termines is equal to the cost of such loan (de-
termined under 502(5)(B) of the Federal Credit 
Reform Act of 1990). Such payment shall be 
made at the time the standby loan agreement is 
executed. 
‘‘(B) MINIMIZATION OF RISK TO THE GOV-
ERNMENT.—In making the determination of the 
cost of the loan for purposes of setting the pay-
ment for a standby loan under subparagraph 
(A), the Secretary and the Office of Manage-
ment and Budget shall take into consideration 
the extent to which the minimum price and the 
cap price reflect historical patterns of volatility 
in actual oil prices relative to projections of fu-
ture oil prices, based upon publicly available 
data from the Energy Information Administra-
tion, and employing statistical methods and 
analyses that are appropriate for the analysis of 
volatility in energy prices. 
‘‘(C) TREATMENT
OF
PAYMENTS.—The 
value to the United States of a payment under 
subparagraph (A) and any profit-sharing pay-
ments under paragraph (3) shall be taken into 
account for purposes of section 502(5)(B)(iii) of 
the Federal Credit Reform Act of 1990 in de-
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termining the cost to the Federal Government 
of a standby loan made under this subsection. 
If a standby loan has no cost to the Federal 
Government, the requirements of section 504(b) 
of such Act shall be deemed to be satisfied. 
‘‘(5) OTHER PROVISIONS.— 
‘‘(A) NO DOUBLE BENEFIT.—A project re-
ceiving a loan under this subsection may not, 
during the primary term of the loan agreement, 
receive a Federal loan guarantee under sub-
section (a) of this section, or under other laws. 
‘‘(B) 
SUBROGATION, 
ETC.—Subsections 
(g)(2) (relating to subrogation), (h) (relating to 
fees), and (j) (relating to full faith and credit) 
shall apply to standby loans under this sub-
section to the same extent they apply to loan 
guarantees.’’. 
SEC. 202. OIL SHALE LEASING. 
(a) REPEAL OF RESTRICTION.—Section 433 of the 
Department of the Interior, Environment, and Related 
Agencies Appropriations Act, 2008 (division F of Public 
Law 110–161; 121 Stat. 2152) is repealed. 
(b) STATE AUTHORITY TO PROHIBIT OIL SHALE 
LEASING.—Section 369 of the Energy Policy Act of 2005 
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(42 U.S.C. 15927) is amended by adding at the end the 
following: 
‘‘(t) STATE AUTHORITY TO PROHIBIT OIL SHALE 
LEASING.—No lease may be issued under this section, sec-
tion 21 of the Mineral Leasing Act (30 U.S.C. 241), or 
any other law, for exploration, research, development, or 
production of oil shale on lands located in a State, if the 
State has enacted a law prohibiting Federal oil shale leas-
ing in the State.’’. 
TITLE III—STUDY OF ENERGY 
TRANSMISSION 
BARRIERS 
AND OPPORTUNITIES 
SEC. 301. STUDY REQUIRED. 
Not later than 2 years after the date of enactment 
of this Act, the Secretary of the Interior shall complete 
a study of— 
(1) barriers to additional access to Federal 
lands for transmission of energy; 
(2) the need for energy transmission corridors 
on public lands to address identified congestion or 
constraints; and 
(3) efficiencies and improvements that may be 
made to existing infrastructure for transmission of 
energy on Federal lands, in lieu of construction of 
new infrastructure. 
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TITLE IV—NEXT GENERATION 
ENERGY AND EFFICIENCY FUND 
SEC. 401. NEXT GENERATION ENERGY AND EFFICIENCY 
FUND. 
(a) ESTABLISHMENT.—There is hereby established in 
the Treasury of the United States the ‘‘Next Generation 
Energy and Efficiency Fund’’ (in this section referred to 
as ‘‘the Fund’’). 
(b) ADMINISTRATION.—The Secretary of Energy 
shall be responsible for administering the Fund for the 
purpose of carrying out this section. 
(c) CONTENTS.—The Fund shall consist of amounts 
deposited into the Fund under section 103(1)(A). Such 
deposits shall cease after $40,000,000,000 has been de-
posited, or 10 years of deposits have been made, whichever 
occurs first. 
(d) PURPOSE.—The Fund shall be used for the pur-
pose of research and development of technologies that will 
significantly decrease America’s reliance on traditional 
fossil fuels and increase energy efficiencies, including wind 
energy, solar energy, marine and hydrokinetic energy, geo-
thermal energy, hydrogen energy, vehicle energy efficiency 
and environmental performance, industrial processes en-
ergy efficiencies, building and lighting energy efficiencies, 
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smart grid technology, and energy storage systems to sup-
port electric drive vehicles. 
(e) IDENTIFICATION OF PROGRAMS.—Not later than 
18 months after the date of enactment of this Act, the 
Secretary of Energy shall identify programs of the Depart-
ment of Energy described in subsection (d) for funding 
from the Fund, including the Advanced Research Projects 
Agency-Energy. 
(f) AVAILABILITY OF FUND.—After the Secretary of 
Energy has completed the identification of programs 
under subsection (e), amounts in the Fund shall be avail-
able, without further appropriation, for carrying out such 
programs. 
TITLE V—ADDRESSING TRANS-
PARENCY AND DATA SHAR-
ING IN SPECULATION 
SEC. 501. COMMISSION AUTHORITY OVER TRADERS. 
Section 4 of the Commodity Exchange Act (7 U.S.C. 
6) is amended by adding at the end the following: 
‘‘(e) COMMISSION AUTHORITY OVER TRADERS.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of this section or any determination made 
by the Commission to grant relief from the require-
ments of subsection (a) to become a designated con-
tract market, derivatives transaction execution facil-
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ity, or other registered entity, in the case of a person 
located within the United States, or otherwise sub-
ject to the jurisdiction of the Commission, trading 
on a foreign board of trade, exchange, or market lo-
cated outside the United States (including the terri-
tories and/or possessions of the United States), the 
Commission shall have authority under this Act— 
‘‘(A) to apply and enforce section 9, in-
cluding provisions relating to manipulation or 
attempted manipulation, the making of false 
statements, and willful violations of this Act; 
‘‘(B) to require or direct the person to 
limit, reduce, or liquidate any position to pre-
vent or reduce the threat of price manipulation, 
excessive speculation, price distortion, or dis-
ruption of delivery or the cash settlement proc-
ess; and 
‘‘(C) to apply such recordkeeping require-
ments as the Commission determines are nec-
essary. 
‘‘(2) CONSULTATION.—Prior to the issuance of 
any order under paragraph (1) to reduce a position 
on a foreign board of trade, exchange, or market lo-
cated outside the United States (including the terri-
tories and possessions of the United States), the 
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Commission shall consult with the foreign board of 
trade, exchange, or market and the appropriate reg-
ulatory authority. 
‘‘(3) ADMINISTRATION.—Nothing in this sub-
section limits any of the otherwise applicable au-
thorities of the Commission.’’. 
SEC. 502. SPECULATIVE LIMITS AND TRANSPARENCY FOR 
OFF-SHORE OIL TRADING. 
Section 4 of the Commodity Exchange Act (7 U.S.C. 
6), as amended by section 501 of this Act, is amended 
by adding at the end the following: 
‘‘(f) FOREIGN BOARDS OF TRADE.— 
‘‘(1) IN GENERAL.—In the case of any foreign 
board of trade for which the Commission has grant-
ed or is considering an application to grant a board 
of trade located outside of the United States relief 
from the requirement of subsection (a) to become a 
designated contract market, derivatives transaction 
execution facility, or other registered entity, with re-
spect to an energy commodity that is physically de-
livered in the United States, prior to continuing to 
or initially granting the relief, the Commission shall 
determine that the foreign board of trade— 
‘‘(A) applies comparable principles or re-
quirements regarding the daily publication of 
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trading information and position limits or ac-
countability levels for speculators as apply to a 
designated contract market, derivatives trans-
action execution facility, or other registered en-
tity trading energy commodities physically deliv-
ered in the United States; and 
‘‘(B) provides such information to the 
Commission regarding the extent of speculative 
and nonspeculative trading in the energy com-
modity that is comparable to the information 
the Commission determines necessary to publish 
a Commitment of Traders report for a des-
ignated contract market, derivatives transaction 
execution facility, or other registered entity 
trading energy commodities physically delivered 
in the United States. 
‘‘(2) EXISTING FOREIGN BOARDS OF TRADE.— 
During the period beginning 1 year after the date of 
enactment of this subsection and ending 18 months 
after the date of enactment of this subsection, the 
Commission shall determine whether to continue to 
grant relief in accordance with paragraph (1) to any 
foreign board of trade for which the Commission 
granted relief prior to the date of enactment of this 
subsection.’’. 
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SEC. 503. ADDITIONAL COMMISSION EMPLOYEES FOR IM-
PROVED ENFORCEMENT. 
Section 2(a)(7) of the Commodity Exchange Act (7 
U.S.C. 2(a)(7)) is amended by adding at the end the fol-
lowing: 
‘‘(D) ADDITIONAL EMPLOYEES.—As soon 
as practicable after the date of enactment of 
this subparagraph, the Commission shall ap-
point at least 100 full-time employees (in addi-
tion to the employees employed by the Commis-
sion as of the date of the enactment of this sub-
paragraph)— 
‘‘(i) to increase the public trans-
parency of operations in energy futures 
markets; 
‘‘(ii) to improve the enforcement of 
this Act in those markets; and 
‘‘(iii) to carry out such other duties as 
are prescribed by the Commission.’’. 
SEC. 504. STUDY OF INTERNATIONAL REGULATION OF EN-
ERGY COMMODITY MARKETS. 
(a) IN GENERAL.—The Comptroller General of the 
United States shall conduct a study of the international 
regime for regulating the trading of energy commodity fu-
tures and derivatives. 
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(b) ANALYSIS.—The study shall include an analysis 
of, at a minimum— 
(1) key common features and differences among 
countries in the regulation of energy commodity 
trading, including with respect to market oversight 
and enforcement; 
(2) agreements and practices for sharing mar-
ket and trading data; 
(3) the use of position limits or thresholds to 
detect and prevent price manipulation, excessive 
speculation, or other unfair trading practices; 
(4) practices regarding the identification of 
commercial and noncommercial trading and the ex-
tent of market speculation; and 
(5) agreements and practices for facilitating 
international cooperation on market oversight, com-
pliance, and enforcement. 
(c) REPORT.—Not later than 120 days after the date 
of enactment of this Act, the Comptroller General shall 
submit to the appropriate committees of Congress a report 
that— 
(1) describes the results of the study; and 
(2) provides recommendations to improve open-
ness, transparency, and other necessary elements of 
a properly functioning market in a manner that pro-
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tects consumers in the United States from the ef-
fects of excessive speculation and energy price vola-
tility. 
SEC. 505. INDEX TRADERS AND SWAP DEALERS. 
Section 4 of the Commodity Exchange Act (7 U.S.C. 
6), as amended by sections 501 and 502 of this Act, is 
amended by adding at the end the following: 
‘‘(g) INDEX TRADERS AND SWAP DEALERS.—Not 
later than 60 days after the date of the enactment of this 
subsection, the Commission shall— 
‘‘(1) routinely require detailed reporting from 
index traders and swap dealers in markets under the 
jurisdiction of the Commission; 
‘‘(2) reclassify the types of traders for regu-
latory and reporting purposes to distinguish between 
index traders and swaps dealers; and 
‘‘(3) review the trading practices for index trad-
ers in markets under the jurisdiction of the Commis-
sion— 
‘‘(A) to ensure that index trading is not 
adversely impacting the price discovery process; 
and 
‘‘(B) to determine whether different prac-
tices or regulations should be implemented.’’. 
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SEC. 506. DISAGGREGATION OF INDEX FUNDS AND OTHER 
DATA IN ENERGY MARKETS. 
Section 4 of the Commodity Exchange Act (7 U.S.C. 
6), as amended by sections 501, 502, and 505 of this Act, 
is amended by adding at the end the following: 
‘‘(h) DISAGGREGATION OF INDEX FUNDS AND DATA 
IN
ENERGY
MARKETS.—The 
Commission 
shall 
disaggregate and make public monthly— 
‘‘(1) the number of positions and total value of 
index funds and other passive, long-only positions in 
energy markets; and 
‘‘(2) data on speculative positions relative to 
bona fide physical hedgers in those markets.’’. 
TITLE VI—NUCLEAR ENERGY 
SEC. 601. STUDY OF IMPACT ON GREENHOUSE GAS REDUC-
TIONS. 
Not later than 18 months after the date of the enact-
ment of this Act, the Secretary of Energy shall study and 
report to the Congress on the effect that expanding nu-
clear energy production would have on reducing green-
house gases. 
SEC. 602. STUDY OF POSSIBLE COST REDUCTIONS. 
Not later than 18 months after the date of the enact-
ment of this Act, the Secretary of Energy shall study and 
report to the Congress on the effect that expanding nu-
clear energy production would have on reducing the cost 
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of an average kilowatt hour to commercial power cus-
tomers. 
SEC. 603. AUTHORIZATION FOR NUCLEAR POWER 2010 PRO-
GRAM. 
Section 952 of the Energy Policy Act of 2005 (42 
U.S.C. 16272) is amended by striking subsection (c) and 
inserting the following: 
‘‘(c) NUCLEAR POWER 2010 PROGRAM.— 
‘‘(1) IN GENERAL.—The Secretary shall carry 
out a Nuclear Power 2010 Program to position the 
United States to commence construction of new nu-
clear power plants by not later than— 
‘‘(A) calendar year 2010; or 
‘‘(B) such first calendar year after cal-
endar year 2010 as is practicable. 
‘‘(2) SCOPE OF PROGRAM.—The Nuclear Power 
2010 Program shall support the objectives of— 
‘‘(A) demonstrating the licensing process 
for new nuclear power plants, including the Nu-
clear Regulatory Commission process for ob-
taining— 
‘‘(i) early site permits; 
‘‘(ii) combined construction or oper-
ating licenses; and 
‘‘(iii) design certifications; and 
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‘‘(B) conducting first-of-a-kind design and 
engineering work on at least 2 advanced nu-
clear reactor designs sufficient to bring those 
designs to a state of design completion suffi-
cient to allow development of firm cost esti-
mates. 
‘‘(3) COST-SHARING.—The Nuclear Power 2010 
Program shall be carried out through the use of 
cost-sharing with the private sector. 
‘‘(4) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated to the Sec-
retary to carry out the Nuclear Power 2010 Pro-
gram— 
‘‘(A) $182,800,000 for fiscal year 2009; 
‘‘(B) $159,600,000 for fiscal year 2010; 
‘‘(C) $135,600,000 for fiscal year 2011; 
‘‘(D) $46,900,000 for fiscal year 2012; 
and 
‘‘(E) $2,200,000 for fiscal year 2013.’’. 
SEC. 604. ESTABLISHMENT OF INTERAGENCY WORKING 
GROUP. 
(a) PURPOSES.—The purposes of this section are— 
(1) to increase the competitiveness of the 
United States nuclear energy products and services 
industries; 
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(2) to identify the stimulus or incentives nec-
essary to cause United States manufacturers of nu-
clear energy products to expand manufacturing ca-
pacity; 
(3) to facilitate the export of United States nu-
clear energy products and services; 
(4) to reduce the trade deficit of the United 
States through the export of United States nuclear 
energy products and services; 
(5) to retain and create nuclear energy manu-
facturing and related service jobs in the United 
States; 
(6) to integrate the objectives described in para-
graphs (1) through (5), in a manner consistent with 
the interests of the United States, into the foreign 
policy of the United States; and 
(7) to authorize funds for increasing United 
States capacity to manufacture nuclear energy prod-
ucts and supply nuclear energy services. 
(b) ESTABLISHMENT.— 
(1) IN
GENERAL.—There is established an 
interagency working group (referred to in this sec-
tion as the ‘‘Working Group’’) that, in consultation 
with representative industry organizations and man-
ufacturers of nuclear energy products, shall make 
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recommendations to coordinate the actions and pro-
grams of the Federal Government in order to pro-
mote increasing domestic manufacturing capacity 
and export of domestic nuclear energy products and 
services. 
(2) COMPOSITION.—The Working Group shall 
be composed of— 
(A) the Secretary (or a designee), who 
shall serve as Chairperson of the Working 
Group; and 
(B) representatives, appointed by the head 
of each applicable agency or department, of— 
(i) the Department of Energy; 
(ii) the Department of Commerce; 
(iii) the Department of Defense; 
(iv) the Department of the Treasury; 
(v) the Department of State; 
(vi) the Environmental Protection 
Agency; 
(vii) the United States Agency for 
International Development; 
(viii) the Export-Import Bank of the 
United States; 
(ix) the Trade and Development 
Agency; 
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(x) the Small Business Administra-
tion; 
(xi) the Office of the United States 
Trade Representative; and 
(xii) other Federal agencies, as deter-
mined by the President. 
(c) DUTIES
OF WORKING GROUP.—The Working 
Group shall— 
(1) not later than 180 days after the date of 
enactment of this Act, identify the actions necessary 
to promote the safe development and application in 
foreign countries of nuclear energy products and 
services— 
(A) to increase electricity generation from 
nuclear energy sources through development of 
new generation facilities; 
(B) to improve the efficiency, safety, and 
reliability of existing nuclear generating facili-
ties through modifications; and 
(C) enhance the safe treatment, handling, 
storage, and disposal of used nuclear fuel; 
(2) not later than 180 days after the date of 
enactment of this Act, identify— 
(A) mechanisms (including tax stimuli for 
investment, loans and loan guarantees, and 
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grants) necessary for United States companies 
to increase— 
(i) the capacity of the companies to 
produce or provide nuclear energy products 
and services; and 
(ii) exports of nuclear energy products 
and services; and 
(B) administrative or legislative initiatives 
that are necessary— 
(i) to encourage United States compa-
nies to increase the manufacturing capac-
ity of the companies for nuclear energy 
products; 
(ii) to provide technical and financial 
assistance and support to small and mid- 
sized businesses to establish quality assur-
ance programs in accordance with domestic 
and international nuclear quality assurance 
code requirements; 
(iii) to encourage, through financial 
incentives, private sector capital invest-
ment to expand manufacturing capacity; 
and 
(iv) to provide technical assistance 
and financial incentives to small and mid- 
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sized businesses to develop the workforce 
necessary to increase manufacturing capac-
ity and meet domestic and international 
nuclear quality assurance code require-
ments; 
(3) not later than 270 days after the date of 
enactment of this Act, submit to Congress a report 
that describes the findings of the Working Group 
under paragraphs (1) and (2), including rec-
ommendations for new legislative authority, as nec-
essary; and 
(4) encourage the agencies represented by mem-
bership in the Working Group— 
(A) to provide technical training and edu-
cation for international development personnel 
and local users in other countries; 
(B) to provide financial and technical as-
sistance to nonprofit institutions that support 
the marketing and export efforts of domestic 
companies that provide nuclear energy products 
and services; 
(C) to develop nuclear energy projects in 
foreign countries; 
(D) to provide technical assistance and 
training materials to loan officers of the World 
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Bank, international lending institutions, com-
mercial and energy attaches at embassies of the 
United States, and other appropriate personnel 
in order to provide information about nuclear 
energy products and services to foreign govern-
ments or other potential project sponsors; 
(E) to support, through financial incen-
tives, private sector efforts to commercialize 
and export nuclear energy products and services 
in accordance with the subsidy codes of the 
World Trade Organization; and 
(F) to augment budgets for trade and de-
velopment programs in order to support 
prefeasibility or feasibility studies for projects 
that use nuclear energy products and services. 
(d) PERSONNEL AND SERVICE MATTERS.—The Sec-
retary and the heads of agencies represented by member-
ship in the Working Group shall detail such personnel and 
furnish such services to the Working Group, with or with-
out reimbursement, as are necessary to carry out the func-
tions of the Working Group. 
(e) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to the Secretary to carry 
out this section $20,000,000 for each of fiscal years 2009 
and 2010. 
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SEC. 605. NUCLEAR ENERGY WORKFORCE. 
Section 1101 of the Energy Policy Act of 2005 (42 
U.S.C. 16411) is amended— 
(1) by redesignating subsection (d) as sub-
section (e); and 
(2) by inserting after subsection (c) the fol-
lowing: 
‘‘(d) WORKFORCE TRAINING.— 
‘‘(1) IN GENERAL.—The Secretary of Labor, in 
cooperation with the Secretary of Energy, shall pro-
mulgate regulations to implement a program to pro-
vide workforce training to meet the high demand for 
workers skilled in the nuclear utility and nuclear en-
ergy products and services industries. 
‘‘(2) CONSULTATION.—In carrying out this sub-
section, the Secretary of Labor shall consult with 
representatives of the nuclear utility and nuclear en-
ergy products and services industries, and organized 
labor, concerning skills that are needed in those in-
dustries. 
‘‘(3) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated to the Sec-
retary of Labor, in coordination with the Secretary 
of Education and the Secretary of Energy, to carry 
out this subsection $20,000,000 for each of fiscal 
years 2009 through 2012.’’. 
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TITLE VII—ENERGY TAX 
INCENTIVES 
SEC. 700. REFERENCE. 
Except as otherwise expressly provided, whenever in 
this title an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a 
section or other provision of the Internal Revenue Code 
of 1986. 
Subtitle A—Energy Production 
Incentives 
PART 1—RENEWABLE ENERGY INCENTIVES 
SEC. 701. RENEWABLE ENERGY CREDIT. 
(a) EXTENSION OF CREDIT.— 
(1) 1-YEAR
EXTENSION
FOR
WIND
FACILI-
TIES.—Paragraph (1) of section 45(d) is amended 
by striking ‘‘January 1, 2009’’ and inserting ‘‘Janu-
ary 1, 2010’’. 
(2) 3-YEAR EXTENSION FOR CERTAIN OTHER 
FACILITIES.—Each of the following provisions of 
section 45(d) is amended by striking ‘‘January 1, 
2009’’ and inserting ‘‘January 1, 2012’’: 
(A) Clauses (i) and (ii) of paragraph 
(2)(A). 
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(B) Clauses (i)(I) and (ii) of paragraph 
(3)(A). 
(C) Paragraph (4). 
(D) Paragraph (5). 
(E) Paragraph (6). 
(F) Paragraph (7). 
(G) Subparagraphs (A) and (B) of para-
graph (9). 
(b) MODIFICATION OF CREDIT PHASEOUT.— 
(1) REPEAL OF PHASEOUT.—Subsection (b) of 
section 45 is amended— 
(A) by striking paragraph (1), and 
(B) by striking ‘‘the 8 cent amount in 
paragraph (1),’’ in paragraph (2) thereof. 
(2) LIMITATION BASED ON INVESTMENT IN FA-
CILITY.—Subsection (b) of section 45 is amended by 
inserting before paragraph (2) the following new 
paragraph: 
‘‘(1) LIMITATION
BASED
ON
INVESTMENT
IN 
FACILITY.— 
‘‘(A) IN
GENERAL.—In the case of any 
qualified facility originally placed in service 
after December 31, 2009, the amount of the 
credit determined under subsection (a) for any 
taxable year with respect to electricity produced 
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at such facility shall not exceed the product 
of— 
‘‘(i) the applicable percentage with re-
spect to such facility, multiplied by 
‘‘(ii) the eligible basis of such facility. 
‘‘(B) CARRYFORWARD OF UNUSED LIMITA-
TION AND EXCESS CREDIT.— 
‘‘(i) UNUSED
LIMITATION.—If the 
limitation imposed under subparagraph (A) 
with respect to any facility for any taxable 
year exceeds the prelimitation credit for 
such facility for such taxable year, the lim-
itation imposed under subparagraph (A) 
with respect to such facility for the suc-
ceeding taxable year shall be increased by 
the amount of such excess. 
‘‘(ii) 
EXCESS
CREDIT.—If 
the 
prelimitation credit with respect to any fa-
cility for any taxable year exceeds the limi-
tation imposed under subparagraph (A) 
with respect to such facility for such tax-
able year, the credit determined under sub-
section (a) with respect to such facility for 
the succeeding taxable year (determined 
before the application of subparagraph (A) 
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for such succeeding taxable year) shall be 
increased by the amount of such excess. 
With respect to any facility, no amount 
may be carried forward under this clause 
to any taxable year beginning after the 10- 
year 
period 
described 
in 
subsection 
(a)(2)(A)(ii) with respect to such facility. 
‘‘(iii) PRELIMITATION
CREDIT.—The 
term ‘prelimitation credit’ with respect to 
any facility for a taxable year means the 
credit determined under subsection (a) 
with respect to such facility for such tax-
able year, determined without regard to 
subparagraph (A) and after taking into ac-
count any increase for such taxable year 
under clause (ii). 
‘‘(C) 
APPLICABLE
PERCENTAGE.—For 
purposes of this paragraph— 
‘‘(i) IN GENERAL.—The term ‘applica-
ble percentage’ means, with respect to any 
facility, the appropriate percentage pre-
scribed by the Secretary for the month in 
which such facility is originally placed in 
service. 
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‘‘(ii) METHOD
OF
PRESCRIBING
AP-
PLICABLE PERCENTAGES.—The applicable 
percentages prescribed by the Secretary for 
any month under clause (i) shall be per-
centages which yield over a 10-year period 
amounts of limitation under subparagraph 
(A) which have a present value equal to 35 
percent of the eligible basis of the facility. 
‘‘(iii) METHOD
OF
DISCOUNTING.— 
The present value under clause (ii) shall be 
determined— 
‘‘(I) as of the last day of the 1st 
year of the 10-year period referred to 
in clause (ii), 
‘‘(II) by using a discount rate 
equal to the greater of 110 percent of 
the Federal long-term rate as in effect 
under section 1274(d) for the month 
preceding the month for which the ap-
plicable percentage is being pre-
scribed, or 4.5 percent, and 
‘‘(III) by taking into account the 
limitation under subparagraph (A) for 
any year on the last day of such year. 
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‘‘(D) ELIGIBLE
BASIS.—For purposes of 
this paragraph— 
‘‘(i) IN GENERAL.—The term ‘eligible 
basis’ means, with respect to any facility, 
the sum of— 
‘‘(I) the basis of such facility de-
termined as of the time that such fa-
cility is originally placed in service, 
and 
‘‘(II) the portion of the basis of 
any shared qualified property which is 
properly allocable to such facility 
under clause (ii). 
‘‘(ii) RULES FOR ALLOCATION.—For 
purposes of subclause (II) of clause (i), the 
basis of shared qualified property shall be 
allocated among all qualified facilities 
which are projected to be placed in service 
and which require utilization of such prop-
erty in proportion to projected generation 
from such facilities. 
‘‘(iii) 
SHARED
QUALIFIED
PROP-
ERTY.—For purposes of this paragraph, 
the term ‘shared qualified property’ means, 
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with respect to any facility, any property 
described in section 168(e)(3)(B)(vi)— 
‘‘(I) which a qualified facility will 
require for utilization of such facility, 
and 
‘‘(II) which is not a qualified fa-
cility. 
‘‘(iv) SPECIAL
RULE
RELATING
TO 
GEOTHERMAL FACILITIES.—In the case of 
any qualified facility using geothermal en-
ergy to produce electricity, the basis of 
such facility for purposes of this paragraph 
shall be determined as though intangible 
drilling and development costs described in 
section 263(c) were capitalized rather than 
expensed. 
‘‘(E) SPECIAL RULE FOR FIRST AND LAST 
YEAR OF CREDIT PERIOD.—In the case of any 
taxable year any portion of which is not within 
the 10-year period described in subsection 
(a)(2)(A)(ii) with respect to any facility, the 
amount of the limitation under subparagraph 
(A) with respect to such facility shall be re-
duced by an amount which bears the same ratio 
to the amount of such limitation (determined 
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without regard to this subparagraph) as such 
portion of the taxable year which is not within 
such period bears to the entire taxable year. 
‘‘(F) ELECTION TO TREAT ALL FACILITIES 
PLACED IN SERVICE IN A YEAR AS 1 FACIL-
ITY.—At the election of the taxpayer, all quali-
fied facilities which are part of the same project 
and which are placed in service during the same 
calendar year shall be treated for purposes of 
this section as 1 facility which is placed in serv-
ice at the mid-point of such year or the first 
day of the following calendar year.’’. 
(c) TRASH FACILITY CLARIFICATION.—Paragraph 
(7) of section 45(d) is amended— 
(1) by striking ‘‘facility which burns’’ and in-
serting ‘‘facility (other than a facility described in 
paragraph (6)) which uses’’, and 
(2) by striking ‘‘COMBUSTION’’. 
(d) EXPANSION OF BIOMASS FACILITIES.— 
(1) OPEN-LOOP
BIOMASS
FACILITIES.—Para-
graph (3) of section 45(d) is amended by redesig-
nating subparagraph (B) as subparagraph (C) and 
by inserting after subparagraph (A) the following 
new subparagraph: 
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‘‘(B) EXPANSION
OF
FACILITY.—Such 
term shall include a new unit placed in service 
after the date of the enactment of this subpara-
graph in connection with a facility described in 
subparagraph (A), but only to the extent of the 
increased amount of electricity produced at the 
facility by reason of such new unit.’’. 
(2) CLOSED-LOOP BIOMASS FACILITIES.—Para-
graph (2) of section 45(d) is amended by redesig-
nating subparagraph (B) as subparagraph (C) and 
inserting after subparagraph (A) the following new 
subparagraph: 
‘‘(B) EXPANSION
OF
FACILITY.—Such 
term shall include a new unit placed in service 
after the date of the enactment of this subpara-
graph in connection with a facility described in 
subparagraph (A)(i), but only to the extent of 
the increased amount of electricity produced at 
the facility by reason of such new unit.’’. 
(e) SALES OF NET ELECTRICITY TO REGULATED 
PUBLIC UTILITIES TREATED AS SALES TO UNRELATED 
PERSONS.—Paragraph (4) of section 45(e) is amended by 
adding at the end the following new sentence: ‘‘The net 
amount of electricity sold by any taxpayer to a regulated 
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public utility (as defined in section 7701(a)(33)) shall be 
treated as sold to an unrelated person.’’. 
(f) MODIFICATION
OF RULES
FOR HYDROPOWER 
PRODUCTION.—Subparagraph (C) of section 45(c)(8) is 
amended to read as follows: 
‘‘(C) NONHYDROELECTRIC DAM.—For pur-
poses of subparagraph (A), a facility is de-
scribed in this subparagraph if— 
‘‘(i) the hydroelectric project installed 
on the nonhydroelectric dam is licensed by 
the Federal Energy Regulatory Commis-
sion and meets all other applicable environ-
mental, licensing, and regulatory require-
ments, 
‘‘(ii) the nonhydroelectric dam was 
placed in service before the date of the en-
actment of this paragraph and operated 
for flood control, navigation, or water sup-
ply purposes and did not produce hydro-
electric power on the date of the enactment 
of this paragraph, and 
‘‘(iii) the hydroelectric project is oper-
ated so that the water surface elevation at 
any given location and time that would 
have occurred in the absence of the hydro-
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electric project is maintained, subject to 
any license requirements imposed under 
applicable law that change the water sur-
face elevation for the purpose of improving 
environmental quality of the affected wa-
terway. 
The Secretary, in consultation with the Federal 
Energy Regulatory Commission, shall certify if 
a hydroelectric project licensed at a nonhydro-
electric dam meets the criteria in clause (iii). 
Nothing in this section shall affect the stand-
ards under which the Federal Energy Regu-
latory Commission issues licenses for and regu-
lates hydropower projects under part I of the 
Federal Power Act.’’. 
(g) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to property originally placed 
in service after December 31, 2008. 
(2) REPEAL
OF
CREDIT
PHASEOUT.—The 
amendments made by subsection (b)(1) shall apply 
to taxable years ending after December 31, 2008. 
(3) LIMITATION BASED ON INVESTMENT IN FA-
CILITY.—The amendment made by subsection (b)(2) 
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shall apply to property originally placed in service 
after December 31, 2009. 
(4) TRASH FACILITY CLARIFICATION; SALES TO 
RELATED
REGULATED
PUBLIC
UTILITIES.—The 
amendments made by subsections (c) and (e) shall 
apply to electricity produced and sold after the date 
of the enactment of this Act. 
(5) EXPANSION OF BIOMASS FACILITIES.—The 
amendments made by subsection (d) shall apply to 
property placed in service after the date of the en-
actment of this Act. 
SEC. 702. PRODUCTION CREDIT FOR ELECTRICITY PRO-
DUCED FROM MARINE RENEWABLES. 
(a) IN GENERAL.—Paragraph (1) of section 45(c) is 
amended by striking ‘‘and’’ at the end of subparagraph 
(G), by striking the period at the end of subparagraph 
(H) and inserting ‘‘, and’’, and by adding at the end the 
following new subparagraph: 
‘‘(I) marine and hydrokinetic renewable en-
ergy.’’. 
(b) MARINE RENEWABLES.—Subsection (c) of sec-
tion 45 is amended by adding at the end the following 
new paragraph: 
‘‘(10) MARINE
AND
HYDROKINETIC
RENEW-
ABLE ENERGY.— 
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‘‘(A) IN GENERAL.—The term ‘marine and 
hydrokinetic renewable energy’ means energy 
derived from— 
‘‘(i) waves, tides, and currents in 
oceans, estuaries, and tidal areas, 
‘‘(ii) free flowing water in rivers, 
lakes, and streams, 
‘‘(iii) free flowing water in an irriga-
tion system, canal, or other man-made 
channel, including projects that utilize non-
mechanical structures to accelerate the 
flow of water for electric power production 
purposes, or 
‘‘(iv) differentials in ocean tempera-
ture (ocean thermal energy conversion). 
‘‘(B) EXCEPTIONS.—Such term shall not 
include any energy which is derived from any 
source which utilizes a dam, diversionary struc-
ture (except as provided in subparagraph 
(A)(iii)), or impoundment for electric power 
production purposes.’’. 
(c) DEFINITION
OF FACILITY.—Subsection (d) of 
section 45 is amended by adding at the end the following 
new paragraph: 
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‘‘(11) MARINE
AND
HYDROKINETIC
RENEW-
ABLE ENERGY FACILITIES.—In the case of a facility 
producing electricity from marine and hydrokinetic 
renewable energy, the term ‘qualified facility’ means 
any facility owned by the taxpayer— 
‘‘(A) which has a nameplate capacity rat-
ing of at least 150 kilowatts, and 
‘‘(B) which is originally placed in service 
on or after the date of the enactment of this 
paragraph and before January 1, 2012.’’. 
(d) CREDIT RATE.—Subparagraph (A) of section 
45(b)(4) is amended by striking ‘‘or (9)’’ and inserting 
‘‘(9), or (11)’’. 
(e) 
COORDINATION
WITH
SMALL
IRRIGATION 
POWER.—Paragraph (5) of section 45(d), as amended by 
section 701, is amended by striking ‘‘January 1, 2012’’ 
and inserting ‘‘the date of the enactment of paragraph 
(11)’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to electricity produced and sold 
after the date of the enactment of this Act, in taxable 
years ending after such date. 
SEC. 703. ENERGY CREDIT. 
(a) EXTENSION OF CREDIT.— 
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(1) SOLAR
ENERGY
PROPERTY.—Paragraphs 
(2)(A)(i)(II) and (3)(A)(ii) of section 48(a) are each 
amended by striking ‘‘January 1, 2009’’ and insert-
ing ‘‘January 1, 2015’’. 
(2) FUEL CELL PROPERTY.—Subparagraph (E) 
of section 48(c)(1) is amended by striking ‘‘Decem-
ber 31, 2008’’ and inserting ‘‘December 31, 2014’’. 
(3) MICROTURBINE PROPERTY.—Subparagraph 
(E) of section 48(c)(2) is amended by striking ‘‘De-
cember 31, 2008’’ and inserting ‘‘December 31, 
2014’’. 
(b) ALLOWANCE OF ENERGY CREDIT AGAINST AL-
TERNATIVE MINIMUM TAX.—Subparagraph (B) of section 
38(c)(4) is amended by striking ‘‘and’’ at the end of clause 
(iii), by redesignating clause (iv) as clause (v), and by in-
serting after clause (iii) the following new clause: 
‘‘(iv) the credit determined under sec-
tion 46 to the extent that such credit is at-
tributable to the energy credit determined 
under section 48, and’’. 
(c) ENERGY CREDIT
FOR COMBINED HEAT
AND 
POWER SYSTEM PROPERTY.— 
(1) IN GENERAL.—Section 48(a)(3)(A) (defin-
ing energy property) is amended by striking ‘‘or’’ at 
the end of clause (iii), by inserting ‘‘or’’ at the end 
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of clause (iv), and by adding at the end the following 
new clause: 
‘‘(v) combined heat and power system 
property,’’. 
(2) COMBINED
HEAT
AND
POWER
SYSTEM 
PROPERTY.—Section 48 is amended by adding at 
the end the following new subsection: 
‘‘(d) COMBINED HEAT AND POWER SYSTEM PROP-
ERTY.—For purposes of subsection (a)(3)(A)(v)— 
‘‘(1) COMBINED
HEAT
AND
POWER
SYSTEM 
PROPERTY.—The term ‘combined heat and power 
system property’ means property comprising a sys-
tem— 
‘‘(A) which uses the same energy source 
for the simultaneous or sequential generation of 
electrical power, mechanical shaft power, or 
both, in combination with the generation of 
steam or other forms of useful thermal energy 
(including heating and cooling applications), 
‘‘(B) which produces— 
‘‘(i) at least 20 percent of its total 
useful energy in the form of thermal en-
ergy which is not used to produce electrical 
or mechanical power (or combination 
thereof), and 
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‘‘(ii) at least 20 percent of its total 
useful energy in the form of electrical or 
mechanical power (or combination thereof), 
‘‘(C) the energy efficiency percentage of 
which exceeds 60 percent, and 
‘‘(D) which is placed in service before Jan-
uary 1, 2015. 
‘‘(2) LIMITATION.— 
‘‘(A) IN GENERAL.—In the case of com-
bined heat and power system property with an 
electrical capacity in excess of the applicable ca-
pacity placed in service during the taxable year, 
the credit under subsection (a)(1) (determined 
without regard to this paragraph) for such year 
shall be equal to the amount which bears the 
same ratio to such credit as the applicable ca-
pacity bears to the capacity of such property. 
‘‘(B) APPLICABLE
CAPACITY.—For pur-
poses of subparagraph (A), the term ‘applicable 
capacity’ means 15 megawatts or a mechanical 
energy capacity of more than 20,000 horse-
power or an equivalent combination of electrical 
and mechanical energy capacities. 
‘‘(C) 
MAXIMUM
CAPACITY.—The 
term 
‘combined heat and power system property’ 
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shall not include any property comprising a sys-
tem if such system has a capacity in excess of 
50 megawatts or a mechanical energy capacity 
in excess of 67,000 horsepower or an equivalent 
combination of electrical and mechanical energy 
capacities. 
‘‘(3) SPECIAL RULES.— 
‘‘(A) 
ENERGY
EFFICIENCY
PERCENT-
AGE.—For purposes of this subsection, the en-
ergy efficiency percentage of a system is the 
fraction— 
‘‘(i) the numerator of which is the 
total useful electrical, thermal, and me-
chanical power produced by the system at 
normal operating rates, and expected to be 
consumed in its normal application, and 
‘‘(ii) the denominator of which is the 
lower heating value of the fuel sources for 
the system. 
‘‘(B) DETERMINATIONS
MADE
ON
BTU 
BASIS.—The energy efficiency percentage and 
the percentages under paragraph (1)(B) shall 
be determined on a Btu basis. 
‘‘(C) INPUT AND OUTPUT PROPERTY NOT 
INCLUDED.—The term ‘combined heat and 
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power system property’ does not include prop-
erty used to transport the energy source to the 
facility or to distribute energy produced by the 
facility. 
‘‘(4) SYSTEMS USING BIOMASS.—If a system is 
designed to use biomass (within the meaning of 
paragraphs (2) and (3) of section 45(c) without re-
gard to the last sentence of paragraph (3)(A)) for at 
least 90 percent of the energy source— 
‘‘(A) paragraph (1)(C) shall not apply, but 
‘‘(B) the amount of credit determined 
under subsection (a) with respect to such sys-
tem shall not exceed the amount which bears 
the same ratio to such amount of credit (deter-
mined without regard to this paragraph) as the 
energy efficiency percentage of such system 
bears to 60 percent.’’. 
(d) INCREASE OF CREDIT LIMITATION FOR FUEL 
CELL PROPERTY.—Subparagraph (B) of section 48(c)(1) 
is amended by striking ‘‘$500’’ and inserting ‘‘$1,500’’. 
(e) PUBLIC UTILITY PROPERTY TAKEN INTO AC-
COUNT.— 
(1) IN
GENERAL.—Paragraph (3) of section 
48(a) is amended by striking the second sentence 
thereof. 
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(2) CONFORMING AMENDMENTS.— 
(A) Paragraph (1) of section 48(c) is 
amended by striking subparagraph (D) and re-
designating subparagraph (E) as subparagraph 
(D). 
(B) Paragraph (2) of section 48(c) is 
amended by striking subparagraph (D) and re-
designating subparagraph (E) as subparagraph 
(D). 
(f) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall take effect on the date of the en-
actment of this Act. 
(2) ALLOWANCE AGAINST ALTERNATIVE MIN-
IMUM TAX.—The amendments made by subsection 
(b) shall apply to credits determined under section 
46 of the Internal Revenue Code of 1986 in taxable 
years beginning after the date of the enactment of 
this Act and to carrybacks of such credits. 
(3) COMBINED HEAT AND POWER AND FUEL 
CELL PROPERTY.—The amendments made by sub-
sections (c) and (d) 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 
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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). 
(4) PUBLIC UTILITY PROPERTY.—The amend-
ments made by subsection (e) shall apply to periods 
after February 13, 2008, 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 enact-
ment of the Revenue Reconciliation Act of 1990). 
SEC. 704. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT 
PROPERTY. 
(a) EXTENSION.—Section 25D(g) is amended by 
striking ‘‘December 31, 2008’’ and inserting ‘‘December 
31, 2014’’. 
(b) MAXIMUM CREDIT FOR SOLAR ELECTRIC PROP-
ERTY.— 
(1) IN
GENERAL.—Section 25D(b)(1)(A) is 
amended by striking ‘‘$2,000’’ and inserting 
‘‘$4,000’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
25D(e)(4)(A)(i) is amended by striking ‘‘$6,667’’ 
and inserting ‘‘$13,333’’. 
(c) CREDIT FOR RESIDENTIAL WIND PROPERTY.— 
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(1) IN GENERAL.—Section 25D(a) is amended 
by striking ‘‘and’’ at the end of paragraph (2), by 
striking the period at the end of paragraph (3) and 
inserting ‘‘, and’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(4) 30 percent of the qualified small wind en-
ergy property expenditures made by the taxpayer 
during such year.’’. 
(2) LIMITATION.—Section 25D(b)(1) is amend-
ed by striking ‘‘and’’ at the end of subparagraph 
(B), by striking the period at the end of subpara-
graph (C) and inserting ‘‘, and’’, and by adding at 
the end the following new subparagraph: 
‘‘(D) $500 with respect to each half kilo-
watt of capacity (not to exceed $4,000) of wind 
turbines for which qualified small wind energy 
property expenditures are made.’’. 
(3) QUALIFIED
SMALL
WIND
ENERGY
PROP-
ERTY EXPENDITURES.— 
(A) IN
GENERAL.—Section 25D(d) is 
amended by adding at the end the following 
new paragraph: 
‘‘(4) QUALIFIED SMALL WIND ENERGY PROP-
ERTY
EXPENDITURE.—The term ‘qualified small 
wind energy property expenditure’ means an expend-
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iture for property which uses a wind turbine to gen-
erate electricity for use in connection with a dwelling 
unit located in the United States and used as a resi-
dence by the taxpayer.’’. 
(B) 
NO
DOUBLE
BENEFIT.—Section 
45(d)(1) is amended by adding at the end the 
following new sentence: ‘‘Such term shall not 
include any facility with respect to which any 
qualified small wind energy property expendi-
ture (as defined in subsection (d)(4) of section 
25D) is taken into account in determining the 
credit under such section.’’. 
(4) MAXIMUM
EXPENDITURES
IN
CASE
OF 
JOINT
OCCUPANCY.—Section 
25D(e)(4)(A) 
is 
amended by striking ‘‘and’’ at the end of clause (ii), 
by striking the period at the end of clause (iii) and 
inserting ‘‘, and’’, and by adding at the end the fol-
lowing new clause: 
‘‘(iv) $1,667 in the case of each half 
kilowatt 
of 
capacity 
(not 
to 
exceed 
$13,333) of wind turbines for which quali-
fied small wind energy property expendi-
tures are made.’’. 
(d) CREDIT FOR GEOTHERMAL HEAT PUMP SYS-
TEMS.— 
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(1) IN GENERAL.—Section 25D(a), as amended 
by subsection (c), is amended by striking ‘‘and’’ at 
the end of paragraph (3), by striking the period at 
the end of paragraph (4) and inserting ‘‘, and’’, and 
by adding at the end the following new paragraph: 
‘‘(5) 30 percent of the qualified geothermal 
heat pump property expenditures made by the tax-
payer during such year.’’. 
(2) 
LIMITATION.—Section 
25D(b)(1), 
as 
amended by subsection (c), is amended by striking 
‘‘and’’ at the end of subparagraph (C), by striking 
the period at the end of subparagraph (D) and in-
serting ‘‘, and’’, and by adding at the end the fol-
lowing new subparagraph: 
‘‘(E) $2,000 with respect to any qualified 
geothermal heat pump property expenditures.’’. 
(3) QUALIFIED
GEOTHERMAL
HEAT
PUMP 
PROPERTY
EXPENDITURE.—Section 
25D(d), 
as 
amended by subsection (c), is amended by adding at 
the end the following new paragraph: 
‘‘(5) QUALIFIED
GEOTHERMAL
HEAT
PUMP 
PROPERTY EXPENDITURE.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
geothermal heat pump property expenditure’ 
means an expenditure for qualified geothermal 
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heat pump property installed on or in connec-
tion with a dwelling unit located in the United 
States and used as a residence by the taxpayer. 
‘‘(B) 
QUALIFIED
GEOTHERMAL
HEAT 
PUMP
PROPERTY.—The term ‘qualified geo-
thermal heat pump property’ means any equip-
ment which— 
‘‘(i) uses the ground or ground water 
as a thermal energy source to heat the 
dwelling unit referred to in subparagraph 
(A) or as a thermal energy sink to cool 
such dwelling unit, and 
‘‘(ii) meets the requirements of the 
Energy Star program which are in effect 
at the time that the expenditure for such 
equipment is made.’’. 
(4) MAXIMUM
EXPENDITURES
IN
CASE
OF 
JOINT
OCCUPANCY.—Section 
25D(e)(4)(A), 
as 
amended by subsection (c), is amended by striking 
‘‘and’’ at the end of clause (iii), by striking the pe-
riod at the end of clause (iv) and inserting ‘‘, and’’, 
and by adding at the end the following new clause: 
‘‘(v) $6,667 in the case of any quali-
fied geothermal heat pump property ex-
penditures.’’. 
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(e) CREDIT ALLOWED AGAINST ALTERNATIVE MIN-
IMUM TAX.— 
(1) IN
GENERAL.—Subsection (c) of section 
25D is amended to read as follows: 
‘‘(c) LIMITATION BASED
ON AMOUNT
OF TAX; 
CARRYFORWARD OF UNUSED CREDIT.— 
‘‘(1) LIMITATION
BASED
ON
AMOUNT
OF 
TAX.—In the case of a taxable year to which section 
26(a)(2) does not apply, the credit allowed under 
subsection (a) for the taxable year shall not exceed 
the excess of— 
‘‘(A) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax im-
posed by section 55, over 
‘‘(B) the sum of the credits allowable 
under this subpart (other than this section) and 
section 27 for the taxable year. 
‘‘(2) CARRYFORWARD OF UNUSED CREDIT.— 
‘‘(A) RULE
FOR
YEARS
IN
WHICH
ALL 
PERSONAL
CREDITS
ALLOWED
AGAINST
REG-
ULAR
AND
ALTERNATIVE
MINIMUM
TAX.—In 
the case of a taxable year to which section 
26(a)(2) applies, if the credit allowable under 
subsection (a) exceeds the limitation imposed by 
section 26(a)(2) for such taxable year reduced 
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by the sum of the credits allowable under this 
subpart (other than this section), such excess 
shall be carried to the succeeding taxable year 
and added to the credit allowable under sub-
section (a) for such succeeding taxable year. 
‘‘(B) RULE
FOR
OTHER
YEARS.—In the 
case of a taxable year to which section 26(a)(2) 
does not apply, if the credit allowable under 
subsection (a) exceeds the limitation imposed by 
paragraph (1) for such taxable year, such ex-
cess shall be carried to the succeeding taxable 
year and added to the credit allowable under 
subsection (a) for such succeeding taxable 
year.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 23(b)(4)(B) is amended by in-
serting ‘‘and section 25D’’ after ‘‘this section’’. 
(B) Section 24(b)(3)(B) is amended by 
striking ‘‘and 25B’’ and inserting ‘‘, 25B, and 
25D’’. 
(C) Section 25B(g)(2) is amended by strik-
ing ‘‘section 23’’ and inserting ‘‘sections 23 and 
25D’’. 
(D) Section 26(a)(1) is amended by strik-
ing ‘‘and 25B’’ and inserting ‘‘25B, and 25D’’. 
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(f) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2007. 
(2) APPLICATION
OF
EGTRRA
SUNSET.—The 
amendments made by subparagraphs (A) and (B) of 
subsection (e)(2) shall be subject to title IX of the 
Economic Growth and Tax Relief Reconciliation Act 
of 2001 in the same manner as the provisions of 
such Act to which such amendments relate. 
SEC. 705. SPECIAL RULE TO IMPLEMENT FERC AND STATE 
ELECTRIC RESTRUCTURING POLICY. 
(a) EXTENSION FOR QUALIFIED ELECTRIC UTILI-
TIES.— 
(1) IN
GENERAL.—Paragraph (3) of section 
451(i) is amended by inserting ‘‘(before January 1, 
2010, in the case of a qualified electric utility)’’ 
after ‘‘January 1, 2008’’. 
(2) QUALIFIED ELECTRIC UTILITY.—Subsection 
(i) of section 451 is amended by redesignating para-
graphs (6) through (10) as paragraphs (7) through 
(11), respectively, and by inserting after paragraph 
(5) the following new paragraph: 
‘‘(6) QUALIFIED ELECTRIC UTILITY.—For pur-
poses of this subsection, the term ‘qualified electric 
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utility’ means a person that, as of the date of the 
qualifying 
electric 
transmission 
transaction, 
is 
vertically integrated, in that it is both— 
‘‘(A) a transmitting utility (as defined in 
section 3(23) of the Federal Power Act (16 
U.S.C. 796(23))) with respect to the trans-
mission facilities to which the election under 
this subsection applies, and 
‘‘(B) an electric utility (as defined in sec-
tion 3(22) of the Federal Power Act (16 U.S.C. 
796(22))).’’. 
(b) EXTENSION
OF PERIOD
FOR TRANSFER
OF 
OPERATIONAL
CONTROL
AUTHORIZED
BY
FERC.— 
Clause (ii) of section 451(i)(4)(B) is amended by striking 
‘‘December 31, 2007’’ and inserting ‘‘the date which is 
4 years after the close of the taxable year in which the 
transaction occurs’’. 
(c) PROPERTY LOCATED OUTSIDE
THE UNITED 
STATES NOT TREATED
AS EXEMPT UTILITY PROP-
ERTY.—Paragraph (5) of section 451(i) is amended by 
adding at the end the following new subparagraph: 
‘‘(C) EXCEPTION FOR PROPERTY LOCATED 
OUTSIDE THE UNITED STATES.—The term ‘ex-
empt utility property’ shall not include any 
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property which is located outside the United 
States.’’. 
(d) EFFECTIVE DATES.— 
(1) EXTENSION.—The amendments made by 
subsection (a) shall apply to transactions after De-
cember 31, 2007. 
(2) TRANSFERS OF OPERATIONAL CONTROL.— 
The amendment made by subsection (b) shall take 
effect as if included in section 909 of the American 
Jobs Creation Act of 2004. 
(3) EXCEPTION FOR PROPERTY LOCATED OUT-
SIDE THE UNITED STATES.—The amendment made 
by subsection (c) shall apply to transactions after 
the date of the enactment of this Act. 
SEC. 706. NEW CLEAN RENEWABLE ENERGY BONDS. 
(a) IN GENERAL.—Subpart I of part IV of sub-
chapter A of chapter 1 is amended by adding at the end 
the following new section: 
‘‘SEC. 54C. NEW CLEAN RENEWABLE ENERGY BONDS. 
‘‘(a) NEW CLEAN RENEWABLE ENERGY BOND.—For 
purposes of this subpart, the term ‘new clean renewable 
energy bond’ means any bond issued as part of an issue 
if— 
‘‘(1) 100 percent of the available project pro-
ceeds of such issue are to be used for capital expend-
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itures incurred by public power providers or coopera-
tive electric companies for one or more qualified re-
newable energy facilities, 
‘‘(2) the bond is issued by a qualified issuer, 
and 
‘‘(3) the issuer designates such bond for pur-
poses of this section. 
‘‘(b) REDUCED CREDIT AMOUNT.—The annual credit 
determined under section 54A(b) with respect to any new 
clean renewable energy bond shall be 70 percent of the 
amount so determined without regard to this subsection. 
‘‘(c) LIMITATION
ON AMOUNT
OF BONDS DES-
IGNATED.— 
‘‘(1) IN
GENERAL.—The maximum aggregate 
face amount of bonds which may be designated 
under subsection (a) by any issuer shall not exceed 
the limitation amount allocated under this sub-
section to such issuer. 
‘‘(2) NATIONAL
LIMITATION
ON
AMOUNT
OF 
BONDS DESIGNATED.—There is a national new clean 
renewable energy bond limitation of $2,000,000,000 
which shall be allocated by the Secretary as provided 
in paragraph (3), except that— 
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‘‘(A) not more than 331⁄3 percent thereof 
may be allocated to qualified projects of public 
power providers, 
‘‘(B) not more than 331⁄3 percent thereof 
may be allocated to qualified projects of govern-
mental bodies, and 
‘‘(C) not more than 331⁄3 percent thereof 
may be allocated to qualified projects of cooper-
ative electric companies. 
‘‘(3) METHOD OF ALLOCATION.— 
‘‘(A) ALLOCATION AMONG PUBLIC POWER 
PROVIDERS.—After the Secretary determines 
the qualified projects of public power providers 
which are appropriate for receiving an alloca-
tion of the national new clean renewable energy 
bond limitation, the Secretary shall, to the max-
imum extent practicable, make allocations 
among such projects in such manner that the 
amount allocated to each such project bears the 
same ratio to the cost of such project as the 
limitation under paragraph (2)(A) bears to the 
cost of all such projects. 
‘‘(B) ALLOCATION AMONG GOVERNMENTAL 
BODIES AND COOPERATIVE ELECTRIC COMPA-
NIES.—The Secretary shall make allocations of 
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the amount of the national new clean renewable 
energy bond limitation described in paragraphs 
(2)(B) and (2)(C) among qualified projects of 
governmental bodies and cooperative electric 
companies, respectively, in such manner as the 
Secretary determines appropriate. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED RENEWABLE ENERGY FACIL-
ITY.—The term ‘qualified renewable energy facility’ 
means a qualified facility (as determined under sec-
tion 45(d) without regard to paragraphs (8) and 
(10) thereof and to any placed in service date) 
owned by a public power provider, a governmental 
body, or a cooperative electric company. 
‘‘(2) PUBLIC
POWER
PROVIDER.—The term 
‘public power provider’ means a State utility with a 
service obligation, as such terms are defined in sec-
tion 217 of the Federal Power Act (as in effect on 
the date of the enactment of this paragraph). 
‘‘(3) GOVERNMENTAL BODY.—The term ‘gov-
ernmental body’ means any State or Indian tribal 
government, or any political subdivision thereof. 
‘‘(4) COOPERATIVE ELECTRIC COMPANY.—The 
term ‘cooperative electric company’ means a mutual 
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or cooperative electric company described in section 
501(c)(12) or section 1381(a)(2)(C). 
‘‘(5) CLEAN RENEWABLE ENERGY BOND LEND-
ER.—The term ‘clean renewable energy bond lender’ 
means a lender which is a cooperative which is 
owned by, or has outstanding loans to, 100 or more 
cooperative electric companies and is in existence on 
February 1, 2002, and shall include any affiliated 
entity which is controlled by such lender. 
‘‘(6) QUALIFIED ISSUER.—The term ‘qualified 
issuer’ means a public power provider, a cooperative 
electric company, a governmental body, a clean re-
newable energy bond lender, or a not-for-profit elec-
tric utility which has received a loan or loan guar-
antee under the Rural Electrification Act.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Paragraph (1) of section 54A(d) is amended 
to read as follows: 
‘‘(1) QUALIFIED TAX CREDIT BOND.—The term 
‘qualified tax credit bond’ means— 
‘‘(A) a qualified forestry conservation 
bond, or 
‘‘(B) a new clean renewable energy bond, 
which is part of an issue that meets requirements of 
paragraphs (2), (3), (4), (5), and (6).’’. 
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the credit allowance date (as defined in section 
54A(e)(1)). 
‘‘(B) 
REPORTING
TO
CORPORATIONS, 
ETC.—Except as otherwise provided in regula-
tions, in the case of any interest described in 
subparagraph (A) of this paragraph, subsection 
(b)(4) of this section shall be applied without 
regard to subparagraphs (A), (H), (I), (J), (K), 
and (L)(i). 
‘‘(C) REGULATORY AUTHORITY.—The Sec-
retary may prescribe such regulations as are 
necessary or appropriate to carry out the pur-
poses of this paragraph, including regulations 
which require more frequent or more detailed 
reporting.’’. 
(d) APPLICATION OF CERTAIN LABOR STANDARDS 
ON PROJECTS FINANCED UNDER TAX CREDIT BONDS.— 
Subchapter IV of chapter 31 of title 40, United States 
Code, shall apply to projects financed with the proceeds 
of any tax credit bond (as defined in section 54A of the 
Internal Revenue Code of 1986). 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after the date 
of the enactment of this Act. 
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PART 2—CARBON MITIGATION PROVISIONS 
SEC. 711. EXPANSION AND MODIFICATION OF ADVANCED 
COAL PROJECT INVESTMENT CREDIT. 
(a) MODIFICATION
OF CREDIT AMOUNT.—Section 
48A(a) is amended by striking ‘‘and’’ at the end of para-
graph (1), by striking the period at the end of paragraph 
(2) and inserting ‘‘, and’’, and by adding at the end the 
following new paragraph: 
‘‘(3) 30 percent of the qualified investment for 
such taxable year in the case of projects described 
in clause (iii) of subsection (d)(3)(B).’’. 
(b) EXPANSION OF AGGREGATE CREDITS.—Section 
48A(d)(3)(A) is amended by striking ‘‘$1,300,000,000’’ 
and inserting ‘‘$2,550,000,000’’. 
(c) AUTHORIZATION OF ADDITIONAL PROJECTS.— 
(1) IN GENERAL.—Subparagraph (B) of section 
48A(d)(3) is amended to read as follows: 
‘‘(B) PARTICULAR PROJECTS.—Of the dol-
lar amount in subparagraph (A), the Secretary 
is authorized to certify— 
‘‘(i) $800,000,000 for integrated gas-
ification combined cycle projects the appli-
cation for which is submitted during the 
period described in paragraph (2)(A)(i), 
‘‘(ii) $500,000,000 for projects which 
use other advanced coal-based generation 
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technologies the application for which is 
submitted during the period described in 
paragraph (2)(A)(i), and 
‘‘(iii) $1,250,000,000 for advanced 
coal-based generation technology projects 
the application for which is submitted dur-
ing the period described in paragraph 
(2)(A)(ii).’’. 
(2) APPLICATION
PERIOD
FOR
ADDITIONAL 
PROJECTS.—Subparagraph (A) of section 48A(d)(2) 
is amended to read as follows: 
‘‘(A) APPLICATION PERIOD.—Each appli-
cant for certification under this paragraph shall 
submit an application meeting the requirements 
of subparagraph (B). An applicant may only 
submit an application— 
‘‘(i) for an allocation from the dollar 
amount specified in clause (i) or (ii) of 
paragraph (3)(B) during the 3-year period 
beginning on the date the Secretary estab-
lishes the program under paragraph (1), 
and 
‘‘(ii) for an allocation from the dollar 
amount specified in paragraph (3)(B)(iii) 
during the 3-year period beginning at the 
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earlier of the termination of the period de-
scribed in clause (i) or the date prescribed 
by the Secretary.’’. 
(3) CAPTURE AND SEQUESTRATION OF CARBON 
DIOXIDE EMISSIONS REQUIREMENT.— 
(A) IN
GENERAL.—Section 48A(e)(1) is 
amended by striking ‘‘and’’ at the end of sub-
paragraph (E), by striking the period at the 
end of subparagraph (F) and inserting ‘‘; and’’, 
and by adding at the end the following new sub-
paragraph: 
‘‘(G) in the case of any project the applica-
tion for which is submitted during the period 
described in subsection (d)(2)(A)(ii), the project 
includes equipment which separates and seques-
ters at least 65 percent (70 percent in the case 
of an application for reallocated credits under 
subsection (d)(4)) of such project’s total carbon 
dioxide emissions.’’. 
(B) HIGHEST
PRIORITY
FOR
PROJECTS 
WHICH
SEQUESTER
CARBON
DIOXIDE
EMIS-
SIONS.—Section 48A(e)(3) is amended by strik-
ing ‘‘and’’ at the end of subparagraph (A)(iii), 
by striking the period at the end of subpara-
graph (B)(iii) and inserting ‘‘, and’’, and by 
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adding at the end the following new subpara-
graph: 
‘‘(C) give highest priority to projects with 
the greatest separation and sequestration per-
centage of total carbon dioxide emissions.’’. 
(C) RECAPTURE OF CREDIT FOR FAILURE 
TO SEQUESTER.—Section 48A is amended by 
adding at the end the following new subsection: 
‘‘(h) RECAPTURE OF CREDIT FOR FAILURE TO SE-
QUESTER.—The Secretary shall provide for recapturing 
the benefit of any credit allowable under subsection (a) 
with respect to any project which fails to attain or main-
tain the separation and sequestration requirements of sub-
section (e)(1)(G).’’. 
(4) ADDITIONAL
PRIORITY
FOR
RESEARCH 
PARTNERSHIPS.—Section 48A(e)(3)(B), as amended 
by paragraph (3)(B), is amended— 
(A) by striking ‘‘and’’ at the end of clause 
(ii), 
(B) by redesignating clause (iii) as clause 
(iv), and 
(C) by inserting after clause (ii) the fol-
lowing new clause: 
‘‘(iii) applicant participants who have 
a research partnership with an eligible edu-
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cational institution (as defined in section 
529(e)(5)), and’’. 
(5) CLERICAL AMENDMENT.—Section 48A(e)(3) 
is amended by striking ‘‘INTEGRATED GASIFICATION 
COMBINED
CYCLE’’ in the heading and inserting 
‘‘CERTAIN’’. 
(d) COMPETITIVE CERTIFICATION AWARDS MODI-
FICATION AUTHORITY.—Section 48A, as amended by sub-
section (c)(3), is amended by adding at the end the fol-
lowing new subsection: 
‘‘(i) COMPETITIVE CERTIFICATION AWARDS MODI-
FICATION AUTHORITY.—In implementing this section or 
section 48B, the Secretary is directed to modify the terms 
of any competitive certification award and any associated 
closing agreement where such modification— 
‘‘(1) is consistent with the objectives of such 
section, 
‘‘(2) is requested by the recipient of the com-
petitive certification award, and 
‘‘(3) involves moving the project site to improve 
the potential to capture and sequester carbon dioxide 
emissions, reduce costs of transporting feedstock, 
and serve a broader customer base, 
unless the Secretary determines that the dollar amount 
of tax credits available to the taxpayer under such section 
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would increase as a result of the modification or such 
modification would result in such project not being origi-
nally certified. In considering any such modification, the 
Secretary shall consult with other relevant Federal agen-
cies, including the Department of Energy.’’. 
(e) DISCLOSURE OF ALLOCATIONS.—Section 48A(d) 
is amended by adding at the end the following new para-
graph: 
‘‘(5) DISCLOSURE OF ALLOCATIONS.—The Sec-
retary shall, upon making a certification under this 
subsection or section 48B(d), publicly disclose the 
identity of the applicant and the amount of the cred-
it certified with respect to such applicant.’’. 
(f) EFFECTIVE DATES.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to credits the application for 
which is submitted during the period described in 
section 48A(d)(2)(A)(ii) of the Internal Revenue 
Code of 1986 and which are allocated or reallocated 
after the date of the enactment of this Act. 
(2) 
COMPETITIVE
CERTIFICATION
AWARDS 
MODIFICATION AUTHORITY.—The amendment made 
by subsection (d) shall take effect on the date of the 
enactment of this Act and is applicable to all com-
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petitive certification awards entered into under sec-
tion 48A or 48B of the Internal Revenue Code of 
1986, whether such awards were issued before, on, 
or after such date of enactment. 
(3) 
DISCLOSURE
OF
ALLOCATIONS.—The 
amendment made by subsection (e) shall apply to 
certifications made after the date of the enactment 
of this Act. 
(4) CLERICAL AMENDMENT.—The amendment 
made by subsection (c)(5) shall take effect as if in-
cluded in the amendment made by section 1307(b) 
of the Energy Tax Incentives Act of 2005. 
SEC. 712. EXPANSION AND MODIFICATION OF COAL GASIFI-
CATION INVESTMENT CREDIT. 
(a) MODIFICATION
OF CREDIT AMOUNT.—Section 
48B(a) is amended by inserting ‘‘(30 percent in the case 
of credits allocated under subsection (d)(1)(B))’’ after ‘‘20 
percent’’. 
(b) EXPANSION OF AGGREGATE CREDITS.—Section 
48B(d)(1) is amended by striking ‘‘shall not exceed 
$350,000,000’’ and all that follows and inserting ‘‘shall 
not exceed— 
‘‘(A) $350,000,000, plus 
‘‘(B) $250,000,000 for qualifying gasifi-
cation projects that include equipment which 
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separates and sequesters at least 75 percent of 
such project’s total carbon dioxide emissions.’’. 
(c) RECAPTURE OF CREDIT FOR FAILURE TO SE-
QUESTER.—Section 48B is amended by adding at the end 
the following new subsection: 
‘‘(f) RECAPTURE OF CREDIT FOR FAILURE TO SE-
QUESTER.—The Secretary shall provide for recapturing 
the benefit of any credit allowable under subsection (a) 
with respect to any project which fails to attain or main-
tain the separation and sequestration requirements for 
such project under subsection (d)(1).’’. 
(d) SELECTION
PRIORITIES.—Section 48B(d) is 
amended by adding at the end the following new para-
graph: 
‘‘(4) SELECTION PRIORITIES.—In determining 
which qualifying gasification projects to certify 
under this section, the Secretary shall— 
‘‘(A) give highest priority to projects with 
the greatest separation and sequestration per-
centage of total carbon dioxide emissions, and 
‘‘(B) give high priority to applicant partici-
pants who have a research partnership with an 
eligible educational institution (as defined in 
section 529(e)(5)).’’. 
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(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to credits described in section 
48B(d)(1)(B) of the Internal Revenue Code of 1986 which 
are allocated or reallocated after the date of the enactment 
of this Act. 
SEC. 713. TEMPORARY INCREASE IN COAL EXCISE TAX. 
Paragraph (2) of section 4121(e) is amended— 
(1) by striking ‘‘January 1, 2014’’ in subpara-
graph (A) and inserting ‘‘December 31, 2018’’, and 
(2) by striking ‘‘January 1 after 1981’’ in sub-
paragraph (B) and inserting ‘‘December 31 after 
2007’’. 
SEC. 714. SPECIAL RULES FOR REFUND OF THE COAL EX-
CISE TAX TO CERTAIN COAL PRODUCERS 
AND EXPORTERS. 
(a) REFUND.— 
(1) COAL PRODUCERS.— 
(A) IN
GENERAL.—Notwithstanding sub-
sections (a)(1) and (c) of section 6416 and sec-
tion 6511 of the Internal Revenue Code of 
1986, if— 
(i) a coal producer establishes that 
such coal producer, or a party related to 
such coal producer, exported coal produced 
by such coal producer to a foreign country 
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or shipped coal produced by such coal pro-
ducer to a possession of the United States, 
or caused such coal to be exported or 
shipped, the export or shipment of which 
was other than through an exporter who 
meets the requirements of paragraph (2), 
(ii) such coal producer filed an excise 
tax return on or after October 1, 1990, 
and on or before the date of the enactment 
of this Act, and 
(iii) such coal producer files a claim 
for refund with the Secretary not later 
than the close of the 30-day period begin-
ning on the date of the enactment of this 
Act, 
then the Secretary shall pay to such coal pro-
ducer an amount equal to the tax paid under 
section 4121 of such Code on such coal ex-
ported or shipped by the coal producer or a 
party related to such coal producer, or caused 
by the coal producer or a party related to such 
coal producer to be exported or shipped. 
(B) SPECIAL
RULES
FOR
CERTAIN
TAX-
PAYERS.—For purposes of this section— 
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(i) IN GENERAL.—If a coal producer 
or a party related to a coal producer has 
received a judgment described in clause 
(iii), such coal producer shall be deemed to 
have established the export of coal to a for-
eign country or shipment of coal to a pos-
session of the United States under sub-
paragraph (A)(i). 
(ii) AMOUNT OF PAYMENT.—If a tax-
payer described in clause (i) is entitled to 
a payment under subparagraph (A), the 
amount of such payment shall be reduced 
by any amount paid pursuant to the judg-
ment described in clause (iii). 
(iii) JUDGMENT DESCRIBED.—A judg-
ment is described in this subparagraph if 
such judgment— 
(I) is made by a court of com-
petent jurisdiction within the United 
States, 
(II) relates to the constitu-
tionality of any tax paid on exported 
coal under section 4121 of the Inter-
nal Revenue Code of 1986, and 
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(III) is in favor of the coal pro-
ducer or the party related to the coal 
producer. 
(2) EXPORTERS.—Notwithstanding subsections 
(a)(1) and (c) of section 6416 and section 6511 of 
the Internal Revenue Code of 1986, and a judgment 
described in paragraph (1)(B)(iii) of this subsection, 
if— 
(A) an exporter establishes that such ex-
porter exported coal to a foreign country or 
shipped coal to a possession of the United 
States, or caused such coal to be so exported or 
shipped, 
(B) such exporter filed a tax return on or 
after October 1, 1990, and on or before the 
date of the enactment of this Act, and 
(C) such exporter files a claim for refund 
with the Secretary not later than the close of 
the 30-day period beginning on the date of the 
enactment of this Act, 
then the Secretary shall pay to such exporter an 
amount equal to $0.825 per ton of such coal ex-
ported by the exporter or caused to be exported or 
shipped, or caused to be exported or shipped, by the 
exporter. 
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(b) LIMITATIONS.—Subsection (a) shall not apply 
with respect to exported coal if a settlement with the Fed-
eral Government has been made with and accepted by, the 
coal producer, a party related to such coal producer, or 
the exporter, of such coal, as of the date that the claim 
is filed under this section with respect to such exported 
coal. For purposes of this subsection, the term ‘‘settlement 
with the Federal Government’’ shall not include any settle-
ment or stipulation entered into as of the date of the en-
actment of this Act, the terms of which contemplate a 
judgment concerning which any party has reserved the 
right to file an appeal, or has filed an appeal. 
(c) SUBSEQUENT REFUND PROHIBITED.—No refund 
shall be made under this section to the extent that a credit 
or refund of such tax on such exported or shipped coal 
has been paid to any person. 
(d) DEFINITIONS.—For purposes of this section— 
(1) COAL
PRODUCER.—The term ‘‘coal pro-
ducer’’ means the person in whom is vested owner-
ship of the coal immediately after the coal is severed 
from the ground, without regard to the existence of 
any contractual arrangement for the sale or other 
disposition of the coal or the payment of any royal-
ties between the producer and third parties. The 
term includes any person who extracts coal from 
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coal waste refuse piles or from the silt waste product 
which results from the wet washing (or similar proc-
essing) of coal. 
(2) EXPORTER.—The term ‘‘exporter’’ means a 
person, other than a coal producer, who does not 
have a contract, fee arrangement, or any other 
agreement with a producer or seller of such coal to 
export or ship such coal to a third party on behalf 
of the producer or seller of such coal and— 
(A) is indicated in the shipper’s export 
declaration or other documentation as the ex-
porter of record, or 
(B) actually exported such coal to a for-
eign country or shipped such coal to a posses-
sion of the United States, or caused such coal 
to be so exported or shipped. 
(3) RELATED PARTY.—The term ‘‘a party re-
lated to such coal producer’’ means a person who— 
(A) is related to such coal producer 
through any degree of common management, 
stock ownership, or voting control, 
(B) is related (within the meaning of sec-
tion 144(a)(3) of the Internal Revenue Code of 
1986) to such coal producer, or 
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(C) has a contract, fee arrangement, or 
any other agreement with such coal producer to 
sell such coal to a third party on behalf of such 
coal producer. 
(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Treasury or the Secretary’s des-
ignee. 
(e) TIMING OF REFUND.—With respect to any claim 
for refund filed pursuant to this section, the Secretary 
shall determine whether the requirements of this section 
are met not later than 180 days after such claim is filed. 
If the Secretary determines that the requirements of this 
section are met, the claim for refund shall be paid not 
later than 180 days after the Secretary makes such deter-
mination. 
(f) INTEREST.—Any refund paid pursuant to this 
section shall be paid by the Secretary with interest from 
the date of overpayment determined by using the overpay-
ment rate and method under section 6621 of the Internal 
Revenue Code of 1986. 
(g) DENIAL OF DOUBLE BENEFIT.—The payment 
under subsection (a) with respect to any coal shall not ex-
ceed— 
(1) in the case of a payment to a coal producer, 
the amount of tax paid under section 4121 of the 
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Internal Revenue Code of 1986 with respect to such 
coal by such coal producer or a party related to such 
coal producer, and 
(2) in the case of a payment to an exporter, an 
amount equal to $0.825 per ton with respect to such 
coal exported by the exporter or caused to be ex-
ported by the exporter. 
(h) APPLICATION OF SECTION.—This section applies 
only to claims on coal exported or shipped on or after Oc-
tober 1, 1990, through the date of the enactment of this 
Act. 
(i) STANDING NOT CONFERRED.— 
(1) EXPORTERS.—With respect to exporters, 
this section shall not confer standing upon an ex-
porter to commence, or intervene in, any judicial or 
administrative proceeding concerning a claim for re-
fund by a coal producer of any Federal or State tax, 
fee, or royalty paid by the coal producer. 
(2) COAL PRODUCERS.—With respect to coal 
producers, this section shall not confer standing 
upon a coal producer to commence, or intervene in, 
any judicial or administrative proceeding concerning 
a claim for refund by an exporter of any Federal or 
State tax, fee, or royalty paid by the producer and 
alleged to have been passed on to an exporter. 
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SEC. 715. CARBON AUDIT OF THE TAX CODE. 
(a) STUDY.—The Secretary of the Treasury shall 
enter into an agreement with the National Academy of 
Sciences to undertake a comprehensive review of the Inter-
nal Revenue Code of 1986 to identify the types of and 
specific tax provisions that have the largest effects on car-
bon and other greenhouse gas emissions and to estimate 
the magnitude of those effects. 
(b) REPORT.—Not later than 2 years after the date 
of enactment of this Act, the National Academy of 
Sciences shall submit to Congress a report containing the 
results of study authorized under this section. 
(c) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$1,500,000 for the period of fiscal years 2008 and 2009. 
Subtitle B—Transportation and 
Domestic Fuel Security Provisions 
SEC. 721. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS 
DEPRECIATION 
FOR 
BIOMASS 
ETHANOL 
PLANT PROPERTY. 
(a) IN GENERAL.—Paragraph (3) of section 168(l) 
is amended to read as follows: 
‘‘(3) CELLULOSIC
BIOFUEL.—The term ‘cel-
lulosic biofuel’ means any liquid fuel which is pro-
duced from any lignocellulosic or hemicellulosic mat-
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ter that is available on a renewable or recurring 
basis.’’. 
(b) CONFORMING AMENDMENTS.—Subsection (l) of 
section 168 is amended— 
(1) by striking ‘‘cellulosic biomass ethanol’’ 
each place it appears and inserting ‘‘cellulosic 
biofuel’’, 
(2) by striking ‘‘CELLULOSIC BIOMASS ETH-
ANOL’’ in the heading of such subsection and insert-
ing ‘‘CELLULOSIC BIOFUEL’’, and 
(3) by striking ‘‘CELLULOSIC
BIOMASS
ETH-
ANOL’’ in the heading of paragraph (2) thereof and 
inserting ‘‘CELLULOSIC BIOFUEL’’. 
(c) EFFECTIVE DATE.—The amendments 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. 722. CREDITS FOR BIODIESEL AND RENEWABLE DIE-
SEL. 
(a) IN GENERAL.—Sections 40A(g), 6426(c)(6), and 
6427(e)(5)(B) are each amended by striking ‘‘December 
31, 2008’’ and inserting ‘‘December 31, 2009’’. 
(b) INCREASE IN RATE OF CREDIT.— 
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(1) INCOME TAX CREDIT.—Paragraphs (1)(A) 
and (2)(A) of section 40A(b) are each amended by 
striking ‘‘50 cents’’ and inserting ‘‘$1.00’’. 
(2) EXCISE
TAX
CREDIT.—Paragraph (2) of 
section 6426(c) is amended to read as follows: 
‘‘(2) APPLICABLE AMOUNT.—For purposes of 
this subsection, the applicable amount is $1.00.’’. 
(3) CONFORMING AMENDMENTS.— 
(A) Subsection (b) of section 40A is 
amended by striking paragraph (3) and by re-
designating paragraphs (4) and (5) as para-
graphs (3) and (4), respectively. 
(B) Paragraph (2) of section 40A(f) is 
amended to read as follows: 
‘‘(2) EXCEPTION.—Subsection (b)(4) shall not 
apply with respect to renewable diesel.’’. 
(C) Paragraphs (2) and (3) of section 
40A(e) are each amended by striking ‘‘sub-
section (b)(5)(C)’’ and inserting ‘‘subsection 
(b)(4)(C)’’. 
(D) Clause (ii) of section 40A(d)(3)(C) is 
amended by striking ‘‘subsection (b)(5)(B)’’ 
and inserting ‘‘subsection (b)(4)(B)’’. 
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(c) UNIFORM TREATMENT OF DIESEL PRODUCED 
FROM BIOMASS.—Paragraph (3) of section 40A(f) is 
amended— 
(1) by striking ‘‘diesel fuel’’ and inserting ‘‘liq-
uid fuel’’, 
(2) 
by 
striking 
‘‘using 
a 
thermal 
depolymerization process’’, and 
(3) by striking ‘‘or D396’’ in subparagraph (B) 
and inserting ‘‘, D396, or other equivalent standard 
approved by the Secretary’’. 
(d) COPRODUCTION OF RENEWABLE DIESEL WITH 
PETROLEUM FEEDSTOCK.— 
(1) IN
GENERAL.—Paragraph (3) of section 
40A(f) (defining renewable diesel) is amended by 
adding at the end the following flush sentence: 
‘‘Such term does not include any fuel derived from 
coprocessing biomass with a feedstock which is not 
biomass. For purposes of this paragraph, the term 
‘biomass’ has the meaning given such term by sec-
tion 45K(c)(3).’’. 
(2) CONFORMING AMENDMENT.—Paragraph (3) 
of section 40A(f) is amended by striking ‘‘(as de-
fined in section 45K(c)(3))’’. 
(e) ELIGIBILITY
OF CERTAIN AVIATION FUEL.— 
Paragraph (3) of section 40A(f) (defining renewable die-
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sel) is amended by adding at the end the following: ‘‘The 
term ‘renewable diesel’ also means fuel derived from bio-
mass which meets the requirements of a Department of 
Defense specification for military jet fuel or an American 
Society of Testing and Materials specification for aviation 
turbine fuel.’’ 
(f) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to fuel produced, and sold or 
used, after December 31, 2008. 
(2) COPRODUCTION
OF
RENEWABLE
DIESEL 
WITH PETROLEUM FEEDSTOCK.—The amendments 
made by subsection (c) shall apply to fuel produced, 
and sold or used, after February 13, 2008. 
SEC. 723. CLARIFICATION THAT CREDITS FOR FUEL ARE 
DESIGNED TO PROVIDE AN INCENTIVE FOR 
UNITED STATES PRODUCTION. 
(a) ALCOHOL FUELS CREDIT.—Subsection (d) of 
section 40 is amended by adding at the end the following 
new paragraph: 
‘‘(6) LIMITATION TO ALCOHOL WITH CONNEC-
TION TO THE UNITED STATES.—No credit shall be 
determined under this section with respect to any al-
cohol which is produced outside the United States 
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for use as a fuel outside the United States. For pur-
poses of this paragraph, the term ‘United States’ in-
cludes any possession of the United States.’’. 
(b) BIODIESEL FUELS CREDIT.—Subsection (d) of 
section 40A is amended by adding at the end the following 
new paragraph: 
‘‘(5) LIMITATION TO BIODIESEL WITH CONNEC-
TION TO THE UNITED STATES.—No credit shall be 
determined under this section with respect to any 
biodiesel which is produced outside the United 
States for use as a fuel outside the United States. 
For purposes of this paragraph, the term ‘United 
States’ includes any possession of the United 
States.’’. 
(c) EXCISE TAX CREDIT.— 
(1) IN GENERAL.—Section 6426 is amended by 
adding at the end the following new subsection: 
‘‘(i) LIMITATION TO FUELS WITH CONNECTION TO 
THE UNITED STATES.— 
‘‘(1) ALCOHOL.—No credit shall be determined 
under this section with respect to any alcohol which 
is produced outside the United States for use as a 
fuel outside the United States. 
‘‘(2) BIODIESEL AND ALTERNATIVE FUELS.— 
No credit shall be determined under this section 
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with respect to any biodiesel or alternative fuel 
which is produced outside the United States for use 
as a fuel outside the United States. 
For purposes of this subsection, the term ‘United States’ 
includes any possession of the United States.’’. 
(2) CONFORMING AMENDMENT.—Subsection (e) 
of section 6427 is amended by redesignating para-
graph (5) as paragraph (6) and by inserting after 
paragraph (4) the following new paragraph: 
‘‘(5) LIMITATION TO FUELS WITH CONNECTION 
TO THE UNITED STATES.—No amount shall be pay-
able under paragraph (1) or (2) with respect to any 
mixture or alternative fuel if credit is not allowed 
with respect to such mixture or alternative fuel by 
reason of section 6426(i).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to claims for credit or payment 
made on or after May 15, 2008. 
SEC. 724. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC 
DRIVE MOTOR VEHICLES. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 is amended by adding at the end 
the following new section: 
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‘‘SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE 
MOTOR VEHICLES. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to the sum of the 
credit amounts determined under subsection (b) with re-
spect to each new qualified plug-in electric drive motor ve-
hicle placed in service by the taxpayer during the taxable 
year. 
‘‘(b) PER VEHICLE DOLLAR LIMITATION.— 
‘‘(1) IN
GENERAL.—The amount determined 
under this subsection with respect to any new quali-
fied plug-in electric drive motor vehicle is the sum 
of the amounts determined under paragraphs (2) 
and (3) with respect to such vehicle. 
‘‘(2) BASE AMOUNT.—The amount determined 
under this paragraph is $3,000. 
‘‘(3) BATTERY CAPACITY.—In the case of a ve-
hicle which draws propulsion energy from a battery 
with not less than 5 kilowatt hours of capacity, the 
amount determined under this paragraph is $200, 
plus $200 for each kilowatt hour of capacity in ex-
cess of 5 kilowatt hours. The amount determined 
under this paragraph shall not exceed $2,000. 
‘‘(c) APPLICATION WITH OTHER CREDITS.— 
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‘‘(1) BUSINESS CREDIT TREATED AS PART OF 
GENERAL BUSINESS CREDIT.—So much of the credit 
which would be allowed under subsection (a) for any 
taxable year (determined without regard to this sub-
section) that is attributable to property of a char-
acter subject to an allowance for depreciation shall 
be treated as a credit listed in section 38(b) for such 
taxable year (and not allowed under subsection (a)). 
‘‘(2) PERSONAL CREDIT.— 
‘‘(A) IN GENERAL.—For purposes of this 
title, the credit allowed under subsection (a) for 
any taxable year (determined after application 
of paragraph (1)) shall be treated as a credit 
allowable under subpart A for such taxable 
year. 
‘‘(B) LIMITATION BASED ON AMOUNT OF 
TAX.—In the case of a taxable year to which 
section 26(a)(2) does not apply, the credit al-
lowed under subsection (a) for any taxable year 
(determined after application of paragraph (1)) 
shall not exceed the excess of— 
‘‘(i) the sum of the regular tax liabil-
ity (as defined in section 26(b)) plus the 
tax imposed by section 55, over 
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‘‘(ii) the sum of the credits allowable 
under subpart A (other than this section 
and sections 23 and 25D) and section 27 
for the taxable year. 
‘‘(d) NEW QUALIFIED PLUG-IN ELECTRIC DRIVE 
MOTOR VEHICLE.—For purposes of this section— 
‘‘(1) IN
GENERAL.—The term ‘new qualified 
plug-in electric drive motor vehicle’ means a motor 
vehicle (as defined in section 30(c)(2))— 
‘‘(A) the original use of which commences 
with the taxpayer, 
‘‘(B) which is acquired for use or lease by 
the taxpayer and not for resale, 
‘‘(C) which is made by a manufacturer, 
‘‘(D) which has a gross vehicle weight rat-
ing of less than 14,000 pounds, 
‘‘(E) which has received a certificate of 
conformity under the Clean Air Act and meets 
or exceeds the Bin 5 Tier II emission standard 
established in regulations prescribed by the Ad-
ministrator of the Environmental Protection 
Agency under section 202(i) of the Clean Air 
Act for that make and model year vehicle, and 
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‘‘(F) which is propelled to a significant ex-
tent by an electric motor which draws electricity 
from a battery which— 
‘‘(i) has a capacity of not less than 4 
kilowatt hours, and 
‘‘(ii) is capable of being recharged 
from an external source of electricity. 
‘‘(2) EXCEPTION.—The term ‘new qualified 
plug-in electric drive motor vehicle’ shall not include 
any vehicle which is not a passenger automobile or 
light truck if such vehicle has a gross vehicle weight 
rating of less than 8,500 pounds. 
‘‘(3) OTHER
TERMS.—The terms ‘passenger 
automobile’, ‘light truck’, and ‘manufacturer’ have 
the meanings given such terms in regulations pre-
scribed by the Administrator of the Environmental 
Protection Agency for purposes of the administra-
tion of title II of the Clean Air Act (42 U.S.C. 7521 
et seq.). 
‘‘(4) BATTERY CAPACITY.—The term ‘capacity’ 
means, with respect to any battery, the quantity of 
electricity which the battery is capable of storing, ex-
pressed in kilowatt hours, as measured from a 100 
percent state of charge to a 0 percent state of 
charge. 
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‘‘(e) LIMITATION ON NUMBER OF NEW QUALIFIED 
PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES ELIGIBLE 
FOR CREDIT.— 
‘‘(1) IN GENERAL.—In the case of a new quali-
fied plug-in electric drive motor vehicle sold during 
the phaseout period, only the applicable percentage 
of the credit otherwise allowable under subsection 
(a) shall be allowed. 
‘‘(2) PHASEOUT PERIOD.—For purposes of this 
subsection, the phaseout period is the period begin-
ning with the second calendar quarter following the 
calendar quarter which includes the first date on 
which the number of new qualified plug-in electric 
drive motor vehicles manufactured by the manufac-
turer of the vehicle referred to in paragraph (1) sold 
for use in the United States after the date of the en-
actment of this section, is at least 60,000. 
‘‘(3) APPLICABLE PERCENTAGE.—For purposes 
of paragraph (1), the applicable percentage is— 
‘‘(A) 50 percent for the first 2 calendar 
quarters of the phaseout period, 
‘‘(B) 25 percent for the 3d and 4th cal-
endar quarters of the phaseout period, and 
‘‘(C) 0 percent for each calendar quarter 
thereafter. 
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‘‘(4) CONTROLLED GROUPS.—Rules similar to 
the rules of section 30B(f)(4) shall apply for pur-
poses of this subsection. 
‘‘(f) SPECIAL RULES.— 
‘‘(1) BASIS
REDUCTION.—The basis of any 
property for which a credit is allowable under sub-
section (a) shall be reduced by the amount of such 
credit (determined without regard to subsection (c)). 
‘‘(2) RECAPTURE.—The Secretary shall, by reg-
ulations, provide for recapturing the benefit of any 
credit allowable under subsection (a) with respect to 
any property which ceases to be property eligible for 
such credit. 
‘‘(3) 
PROPERTY
USED
OUTSIDE
UNITED 
STATES, ETC., NOT QUALIFIED.—No credit shall be 
allowed under subsection (a) with respect to any 
property referred to in section 50(b)(1) or with re-
spect to the portion of the cost of any property 
taken into account under section 179. 
‘‘(4) ELECTION
NOT
TO
TAKE
CREDIT.—No 
credit shall be allowed under subsection (a) for any 
vehicle if the taxpayer elects to not have this section 
apply to such vehicle. 
‘‘(5) PROPERTY USED BY TAX-EXEMPT ENTITY; 
INTERACTION WITH AIR QUALITY AND MOTOR VEHI-
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CLE SAFETY STANDARDS.—Rules similar to the rules 
of paragraphs (6) and (10) of section 30B(h) shall 
apply for purposes of this section.’’. 
(b) COORDINATION WITH ALTERNATIVE MOTOR VE-
HICLE CREDIT.—Section 30B(d)(3) is amended by adding 
at the end the following new subparagraph: 
‘‘(D) EXCLUSION OF PLUG-IN VEHICLES.— 
Any vehicle with respect to which a credit is al-
lowable under section 30D (determined without 
regard to subsection (c) thereof) shall not be 
taken into account under this section.’’. 
(c) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Section 38(b) is amended— 
(1) by striking ‘‘and’’ each place it appears at 
the end of any paragraph, 
(2) by striking ‘‘plus’’ each place it appears at 
the end of any paragraph, 
(3) by striking the period at the end of para-
graph (31) and inserting ‘‘, plus’’, and 
(4) by adding at the end the following new 
paragraph: 
‘‘(32) the portion of the new qualified plug-in 
electric drive motor vehicle credit to which section 
30D(c)(1) applies.’’. 
(d) CONFORMING AMENDMENTS.— 
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100 
(1)(A) Section 24(b)(3)(B), as amended by sec-
tion 704, is amended by striking ‘‘and 25D’’ and in-
serting ‘‘25D, and 30D’’. 
(B) Section 25(e)(1)(C)(ii) is amended by in-
serting ‘‘30D,’’ after ‘‘25D,’’. 
(C) Section 25B(g)(2), as amended by section 
704, is amended by striking ‘‘and 25D’’ and insert-
ing ‘‘, 25D, and 30D’’. 
(D) Section 26(a)(1), as amended by section 
704, is amended by striking ‘‘and 25D’’ and insert-
ing ‘‘25D, and 30D’’. 
(E) Section 1400C(d)(2) is amended by striking 
‘‘and 25D’’ and inserting ‘‘25D, and 30D’’. 
(2) Section 1016(a) is amended by striking 
‘‘and’’ at the end of paragraph (35), by striking the 
period at the end of paragraph (36) and inserting ‘‘, 
and’’, and by adding at the end the following new 
paragraph: 
‘‘(37) to the extent provided in section 
30D(f)(1).’’. 
(3) Section 6501(m) is amended by inserting 
‘‘30D(f)(4),’’ after ‘‘30C(e)(5),’’. 
(4) The table of sections for subpart B of part 
IV of subchapter A of chapter 1 is amended by add-
ing at the end the following new item: 
‘‘Sec. 30D. New qualified plug-in electric drive motor vehicles.’’. 
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101 
(e) TREATMENT OF ALTERNATIVE MOTOR VEHICLE 
CREDIT AS A PERSONAL CREDIT.— 
(1) IN
GENERAL.—Paragraph (2) of section 
30B(g) is amended to read as follows: 
‘‘(2) PERSONAL
CREDIT.—The credit allowed 
under subsection (a) for any taxable year (after ap-
plication of paragraph (1)) shall be treated as a 
credit allowable under subpart A for such taxable 
year.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Subparagraph (A) of section 30C(d)(2) 
is amended by striking ‘‘sections 27, 30, and 
30B’’ and inserting ‘‘sections 27 and 30’’. 
(B) Paragraph (3) of section 55(c) is 
amended by striking ‘‘30B(g)(2),’’. 
(f) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2008. 
(2) TREATMENT OF ALTERNATIVE MOTOR VE-
HICLE CREDIT AS PERSONAL CREDIT.—The amend-
ments made by subsection (e) shall apply to taxable 
years beginning after December 31, 2007. 
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102 
(g) APPLICATION
OF
EGTRRA SUNSET.—The 
amendment made by subsection (d)(1)(A) shall be subject 
to title IX of the Economic Growth and Tax Relief Rec-
onciliation Act of 2001 in the same manner as the provi-
sion of such Act to which such amendment relates. 
SEC. 725. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING 
REDUCTION UNITS AND ADVANCED INSULA-
TION. 
(a) IN GENERAL.—Section 4053 is amended by add-
ing at the end the following new paragraphs: 
‘‘(9) IDLING REDUCTION DEVICE.—Any device 
or system of devices which— 
‘‘(A) is designed to provide to a vehicle 
those services (such as heat, air conditioning, or 
electricity) that would otherwise require the op-
eration of the main drive engine while the vehi-
cle is temporarily parked or remains stationary 
using one or more devices affixed to a tractor, 
and 
‘‘(B) is certified by the Secretary of En-
ergy, in consultation with the Administrator of 
the Environmental Protection Agency and the 
Secretary of Transportation, to reduce idling of 
such vehicle at a motor vehicle rest stop or 
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103 
other location where such vehicles are tempo-
rarily parked or remain stationary. 
‘‘(10) ADVANCED INSULATION.—Any insulation 
that has an R value of not less than R35 per inch.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to sales or installations after the 
date of the enactment of this Act. 
SEC. 726. RESTRUCTURING OF NEW YORK LIBERTY ZONE 
TAX CREDITS. 
(a) IN GENERAL.—Part I of subchapter Y of chapter 
1 is amended by redesignating section 1400L as section 
1400K and by adding at the end the following new section: 
‘‘SEC. 1400L. NEW YORK LIBERTY ZONE TAX CREDITS. 
‘‘(a) IN GENERAL.—In the case of a New York Lib-
erty Zone governmental unit, there shall be allowed as a 
credit against any taxes imposed for any payroll period 
by section 3402 for which such governmental unit is liable 
under section 3403 an amount equal to so much of the 
portion of the qualifying project expenditure amount allo-
cated under subsection (b)(3) to such governmental unit 
for the calendar year as is allocated by such governmental 
unit to such period under subsection (b)(4). 
‘‘(b) 
QUALIFYING
PROJECT
EXPENDITURE 
AMOUNT.—For purposes of this section— 
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104 
‘‘(1) 
IN
GENERAL.—The 
term 
‘qualifying 
project expenditure amount’ means, with respect to 
any calendar year, the sum of— 
‘‘(A) the total expenditures paid or in-
curred during such calendar year by all New 
York Liberty Zone governmental units and the 
Port Authority of New York and New Jersey 
for any portion of qualifying projects located 
wholly within the City of New York, New York, 
and 
‘‘(B) any such expenditures— 
‘‘(i) paid or incurred in any preceding 
calendar year which begins after the date 
of enactment of this section, and 
‘‘(ii) not previously allocated under 
paragraph (3). 
‘‘(2) QUALIFYING PROJECT.—The term ‘quali-
fying project’ means any transportation infrastruc-
ture project, including highways, mass transit sys-
tems, railroads, airports, ports, and waterways, in or 
connecting with the New York Liberty Zone (as de-
fined in section 1400K(h)), which is designated as a 
qualifying project under this section jointly by the 
Governor of the State of New York and the Mayor 
of the City of New York, New York. 
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105 
‘‘(3) GENERAL ALLOCATION.— 
‘‘(A) IN GENERAL.—The Governor of the 
State of New York and the Mayor of the City 
of New York, New York, shall jointly allocate to 
each New York Liberty Zone governmental unit 
the portion of the qualifying project expenditure 
amount which may be taken into account by 
such governmental unit under subsection (a) for 
any calendar year in the credit period. 
‘‘(B) AGGREGATE LIMIT.—The aggregate 
amount which may be allocated under subpara-
graph (A) for all calendar years in the credit 
period shall not exceed $2,000,000,000. 
‘‘(C) 
ANNUAL
LIMIT.—The 
aggregate 
amount which may be allocated under subpara-
graph (A) for any calendar year in the credit 
period shall not exceed the sum of— 
‘‘(i) $115,000,000 ($425,000,000 in 
the case of the last 2 years in the credit 
period), plus 
‘‘(ii) the aggregate amount authorized 
to be allocated under this paragraph for all 
preceding calendar years in the credit pe-
riod which was not so allocated. 
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106 
‘‘(D) UNALLOCATED AMOUNTS AT END OF 
CREDIT PERIOD.—If, as of the close of the cred-
it period, the amount under subparagraph (B) 
exceeds the aggregate amount allocated under 
subparagraph (A) for all calendar years in the 
credit period, the Governor of the State of New 
York and the Mayor of the City of New York, 
New York, may jointly allocate to New York 
Liberty Zone governmental units for any cal-
endar year in the 5-year period following the 
credit period an amount equal to— 
‘‘(i) the lesser of— 
‘‘(I) such excess, or 
‘‘(II) the qualifying project ex-
penditure amount for such calendar 
year, reduced by 
‘‘(ii) the aggregate amount allocated 
under this subparagraph for all preceding 
calendar years. 
‘‘(4) ALLOCATION
TO
PAYROLL
PERIODS.— 
Each New York Liberty Zone governmental unit 
which has been allocated a portion of the qualifying 
project expenditure amount under paragraph (3) for 
a calendar year may allocate such portion to payroll 
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107 
periods beginning in such calendar year as such gov-
ernmental unit determines appropriate. 
‘‘(c) CARRYOVER OF UNUSED ALLOCATIONS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), if the amount allocated under subsection 
(b)(3) to a New York Liberty Zone governmental 
unit for any calendar year exceeds the aggregate 
taxes imposed by section 3402 for which such gov-
ernmental unit is liable under section 3403 for peri-
ods beginning in such year, such excess shall be car-
ried to the succeeding calendar year and added to 
the allocation of such governmental unit for such 
succeeding calendar year. 
‘‘(2) REALLOCATION.—If a New York Liberty 
Zone governmental unit does not use an amount al-
located to it under subsection (b)(3) within the time 
prescribed by the Governor of the State of New York 
and the Mayor of the City of New York, New York, 
then such amount shall after such time be treated 
for purposes of subsection (b)(3) in the same man-
ner as if it had never been allocated. 
‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
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114 
‘‘(2) the bond is issued by a State or local gov-
ernment, and 
‘‘(3) the issuer designates such bond for pur-
poses of this section. 
‘‘(b) REDUCED CREDIT AMOUNT.—The annual credit 
determined under section 54A(b) with respect to any 
qualified energy conservation bond shall be 70 percent of 
the amount so determined without regard to this sub-
section. 
‘‘(c) LIMITATION
ON AMOUNT
OF BONDS DES-
IGNATED.—The maximum aggregate face amount of 
bonds which may be designated under subsection (a) by 
any issuer shall not exceed the limitation amount allocated 
to such issuer under subsection (e). 
‘‘(d) NATIONAL LIMITATION ON AMOUNT OF BONDS 
DESIGNATED.—There is a national qualified energy con-
servation bond limitation of $3,000,000,000. 
‘‘(e) ALLOCATIONS.— 
‘‘(1) IN
GENERAL.—The limitation applicable 
under subsection (d) shall be allocated by the Sec-
retary among the States in proportion to the popu-
lation of the States. 
‘‘(2) ALLOCATIONS
TO
LARGEST
LOCAL
GOV-
ERNMENTS.— 
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115 
‘‘(A) IN
GENERAL.—In the case of any 
State in which there is a large local govern-
ment, each such local government shall be allo-
cated a portion of such State’s allocation which 
bears the same ratio to the State’s allocation 
(determined without regard to this subpara-
graph) as the population of such large local 
government bears to the population of such 
State. 
‘‘(B) ALLOCATION OF UNUSED LIMITATION 
TO STATE.—The amount allocated under this 
subsection to a large local government may be 
reallocated by such local government to the 
State in which such local government is located. 
‘‘(C) LARGE
LOCAL
GOVERNMENT.—For 
purposes of this section, the term ‘large local 
government’ means any municipality or county 
if such municipality or county has a population 
of 100,000 or more. 
‘‘(3) ALLOCATION
TO
ISSUERS; RESTRICTION 
ON
PRIVATE
ACTIVITY
BONDS.—Any allocation 
under this subsection to a State or large local gov-
ernment shall be allocated by such State or large 
local government to issuers within the State in a 
manner that results in not less than 70 percent of 
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