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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1601 Introduced in Senate (IS)]

110th CONGRESS
  1st Session
                                S. 1601

   To lower the effective tax rate on investment in necessary energy 
    infrastructure and credits for renewable energy, and for other 
                               purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             June 12, 2007

   Mr. Hagel introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
   To lower the effective tax rate on investment in necessary energy 
    infrastructure and credits for renewable energy, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Energy 
Infrastructure Tax Reform and Incentives Act of 2007''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 101. Income and gains from electricity transmission systems 
                            treated as qualifying income for publicly 
                            traded partnerships.
Sec. 102. Five-year applicable recovery period for depreciation of 
                            qualified energy management devices.
Sec. 103. Special depreciation allowance for cellulosic biomass ethanol 
                            plant property.
Sec. 104. Coal-to-liquid facilities.
Sec. 105. Dedicated ethanol pipelines treated as 15-year property.
Sec. 106. Credit for pollution abatement equipment.
Sec. 107. Modifications relating to clean renewable energy bonds.
Sec. 108. Extension of renewable energy production tax credit.
Sec. 109. Energy credit extended to green buildings.

SEC. 101. INCOME AND GAINS FROM ELECTRICITY TRANSMISSION SYSTEMS 
              TREATED AS QUALIFYING INCOME FOR PUBLICLY TRADED 
              PARTNERSHIPS.

    (a) In General.--Section 7704(d)(1) of the Internal Revenue Code of 
1986 (defining qualifying income) is amended by redesignating 
subparagraphs (F) and (G) as subparagraphs (G) and (H), respectively, 
and by inserting after subparagraph (E) the following new subparagraph:
                    ``(F) income and gains from the transmission of 
                electricity at 69 or more kilovolts through any 
                property the original use of which commences after 
                December 31, 2006,''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act, in taxable years 
ending after such date.

SEC. 102. FIVE-YEAR APPLICABLE RECOVERY PERIOD FOR DEPRECIATION OF 
              QUALIFIED ENERGY MANAGEMENT DEVICES.

    (a) In General.--Section 168(e)(3)(B) of the Internal Revenue Code 
of 1986 (defining 5-year property) is amended by striking ``and'' at 
the end of clause (v), by striking the period at the end of clause 
(vi)(III) and inserting ``, and'', and by inserting after clause (vi) 
the following new clause:
                            ``(vii) any qualified energy management 
                        device.''.
    (b) Definition of Qualified Energy Management Device.--Section 
168(i) of such Code (relating to definitions and special rules) is 
amended by inserting at the end the following new paragraph:
            ``(18) Qualified energy management device.--
                    ``(A) In general.--The term `qualified energy 
                management device' means any energy management device 
                which is placed in service by a taxpayer who is a 
                supplier of electric energy or a provider of electric 
                energy services.
                    ``(B) Energy management device.--For purposes of 
                subparagraph (A), the term `energy management device' 
                means any time-based meter and related communications 
                equipment which is capable of being used by the 
                taxpayer as part of a system that--
                            ``(i) measures and records electricity 
                        usage data on a time-differentiated basis in at 
                        least 24 separate time segments per day,
                            ``(ii) provides for the exchange of 
                        information between supplier or provider and 
                        the customer's energy management device in 
                        support of time-based rates or other forms of 
                        demand response, and
                            ``(iii) provides data to such supplier or 
                        provider so that the supplier or provider can 
                        provide energy usage information to customers 
                        electronically.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service in taxable years ending after the 
date of the enactment of this Act.

SEC. 103. SPECIAL DEPRECIATION ALLOWANCE FOR CELLULOSIC BIOMASS ETHANOL 
              PLANT PROPERTY.

    (a) In General.--Section 168 of the Internal Revenue Code of 1986 
(relating to accelerated cost recovery system) is amended by adding at 
the end the following:
    ``(l) Special Allowance for Cellulosic Biomass Ethanol Plant 
Property.--
            ``(1) Additional allowance.--In the case of any qualified 
        cellulosic biomass ethanol plant property--
                    ``(A) the depreciation deduction provided by 
                section 167(a) for the taxable year in which such 
                property is placed in service shall include an 
                allowance equal to 50 percent of the adjusted basis of 
                such property, and
                    ``(B) the adjusted basis of such property shall be 
                reduced by the amount of such deduction before 
                computing the amount otherwise allowable as a 
                depreciation deduction under this chapter for such 
                taxable year and any subsequent taxable year.
            ``(2) Qualified cellulosic biomass ethanol plant 
        property.--
                    ``(A) In general.--The term `qualified cellulosic 
                biomass ethanol plant property' means property of a 
                character subject to the allowance for depreciation--
                            ``(i) which is used in the United States 
                        solely to produce cellulosic biomass ethanol,
                            ``(ii) the original use of which commences 
                        with the taxpayer after the date of the 
                        enactment of this subsection,
                            ``(iii) which has a nameplate capacity of 
                        100,000,000 gallons per year of cellulosic 
                        biomass ethanol,
                            ``(iv) which is acquired by the taxpayer by 
                        purchase (as defined in section 179(d)) after 
                        the date of the enactment of this subsection, 
                        but only if no written binding contract for the 
                        acquisition was in effect on or before the date 
                        of the enactment of this subsection, and
                            ``(v) which is placed in service by the 
                        taxpayer before January 1, 2013.
                    ``(B) Exceptions.--
                            ``(i) Alternative depreciation property.--
                        Such term shall not include any property 
                        described in section 168(k)(2)(D)(i).
                            ``(ii) Tax-exempt bond-financed property.--
                        Such term shall not include any property any 
                        portion of which is financed with the proceeds 
                        of any obligation the interest on which is 
                        exempt from tax under section 103.
                            ``(iii) Election out.--If a taxpayer makes 
                        an election under this subparagraph with 
                        respect to any class of property for any 
                        taxable year, this subsection shall not apply 
                        to all property in such class placed in service 
                        during such taxable year.
            ``(3) Cellulosic biomass ethanol.--For purposes of this 
        subsection, the term `cellulosic biomass ethanol'--
                    ``(A) means ethanol derived from any 
                lignocellulosic or hemicellulosic matter that is 
                available on a renewable or recurring basis, 
                including--
                            ``(i) dedicated energy crops and trees,
                            ``(ii) wood and wood residues,
                            ``(iii) plants,
                            ``(iv) grasses,
                            ``(v) agricultural residues,
                            ``(vi) fibers,
                            ``(vii) animal wastes and other waste 
                        materials, and
                            ``(viii) municipal and solid waste, and
                    ``(B) includes any ethanol produced in facilities 
                where animal wastes or other waste materials are 
                digested or otherwise used to displace 90 percent or 
                more of the fossil fuel normally used in the production 
                of ethanol.
            ``(4) Special rules.--For purposes of this subsection, 
        rules similar to the rules of subparagraph (E) of section 
        168(k)(2) shall apply, except that such subparagraph shall be 
        applied--
                    ``(A) by substituting `the date of the enactment of 
                subsection (l)' for `September 10, 2001' each place it 
                appears therein,
                    ``(B) by substituting `January 1, 2013' for 
                `January 1, 2005' in clause (i) thereof, and
                    ``(C) by substituting `qualified cellulosic biomass 
                ethanol plant property' for `qualified property' in 
                clause (iv) thereof.
            ``(5) Allowance against alternative minimum tax.--For 
        purposes of this subsection, rules similar to the rules of 
        section 168(k)(2)(G) shall apply.
            ``(6) Recapture.--For purposes of this subsection, rules 
        similar to the rules under section 179(d)(10) shall apply with 
        respect to any qualified cellulosic biomass ethanol plant 
        property which ceases to be qualified cellulosic biomass 
        ethanol plant property.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after the date of the enactment of this 
Act, in taxable years ending after such date.

SEC. 104. COAL-TO-LIQUID FACILITIES.

    (a) In General.--Section 168 of the Internal Revenue Code of 1986 
(relating to accelerated cost recovery system), as amended by this Act, 
is amended by adding at the end the following:
    ``(m) Special Allowance for Coal-to-Liquid Plant Property.--
            ``(1) Additional allowance.--In the case of any qualified 
        coal-to-liquid plant property--
                    ``(A) the depreciation deduction provided by 
                section 167(a) for the taxable year in which such 
                property is placed in service shall include an 
                allowance equal to 50 percent of the adjusted basis of 
                such property, and
                    ``(B) the adjusted basis of such property shall be 
                reduced by the amount of such deduction before 
                computing the amount otherwise allowable as a 
                depreciation deduction under this chapter for such 
                taxable year and any subsequent taxable year.
            ``(2) Qualified coal-to-liquid plant property.--
                    ``(A) In general.--The term `qualified coal-to-
                liquid plant property' means property of a character 
                subject to the allowance for depreciation--
                            ``(i) which is part of a commercial-scale 
                        project that converts coal to 1 or more liquid 
                        or gaseous transportation fuel that 
                        demonstrates the capture, and sequestration or 
                        disposal or use of, the carbon dioxide produced 
                        in the conversion process, and that, on the 
                        basis of carbon dioxide sequestration plan 
                        prepared by the applicant, is certified by the 
                        Administrator of the Environmental Protection 
                        Agency, in consultation with the Secretary of 
                        Energy, as producing fuel with life cycle 
                        carbon dioxide emissions at or below the 
                        average life-cycle carbon dioxide emissions for 
                        the same type of fuel produced at traditional 
                        petroleum based facilities with similar annual 
                        capacities,
                            ``(ii) which is used in the United States 
                        solely to produce coal-to-liquid fuels,
                            ``(iii) the original use of which commences 
                        with the taxpayer after the date of the 
                        enactment of this subsection,
                            ``(iv) which has a nameplate capacity of 
                        30,000 barrels per day production of coal-to-
                        liquid fuels;
                            ``(v) which is acquired by the taxpayer by 
                        purchase (as defined in section 179(d)) after 
                        the date of the enactment of this subsection, 
                        but only if no written binding contract for the 
                        acquisition was in effect on or before the date 
                        of the enactment of this subsection, and
                            ``(vi) which is placed in service by the 
                        taxpayer before January 1, 2013.
                    ``(B) Exceptions.--
                            ``(i) Alternative depreciation property.--
                        Such term shall not include any property 
                        described in section 168(k)(2)(D)(i).
                            ``(ii) Tax-exempt bond-financed property.--
                        Such term shall not include any property any 
                        portion of which is financed with the proceeds 
                        of any obligation the interest on which is 
                        exempt from tax under section 103.
                            ``(iii) Election out.--If a taxpayer makes 
                        an election under this subparagraph with 
                        respect to any class of property for any 
                        taxable year, this subsection shall not apply 
                        to all property in such class placed in service 
                        during such taxable year.
            ``(3) Special rules.--For purposes of this subsection, 
        rules similar to the rules of subparagraph (E) of section 
        168(k)(2) shall apply, except that such subparagraph shall be 
        applied--
                    ``(A) by substituting `the date of the enactment of 
                subsection (l)' for `September 10, 2001' each place it 
                appears therein,
                    ``(B) by substituting `January 1, 2013' for 
                `January 1, 2005' in clause (i) thereof, and
                    ``(C) by substituting `qualified coal-to-liquid 
                plant property' for `qualified property' in clause (iv) 
                thereof.
            ``(4) Allowance against alternative minimum tax.--For 
        purposes of this subsection, rules similar to the rules of 
        section 168(k)(2)(G) shall apply.
            ``(5) Recapture.--For purposes of this subsection, rules 
        similar to the rules under section 179(d)(10) shall apply with 
        respect to any qualified coal-to-liquid plant property which 
        ceases to be qualified coal-to-liquid plant property.''.
    (b) Effective Date.--The amendment made by this subsection shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 105. DEDICATED ETHANOL PIPELINES TREATED AS 15-YEAR PROPERTY.

    (a) In General.--Section 168(e)(3)(E) of the Internal Revenue Code 
of 1986 (defining 15-year property), is amended by striking ``and'' at 
the end of clause (vii), by striking the period at the end of clause 
(viii) and by inserting ``, and'', and by adding at the end the 
following new clause:
                            ``(ix) any dedicated ethanol distribution 
                        line the original use of which commences with 
                        the taxpayer after August 1, 2007, and which is 
                        placed in service before January 1, 2013.''.
    (b) Alternative System.--The table contained in section 
168(g)(3)(B) of such Code (relating to special rule for certain 
property assigned to classes) is amended by inserting after the item 
relating to subparagraph (E)(viii) the following new item:

``(E)(ix)......................................................  35.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to property placed in service after August 1, 2007.
            (2) Exception.--The amendments made by this section shall 
        not apply to any property with respect to which the taxpayer or 
        related party has entered into a binding contract for the 
        construction thereof on or before August 1, 2007, or, in the 
        case of self-constructed property, has started construction on 
        or before such date.

SEC. 106. CREDIT FOR POLLUTION ABATEMENT EQUIPMENT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 45N the following new section:

``SEC. 45O. CREDIT FOR POLLUTION ABATEMENT EQUIPMENT.

    ``(a) General Rule.--For purposes of section 38, the pollution 
abatement equipment credit for any taxable year is an amount equal to 
30 percent of the costs of any qualified pollution abatement equipment 
property placed in service by the taxpayer during the taxable year.
    ``(b) Limitation.--The credit allowed under subsection (a) for any 
taxable year with respect to any qualified pollution abatement 
equipment property shall not exceed--
            ``(1) $50,000,000 in the case of a property of a character 
        subject an allowance for depreciation provided in section 167, 
        and
            ``(2) $30,000,000 in any other case.
    ``(c) Qualified Pollution Abatement Equipment Property.--For 
purposes of this section, the term `qualified pollution abatement 
equipment property' means pollution abatement equipment--
            ``(1) which is part of a unit or facility which either--
                    ``(A) utilizes technologies that meet relevant 
                Federal and State clean air requirements applicable to 
                the unit or facility, including being adequately 
                demonstrated for purposes of section 111 of the Clean 
                Air Act (42 U.S.C. 7411), achievable for purposes of 
                section 169 of that Act (42 U.S.C. 7479), or achievable 
                in practice for purposes of section 171 of that Act (42 
                U.S.C. 7501, or
                    ``(B) utilizes equipment or processes that exceed 
                relevant Federal or State clean air requirements 
                applicable to the unit or facility by achieving greater 
                efficiency or environmental performance,
            ``(2) which is installed on a voluntary basis and not as a 
        result of an agreement with a Federal or State agency or 
        required as a decree from a judicial decision, and
            ``(3) with respect to which an election under section 169 
        is not in effect.''.
    (b) Credit Treated as Part of General Business Credit.--Section 
38(b) of such Code is amended by striking ``plus'' at the end of 
paragraph (30), by striking the period at the end of paragraph (31) and 
inserting ``, plus'', and by adding at the end the following new 
paragraph:
            ``(32) the pollution abatement equipment credit determined 
        under section 45O(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by 
inserting after the item relating to section 45N the following new 
item:

``Sec. 45O. Credit for pollution abatement equipment.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to expenditures made after the date of the enactment of this Act, 
in taxable years ending after such date.

SEC. 107. MODIFICATIONS RELATING TO CLEAN RENEWABLE ENERGY BONDS.

    (a) Clean Renewable Energy Bond.--Paragraph (1) of section 54(d) of 
the Internal Revenue Code of 1986 (defining clean renewable energy 
bond) is amended--
            (1) in subparagraph (A), by striking ``pursuant'' and all 
        that follows through ``subsection (f)(2)'',
            (2) in subparagraph (B), by striking ``95 percent or more 
        of the proceeds'' and inserting ``90 percent or more of the net 
        proceeds'', and
            (3) in subparagraph (D), by striking ``subsection (h)'' and 
        inserting ``subsection (g)''.
    (b) Qualified Project.--Subparagraph (A) of section 54(d)(2) of 
such Code (defining qualified project) is amended to read as follows:
                    ``(A) In general.--The term `qualified project' 
                means any qualified facility (as determined under 
                section 45(d) without regard to paragraphs (8) and (10) 
                thereof and to any placed in service requirement) owned 
                by a qualified borrower and also without regard to the 
                following:
                            ``(i) In the case of a qualified facility 
                        described in section 45(d)(9) (regarding 
                        incremental hydropower production), any 
                        determination of incremental hydropower 
                        production and related calculations shall be 
                        determined by the qualified borrower based on a 
                        methodology that meets Federal Energy 
                        Regulatory Commission standards.
                            ``(ii) In the case of a qualified facility 
                        described in section 45(d)(9) (regarding 
                        hydropower production), the facility need not 
                        be licensed by the Federal Energy Regulation 
                        Commission if the facility, when constructed, 
                        will meet Federal Energy Regulatory Commission 
                        licensing requirements and other applicable 
                        environmental, licensing, and regulatory 
                        requirements.''.
    (c) Reimbursement.--Subparagraph (C) of section 54(d)(2) of such 
Code (relating to reimbursement) is amended to read as follows:
                    ``(C) Reimbursement.--For purposes of paragraph 
                (1)(B), proceeds of a clean renewable energy bond may 
                be issued to reimburse a qualified borrower for amounts 
                paid after the date of the enactment of this 
                subparagraph in the same manner as proceeds of State 
                and local government obligations the interest upon 
                which is exempt from tax under section 103.''.
    (d) Change in Use.--Subparagraph (D) of section 54(d)(2) of such 
Code (relating to treatment of changes in use) is amended by striking 
``or qualified issuer''.
    (e) Maximum Term.--Paragraph (2) of section 54(e) of such Code 
(relating to maximum term) is amended by striking ``without regard to 
the requirements of subsection (1)(6) and''.
    (f) Repeal of Limitation on Amount of Bonds Designated.--Section 54 
of such Code is amended by striking subsection (f) (relating to repeal 
of limitation on amount of bonds designated).
    (g) Special Rules Relating to Expenditures.--Subsection (h) of 
section 54 of such Code (relating to special rules relating to 
expenditures) is amended--
            (1) in paragraph (1)(A), by striking ``95 percent of the 
        proceeds'' and inserting ``90 percent of the net proceeds'',
            (2) in paragraph (1)(B)--
                    (A) by striking ``10 percent of the proceeds'' and 
                inserting ``5 percent of the net proceeds'', and
                    (B) by striking ``the 6-month period beginning on'' 
                both places it appears and inserting ``1 year of'',
            (3) in paragraph (1)(C), by inserting ``net'' before 
        ``proceeds'', and
            (4) in paragraph (3), by striking ``95 percent of the 
        proceeds'' and inserting ``90 percent of the net proceeds''.
    (h) Repeal of Special Rules Relating to Arbitrage.--Section 54 of 
such Code is amended by striking subsection (i) (relating to repeal of 
special rules relating to arbitrage).
    (i) Public Power Entity.--Subsection (j) of section 54 of such Code 
(defining cooperative electric company; qualified energy tax credit 
bond lender; governmental body; qualified borrower) is amended--
            (1) by redesignating paragraphs (4) and (5) as paragraphs 
        (5) and (6), respectively,
            (2) by inserting after paragraph (3) the following new 
        paragraph:
            ``(4) Public power entity.--The term `public power entity' 
        means a State utility with a service obligation, as such terms 
        are defined in section 217 of the Federal Power Act (as in 
        effect on the date of enactment of this paragraph).'',
            (3) in paragraph (5), as so redesignated--
                    (A) by striking ``or'' at the end of subparagraph 
                (B),
                    (B) by striking the period at the end of 
                subparagraph (C) and inserting ``, or'', and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) a public power entity.'', and
            (4) in paragraph (6), as so redesignated--
                    (A) by striking ``or'' at the end of subparagraph 
                (A),
                    (B) by striking the period at the end of 
                subparagraph (B) and inserting ``, or'', and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) a public power entity.''.
    (j) Repeal of Ratable Principal Amortization Requirement.--
Subsection (l) of section 54 of such Code (relating to other 
definitions and special rules) is amended by striking paragraph (5) and 
redesignating paragraph (6) as paragraph (5).
    (k) Net Proceeds.--Subsection (l) of section 54 of such Code 
(relating to other definitions and special rules), as amended by 
subsection (j), is amended by redesignating paragraphs (2), (3), (4), 
and (5) as paragraphs (4), (5), (6), and (7), respectively, and by 
inserting after paragraph (1) the following new paragraphs:
            ``(2) Net proceeds.--The term `net proceeds' means, with 
        respect to an issue, the proceeds of such issue reduced by 
        amounts in a reasonably required reserve or replacement fund.
            ``(3) Limitation on amount in reserve or replacement fund 
        which may be financed by issue.--A bond issued as part of an 
        issue shall not be treated as a clean renewable energy bond if 
        the amount of the proceeds from the sale of such issue which is 
        part of any reserve or replacement fund exceeds 10 percent of 
        the proceeds of the issue (or such higher amount which the 
        issuer establishes is necessary to the satisfaction of the 
        Secretary).''.
    (l) Other Special Rules.--Subsection (l) of section 54 of such Code 
((relating to other definitions and special rules), as amended by 
subsections (j) and (k), is amended by adding at the end the following 
new paragraphs:
            ``(8) Credits may be separated.--There may be a separation 
        (including at issuance) of the ownership of a clean renewable 
        energy bond and the entitlement to the credit under this 
        section with respect to such bond. In case of any such 
        separation, the credit under this section shall be allowed to 
        the person who on the credit allowance date holds the 
        instrument evidencing the entitlement to the credit and not to 
        the holder of the bond.
            ``(9) Treatment for estimated tax purposes.--Solely for the 
        purposes of sections 6654 and 6655, the credit allowed by this 
        section to a taxpayer by reason of holding a qualified energy 
        tax credit bond on a credit allowance date (or the credit in 
        the case of a separation as provided in paragraph (8)) shall be 
        treated as if it were a payment of estimated tax made by the 
        taxpayer on such date.
            ``(10) Carryback and carryforward of unused credits.--If 
        the sum of the credit exceeds the limitation imposed by 
        subsection (c) for any taxable year, any credits may be applied 
        in a manner similar to the rules set forth in section 39.''.
    (m) Termination.--Subsection (m) of section 54 of such Code 
(relating to termination) is amended by striking ``2008'' and inserting 
``2013''.
    (n) Clerical Redesignations.--Section 54 of such Code, as amended 
by the preceding provisions of this section, is amended by 
redesignating subsections (g), (h), (j), (k), (l), and (m) as 
subsections (f), (g), (h), (i), (j), and (k), respectively.
    (o) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.

SEC. 108. EXTENSION OF RENEWABLE ENERGY PRODUCTION TAX CREDIT.

    (a) In General.--Section 45 of the Internal Revenue Code of 1986 is 
amended--
            (1) by striking ``10-year period beginning on the date the 
        facility was originally placed in service,'' in subsection 
        (a)(2)(A)(ii) and inserting ``5-year period beginning on the 
        date the facility was originally placed in service,'',
            (2) by striking ``in subsection (a)(2)(A)(ii).'' in 
        subsection (b)(4)(B)(i) and inserting ``beginning on the date 
        the facility was originally placed in service.'',
            (3) by striking ``in subsection (a)(2)(A)(ii).'' in 
        subsection (b)(4)(B)(ii) and inserting ``beginning on the date 
        the facility was originally placed in service.'', and
            (4) by striking ``January 1, 2009'' each place it appears 
        in subsection (d) and inserting ``January 1, 2014''.
    (b) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

SEC. 109. ENERGY CREDIT EXTENDED TO GREEN BUILDINGS.

    (a) In General.--Section 48(a)(3)(A) of the Internal Revenue Code 
of 1986 (defining energy property) is amended--
            (1) by striking ``or'' at the end of clause (iii),
            (2) by inserting after clause (iv) the following new 
        clauses:
                            ``(v) thermal storage system determined by 
                        the Secretary of Energy through a site specific 
                        feasibility study which allows for a reduction 
                        in energy use of 10 percent per year compared 
                        with conventional technologies, or
                            ``(vi) daylight dimming technologies 
                        determined by the Secretary of Energy,''.
    (b) Credit Rate.--Section 48(a)(2)(A) of such Code (relating to 
energy percentage) is amended--
            (1) by striking ``and'' at the end of clause (i)(III),
            (2) by redesignating clause (ii) as clause (iii), and
            (3) by inserting after clause (i) the following new clause:
                            ``(ii) 50 percent in the case of energy 
                        property described in clause (v) or (vi) of 
                        paragraph (3)(A), and''.
    (c) Limitations.--Section 48 of such Code is amended by adding at 
the end the following new subsection:
    ``(d) Energy Property for Green Buildings.--
            ``(1) Thermal storage unit.--In the case of energy property 
        described in paragraph (3)(A)(v) placed in service during the 
        taxable year, the credit otherwise determined under subsection 
        (a)(1) for such year with respect to such property shall not 
        exceed $500,000.
            ``(2) Daylight dimming technologies.--In the case of energy 
        property described in paragraph (3)(A)(vi) placed in service 
        during the taxable year, the credit otherwise determined under 
        subsection (a)(1) for such year with respect to such property 
        shall not exceed $500,000.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to periods after the date of the enactment of this Act, in 
taxable years ending after such date, under rules similar to the rules 
of section 48(m) of the Internal Revenue Code of 1986 (as in effect on 
the day before the date of the enactment of the Revenue Reconciliation 
Act of 1990).
                                 <all>
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