II 

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. 

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; TABLE OF CONTENTS. 

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

5 ‘‘Energy Infrastructure Tax Reform and Incentives Act 

6 of 2007’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 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. 


bajohnson on PRODPC60 with BILLS
2 

•S 1601 IS

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. 

1 SEC. 101. INCOME AND GAINS FROM ELECTRICITY TRANS2 MISSION SYSTEMS TREATED AS QUALIFYING 

3 INCOME FOR PUBLICLY TRADED PARTNER4 SHIPS. 

5 (a) IN GENERAL.—Section 7704(d)(1) of the Inter6 nal Revenue Code of 1986 (defining qualifying income) is 

7 amended by redesignating subparagraphs (F) and (G) as 

8 subparagraphs (G) and (H), respectively, and by inserting 

9 after subparagraph (E) the following new subparagraph: 

10 ‘‘(F) income and gains from the trans11 mission of electricity at 69 or more kilovolts 

12 through any property the original use of which 

13 commences after December 31, 2006,’’. 

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

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

16 of this Act, in taxable years ending after such date. 


bajohnson on PRODPC60 with BILLS
3 

•S 1601 IS

1 SEC. 102. FIVE-YEAR APPLICABLE RECOVERY PERIOD FOR 

2 DEPRECIATION OF QUALIFIED ENERGY MAN3 AGEMENT DEVICES. 

4 (a) IN GENERAL.—Section 168(e)(3)(B) of the Inter5 nal Revenue Code of 1986 (defining 5-year property) is 

6 amended by striking ‘‘and’’ at the end of clause (v), by 

7 striking the period at the end of clause (vi)(III) and in8 serting ‘‘, and’’, and by inserting after clause (vi) the fol9 lowing new clause: 

10 ‘‘(vii) any qualified energy manage11 ment device.’’. 

12 (b) DEFINITION OF QUALIFIED ENERGY MANAGE13 MENT DEVICE.—Section 168(i) of such Code (relating to 

14 definitions and special rules) is amended by inserting at 

15 the end the following new paragraph: 

16 ‘‘(18) QUALIFIED ENERGY MANAGEMENT DE17 VICE.— 

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

19 energy management device’ means any energy 

20 management device which is placed in service 

21 by a taxpayer who is a supplier of electric en22 ergy or a provider of electric energy services. 

23 ‘‘(B) ENERGY MANAGEMENT DEVICE.— 

24 For purposes of subparagraph (A), the term 

25 ‘energy management device’ means any time26 based meter and related communications equipVerDate Aug 31 2005 02:55 Jun 13, 2007 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1601.IS S1601

bajohnson on PRODPC60 with BILLS
4 

•S 1601 IS

1 ment which is capable of being used by the tax2 payer as part of a system that— 

3 ‘‘(i) measures and records electricity 

4 usage data on a time-differentiated basis 

5 in at least 24 separate time segments per 

6 day, 

7 ‘‘(ii) provides for the exchange of in8 formation between supplier or provider and 

9 the customer’s energy management device 

10 in support of time-based rates or other 

11 forms of demand response, and 

12 ‘‘(iii) provides data to such supplier or 

13 provider so that the supplier or provider 

14 can provide energy usage information to 

15 customers electronically.’’. 

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

17 this section shall apply to property placed in service in 

18 taxable years ending after the date of the enactment of 

19 this Act. 

20 SEC. 103. SPECIAL DEPRECIATION ALLOWANCE FOR CEL21 LULOSIC BIOMASS ETHANOL PLANT PROP22 ERTY. 

23 (a) IN GENERAL.—Section 168 of the Internal Rev24 enue Code of 1986 (relating to accelerated cost recovery 

25 system) is amended by adding at the end the following: 


bajohnson on PRODPC60 with BILLS
5 

•S 1601 IS

1 ‘‘(l) SPECIAL ALLOWANCE FOR CELLULOSIC BIO2 MASS ETHANOL PLANT PROPERTY.— 

3 ‘‘(1) ADDITIONAL ALLOWANCE.—In the case of 

4 any qualified cellulosic biomass ethanol plant prop5 erty— 

6 ‘‘(A) the depreciation deduction provided 

7 by section 167(a) for the taxable year in which 

8 such property is placed in service shall include 

9 an allowance equal to 50 percent of the ad10 justed basis of such property, and 

11 ‘‘(B) the adjusted basis of such property 

12 shall be reduced by the amount of such deduc13 tion before computing the amount otherwise al14 lowable as a depreciation deduction under this 

15 chapter for such taxable year and any subse16 quent taxable year. 

17 ‘‘(2) QUALIFIED CELLULOSIC BIOMASS ETH18 ANOL PLANT PROPERTY.— 

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

20 cellulosic biomass ethanol plant property’ means 

21 property of a character subject to the allowance 

22 for depreciation— 

23 ‘‘(i) which is used in the United 

24 States solely to produce cellulosic biomass 

25 ethanol, 


bajohnson on PRODPC60 with BILLS
6 

•S 1601 IS

1 ‘‘(ii) the original use of which com2 mences with the taxpayer after the date of 

3 the enactment of this subsection, 

4 ‘‘(iii) which has a nameplate capacity 

5 of 100,000,000 gallons per year of cel6 lulosic biomass ethanol, 

7 ‘‘(iv) which is acquired by the tax8 payer by purchase (as defined in section 

9 179(d)) after the date of the enactment of 

10 this subsection, but only if no written bind11 ing contract for the acquisition was in ef12 fect on or before the date of the enactment 

13 of this subsection, and 

14 ‘‘(v) which is placed in service by the 

15 taxpayer before January 1, 2013. 

16 ‘‘(B) EXCEPTIONS.— 

17 ‘‘(i) ALTERNATIVE DEPRECIATION

18 PROPERTY.—Such term shall not include 

19 any property described in section 

20 168(k)(2)(D)(i). 

21 ‘‘(ii) TAX-EXEMPT BOND-FINANCED

22 PROPERTY.—Such term shall not include 

23 any property any portion of which is fi24 nanced with the proceeds of any obligation 


bajohnson on PRODPC60 with BILLS
7 

•S 1601 IS

1 the interest on which is exempt from tax 

2 under section 103. 

3 ‘‘(iii) ELECTION OUT.—If a taxpayer 

4 makes an election under this subparagraph 

5 with respect to any class of property for 

6 any taxable year, this subsection shall not 

7 apply to all property in such class placed 

8 in service during such taxable year. 

9 ‘‘(3) CELLULOSIC BIOMASS ETHANOL.—For 

10 purposes of this subsection, the term ‘cellulosic bio11 mass ethanol’— 

12 ‘‘(A) means ethanol derived from any 

13 lignocellulosic or hemicellulosic matter that is 

14 available on a renewable or recurring basis, in15 cluding— 

16 ‘‘(i) dedicated energy crops and trees, 

17 ‘‘(ii) wood and wood residues, 

18 ‘‘(iii) plants, 

19 ‘‘(iv) grasses, 

20 ‘‘(v) agricultural residues, 

21 ‘‘(vi) fibers, 

22 ‘‘(vii) animal wastes and other waste 

23 materials, and 

24 ‘‘(viii) municipal and solid waste, and 


bajohnson on PRODPC60 with BILLS
8 

•S 1601 IS

1 ‘‘(B) includes any ethanol produced in fa2 cilities where animal wastes or other waste ma3 terials are digested or otherwise used to dis4 place 90 percent or more of the fossil fuel nor5 mally used in the production of ethanol. 

6 ‘‘(4) SPECIAL RULES.—For purposes of this 

7 subsection, rules similar to the rules of subpara8 graph (E) of section 168(k)(2) shall apply, except 

9 that such subparagraph shall be applied— 

10 ‘‘(A) by substituting ‘the date of the enact11 ment of subsection (l)’ for ‘September 10, 

12 2001’ each place it appears therein, 

13 ‘‘(B) by substituting ‘January 1, 2013’ for 

14 ‘January 1, 2005’ in clause (i) thereof, and 

15 ‘‘(C) by substituting ‘qualified cellulosic 

16 biomass ethanol plant property’ for ‘qualified 

17 property’ in clause (iv) thereof. 

18 ‘‘(5) ALLOWANCE AGAINST ALTERNATIVE MIN19 IMUM TAX.—For purposes of this subsection, rules 

20 similar to the rules of section 168(k)(2)(G) shall 

21 apply. 

22 ‘‘(6) RECAPTURE.—For purposes of this sub23 section, rules similar to the rules under section 

24 179(d)(10) shall apply with respect to any qualified 

25 cellulosic biomass ethanol plant property which 


bajohnson on PRODPC60 with BILLS
9 

•S 1601 IS

1 ceases to be qualified cellulosic biomass ethanol 

2 plant property.’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 this section shall apply to property placed in service after 

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

6 ending after such date. 

7 SEC. 104. COAL-TO-LIQUID FACILITIES. 

8 (a) IN GENERAL.—Section 168 of the Internal Rev9 enue Code of 1986 (relating to accelerated cost recovery 

10 system), as amended by this Act, is amended by adding 

11 at the end the following: 

12 ‘‘(m) SPECIAL ALLOWANCE FOR COAL-TO-LIQUID

13 PLANT PROPERTY.— 

14 ‘‘(1) ADDITIONAL ALLOWANCE.—In the case of 

15 any qualified coal-to-liquid plant property— 

16 ‘‘(A) the depreciation deduction provided 

17 by section 167(a) for the taxable year in which 

18 such property is placed in service shall include 

19 an allowance equal to 50 percent of the ad20 justed basis of such property, and 

21 ‘‘(B) the adjusted basis of such property 

22 shall be reduced by the amount of such deduc23 tion before computing the amount otherwise al24 lowable as a depreciation deduction under this 


bajohnson on PRODPC60 with BILLS
10 

•S 1601 IS

1 chapter for such taxable year and any subse2 quent taxable year. 

3 ‘‘(2) QUALIFIED COAL-TO-LIQUID PLANT PROP4 ERTY.— 

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

6 coal-to-liquid plant property’ means property of 

7 a character subject to the allowance for depre8 ciation— 

9 ‘‘(i) which is part of a commercial10 scale project that converts coal to 1 or 

11 more liquid or gaseous transportation fuel 

12 that demonstrates the capture, and seques13 tration or disposal or use of, the carbon di14 oxide produced in the conversion process, 

15 and that, on the basis of carbon dioxide se16 questration plan prepared by the applicant, 

17 is certified by the Administrator of the En18 vironmental Protection Agency, in con19 sultation with the Secretary of Energy, as 

20 producing fuel with life cycle carbon diox21 ide emissions at or below the average life22 cycle carbon dioxide emissions for the same 

23 type of fuel produced at traditional petro24 leum based facilities with similar annual 

25 capacities, 


bajohnson on PRODPC60 with BILLS
11 

•S 1601 IS

1 ‘‘(ii) which is used in the United 

2 States solely to produce coal-to-liquid fuels, 

3 ‘‘(iii) the original use of which com4 mences with the taxpayer after the date of 

5 the enactment of this subsection, 

6 ‘‘(iv) which has a nameplate capacity 

7 of 30,000 barrels per day production of 

8 coal-to-liquid fuels; 

9 ‘‘(v) which is acquired by the taxpayer 

10 by purchase (as defined in section 179(d)) 

11 after the date of the enactment of this sub12 section, but only if no written binding con13 tract for the acquisition was in effect on or 

14 before the date of the enactment of this 

15 subsection, and 

16 ‘‘(vi) which is placed in service by the 

17 taxpayer before January 1, 2013. 

18 ‘‘(B) EXCEPTIONS.— 

19 ‘‘(i) ALTERNATIVE DEPRECIATION

20 PROPERTY.—Such term shall not include 

21 any property described in section 

22 168(k)(2)(D)(i). 

23 ‘‘(ii) TAX-EXEMPT BOND-FINANCED

24 PROPERTY.—Such term shall not include 

25 any property any portion of which is fiVerDate Aug 31 2005 02:55 Jun 13, 2007 Jkt 059200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1601.IS S1601

bajohnson on PRODPC60 with BILLS
12 

•S 1601 IS

1 nanced with the proceeds of any obligation 

2 the interest on which is exempt from tax 

3 under section 103. 

4 ‘‘(iii) ELECTION OUT.—If a taxpayer 

5 makes an election under this subparagraph 

6 with respect to any class of property for 

7 any taxable year, this subsection shall not 

8 apply to all property in such class placed 

9 in service during such taxable year. 

10 ‘‘(3) SPECIAL RULES.—For purposes of this 

11 subsection, rules similar to the rules of subpara12 graph (E) of section 168(k)(2) shall apply, except 

13 that such subparagraph shall be applied— 

14 ‘‘(A) by substituting ‘the date of the enact15 ment of subsection (l)’ for ‘September 10, 

16 2001’ each place it appears therein, 

17 ‘‘(B) by substituting ‘January 1, 2013’ for 

18 ‘January 1, 2005’ in clause (i) thereof, and 

19 ‘‘(C) by substituting ‘qualified coal-to-liq20 uid plant property’ for ‘qualified property’ in 

21 clause (iv) thereof. 

22 ‘‘(4) ALLOWANCE AGAINST ALTERNATIVE MIN23 IMUM TAX.—For purposes of this subsection, rules 

24 similar to the rules of section 168(k)(2)(G) shall 

25 apply. 


bajohnson on PRODPC60 with BILLS
13 

•S 1601 IS

1 ‘‘(5) RECAPTURE.—For purposes of this sub2 section, rules similar to the rules under section 

3 179(d)(10) shall apply with respect to any qualified 

4 coal-to-liquid plant property which ceases to be 

5 qualified coal-to-liquid plant property.’’. 

6 (b) EFFECTIVE DATE.—The amendment made by 

7 this subsection shall apply to property placed in service 

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

9 years ending after such date. 

10 SEC. 105. DEDICATED ETHANOL PIPELINES TREATED AS 15- 

11 YEAR PROPERTY. 

12 (a) IN GENERAL.—Section 168(e)(3)(E) of the Inter13 nal Revenue Code of 1986 (defining 15-year property), is 

14 amended by striking ‘‘and’’ at the end of clause (vii), by 

15 striking the period at the end of clause (viii) and by insert16 ing ‘‘, and’’, and by adding at the end the following new 

17 clause: 

18 ‘‘(ix) any dedicated ethanol distribu19 tion line the original use of which com20 mences with the taxpayer after August 1, 

21 2007, and which is placed in service before 

22 January 1, 2013.’’. 

23 (b) ALTERNATIVE SYSTEM.—The table contained in 

24 section 168(g)(3)(B) of such Code (relating to special rule 

25 for certain property assigned to classes) is amended by 


bajohnson on PRODPC60 with BILLS
14 

•S 1601 IS

1 inserting after the item relating to subparagraph (E)(viii) 

2 the following new item: 

‘‘(E)(ix) ...................................................................................................... 35.’’. 

3 (c) EFFECTIVE DATE.— 

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

5 this section shall apply to property placed in service 

6 after August 1, 2007. 

7 (2) EXCEPTION.—The amendments made by 

8 this section shall not apply to any property with re9 spect to which the taxpayer or related party has en10 tered into a binding contract for the construction 

11 thereof on or before August 1, 2007, or, in the case 

12 of self-constructed property, has started construction 

13 on or before such date. 

14 SEC. 106. CREDIT FOR POLLUTION ABATEMENT EQUIP15 MENT. 

16 (a) IN GENERAL.—Subpart D of part IV of sub17 chapter A of chapter 1 of the Internal Revenue Code of 

18 1986 is amended by inserting after section 45N the fol19 lowing new section: 

20 ‘‘SEC. 45O. CREDIT FOR POLLUTION ABATEMENT EQUIP21 MENT. 

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

23 the pollution abatement equipment credit for any taxable 

24 year is an amount equal to 30 percent of the costs of any 


bajohnson on PRODPC60 with BILLS
15 

•S 1601 IS

1 qualified pollution abatement equipment property placed 

2 in service by the taxpayer during the taxable year. 

3 ‘‘(b) LIMITATION.—The credit allowed under sub4 section (a) for any taxable year with respect to any quali5 fied pollution abatement equipment property shall not ex6 ceed— 

7 ‘‘(1) $50,000,000 in the case of a property of 

8 a character subject an allowance for depreciation 

9 provided in section 167, and 

10 ‘‘(2) $30,000,000 in any other case. 

11 ‘‘(c) QUALIFIED POLLUTION ABATEMENT EQUIP12 MENT PROPERTY.—For purposes of this section, the term 

13 ‘qualified pollution abatement equipment property’ means 

14 pollution abatement equipment— 

15 ‘‘(1) which is part of a unit or facility which ei16 ther— 

17 ‘‘(A) utilizes technologies that meet rel18 evant Federal and State clean air requirements 

19 applicable to the unit or facility, including being 

20 adequately demonstrated for purposes of section 

21 111 of the Clean Air Act (42 U.S.C. 7411), 

22 achievable for purposes of section 169 of that 

23 Act (42 U.S.C. 7479), or achievable in practice 

24 for purposes of section 171 of that Act (42 

25 U.S.C. 7501, or 


bajohnson on PRODPC60 with BILLS
16 

•S 1601 IS

1 ‘‘(B) utilizes equipment or processes that 

2 exceed relevant Federal or State clean air re3 quirements applicable to the unit or facility by 

4 achieving greater efficiency or environmental 

5 performance, 

6 ‘‘(2) which is installed on a voluntary basis and 

7 not as a result of an agreement with a Federal or 

8 State agency or required as a decree from a judicial 

9 decision, and 

10 ‘‘(3) with respect to which an election under 

11 section 169 is not in effect.’’. 

12 (b) CREDIT TREATED AS PART OF GENERAL BUSI13 NESS CREDIT.—Section 38(b) of such Code is amended 

14 by striking ‘‘plus’’ at the end of paragraph (30), by strik15 ing the period at the end of paragraph (31) and inserting 

16 ‘‘, plus’’, and by adding at the end the following new para17 graph: 

18 ‘‘(32) the pollution abatement equipment credit 

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

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

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

22 of such Code is amended by inserting after the item relat23 ing to section 45N the following new item: 

‘‘Sec. 45O. Credit for pollution abatement equipment.’’. 

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

25 this section shall apply to expenditures made after the 


bajohnson on PRODPC60 with BILLS
17 

•S 1601 IS

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

2 after such date. 

3 SEC. 107. MODIFICATIONS RELATING TO CLEAN RENEW4 ABLE ENERGY BONDS. 

5 (a) CLEAN RENEWABLE ENERGY BOND.—Paragraph 

6 (1) of section 54(d) of the Internal Revenue Code of 1986 

7 (defining clean renewable energy bond) is amended— 

8 (1) in subparagraph (A), by striking ‘‘pursu9 ant’’ and all that follows through ‘‘subsection 

10 (f)(2)’’, 

11 (2) in subparagraph (B), by striking ‘‘95 per12 cent or more of the proceeds’’ and inserting ‘‘90 per13 cent or more of the net proceeds’’, and 

14 (3) in subparagraph (D), by striking ‘‘sub15 section (h)’’ and inserting ‘‘subsection (g)’’. 

16 (b) QUALIFIED PROJECT.—Subparagraph (A) of sec17 tion 54(d)(2) of such Code (defining qualified project) is 

18 amended to read as follows: 

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

20 project’ means any qualified facility (as deter21 mined under section 45(d) without regard to 

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

23 placed in service requirement) owned by a 

24 qualified borrower and also without regard to 

25 the following: 


bajohnson on PRODPC60 with BILLS
18 

•S 1601 IS

1 ‘‘(i) In the case of a qualified facility 

2 described in section 45(d)(9) (regarding in3 cremental hydropower production), any de4 termination of incremental hydropower 

5 production and related calculations shall be 

6 determined by the qualified borrower based 

7 on a methodology that meets Federal En8 ergy Regulatory Commission standards. 

9 ‘‘(ii) In the case of a qualified facility 

10 described in section 45(d)(9) (regarding 

11 hydropower production), the facility need 

12 not be licensed by the Federal Energy 

13 Regulation Commission if the facility, 

14 when constructed, will meet Federal En15 ergy Regulatory Commission licensing re16 quirements and other applicable environ17 mental, licensing, and regulatory require18 ments.’’. 

19 (c) REIMBURSEMENT.—Subparagraph (C) of section 

20 54(d)(2) of such Code (relating to reimbursement) is 

21 amended to read as follows: 

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

23 paragraph (1)(B), proceeds of a clean renew24 able energy bond may be issued to reimburse a 

25 qualified borrower for amounts paid after the 


bajohnson on PRODPC60 with BILLS
19 

•S 1601 IS

1 date of the enactment of this subparagraph in 

2 the same manner as proceeds of State and local 

3 government obligations the interest upon which 

4 is exempt from tax under section 103.’’. 

5 (d) CHANGE IN USE.—Subparagraph (D) of section 

6 54(d)(2) of such Code (relating to treatment of changes 

7 in use) is amended by striking ‘‘or qualified issuer’’. 

8 (e) MAXIMUM TERM.—Paragraph (2) of section 

9 54(e) of such Code (relating to maximum term) is amend10 ed by striking ‘‘without regard to the requirements of sub11 section (1)(6) and’’. 

12 (f) REPEAL OF LIMITATION ON AMOUNT OF BONDS

13 DESIGNATED.—Section 54 of such Code is amended by 

14 striking subsection (f) (relating to repeal of limitation on 

15 amount of bonds designated). 

16 (g) SPECIAL RULES RELATING TO EXPENDI17 TURES.—Subsection (h) of section 54 of such Code (relat18 ing to special rules relating to expenditures) is amended— 

19 (1) in paragraph (1)(A), by striking ‘‘95 per20 cent of the proceeds’’ and inserting ‘‘90 percent of 

21 the net proceeds’’, 

22 (2) in paragraph (1)(B)— 

23 (A) by striking ‘‘10 percent of the pro24 ceeds’’ and inserting ‘‘5 percent of the net pro25 ceeds’’, and 


bajohnson on PRODPC60 with BILLS
20 

•S 1601 IS

1 (B) by striking ‘‘the 6-month period begin2 ning on’’ both places it appears and inserting 

3 ‘‘1 year of’’, 

4 (3) in paragraph (1)(C), by inserting ‘‘net’’ be5 fore ‘‘proceeds’’, and 

6 (4) in paragraph (3), by striking ‘‘95 percent of 

7 the proceeds’’ and inserting ‘‘90 percent of the net 

8 proceeds’’. 

9 (h) REPEAL OF SPECIAL RULES RELATING TO ARBI10 TRAGE.—Section 54 of such Code is amended by striking 

11 subsection (i) (relating to repeal of special rules relating 

12 to arbitrage). 

13 (i) PUBLIC POWER ENTITY.—Subsection (j) of sec14 tion 54 of such Code (defining cooperative electric com15 pany; qualified energy tax credit bond lender; govern16 mental body; qualified borrower) is amended— 

17 (1) by redesignating paragraphs (4) and (5) as 

18 paragraphs (5) and (6), respectively, 

19 (2) by inserting after paragraph (3) the fol20 lowing new paragraph: 

21 ‘‘(4) PUBLIC POWER ENTITY.—The term ‘public 

22 power entity’ means a State utility with a service ob23 ligation, as such terms are defined in section 217 of 

24 the Federal Power Act (as in effect on the date of 

25 enactment of this paragraph).’’, 


bajohnson on PRODPC60 with BILLS
21 

•S 1601 IS

1 (3) in paragraph (5), as so redesignated— 

2 (A) by striking ‘‘or’’ at the end of subpara3 graph (B), 

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

5 subparagraph (C) and inserting ‘‘, or’’, and 

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

7 subparagraph: 

8 ‘‘(D) a public power entity.’’, and 

9 (4) in paragraph (6), as so redesignated— 

10 (A) by striking ‘‘or’’ at the end of subpara11 graph (A), 

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

13 subparagraph (B) and inserting ‘‘, or’’, and 

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

15 subparagraph: 

16 ‘‘(C) a public power entity.’’. 

17 (j) REPEAL OF RATABLE PRINCIPAL AMORTIZATION

18 REQUIREMENT.—Subsection (l) of section 54 of such 

19 Code (relating to other definitions and special rules) is 

20 amended by striking paragraph (5) and redesignating 

21 paragraph (6) as paragraph (5). 

22 (k) NET PROCEEDS.—Subsection (l) of section 54 of 

23 such Code (relating to other definitions and special rules), 

24 as amended by subsection (j), is amended by redesignating 

25 paragraphs (2), (3), (4), and (5) as paragraphs (4), (5), 


bajohnson on PRODPC60 with BILLS
22 

•S 1601 IS

1 (6), and (7), respectively, and by inserting after paragraph 

2 (1) the following new paragraphs: 

3 ‘‘(2) NET PROCEEDS.—The term ‘net proceeds’ 

4 means, with respect to an issue, the proceeds of such 

5 issue reduced by amounts in a reasonably required 

6 reserve or replacement fund. 

7 ‘‘(3) LIMITATION ON AMOUNT IN RESERVE OR

8 REPLACEMENT FUND WHICH MAY BE FINANCED BY

9 ISSUE.—A bond issued as part of an issue shall not 

10 be treated as a clean renewable energy bond if the 

11 amount of the proceeds from the sale of such issue 

12 which is part of any reserve or replacement fund ex13 ceeds 10 percent of the proceeds of the issue (or 

14 such higher amount which the issuer establishes is 

15 necessary to the satisfaction of the Secretary).’’. 

16 (l) OTHER SPECIAL RULES.—Subsection (l) of sec17 tion 54 of such Code ((relating to other definitions and 

18 special rules), as amended by subsections (j) and (k), is 

19 amended by adding at the end the following new para20 graphs: 

21 ‘‘(8) CREDITS MAY BE SEPARATED.—There 

22 may be a separation (including at issuance) of the 

23 ownership of a clean renewable energy bond and the 

24 entitlement to the credit under this section with re25 spect to such bond. In case of any such separation, 


bajohnson on PRODPC60 with BILLS
23 

•S 1601 IS

1 the credit under this section shall be allowed to the 

2 person who on the credit allowance date holds the 

3 instrument evidencing the entitlement to the credit 

4 and not to the holder of the bond. 

5 ‘‘(9) TREATMENT FOR ESTIMATED TAX PUR6 POSES.—Solely for the purposes of sections 6654 

7 and 6655, the credit allowed by this section to a tax8 payer by reason of holding a qualified energy tax 

9 credit bond on a credit allowance date (or the credit 

10 in the case of a separation as provided in paragraph 

11 (8)) shall be treated as if it were a payment of esti12 mated tax made by the taxpayer on such date. 

13 ‘‘(10) CARRYBACK AND CARRYFORWARD OF UN14 USED CREDITS.—If the sum of the credit exceeds 

15 the limitation imposed by subsection (c) for any tax16 able year, any credits may be applied in a manner 

17 similar to the rules set forth in section 39.’’. 

18 (m) TERMINATION.—Subsection (m) of section 54 of 

19 such Code (relating to termination) is amended by striking 

20 ‘‘2008’’ and inserting ‘‘2013’’. 

21 (n) CLERICAL REDESIGNATIONS.—Section 54 of such 

22 Code, as amended by the preceding provisions of this sec23 tion, is amended by redesignating subsections (g), (h), (j), 

24 (k), (l), and (m) as subsections (f), (g), (h), (i), (j), and 

25 (k), respectively. 


bajohnson on PRODPC60 with BILLS
24 

•S 1601 IS

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

2 this section shall apply to obligations issued after the date 

3 of the enactment of this Act. 

4 SEC. 108. EXTENSION OF RENEWABLE ENERGY PRODUC5 TION TAX CREDIT. 

6 (a) IN GENERAL.—Section 45 of the Internal Rev7 enue Code of 1986 is amended— 

8 (1) by striking ‘‘10-year period beginning on 

9 the date the facility was originally placed in service,’’ 

10 in subsection (a)(2)(A)(ii) and inserting ‘‘5-year pe11 riod beginning on the date the facility was originally 

12 placed in service,’’, 

13 (2) by striking ‘‘in subsection (a)(2)(A)(ii).’’ in 

14 subsection (b)(4)(B)(i) and inserting ‘‘beginning on 

15 the date the facility was originally placed in serv16 ice.’’, 

17 (3) by striking ‘‘in subsection (a)(2)(A)(ii).’’ in 

18 subsection (b)(4)(B)(ii) and inserting ‘‘beginning on 

19 the date the facility was originally placed in serv20 ice.’’, and 

21 (4) by striking ‘‘January 1, 2009’’ each place 

22 it appears in subsection (d) and inserting ‘‘January 

23 1, 2014’’. 


bajohnson on PRODPC60 with BILLS
25 

•S 1601 IS

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

2 this section shall apply to property placed in service after 

3 the date of the enactment of this Act. 

4 SEC. 109. ENERGY CREDIT EXTENDED TO GREEN BUILD5 INGS. 

6 (a) IN GENERAL.—Section 48(a)(3)(A) of the Inter7 nal Revenue Code of 1986 (defining energy property) is 

8 amended— 

9 (1) by striking ‘‘or’’ at the end of clause (iii), 

10 (2) by inserting after clause (iv) the following 

11 new clauses: 

12 ‘‘(v) thermal storage system deter13 mined by the Secretary of Energy through 

14 a site specific feasibility study which allows 

15 for a reduction in energy use of 10 percent 

16 per year compared with conventional tech17 nologies, or 

18 ‘‘(vi) daylight dimming technologies 

19 determined by the Secretary of Energy,’’. 

20 (b) CREDIT RATE.—Section 48(a)(2)(A) of such 

21 Code (relating to energy percentage) is amended— 

22 (1) by striking ‘‘and’’ at the end of clause 

23 (i)(III), 

24 (2) by redesignating clause (ii) as clause (iii), 

25 and 


bajohnson on PRODPC60 with BILLS
26 

•S 1601 IS

1 (3) by inserting after clause (i) the following 

2 new clause: 

3 ‘‘(ii) 50 percent in the case of energy 

4 property described in clause (v) or (vi) of 

5 paragraph (3)(A), and’’. 

6 (c) LIMITATIONS.—Section 48 of such Code is 

7 amended by adding at the end the following new sub8 section: 

9 ‘‘(d) ENERGY PROPERTY FOR GREEN BUILDINGS.— 

10 ‘‘(1) THERMAL STORAGE UNIT.—In the case of 

11 energy property described in paragraph (3)(A)(v) 

12 placed in service during the taxable year, the credit 

13 otherwise determined under subsection (a)(1) for 

14 such year with respect to such property shall not ex15 ceed $500,000. 

16 ‘‘(2) DAYLIGHT DIMMING TECHNOLOGIES.—In 

17 the case of energy property described in paragraph 

18 (3)(A)(vi) placed in service during the taxable year, 

19 the credit otherwise determined under subsection 

20 (a)(1) for such year with respect to such property 

21 shall not exceed $500,000.’’. 

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

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

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

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


bajohnson on PRODPC60 with BILLS
27 

•S 1601 IS

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

2 day before the date of the enactment of the Revenue Rec3 onciliation Act of 1990). 

Æ 


bajohnson on PRODPC60 with BILLS