‘‘(A) with respect to a facility producing 
steel industry fuel, any facility (or any modi-
fication to a facility) which is placed in service 
before January 1, 2010, and 
‘‘(B) with respect to any other facility pro-
ducing refined coal, any facility placed in serv-
ice after the date of the enactment of the Amer-
ican Jobs Creation Act of 2004 and before Janu-
ary 1, 2010.’’. 
(d) COORDINATION WITH CREDIT FOR PRODUCING 
FUEL FROM A NONCONVENTIONAL SOURCE.— 
(1) IN GENERAL.—Subparagraph (B) of section 
45(e)(9) of the Internal Revenue Code of 1986 is 
amended— 
(A) by striking ‘‘The term’’ and inserting 
the following: 
‘‘(i) IN GENERAL.—The term’’, and 
(B) by adding at the end the following new 
clause: 
‘‘(ii) EXCEPTION FOR STEEL INDUSTRY 
COAL.—In the case of a facility producing 
steel industry fuel, clause (i) shall not apply 
to so much of the refined coal produced at 
such facility as is steel industry fuel.’’.
(2) NO DOUBLE BENEFIT.—Section 45K(g)(2) of 
such Code is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(E) COORDINATION WITH SECTION 45.—No 
credit shall be allowed with respect to any quali-
fied fuel which is steel industry fuel (as defined 
in section 45(c)(7)) if a credit is allowed to the 
taxpayer for such fuel under section 45.’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall apply to fuel produced and sold after Sep-
tember 30, 2008. 
SEC. 109. 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 
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 transmission 
facilities to which the election under this sub-
section 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 OPER-
ATIONAL 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 PROPERTY.— 
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
property which is located outside the United 
States.’’. 
(d) EFFECTIVE DATES.— 
(1) EXTENSION.—The amendments made by sub-
section (a) shall apply to transactions after December 
31, 2007. 
(2) TRANSFERS
OF
OPERATIONAL
CONTROL.— 
The amendment made by subsection (b) shall take ef-
fect 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. 
Subtitle B—Carbon Mitigation and 
Coal Provisions 
SEC. 111. 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 dollar 
amount in subparagraph (A), the Secretary is 
authorized to certify— 
‘‘(i) $800,000,000 for integrated gasifi-
cation combined cycle projects the applica-
tion for which is submitted during the pe-
riod described in paragraph (2)(A)(i), 
‘‘(ii) $500,000,000 for projects which 
use other advanced coal-based generation 
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 during
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 
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 subpara-
graph: 
‘‘(G) in the case of any project the applica-
tion for which is submitted during the period de-
scribed in subsection (d)(2)(A)(ii), the project in-
cludes equipment which separates and sequesters 
at least 65 percent (70 percent in the case of an 
application for reallocated credits under sub-
section (d)(4)) of such project’s total carbon diox-
ide 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 
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: 
‘‘(i) 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 maintain 
the separation and sequestration requirements of subsection 
(e)(1)(G).’’. 
(4) ADDITIONAL PRIORITY FOR RESEARCH PART-
NERSHIPS.—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-
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) DISCLOSURE OF ALLOCATIONS.—Section 48A(d) is 
amended by adding at the end the following new paragraph: 
‘‘(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 credit 
certified with respect to such applicant.’’. 
(e) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amendments made by this sec-
tion 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) DISCLOSURE OF ALLOCATIONS.—The amend-
ment made by subsection (d) shall apply to certifi-
cations made after the date of the enactment of this 
Act. 
(3) 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. 112. 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 
separates and sequesters at least 75 percent of 
such project’s total carbon dioxide emissions.’’. 
(c) RECAPTURE OF CREDIT FOR FAILURE TO SEQUES-
TER.—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 maintain 
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 paragraph:
‘‘(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 par-
ticipants who have a research partnership with 
an eligible educational institution (as defined in 
section 529(e)(5)).’’. 
(e) ELIGIBLE PROJECTS INCLUDE TRANSPORTATION 
GRADE LIQUID FUELS.—Section 48B(c)(7) (defining eligi-
ble entity) is amended by striking ‘‘and’’ at the end of sub-
paragraph (F), by striking the period at the end of subpara-
graph (G) and inserting ‘‘, and’’, and by adding at the end 
the following new subparagraph: 
‘‘(H) transportation grade liquid fuels.’’. 
(f) 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. 113. TEMPORARY INCREASE IN COAL EXCISE TAX; 
FUNDING OF BLACK LUNG DISABILITY TRUST 
FUND. 
(a) EXTENSION
OF TEMPORARY INCREASE.—Para-
graph (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’’. 
(b) RESTRUCTURING OF TRUST FUND DEBT.— 
(1) DEFINITIONS.—For purposes of this sub-
section— 
(A) MARKET VALUE OF THE OUTSTANDING 
REPAYABLE
ADVANCES, PLUS
ACCRUED
INTER-
EST.—The term ‘‘market value of the out-
standing repayable advances, plus accrued inter-
est’’ means the present value (determined by the 
Secretary of the Treasury as of the refinancing 
date and using the Treasury rate as the discount 
rate) of the stream of principal and interest pay-
ments derived assuming that each repayable ad-
vance that is outstanding on the refinancing 
date is due on the 30th anniversary of the end 
of the fiscal year in which the advance was made 
to the Trust Fund, and that all such principal
and interest payments are made on September 
30 of the applicable fiscal year. 
(B) REFINANCING DATE.—The term ‘‘refi-
nancing date’’ means the date occurring 2 days 
after the enactment of this Act. 
(C) REPAYABLE ADVANCE.—The term ‘‘re-
payable advance’’ means an amount that has 
been appropriated to the Trust Fund in order to 
make benefit payments and other expenditures 
that are authorized under section 9501 of the In-
ternal Revenue Code of 1986 and are required to 
be repaid when the Secretary of the Treasury de-
termines that monies are available in the Trust 
Fund for such purpose. 
(D) TREASURY RATE.—The term ‘‘Treasury 
rate’’ means a rate determined by the Secretary 
of the Treasury, taking into consideration cur-
rent market yields on outstanding marketable ob-
ligations of the United States of comparable ma-
turities. 
(E) TREASURY
1-YEAR
RATE.—The term 
‘‘Treasury 1-year rate’’ means a rate determined 
by the Secretary of the Treasury, taking into 
consideration current market yields on out-
standing marketable obligations of the United
States with remaining periods to maturity of 
approximately 1 year, to have been in effect as 
of the close of business 1 business day prior to 
the date on which the Trust Fund issues obliga-
tions to the Secretary of the Treasury under 
paragraph (2)(B). 
(2) REFINANCING
OF
OUTSTANDING
PRINCIPAL 
OF REPAYABLE ADVANCES AND UNPAID INTEREST ON 
SUCH ADVANCES.— 
(A) TRANSFER TO GENERAL FUND.—On the 
refinancing date, the Trust Fund shall repay the 
market value of the outstanding repayable ad-
vances, plus accrued interest, by transferring 
into the general fund of the Treasury the fol-
lowing sums: 
(i) The proceeds from obligations that 
the Trust Fund shall issue to the Secretary 
of the Treasury in such amounts as the Sec-
retaries of Labor and the Treasury shall de-
termine and bearing interest at the Treas-
ury rate, and that shall be in such forms 
and denominations and be subject to such 
other terms and conditions, including matu-
rity, as the Secretary of the Treasury shall 
prescribe.
(ii) All, or that portion, of the appro-
priation made to the Trust Fund pursuant 
to paragraph (3) that is needed to cover the 
difference defined in that paragraph. 
(B) REPAYMENT OF OBLIGATIONS.—In the 
event that the Trust Fund is unable to repay the 
obligations that it has issued to the Secretary of 
the Treasury under subparagraph (A)(i) and 
this subparagraph, or is unable to make benefit 
payments and other authorized expenditures, the 
Trust Fund shall issue obligations to the Sec-
retary of the Treasury in such amounts as may 
be necessary to make such repayments, pay-
ments, and expenditures, with a maturity of 1 
year, and bearing interest at the Treasury 1-year 
rate. These obligations shall be in such forms and 
denominations and be subject to such other terms 
and conditions as the Secretary of the Treasury 
shall prescribe. 
(C) AUTHORITY TO ISSUE OBLIGATIONS.— 
The Trust Fund is authorized to issue obliga-
tions to the Secretary of the Treasury under sub-
paragraphs (A)(i) and (B). The Secretary of the 
Treasury is authorized to purchase such obliga-
tions of the Trust Fund. For the purposes of
making such purchases, the Secretary of the 
Treasury may use as a public debt transaction 
the proceeds from the sale of any securities issued 
under chapter 31 of title 31, United States Code, 
and the purposes for which securities may be 
issued under such chapter are extended to in-
clude any purchase of such Trust Fund obliga-
tions under this subparagraph. 
(3) ONE-TIME APPROPRIATION.—There is hereby 
appropriated to the Trust Fund an amount sufficient 
to pay to the general fund of the Treasury the dif-
ference between— 
(A) the market value of the outstanding re-
payable advances, plus accrued interest; and 
(B) the proceeds from the obligations issued 
by the Trust Fund to the Secretary of the Treas-
ury under paragraph (2)(A)(i). 
(4) PREPAYMENT
OF
TRUST
FUND
OBLIGA-
TIONS.—The Trust Fund is authorized to repay any 
obligation issued to the Secretary of the Treasury 
under subparagraphs (A)(i) and (B) of paragraph (2) 
prior to its maturity date by paying a prepayment 
price that would, if the obligation being prepaid (in-
cluding all unpaid interest accrued thereon through 
the date of prepayment) were purchased by a third
party and held to the maturity date of such obliga-
tion, produce a yield to the third-party purchaser for 
the period from the date of purchase to the maturity 
date of such obligation substantially equal to the 
Treasury yield on outstanding marketable obligations 
of the United States having a comparable maturity to 
this period. 
SEC. 114. 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 
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 beginning 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 exported 
or shipped by the coal producer or a party re-
lated 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— 
(i) IN GENERAL.—If a coal producer or 
a party related to a coal producer has re-
ceived a judgment described in clause (iii), 
such coal producer shall be deemed to have 
established the export of coal to a foreign 
country or shipment of coal to a possession
of the United States under subparagraph 
(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 judgment 
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 constitutionality 
of any tax paid on exported coal under 
section 4121 of the Internal Revenue 
Code of 1986, and 
(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 de-
scribed 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 enact-
ment of this Act, 
then the Secretary shall pay to such exporter an 
amount equal to $0.825 per ton of such coal exported 
by the exporter or caused to be exported or shipped, 
or caused to be exported or shipped, by the exporter. 
(b) LIMITATIONS.—Subsection (a) shall not apply with 
respect to exported coal if a settlement with the Federal 
Government has been made with and accepted by, the coal 
producer, a party related to such coal producer, or the ex-
porter, 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 settlement or
stipulation entered into as of the date of the enactment of 
this Act, the terms of which contemplate a judgment con-
cerning 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 producer’’ 
means the person in whom is vested ownership of the 
coal immediately after the coal is severed from the 
ground, without regard to the existence of any con-
tractual arrangement for the sale or other disposition 
of the coal or the payment of any royalties between 
the producer and third parties. The term includes any 
person who extracts coal from coal waste refuse piles 
or from the silt waste product which results from the 
wet washing (or similar processing) 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 pro-
ducer or seller of such coal and—
(A) is indicated in the shipper’s export dec-
laration or other documentation as the exporter 
of record, or 
(B) actually exported such coal to a foreign 
country or shipped such coal to a possession of 
the United States, or caused such coal to be so 
exported or shipped. 
(3) RELATED PARTY.—The term ‘‘a party related 
to such coal producer’’ means a person who— 
(A) is related to such coal producer through 
any degree of common management, stock owner-
ship, 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 
(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 designee. 
(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 Sec-
retary 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 determination. 
(f) INTEREST.—Any refund paid pursuant to this sec-
tion shall be paid by the Secretary with interest from the 
date of overpayment determined by using the overpayment 
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 In-
ternal 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 exported 
by the exporter. 
(h) APPLICATION OF SECTION.—This section applies 
only to claims on coal exported or shipped on or after Octo-
ber 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 exporter to 
commence, or intervene in, any judicial or adminis-
trative proceeding concerning a claim for refund 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 pro-
ducers, this section shall not confer standing upon a 
coal producer to commence, or intervene in, any judi-
cial 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. 
SEC. 115. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRA-
TION. 
(a) IN GENERAL.—Subpart D of part IV of subchapter 
A of chapter 1 (relating to business credits) is amended by 
adding at the end the following new section: 
‘‘SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION. 
‘‘(a) GENERAL RULE.—For purposes of section 38, the 
carbon dioxide sequestration credit for any taxable year is 
an amount equal to the sum of— 
‘‘(1) $20 per metric ton of qualified carbon diox-
ide which is—
‘‘(A) captured by the taxpayer at a quali-
fied facility, and 
‘‘(B) disposed of by the taxpayer in secure 
geological storage, and 
‘‘(2) $10 per metric ton of qualified carbon diox-
ide which is— 
‘‘(A) captured by the taxpayer at a quali-
fied facility, and 
‘‘(B) used by the taxpayer as a tertiary 
injectant in a qualified enhanced oil or natural 
gas recovery project. 
‘‘(b) QUALIFIED CARBON DIOXIDE.—For purposes of 
this section— 
‘‘(1) IN GENERAL.—The term ‘qualified carbon 
dioxide’ means carbon dioxide captured from an in-
dustrial source which— 
‘‘(A) would otherwise be released into the 
atmosphere as industrial emission of greenhouse 
gas, and 
‘‘(B) is measured at the source of capture 
and verified at the point of disposal or injection. 
‘‘(2) RECYCLED
CARBON
DIOXIDE.—The term 
‘qualified carbon dioxide’ includes the initial deposit 
of captured carbon dioxide used as a tertiary 
injectant. Such term does not include carbon dioxide
that is re-captured, recycled, and re-injected as part 
of the enhanced oil and natural gas recovery process. 
‘‘(c) QUALIFIED FACILITY.—For purposes of this sec-
tion, the term ‘qualified facility’ means any industrial fa-
cility— 
‘‘(1) which is owned by the taxpayer, 
‘‘(2) at which carbon capture equipment is 
placed in service, and 
‘‘(3) which captures not less than 500,000 metric 
tons of carbon dioxide during the taxable year. 
‘‘(d) SPECIAL RULES AND OTHER DEFINITIONS.—For 
purposes of this section— 
‘‘(1) ONLY CARBON DIOXIDE CAPTURED AND DIS-
POSED
OF
OR
USED
WITHIN
THE
UNITED
STATES 
TAKEN INTO ACCOUNT.—The credit under this section 
shall apply only with respect to qualified carbon di-
oxide the capture and disposal or use of which is 
within— 
‘‘(A) the United States (within the meaning 
of section 638(1)), or 
‘‘(B) a possession of the United States 
(within the meaning of section 638(2)). 
‘‘(2) SECURE GEOLOGICAL STORAGE.—The Sec-
retary, in consultation with the Administrator of the 
Environmental Protection Agency, shall establish reg-
ulations for determining adequate security measures 
for the geological storage of carbon dioxide under sub-
section (a)(1)(B) such that the carbon dioxide does 
not escape into the atmosphere. Such term shall in-
clude 
storage 
at 
deep 
saline 
formations 
and 
unminable coal seems under such conditions as the 
Secretary may determine under such regulations. 
‘‘(3) TERTIARY INJECTANT.—The term ‘tertiary 
injectant’ has the same meaning as when used within 
section 193(b)(1). 
‘‘(4) QUALIFIED
ENHANCED
OIL
OR
NATURAL 
GAS
RECOVERY
PROJECT.—The term ‘qualified en-
hanced oil or natural gas recovery project’ has the 
meaning given the term ‘qualified enhanced oil recov-
ery project’ by section 43(c)(2), by substituting ‘crude 
oil or natural gas’ for ‘crude oil’ in subparagraph 
(A)(i) thereof. 
‘‘(5) CREDIT
ATTRIBUTABLE
TO
TAXPAYER.— 
Any credit under this section shall be attributable to 
the person that captures and physically or contrac-
tually ensures the disposal of or the use as a tertiary 
injectant of the qualified carbon dioxide, except to the 
extent provided in regulations prescribed by the Sec-
retary.
‘‘(6) RECAPTURE.—The Secretary shall, by regu-
lations, provide for recapturing the benefit of any 
credit allowable under subsection (a) with respect to 
any qualified carbon dioxide which ceases to be cap-
tured, disposed of, or used as a tertiary injectant in 
a manner consistent with the requirements of this sec-
tion. 
‘‘(7) INFLATION
ADJUSTMENT.—In the case of 
any taxable year beginning in a calendar year after 
2009, there shall be substituted for each dollar amount 
contained in subsection (a) an amount equal to the 
product of— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the inflation adjustment factor for 
such calendar year determined under section 
43(b)(3)(B) for such calendar year, determined 
by substituting ‘2008’ for ‘1990’. 
‘‘(e) APPLICATION OF SECTION.—The credit under this 
section shall apply with respect to qualified carbon dioxide 
before the end of the calendar year in which the Secretary, 
in consultation with the Administrator of the Environ-
mental Protection Agency, certifies that 75,000,000 metric 
tons of qualified carbon dioxide have been captured and dis-
posed of or used as a tertiary injectant.’’.
(b) CONFORMING AMENDMENT.—Section 38(b) (relat-
ing to general business credit) is amended by striking 
‘‘plus’’ at the end of paragraph (32), by striking the period 
at the end of paragraph (33) and inserting ‘‘, plus’’, and 
by adding at the end of following new paragraph: 
‘‘(34) the carbon dioxide sequestration credit de-
termined under section 45Q(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections for 
subpart B of part IV of subchapter A of chapter 1 (relating 
to other credits) is amended by adding at the end the fol-
lowing new section: 
‘‘Sec. 45Q. Credit for carbon dioxide sequestration.’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to carbon dioxide captured after the date 
of the enactment of this Act. 
SEC. 116. CERTAIN INCOME AND GAINS RELATING TO IN-
DUSTRIAL SOURCE CARBON DIOXIDE TREAT-
ED AS QUALIFYING INCOME FOR PUBLICLY 
TRADED PARTNERSHIPS. 
(a) IN
GENERAL.—Subparagraph (E) of section 
7704(d)(1) (defining qualifying income) is amended by in-
serting ‘‘or industrial source carbon dioxide’’ after ‘‘tim-
ber)’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall take effect on the date of the enactment of this 
Act, in taxable years ending after such date.
SEC. 117. 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 Internal Rev-
enue Code of 1986 to identify the types of and specific tax 
provisions that have the largest effects on carbon 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 2009 and 2010. 
TITLE 
II—TRANSPORTATION 
AND DOMESTIC FUEL SECU-
RITY PROVISIONS 
SEC. 201. 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 ‘cellulosic 
biofuel’ means any liquid fuel which is produced from
any lignocellulosic or hemicellulosic matter that is 
available on a renewable or recurring basis.’’. 
(b) CONFORMING AMENDMENTS.—Subsection (l) of sec-
tion 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 inserting 
‘‘CELLULOSIC BIOFUEL’’, and 
(3) by striking ‘‘CELLULOSIC BIOMASS ETHANOL’’ 
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. 202. 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.— 
(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 sec-
tion 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 amend-
ed by striking paragraph (3) and by redesig-
nating paragraphs (4) and (5) as paragraphs 
(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 ‘‘subsection 
(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)’’. 
(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 inserting ‘‘, or other equivalent standard 
approved by the Secretary’’ after ‘‘D396’’. 
(d) COPRODUCTION OF RENEWABLE DIESEL WITH PE-
TROLEUM FEEDSTOCK.— 
(1) IN
GENERAL.—Paragraph (3) of section 
40A(f) is amended by adding at the end the following 
new sentences: ‘‘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 section 45K(c)(3).’’. 
(2) CONFORMING AMENDMENT.—Paragraph (3) 
of section 40A(f) is amended by striking ‘‘(as defined 
in section 45K(c)(3))’’. 
(e) ELIGIBILITY OF CERTAIN AVIATION FUEL.—Sub-
section (f) of section 40A (relating to renewable diesel) is 
amended by adding at the end the following new paragraph: 
‘‘(4) CERTAIN AVIATION FUEL.— 
‘‘(A) IN GENERAL.—Except as provided in 
the last 3 sentences of paragraph (3), the term 
‘renewable diesel’ shall include fuel derived from 
biomass which meets the requirements of a De-
partment of Defense specification for military jet
fuel or an American Society of Testing and Ma-
terials specification for aviation turbine fuel. 
‘‘(B) APPLICATION OF MIXTURE CREDITS.— 
In the case of fuel which is treated as renewable 
diesel solely by reason of subparagraph (A), sub-
section (b)(1) and section 6426(c) shall be ap-
plied with respect to such fuel by treating ker-
osene as though it were diesel fuel.’’. 
(f) MODIFICATION RELATING TO DEFINITION OF AGRI- 
BIODIESEL.—Paragraph (2) of section 40A(d) (relating to 
agri-biodiesel) is amended by striking ‘‘and mustard seeds’’ 
and inserting ‘‘mustard seeds, and camelina’’. 
(g) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amendments made by this sec-
tion shall apply to fuel produced, and sold or used, 
after December 31, 2008. 
(2) COPRODUCTION
OF
RENEWABLE
DIESEL 
WITH
PETROLEUM
FEEDSTOCK.—The amendment 
made by subsection (d) shall apply to fuel produced, 
and sold or used, after the date of the enactment of 
this Act.
SEC. 203. CLARIFICATION THAT CREDITS FOR FUEL ARE DE-
SIGNED TO PROVIDE AN INCENTIVE FOR 
UNITED STATES PRODUCTION. 
(a) ALCOHOL FUELS CREDIT.—Subsection (d) of sec-
tion 40 is amended by adding at the end the following new 
paragraph: 
‘‘(7) LIMITATION TO ALCOHOL WITH CONNECTION 
TO THE UNITED STATES.—No credit shall be deter-
mined under this section with respect to any alcohol 
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.’’. 
(b) BIODIESEL FUELS CREDIT.—Subsection (d) of sec-
tion 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 de-
termined under this section with respect to any bio-
diesel 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 with re-
spect to any biodiesel or alternative fuel which is pro-
duced outside the United States for use as a fuel out-
side the United States. 
For purposes of this subsection, the term ‘United States’ in-
cludes 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. 204. EXTENSION AND MODIFICATION OF ALTERNATIVE 
FUEL CREDIT. 
(a) EXTENSION.— 
(1) ALTERNATIVE FUEL CREDIT.—Paragraph (4) 
of section 6426(d) (relating to alternative fuel credit) 
is amended by striking ‘‘September 30, 2009’’ and in-
serting ‘‘December 31, 2009’’. 
(2) ALTERNATIVE
FUEL
MIXTURE
CREDIT.— 
Paragraph (3) of section 6426(e) (relating to alter-
native fuel mixture credit) is amended by striking 
‘‘September 30, 2009’’ and inserting ‘‘December 31, 
2009’’. 
(3) PAYMENTS.—Subparagraph (C) of section 
6427(e)(5) (relating to termination) is amended by 
striking ‘‘September 30, 2009’’ and inserting ‘‘Decem-
ber 31, 2009’’. 
(b) MODIFICATIONS.— 
(1) ALTERNATIVE
FUEL
TO
INCLUDE
COM-
PRESSED
OR
LIQUIFIED
BIOMASS
GAS.—Paragraph 
(2) of section 6426(d) (relating to alternative fuel 
credit) is amended by striking ‘‘and’’ at the end of 
subparagraph (E), by redesignating subparagraph
(F) as subparagraph (G), and by inserting after sub-
paragraph (E) the following new subparagraph: 
‘‘(F) compressed or liquefied gas derived 
from biomass (as defined in section 45K(c)(3)), 
and’’. 
(2) CREDIT
ALLOWED
FOR
AVIATION
USE
OF 
FUEL.—Paragraph (1) of section 6426(d) is amended 
by inserting ‘‘sold by the taxpayer for use as a fuel 
in aviation,’’ after ‘‘motorboat,’’. 
(c) CARBON CAPTURE REQUIREMENT FOR CERTAIN 
FUELS.— 
(1) IN
GENERAL.—Subsection (d) of section 
6426, as amended by subsection (a), is amended by 
redesignating paragraph (4) as paragraph (5) and by 
inserting after paragraph (3) the following new para-
graph: 
‘‘(4) CARBON CAPTURE REQUIREMENT.— 
‘‘(A) IN
GENERAL.—The requirements of 
this paragraph are met if the fuel is certified, 
under such procedures as required by the Sec-
retary, as having been derived from coal pro-
duced at a gasification facility which separates 
and sequesters not less than the applicable per-
centage of such facility’s total carbon dioxide 
emissions.
‘‘(B) APPLICABLE PERCENTAGE.—For pur-
poses of subparagraph (A), the applicable per-
centage is— 
‘‘(i) 50 percent in the case of fuel pro-
duced after September 30, 2009, and on or 
before December 30, 2009, and 
‘‘(ii) 75 percent in the case of fuel pro-
duced after December 30, 2009.’’. 
(2) CONFORMING
AMENDMENT.—Subparagraph 
(E) of section 6426(d)(2) is amended by inserting 
‘‘which meets the requirements of paragraph (4) and 
which is’’ after ‘‘any liquid fuel’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to fuel sold or used after the date of the 
enactment of this Act. 
SEC. 205. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC 
DRIVE MOTOR VEHICLES. 
(a) PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE CRED-
IT.—Subpart B of part IV of subchapter A of chapter 1 
(relating to other credits) is amended by adding at the end 
the following new section: 
‘‘SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE 
MOTOR VEHICLES. 
‘‘(a) ALLOWANCE OF CREDIT.—
‘‘(1) IN GENERAL.—There shall be allowed as a 
credit against the tax imposed by this chapter for the 
taxable year an amount equal to the applicable 
amount with respect to each new qualified plug-in 
electric drive motor vehicle placed in service by the 
taxpayer during the taxable year. 
‘‘(2) APPLICABLE
AMOUNT.—For purposes of 
paragraph (1), the applicable amount is sum of— 
‘‘(A) $2,500, plus 
‘‘(B) $417 for each kilowatt hour of traction 
battery capacity in excess of 4 kilowatt hours. 
‘‘(b) LIMITATIONS.— 
‘‘(1) LIMITATION
BASED
ON
WEIGHT.—The 
amount of the credit allowed under subsection (a) by 
reason of subsection (a)(2) shall not exceed— 
‘‘(A) $7,500, in the case of any new quali-
fied plug-in electric drive motor vehicle with a 
gross vehicle weight rating of not more than 
10,000 pounds, 
‘‘(B) $10,000, in the case of any new quali-
fied plug-in electric drive motor vehicle with a 
gross vehicle weight rating of more than 10,000 
pounds but not more than 14,000 pounds, 
‘‘(C) $12,500, in the case of any new quali-
fied plug-in electric drive motor vehicle with a
gross vehicle weight rating of more than 14,000 
pounds but not more than 26,000 pounds, and 
‘‘(D) $15,000, in the case of any new quali-
fied plug-in electric drive motor vehicle with a 
gross vehicle weight rating of more than 26,000 
pounds. 
‘‘(2) LIMITATION ON NUMBER OF PASSENGER VE-
HICLES AND LIGHT TRUCKS ELIGIBLE FOR CREDIT.— 
‘‘(A) IN GENERAL.—In the case of a new 
qualified 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. 
‘‘(B) PHASEOUT PERIOD.—For purposes of 
this subsection, the phaseout period is the period 
beginning with the second calendar quarter fol-
lowing the calendar quarter which includes the 
first date on which the total number of such new 
qualified plug-in electric drive motor vehicles 
sold for use in the United States after December 
31, 2008, is at least 250,000. 
‘‘(C) APPLICABLE PERCENTAGE.—For pur-
poses of subparagraph (A), the applicable per-
centage is—
‘‘(i) 50 percent for the first 2 calendar 
quarters of the phaseout period, 
‘‘(ii) 25 percent for the 3d and 4th cal-
endar quarters of the phaseout period, and 
‘‘(iii) 0 percent for each calendar quar-
ter thereafter. 
‘‘(D) CONTROLLED GROUPS.—Rules similar 
to the rules of section 30B(f)(4) shall apply for 
purposes of this subsection. 
‘‘(c) NEW
QUALIFIED
PLUG-IN
ELECTRIC
DRIVE 
MOTOR VEHICLE.—For purposes of this section, the term 
‘new qualified plug-in electric drive motor vehicle’ means 
a motor vehicle— 
‘‘(1) which draws propulsion using a traction 
battery with at least 4 kilowatt hours of capacity, 
‘‘(2) which uses an offboard source of energy to 
recharge such battery, 
‘‘(3) which, in the case of a passenger vehicle or 
light truck which has a gross vehicle weight rating of 
not more than 8,500 pounds, has received a certificate 
of conformity under the Clean Air Act and meets or 
exceeds the equivalent qualifying California low emis-
sion vehicle standard under section 243(e)(2) of the 
Clean Air Act for that make and model year, and
‘‘(A) in the case of a vehicle having a gross 
vehicle weight rating of 6,000 pounds or less, the 
Bin 5 Tier II emission standard established in 
regulations prescribed by the Administrator of 
the Environmental Protection Agency under sec-
tion 202(i) of the Clean Air Act for that make 
and model year vehicle, and 
‘‘(B) in the case of a vehicle having a gross 
vehicle weight rating of more than 6,000 pounds 
but not more than 8,500 pounds, the Bin 8 Tier 
II emission standard which is so established, 
‘‘(4) the original use of which commences with 
the taxpayer, 
‘‘(5) which is acquired for use or lease by the 
taxpayer and not for resale, and 
‘‘(6) which is made by a manufacturer. 
‘‘(d) APPLICATION WITH OTHER CREDITS.— 
‘‘(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 character 
subject to an allowance for depreciation shall be treat-
ed 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 al-
lowable under subpart A for such taxable year. 
‘‘(B) LIMITATION
BASED
ON
AMOUNT
OF 
TAX.—In the case of a taxable year to which sec-
tion 26(a)(2) does not apply, the credit allowed 
under subsection (a) for any taxable year (deter-
mined after application of paragraph (1)) shall 
not exceed the excess of— 
‘‘(i) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax 
imposed by section 55, over 
‘‘(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. 
‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.—For 
purposes of this section— 
‘‘(1) MOTOR VEHICLE.—The term ‘motor vehicle’ 
has the meaning given such term by section 30(c)(2). 
‘‘(2) OTHER TERMS.—The terms ‘passenger auto-
mobile’, ‘light truck’, and ‘manufacturer’ have the
meanings given such terms in regulations prescribed 
by the Administrator of the Environmental Protection 
Agency for purposes of the administration of title II 
of the Clean Air Act (42 U.S.C. 7521 et seq.). 
‘‘(3) TRACTION
BATTERY
CAPACITY.—Traction 
battery capacity shall be measured in kilowatt hours 
from a 100 percent state of charge to a zero percent 
state of charge. 
‘‘(4) REDUCTION IN BASIS.—For purposes of this 
subtitle, the basis of any property for which a credit 
is allowable under subsection (a) shall be reduced by 
the amount of such credit so allowed. 
‘‘(5) NO DOUBLE BENEFIT.—The amount of any 
deduction or other credit allowable under this chapter 
for a new qualified plug-in electric drive motor vehi-
cle shall be reduced by the amount of credit allowed 
under subsection (a) for such vehicle for the taxable 
year. 
‘‘(6) PROPERTY USED BY TAX-EXEMPT ENTITY.— 
In the case of a vehicle the use of which is described 
in paragraph (3) or (4) of section 50(b) and which 
is not subject to a lease, the person who sold such ve-
hicle to the person or entity using such vehicle shall 
be treated as the taxpayer that placed such vehicle in 
service, but only if such person clearly discloses to
such person or entity in a document the amount of 
any credit allowable under subsection (a) with respect 
to such vehicle (determined without regard to sub-
section (b)(2)). 
‘‘(7) PROPERTY USED OUTSIDE UNITED STATES, 
ETC., NOT QUALIFIED.—No credit shall be allowable 
under subsection (a) with respect to any property re-
ferred to in section 50(b)(1) or with respect to the 
portion of the cost of any property taken into account 
under section 179. 
‘‘(8) RECAPTURE.—The Secretary shall, by regu-
lations, 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 (including recapture in the case of a lease 
period of less than the economic life of a vehicle). 
‘‘(9) ELECTION TO NOT TAKE CREDIT.—No credit 
shall be allowed under subsection (a) for any vehicle 
if the taxpayer elects not to have this section apply 
to such vehicle. 
‘‘(10) INTERACTION
WITH
AIR
QUALITY
AND 
MOTOR VEHICLE SAFETY STANDARDS.—Unless other-
wise provided in this section, a motor vehicle shall 
not be considered eligible for a credit under this sec-
tion unless such vehicle is in compliance with—
‘‘(A) the applicable provisions of the Clean 
Air Act for the applicable make and model year 
of the vehicle (or applicable air quality provi-
sions of State law in the case of a State which 
has adopted such provision under a waiver 
under section 209(b) of the Clean Air Act), and 
‘‘(B) the motor vehicle safety provisions of 
sections 30101 through 30169 of title 49, United 
States Code. 
‘‘(f) REGULATIONS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the Secretary shall promulgate such regula-
tions as necessary to carry out the provisions of this 
section. 
‘‘(2) COORDINATION IN PRESCRIPTION OF CER-
TAIN REGULATIONS.—The Secretary of the Treasury, 
in coordination with the Secretary of Transportation 
and the Administrator of the Environmental Protec-
tion Agency, shall prescribe such regulations as nec-
essary to determine whether a motor vehicle meets the 
requirements to be eligible for a credit under this sec-
tion. 
‘‘(g) TERMINATION.—This section shall not apply to 
property purchased after December 31, 2014.’’.
(b) COORDINATION WITH ALTERNATIVE MOTOR VEHI-
CLE 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 (d) thereof) shall not be 
taken into account under this section.’’. 
(c) CREDIT MADE PART
OF GENERAL BUSINESS 
CREDIT.—Section 38(b), as amended by this Act, is amend-
ed by striking ‘‘plus’’ at the end of paragraph (33), by strik-
ing the period at the end of paragraph (34) and inserting 
‘‘plus’’, and by adding at the end the following new para-
graph: 
‘‘(35) the portion of the new qualified plug-in 
electric drive motor vehicle credit to which section 
30D(d)(1) applies.’’. 
(d) CONFORMING AMENDMENTS.— 
(1)(A) Section 24(b)(3)(B), as amended by sec-
tion 106, is amended by striking ‘‘and 25D’’ and in-
serting ‘‘25D, and 30D’’. 
(B) Section 25(e)(1)(C)(ii) is amended by insert-
ing ‘‘30D,’’ after ‘‘25D,’’.
(C) Section 25B(g)(2), as amended by section 
106, is amended by striking ‘‘and 25D’’ and inserting 
‘‘, 25D, and 30D’’. 
(D) Section 26(a)(1), as amended by section 106, 
is amended by striking ‘‘and 25D’’ and inserting 
‘‘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(e)(4).’’. 
(3) Section 6501(m) is amended by inserting 
‘‘30D(e)(9),’’ after ‘‘30C(e)(5),’’. 
(4) The table of sections for subpart B of part IV 
of subchapter A of chapter 1 is amended by adding 
at the end the following new item: 
‘‘Sec. 30D. New qualified plug-in electric drive motor vehicles.’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
(f) APPLICATION OF EGTRRA SUNSET.—The amend-
ment made by subsection (d)(1)(A) shall be subject to title
IX of the Economic Growth and Tax Relief Reconciliation 
Act of 2001 in the same manner as the provision of such 
Act to which such amendment relates. 
SEC. 206. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING 
REDUCTION UNITS AND ADVANCED INSULA-
TION. 
(a) IN GENERAL.—Section 4053 is amended by adding 
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 oper-
ation of the main drive engine while the vehicle 
is temporarily parked or remains stationary 
using one or more devices affixed to a tractor, 
and 
‘‘(B) is determined by the Administrator of 
the Environmental Protection Agency, in con-
sultation with the Secretary of Energy and the 
Secretary of Transportation, to reduce idling of 
such vehicle at a motor vehicle rest stop or other 
location where such vehicles are temporarily 
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. 207. ALTERNATIVE FUEL VEHICLE REFUELING PROP-
ERTY CREDIT. 
(a) EXTENSION OF CREDIT.—Paragraph (2) of section 
30C(g) is amended by striking ‘‘December 31, 2009’’ and 
inserting ‘‘December 31, 2010’’. 
(b) INCLUSION OF ELECTRICITY AS A CLEAN-BURNING 
FUEL.—Section 30C(c)(2) is amended by adding at the end 
the following new subparagraph: 
‘‘(C) Electricity.’’. 
(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. 208. CERTAIN INCOME AND GAINS RELATING TO ALCO-
HOL 
FUELS 
AND 
MIXTURES, 
BIODIESEL 
FUELS AND MIXTURES, AND ALTERNATIVE 
FUELS AND MIXTURES TREATED AS QUALI-
FYING INCOME FOR PUBLICLY TRADED PART-
NERSHIPS. 
(a) IN
GENERAL.—Subparagraph (E) of section 
7704(d)(1), as amended by this Act, is amended by striking 
‘‘or industrial source carbon dioxide’’ and inserting ‘‘, in-
dustrial source carbon dioxide, or the transportation or 
storage of any fuel described in subsection (b), (c), (d), or 
(e) of section 6426, or any alcohol fuel defined in section 
6426(b)(4)(A) or any biodiesel fuel as defined in section 
40A(d)(1)’’ after ‘‘timber)’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall take effect on the date of the enactment of this 
Act, in taxable years ending after such date. 
SEC. 209. EXTENSION AND MODIFICATION OF ELECTION TO 
EXPENSE CERTAIN REFINERIES. 
(a) EXTENSION.—Paragraph (1) of section 179C(c) 
(relating to qualified refinery property) is amended— 
(1) by striking ‘‘January 1, 2012’’ in subpara-
graph (B) and inserting ‘‘January 1, 2014’’, and 
(2) by striking ‘‘January 1, 2008’’ each place it 
appears in subparagraph (F) and inserting ‘‘January 
1, 2010’’.
(b) INCLUSION OF FUEL DERIVED FROM SHALE AND 
TAR SANDS.— 
(1) IN GENERAL.—Subsection (d) of section 179C 
is amended by inserting ‘‘, or directly from shale or 
tar sands’’ after ‘‘(as defined in section 45K(c))’’. 
(2) CONFORMING AMENDMENT.—Paragraph (2) 
of section 179C(e) is amended by inserting ‘‘shale, tar 
sands, or’’ before ‘‘qualified fuels’’. 
(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. 
SEC. 210. EXTENSION OF SUSPENSION OF TAXABLE INCOME 
LIMIT ON PERCENTAGE DEPLETION FOR OIL 
AND NATURAL GAS PRODUCED FROM MAR-
GINAL PROPERTIES. 
Subparagraph (H) of section 613A(c)(6) (relating to 
oil and gas produced from marginal properties) is amended 
by striking ‘‘for any taxable year’’ and all that follows and 
inserting ‘‘for any taxable year— 
‘‘(i) beginning after December 31, 
1997, and before January 1, 2008, or 
‘‘(ii) beginning after December 31, 
2008, and before January 1, 2010.’’.
SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE 
COMMUTERS. 
(a) IN GENERAL.—Paragraph (1) of section 132(f) is 
amended by adding at the end the following: 
‘‘(D) Any qualified bicycle commuting re-
imbursement.’’. 
(b) LIMITATION ON EXCLUSION.—Paragraph (2) of 
section 132(f) is amended by striking ‘‘and’’ at the end of 
subparagraph (A), by striking the period at the end of sub-
paragraph (B) and inserting ‘‘, and’’, and by adding at 
the end the following new subparagraph: 
‘‘(C) the applicable annual limitation in 
the case of any qualified bicycle commuting re-
imbursement.’’. 
(c) DEFINITIONS.—Paragraph (5) of section 132(f) is 
amended by adding at the end the following: 
‘‘(F) DEFINITIONS
RELATED
TO
BICYCLE 
COMMUTING REIMBURSEMENT.— 
‘‘(i) QUALIFIED
BICYCLE
COMMUTING 
REIMBURSEMENT.—The term ‘qualified bi-
cycle commuting reimbursement’ means, 
with respect to any calendar year, any em-
ployer reimbursement during the 15-month 
period beginning with the first day of such 
calendar year for reasonable expenses in-
curred by the employee during such cal-
endar year for the purchase of a bicycle and 
bicycle improvements, repair, and storage, 
if such bicycle is regularly used for travel 
between the employee’s residence and place 
of employment. 
‘‘(ii) APPLICABLE
ANNUAL
LIMITA-
TION.—The term ‘applicable annual limita-
tion’ means, with respect to any employee 
for any calendar year, the product of $20 
multiplied by the number of qualified bicy-
cle commuting months during such year. 
‘‘(iii) QUALIFIED BICYCLE COMMUTING 
MONTH.—The term ‘qualified bicycle com-
muting month’ means, with respect to any 
employee, any month during which such 
employee— 
‘‘(I) regularly uses the bicycle for 
a substantial portion of the travel be-
tween the employee’s residence and 
place of employment, and 
‘‘(II) does not receive any benefit 
described in subparagraph (A), (B), or 
(C) of paragraph (1).’’. 
(d) CONSTRUCTIVE RECEIPT
OF BENEFIT.—Para-
graph (4) of section 132(f) is amended by inserting ‘‘(other
than a qualified bicycle commuting reimbursement)’’ after 
‘‘qualified transportation fringe’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
TITLE III—ENERGY CONSERVA-
TION AND EFFICIENCY PROVI-
SIONS 
SEC. 301. QUALIFIED ENERGY CONSERVATION BONDS. 
(a) IN GENERAL.—Subpart I of part IV of subchapter 
A of chapter 1, as amended by section 107, is amended by 
adding at the end the following new section: 
‘‘SEC. 54D. QUALIFIED ENERGY CONSERVATION BONDS. 
‘‘(a) QUALIFIED ENERGY CONSERVATION BOND.—For 
purposes of this subchapter, the term ‘qualified energy con-
servation bond’ means any bond issued as part of an issue 
if— 
‘‘(1) 100 percent of the available project proceeds 
of such issue are to be used for one or more qualified 
conservation purposes, 
‘‘(2) the bond is issued by a State or local gov-
ernment, and 
‘‘(3) the issuer designates such bond for purposes 
of this section.
‘‘(b) REDUCED CREDIT AMOUNT.—The annual credit 
determined under section 54A(b) with respect to any quali-
fied energy conservation bond shall be 70 percent of the 
amount so determined without regard to this subsection. 
‘‘(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 $800,000,000. 
‘‘(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 GOVERN-
MENTS.— 
‘‘(A) IN
GENERAL.—In the case of any 
State in which there is a large local government, 
each such local government shall be allocated a 
portion of such State’s allocation which bears the 
same ratio to the State’s allocation (determined 
without regard to this subparagraph) as the pop-
ulation 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 re-
allocated 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 gov-
ernment’ 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 government 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 the allocation to such 
State or large local government being used to des-
ignate bonds which are not private activity bonds. 
‘‘(f) QUALIFIED CONSERVATION PURPOSE.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified conserva-
tion purpose’ means any of the following:
‘‘(A) Capital expenditures incurred for pur-
poses of— 
‘‘(i) reducing energy consumption in 
publicly-owned buildings by at least 20 per-
cent, 
‘‘(ii) implementing green community 
programs, 
‘‘(iii) rural development involving the 
production of electricity from renewable en-
ergy resources, or 
‘‘(iv) any qualified facility (as deter-
mined under section 45(d) without regard 
to paragraphs (8) and (10) thereof and 
without regard to any placed in service 
date). 
‘‘(B) Expenditures with respect to research 
facilities, and research grants, to support re-
search in— 
‘‘(i) development of cellulosic ethanol 
or other nonfossil fuels, 
‘‘(ii) technologies for the capture and 
sequestration of carbon dioxide produced 
through the use of fossil fuels,
‘‘(iii) increasing the efficiency of exist-
ing technologies for producing nonfossil 
fuels, 
‘‘(iv) automobile battery technologies 
and other technologies to reduce fossil fuel 
consumption in transportation, or 
‘‘(v) technologies to reduce energy use 
in buildings. 
‘‘(C) Mass commuting facilities and related 
facilities that reduce the consumption of energy, 
including expenditures to reduce pollution from 
vehicles used for mass commuting. 
‘‘(D) Demonstration projects designed to 
promote the commercialization of— 
‘‘(i) green building technology, 
‘‘(ii) conversion of agricultural waste 
for use in the production of fuel or other-
wise, 
‘‘(iii) advanced battery manufacturing 
technologies, 
‘‘(iv) technologies to reduce peak use of 
electricity, or 
‘‘(v) technologies for the capture and 
sequestration of carbon dioxide emitted from
102 
(c) MODIFICATION
OF WATER HEATER REQUIRE-
MENTS.—Section 25C(d)(3)(E) is amended by inserting ‘‘or 
a thermal efficiency of at least 90 percent’’ after ‘‘0.80’’. 
(d) COORDINATION WITH CREDIT
FOR QUALIFIED 
GEOTHERMAL HEAT PUMP PROPERTY EXPENDITURES.— 
(1) IN
GENERAL.—Paragraph (3) of section 
25C(d), as amended by subsections (b) and (c), is 
amended by striking subparagraph (C) and by redes-
ignating subparagraphs (D), (E), and (F) as sub-
paragraphs (C), (D), and (E), respectively. 
(2) CONFORMING
AMENDMENT.—Subparagraph 
(C) of section 25C(d)(2) is amended to read as fol-
lows: 
‘‘(C) REQUIREMENTS AND STANDARDS FOR 
AIR
CONDITIONERS
AND
HEAT
PUMPS.—The 
standards and requirements prescribed by the 
Secretary under subparagraph (B) with respect 
to the energy efficiency ratio (EER) for central 
air conditioners and electric heat pumps— 
‘‘(i) shall require measurements to be 
based on published data which is tested by 
manufacturers at 95 degrees Fahrenheit, 
and 
‘‘(ii) may be based on the certified 
data of the Air Conditioning and Refrigera-
103 
tion Institute that are prepared in partner-
ship with the Consortium for Energy Effi-
ciency.’’. 
(e) MODIFICATION OF QUALIFIED ENERGY EFFICIENCY 
IMPROVEMENTS.— 
(1) IN
GENERAL.—Paragraph (1) of section 
25C(c) is amended by inserting ‘‘, or an asphalt roof 
with appropriate cooling granules,’’ before ‘‘which 
meet the Energy Star program requirements’’. 
(2) BUILDING
ENVELOPE
COMPONENT.—Sub-
paragraph (D) of section 25C(c)(2) is amended— 
(A) by inserting ‘‘or asphalt roof’’ after 
‘‘metal roof’’, and 
(B) by inserting ‘‘or cooling granules’’ after 
‘‘pigmented coatings’’. 
(f) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made this section shall 
apply to expenditures made after December 31, 2008. 
(2) MODIFICATION OF QUALIFIED ENERGY EFFI-
CIENCY IMPROVEMENTS.—The amendments made by 
subsection (e) shall apply to property placed in serv-
ice after the date of the enactment of this Act.
104 
SEC. 303. ENERGY EFFICIENT COMMERCIAL BUILDINGS DE-
DUCTION. 
Subsection (h) of section 179D is amended by striking 
‘‘December 31, 2008’’ and inserting ‘‘December 31, 2013’’. 
SEC. 304. NEW ENERGY EFFICIENT HOME CREDIT. 
Subsection (g) of section 45L (relating to termination) 
is amended by striking ‘‘December 31, 2008’’ and inserting 
‘‘December 31, 2009’’. 
SEC. 305. MODIFICATIONS OF ENERGY EFFICIENT APPLI-
ANCE CREDIT FOR APPLIANCES PRODUCED 
AFTER 2007. 
(a) IN GENERAL.—Subsection (b) of section 45M is 
amended to read as follows: 
‘‘(b) APPLICABLE AMOUNT.—For purposes of sub-
section (a)— 
‘‘(1) DISHWASHERS.—The applicable amount 
is— 
‘‘(A) $45 in the case of a dishwasher which 
is manufactured in calendar year 2008 or 2009 
and which uses no more than 324 kilowatt hours 
per year and 5.8 gallons per cycle, and 
‘‘(B) $75 in the case of a dishwasher which 
is manufactured in calendar year 2008, 2009, or 
2010 and which uses no more than 307 kilowatt 
hours per year and 5.0 gallons per cycle (5.5 gal-
105 
lons per cycle for dishwashers designed for great-
er than 12 place settings). 
‘‘(2) 
CLOTHES
WASHERS.—The 
applicable 
amount is— 
‘‘(A) $75 in the case of a residential top- 
loading clothes washer manufactured in calendar 
year 2008 which meets or exceeds a 1.72 modi-
fied energy factor and does not exceed a 8.0 
water consumption factor, 
‘‘(B) $125 in the case of a residential top- 
loading clothes washer manufactured in calendar 
year 2008 or 2009 which meets or exceeds a 1.8 
modified energy factor and does not exceed a 7.5 
water consumption factor, 
‘‘(C) $150 in the case of a residential or 
commercial clothes washer manufactured in cal-
endar year 2008, 2009, or 2010 which meets or 
exceeds 2.0 modified energy factor and does not 
exceed a 6.0 water consumption factor, and 
‘‘(D) $250 in the case of a residential or 
commercial clothes washer manufactured in cal-
endar year 2008, 2009, or 2010 which meets or 
exceeds 2.2 modified energy factor and does not 
exceed a 4.5 water consumption factor.
106 
‘‘(3) REFRIGERATORS.—The applicable amount 
is— 
‘‘(A) $50 in the case of a refrigerator which 
is manufactured in calendar year 2008, and con-
sumes at least 20 percent but not more than 22.9 
percent less kilowatt hours per year than the 
2001 energy conservation standards, 
‘‘(B) $75 in the case of a refrigerator which 
is manufactured in calendar year 2008 or 2009, 
and consumes at least 23 percent but no more 
than 24.9 percent less kilowatt hours per year 
than the 2001 energy conservation standards, 
‘‘(C) $100 in the case of a refrigerator 
which is manufactured in calendar year 2008, 
2009, or 2010, and consumes at least 25 percent 
but not more than 29.9 percent less kilowatt 
hours per year than the 2001 energy conserva-
tion standards, and 
‘‘(D) $200 in the case of a refrigerator man-
ufactured in calendar year 2008, 2009, or 2010 
and which consumes at least 30 percent less en-
ergy than the 2001 energy conservation stand-
ards.’’. 
(b) ELIGIBLE PRODUCTION.—
107 
(1) SIMILAR
TREATMENT
FOR
ALL
APPLI-
ANCES.—Subsection (c) of section 45M is amended— 
(A) by striking paragraph (2), 
(B) by striking ‘‘(1) IN GENERAL’’ and all 
that follows through ‘‘the eligible’’ and inserting 
‘‘The eligible’’, 
(C) by moving the text of such subsection in 
line with the subsection heading, and 
(D) by redesignating subparagraphs (A) 
and (B) as paragraphs (1) and (2), respectively, 
and by moving such paragraphs 2 ems to the 
left. 
(2) MODIFICATION
OF
BASE
PERIOD.—Para-
graph (2) of section 45M(c), as amended by para-
graph (1), is amended by striking ‘‘3-calendar year’’ 
and inserting ‘‘2-calendar year’’. 
(c) TYPES OF ENERGY EFFICIENT APPLIANCES.—Sub-
section (d) of section 45M is amended to read as follows: 
‘‘(d) TYPES OF ENERGY EFFICIENT APPLIANCE.—For 
purposes of this section, the types of energy efficient appli-
ances are— 
‘‘(1) dishwashers described in subsection (b)(1), 
‘‘(2) clothes washers described in subsection 
(b)(2), and
108 
‘‘(3) 
refrigerators 
described 
in 
subsection 
(b)(3).’’. 
(d) AGGREGATE CREDIT AMOUNT ALLOWED.— 
(1) INCREASE IN LIMIT.—Paragraph (1) of sec-
tion 45M(e) is amended to read as follows: 
‘‘(1) AGGREGATE CREDIT AMOUNT ALLOWED.— 
The aggregate amount of credit allowed under sub-
section (a) with respect to a taxpayer for any taxable 
year shall not exceed $75,000,000 reduced by the 
amount of the credit allowed under subsection (a) to 
the taxpayer (or any predecessor) for all prior taxable 
years beginning after December 31, 2007.’’. 
(2) EXCEPTION
FOR
CERTAIN
REFRIGERATOR 
AND CLOTHES WASHERS.—Paragraph (2) of section 
45M(e) is amended to read as follows: 
‘‘(2) AMOUNT ALLOWED FOR CERTAIN REFRIG-
ERATORS AND CLOTHES WASHERS.—Refrigerators de-
scribed in subsection (b)(3)(D) and clothes washers 
described in subsection (b)(2)(D) shall not be taken 
into account under paragraph (1).’’. 
(e) QUALIFIED ENERGY EFFICIENT APPLIANCES.— 
(1) IN
GENERAL.—Paragraph (1) of section 
45M(f) is amended to read as follows:
109 
‘‘(1) QUALIFIED
ENERGY
EFFICIENT
APPLI-
ANCE.—The term ‘qualified energy efficient appliance’ 
means— 
‘‘(A) any dishwasher described in subsection 
(b)(1), 
‘‘(B) any clothes washer described in sub-
section (b)(2), and 
‘‘(C) any refrigerator described in sub-
section (b)(3).’’. 
(2) CLOTHES
WASHER.—Section 45M(f)(3) is 
amended by inserting ‘‘commercial’’ before ‘‘residen-
tial’’ the second place it appears. 
(3) 
TOP-LOADING
CLOTHES
WASHER.—Sub-
section (f) of section 45M is amended by redesignating 
paragraphs (4), (5), (6), and (7) as paragraphs (5), 
(6), (7), and (8), respectively, and by inserting after 
paragraph (3) the following new paragraph: 
‘‘(4) 
TOP-LOADING
CLOTHES
WASHER.—The 
term ‘top-loading clothes washer’ means a clothes 
washer which has the clothes container compartment 
access located on the top of the machine and which 
operates on a vertical axis.’’. 
(4) REPLACEMENT OF ENERGY FACTOR.—Section 
45M(f)(6), as redesignated by paragraph (3), is 
amended to read as follows:
110 
‘‘(6) MODIFIED
ENERGY
FACTOR.—The term 
‘modified energy factor’ means the modified energy 
factor established by the Department of Energy for 
compliance with the Federal energy conservation 
standard.’’. 
(5) GALLONS PER CYCLE; WATER CONSUMPTION 
FACTOR.—Section 45M(f), as amended by paragraph 
(3), is amended by adding at the end the following: 
‘‘(9) GALLONS PER CYCLE.—The term ‘gallons 
per cycle’ means, with respect to a dishwasher, the 
amount of water, expressed in gallons, required to 
complete a normal cycle of a dishwasher. 
‘‘(10) WATER CONSUMPTION FACTOR.—The term 
‘water consumption factor’ means, with respect to a 
clothes washer, the quotient of the total weighted per- 
cycle water consumption divided by the cubic foot (or 
liter) capacity of the clothes washer.’’. 
(f) EFFECTIVE DATE.—The amendments made by this 
section shall apply to appliances produced after December 
31, 2007. 
SEC. 306. ACCELERATED RECOVERY PERIOD FOR DEPRE-
CIATION OF SMART METERS AND SMART 
GRID SYSTEMS. 
(a) IN GENERAL.—Section 168(e)(3)(D) is amended 
by striking ‘‘and’’ at the end of clause (i), by striking the
121 
or any primary product thereof during such tax-
able year. 
‘‘(C) PRIMARY PRODUCT.—For purposes of 
this paragraph, the term ‘primary product’ has 
the same meaning as when used in section 
927(a)(2)(C), as in effect before its repeal.’’. 
(b) CONFORMING
AMENDMENT.—Section 199(d)(2) 
(relating to application to individuals) is amended by 
striking ‘‘subsection (a)(1)(B)’’ and inserting ‘‘subsections 
(a)(1)(B) and (d)(9)(A)(iii)’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
SEC. 402. ELIMINATION OF THE DIFFERENT TREATMENT OF 
FOREIGN OIL AND GAS EXTRACTION INCOME 
AND FOREIGN OIL RELATED INCOME FOR 
PURPOSES OF THE FOREIGN TAX CREDIT. 
(a) IN GENERAL.—Subsections (a) and (b) of section 
907 (relating to special rules in case of foreign oil and gas 
income) are amended to read as follows: 
‘‘(a) REDUCTION IN AMOUNT ALLOWED AS FOREIGN 
TAX UNDER SECTION 901.—In applying section 901, the 
amount of any foreign oil and gas taxes paid or accrued 
(or deemed to have been paid) during the taxable year 
which would (but for this subsection) be taken into account