(b) CONFORMING AMENDMENTS.—Section 32902 of 
title 49, United States Code, is further amended— 
(1) in subsection (g)(2), by striking ‘‘(and sub-
mit the amendment to Congress when required 
under subsection (c)(2) of this section)’’; and 
(2) in subsection (k) (as so redesignated) by 
striking ‘‘or (g)’’ and inserting ‘‘(g), or (i)’’. 
SEC. 9. RENEWABLE ELECTRICITY PRODUCTION CREDIT. 
(a) IN GENERAL.—Section 45(d) of the Internal Rev-
enue Code of 1986 (relating to qualified facilities) is 
amended by striking ‘‘January 1, 2009’’ each place it ap-
pears in paragraphs (1), (2), (3), (4), (5), (6), and (7) 
and inserting ‘‘January 1, 2016’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to property placed in service 
after the date of the enactment of this Act. 
SEC. 10. EXTENSION AND MODIFICATION OF INVESTMENT 
TAX CREDIT WITH RESPECT TO SOLAR EN-
ERGY PROPERTY, QUALIFIED FUEL CELL 
PROPERTY, AND GEOTHERMAL PROPERTY. 
(a) 
SOLAR
ENERGY
PROPERTY.—Paragraphs 
(2)(A)(i)(II) and (3)(A)(ii) of section 48(a) of the Internal 
Revenue Code of 1986 are each amended by striking 
‘‘January 1, 2009’’ and inserting ‘‘January 1, 2016’’. 
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(b) ELIGIBLE FUEL CELL PROPERTY.—Paragraph 
(1)(E) of section 48(c) of such Code is amended by strik-
ing ‘‘December 31, 2008’’ and inserting ‘‘December 31, 
2015’’. 
(c) GEOTHERMAL PROPERTY.—Paragraph (2)(A)(i) 
of section 48(a) of such Code is amended by striking 
‘‘and’’ at the end of subclause (II) and by adding at the 
end the following new subclause: 
‘‘(IV) energy property described 
in paragraph (3)(A)(iii) but only with 
respect to periods ending before Janu-
ary 1, 2016, and’’. 
(d) 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. 11. EXTENSION OF CREDIT FOR RESIDENTIAL ENERGY 
EFFICIENT PROPERTY. 
(a) EXTENSION.—Subsection (g) of section 25D of 
the Internal Revenue Code of 1986 (relating to termi-
nation) is amended by striking ‘‘December 31, 2008’’ and 
inserting ‘‘December 31, 2015’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
the date of the enactment of this Act. 
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SEC. 12. CREDIT FOR WIND ENERGY PROPERTY INSTALLED 
IN RESIDENCES AND BUSINESSES. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after section 30C the fol-
lowing new section: 
‘‘SEC. 30D. WIND ENERGY PROPERTY. 
‘‘(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 30 percent (10 
percent after December 31, 2015) of the amount paid or 
incurred by the taxpayer for qualified wind energy prop-
erty placed in service or installed during such taxable year. 
‘‘(b) LIMITATION.—No credit shall be allowed under 
subsection (a) unless at least 50 percent of the energy pro-
duced annually by the qualified wind energy property is 
consumed on the site on which the property is placed in 
service or installed. 
‘‘(c) QUALIFIED WIND ENERGY PROPERTY.—For 
purposes of this section, the term qualified wind energy 
property means a qualifying wind turbine if— 
‘‘(1) such turbine is placed in service or in-
stalled on or in connection with property located in 
the United States, 
‘‘(2) in the case of an individual, the property 
on or in connection with which such turbine is in-
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stalled is a dwelling unit which is located in the 
United States, 
‘‘(3) the original use of such turbine commences 
with the taxpayer, and 
‘‘(4) such turbine carries at least a 5-year lim-
ited warranty covering defects in design, material, or 
workmanship, and, for property that is not installed 
by the taxpayer, at least a 5-year limited warranty 
covering defects in installation. 
‘‘(d) OTHER DEFINITIONS.—For purposes of this 
section: 
‘‘(1) QUALIFYING WIND TURBINE.—The term 
qualifying wind turbine means a wind turbine of 100 
kilowatts of rated capacity or less which meets the 
latest performance rating standards published by the 
American Wind Energy Association and which is 
used to generate electricity. 
‘‘(2) PRINCIPAL RESIDENCE.—The term prin-
cipal residence shall have the same meaning as when 
used in section 121. 
‘‘(e) LIMITATION BASED ON AMOUNT OF TAX.— 
‘‘(1) IN GENERAL.—The credit allowed under 
subsection (a) for any taxable year shall not exceed 
the excess of— 
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‘‘(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 part (other than under this section 
and subpart C thereof, relating to refundable 
credits) and section 1397E. 
‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 
credit allowable under subsection (a) exceeds the 
limitation imposed by paragraph (1) for such taxable 
year, such excess shall be carried to the succeeding 
taxable year and added to the credit allowable under 
subsection (a) for such taxable year. 
‘‘(f) SPECIAL RULES.—For purposes of this section: 
‘‘(1) TENANT-STOCKHOLDER IN COOPERATIVE 
HOUSING CORPORATION.—In the case of an indi-
vidual who is a tenant-stockholder (as defined in sec-
tion 216(b)(2)) in a cooperative housing corporation 
(as defined in section 216(b)(1)), such individual 
shall be treated as having paid his tenant-stock-
holder’s proportionate share (as defined in section 
216(b)(3)) of any expenditures paid or incurred for 
qualified wind energy property by such corporation, 
and such credit shall be allocated appropriately to 
such individual. 
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‘‘(2) CONDOMINIUMS.— 
‘‘(A) IN GENERAL.—In the case of an indi-
vidual who is a member of a condominium man-
agement association with respect to a condo-
minium which he owns, such individual shall be 
treated as having paid his proportionate share 
of expenditures paid or incurred for qualified 
wind energy property by such association, and 
such credit shall be allocated appropriately to 
such individual. 
‘‘(B) CONDOMINIUM
MANAGEMENT
ASSO-
CIATION.—For purposes of this paragraph, the 
term condominium management association 
means an organization which meets the require-
ments of section 528(c)(2) with respect to a 
condominium project of which substantially all 
of the units are used by individuals as resi-
dences. 
‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section for any ex-
penditure with respect to a residence or other property, 
the basis of such residence or other property shall be re-
duced by the amount of the credit so allowed.’’. 
(b) CONFORMING AMENDMENT.—Subsection (a) of 
section 1016 of such Code (relating to general rule for 
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adjustments to basis) is amended by striking ‘‘and’’ at the 
end of paragraph (36), by striking the period at the end 
of paragraph (37) and inserting ‘‘, and’’, and by adding 
at the end the following new paragraph: 
‘‘(38) in the case of a residence or other prop-
erty with respect to which a credit was allowed 
under section 30D, to the extent provided in section 
30D(g).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart B of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 30C the following new item: 
‘‘Sec. 30D. Wind energy property.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service or 
installed after December 31, 2006, in taxable years ending 
after such date. 
SEC. 13. GEOTHERMAL RESEARCH. 
There are authorized to be appropriated to the Sec-
retary of Energy $32,500,000 for geothermal research. 
SEC. 14. RENEWABLE PORTFOLIO STANDARD. 
Title VI of the Public Utility Regulatory Policies Act 
of 1978 (16 U.S.C. 2601 et seq.) is amended by adding 
at the end the following: 
‘‘SEC. 610. FEDERAL RENEWABLE PORTFOLIO STANDARD. 
‘‘(a) RENEWABLE ENERGY REQUIREMENT.— 
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‘‘(1) IN GENERAL.—Each electric utility that 
sells electricity to electric consumers shall obtain a 
percentage of the base amount of electricity it sells 
to electric consumers in any calendar year from new 
renewable energy or existing renewable energy. The 
percentage obtained in a calendar year shall not be 
less than the amount specified in the following table: 
‘‘Calendar year: 
Minimum annual 
percentage: 
2008 through 2009 ..................................................................
5.0
2010 through 2011 ..................................................................
8.0
2012 through 2013 ..................................................................
11.0
2014 through 2015 ..................................................................
15.0
2016 and thereafter .................................................................
20.0. 
‘‘(2) MEANS OF COMPLIANCE.—An electric util-
ity shall meet the requirements of paragraph (1) 
by— 
‘‘(A) generating electric energy using new 
renewable energy or existing renewable energy; 
‘‘(B) purchasing electric energy generated 
by new renewable energy or existing renewable 
energy; 
‘‘(C) purchasing renewable energy credits 
issued under subsection (b); or 
‘‘(D) a combination of the foregoing. 
‘‘(b) RENEWABLE ENERGY CREDIT TRADING PRO-
GRAM.—Not later than January 1 of the first calendar 
year beginning after the enactment of this Act, the Sec-
retary shall establish a renewable energy credit trading 
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program to permit an electric utility that does not gen-
erate or purchase enough electric energy from renewable 
energy to meet its obligations under subsection (a)(1) to 
satisfy such requirements by purchasing sufficient renew-
able energy credits. 
‘‘(c) ENFORCEMENT.— 
‘‘(1) CIVIL
PENALTIES.—Any electric utility 
that fails to meet the renewable energy requirements 
of subsection (a) shall be subject to a civil penalty. 
‘‘(2) AMOUNT OF PENALTY.—The amount of 
the civil penalty shall be determined by multiplying 
the number of kilowatt-hours of electric energy sold 
to electric consumers in violation of subsection (a) 
by the greater of 1.5 cents (adjusted for inflation 
under subsection (f)) or 200 percent of the average 
market value of renewable energy credits during the 
year in which the violation occurred. 
‘‘(3) MITIGATION OR WAIVER.—The Secretary 
may mitigate or waive a civil penalty under this sub-
section if the electric utility was unable to comply 
with subsection (a) for reasons outside of the rea-
sonable control of the utility. The Secretary shall re-
duce the amount of any penalty determined under 
paragraph (2) by an amount paid by the electric 
utility to a State for failure to comply with the re-
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quirement of a State renewable energy program if 
the State requirement is greater than the applicable 
requirement of subsection (a). 
‘‘(4) PROCEDURE FOR ASSESSING PENALTY.— 
The Secretary shall assess a civil penalty under this 
subsection in accordance with the procedures pre-
scribed by section 333(d) of the Energy Policy and 
Conservation Act (42 U.S.C. 6303(d)). 
‘‘(d) RULES.—The Secretary shall issue rules imple-
menting this section not later than 1 year after the date 
of enactment of this section. 
‘‘(e) EXEMPTIONS.—This section shall not apply in 
any calendar year to an electric utility— 
‘‘(1) that sold less than 4,000,000 megawatt- 
hours of electric energy to electric consumers during 
the preceding calendar year; or 
‘‘(2) in Hawaii. 
‘‘(f) INFLATION ADJUSTMENT.—Not later than De-
cember 31 of each year beginning in 2009, the Secretary 
shall adjust for inflation the amount of the civil penalty 
per kilowatt-hour under subsection (c)(2). 
‘‘(g) STATE PROGRAMS.—Nothing in this section 
shall diminish any authority of a State or political subdivi-
sion thereof to adopt or enforce any law or regulation re-
specting renewable energy, but, except as provided in sub-
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section (c)(3), no such law or regulation shall relieve any 
person of any requirement otherwise applicable under this 
section. The Secretary, in consultation with States having 
such renewable energy programs, shall, to the maximum 
extent practicable, facilitate coordination between the Fed-
eral program and State programs. 
‘‘(h) DEFINITIONS.—For purposes of this section: 
‘‘(1) BASE
AMOUNT
OF
ELECTRICITY.—The 
term ‘base amount of electricity’ means the total 
amount of electricity sold by an electric utility to 
electric consumers in a calendar year, excluding— 
‘‘(A) electricity generated by a hydro-
electric facility (including a pumped storage fa-
cility but excluding incremental hydropower); 
and 
‘‘(B) electricity generated through the in-
cineration of municipal solid waste. 
‘‘(2) DISTRIBUTED
GENERATION
FACILITY.— 
The term ‘distributed generation facility’ means a 
facility at a customer site. 
‘‘(3) EXISTING
RENEWABLE
ENERGY.—The 
term ‘existing renewable energy’ means, except as 
provided in paragraph (7)(B), electric energy gen-
erated at a facility (including a distributed genera-
tion facility) placed in service prior to the date of 
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enactment of this section from solar, wind, or geo-
thermal energy; ocean energy; biomass (as defined in 
section 203(a) of the Energy Policy Act of 2005); or 
landfill gas. 
‘‘(4) GEOTHERMAL ENERGY.—The term ‘geo-
thermal energy’ means energy derived from a geo-
thermal deposit (within the meaning of section 
613(e)(2) of the Internal Revenue Code of 1986). 
‘‘(5) INCREMENTAL
GEOTHERMAL
PRODUC-
TION.— 
‘‘(A) IN GENERAL.—The term ‘incremental 
geothermal production’ means for any year the 
excess of— 
‘‘(i) the total kilowatt hours of elec-
tricity produced from a facility (including a 
distributed generation facility) using geo-
thermal energy, over 
‘‘(ii) the average annual kilowatt 
hours produced at such facility for 5 of the 
previous 7 calendar years before the date 
of enactment of this section after elimi-
nating the highest and the lowest kilowatt 
hour production years in such 7-year pe-
riod. 
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