II 

111TH CONGRESS 

2D SESSION S. 3336 

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

of bonds issued to finance renewable energy resource facilities, conservation and efficiency facilities, and other specified greenhouse gas emission 

technologies. 

IN THE SENATE OF THE UNITED STATES 

MAY 11, 2010 

Mrs. FEINSTEIN (for herself and Mr. BROWN of Ohio) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

for the treatment of bonds issued to finance renewable 

energy resource facilities, conservation and efficiency facilities, and other specified greenhouse gas emission technologies. 

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. 

4 This Act may be cited as the ‘‘Private Activity Re5 newable Energy Bonds Act’’. 


tjames on DSK5CLS3C1PROD with BILLS
2 

•S 3336 IS

1 SEC. 2. TREATMENT OF BONDS ISSUED TO FINANCE RE2 NEWABLE ENERGY RESOURCE FACILITIES 

3 AND CONSERVATION AND EFFICIENCY FA4 CILITIES AND OTHER SPECIFIED GREEN5 HOUSE GAS EMISSION TECHNOLOGIES. 

6 (a) IN GENERAL.—Section 142(a) of the Internal 

7 Revenue Code of 1986 is amended by striking ‘‘or’’ at the 

8 end of paragraph (14), by striking the period at the end 

9 of paragraph (15) and inserting a comma, and by insert10 ing after paragraph (15) the following new paragraphs: 

11 ‘‘(16) renewable energy resource facilities, 

12 ‘‘(17) conservation and efficiency facilities and 

13 projects, or 

14 ‘‘(18) high efficiency vehicles and related facili15 ties or projects.’’. 

16 (b) RENEWABLE ENERGY RESOURCE FACILITY.— 

17 Section 142 of the Internal Revenue Code of 1986 is 

18 amended by adding at the end the following new sub19 section: 

20 ‘‘(n) RENEWABLE ENERGY RESOURCE FACILI21 TIES.—For purposes of subsection (a)(16)— 

22 ‘‘(1) IN GENERAL.—The term ‘renewable en23 ergy resource facility’ means— 

24 ‘‘(A) any facility used to produce electric 

25 or thermal energy (including a distributed gen26 eration facility) from— 


tjames on DSK5CLS3C1PROD with BILLS
3 

•S 3336 IS

1 ‘‘(i) solar, wind, or geothermal energy, 

2 ‘‘(ii) marine and hydrokinetic renew3 able energy, 

4 ‘‘(iii) incremental hydropower, 

5 ‘‘(iv) biogas and solids produced in 

6 the wastewater treatment process, or 

7 ‘‘(v) biomass (as defined in section 

8 203(b)(1) of the Energy Policy Act of 

9 2005 (42 U.S.C. 15852(b)(1))), 

10 ‘‘(B) any facility used to produce biogas, 

11 or 

12 ‘‘(C) any facility or project used for the 

13 manufacture of facilities referred to in subpara14 graph (A) or (B). 

15 ‘‘(2) SPECIAL REQUIREMENTS FOR FACILITIES

16 PRODUCING BIOGAS.— 

17 ‘‘(A) IN GENERAL.—A facility shall not be 

18 treated as described in paragraph (1)(B), un19 less the biogas produced— 

20 ‘‘(i) is of pipeline quality and distrib21 uted into a vehicle for transportation or 

22 into an intrastate, interstate, or LDC pipe23 line system, or 

24 ‘‘(ii) is used to produce onsite elec25 tricity or hydrogen fuel for use in vehicular 


tjames on DSK5CLS3C1PROD with BILLS
4 

•S 3336 IS

1 or stationary fuel cell applications and has 

2 a British thermal unit content of at least 

3 500 per cubic foot. 

4 ‘‘(B) PIPELINE QUALITY.—For purposes of 

5 subparagraph (A)(i), with respect to biogas, the 

6 term ‘pipeline quality’ means biogas with a 

7 British thermal unit content of at least 930 per 

8 cubic foot. 

9 ‘‘(3) DEFINITIONS.—For purposes of this sub10 section— 

11 ‘‘(A) GEOTHERMAL ENERGY.—The term 

12 ‘geothermal energy’ means energy derived from 

13 a geothermal deposit (within the meaning of 

14 section 613(e)(2)) or from geothermal heat 

15 pumps. 

16 ‘‘(B) MARINE AND HYDROKINETIC RENEW17 ABLE ENERGY.—The term ‘marine and 

18 hydrokinetic renewable energy’ has the meaning 

19 given such term in section 45(c)(10). 

20 ‘‘(C) INCREMENTAL HYDROPOWER.—The 

21 term ‘incremental hydropower’ means additional 

22 energy generated as a result of efficiency im23 provements or capacity additions to existing hy24 dropower facilities made on or after the date of 

25 enactment of this subsection. The term ‘increVerDate Mar 15 2010 00:43 May 12, 2010 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3336.IS S3336

tjames on DSK5CLS3C1PROD with BILLS
5 

•S 3336 IS

1 mental hydropower’ does not include additional 

2 energy generated as a result of operational 

3 changes not directly associated with efficiency 

4 improvements or capacity additions. 

5 ‘‘(D) BIOGAS.—The term ‘biogas’ means a 

6 gaseous fuel derived from landfill, municipal 

7 solid waste, food waste, wastewater or biosolids, 

8 or biomass (as defined in section 203(b)(1) of 

9 the Energy Policy Act of 2005 (42 U.S.C. 

10 15852(b))). 

11 ‘‘(4) SPECIAL RULES FOR ENERGY LOAN TAX

12 ASSESSMENT FINANCING.— 

13 ‘‘(A) IN GENERAL.—In the case of any re14 newable recovery energy resource facility pro15 vided from the proceeds of a bond secured by 

16 any tax assessment loan upon real property, the 

17 term ‘facility’ in paragraph (1) includes— 

18 ‘‘(i) a prepayment for the principal 

19 purpose of purchasing electricity from re20 newable energy resource property, and 

21 ‘‘(ii) a prepayment of a lease or li22 cense of such property, but only if the pre23 payment agreement provides that it shall 

24 not be canceled prior to the expiration of 

25 the tax assessment loan. 


tjames on DSK5CLS3C1PROD with BILLS
6 

•S 3336 IS

1 ‘‘(B) TAX ASSESSMENT LOAN.—For pur2 poses of subparagraph (A), the term ‘tax as3 sessment loan’ shall mean a governmental as4 sessment, special tax, or similar charge upon 

5 real property.’’. 

6 (c) CONSERVATION AND EFFICIENCY FACILITY OR

7 PROJECT.—Section 142 of the Internal Revenue Code of 

8 1986, as amended by subsection (b), is amended by adding 

9 at the end the following new subsection: 

10 ‘‘(o) CONSERVATION AND EFFICIENCY FACILITIES

11 AND PROJECTS.— 

12 ‘‘(1) IN GENERAL.—For purposes of subsection 

13 (a)(17), the term ‘conservation and efficiency facility 

14 or project’ means— 

15 ‘‘(A) any facility used for the conservation 

16 or the efficient use of energy, including energy 

17 efficient retrofitting of existing buildings, or for 

18 the efficient storage, transmission, or distribu19 tion of energy, including any facility or project 

20 designed to implement smart grid technologies 

21 (as described in title XIII of the Energy Inde22 pendence and Security Act of 2007, or indi23 vidual components of such technologies as listed 

24 in section 1301 of such Act), 


tjames on DSK5CLS3C1PROD with BILLS
7 

•S 3336 IS

1 ‘‘(B) any facility used for the conservation 

2 of or the efficient use of water, including— 

3 ‘‘(i) any facility or project designed 

4 to— 

5 ‘‘(I) reduce the demand for 

6 water, 

7 ‘‘(II) improve efficiency in use 

8 and reduce losses and waste of water, 

9 including water reuse, and 

10 ‘‘(III) improve land management 

11 practices to conserve water, or 

12 ‘‘(ii) any individual component of a 

13 facility or project referred to in clause (i), 

14 or 

15 ‘‘(C) any facility or project used for the 

16 manufacture of facilities referred to in subpara17 graphs (A) and (B). 

18 For purposes of subparagraph (B)(i), facility or 

19 project does not include any facility or project that 

20 stores water. 

21 ‘‘(2) SPECIAL RULES FOR ENERGY LOAN TAX

22 ASSESSMENT FINANCING.— 

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

24 conservation and efficiency facility or project 

25 provided from the proceeds of a bond secured 


tjames on DSK5CLS3C1PROD with BILLS
8 

•S 3336 IS

1 by any tax assessment loan upon real property, 

2 the term ‘facility’ in paragraph (1)(A) in3 cludes— 

4 ‘‘(i) a prepayment for the principal 

5 purpose of purchasing electricity from con6 servation and efficiency property, and 

7 ‘‘(ii) a prepayment of a lease or li8 cense of such property, but only if the pre9 payment agreement provides that it shall 

10 not be canceled prior to the expiration of 

11 the tax assessment loan. 

12 ‘‘(B) TAX ASSESSMENT LOAN.—For pur13 poses of subparagraph (A), the term ‘tax as14 sessment loan’ shall mean a governmental as15 sessment, special tax or similar charge upon 

16 real property.’’. 

17 (d) HIGH EFFICIENCY VEHICLES AND RELATED FA18 CILITIES OR PROJECTS.—Section 142 of the Internal Rev19 enue Code of 1986, as amended by subsections (b) and 

20 (c), is amended by adding at the end the following new 

21 subsection: 

22 ‘‘(p) HIGH EFFICIENCY VEHICLES AND RELATED

23 FACILITIES OR PROJECTS.—For purposes of subsection 

24 (a)(18)— 


tjames on DSK5CLS3C1PROD with BILLS
9 

•S 3336 IS

1 ‘‘(1) HIGH EFFICIENCY VEHICLES.—The term 

2 ‘high efficiency vehicle’ means any vehicle that will 

3 exceed by at least 150 percent the average combined 

4 fuel economy for vehicles with substantially similar 

5 attributes in the model year in which the production 

6 of such vehicle is expected to begin at the facility. 

7 ‘‘(2) FACILITIES RELATED TO HIGH EFFI8 CIENCY VEHICLES.—A facility or project is related 

9 to a high efficiency vehicle if the facility is any real 

10 or personal property to be used in the design, tech11 nology transfer, manufacture, production, assembly, 

12 distribution, recharging or refueling, or service of 

13 high efficiency vehicles.’’. 

14 (e) NATIONAL LIMITATION ON AMOUNT OF RENEW15 ABLE ENERGY BONDS.—Section 142 of the Internal Rev16 enue Code of 1986, as amended by subsections (b), (c), 

17 and (d), is amended by adding at the end the following 

18 new subsection: 

19 ‘‘(q) NATIONAL LIMITATION ON AMOUNT OF RENEW20 ABLE ENERGY BONDS.— 

21 ‘‘(1) IN GENERAL.—An issue shall not be treat22 ed as an issue described in paragraph (16), (17), or 

23 (18) of subsection (a) if the aggregate face amount 

24 of bonds issued by the State pursuant thereto (when 

25 added to the aggregate face amount of bonds preVerDate Mar 15 2010 00:43 May 12, 2010 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S3336.IS S3336

tjames on DSK5CLS3C1PROD with BILLS
10 

•S 3336 IS

1 viously so issued during the calendar year) exceeds 

2 the amount allocated to the State by the Secretary 

3 under paragraph (2) for such calendar year. 

4 ‘‘(2) ALLOCATION RULES.— 

5 ‘‘(A) ALLOCATION AMONG STATES BY POP6 ULATION.—The Secretary shall allocate author7 ity to issue bonds described in paragraph (16), 

8 (17), or (18) of subsection (a) to each State by 

9 population for each calendar year in an aggre10 gate amount to all States not to exceed 

11 $2,500,000,000. 

12 ‘‘(B) STATE ALLOCATION.—The State may 

13 allocate the amount allocated to the State 

14 under subparagraph (A) for any calendar year 

15 among facilities or projects described in para16 graphs (16), (17), and (18) of subsection (a) in 

17 such manner as the State determines appro18 priate. 

19 ‘‘(C) UNUSED RENEWABLE ENERGY BOND

20 CARRYOVER TO BE ALLOCATED AMONG QUALI21 FIED STATES.— 

22 ‘‘(i) IN GENERAL.—Any unused bond 

23 allocation for any State for any calendar 

24 year under subparagraph (A) shall carry25 over to the succeeding calendar year and 


tjames on DSK5CLS3C1PROD with BILLS
11 

•S 3336 IS

1 be assigned to the Secretary for allocation 

2 among qualified States for the succeeding 

3 calendar year. 

4 ‘‘(ii) UNUSED BOND ALLOCATION

5 CARRYOVER.—For purposes of this sub6 paragraph, unused bond allocations are 

7 bond allocations described in subparagraph 

8 (A) of any State which remain unused by 

9 November 1 of any calendar year. 

10 ‘‘(iii) FORMULA FOR ALLOCATION OF

11 UNUSED BOND ALLOCATION CARRYOVERS

12 AMONG QUALIFIED STATES.—The amount 

13 allocated under this subparagraph to a 

14 qualified State for any calendar year shall 

15 bear the same ratio to all States from the 

16 preceding calendar year under subpara17 graph (A), excluding States which are not 

18 a qualified State. 

19 ‘‘(iv) TIMING OF ALLOCATION.—The 

20 Secretary shall allocate the unused bond 

21 allocation carried over from the preceding 

22 year among qualified States not later than 

23 March 1 of the succeeding year. 

24 ‘‘(v) QUALIFIED STATE.—For pur25 poses of this subparagraph, the term 


tjames on DSK5CLS3C1PROD with BILLS
12 

•S 3336 IS

1 ‘qualified State’ means, with respect to a 

2 calendar year, any State— 

3 ‘‘(I) which allocated its entire 

4 bond allocation under subparagraph 

5 (A) for the preceding calendar year, 

6 and 

7 ‘‘(II) for which a request is made 

8 (not later than August 1 of the cal9 endar year) to receive an allocation 

10 under clause (iii). 

11 ‘‘(vi) REPORTING.—States shall re12 port annually to the Secretary on their use 

13 of bonds described in paragraph (16), (17), 

14 and (18) of subsection (a), including de15 scription of projects, amount spent per 

16 project, total amount of unused bonds, and 

17 expected greenhouse gas or water savings 

18 per project with a description of how such 

19 savings were calculated. Such reporting 

20 shall be submitted not later than Novem21 ber 1 of any calendar year.’’. 

22 (f) COORDINATION WITH SECTION 45.—Paragraph 

23 (3) of section 45(b) of the Internal Revenue Code of 1986 

24 is amended by adding at the end the following new sen25 tence: ‘‘Clause (ii) of subparagraph (A) shall not apply 


tjames on DSK5CLS3C1PROD with BILLS
13 

•S 3336 IS

1 with respect to any facility described in paragraph (16), 

2 (17), or (18) of section 142(a).’’. 

3 (g) COORDINATION WITH SECTION 45K.—Subpara4 graph (A) of section 45K(b)(3) of the Internal Revenue 

5 Code of 1986 is amended by adding at the end the fol6 lowing flush sentence: 

7 ‘‘Subclause (II) of clause (i) shall not apply 

8 with respect to any facility described in para9 graph (16), (17), or (18) of section 142(a).’’. 

10 (h) COORDINATION WITH SECTION 48.—Subpara11 graph (A) of section 48(a)(4) of the Internal Revenue 

12 Code of 1986 is amended by adding at the end the fol13 lowing flush sentence: 

14 ‘‘Clause (ii) shall not apply with respect to any 

15 facility described in paragraph (16), (17), or 

16 (18) of section 142(a).’’. 

17 (i) COORDINATION WITH SECTION 146(g)(3).—Sec18 tion 146(g)(3) of the Internal Revenue Code of 1986 is 

19 amended by striking ‘‘or (15)’’ and inserting ‘‘(15), (16), 

20 (17), or (18)’’. 

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

22 this section shall apply to obligations issued after the date 

23 of the enactment of this Act. 

Æ 


tjames on DSK5CLS3C1PROD with BILLS