339 
HR 1 RDS 
able governmental bond issued as part of an issue 
if— 
‘‘(A) 100 percent of the available project 
proceeds (as defined in section 54A) of such 
issue are to be used for capital expenditures, 
and 
‘‘(B) the issuer makes an irrevocable elec-
tion to have this subsection apply. 
‘‘(h) REGULATIONS.—The Secretary may prescribe 
such regulations and other guidance as may be necessary 
or appropriate to carry out this section and section 
6432.’’. 
(b) CREDIT FOR QUALIFIED BONDS ISSUED BEFORE 
2011.—Subchapter B of chapter 65, as amended by this 
Act, is amended by adding at the end the following new 
section: 
‘‘SEC. 6432. CREDIT FOR QUALIFIED BONDS ALLOWED TO 
ISSUER. 
‘‘(a) IN GENERAL.—In the case of a qualified bond 
issued before January 1, 2011, the issuer of such bond 
shall be allowed a credit with respect to each interest pay-
ment under such bond which shall be payable by the Sec-
retary as provided in subsection (b). 
‘‘(b) PAYMENT OF CREDIT.—The Secretary shall pay 
(contemporaneously with each interest payment date 
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HR 1 RDS 
under such bond) to the issuer of such bond (or to any 
person who makes such interest payments on behalf of the 
issuer) 35 percent of the interest payable under such bond 
on such date. 
‘‘(c) APPLICATION OF ARBITRAGE RULES.—For pur-
poses of section 148, the yield on a qualified bond shall 
be reduced by the credit allowed under this section. 
‘‘(d) INTEREST PAYMENT DATE.—For purposes of 
this subsection, the term ‘interest payment date’ means 
each date on which interest is payable by the issuer under 
the terms of the bond. 
‘‘(e) QUALIFIED BOND.—For purposes of this sub-
section, the term ‘qualified bond’ has the meaning given 
such term in section 54AA(h).’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 1324(b)(2) of title 31, United 
States Code, is amended by striking ‘‘or 6428’’ and 
inserting ‘‘6428, or 6432,’’. 
(2) Section 54A(c)(1)(B) is amended by strik-
ing ‘‘subpart C’’ and inserting ‘‘subparts C and J’’. 
(3) 
Sections 
54(c)(2), 
1397E(c)(2), 
and 
1400N(l)(3)(B) are each amended by striking ‘‘and 
I’’ and inserting ‘‘, I, and J’’. 
(4) Section 6401(b)(1) is amended by striking 
‘‘and I’’ and inserting ‘‘I, and J’’. 
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(5) 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 J. Taxable bond option for governmental bonds.’’. 
(6) The table of sections for subchapter B of 
chapter 65, as amended by this Act, is amended by 
adding at the end the following new item: 
‘‘Sec. 6432. Credit for qualified bonds allowed to issuer on advance basis.’’. 
(d) TRANSITIONAL
COORDINATION
WITH
STATE 
LAW.—Except as otherwise provided by a State after the 
date of the enactment of this Act, the interest on any tax-
able governmental bond (as defined in section 54AA of 
the Internal Revenue Code of 1986, as added by this sec-
tion) and the amount of any credit determined under such 
section with respect to such bond shall be treated for pur-
poses of the income tax laws of such State as being exempt 
from Federal income tax. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after the date 
of the enactment of this Act. 
PART 4—RECOVERY ZONE BONDS 
SEC. 1531. RECOVERY ZONE BONDS. 
(a) IN GENERAL.—Subchapter Y of chapter 1 is 
amended by adding at the end the following new part: 
‘‘PART III—RECOVERY ZONE BONDS 
‘‘Sec. 1400U–1. Allocation of recovery zone bonds. 
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‘‘Sec. 1400U–2. Recovery zone economic development bonds. 
‘‘Sec. 1400U–3. Recovery zone facility bonds. 
‘‘SEC. 1400U–1. ALLOCATION OF RECOVERY ZONE BONDS. 
‘‘(a) ALLOCATIONS.— 
‘‘(1) IN GENERAL.—The Secretary shall allo-
cate the national recovery zone economic develop-
ment bond limitation and the national recovery zone 
facility bond limitation among the States in the pro-
portion that each such State’s 2008 State employ-
ment decline bears to the aggregate of the 2008 
State employment declines for all of the States. 
‘‘(2) 2008 STATE EMPLOYMENT DECLINE.—For 
purposes of this subsection, the term ‘2008 State 
employment decline’ means, with respect to any 
State, the excess (if any) of— 
‘‘(A) the number of individuals employed 
in such State determined for December 2007, 
over 
‘‘(B) the number of individuals employed 
in such State determined for December 2008. 
‘‘(3) ALLOCATIONS BY STATES.— 
‘‘(A) IN GENERAL.—Each State with re-
spect to which an allocation is made under 
paragraph (1) shall reallocate such allocation 
among the counties and large municipalities in 
such State in the proportion the each such 
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HR 1 RDS 
county’s or municipality’s 2008 employment de-
cline bears to the aggregate of the 2008 em-
ployment declines for all the counties and mu-
nicipalities in such State. 
‘‘(B) LARGE
MUNICIPALITIES.—For pur-
poses of subparagraph (A), the term ‘large mu-
nicipality’ means a municipality with a popu-
lation of more than 100,000. 
‘‘(C) DETERMINATION OF LOCAL EMPLOY-
MENT DECLINES.—For purposes of this para-
graph, the employment decline of any munici-
pality or county shall be determined in the 
same manner as determining the State employ-
ment decline under paragraph (2), except that 
in the case of a municipality any portion of 
which is in a county, such portion shall be 
treated as part of such municipality and not 
part of such county. 
‘‘(4) NATIONAL LIMITATIONS.— 
‘‘(A) RECOVERY ZONE ECONOMIC DEVEL-
OPMENT BONDS.—There is a national recovery 
zone economic development bond limitation of 
$10,000,000,000. 
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‘‘(B) RECOVERY ZONE FACILITY BONDS.— 
There is a national recovery zone facility bond 
limitation of $15,000,000,000. 
‘‘(b) RECOVERY ZONE.—For purposes of this part, 
the term ‘recovery zone’ means— 
‘‘(1) any area designated by the issuer as hav-
ing significant poverty, unemployment, home fore-
closures, or general distress, and 
‘‘(2) any area for which a designation as an em-
powerment zone or renewal community is in effect. 
‘‘SEC. 1400U–2. RECOVERY ZONE ECONOMIC DEVELOPMENT 
BONDS. 
‘‘(a) IN GENERAL.—In the case of a recovery zone 
economic development bond— 
‘‘(1) such bond shall be treated as a qualified 
bond for purposes of section 6432, and 
‘‘(2) subsection (b) of such section shall be ap-
plied by substituting ‘55 percent’ for ‘35 percent’. 
‘‘(b) RECOVERY ZONE ECONOMIC DEVELOPMENT 
BOND.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘recovery zone economic development 
bond’ means any taxable governmental bond (as de-
fined in section 54AA(d)) issued before January 1, 
2011, as part of issue if— 
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‘‘(A) 100 percent of the available project 
proceeds (as defined in section 54A) of such 
issue are to be used for one or more qualified 
economic development purposes, and 
‘‘(B) the issuer designates such bond for 
purposes of this section. 
‘‘(2) LIMITATION ON AMOUNT OF BONDS DES-
IGNATED.—The maximum aggregate face amount of 
bonds which may be designated by any issuer under 
paragraph (1) shall not exceed the amount of the re-
covery zone economic development bond limitation 
allocated to such issuer under section 1400U–1. 
‘‘(c) QUALIFIED ECONOMIC DEVELOPMENT PUR-
POSE.—For purposes of this section, the term ‘qualified 
economic development purpose’ means expenditures for 
purposes of promoting development or other economic ac-
tivity in a recovery zone, including— 
‘‘(1) capital expenditures paid or incurred with 
respect to property located in such zone, 
‘‘(2) expenditures for public infrastructure and 
construction of public facilities, and 
‘‘(3) expenditures for job training and edu-
cational programs. 
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HR 1 RDS 
‘‘SEC. 1400U–3. RECOVERY ZONE FACILITY BONDS. 
‘‘(a) IN GENERAL.—For purposes of part IV of sub-
chapter B (relating to tax exemption requirements for 
State and local bonds), the term ‘exempt facility bond’ in-
cludes any recovery zone facility bond. 
‘‘(b) RECOVERY ZONE FACILITY BOND.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘recovery zone facility bond’ means 
any bond issued as part of an issue if— 
‘‘(A) 95 percent or more of the net pro-
ceeds (as defined in section 150(a)(3)) of such 
issue are to be used for recovery zone property, 
‘‘(B) such bond is issued before January 1, 
2011, and 
‘‘(C) the issuer designates such bond for 
purposes of this section. 
‘‘(2) LIMITATION ON AMOUNT OF BONDS DES-
IGNATED.—The maximum aggregate face amount of 
bonds which may be designated by any issuer under 
paragraph (1) shall not exceed the amount of recov-
ery zone facility bond limitation allocated to such 
issuer under section 1400U–1. 
‘‘(c) RECOVERY ZONE PROPERTY.—For purposes of 
this section— 
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HR 1 RDS 
‘‘(1) IN
GENERAL.—The term ‘recovery zone 
property’ means any property to which section 168 
applies (or would apply but for section 179) if— 
‘‘(A) such property was acquired by the 
taxpayer by purchase (as defined in section 
179(d)(2)) after the date on which the designa-
tion of the recovery zone took effect, 
‘‘(B) the original use of which in the recov-
ery zone commences with the taxpayer, and 
‘‘(C) substantially all of the use of which 
is in the recovery zone and is in the active con-
duct of a qualified business by the taxpayer in 
such zone. 
‘‘(2) QUALIFIED BUSINESS.—The term ‘quali-
fied business’ means any trade or business except 
that— 
‘‘(A) the rental to others of real property 
located in a recovery zone shall be treated as a 
qualified business only if the property is not 
residential rental property (as defined in section 
168(e)(2)), and 
‘‘(B) such term shall not include any trade 
or business consisting of the operation of any 
facility described in section 144(c)(6)(B). 
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‘‘(3) SPECIAL RULES FOR SUBSTANTIAL REN-
OVATIONS AND SALE-LEASEBACK.—Rules similar to 
the rules of subsections (a)(2) and (b) of section 
1397D shall apply for purposes of this subsection. 
‘‘(d) NONAPPLICATION OF CERTAIN RULES.—Sec-
tions 146 (relating to volume cap) and 147(d) (relating 
to acquisition of existing property not permitted) shall not 
apply to any recovery zone facility bond.’’. 
(b) CLERICAL AMENDMENT.—The table of parts for 
subchapter Y of chapter 1 of such Code is amended by 
adding at the end the following new item: 
‘‘PART III. RECOVERY ZONE BONDS.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after the date 
of the enactment of this Act. 
SEC. 1532. TRIBAL ECONOMIC DEVELOPMENT BONDS. 
(a) IN GENERAL.—Section 7871 is amended by add-
ing at the end the following new subsection: 
‘‘(f) TRIBAL ECONOMIC DEVELOPMENT BONDS.— 
‘‘(1) ALLOCATION OF LIMITATION.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
allocate the national tribal economic develop-
ment bond limitation among the Indian tribal 
governments in such manner as the Secretary, 
in consultation with the Secretary of the Inte-
rior, determines appropriate. 
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HR 1 RDS 
‘‘(B) NATIONAL LIMITATION.—There is a 
national tribal economic development bond limi-
tation of $2,000,000,000. 
‘‘(2) BONDS
TREATED
AS
EXEMPT
FROM 
TAX.—In the case of a tribal economic development 
bond— 
‘‘(A) notwithstanding subsection (c), such 
bond shall be treated for purposes of this title 
in the same manner as if such bond were issued 
by a State, and 
‘‘(B) section 146 shall not apply. 
‘‘(3) 
TRIBAL
ECONOMIC
DEVELOPMENT 
BOND.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the term ‘tribal economic development 
bond’ means any bond issued by an Indian trib-
al government— 
‘‘(i) the interest on which is not ex-
empt from tax under section 103 by reason 
of subsection (c) (determined without re-
gard to this subsection) but would be so 
exempt if issued by a State or local govern-
ment, and 
‘‘(ii) which is designated by the In-
dian tribal government as a tribal eco-
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HR 1 RDS 
nomic development bond for purposes of 
this subsection. 
‘‘(B) EXCEPTIONS.—The term tribal eco-
nomic development bond shall not include any 
bond issued as part of an issue if any portion 
of the proceeds of such issue are used to fi-
nance— 
‘‘(i) any portion of a building in which 
class II or class III gaming (as defined in 
section 4 of the Indian Gaming Regulatory 
Act) is conducted or housed or any other 
property actually used in the conduct of 
such gaming, or 
‘‘(ii) any facility located outside the 
Indian reservation (as defined in section 
168(j)(6)). 
‘‘(C) LIMITATION ON AMOUNT OF BONDS 
DESIGNATED.—The maximum aggregate face 
amount of bonds which may be designated by 
any Indian tribal government under subpara-
graph (A) shall not exceed the amount of na-
tional tribal economic development bond limita-
tion allocated to such government under para-
graph (1).’’. 
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(b) STUDY.—The Secretary of the Treasury, or the 
Secretary’s delegate, shall conduct a study of the effects 
of the amendment made by subsection (a). Not later than 
1 year after the date of the enactment of this Act, the 
Secretary of the Treasury, or the Secretary’s delegate, 
shall report to Congress on the results of the studies con-
ducted under this paragraph, including the Secretary’s 
recommendations regarding such amendment. 
(c) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to obligations issued after the 
date of the enactment of this Act. 
PART 5—REPEAL OF WITHHOLDING TAX ON 
GOVERNMENT CONTRACTORS 
SEC. 1541. REPEAL OF WITHHOLDING TAX ON GOVERN-
MENT CONTRACTORS. 
Section 3402 is amended by striking subsection (t). 
Subtitle G—Energy Incentives 
PART 1—RENEWABLE ENERGY INCENTIVES 
SEC. 1601. EXTENSION OF CREDIT FOR ELECTRICITY PRO-
DUCED 
FROM 
CERTAIN 
RENEWABLE 
RE-
SOURCES. 
(a) IN GENERAL.—Subsection (d) of section 45 is 
amended— 
(1) by striking ‘‘2010’’ in paragraph (1) and in-
serting ‘‘2013’’, 
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HR 1 RDS 
(2) by striking ‘‘2011’’ each place it appears in 
paragraphs (2), (3), (4), (6), (7) and (9) and insert-
ing ‘‘2014’’, and 
(3) by striking ‘‘2012’’ in paragraph (11)(B) 
and inserting ‘‘2014’’. 
(b) TECHNICAL AMENDMENT.—Paragraph (5) of 
section 45(d) is amended by striking ‘‘and before’’ and 
all that follows and inserting ‘‘ and before October 3, 
2008.’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
subsection (a) shall apply to property placed in serv-
ice after the date of the enactment of this Act. 
(2) TECHNICAL AMENDMENT.—The amendment 
made by subsection (b) shall take effect as if in-
cluded in section 102 of the Energy Improvement 
and Extension Act of 2008. 
SEC. 1602. ELECTION OF INVESTMENT CREDIT IN LIEU OF 
PRODUCTION CREDIT. 
(a) IN GENERAL.—Subsection (a) of section 48 is 
amended by adding at the end the following new para-
graph: 
‘‘(5) ELECTION TO TREAT QUALIFIED FACILI-
TIES AS ENERGY PROPERTY.— 
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HR 1 RDS 
‘‘(A) IN
GENERAL.—In the case of any 
qualified investment credit facility placed in 
service in 2009 or 2010— 
‘‘(i) such facility shall be treated as 
energy property for purposes of this sec-
tion, and 
‘‘(ii) the energy percentage with re-
spect to such property shall be 30 percent. 
‘‘(B) DENIAL OF PRODUCTION CREDIT.— 
No credit shall be allowed under section 45 for 
any taxable year with respect to any qualified 
investment credit facility. 
‘‘(C) QUALIFIED INVESTMENT CREDIT FA-
CILITY.—For purposes of this paragraph, the 
term ‘qualified investment credit facility’ means 
any facility described in paragraph (1), (2), (3), 
(4), (6), (7), (9), or (11) of section 45(d) if no 
credit has been allowed under section 45 with 
respect to such facility and the taxpayer makes 
an irrevocable election to have this paragraph 
apply to such facility.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to facilities placed in service after 
December 31, 2008. 
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HR 1 RDS 
SEC. 1603. REPEAL OF CERTAIN LIMITATIONS ON CREDIT 
FOR RENEWABLE ENERGY PROPERTY. 
(a) REPEAL OF LIMITATION ON CREDIT FOR QUALI-
FIED SMALL WIND ENERGY PROPERTY.—Paragraph (4) 
of section 48(c) is amended by striking subparagraph (B) 
and by redesignating subparagraphs (C) and (D) as sub-
paragraphs (B) and (C). 
(b) REPEAL
OF LIMITATION
ON PROPERTY FI-
NANCED BY SUBSIDIZED ENERGY FINANCING.— 
(1) IN GENERAL.—Subsection (a) of section 48 
is amended by striking paragraph (4). 
(2) CONFORMING AMENDMENTS.— 
(A) Section 25C(e)(1) is amended by strik-
ing ‘‘(8), and (9)’’ and inserting ‘‘and (8)’’. 
(B) Section 25D(e) is amended by striking 
paragraph (9). 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2),the amendment made by this section shall 
apply to periods after December 31, 2008, under 
rules similar to the rules of section 48(m) of the In-
ternal Revenue Code of 1986 (as in effect on the day 
before the date of the enactment of the Revenue 
Reconciliation Act of 1990). 
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HR 1 RDS 
(2) CONFORMING AMENDMENTS.—The amend-
ments made by subsection (b)(2) shall apply to tax-
able years beginning after December 31, 2008. 
SEC. 1604. COORDINATION WITH RENEWABLE ENERGY 
GRANTS. 
Section 48 is amended by adding at the end the fol-
lowing new subsection: 
‘‘(d) COORDINATION WITH DEPARTMENT OF EN-
ERGY GRANTS.—In the case of any property with respect 
to which the Secretary of Energy makes a grant under 
section 1721 of the American Recovery and Reinvestment 
Tax Act of 2009— 
‘‘(1) DENIAL
OF
PRODUCTION
AND
INVEST-
MENT
CREDITS.—No credit shall be determined 
under this section or section 45 with respect to such 
property for the taxable year in which such grant is 
made or any subsequent taxable year. 
‘‘(2) RECAPTURE OF CREDITS FOR PROGRESS 
EXPENDITURES MADE BEFORE GRANT.—If a credit 
was determined under this section with respect to 
such property for any taxable year ending before 
such grant is made— 
‘‘(A) the tax imposed under subtitle A on 
the taxpayer for the taxable year in which such 
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HR 1 RDS 
grant is made shall be increased by so much of 
such credit as was allowed under section 38, 
‘‘(B) the general business carryforwards 
under section 39 shall be adjusted so as to re-
capture the portion of such credit which was 
not so allowed, and 
‘‘(C) the amount of such grant shall be de-
termined without regard to any reduction in the 
basis of such property by reason of such credit. 
‘‘(3) TREATMENT OF GRANTS.—Any such grant 
shall— 
‘‘(A) not be includible in the gross income 
of the taxpayer, but 
‘‘(B) shall be taken into account in deter-
mining the basis of the property to which such 
grant relates, except that the basis of such 
property shall be reduced under section 50(c) in 
the same manner as a credit allowed under sub-
section (a).’’. 
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HR 1 RDS 
grants for capital expenditures to implement any 
green community program)’’ after ‘‘Capital expendi-
tures’’. 
(2) BONDS TO IMPLEMENT GREEN COMMUNITY 
PROGRAMS
NOT
TREATED
AS
PRIVATE
ACTIVITY 
BONDS FOR PURPOSES OF LIMITATIONS ON QUALI-
FIED ENERGY CONSERVATION BONDS .—Subsection 
(e) of section 54D is amended by adding at the end 
the following new paragraph: 
‘‘(4) BONDS
TO
IMPLEMENT
GREEN
COMMU-
NITY PROGRAMS NOT TREATED AS PRIVATE ACTIV-
ITY BONDS.—For purposes of paragraph (3) and 
subsection (f)(2), a bond shall not be treated as a 
private activity bond solely because proceeds of the 
issue of which such bond is a part are to be used 
for loans or grants for capital expenditures to imple-
ment any green community program.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after the date 
of the enactment of this Act. 
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HR 1 RDS 
PART 3—ENERGY CONSERVATION INCENTIVES 
SEC. 1621. EXTENSION AND MODIFICATION OF CREDIT FOR 
NONBUSINESS ENERGY PROPERTY. 
(a) IN GENERAL.—Section 25C is amended by strik-
ing subsections (a) and (b) and inserting the following new 
subsections: 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount 
equal to 30 percent of the sum of— 
‘‘(1) the amount paid or incurred by the tax-
payer during such taxable year for qualified energy 
efficiency improvements, and 
‘‘(2) the amount of the residential energy prop-
erty expenditures paid or incurred by the taxpayer 
during such taxable year. 
‘‘(b) LIMITATION.—The aggregate amount of the 
credits allowed under this section for taxable years begin-
ning in 2009 and 2010 with respect to any taxpayer shall 
not exceed $1,500.’’. 
(b) EXTENSION.—Section 25C(g)(2) is amended by 
striking ‘‘December 31, 2009’’ and inserting ‘‘December 
31, 2010’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2008. 
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HR 1 RDS 
SEC. 1622. MODIFICATION OF CREDIT FOR RESIDENTIAL 
ENERGY EFFICIENT PROPERTY. 
(a) REMOVAL OF CREDIT LIMITATION FOR PROP-
ERTY PLACED IN SERVICE.— 
(1) IN
GENERAL.—Paragraph (1) of section 
25D(b) is amended to read as follows: 
‘‘(1) MAXIMUM CREDIT FOR FUEL CELLS.—In 
the case of any qualified fuel cell property expendi-
ture, the credit allowed under subsection (a) (deter-
mined without regard to subsection (c)) for any tax-
able year shall not exceed $500 with respect to each 
half kilowatt of capacity of the qualified fuel cell 
property (as defined in section 48(c)(1)) to which 
such expenditure relates.’’. 
(2) CONFORMING AMENDMENT.—Paragraph (4) 
of section 25D(e) is amended— 
(A) by striking all that precedes subpara-
graph (B) and inserting the following: 
‘‘(4) FUEL
CELL
EXPENDITURE
LIMITATIONS 
IN CASE OF JOINT OCCUPANCY.—In the case of any 
dwelling unit with respect to which qualified fuel cell 
property expenditures are made and which is jointly 
occupied and used during any calendar year as a 
residence by two or more individuals the following 
rules shall apply: 
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‘‘(A) MAXIMUM EXPENDITURES FOR FUEL 
CELLS.—The maximum amount of such ex-
penditures which may be taken into account 
under subsection (a) by all such individuals 
with respect to such dwelling unit during such 
calendar year shall be $1,667 in the case of 
each half kilowatt of capacity of qualified fuel 
cell property (as defined in section 48(c)(1)) 
with respect to which such expenditures re-
late.’’, and 
(B) by striking subparagraph (C). 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2008. 
SEC. 1623. TEMPORARY INCREASE IN CREDIT FOR ALTER-
NATIVE FUEL VEHICLE REFUELING PROP-
ERTY. 
(a) IN GENERAL.—Section 30C(e) is amended by 
adding at the end the following new paragraph: 
‘‘(6) SPECIAL RULE FOR PROPERTY PLACED IN 
SERVICE
DURING
2009
AND
2010.—In the case of 
property placed in service in taxable years beginning 
after December 31, 2008, and before January 1, 
2011— 
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‘‘(A) in the case of any such property 
which does not relate to hydrogen— 
‘‘(i) subsection (a) shall be applied by 
substituting ‘50 percent’ for ‘30 percent’, 
‘‘(ii) subsection (b)(1) shall be applied 
by substituting ‘$50,000’ for ‘$30,000’, 
and 
‘‘(iii) subsection (b)(2) shall be ap-
plied by substituting ‘$2,000’ for ‘$1,000’, 
and 
‘‘(B) in the case of any such property 
which relates to hydrogen, subsection (b) shall 
be applied by substituting ‘$200,000’ for 
‘$30,000’.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2008. 
PART 4—ENERGY RESEARCH INCENTIVES 
SEC. 1631. INCREASED RESEARCH CREDIT FOR ENERGY RE-
SEARCH. 
(a) IN GENERAL.—Section 41 is amended by redesig-
nating subsection (h) as subsection (i) and by inserting 
after subsection (g) the following new subsection: 
‘‘(h) ENERGY RESEARCH CREDIT.—In the case of 
any taxable year beginning in 2009 or 2010— 
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‘‘(1) IN
GENERAL.—The credit determined 
under subsection (a)(1) shall be increased by 20 per-
cent of the qualified energy research expenses for 
the taxable year. 
‘‘(2) 
QUALIFIED
ENERGY
RESEARCH
EX-
PENSES.—For purposes of this subsection, the term 
‘qualified energy research expenses’ means so much 
of the taxpayer’s qualified research expenses as are 
related to the fields of fuel cells and battery tech-
nology, renewable energy, energy conservation tech-
nology, efficient transmission and distribution of 
electricity, and carbon capture and sequestration. 
‘‘(3) COORDINATION
WITH
OTHER
RESEARCH 
CREDITS.— 
‘‘(A) INCREMENTAL CREDIT.—The amount 
of qualified energy research expenses taken into 
account under subsection (a)(1)(A) shall not ex-
ceed the base amount. 
‘‘(B) ALTERNATIVE SIMPLIFIED CREDIT.— 
For purposes of subsection (c)(5), the amount 
of qualified energy research expenses taken into 
account for the taxable year for which the cred-
it is being determined shall not exceed— 
‘‘(i) 
in 
the 
case 
of 
subsection 
(c)(5)(A), 50 percent of the average quali-
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fied research expenses for the 3 taxable 
years preceding the taxable year for which 
the credit is being determined, and 
‘‘(ii) 
in 
the 
case 
of 
subsection 
(c)(5)(B)(ii), zero. 
‘‘(C) BASIC RESEARCH AND ENERGY RE-
SEARCH CONSORTIUM PAYMENTS.—Any amount 
taken into account under paragraph (1) shall 
not be taken into account under paragraph (2) 
or (3) of subsection (a).’’. 
(b) CONFORMING AMENDMENT.—Subparagraph (B) 
of section 41(i)(1)(B), as redesignated by subsection (a), 
is amended by inserting ‘‘(in the case of the increase in 
the credit determined under subsection (h), December 31, 
2010)’’ after ‘‘December 31, 2009’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2008. 
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Subtitle H—Other Provisions 
PART 
1—APPLICATION 
OF 
CERTAIN 
LABOR 
STANDARDS TO PROJECTS FINANCED WITH 
CERTAIN TAX-FAVORED BONDS 
SEC. 1701. APPLICATION OF CERTAIN LABOR STANDARDS 
TO PROJECTS FINANCED WITH CERTAIN TAX- 
FAVORED BONDS. 
Subchapter IV of chapter 31 of the title 40, United 
States Code, shall apply to projects financed with the pro-
ceeds of— 
(1) any qualified clean renewable energy bond 
(as defined in section 54C of the Internal Revenue 
Code of 1986) issued after the date of the enact-
ment of this Act, 
(2) any qualified energy conservation bond (as 
defined in section 54D of the Internal Revenue Code 
of 1986) issued after the date of the enactment of 
this Act, 
(3) any qualified zone academy bond (as de-
fined in section 54E of the Internal Revenue Code 
of 1986) issued after the date of the enactment of 
this Act, 
(4) any qualified school construction bond (as 
defined in section 54F of the Internal Revenue Code 
of 1986), and 
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(5) any recovery zone economic development 
bond (as defined in section 1400U–2 of the Internal 
Revenue Code of 1986). 
PART 2—GRANTS TO PROVIDE FINANCING FOR 
LOW-INCOME HOUSING 
SEC. 1711. GRANTS TO STATES FOR LOW-INCOME HOUSING 
PROJECTS IN LIEU OF LOW-INCOME HOUS-
ING CREDIT ALLOCATIONS FOR 2009. 
(a) IN GENERAL.—The Secretary of the Treasury 
shall make a grant to the housing credit agency of each 
State in an amount equal to such State’s low-income hous-
ing grant election amount. 
(b) LOW-INCOME
HOUSING
GRANT
ELECTION 
AMOUNT.—For purposes of this section, the term ‘‘low- 
income housing grant election amount’’ means, with re-
spect to any State, such amount as the State may elect 
which does not exceed 85 percent of the product of— 
(1) the sum of— 
(A) 100 percent of the State housing credit 
ceiling for 2009 which is attributable to 
amounts described in clauses (i) and (iii) of sec-
tion 42(h)(3)(C) of the Internal Revenue Code 
of 1986, and 
(B) 40 percent of the State housing credit 
ceiling for 2009 which is attributable to 
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amounts described in clauses (ii) and (iv) of 
such section, multiplied by 
(2) 10. 
(c) SUBAWARDS FOR LOW-INCOME BUILDINGS.— 
(1) IN GENERAL.—A State housing credit agen-
cy receiving a grant under this section shall use such 
grant to make subawards to finance the construction 
or acquisition and rehabilitation of qualified low-in-
come buildings. A subaward under this section may 
be made to finance a qualified low-income building 
with or without an allocation under section 42 of the 
Internal Revenue Code of 1986, except that a State 
housing credit agency may make subawards to fi-
nance qualified low-income buildings without an allo-
cation only if it makes a determination that such use 
will increase the total funds available to the State to 
build and rehabilitate affordable housing. In com-
plying with such determination requirement, a State 
housing credit agency shall establish a process in 
which applicants that are allocated credits are re-
quired to demonstrate good faith efforts to obtain 
investment commitments for such credits before the 
agency makes such subawards. 
(2) SUBAWARDS SUBJECT TO SAME REQUIRE-
MENTS AS LOW-INCOME HOUSING CREDIT ALLOCA-
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TIONS.—Any such subaward with respect to any 
qualified low-income building shall be made in the 
same manner and shall be subject to the same limi-
tations (including rent, income, and use restrictions 
on such building) as an allocation of housing credit 
dollar amount allocated by such State housing credit 
agency under section 42 of the Internal Revenue 
Code of 1986, except that such subawards shall not 
be limited by, or otherwise affect (except as provided 
in subsection (h)(3)(J) of such section), the State 
housing credit ceiling applicable to such agency. 
(3) COMPLIANCE AND ASSET MANAGEMENT.— 
The State housing credit agency shall perform asset 
management functions to ensure compliance with 
section 42 of the Internal Revenue Code of 1986 
and the long-term viability of buildings funded by 
any subaward under this section. The State housing 
credit agency may collect reasonable fees from a 
subaward recipient to cover expenses associated with 
the performance of its duties under this paragraph. 
The State housing credit agency may retain an 
agent or other private contractor to satisfy the re-
quirements of this paragraph. 
(4) RECAPTURE.—The State housing credit 
agency shall impose conditions or restrictions, in-
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cluding a requirement providing for recapture, on 
any subaward under this section so as to assure that 
the building with respect to which such subaward is 
made remains a qualified low-income building during 
the compliance period. Any such recapture shall be 
payable to the Secretary of the Treasury for deposit 
in the general fund of the Treasury and may be en-
forced by means of liens or such other methods as 
the Secretary of the Treasury determines appro-
priate. 
(d) RETURN OF UNUSED GRANT FUNDS.—Any grant 
funds not used to make subawards under this section be-
fore January 1, 2011, shall be returned to the Secretary 
of the Treasury on such date. Any subawards returned 
to the State housing credit agency on or after such date 
shall be promptly returned to the Secretary of the Treas-
ury. Any amounts returned to the Secretary of the Treas-
ury under this subsection shall be deposited in the general 
fund of the Treasury. 
(e) DEFINITIONS.—Any term used in this section 
which is also used in section 42 of the Internal Revenue 
Code of 1986 shall have the same meaning for purposes 
of this section as when used in such section 42. Any ref-
erence in this section to the Secretary of the Treasury 
shall be treated as including the Secretary’s delegate. 
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manner as in the case of emergency unemployment com-
pensation. 
(g) APPLICATION TO OTHER UNEMPLOYMENT BENE-
FITS.— 
(1) IN GENERAL.—Each agreement under this 
section shall include provisions to provide that the 
purposes of the preceding provisions of this section 
shall be applied with respect to unemployment bene-
fits described in subsection (h)(3) to the same extent 
and in the same manner as if those benefits were 
regular compensation. 
(2) ELIGIBILITY AND TERMINATION RULES.— 
Additional compensation (as described in subsection 
(b)(1))— 
(A) shall not be payable, pursuant to this 
subsection, with respect to any unemployment 
benefits described in subsection (h)(3) for any 
week beginning on or after the date specified in 
subsection (e)(1)(B), except in the case of an 
individual who was eligible to receive additional 
compensation (as so described) in connection 
with any regular compensation or any unem-
ployment benefits described in subsection (h)(3) 
for any period of unemployment ending before 
such date; and 
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