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placed in service date) owned by a qualified bor-
rower. 
‘‘(B) REFINANCING
RULES.—For purposes 
of paragraph (1)(B), a qualified project may be 
refinanced with proceeds of a clean renewable en-
ergy bond only if the indebtedness being refi-
nanced (including any obligation directly or in-
directly refinanced by such indebtedness) was 
originally incurred by a qualified borrower after 
the date of the enactment of this section. 
‘‘(C) REIMBURSEMENT.—For purposes of 
paragraph (1)(B), a clean renewable energy bond 
may be issued to reimburse a qualified borrower 
for amounts paid after the date of the enactment 
of this section with respect to a qualified project, 
but only if— 
‘‘(i) prior to the payment of the origi-
nal expenditure, the qualified borrower de-
clared its intent to reimburse such expendi-
ture with the proceeds of a clean renewable 
energy bond, 
‘‘(ii) not later than 60 days after pay-
ment of the original expenditure, the quali-
fied issuer adopts an official intent to reim-
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burse the original expenditure with such 
proceeds, and 
‘‘(iii) the reimbursement is made not 
later than 18 months after the date the 
original expenditure is paid. 
‘‘(D) TREATMENT OF CHANGES IN USE.— 
For purposes of paragraph (1)(B), the proceeds 
of an issue shall not be treated as used for a 
qualified project to the extent that a qualified 
borrower takes any action within its control 
which causes such proceeds not to be used for a 
qualified project. The Secretary shall prescribe 
regulations specifying remedial actions that may 
be taken (including conditions to taking such re-
medial actions) to prevent an action described in 
the preceding sentence from causing a bond to 
fail to be a clean renewable energy bond. 
‘‘(e) MATURITY LIMITATIONS.— 
‘‘(1) DURATION OF TERM.—A bond shall not be 
treated as a clean renewable energy bond if the matu-
rity of such bond exceeds the maximum term deter-
mined by the Secretary under paragraph (2) with re-
spect to such bond. 
‘‘(2) MAXIMUM
TERM.—During each calendar 
month, the Secretary shall determine the maximum
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term permitted under this paragraph for bonds issued 
during the following calendar month. Such maximum 
term shall be the term which the Secretary estimates 
will result in the present value of the obligation to 
repay the principal on the bond being equal to 50 
percent of the face amount of such bond. Such present 
value shall be determined using as a discount rate the 
average annual interest rate of tax of tax-exempt obli-
gations having a term of 10 years or more which are 
issued during the month. If the term as so determined 
is not a multiple of a whole year, such term shall be 
rounded to the next highest whole year. 
‘‘(3) RATABLE
PRINCIPAL
AMORTIZATION
RE-
QUIRED.—A bond shall not be treated as a clean re-
newable energy bond unless it is part of an issue 
which provides for an equal amount of principal to 
be paid by the qualified issuer during each calendar 
year that the issue is outstanding. 
‘‘(f) LIMITATION
ON
AMOUNT
OF
BONDS
DES-
IGNATED.— 
‘‘(1) NATIONAL
LIMITATION.—There is a na-
tional clean renewable energy bond limitation of 
$1,000,000,000. 
‘‘(2) ALLOCATION
BY
SECRETARY.—The Sec-
retary shall allocate the amount described in para-
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graph (1) among qualified projects in such manner as 
the Secretary determines appropriate. 
‘‘(g) CREDIT INCLUDED IN GROSS INCOME.—Gross in-
come includes the amount of the credit allowed to the tax-
payer under this section (determined without regard to sub-
section (c)) and the amount so included shall be treated as 
interest income. 
‘‘(h) SPECIAL RULES RELATING TO EXPENDITURES.— 
‘‘(1) IN GENERAL.—An issue shall be treated as 
meeting the requirements of this subsection if, as of 
the date of issuance, the qualified issuer reasonably 
expects— 
‘‘(A) at least 95 percent of the proceeds from 
the sale of the issue are to be spent for 1 or more 
qualified projects within the 5-year period begin-
ning on the date of issuance of the clean energy 
bond, 
‘‘(B) a binding commitment with a third 
party to spend at least 10 percent of the proceeds 
from the sale of the issue will be incurred within 
the 6-month period beginning on the date of 
issuance of the clean energy bond or, in the case 
of a clean energy bond the proceeds of which are 
to be loaned to 2 or more qualified borrowers, 
such binding commitment will be incurred with-
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in the 6-month period beginning on the date of 
the loan of such proceeds to a qualified borrower, 
and 
‘‘(C) such projects will be completed with 
due diligence and the proceeds from the sale of 
the issue will be spent with due diligence. 
‘‘(2) EXTENSION OF PERIOD.—Upon submission 
of a request prior to the expiration of the period de-
scribed in paragraph (1)(A), the Secretary may ex-
tend such period if the qualified issuer establishes that 
the failure to satisfy the 5-year requirement is due to 
reasonable cause and the related projects will continue 
to proceed with due diligence. 
‘‘(3) FAILURE TO SPEND REQUIRED AMOUNT OF 
BOND PROCEEDS WITHIN 5 YEARS.—To the extent that 
less than 95 percent of the proceeds of such issue are 
expended by the close of the 5-year period beginning 
on the date of issuance (or if an extension has been 
obtained under paragraph (2), by the close of the ex-
tended period), the qualified issuer shall redeem all of 
the nonqualified bonds within 90 days after the end 
of such period. For purposes of this paragraph, the 
amount of the nonqualified bonds required to be re-
deemed shall be determined in the same manner as 
under section 142.
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‘‘(i) SPECIAL RULES RELATING TO ARBITRAGE.—A 
bond which is part of an issue shall not be treated as a 
clean renewable energy bond unless, with respect to the issue 
of which the bond is a part, the qualified issuer satisfies 
the arbitrage requirements of section 148 with respect to 
proceeds of the issue. 
‘‘(j) COOPERATIVE ELECTRIC COMPANY; QUALIFIED 
ENERGY TAX CREDIT BOND LENDER; GOVERNMENTAL 
BODY; QUALIFIED BORROWER.—For purposes of this sec-
tion— 
‘‘(1) COOPERATIVE
ELECTRIC
COMPANY.—The 
term ‘cooperative electric company’ means a mutual 
or cooperative electric company described in section 
501(c)(12) or section 1381(a)(2)(C), or a not-for-prof-
it electric utility which has received a loan or loan 
guarantee under the Rural Electrification Act. 
‘‘(2) 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 coopera-
tive electric companies and is in existence on Feb-
ruary 1, 2002, and shall include any affiliated entity 
which is controlled by such lender. 
‘‘(3) GOVERNMENTAL BODY.—The term ‘govern-
mental body’ means any State, territory, possession of
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the United States, the District of Columbia, Indian 
tribal government, and any political subdivision 
thereof. 
‘‘(4) QUALIFIED
ISSUER.—The term ‘qualified 
issuer’ means— 
‘‘(A) a clean renewable energy bond lender, 
‘‘(B) a cooperative electric company, 
‘‘(C) a governmental body, or 
‘‘(D) the Tennessee Valley Authority. 
‘‘(5) QUALIFIED BORROWER.—The term ‘quali-
fied borrower’ means— 
‘‘(A) a mutual or cooperative electric com-
pany 
described 
in 
section 
501(c)(12) 
or 
1381(a)(2)(C), 
‘‘(B) a governmental body, or 
‘‘(C) the Tennessee Valley Authority. 
‘‘(k) SPECIAL RULES RELATING TO POOL BONDS.— 
No portion of a pooled financing bond may be allocable to 
any loan unless the borrower has entered into a written 
loan commitment for such portion prior to the issue date 
of such issue. 
‘‘(l) OTHER DEFINITIONS AND SPECIAL RULES.—For 
purposes of this section— 
‘‘(1) BOND.—The term ‘bond’ includes any obli-
gation.
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‘‘(2) POOLED
FINANCING
BOND.—The term 
‘pooled financing bond’ shall have the meaning given 
such term by section 149(f)(4)(A). 
‘‘(3) PARTNERSHIP; S CORPORATION; AND OTHER 
PASS-THRU ENTITIES.— 
‘‘(A) IN GENERAL.—Under regulations pre-
scribed by the Secretary, in the case of a part-
nership, trust, S corporation, or other pass-thru 
entity, rules similar to the rules of section 41(g) 
shall apply with respect to the credit allowable 
under subsection (a). 
‘‘(B) NO BASIS ADJUSTMENT.—Rules simi-
lar to the rules under section 1397E(i)(2) shall 
apply. 
‘‘(4) BONDS HELD BY REGULATED INVESTMENT 
COMPANIES.—If any clean renewable energy bond is 
held by a regulated investment company, the credit 
determined under subsection (a) shall be allowed to 
shareholders of such company under procedures pre-
scribed by the Secretary. 
‘‘(5) TREATMENT
FOR
ESTIMATED
TAX
PUR-
POSES.—Solely for purposes of sections 6654 and 
6655, the credit allowed by this section to a taxpayer 
by reason of holding a clean renewable energy bond 
on a credit allowance date shall be treated as if it
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were a payment of estimated tax made by the tax-
payer on such date. 
‘‘(6) REPORTING.—Issuers of clean renewable en-
ergy bonds shall submit reports similar to the reports 
required under section 149(e). 
‘‘(m) TERMINATION.—This section shall not apply 
with respect to any bond issued after December 31, 2008.’’. 
(b) REPORTING.—Subsection (d) of section 6049 (relat-
ing to returns regarding payments of interest) is amended 
by adding at the end the following new paragraph: 
‘‘(8) REPORTING OF CREDIT ON CLEAN RENEW-
ABLE ENERGY BONDS.— 
‘‘(A) IN GENERAL.—For purposes of sub-
section (a), the term ‘interest’ includes amounts 
includible in gross income under section 54(g) 
and such amounts shall be treated as paid on the 
credit allowance date (as defined in section 
54(b)(4)). 
‘‘(B) REPORTING TO CORPORATIONS, ETC.— 
Except as otherwise provided in regulations, in 
the case of any interest described in subpara-
graph (A), subsection (b)(4) shall be applied 
without regard to subparagraphs (A), (H), (I), 
(J), (K), and (L)(i) of such subsection.
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‘‘(C) REGULATORY
AUTHORITY.—The Sec-
retary may prescribe such regulations as are nec-
essary or appropriate to carry out the purposes 
of this paragraph, including regulations which 
require more frequent or more detailed report-
ing.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) The table of subparts for part IV of sub-
chapter A of chapter 1 is amended by adding at the 
end the following new item: 
‘‘SUBPART H. NONREFUNDABLE CREDIT TO HOLDERS OF CERTAIN BONDS.’’. 
(2) Section 1397E(c)(2) is amended by inserting 
‘‘, and subpart H thereof’’ after ‘‘refundable credits’’. 
(3) Section 6401(b)(1) is amended by striking 
‘‘and G’’ and inserting ‘‘G, and H’’. 
(d) ISSUANCE OF REGULATIONS.—The Secretary of 
Treasury shall issue regulations required under section 54 
of the Internal Revenue Code of 1986 (as added by this sec-
tion) not later than 120 days after the date of the enactment 
of this Act. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall apply to bonds issued after December 31, 2005. 
SEC. 1505. TREATMENT OF INCOME OF CERTAIN ELECTRIC 
COOPERATIVES. 
(a) ELIMINATION OF SUNSET ON TREATMENT OF IN-
COME FROM OPEN ACCESS
AND NUCLEAR DECOMMIS-
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SIONING TRANSACTIONS.—Section 501(c)(12)(C) is amend-
ed by striking the last sentence. 
(b) ELIMINATION OF SUNSET ON TREATMENT OF IN-
COME
FROM
LOAD
LOSS
TRANSACTIONS.—Section 
501(c)(12)(H) is amended by striking clause (x). 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on the date of the enactment of this 
Act. 
SEC. 1506. DISPOSITIONS OF TRANSMISSION PROPERTY TO 
IMPLEMENT FERC RESTRUCTURING POLICY. 
(a) IN GENERAL.—Section 451(i)(3) (defining quali-
fying electric transmission transaction) is amended by 
striking ‘‘2007’’ and inserting ‘‘2008’’. 
(b) TECHNICAL AMENDMENT RELATED TO SECTION 
909 OF THE AMERICAN JOBS CREATION ACT OF 2004.— 
Clause (ii) of section 451(i)(4)(B) is amended by striking 
‘‘the close of the period applicable under subsection 
(a)(2)(B) as extended under paragraph (2)’’ and inserting 
‘‘December 31, 2007’’. 
(c) EFFECTIVE DATES.— 
(1) IN GENERAL.—The amendment made by sub-
section (a) shall apply to transactions occurring after 
the date of the enactment of this Act. 
(2) TECHNICAL AMENDMENT.—The amendment 
made by subsection (b) shall take effect as if included
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in the amendments made by section 909 of the Amer-
ican Jobs Creation Act of 2004. 
SEC. 1507. CREDIT FOR PRODUCTION FROM ADVANCED NU-
CLEAR POWER FACILITIES. 
(a) IN GENERAL.—Subpart D of part IV of subchapter 
A of chapter 1 (relating to business related credits) is 
amended by adding after section 45I the following new sec-
tion: 
‘‘SEC. 45J. CREDIT FOR PRODUCTION FROM ADVANCED NU-
CLEAR POWER FACILITIES. 
‘‘(a) GENERAL RULE.—For purposes of section 38, the 
advanced nuclear power facility production credit of any 
taxpayer for any taxable year is equal to the product of— 
‘‘(1) 1.8 cents, multiplied by 
‘‘(2) the kilowatt hours of electricity— 
‘‘(A) produced by the taxpayer at an ad-
vanced nuclear power facility during the 8-year 
period beginning on the date the facility was 
originally placed in service, and 
‘‘(B) sold by the taxpayer to an unrelated 
person during the taxable year. 
‘‘(b) NATIONAL LIMITATION.— 
‘‘(1) IN GENERAL.—The amount of credit which 
would (but for this subsection and subsection (c)) be 
allowed with respect to any facility for any taxable