributions made in taxable 

17 years beginning after December 31, 2007. 

18 SEC. 240. WORK OPPORTUNITY TAX CREDIT FOR HURRI19 CANE KATRINA EMPLOYEES. 

20 (a) IN GENERAL.—Paragraph (1) of section 201(b) 

21 of the Katrina Emergency Tax Relief Act of 2005 is 

22 amended by striking ‘‘2-year’’ and inserting ‘‘3-year’’. 

23 (b) EFFECTIVE DATE.—The amendment made by 

24 subsection (a) shall apply to individuals hired after August 

25 27, 2007. 


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1 SEC. 241. SUBPART F EXCEPTION FOR ACTIVE FINANCING 

2 INCOME. 

3 (a) EXEMPT INSURANCE INCOME.—Paragraph (10) 

4 of section 953(e) (relating to application) is amended— 

5 (1) by striking ‘‘January 1, 2009’’ and insert6 ing ‘‘January 1, 2010’’, and 

7 (2) by striking ‘‘December 31, 2008’’ and in8 serting ‘‘December 31, 2009’’. 

9 (b) EXCEPTION TO TREATMENT AS FOREIGN PER10 SONAL HOLDING COMPANY INCOME.—Paragraph (9) of 

11 section 954(h) (relating to application) is amended by 

12 striking ‘‘January 1, 2009’’ and inserting ‘‘January 1, 

13 2010’’. 

14 SEC. 242. LOOK-THRU RULE FOR RELATED CONTROLLED 

15 FOREIGN CORPORATIONS. 

16 (a) IN GENERAL.—Subparagraph (C) of section 

17 954(c)(6) (relating to application) is amended by striking 

18 ‘‘January 1, 2009’’ and inserting ‘‘January 1, 2010’’. 

19 (b) EFFECTIVE DATE.—The amendment made by 

20 this section shall apply to taxable years of foreign corpora21 tions beginning after December 31, 2008, and to taxable 

22 years of United States shareholders with or within which 

23 such taxable years of foreign corporations end. 


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1 SEC. 243. EXPENSING FOR CERTAIN QUALIFIED FILM AND 

2 TELEVISION PRODUCTIONS. 

3 (a) IN GENERAL.—Subsection (f) of section 181 is 

4 amended by striking ‘‘December 31, 2008’’ and inserting 

5 ‘‘December 31, 2009’’. 

6 (b) EFFECTIVE DATE.—The amendment made by 

7 this section shall apply to productions commencing after 

8 December 31, 2008. 

9 SEC. 244. EXTENSION AND MODIFICATION OF DUTY SUS10 PENSION ON WOOL PRODUCTS; WOOL RE11 SEARCH FUND; WOOL DUTY REFUNDS. 

12 (a) EXTENSION OF TEMPORARY DUTY REDUC13 TIONS.—Each of the following headings of the Har14 monized Tariff Schedule of the United States is amended 

15 by striking the date in the effective period column and 

16 inserting ‘‘12/31/2014’’: 

17 (1) Heading 9902.51.11 (relating to fabrics of 

18 worsted wool). 

19 (2) Heading 9902.51.13 (relating to yarn of 

20 combed wool). 

21 (3) Heading 9902.51.14 (relating to wool fiber, 

22 waste, garnetted stock, combed wool, or wool top). 

23 (4) Heading 9902.51.15 (relating to fabrics of 

24 combed wool). 

25 (5) Heading 9902.51.16 (relating to fabrics of 

26 combed wool). 


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1 (b) EXTENSION OF DUTY REFUNDS AND WOOL RE2 SEARCH TRUST FUND.— 

3 (1) IN GENERAL.—Section 4002(c) of the Wool 

4 Suit and Textile Trade Extension Act of 2004 (Pub5 lic Law 108–429; 118 Stat. 2603) is amended— 

6 (A) in paragraph (3)(C), by striking 

7 ‘‘2010’’ and inserting ‘‘2015’’; and 

8 (B) in paragraph (6)(A), by striking 

9 ‘‘through 2009’’ and inserting ‘‘through 2014’’. 

10 (2) SUNSET.—Section 506(f) of the Trade and 

11 Development Act of 2000 (Public 106–200; 114 

12 Stat. 303 (7 U.S.C. 7101 note)) is amended by 

13 striking ‘‘2010’’ and inserting ‘‘2015’’. 

14 Subtitle D—Other Extensions 

15 SEC. 251. AUTHORITY TO DISCLOSE INFORMATION RE16 LATED TO TERRORIST ACTIVITIES MADE 

17 PERMANENT. 

18 (a) IN GENERAL.—Subparagraph (C) of section 

19 6103(i)(3) is amended by striking clause (iv). 

20 (b) DISCLOSURE ON REQUEST.—Paragraph (7) of 

21 section 6103(i) is amended by striking subparagraph (E). 

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

23 this section shall apply to disclosures after the date of the 

24 enactment of this Act. 


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1 SEC. 252. AUTHORITY FOR UNDERCOVER OPERATIONS 

2 MADE PERMANENT. 

3 (a) IN GENERAL.—Subsection (c) of section 7608 is 

4 amended by striking paragraph (6). 

5 (b) EFFECTIVE DATE.—The amendment made by 

6 this section shall take effect on January 1, 2008. 

7 SEC. 253. INCREASE IN LIMIT ON COVER OVER OF RUM EX8 CISE TAX TO PUERTO RICO AND THE VIRGIN 

9 ISLANDS. 

10 (a) IN GENERAL.—Paragraph (1) of section 7652(f) 

11 is amended by striking ‘‘January 1, 2008’’ and inserting 

12 ‘‘January 1, 2009’’. 

13 (b) EFFECTIVE DATE.—The amendment made by 

14 this section shall apply to distilled spirits brought into the 

15 United States after December 31, 2007. 

16 TITLE III—ADDITIONAL RELIEF 

17 Subtitle A—Individual Tax Relief 

18 SEC. 301. ADDITIONAL STANDARD DEDUCTION FOR REAL 

19 PROPERTY TAXES FOR NONITEMIZERS. 

20 (a) IN GENERAL.—Section 63(c)(1) (defining stand21 ard deduction) is amended by striking ‘‘and’’ at the end 

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

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

24 at the end the following new subparagraph: 

25 ‘‘(C) in the case of any taxable year begin26 ning in 2008, the real property tax deduction.’’. 


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•S 3125 IS

1 (b) DEFINITION.—Section 63(c) is amended by add2 ing at the end the following new paragraph: 

3 ‘‘(7) REAL PROPERTY TAX DEDUCTION.—For 

4 purposes of paragraph (1), the real property tax de5 duction is the lesser of— 

6 ‘‘(A) the amount allowable as a deduction 

7 under this chapter for State and local taxes de8 scribed in section 164(a)(1), or 

9 ‘‘(B) $350 ($700 in the case of a joint re10 turn). 

11 Any taxes taken into account under section 62(a) 

12 shall not be taken into account under this para13 graph.’’. 

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

15 this section shall apply to taxable years beginning after 

16 December 31, 2007. 

17 SEC. 302. $10,000 INCOME THRESHOLD USED TO CAL18 CULATE REFUNDABLE PORTION OF CHILD 

19 TAX CREDIT. 

20 (a) IN GENERAL.—Section 24(d) (relating to portion 

21 of credit refundable) is amended by adding at the end the 

22 following new paragraph: 

23 ‘‘(4) SPECIAL RULE FOR 2008.—Notwith24 standing paragraph (3), in the case of any taxable 

25 year beginning in 2008, the dollar amount in effect 


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1 for such taxable year under paragraph (1)(B)(i) 

2 shall be $10,000.’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 this section shall apply to taxable years beginning after 

5 December 31, 2007. 

6 SEC. 303. INCOME AVERAGING FOR AMOUNTS RECEIVED IN 

7 CONNECTION WITH THE EXXON VALDEZ LITI8 GATION. 

9 (a) INCOME AVERAGING OF AMOUNTS RECEIVED

10 FROM THE EXXON VALDEZ LITIGATION.—For purposes 

11 of section 1301 of the Internal Revenue Code of 1986— 

12 (1) any qualified taxpayer who receives any 

13 qualified settlement income in any taxable year shall 

14 be treated as engaged in a fishing business (deter15 mined without regard to the commercial nature of 

16 the business), and 

17 (2) such qualified settlement income shall be 

18 treated as income attributable to such a fishing busi19 ness for such taxable year. 

20 (b) CONTRIBUTIONS OF AMOUNTS RECEIVED TO RE21 TIREMENT ACCOUNTS.— 

22 (1) IN GENERAL.—Any qualified taxpayer who 

23 receives qualified settlement income during the tax24 able year may, at any time before the end of the tax25 able year in which such income was received, make 


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1 one or more contributions to an eligible retirement 

2 plan of which such qualified taxpayer is a bene3 ficiary in an aggregate amount not to exceed the 

4 lesser of— 

5 (A) $100,000 (reduced by the amount of 

6 qualified settlement income contributed to an 

7 eligible retirement plan in prior taxable years 

8 pursuant to this subsection), or 

9 (B) the amount of qualified settlement in10 come received by the individual during the tax11 able year. 

12 (2) TIME WHEN CONTRIBUTIONS DEEMED

13 MADE.—For purposes of paragraph (1), a qualified 

14 taxpayer shall be deemed to have made a contribu15 tion to an eligible retirement plan on the last day of 

16 the taxable year in which such income is received if 

17 the contribution is made on account of such taxable 

18 year and is made not later than the time prescribed 

19 by law for filing the return for such taxable year 

20 (not including extensions thereof). 

21 (3) TREATMENT OF CONTRIBUTIONS TO ELIGI22 BLE RETIREMENT PLANS.—For purposes of the In23 ternal Revenue Code of 1986, if a contribution is 

24 made pursuant to paragraph (1) with respect to 

25 qualified settlement income, then— 


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1 (A) except as provided in paragraph (4)— 

2 (i) to the extent of such contribution, 

3 the qualified settlement income shall not 

4 be included in taxable income, and 

5 (ii) for purposes of section 72 of such 

6 Code, such contribution shall not be con7 sidered to be investment in the contract, 

8 (B) the qualified taxpayer shall, to the ex9 tent of the amount of the contribution, be treat10 ed— 

11 (i) as having received the qualified 

12 settlement income— 

13 (I) in the case of a contribution 

14 to an individual retirement plan (as 

15 defined under section 7701(a)(37) of 

16 such Code), in a distribution described 

17 in section 408(d)(3) of such Code, 

18 and 

19 (II) in the case of any other eligi20 ble retirement plan, in an eligible roll21 over distribution (as defined under 

22 section 402(f)(2) of such Code), and 

23 (ii) as having transferred the amount 

24 to the eligible retirement plan in a direct 


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1 trustee to trustee transfer within 60 days 

2 of the distribution, 

3 (C) section 408(d)(3)(B) of the Internal 

4 Revenue Code of 1986 shall not apply with re5 spect to amounts treated as a rollover under 

6 this paragraph, and 

7 (D) section 408A(c)(3)(B) of the Internal 

8 Revenue Code of 1986 shall not apply with re9 spect to amounts contributed to a Roth IRA (as 

10 defined under section 408A(b) of such Code) or 

11 a designated Roth contribution to an applicable 

12 retirement plan (within the meaning of section 

13 402A of such Code) under this paragraph. 

14 (4) SPECIAL RULE FOR ROTH IRAS AND ROTH

15 401(k)S.—For purposes of the Internal Revenue 

16 Code of 1986, if a contribution is made pursuant to 

17 paragraph (1) with respect to qualified settlement 

18 income to a Roth IRA (as defined under section 

19 408A(b) of such Code) or as a designated Roth con20 tribution to an applicable retirement plan (within 

21 the meaning of section 402A of such Code), then— 

22 (A) the qualified settlement income shall 

23 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 Subtitle B—Business Related 

18 Provisions 

19 SEC. 311. UNIFORM TREATMENT OF ATTORNEY-ADVANCED 

20 EXPENSES AND COURT COSTS IN CONTIN21 GENCY FEE CASES. 

22 (a) IN GENERAL.—Section 162 is amended by redes23 ignating subsection (q) as subsection (r) and by inserting 

24 after subsection (p) the following new subsection: 


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1 ‘‘(q) ATTORNEY-ADVANCED EXPENSES AND COURT

2 COSTS IN CONTINGENCY FEE CASES.—In the case of any 

3 expense or court cost which is paid or incurred in the 

4 course of the trade or business of practicing law and the 

5 repayment of which is contingent on a recovery by judg6 ment or settlement in the action to which such expense 

7 or cost relates, the deduction under subsection (a) shall 

8 be determined as if such expense or cost was not subject 

9 to repayment.’’. 

10 (b) EFFECTIVE DATE.—The amendment made by 

11 this section shall apply to expenses and costs paid or in12 curred in taxable years beginning after December 31, 

13 2008. 

14 SEC. 312. PROVISIONS RELATED TO FILM AND TELEVISION 

15 PRODUCTIONS. 

16 (a) MODIFICATION OF LIMITATION ON EXPENS17 ING.—Subparagraph (A) of section 181(a)(2) is amended 

18 to read as follows: 

19 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

20 not apply to so much of the aggregate cost of 

21 any qualified film or television production as ex22 ceeds $15,000,000.’’. 

23 (b) MODIFICATIONS TO DEDUCTION FOR DOMESTIC

24 ACTIVITIES.— 


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1 (1) DETERMINATION OF W–2 WAGES.—Para2 graph (2) of section 199(b) is amended by adding at 

3 the end the following new subparagraph: 

4 ‘‘(D) SPECIAL RULE FOR QUALIFIED

5 FILM.—In the case of a qualified film, such 

6 term shall include compensation for services 

7 performed in the United States by actors, pro8 duction personnel, directors, and producers.’’. 

9 (2) DEFINITION OF QUALIFIED FILM.—Para10 graph (6) of section 199(c) is amended by adding at 

11 the end the following: ‘‘A qualified film shall include 

12 any copyrights, trademarks, or other intangibles 

13 with respect to such film. The methods and means 

14 of distributing a qualified film shall not affect the 

15 availability of the deduction under this section.’’. 

16 (3) PARTNERSHIPS.—Subparagraph (A) of sec17 tion 199(d)(1) is amended by striking ‘‘and’’ at the 

18 end of clause (ii), by striking the period at the end 

19 of clause (iii) and inserting ‘‘, and’’, and by adding 

20 at the end the following new clause: 

21 ‘‘(iv) in the case of each partner of a 

22 partnership, or shareholder of an S cor23 poration, who owns (directly or indirectly) 

24 at least 20 percent of the capital interests 


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1 in such partnership or of the stock of such 

2 S corporation— 

3 ‘‘(I) such partner or shareholder 

4 shall be treated as having engaged di5 rectly in any film produced by such 

6 partnership or S corporation, and 

7 ‘‘(II) such partnership or S cor8 poration shall be treated as having en9 gaged directly in any film produced by 

10 such partner or shareholder.’’. 

11 (c) EFFECTIVE DATE.— 

12 (1) IN GENERAL.—Except as otherwise pro13 vided in this subsection, the amendments made by 

14 this section shall apply to taxable years beginning 

15 after December 31, 2007. 

16 (2) EXPENSING.—The amendments made by 

17 subsection (a) shall apply to qualified film and tele18 vision productions commencing after December 31, 

19 2007. 

20 SEC. 313. MODIFICATION OF RATE OF EXCISE TAX ON CER21 TAIN WOODEN ARROWS DESIGNED FOR USE 

22 BY CHILDREN. 

23 (a) IN GENERAL.—Paragraph (2) of section 4161(b) 

24 (relating to arrows) is amended by redesignating subparaVerDate Aug 31 2005 22:16 Jun 13, 2008 Jkt 069200 PO 00000 Frm 00144 Fmt 6652 Sfmt 6201 E:\BILLS\S3125.IS S3125

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1 graph (B) as subparagraph (C) and by inserting after sub2 paragraph (A) the following new subparagraph: 

3 ‘‘(B) EXEMPTION FOR CERTAIN WOODEN

4 ARROW SHAFTS.—Subparagraph (A) shall not 

5 apply to any shaft consisting of all natural 

6 wood with no laminations or artificial means of 

7 enhancing the spine of such shaft (whether sold 

8 separately or incorporated as part of a finished 

9 or unfinished product) of a type used in the 

10 manufacture of any arrow which after its as11 sembly— 

‘‘(i) measures 5 12 ⁄16 of an inch or less in 

13 diameter, and 

14 ‘‘(ii) is not suitable for use with a bow 

15 described in paragraph (1)(A).’’. 

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

17 this section shall apply to shafts first sold after the date 

18 of enactment of this Act. 


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1 Subtitle C—Modification of Penalty 

2 on Understatement of Tax3 payer’s Liability by Tax Return 

4 Preparer 

5 SEC. 321. MODIFICATION OF PENALTY ON UNDERSTATE6 MENT OF TAXPAYER’S LIABILITY BY TAX RE7 TURN PREPARER. 

8 (a) IN GENERAL.—Subsection (a) of section 6694 

9 (relating to understatement due to unreasonable positions) 

10 is amended to read as follows: 

11 ‘‘(a) UNDERSTATEMENT DUE TO UNREASONABLE

12 POSITIONS.— 

13 ‘‘(1) IN GENERAL.—If a tax return preparer— 

14 ‘‘(A) prepares any return or claim of re15 fund with respect to which any part of an un16 derstatement of liability is due to a position de17 scribed in paragraph (2), and 

18 ‘‘(B) knew (or reasonably should have 

19 known) of the position, 

20 such tax return preparer shall pay a penalty with re21 spect to each such return or claim in an amount 

22 equal to the greater of $1,000 or 50 percent of the 

23 income derived (or to be derived) by the tax return 

24 preparer with respect to the return or claim. 

25 ‘‘(2) UNREASONABLE POSITION.— 


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1 ‘‘(A) IN GENERAL.—Except as otherwise 

2 provided in this paragraph, a position is de3 scribed in this paragraph unless there is or was 

4 substantial authority for the position. 

5 ‘‘(B) DISCLOSED POSITIONS.—If the posi6 tion was disclosed as provided in section 

7 6662(d)(2)(B)(ii)(I) and is not a position to 

8 which subparagraph (C) applies, the position is 

9 described in this paragraph unless there is a 

10 reasonable basis for the position. 

11 ‘‘(C) TAX SHELTERS AND REPORTABLE

12 TRANSACTIONS.—If the position is with respect 

13 to a tax shelter (as defined in section 

14 6662(d)(2)(C)(ii)) or a reportable transaction 

15 to which section 6662A applies, the position is 

16 described in this paragraph unless it is reason17 able to believe that the position would more 

18 likely than not be sustained on its merits. 

19 ‘‘(3) REASONABLE CAUSE EXCEPTION.—No 

20 penalty shall be imposed under this subsection if it 

21 is shown that there is reasonable cause for the un22 derstatement and the tax return preparer acted in 

23 good faith.’’. 

24 (b) EFFECTIVE DATE.—The amendment made by 

25 this section shall apply— 


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1 (1) in the case of a position other than a posi2 tion described in subparagraph (C) of section 

3 6694(a)(2) of the Internal Revenue Code of 1986 

4 (as amended by this section), to returns prepared 

5 after May 25, 2007, and 

6 (2) in the case of a position described in such 

7 subparagraph (C), to returns prepared for taxable 

8 years ending after the date of the enactment of this 

9 Act. 

10 Subtitle D—Extension and Expan11 sion of Certain GO Zone Incen12 tives 

13 SEC. 331. CERTAIN GO ZONE INCENTIVES. 

14 (a) USE OF AMENDED INCOME TAX RETURNS TO

15 TAKE INTO ACCOUNT RECEIPT OF CERTAIN HURRICANE16 RELATED CASUALTY LOSS GRANTS BY DISALLOWING

17 PREVIOUSLY TAKEN CASUALTY LOSS DEDUCTIONS.— 

18 (1) IN GENERAL.—Notwithstanding any other 

19 provision of the Internal Revenue Code of 1986, if 

20 a taxpayer claims a deduction for any taxable year 

21 with respect to a casualty loss to a principal resi22 dence (within the meaning of section 121 of such 

23 Code) resulting from Hurricane Katrina, Hurricane 

24 Rita, or Hurricane Wilma and in a subsequent tax25 able year receives a grant under Public Law 109– 


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1 148, 109–234, or 110–116 as reimbursement for 

2 such loss, such taxpayer may elect to file an amend3 ed income tax return for the taxable year in which 

4 such deduction was allowed (and for any taxable 

5 year to which such deduction is carried) and reduce 

6 (but not below zero) the amount of such deduction 

7 by the amount of such reimbursement. 

8 (2) TIME OF FILING AMENDED RETURN.— 

9 Paragraph (1) shall apply with respect to any grant 

10 only if any amended income tax returns with respect 

11 to such grant are filed not later than the later of— 

12 (A) the due date for filing the tax return 

13 for the taxable year in which the taxpayer re14 ceives such grant, or 

15 (B) the date which is 1 year after the date 

16 of the enactment of this Act. 

17 (3) WAIVER OF PENALTIES AND INTEREST.— 

18 Any underpayment of tax resulting from the reduc19 tion under paragraph (1) of the amount otherwise 

20 allowable as a deduction shall not be subject to any 

21 penalty or interest under such Code if such tax is 

22 paid not later than 1 year after the filing of the 

23 amended return to which such reduction relates. 


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1 (b) WAIVER OF DEADLINE ON CONSTRUCTION OF

2 GO ZONE PROPERTY ELIGIBLE FOR BONUS DEPRECIA3 TION.— 

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

5 1400N(d)(3) is amended to read as follows: 

6 ‘‘(B) without regard to ‘and before Janu7 ary 1, 2009’ in clause (i) thereof, and’’. 

8 (2) EFFECTIVE DATE.—The amendment made 

9 by this subsection shall apply to property placed in 

10 service after December 31, 2007. 

11 (c) INCLUSION OF CERTAIN COUNTIES IN GULF OP12 PORTUNITY ZONE FOR PURPOSES OF TAX-EXEMPT BOND

13 FINANCING.— 

14 (1) IN GENERAL.—Subsection (a) of section 

15 1400N is amended by adding at the end the fol16 lowing new paragraph: 

17 ‘‘(8) INCLUSION OF CERTAIN COUNTIES.—For 

18 purposes of this subsection, the Gulf Opportunity 

19 Zone includes Colbert County, Alabama and Dallas 

20 County, Alabama.’’. 

21 (2) EFFECTIVE DATE.—The amendment made 

22 by this subsection shall take effect as if included in 

23 the provisions of the Gulf Opportunity Zone Act of 

24 2005 to which it relates. 


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1 Subtitle E—Other Provisions 

2 SEC. 341. SECURE RURAL SCHOOLS AND COMMUNITY SELF3 DETERMINATION PROGRAM. 

4 (a) REAUTHORIZATION OF THE SECURE RURAL

5 SCHOOLS AND COMMUNITY SELF-DETERMINATION ACT

6 OF 2000.—The Secure Rural Schools and Community 

7 Self-Determination Act of 2000 (16 U.S.C. 500 note; Pub8 lic Law 106–393) is amended by striking sections 1 

9 through 403 and inserting the following: 

10 ‘‘SECTION 1. SHORT TITLE. 

11 ‘‘This Act may be cited as the ‘Secure Rural Schools 

12 and Community Self-Determination Act of 2000’. 

13 ‘‘SEC. 2. PURPOSES. 

14 ‘‘The purposes of this Act are— 

15 ‘‘(1) to stabilize and transition payments to 

16 counties to provide funding for schools and roads 

17 that supplements other available funds; 

18 ‘‘(2) to make additional investments in, and 

19 create additional employment opportunities through, 

20 projects that— 

21 ‘‘(A)(i) improve the maintenance of exist22 ing infrastructure; 

23 ‘‘(ii) implement stewardship objectives that 

24 enhance forest ecosystems; and 


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1 ‘‘(iii) restore and improve land health and 

2 water quality; 

3 ‘‘(B) enjoy broad-based support; and 

4 ‘‘(C) have objectives that may include— 

5 ‘‘(i) road, trail, and infrastructure 

6 maintenance or obliteration; 

7 ‘‘(ii) soil productivity improvement; 

8 ‘‘(iii) improvements in forest eco9 system health; 

10 ‘‘(iv) watershed restoration and main11 tenance; 

12 ‘‘(v) the restoration, maintenance, and 

13 improvement of wildlife and fish habitat; 

14 ‘‘(vi) the control of noxious and exotic 

15 weeds; and 

16 ‘‘(vii) the reestablishment of native 

17 species; and 

18 ‘‘(3) to improve cooperative relationships 

19 among— 

20 ‘‘(A) the people that use and care for Fed21 eral land; and 

22 ‘‘(B) the agencies that manage the Federal 

23 land. 

24 ‘‘SEC. 3. DEFINITIONS. 

25 ‘‘In this Act: 


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1 ‘‘(1) ADJUSTED SHARE.—The term ‘adjusted 

2 share’ means the number equal to the quotient ob3 tained by dividing— 

4 ‘‘(A) the number equal to the quotient ob5 tained by dividing— 

6 ‘‘(i) the base share for the eligible 

7 county; by 

8 ‘‘(ii) the income adjustment for the el9 igible county; by 

10 ‘‘(B) the number equal to the sum of the 

11 quotients obtained under subparagraph (A) and 

12 paragraph (8)(A) for all eligible counties. 

13 ‘‘(2) BASE SHARE.—The term ‘base share’ 

14 means the number equal to the average of— 

15 ‘‘(A) the quotient obtained by dividing— 

16 ‘‘(i) the number of acres of Federal 

17 land described in paragraph (7)(A) in each 

18 eligible county; by 

19 ‘‘(ii) the total number acres of Fed20 eral land in all eligible counties in all eligi21 ble States; and 

22 ‘‘(B) the quotient obtained by dividing— 

23 ‘‘(i) the amount equal to the average 

24 of the 3 highest 25-percent payments and 

25 safety net payments made to each eligible 


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1 State for each eligible county during the 

2 eligibility period; by 

3 ‘‘(ii) the amount equal to the sum of 

4 the amounts calculated under clause (i) 

5 and paragraph (9)(B)(i) for all eligible 

6 counties in all eligible States during the 

7 eligibility period. 

8 ‘‘(3) COUNTY PAYMENT.—The term ‘county 

9 payment’ means the payment for an eligible county 

10 calculated under section 101(b). 

11 ‘‘(4) ELIGIBLE COUNTY.—The term ‘eligible 

12 county’ means any county that— 

13 ‘‘(A) contains Federal land (as defined in 

14 paragraph (7)); and 

15 ‘‘(B) elects to receive a share of the State 

16 payment or the county payment under section 

17 102(b). 

18 ‘‘(5) ELIGIBILITY PERIOD.—The term ‘eligi19 bility period’ means fiscal year 1986 through fiscal 

20 year 1999. 

21 ‘‘(6) ELIGIBLE STATE.—The term ‘eligible 

22 State’ means a State or territory of the United 

23 States that received a 25-percent payment for 1 or 

24 more fiscal years of the eligibility period. 


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1 ‘‘(7) FEDERAL LAND.—The term ‘Federal land’ 

2 means— 

3 ‘‘(A) land within the National Forest Sys4 tem, as defined in section 11(a) of the Forest 

5 and Rangeland Renewable Resources Planning 

6 Act of 1974 (16 U.S.C. 1609(a)) exclusive of 

7 the National Grasslands and land utilization 

8 projects designated as National Grasslands ad9 ministered pursuant to the Act of July 22, 

10 1937 (7 U.S.C. 1010–1012); and 

11 ‘‘(B) such portions of the revested Oregon 

12 and California Railroad and reconveyed Coos 

13 Bay Wagon Road grant land as are or may 

14 hereafter come under the jurisdiction of the De15 partment of the Interior, which have heretofore 

16 or may hereafter be classified as timberlands, 

17 and power-site land valuable for timber, that 

18 shall be managed, except as provided in the 

19 former section 3 of the Act of August 28, 1937 

20 (50 Stat. 875; 43 U.S.C. 1181c), for permanent 

21 forest production. 

22 ‘‘(8) 50-PERCENT ADJUSTED SHARE.—The 

23 term ‘50-percent adjusted share’ means the number 

24 equal to the quotient obtained by dividing— 


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1 ‘‘(A) the number equal to the quotient ob2 tained by dividing— 

3 ‘‘(i) the 50-percent base share for the 

4 eligible county; by 

5 ‘‘(ii) the income adjustment for the el6 igible county; by 

7 ‘‘(B) the number equal to the sum of the 

8 quotients obtained under subparagraph (A) and 

9 paragraph (1)(A) for all eligible counties. 

10 ‘‘(9) 50-PERCENT BASE SHARE.—The term ‘50- 

11 percent base share’ means the number equal to the 

12 average of— 

13 ‘‘(A) the quotient obtained by dividing— 

14 ‘‘(i) the number of acres of Federal 

15 land described in paragraph (7)(B) in each 

16 eligible county; by 

17 ‘‘(ii) the total number acres of Fed18 eral land in all eligible counties in all eligi19 ble States; and 

20 ‘‘(B) the quotient obtained by dividing— 

21 ‘‘(i) the amount equal to the average 

22 of the 3 highest 50-percent payments made 

23 to each eligible county during the eligibility 

24 period; by 


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1 ‘‘(ii) the amount equal to the sum of 

2 the amounts calculated under clause (i) 

3 and paragraph (2)(B)(i) for all eligible 

4 counties in all eligible States during the 

5 eligibility period. 

6 ‘‘(10) 50-PERCENT PAYMENT.—The term ‘50- 

7 percent payment’ means the payment that is the 

8 sum of the 50-percent share otherwise paid to a 

9 county pursuant to title II of the Act of August 28, 

10 1937 (chapter 876; 50 Stat. 875; 43 U.S.C. 1181f), 

11 and the payment made to a county pursuant to the 

12 Act of May 24, 1939 (chapter 144; 53 Stat. 753; 43 

13 U.S.C. 1181f–1 et seq.). 

14 ‘‘(11) FULL FUNDING AMOUNT.—The term ‘full 

15 funding amount’ means— 

16 ‘‘(A) $500,000,000 for fiscal year 2008; 

17 and 

18 ‘‘(B) for fiscal year 2009 and each fiscal 

19 year thereafter, the amount that is equal to 90 

20 percent of the full funding amount for the pre21 ceding fiscal year. 

22 ‘‘(12) INCOME ADJUSTMENT.—The term ‘in23 come adjustment’ means the square of the quotient 

24 obtained by dividing— 


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1 ‘‘(A) the per capita personal income for 

2 each eligible county; by 

3 ‘‘(B) the median per capita personal in4 come of all eligible counties. 

5 ‘‘(13) PER CAPITA PERSONAL INCOME.—The 

6 term ‘per capita personal income’ means the most 

7 recent per capita personal income data, as deter8 mined by the Bureau of Economic Analysis. 

9 ‘‘(14) SAFETY NET PAYMENTS.—The term 

10 ‘safety net payments’ means the special payment 

11 amounts paid to States and counties required by 

12 section 13982 or 13983 of the Omnibus Budget 

13 Reconciliation Act of 1993 (Public Law 103–66; 16 

14 U.S.C. 500 note; 43 U.S.C. 1181f note). 

15 ‘‘(15) SECRETARY CONCERNED.—The term 

16 ‘Secretary concerned’ means— 

17 ‘‘(A) the Secretary of Agriculture or the 

18 designee of the Secretary of Agriculture with 

19 respect to the Federal land described in para20 graph (7)(A); and 

21 ‘‘(B) the Secretary of the Interior or the 

22 designee of the Secretary of the Interior with 

23 respect to the Federal land described in para24 graph (7)(B). 


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1 ‘‘(16) STATE PAYMENT.—The term ‘State pay2 ment’ means the payment for an eligible State cal3 culated under section 101(a). 

4 ‘‘(17) 25-PERCENT PAYMENT.—The term ‘25- 

5 percent payment’ means the payment to States re6 quired by the sixth paragraph under the heading of 

7 ‘FOREST SERVICE’ in the Act of May 23, 1908 

8 (35 Stat. 260; 16 U.S.C. 500), and section 13 of the 

9 Act of March 1, 1911 (36 Stat. 963; 16 U.S.C. 

10 500). 

11 ‘‘TITLE I—SECURE PAYMENTS 

12 FOR STATES AND COUNTIES 

13 CONTAINING FEDERAL LAND 

14 ‘‘SEC. 101. SECURE PAYMENTS FOR STATES CONTAINING 

15 FEDERAL LAND. 

16 ‘‘(a) STATE PAYMENT.—For each of fiscal years 

17 2008 through 2011, the Secretary of Agriculture shall cal18 culate for each eligible State an amount equal to the sum 

19 of the products obtained by multiplying— 

20 ‘‘(1) the adjusted share for each eligible county 

21 within the eligible State; by 

22 ‘‘(2) the full funding amount for the fiscal year. 

23 ‘‘(b) COUNTY PAYMENT.—For each of fiscal years 

24 2008 through 2011, the Secretary of the Interior shall cal25 culate for each eligible county that received a 50-percent 


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1 payment during the eligibility period an amount equal to 

2 the product obtained by multiplying— 

3 ‘‘(1) the 50-percent adjusted share for the eligi4 ble county; by 

5 ‘‘(2) the full funding amount for the fiscal year. 

6 ‘‘SEC. 102. PAYMENTS TO STATES AND COUNTIES. 

7 ‘‘(a) PAYMENT AMOUNTS.—Except as provided in 

8 section 103, the Secretary of the Treasury shall pay to— 

9 ‘‘(1) a State or territory of the United States 

10 an amount equal to the sum of the amounts elected 

11 under subsection (b) by each county within the State 

12 or territory for— 

13 ‘‘(A) if the county is eligible for the 25- 

14 percent payment, the share of the 25-percent 

15 payment; or 

16 ‘‘(B) the share of the State payment of the 

17 eligible county; and 

18 ‘‘(2) a county an amount equal to the amount 

19 elected under subsection (b) by each county for— 

20 ‘‘(A) if the county is eligible for the 50- 

21 percent payment, the 50-percent payment; or 

22 ‘‘(B) the county payment for the eligible 

23 county. 

24 ‘‘(b) ELECTION TO RECEIVE PAYMENT AMOUNT.— 

25 ‘‘(1) ELECTION; SUBMISSION OF RESULTS.— 


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1 ‘‘(A) IN GENERAL.—The election to receive 

2 a share of the State payment, the county pay3 ment, a share of the State payment and the 

4 county payment, a share of the 25-percent pay5 ment, the 50-percent payment, or a share of the 

6 25-percent payment and the 50-percent pay7 ment, as applicable, shall be made at the discre8 tion of each affected county by August 1, 2008, 

9 and August 1 of each second fiscal year there10 after, in accordance with paragraph (2), and 

11 transmitted to the Secretary concerned by the 

12 Governor of each eligible State. 

13 ‘‘(B) FAILURE TO TRANSMIT.—If an elec14 tion for an affected county is not transmitted to 

15 the Secretary concerned by the date specified 

16 under subparagraph (A), the affected county 

17 shall be considered to have elected to receive a 

18 share of the State payment, the county pay19 ment, or a share of the State payment and the 

20 county payment, as applicable. 

21 ‘‘(2) DURATION OF ELECTION.— 

22 ‘‘(A) IN GENERAL.—A county election to 

23 receive a share of the 25-percent payment or 

24 50-percent payment, as applicable, shall be ef25 fective for 2 fiscal years. 


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1 ‘‘(B) FULL FUNDING AMOUNT.—If a coun2 ty elects to receive a share of the State payment 

3 or the county payment, the election shall be ef4 fective for all subsequent fiscal years through 

5 fiscal year 2011. 

6 ‘‘(3) SOURCE OF PAYMENT AMOUNTS.—The 

7 payment to an eligible State or eligible county under 

8 this section for a fiscal year shall be derived from— 

9 ‘‘(A) any amounts that are appropriated to 

10 carry out this Act; 

11 ‘‘(B) any revenues, fees, penalties, or mis12 cellaneous receipts, exclusive of deposits to any 

13 relevant trust fund, special account, or perma14 nent operating funds, received by the Federal 

15 Government from activities by the Bureau of 

16 Land Management or the Forest Service on the 

17 applicable Federal land; and 

18 ‘‘(C) to the extent of any shortfall, out of 

19 any amounts in the Treasury of the United 

20 States not otherwise appropriated. 

21 ‘‘(c) DISTRIBUTION AND EXPENDITURE OF PAY22 MENTS.— 

23 ‘‘(1) DISTRIBUTION METHOD.—A State that re24 ceives a payment under subsection (a) for Federal 

25 land described in section 3(7)(A) shall distribute the 


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1 appropriate payment amount among the appropriate 

2 counties in the State in accordance with— 

3 ‘‘(A) the Act of May 23, 1908 (16 U.S.C. 

4 500); and 

5 ‘‘(B) section 13 of the Act of March 1, 

6 1911 (36 Stat. 963; 16 U.S.C. 500). 

7 ‘‘(2) EXPENDITURE PURPOSES.—Subject to 

8 subsection (d), payments received by a State under 

9 subsection (a) and distributed to counties in accord10 ance with paragraph (1) shall be expended as re11 quired by the laws referred to in paragraph (1). 

12 ‘‘(d) EXPENDITURE RULES FOR ELIGIBLE COUN13 TIES.— 

14 ‘‘(1) ALLOCATIONS.— 

15 ‘‘(A) USE OF PORTION IN SAME MANNER

16 AS 25-PERCENT PAYMENT OR 50-PERCENT PAY17 MENT, AS APPLICABLE.—Except as provided in 

18 paragraph (3)(B), if an eligible county elects to 

19 receive its share of the State payment or the 

20 county payment, not less than 80 percent, but 

21 not more than 85 percent, of the funds shall be 

22 expended in the same manner in which the 25- 

23 percent payments or 50-percent payment, as 

24 applicable, are required to be expended. 


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1 ‘‘(B) ELECTION AS TO USE OF BAL2 ANCE.—Except as provided in subparagraph 

3 (C), an eligible county shall elect to do 1 or 

4 more of the following with the balance of any 

5 funds not expended pursuant to subparagraph 

6 (A): 

7 ‘‘(i) Reserve any portion of the bal8 ance for projects in accordance with title 

9 II. 

10 ‘‘(ii) Reserve not more than 7 percent 

11 of the total share for the eligible county of 

12 the State payment or the county payment 

13 for projects in accordance with title III. 

14 ‘‘(iii) Return the portion of the bal15 ance not reserved under clauses (i) and (ii) 

16 to the Treasury of the United States. 

17 ‘‘(C) COUNTIES WITH MODEST DISTRIBU18 TIONS.—In the case of each eligible county to 

19 which more than $100,000, but less than 

20 $350,000, is distributed for any fiscal year pur21 suant to either or both of paragraphs (1)(B) 

22 and (2)(B) of subsection (a), the eligible coun23 ty, with respect to the balance of any funds not 

24 expended pursuant to subparagraph (A) for 

25 that fiscal year, shall— 


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1 ‘‘(i) reserve any portion of the balance 

2 for— 

3 ‘‘(I) carrying out projects under 

4 title II; 

5 ‘‘(II) carrying out projects under 

6 title III; or 

7 ‘‘(III) a combination of the pur8 poses described in subclauses (I) and 

9 (II); or 

10 ‘‘(ii) return the portion of the balance 

11 not reserved under clause (i) to the Treas12 ury of the United States. 

13 ‘‘(2) DISTRIBUTION OF FUNDS.— 

14 ‘‘(A) IN GENERAL.—Funds reserved by an 

15 eligible county under subparagraph (B)(i) or 

16 (C)(i) of paragraph (1) for carrying out 

17 projects under title II shall be deposited in a 

18 special account in the Treasury of the United 

19 States. 

20 ‘‘(B) AVAILABILITY.—Amounts deposited 

21 under subparagraph (A) shall— 

22 ‘‘(i) be available for expenditure by 

23 the Secretary concerned, without further 

24 appropriation; and 


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1 ‘‘(ii) remain available until expended 

2 in accordance with title II. 

3 ‘‘(3) ELECTION.— 

4 ‘‘(A) NOTIFICATION.— 

5 ‘‘(i) IN GENERAL.—An eligible county 

6 shall notify the Secretary concerned of an 

7 election by the eligible county under this 

8 subsection not later than September 30 of 

9 each fiscal year. 

10 ‘‘(ii) FAILURE TO ELECT.—Except as 

11 provided in subparagraph (B), if the eligi12 ble county fails to make an election by the 

13 date specified in clause (i), the eligible 

14 county shall— 

15 ‘‘(I) be considered to have elected 

16 to expend 85 percent of the funds in 

17 accordance with paragraph (1)(A); 

18 and 

19 ‘‘(II) return the balance to the 

20 Treasury of the United States. 

21 ‘‘(B) COUNTIES WITH MINOR DISTRIBU22 TIONS.—In the case of each eligible county to 

23 which less than $100,000 is distributed for any 

24 fiscal year pursuant to either or both of para25 graphs (1)(B) and (2)(B) of subsection (a), the 


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1 eligible county may elect to expend all the funds 

2 in the same manner in which the 25-percent 

3 payments or 50-percent payments, as applica4 ble, are required to be expended. 

5 ‘‘(e) TIME FOR PAYMENT.—The payments required 

6 under this section for a fiscal year shall be made as soon 

7 as practicable after the end of that fiscal year. 

8 ‘‘SEC. 103. TRANSITION PAYMENTS TO STATES. 

9 ‘‘(a) DEFINITIONS.—In this section: 

10 ‘‘(1) ADJUSTED AMOUNT.—The term ‘adjusted 

11 amount’ means, with respect to a covered State— 

12 ‘‘(A) for fiscal year 2008, 90 percent of— 

13 ‘‘(i) the sum of the amounts paid for 

14 fiscal year 2006 under section 102(a)(2) 

15 (as in effect on September 29, 2006) for 

16 the eligible counties in the covered State 

17 that have elected under section 102(b) to 

18 receive a share of the State payment for 

19 fiscal year 2008; and 

20 ‘‘(ii) the sum of the amounts paid for 

21 fiscal year 2006 under section 103(a)(2) 

22 (as in effect on September 29, 2006) for 

23 the eligible counties in the State of Oregon 

24 that have elected under section 102(b) to 


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1 receive the county payment for fiscal year 

2 2008; 

3 ‘‘(B) for fiscal year 2009, 76 percent of— 

4 ‘‘(i) the sum of the amounts paid for 

5 fiscal year 2006 under section 102(a)(2) 

6 (as in effect on September 29, 2006) for 

7 the eligible counties in the covered State 

8 that have elected under section 102(b) to 

9 receive a share of the State payment for 

10 fiscal year 2009; and 

11 ‘‘(ii) the sum of the amounts paid for 

12 fiscal year 2006 under section 103(a)(2) 

13 (as in effect on September 29, 2006) for 

14 the eligible counties in the State of Oregon 

15 that have elected under section 102(b) to 

16 receive the county payment for fiscal year 

17 2009; and 

18 ‘‘(C) for fiscal year 2010, 65 percent of— 

19 ‘‘(i) the sum of the amounts paid for 

20 fiscal year 2006 under section 102(a)(2) 

21 (as in effect on September 29, 2006) for 

22 the eligible counties in the covered State 

23 that have elected under section 102(b) to 

24 receive a share of the State payment for 

25 fiscal year 2010; and 


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1 ‘‘(ii) the sum of the amounts paid for 

2 fiscal year 2006 under section 103(a)(2) 

3 (as in effect on September 29, 2006) for 

4 the eligible counties in the State of Oregon 

5 that have elected under section 102(b) to 

6 receive the county payment for fiscal year 

7 2010. 

8 ‘‘(2) COVERED STATE.—The term ‘covered 

9 State’ means each of the States of California, Lou10 isiana, Oregon, Pennsylvania, South Carolina, South 

11 Dakota, Texas, and Washington. 

12 ‘‘(b) TRANSITION PAYMENTS.—For each of fiscal 

13 years 2008 through 2010, in lieu of the payment amounts 

14 that otherwise would have been made under paragraphs 

15 (1)(B) and (2)(B) of section 102(a), the Secretary of the 

16 Treasury shall pay the adjusted amount to each covered 

17 State and the eligible counties within the covered State, 

18 as applicable. 

19 ‘‘(c) DISTRIBUTION OF ADJUSTED AMOUNT.—Ex20 cept as provided in subsection (d), it is the intent of Con21 gress that the method of distributing the payments under 

22 subsection (b) among the counties in the covered States 

23 for each of fiscal years 2008 through 2010 be in the same 

24 proportion that the payments were distributed to the eligi25 ble counties in fiscal year 2006. 


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1 ‘‘(d) DISTRIBUTION OF PAYMENTS IN CALI2 FORNIA.—The following payments shall be distributed 

3 among the eligible counties in the State of California in 

4 the same proportion that payments under section 

5 102(a)(2) (as in effect on September 29, 2006) were dis6 tributed to the eligible counties for fiscal year 2006: 

7 ‘‘(1) Payments to the State of California under 

8 subsection (b). 

9 ‘‘(2) The shares of the eligible counties of the 

10 State payment for California under section 102 for 

11 fiscal year 2011. 

12 ‘‘(e) TREATMENT OF PAYMENTS.—For purposes of 

13 this Act, any payment made under subsection (b) shall be 

14 considered to be a payment made under section 102(a). 

15 ‘‘TITLE II—SPECIAL PROJECTS 

16 ON FEDERAL LAND 

17 ‘‘SEC. 201. DEFINITIONS. 

18 ‘‘In this title: 

19 ‘‘(1) PARTICIPATING COUNTY.—The term ‘par20 ticipating county’ means an eligible county that 

21 elects under section 102(d) to expend a portion of 

22 the Federal funds received under section 102 in ac23 cordance with this title. 

24 ‘‘(2) PROJECT FUNDS.—The term ‘project 

25 funds’ means all funds an eligible county elects 


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1 under section 102(d) to reserve for expenditure in 

2 accordance with this title. 

3 ‘‘(3) RESOURCE ADVISORY COMMITTEE.—The 

4 term ‘resource advisory committee’ means— 

5 ‘‘(A) an advisory committee established by 

6 the Secretary concerned under section 205; or 

7 ‘‘(B) an advisory committee determined by 

8 the Secretary concerned to meet the require9 ments of section 205. 

10 ‘‘(4) RESOURCE MANAGEMENT PLAN.—The 

11 term ‘resource management plan’ means— 

12 ‘‘(A) a land use plan prepared by the Bu13 reau of Land Management for units of the Fed14 eral land described in section 3(7)(B) pursuant 

15 to section 202 of the Federal Land Policy and 

16 Management Act of 1976 (43 U.S.C. 1712); or 

17 ‘‘(B) a land and resource management 

18 plan prepared by the Forest Service for units of 

19 the National Forest System pursuant to section 

20 6 of the Forest and Rangeland Renewable Re21 sources Planning Act of 1974l (16 U.S.C. 

22 1604). 


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1 ‘‘SEC. 202. GENERAL LIMITATION ON USE OF PROJECT 

2 FUNDS. 

3 ‘‘(a) LIMITATION.—Project funds shall be expended 

4 solely on projects that meet the requirements of this title. 

5 ‘‘(b) AUTHORIZED USES.—Project funds may be 

6 used by the Secretary concerned for the purpose of enter7 ing into and implementing cooperative agreements with 

8 willing Federal agencies, State and local governments, pri9 vate and nonprofit entities, and landowners for protection, 

10 restoration, and enhancement of fish and wildlife habitat, 

11 and other resource objectives consistent with the purposes 

12 of this Act on Federal land and on non-Federal land where 

13 projects would benefit the resources on Federal land. 

14 ‘‘SEC. 203. SUBMISSION OF PROJECT PROPOSALS. 

15 ‘‘(a) SUBMISSION OF PROJECT PROPOSALS TO SEC16 RETARY CONCERNED.— 

17 ‘‘(1) PROJECTS FUNDED USING PROJECT

18 FUNDS.—Not later than September 30 for fiscal 

19 year 2008, and each September 30 thereafter for 

20 each succeeding fiscal year through fiscal year 2011, 

21 each resource advisory committee shall submit to the 

22 Secretary concerned a description of any projects 

23 that the resource advisory committee proposes the 

24 Secretary undertake using any project funds re25 served by eligible counties in the area in which the 


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1 resource advisory committee has geographic jurisdic2 tion. 

3 ‘‘(2) PROJECTS FUNDED USING OTHER

4 FUNDS.—A resource advisory committee may submit 

5 to the Secretary concerned a description of any 

6 projects that the committee proposes the Secretary 

7 undertake using funds from State or local govern8 ments, or from the private sector, other than project 

9 funds and funds appropriated and otherwise avail10 able to do similar work. 

11 ‘‘(3) JOINT PROJECTS.—Participating counties 

12 or other persons may propose to pool project funds 

13 or other funds, described in paragraph (2), and 

14 jointly propose a project or group of projects to a re15 source advisory committee established under section 

16 205. 

17 ‘‘(b) REQUIRED DESCRIPTION OF PROJECTS.—In 

18 submitting proposed projects to the Secretary concerned 

19 under subsection (a), a resource advisory committee shall 

20 include in the description of each proposed project the fol21 lowing information: 

22 ‘‘(1) The purpose of the project and a descrip23 tion of how the project will meet the purposes of this 

24 title. 

25 ‘‘(2) The anticipated duration of the project. 


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1 ‘‘(3) The anticipated cost of the project. 

2 ‘‘(4) The proposed source of funding for the 

3 project, whether project funds or other funds. 

4 ‘‘(5)(A) Expected outcomes, including how the 

5 project will meet or exceed desired ecological condi6 tions, maintenance objectives, or stewardship objec7 tives. 

8 ‘‘(B) An estimate of the amount of any timber, 

9 forage, and other commodities and other economic 

10 activity, including jobs generated, if any, anticipated 

11 as part of the project. 

12 ‘‘(6) A detailed monitoring plan, including 

13 funding needs and sources, that— 

14 ‘‘(A) tracks and identifies the positive or 

15 negative impacts of the project, implementation, 

16 and provides for validation monitoring; and 

17 ‘‘(B) includes an assessment of the fol18 lowing: 

19 ‘‘(i) Whether or not the project met or 

20 exceeded desired ecological conditions; cre21 ated local employment or training opportu22 nities, including summer youth jobs pro23 grams such as the Youth Conservation 

24 Corps where appropriate. 


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1 ‘‘(ii) Whether the project improved 

2 the use of, or added value to, any products 

3 removed from land consistent with the pur4 poses of this title. 

5 ‘‘(7) An assessment that the project is to be in 

6 the public interest. 

7 ‘‘(c) AUTHORIZED PROJECTS.—Projects proposed 

8 under subsection (a) shall be consistent with section 2. 

9 ‘‘SEC. 204. EVALUATION AND APPROVAL OF PROJECTS BY 

10 SECRETARY CONCERNED. 

11 ‘‘(a) CONDITIONS FOR APPROVAL OF PROPOSED

12 PROJECT.—The Secretary concerned may make a decision 

13 to approve a project submitted by a resource advisory com14 mittee under section 203 only if the proposed project satis15 fies each of the following conditions: 

16 ‘‘(1) The project complies with all applicable 

17 Federal laws (including regulations). 

18 ‘‘(2) The project is consistent with the applica19 ble resource management plan and with any water20 shed or subsequent plan developed pursuant to the 

21 resource management plan and approved by the Sec22 retary concerned. 

23 ‘‘(3) The project has been approved by the re24 source advisory committee in accordance with secVerDate Aug 31 2005 22:16 Jun 13, 2008 Jkt 069200 PO 00000 Frm 00175 Fmt 6652 Sfmt 6201 E:\BILLS\S3125.IS S3125

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1 tion 205, including the procedures issued under sub2 section (e) of that section. 

3 ‘‘(4) A project description has been submitted 

4 by the resource advisory committee to the Secretary 

5 concerned in accordance with section 203. 

6 ‘‘(5) The project will improve the maintenance 

7 of existing infrastructure, implement stewardship ob8 jectives that enhance forest ecosystems, and restore 

9 and improve land health and water quality. 

10 ‘‘(b) ENVIRONMENTAL REVIEWS.— 

11 ‘‘(1) REQUEST FOR PAYMENT BY COUNTY.— 

12 The Secretary concerned may request the resource 

13 advisory committee submitting a proposed project to 

14 agree to the use of project funds to pay for any envi15 ronmental review, consultation, or compliance with 

16 applicable environmental laws required in connection 

17 with the project. 

18 ‘‘(2) CONDUCT OF ENVIRONMENTAL REVIEW.— 

19 If a payment is requested under paragraph (1) and 

20 the resource advisory committee agrees to the ex21 penditure of funds for this purpose, the Secretary 

22 concerned shall conduct environmental review, con23 sultation, or other compliance responsibilities in ac24 cordance with Federal laws (including regulations). 

25 ‘‘(3) EFFECT OF REFUSAL TO PAY.— 


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1 ‘‘(A) IN GENERAL.—If a resource advisory 

2 committee does not agree to the expenditure of 

3 funds under paragraph (1), the project shall be 

4 deemed withdrawn from further consideration 

5 by the Secretary concerned pursuant to this 

6 title. 

7 ‘‘(B) EFFECT OF WITHDRAWAL.—A with8 drawal under subparagraph (A) shall be deemed 

9 to be a rejection of the project for purposes of 

10 section 207(c). 

11 ‘‘(c) DECISIONS OF SECRETARY CONCERNED.— 

12 ‘‘(1) REJECTION OF PROJECTS.— 

13 ‘‘(A) IN GENERAL.—A decision by the Sec14 retary concerned to reject a proposed project 

15 shall be at the sole discretion of the Secretary 

16 concerned. 

17 ‘‘(B) NO ADMINISTRATIVE APPEAL OR JU18 DICIAL REVIEW.—Notwithstanding any other 

19 provision of law, a decision by the Secretary 

20 concerned to reject a proposed project shall not 

21 be subject to administrative appeal or judicial 

22 review. 

23 ‘‘(C) NOTICE OF REJECTION.—Not later 

24 than 30 days after the date on which the Sec25 retary concerned makes the rejection decision, 


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1 the Secretary concerned shall notify in writing 

2 the resource advisory committee that submitted 

3 the proposed project of the rejection and the 

4 reasons for rejection. 

5 ‘‘(2) NOTICE OF PROJECT APPROVAL.—The 

6 Secretary concerned shall publish in the Federal 

7 Register notice of each project approved under sub8 section (a) if the notice would be required had the 

9 project originated with the Secretary. 

10 ‘‘(d) SOURCE AND CONDUCT OF PROJECT.—Once the 

11 Secretary concerned accepts a project for review under 

12 section 203, the acceptance shall be deemed a Federal ac13 tion for all purposes. 

14 ‘‘(e) IMPLEMENTATION OF APPROVED PROJECTS.— 

15 ‘‘(1) COOPERATION.—Notwithstanding chapter 

16 63 of title 31, United States Code, using project 

17 funds the Secretary concerned may enter into con18 tracts, grants, and cooperative agreements with 

19 States and local governments, private and nonprofit 

20 entities, and landowners and other persons to assist 

21 the Secretary in carrying out an approved project. 

22 ‘‘(2) BEST VALUE CONTRACTING.— 

23 ‘‘(A) IN GENERAL.—For any project in24 volving a contract authorized by paragraph (1) 

25 the Secretary concerned may elect a source for 


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1 performance of the contract on a best value 

2 basis. 

3 ‘‘(B) FACTORS.—The Secretary concerned 

4 shall determine best value based on such factors 

5 as— 

6 ‘‘(i) the technical demands and com7 plexity of the work to be done; 

8 ‘‘(ii)(I) the ecological objectives of the 

9 project; and 

10 ‘‘(II) the sensitivity of the resources 

11 being treated; 

12 ‘‘(iii) the past experience by the con13 tractor with the type of work being done, 

14 using the type of equipment proposed for 

15 the project, and meeting or exceeding de16 sired ecological conditions; and 

17 ‘‘(iv) the commitment of the con18 tractor to hiring highly qualified workers 

19 and local residents. 

20 ‘‘(3) MERCHANTABLE TIMBER CONTRACTING

21 PILOT PROGRAM.— 

22 ‘‘(A) ESTABLISHMENT.—The Secretary 

23 concerned shall establish a pilot program to im24 plement a certain percentage of approved 


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1 projects involving the sale of merchantable tim2 ber using separate contracts for— 

3 ‘‘(i) the harvesting or collection of 

4 merchantable timber; and 

5 ‘‘(ii) the sale of the timber. 

6 ‘‘(B) ANNUAL PERCENTAGES.—Under the 

7 pilot program, the Secretary concerned shall en8 sure that, on a nationwide basis, not less than 

9 the following percentage of all approved projects 

10 involving the sale of merchantable timber are 

11 implemented using separate contracts: 

12 ‘‘(i) For fiscal year 2008, 35 percent. 

13 ‘‘(ii) For fiscal year 2009, 45 percent. 

14 ‘‘(iii) For each of fiscal years 2010 

15 and 2011, 50 percent. 

16 ‘‘(C) INCLUSION IN PILOT PROGRAM.—The 

17 decision whether to use separate contracts to 

18 implement a project involving the sale of mer19 chantable timber shall be made by the Sec20 retary concerned after the approval of the 

21 project under this title. 

22 ‘‘(D) ASSISTANCE.— 

23 ‘‘(i) IN GENERAL.—The Secretary 

24 concerned may use funds from any appro25 priated account available to the Secretary 


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1 for the Federal land to assist in the ad2 ministration of projects conducted under 

3 the pilot program. 

4 ‘‘(ii) MAXIMUM AMOUNT OF ASSIST5 ANCE.—The total amount obligated under 

6 this subparagraph may not exceed 

7 $1,000,000 for any fiscal year during 

8 which the pilot program is in effect. 

9 ‘‘(E) REVIEW AND REPORT.— 

10 ‘‘(i) INITIAL REPORT.—Not later than 

11 September 30, 2010, the Comptroller Gen12 eral shall submit to the Committees on Ag13 riculture, Nutrition, and Forestry and En14 ergy and Natural Resources of the Senate 

15 and the Committees on Agriculture and 

16 Natural Resources of the House of Rep17 resentatives a report assessing the pilot 

18 program. 

19 ‘‘(ii) ANNUAL REPORT.—The Sec20 retary concerned shall submit to the Com21 mittees on Agriculture, Nutrition, and For22 estry and Energy and Natural Resources 

23 of the Senate and the Committees on Agri24 culture and Natural Resources of the 


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1 House of Representatives an annual report 

2 describing the results of the pilot program. 

3 ‘‘(f) REQUIREMENTS FOR PROJECT FUNDS.—The 

4 Secretary shall ensure that at least 50 percent of all 

5 project funds be used for projects that are primarily dedi6 cated— 

7 ‘‘(1) to road maintenance, decommissioning, or 

8 obliteration; or 

9 ‘‘(2) to restoration of streams and watersheds. 

10 ‘‘SEC. 205. RESOURCE ADVISORY COMMITTEES. 

11 ‘‘(a) ESTABLISHMENT AND PURPOSE OF RESOURCE

12 ADVISORY COMMITTEES.— 

13 ‘‘(1) ESTABLISHMENT.—The Secretary con14 cerned shall establish and maintain resource advi15 sory committees to perform the duties in subsection 

16 (b), except as provided in paragraph (4). 

17 ‘‘(2) PURPOSE.—The purpose of a resource ad18 visory committee shall be— 

19 ‘‘(A) to improve collaborative relationships; 

20 and 

21 ‘‘(B) to provide advice and recommenda22 tions to the land management agencies con23 sistent with the purposes of this title. 

24 ‘‘(3) ACCESS TO RESOURCE ADVISORY COMMIT25 TEES.—To ensure that each unit of Federal land 


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1 has access to a resource advisory committee, and 

2 that there is sufficient interest in participation on a 

3 committee to ensure that membership can be bal4 anced in terms of the points of view represented and 

5 the functions to be performed, the Secretary con6 cerned may, establish resource advisory committees 

7 for part of, or 1 or more, units of Federal land. 

8 ‘‘(4) EXISTING ADVISORY COMMITTEES.— 

9 ‘‘(A) IN GENERAL.—An advisory com10 mittee that meets the requirements of this sec11 tion, a resource advisory committee established 

12 before September 29, 2006, or an advisory com13 mittee determined by the Secretary concerned 

14 before September 29, 2006, to meet the re15 quirements of this section may be deemed by 

16 the Secretary concerned to be a resource advi17 sory committee for the purposes of this title. 

18 ‘‘(B) CHARTER.—A charter for a com19 mittee described in subparagraph (A) that was 

20 filed on or before September 29, 2006, shall be 

21 considered to be filed for purposes of this Act. 

22 ‘‘(C) BUREAU OF LAND MANAGEMENT AD23 VISORY COMMITTEES.—The Secretary of the In24 terior may deem a resource advisory committee 

25 meeting the requirements of subpart 1784 of 


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1 part 1780 of title 43, Code of Federal Regula2 tions, as a resource advisory committee for the 

3 purposes of this title. 

4 ‘‘(b) DUTIES.—A resource advisory committee 

5 shall— 

6 ‘‘(1) review projects proposed under this title by 

7 participating counties and other persons; 

8 ‘‘(2) propose projects and funding to the Sec9 retary concerned under section 203; 

10 ‘‘(3) provide early and continuous coordination 

11 with appropriate land management agency officials 

12 in recommending projects consistent with purposes 

13 of this Act under this title; 

14 ‘‘(4) provide frequent opportunities for citizens, 

15 organizations, tribes, land management agencies, 

16 and other interested parties to participate openly 

17 and meaningfully, beginning at the early stages of 

18 the project development process under this title; 

19 ‘‘(5)(A) monitor projects that have been ap20 proved under section 204; and 

21 ‘‘(B) advise the designated Federal official on 

22 the progress of the monitoring efforts under sub23 paragraph (A); and 

24 ‘‘(6) make recommendations to the Secretary 

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1 ments to the projects being monitored by the re2 source advisory committee. 

3 ‘‘(c) APPOINTMENT BY THE SECRETARY.— 

4 ‘‘(1) APPOINTMENT AND TERM.— 

5 ‘‘(A) IN GENERAL.—The Secretary con6 cerned, shall appoint the members of resource 

7 advisory committees for a term of 4 years be8 ginning on the date of appointment. 

9 ‘‘(B) REAPPOINTMENT.—The Secretary 

10 concerned may reappoint members to subse11 quent 4-year terms. 

12 ‘‘(2) BASIC REQUIREMENTS.—The Secretary 

13 concerned shall ensure that each resource advisory 

14 committee established meets the requirements of 

15 subsection (d). 

16 ‘‘(3) INITIAL APPOINTMENT.—Not later than 

17 180 days after the date of the enactment of this Act, 

18 the Secretary concerned shall make initial appoint19 ments to the resource advisory committees. 

20 ‘‘(4) VACANCIES.—The Secretary concerned 

21 shall make appointments to fill vacancies on any re22 source advisory committee as soon as practicable 

23 after the vacancy has occurred. 


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1 ‘‘(5) COMPENSATION.—Members of the re2 source advisory committees shall not receive any 

3 compensation. 

4 ‘‘(d) COMPOSITION OF ADVISORY COMMITTEE.— 

5 ‘‘(1) NUMBER.—Each resource advisory com6 mittee shall be comprised of 15 members. 

7 ‘‘(2) COMMUNITY INTERESTS REPRESENTED.— 

8 Committee members shall be representative of the 

9 interests of the following 3 categories: 

10 ‘‘(A) 5 persons that— 

11 ‘‘(i) represent organized labor or non12 timber forest product harvester groups; 

13 ‘‘(ii) represent developed outdoor 

14 recreation, off highway vehicle users, or 

15 commercial recreation activities; 

16 ‘‘(iii) represent— 

17 ‘‘(I) energy and mineral develop18 ment interests; or 

19 ‘‘(II) commercial or recreational 

20 fishing interests; 

21 ‘‘(iv) represent the commercial timber 

22 industry; or 

23 ‘‘(v) hold Federal grazing or other 

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1 trial private forest land owners, within the 

2 area for which the committee is organized. 

3 ‘‘(B) 5 persons that represent— 

4 ‘‘(i) nationally recognized environ5 mental organizations; 

6 ‘‘(ii) regionally or locally recognized 

7 environmental organizations; 

8 ‘‘(iii) dispersed recreational activities; 

9 ‘‘(iv) archaeological and historical in10 terests; or 

11 ‘‘(v) nationally or regionally recog12 nized wild horse and burro interest groups, 

13 wildlife or hunting organizations, or water14 shed associations. 

15 ‘‘(C) 5 persons that— 

16 ‘‘(i) hold State elected office (or a 

17 designee); 

18 ‘‘(ii) hold county or local elected of19 fice; 

20 ‘‘(iii) represent American Indian 

21 tribes within or adjacent to the area for 

22 which the committee is organized; 

23 ‘‘(iv) are school officials or teachers; 

24 or 


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1 ‘‘(v) represent the affected public at 

2 large. 

3 ‘‘(3) BALANCED REPRESENTATION.—In ap4 pointing committee members from the 3 categories 

5 in paragraph (2), the Secretary concerned shall pro6 vide for balanced and broad representation from 

7 within each category. 

8 ‘‘(4) GEOGRAPHIC DISTRIBUTION.—The mem9 bers of a resource advisory committee shall reside 

10 within the State in which the committee has juris11 diction and, to extent practicable, the Secretary con12 cerned shall ensure local representation in each cat13 egory in paragraph (2). 

14 ‘‘(5) CHAIRPERSON.—A majority on each re15 source advisory committee shall select the chair16 person of the committee. 

17 ‘‘(e) APPROVAL PROCEDURES.— 

18 ‘‘(1) IN GENERAL.—Subject to paragraph (3), 

19 each resource advisory committee shall establish pro20 cedures for proposing projects to the Secretary con21 cerned under this title. 

22 ‘‘(2) QUORUM.—A quorum must be present to 

23 constitute an official meeting of the committee. 

24 ‘‘(3) APPROVAL BY MAJORITY OF MEMBERS.— 

25 A project may be proposed by a resource advisory 


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1 committee to the Secretary concerned under section 

2 203(a), if the project has been approved by a major3 ity of members of the committee from each of the 

4 3 categories in subsection (d)(2). 

5 ‘‘(f) OTHER COMMITTEE AUTHORITIES AND RE6 QUIREMENTS.— 

7 ‘‘(1) STAFF ASSISTANCE.—A resource advisory 

8 committee may submit to the Secretary concerned a 

9 request for periodic staff assistance from Federal 

10 employees under the jurisdiction of the Secretary. 

11 ‘‘(2) MEETINGS.—All meetings of a resource 

12 advisory committee shall be announced at least 1 

13 week in advance in a local newspaper of record and 

14 shall be open to the public. 

15 ‘‘(3) RECORDS.—A resource advisory committee 

16 shall maintain records of the meetings of the com17 mittee and make the records available for public in18 spection. 

19 ‘‘SEC. 206. USE OF PROJECT FUNDS. 

20 ‘‘(a) AGREEMENT REGARDING SCHEDULE AND COST

21 OF PROJECT.— 

22 ‘‘(1) AGREEMENT BETWEEN PARTIES.—The 

23 Secretary concerned may carry out a project sub24 mitted by a resource advisory committee under sec25 tion 203(a) using project funds or other funds deVerDate Aug 31 2005 22:16 Jun 13, 2008 Jkt 069200 PO 00000 Frm 00189 Fmt 6652 Sfmt 6201 E:\BILLS\S3125.IS S3125

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1 scribed in section 203(a)(2), if, as soon as prac2 ticable after the issuance of a decision document for 

3 the project and the exhaustion of all administrative 

4 appeals and judicial review of the project decision, 

5 the Secretary concerned and the resource advisory 

6 committee enter into an agreement addressing, at a 

7 minimum, the following: 

8 ‘‘(A) The schedule for completing the 

9 project. 

10 ‘‘(B) The total cost of the project, includ11 ing the level of agency overhead to be assessed 

12 against the project. 

13 ‘‘(C) For a multiyear project, the esti14 mated cost of the project for each of the fiscal 

15 years in which it will be carried out. 

16 ‘‘(D) The remedies for failure of the Sec17 retary concerned to comply with the terms of 

18 the agreement consistent with current Federal 

19 law. 

20 ‘‘(2) LIMITED USE OF FEDERAL FUNDS.—The 

21 Secretary concerned may decide, at the sole discre22 tion of the Secretary concerned, to cover the costs 

23 of a portion of an approved project using Federal 

24 funds appropriated or otherwise available to the Sec25 retary for the same purposes as the project. 


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1 ‘‘(b) TRANSFER OF PROJECT FUNDS.— 

2 ‘‘(1) INITIAL TRANSFER REQUIRED.—As soon 

3 as practicable after the agreement is reached under 

4 subsection (a) with regard to a project to be funded 

5 in whole or in part using project funds, or other 

6 funds described in section 203(a)(2), the Secretary 

7 concerned shall transfer to the applicable unit of Na8 tional Forest System land or Bureau of Land Man9 agement District an amount of project funds equal 

10 to— 

11 ‘‘(A) in the case of a project to be com12 pleted in a single fiscal year, the total amount 

13 specified in the agreement to be paid using 

14 project funds, or other funds described in sec15 tion 203(a)(2); or 

16 ‘‘(B) in the case of a multiyear project, the 

17 amount specified in the agreement to be paid 

18 using project funds, or other funds described in 

19 section 203(a)(2) for the first fiscal year. 

20 ‘‘(2) CONDITION ON PROJECT COMMENCE21 MENT.—The unit of National Forest System land or 

22 Bureau of Land Management District concerned, 

23 shall not commence a project until the project funds, 

24 or other funds described in section 203(a)(2) re25 quired to be transferred under paragraph (1) for the 


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1 project, have been made available by the Secretary 

2 concerned. 

3 ‘‘(3) SUBSEQUENT TRANSFERS FOR MULTIYEAR

4 PROJECTS.— 

5 ‘‘(A) IN GENERAL.—For the second and 

6 subsequent fiscal years of a multiyear project to 

7 be funded in whole or in part using project 

8 funds, the unit of National Forest System land 

9 or Bureau of Land Management District con10 cerned shall use the amount of project funds re11 quired to continue the project in that fiscal year 

12 according to the agreement entered into under 

13 subsection (a). 

14 ‘‘(B) SUSPENSION OF WORK.—The Sec15 retary concerned shall suspend work on the 

16 project if the project funds required by the 

17 agreement in the second and subsequent fiscal 

18 years are not available. 

19 ‘‘SEC. 207. AVAILABILITY OF PROJECT FUNDS. 

20 ‘‘(a) SUBMISSION OF PROPOSED PROJECTS TO OBLI21 GATE FUNDS.—By September 30 of each fiscal year 

22 through fiscal year 2011, a resource advisory committee 

23 shall submit to the Secretary concerned pursuant to sec24 tion 203(a)(1) a sufficient number of project proposals 

25 that, if approved, would result in the obligation of at least 


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1 the full amount of the project funds reserved by the par2 ticipating county in the preceding fiscal year. 

3 ‘‘(b) USE OR TRANSFER OF UNOBLIGATED

4 FUNDS.—Subject to section 208, if a resource advisory 

5 committee fails to comply with subsection (a) for a fiscal 

6 year, any project funds reserved by the participating coun7 ty in the preceding fiscal year and remaining unobligated 

8 shall be available for use as part of the project submissions 

9 in the next fiscal year. 

10 ‘‘(c) EFFECT OF REJECTION OF PROJECTS.—Subject 

11 to section 208, any project funds reserved by a partici12 pating county in the preceding fiscal year that are unobli13 gated at the end of a fiscal year because the Secretary 

14 concerned has rejected one or more proposed projects shall 

15 be available for use as part of the project submissions in 

16 the next fiscal year. 

17 ‘‘(d) EFFECT OF COURT ORDERS.— 

18 ‘‘(1) IN GENERAL.—If an approved project 

19 under this Act is enjoined or prohibited by a Federal 

20 court, the Secretary concerned shall return the un21 obligated project funds related to the project to the 

22 participating county or counties that reserved the 

23 funds. 

24 ‘‘(2) EXPENDITURE OF FUNDS.—The returned 

25 funds shall be available for the county to expend in 


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1 the same manner as the funds reserved by the coun2 ty under subparagraph (B) or (C)(i) of section 

3 102(d)(1). 

4 ‘‘SEC. 208. TERMINATION OF AUTHORITY. 

5 ‘‘(a) IN GENERAL.—The authority to initiate projects 

6 under this title shall terminate on September 30, 2011. 

7 ‘‘(b) DEPOSITS IN TREASURY.—Any project funds 

8 not obligated by September 30, 2012, shall be deposited 

9 in the Treasury of the United States. 

10 ‘‘TITLE III—COUNTY FUNDS 

11 ‘‘SEC. 301. DEFINITIONS. 

12 ‘‘In this title: 

13 ‘‘(1) COUNTY FUNDS.—The term ‘county funds’ 

14 means all funds an eligible county elects under sec15 tion 102(d) to reserve for expenditure in accordance 

16 with this title. 

17 ‘‘(2) PARTICIPATING COUNTY.—The term ‘par18 ticipating county’ means an eligible county that 

19 elects under section 102(d) to expend a portion of 

20 the Federal funds received under section 102 in ac21 cordance with this title. 

22 ‘‘SEC. 302. USE. 

23 ‘‘(a) AUTHORIZED USES.—A participating county, 

24 including any applicable agencies of the participating 


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1 county, shall use county funds, in accordance with this 

2 title, only— 

3 ‘‘(1) to carry out activities under the Firewise 

4 Communities program to provide to homeowners in 

5 fire-sensitive ecosystems education on, and assist6 ance with implementing, techniques in home siting, 

7 home construction, and home landscaping that can 

8 increase the protection of people and property from 

9 wildfires; 

10 ‘‘(2) to reimburse the participating county for 

11 search and rescue and other emergency services, in12 cluding firefighting, that are— 

13 ‘‘(A) performed on Federal land after the 

14 date on which the use was approved under sub15 section (b); 

16 ‘‘(B) paid for by the participating county; 

17 and 

18 ‘‘(3) to develop community wildfire protection 

19 plans in coordination with the appropriate Secretary 

20 concerned. 

21 ‘‘(b) PROPOSALS.—A participating county shall use 

22 county funds for a use described in subsection (a) only 

23 after a 45-day public comment period, at the beginning 

24 of which the participating county shall— 


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1 ‘‘(1) publish in any publications of local record 

2 a proposal that describes the proposed use of the 

3 county funds; and 

4 ‘‘(2) submit the proposal to any resource advi5 sory committee established under section 205 for the 

6 participating county. 

7 ‘‘SEC. 303. CERTIFICATION. 

8 ‘‘(a) IN GENERAL.—Not later than February 1 of the 

9 year after the year in which any county funds were ex10 pended by a participating county, the appropriate official 

11 of the participating county shall submit to the Secretary 

12 concerned a certification that the county funds expended 

13 in the applicable year have been used for the uses author14 ized under section 302(a), including a description of the 

15 amounts expended and the uses for which the amounts 

16 were expended. 

17 ‘‘(b) REVIEW.—The Secretary concerned shall review 

18 the certifications submitted under subsection (a) as the 

19 Secretary concerned determines to be appropriate. 

20 ‘‘SEC. 304. TERMINATION OF AUTHORITY. 

21 ‘‘(a) IN GENERAL.—The authority to initiate projects 

22 under this title terminates on September 30, 2011. 

23 ‘‘(b) AVAILABILITY.—Any county funds not obligated 

24 by September 30, 2012, shall be returned to the Treasury 

25 of the United States. 


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1 ‘‘TITLE IV—MISCELLANEOUS 

2 PROVISIONS 

3 ‘‘SEC. 401. REGULATIONS. 

4 ‘‘The Secretary of Agriculture and the Secretary of 

5 the Interior shall issue regulations to carry out the pur6 poses of this Act. 

7 ‘‘SEC. 402. AUTHORIZATION OF APPROPRIATIONS. 

8 ‘‘There are authorized to be appropriated such sums 

9 as are necessary to carry out this Act for each of fiscal 

10 years 2008 through 2011. 

11 ‘‘SEC. 403. TREATMENT OF FUNDS AND REVENUES. 

12 ‘‘(a) RELATION TO OTHER APPROPRIATIONS.— 

13 Funds made available under section 402 and funds made 

14 available to a Secretary concerned under section 206 shall 

15 be in addition to any other annual appropriations for the 

16 Forest Service and the Bureau of Land Management. 

17 ‘‘(b) DEPOSIT OF REVENUES AND OTHER FUNDS.— 

18 All revenues generated from projects pursuant to title II, 

19 including any interest accrued from the revenues, shall be 

20 deposited in the Treasury of the United States.’’. 

21 (b) FOREST RECEIPT PAYMENTS TO ELIGIBLE

22 STATES AND COUNTIES.— 

23 (1) ACT OF MAY 23, 1908.—The sixth paragraph 

24 under the heading ‘‘FOREST SERVICE’’ in the Act 

25 of May 23, 1908 (16 U.S.C. 500) is amended in the 


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1 first sentence by striking ‘‘twenty-five percentum’’ 

2 and all that follows through ‘‘shall be paid’’ and in3 serting the following: ‘‘an amount equal to the an4 nual average of 25 percent of all amounts received 

5 for the applicable fiscal year and each of the pre6 ceding 6 fiscal years from each national forest shall 

7 be paid’’. 

8 (2) WEEKS LAW.—Section 13 of the Act of 

9 March 1, 1911 (commonly known as the ‘‘Weeks 

10 Law’’) (16 U.S.C. 500) is amended in the first sen11 tence by striking ‘‘twenty-five percentum’’ and all 

12 that follows through ‘‘shall be paid’’ and inserting 

13 the following: ‘‘an amount equal to the annual aver14 age of 25 percent of all amounts received for the ap15 plicable fiscal year and each of the preceding 6 fiscal 

16 years from each national forest shall be paid’’. 

17 (c) PAYMENTS IN LIEU OF TAXES.— 

18 (1) IN GENERAL.—Section 6906 of title 31, 

19 United States Code, is amended to read as follows: 

20 ‘‘§ 6906. Funding 

21 ‘‘For each of fiscal years 2008 through 2012— 

22 ‘‘(1) each county or other eligible unit of local 

23 government shall be entitled to payment under this 

24 chapter; and 


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1 ‘‘(2) sums shall be made available to the Sec2 retary of the Interior for obligation or expenditure in 

3 accordance with this chapter.’’. 

4 (2) CONFORMING AMENDMENT.—The table of 

5 sections for chapter 69 of title 31, United States 

6 Code, is amended by striking the item relating to 

7 section 6906 and inserting the following: 

‘‘6906. Funding.’’. 

8 (3) BUDGET SCOREKEEPING.— 

9 (A) IN GENERAL.—Notwithstanding the 

10 Budget Scorekeeping Guidelines and the accom11 panying list of programs and accounts set forth 

12 in the joint explanatory statement of the com13 mittee of conference accompanying Conference 

14 Report 105–217, the section in this title re15 garding Payments in Lieu of Taxes shall be 

16 treated in the baseline for purposes of section 

17 257 of the Balanced Budget and Emergency 

18 Deficit Control Act of 1985 (as in effect prior 

19 to September 30, 2002), and by the Chairmen 

20 of the House and Senate Budget Committees, 

21 as appropriate, for purposes of budget enforce22 ment in the House and Senate, and under the 

23 Congressional Budget Act of 1974 as if Pay24 ment in Lieu of Taxes (14–1114–0–1–806) 

25 were an account designated as Appropriated 


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1 Entitlements and Mandatories for Fiscal Year 

2 1997 in the joint explanatory statement of the 

3 committee of conference accompanying Con4 ference Report 105–217. 

5 (B) EFFECTIVE DATE.—This paragraph 

6 shall remain in effect for the fiscal years to 

7 which the entitlement in section 6906 of title 

8 31, United States Code (as amended by para9 graph (1)), applies. 

10 SEC. 342. CLARIFICATION OF UNIFORM DEFINITION OF 

11 CHILD. 

12 (a) CHILD MUST BE YOUNGER THAN CLAIMANT.— 

13 Section 152(c)(3)(A) (relating to age requirements) is 

14 amended by inserting ‘‘is younger than the taxpayer claim15 ing such individual as a qualifying child and’’ after ‘‘such 

16 individual’’. 

17 (b) CHILD MUST BE UNMARRIED.—Section 

18 152(c)(1) (relating to qualifying child) is amended by 

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

20 the period at the end of subparagraph (D) and inserting 

21 ‘‘, and’’, and by adding at the end the following new sub22 paragraph: 

23 ‘‘(E) who has not filed a joint return 

24 (other than only for a claim of refund) with the 

25 individual’s spouse under section 6013 for the 


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1 taxable year beginning in the calendar year in 

2 which the taxable year of the taxpayer begins.’’. 

3 (c) RESTRICT QUALIFYING CHILD TAX BENEFITS TO

4 CHILD’S PARENT.— 

5 (1) CHILD TAX CREDIT.—Subsection (a) of sec6 tion 24 (relating to child tax credit) is amended by 

7 inserting ‘‘for which the taxpayer is allowed a deduc8 tion under section 151’’ after ‘‘of the taxpayer’’. 

9 (2) PERSONS OTHER THAN PARENTS CLAIMING

10 QUALIFYING CHILD.— 

11 (A) IN GENERAL.—Paragraph (4) of sec12 tion 152(c) is amended by adding at the end 

13 the following new subparagraph: 

14 ‘‘(C) NO PARENT CLAIMING QUALIFYING

15 CHILD.—If the parents of an individual may 

16 claim such individual as a qualifying child but 

17 no parent so claims the individual, such indi18 vidual may be claimed as the qualifying child of 

19 another taxpayer but only if the adjusted gross 

20 income of such taxpayer is higher than the 

21 highest adjusted gross income of any parent of 

22 the individual.’’. 

23 (B) CONFORMING AMENDMENTS.— 

24 (i) Subparagraph (A) of section 

25 152(c)(4) is amended by striking ‘‘Except’’ 


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1 through ‘‘2 or more taxpayers’’ and insert2 ing ‘‘Except as provided in subparagraphs 

3 (B) and (C), if (but for this paragraph) an 

4 individual may be claimed as a qualifying 

5 child by 2 or more taxpayers’’. 

6 (ii) The heading for paragraph (4) of 

7 section 152(c) is amended by striking 

8 ‘‘CLAIMING’’ and inserting ‘‘WHO CAN

9 CLAIM THE SAME’’. 

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

11 this section shall apply to taxable years beginning after 

12 December 31, 2008. 

13 TITLE IV—REVENUE 

14 PROVISIONS 

15 SEC. 401. NONQUALIFIED DEFERRED COMPENSATION 

16 FROM CERTAIN TAX INDIFFERENT PARTIES. 

17 (a) IN GENERAL.—Subpart B of part II of sub18 chapter E of chapter 1 is amended by inserting after sec19 tion 457 the following new section: 

20 ‘‘SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION 

21 FROM CERTAIN TAX INDIFFERENT PARTIES. 

22 ‘‘(a) IN GENERAL.—Any compensation which is de23 ferred under a nonqualified deferred compensation plan of 

24 a nonqualified entity shall be includible in gross income 


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1 when there is no substantial risk of forfeiture of the rights 

2 to such compensation. 

3 ‘‘(b) NONQUALIFIED ENTITY.—For purposes of this 

4 section, the term ‘nonqualified entity’ means— 

5 ‘‘(1) any foreign corporation unless substan6 tially all of its income is— 

7 ‘‘(A) effectively connected with the conduct 

8 of a trade or business in the United States, or 

9 ‘‘(B) subject to a comprehensive foreign in10 come tax, and 

11 ‘‘(2) any partnership unless substantially all of 

12 its income is allocated to persons other than— 

13 ‘‘(A) foreign persons with respect to whom 

14 such income is not subject to a comprehensive 

15 foreign income tax, and 

16 ‘‘(B) organizations which are exempt from 

17 tax under this title. 

18 ‘‘(c) DETERMINABILITY OF AMOUNTS OF COMPENSA19 TION.— 

20 ‘‘(1) IN GENERAL.—If the amount of any com21 pensation is not determinable at the time that such 

22 compensation is otherwise includible in gross income 

23 under subsection (a)— 

24 ‘‘(A) such amount shall be so includible in 

25 gross income when determinable, and 


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1 ‘‘(B) the tax imposed under this chapter 

2 for the taxable year in which such compensation 

3 is includible in gross income shall be increased 

4 by the sum of— 

5 ‘‘(i) the amount of interest determined 

6 under paragraph (2), and 

7 ‘‘(ii) an amount equal to 20 percent of 

8 the amount of such compensation. 

9 ‘‘(2) INTEREST.—For purposes of paragraph 

10 (1)(B)(i), the interest determined under this para11 graph for any taxable year is the amount of interest 

12 at the underpayment rate under section 6621 plus 

13 1 percentage point on the underpayments that would 

14 have occurred had the deferred compensation been 

15 includible in gross income for the taxable year in 

16 which first deferred or, if later, the first taxable year 

17 in which such deferred compensation is not subject 

18 to a substantial risk of forfeiture. 

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

20 For purposes of this section— 

21 ‘‘(1) SUBSTANTIAL RISK OF FORFEITURE.— 

22 ‘‘(A) IN GENERAL.—The rights of a person 

23 to compensation shall be treated as subject to 

24 a substantial risk of forfeiture only if such per25 son’s rights to such compensation are condiVerDate Aug 31 2005 22:16 Jun 13, 2008 Jkt 069200 PO 00000 Frm 00204 Fmt 6652 Sfmt 6201 E:\BILLS\S3125.IS S3125

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1 tioned upon the future performance of substan2 tial services by any individual. 

3 ‘‘(B) EXCEPTION FOR COMPENSATION

4 BASED ON GAIN RECOGNIZED ON AN INVEST5 MENT ASSET.— 

6 ‘‘(i) IN GENERAL.—To the extent pro7 vided in regulations prescribed by the Sec8 retary, if compensation is determined solely 

9 by reference to the amount of gain recog10 nized on the disposition of an investment 

11 asset, such compensation shall be treated 

12 as subject to a substantial risk of for13 feiture until the date of such disposition. 

14 ‘‘(ii) INVESTMENT ASSET.—For pur15 poses of clause (i), the term ‘investment 

16 asset’ means any single asset (other than 

17 an investment fund or similar entity)— 

18 ‘‘(I) acquired directly by an in19 vestment fund or similar entity, 

20 ‘‘(II) with respect to which such 

21 entity does not (nor does any person 

22 related to such entity) participate in 

23 the active management of such asset 

24 (or if such asset is an interest in an 


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1 entity, in the active management of 

2 the activities of such entity), and 

3 ‘‘(III) substantially all of any 

4 gain on the disposition of which (other 

5 than such deferred compensation) is 

6 allocated to investors in such entity. 

7 ‘‘(iii) COORDINATION WITH SPECIAL

8 RULE.—Paragraph (3)(B) shall not apply 

9 to any compensation to which clause (i) 

10 applies. 

11 ‘‘(2) COMPREHENSIVE FOREIGN INCOME TAX.— 

12 The term ‘comprehensive foreign income tax’ means, 

13 with respect to any foreign person, the income tax 

14 of a foreign country if— 

15 ‘‘(A) such person is eligible for the benefits 

16 of a comprehensive income tax treaty between 

17 such foreign country and the United States, or 

18 ‘‘(B) such person demonstrates to the sat19 isfaction of the Secretary that such foreign 

20 country has a comprehensive income tax. 

21 ‘‘(3) NONQUALIFIED DEFERRED COMPENSA22 TION PLAN.— 

23 ‘‘(A) IN GENERAL.—The term ‘non24 qualified deferred compensation plan’ has the 

25 meaning given such term under section 


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1 409A(d), except that such term shall include 

2 any plan that provides a right to compensation 

3 based on the appreciation in value of a specified 

4 number of equity units of the service recipient. 

5 ‘‘(B) EXCEPTION.—Compensation shall 

6 not be treated as deferred for purposes of this 

7 section if the service provider receives payment 

8 of such compensation not later than 12 months 

9 after the end of the taxable year of the service 

10 recipient during which the right to the payment 

11 of such compensation is no longer subject to a 

12 substantial risk of forfeiture. 

13 ‘‘(4) EXCEPTION FOR CERTAIN COMPENSATION

14 WITH RESPECT TO EFFECTIVELY CONNECTED IN15 COME.—In the case a foreign corporation with in16 come which is taxable under section 882, this section 

17 shall not apply to compensation which, had such 

18 compensation had been paid in cash on the date that 

19 such compensation ceased to be subject to a sub20 stantial risk of forfeiture, would have been deduct21 ible by such foreign corporation against such income. 

22 ‘‘(5) APPLICATION OF RULES.—Rules similar to 

23 the rules of paragraphs (5) and (6) of section 

24 409A(d) shall apply. 


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1 ‘‘(e) REGULATIONS.—The Secretary shall prescribe 

2 such regulations as may be necessary or appropriate to 

3 carry out the purposes of this section, including regula4 tions disregarding a substantial risk of forfeiture in cases 

5 where necessary to carry out the purposes of this sec6 tion.’’. 

7 (b) CONFORMING AMENDMENT.—Section 26(b)(2) is 

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

9 (U), by striking the period at the end of subparagraph 

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

11 following new subparagraph: 

12 ‘‘(W) section 457A(c)(1)(B) (relating to 

13 determinability of amounts of compensation).’’. 

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

15 of subpart B of part II of subchapter E of chapter 1 is 

16 amended by inserting after the item relating to section 

17 457 the following new item: 

‘‘Sec. 457A. Nonqualified deferred compensation from certain tax indifferent 

parties.’’. 

18 (d) EFFECTIVE DATE.— 

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

21 this section shall apply to amounts deferred which 

22 are attributable to services performed after Decem23 ber 31, 2008. 


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1 (2) APPLICATION TO EXISTING DEFERRALS.— 

2 In the case of any amount deferred to which the 

3 amendments made by this section do not apply solely 

4 by reason of the fact that the amount is attributable 

5 to services performed before January 1, 2009, to the 

6 extent such amount is not includible in gross income 

7 in a taxable year beginning before 2018, such 

8 amounts shall be includible in gross income in the 

9 later of— 

10 (A) the last taxable year beginning before 

11 2018, or 

12 (B) the taxable year in which there is no 

13 substantial risk of forfeiture of the rights to 

14 such compensation (determined in the same 

15 manner as determined for purposes of section 

16 457A of the Internal Revenue Code of 1986, as 

17 added by this section). 

18 (3) CHARITABLE CONTRIBUTIONS OF EXISTING

19 DEFERRALS PERMITTED.— 

20 (A) IN GENERAL.—Subsection (b) of sec21 tion 170 of the Internal Revenue Code of 1986 

22 shall not apply to (and subsections (b) and (d) 

23 of such section shall be applied without regard 

24 to) so much of the taxpayer’s qualified con25 tributions made during the taxpayer’s last taxVerDate Aug 31 2005 22:16 Jun 13, 2008 Jkt 069200 PO 00000 Frm 00209 Fmt 6652 Sfmt 6201 E:\BILLS\S3125.IS S3125

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1 able year beginning before 2018 as does not ex2 ceed the taxpayer’s qualified inclusion amount. 

3 For purposes of subsection (b) of section 170 of 

4 such Code, the taxpayer’s contribution base for 

5 such last taxable year shall be reduced by the 

6 amount of the taxpayer’s qualified contributions 

7 to which such subsection does not apply by rea8 son the preceding sentence. 

9 (B) QUALIFIED CONTRIBUTIONS.—For 

10 purposes of this paragraph, the term ‘‘qualified 

11 contributions’’ means the aggregate charitable 

12 contributions (as defined in section 170(c) of 

13 such Code) paid in cash by the taxpayer to or14 ganizations described in section 170(b)(1)(A) of 

15 such Code (other than any organization de16 scribed in section 509(a)(3) of such Code or 

17 any fund or account described in section 

18 4966(d)(2) of such Code). 

19 (C) QUALIFIED INCLUSION AMOUNT.—For 

20 purposes of this paragraph, the term ‘‘qualified 

21 inclusion amount’’ means the amount includible 

22 in the taxpayer’s gross income for the last tax23 able year beginning before 2018 by reason of 

24 paragraph (2). 


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1 (4) ACCELERATED PAYMENTS.—No later than 

2 120 days after the date of the enactment of this Act, 

3 the Secretary shall issue guidance providing a lim4 ited period of time during which a nonqualified de5 ferred compensation arrangement attributable to 

6 services performed on or before December 31, 2008, 

7 may, without violating the requirements of section 

8 409A(a) of the Internal Revenue Code of 1986, be 

9 amended to conform the date of distribution to the 

10 date the amounts are required to be included in in11 come. 

12 (5) CERTAIN BACK-TO-BACK ARRANGEMENTS.— 

13 If the taxpayer is also a service recipient and main14 tains one or more nonqualified deferred compensa15 tion arrangements for its service providers under 

16 which any amount is attributable to services per17 formed on or before December 31, 2008, the guid18 ance issued under paragraph (4) shall permit such 

19 arrangements to be amended to conform the dates of 

20 distribution under such arrangement to the date 

21 amounts are required to be included in the income 

22 of such taxpayer under this subsection. 

23 (6) ACCELERATED PAYMENT NOT TREATED AS

24 MATERIAL MODIFICATION.—Any amendment to a 

25 nonqualified deferred compensation arrangement 


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1 made pursuant to paragraph (4) or (5) shall not be 

2 treated as a material modification of the arrange3 ment for purposes of section 409A of the Internal 

4 Revenue Code of 1986. 

5 SEC. 402. DELAY IN APPLICATION OF WORLDWIDE ALLOCA6 TION OF INTEREST. 

7 (a) IN GENERAL.—Paragraph (6) of section 864(f) 

8 is amended— 

9 (1) by striking ‘‘December 31, 2008’’ and in10 serting ‘‘December 31, 2018’’, 

11 (2) by striking ‘‘An election’’ and inserting: 

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

13 subparagraph (B), an election’’, and 

14 (3) by adding at the end the following new sub15 paragraph: 

16 ‘‘(B) EARLIER APPLICATION FOR CERTAIN

17 GROUPS INCLUDING HOLDING COMPANIES.— 

18 ‘‘(i) IN GENERAL.—Notwithstanding 

19 subparagraph (A), in the case of an appli20 cable worldwide affiliated group— 

21 ‘‘(I) the common parent of the 

22 applicable worldwide affiliated group 

23 may elect, for its first taxable year be24 ginning after December 31, 2008, to 

25 have paragraphs (1), (2), and (3) 


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1 apply to the applicable worldwide af2 filiated group as if it were a separate 

3 worldwide affiliated group, and 

4 ‘‘(II) except as provided in clause 

5 (ii), such election shall apply to such 

6 applicable worldwide affiliated group 

7 for such taxable year and the 2 imme8 diately succeeding taxable years unless 

9 revoked with the consent of the Sec10 retary. 

11 Such election shall not preclude an election 

12 under subparagraph (A) with respect to 

13 the worldwide affiliated group to which 

14 such applicable worldwide affiliated group 

15 relates. 

16 ‘‘(ii) LIMITATION BASED ON FOREIGN

17 ASSETS.—This subsection shall not apply 

18 to a taxable year for which the election 

19 under clause (i) is otherwise in effect if the 

20 ratio (expressed as a percentage) which the 

21 foreign assets of the applicable worldwide 

22 affiliated group bear to all the assets of 

23 the applicable worldwide affiliated group 

24 exceeds 3 percent at any time during such 

25 taxable year. 


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1 ‘‘(iii) APPLICABLE WORLDWIDE AF2 FILIATED GROUP.—For purposes of this 

3 subparagraph, the term ‘applicable world4 wide affiliated group’ means, with respect 

5 to any worldwide affiliated group (as de6 fined in paragraph (1)(C)) the common 

7 parent of which is an entity described in 

8 clause (i), (ii), or (iii) of paragraph (4)(C), 

9 a separate group consisting of those mem10 bers of such worldwide affiliated group 

11 which— 

12 ‘‘(I) are entities described in 

13 clause (i), (ii), or (iii) of paragraph 

14 (4)(C), or are subsidiaries of such en15 tities substantially all of the activities 

16 of which are payroll, asset holding, or 

17 other activities which are integrally 

18 related to activities described in any 

19 such clause, and 

20 ‘‘(II) were in existence, and were 

21 members of such group, as of October 

22 21, 2004. 

23 ‘‘(iv) GUIDANCE.—The Secretary may 

24 prescribe such guidance as may be nec25 essary to carry out the application of this 


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1 subparagraph, including guidance with re2 spect to the proper method for determining 

3 the ratio described in clause (ii) and guid4 ance to prevent avoidance of the purposes 

5 of this subparagraph.’’. 

6 (b) CONFORMING AMENDMENT.—Paragraph (5)(D) 

7 of section 864(f) is amended by striking ‘‘December 31, 

8 2008’’ and inserting ‘‘December 31, 2018’’. 

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

10 this section shall apply to taxable years beginning after 

11 December 31, 2008. 

12 SEC. 403. TIME FOR PAYMENT OF CORPORATE ESTIMATED 

13 TAXES. 

14 (a) REPEAL OF ADJUSTMENT FOR 2012.—Subpara15 graph (B) of section 401(1) of the Tax Increase Preven16 tion and Reconciliation Act of 2005 is amended by striking 

17 the percentage contained therein and inserting ‘‘100 per18 cent’’. 

19 (b) MODIFICATION OF ADJUSTMENT FOR 2013.— 

20 The percentage under subparagraph (C) of section 401(1) 

21 of the Tax Increase Prevention and Reconciliation Act of 

22 2005 in effect on the date of the enactment of this Act 

23 is increased by 37.75 percentage points. 

Æ 


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