177 
representatives of the nuclear utility and nuclear en-
ergy products and services industries, and organized 
labor, concerning skills that are needed in those in-
dustries. 
‘‘(3) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated to the Sec-
retary of Labor, working in coordination with the 
Secretaries of Education and Energy $20,000,000 
for each of fiscal years 2008 through 2012 for use 
in implementing a program to provide workforce 
training to meet the high demand for workers skilled 
in the nuclear utility and nuclear energy products 
and services industries.’’. 
SEC. 185. NATIONAL NUCLEAR ENERGY COUNCIL. 
(a) IN GENERAL.— 
(1) The Secretary of Energy shall establish a 
National Nuclear Energy Council (hereinafter the 
‘‘Council’’). 
(2) The National Nuclear Energy Council shall 
be subject to the requirements of the Federal Advi-
sory Committee Act (5 U.S.C. Appendix 2). 
(b) PURPOSE.—The National Nuclear Energy Coun-
cil shall— 
(1) serve in an advisory capacity to the Sec-
retary of Energy regarding nuclear energy on mat-
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ters submitted to the Council by the Secretary of 
Energy; and 
(2) advise, inform, and make recommendations 
to the Secretary of Energy, and represent the views 
of the nuclear energy industry with respect to any 
matter relating to nuclear energy. 
(c) MEMBERSHIP AND ORGANIZATION.— 
(1) The members of the Council shall be ap-
pointed by the Secretary of Energy. 
(2) The Council may establish such study and 
administrative committees as it may deem appro-
priate. Study committees shall only assist the Coun-
cil in preparing its advice, information, or rec-
ommendations to the Secretary of Energy. Adminis-
trative committees shall be formed solely for the 
purpose of assisting the Council or its Chairman in 
the management of the internal affairs of the Coun-
cil. 
(3) The officers of the Council shall consist of 
a Chairman, a Vice Chairman, and such other offi-
cers as may be approved by the Council. The Chair-
man and Vice Chairman must be members of the 
Council and shall receive no compensation for service 
as officers of the Council. 
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(4) The Secretary of Energy shall be Cochair-
man of the Council. If the Secretary of Energy des-
ignates a full-time, salaried official of the Depart-
ment of Energy as his alternate, such alternate may 
exercise any duties of the Secretary of Energy and 
may perform any function on the Council otherwise 
reserved for the Secretary of Energy. 
(5) The Chairman and the Vice Chairman shall 
be elected by the Council at its organizational meet-
ing to serve until their successors are elected at the 
next organizational meeting of the Council. 
(d) MEETINGS.— 
(1) Regular meetings of the Council shall be 
held at least twice each year at times determined by 
the Chairman and approved by the Government Co-
chairman. 
(2) No meeting of the Council shall be held un-
less the Government Cochairman approves the agen-
da thereof, approves the calling thereof, and is 
present thereat. 
(3) The time and place of all Council meetings 
shall be given general publicity and such meetings 
shall be open to the public. 
(e) STUDIES BY THE COUNCIL.— 
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(1) The Council may establish study committees 
to prepare reports for the consideration of the Coun-
cil pursuant to requests from the Secretary of En-
ergy for advice, information, and recommendations. 
(2) The Secretary of Energy or a full-time em-
ployee of the Department of Energy designated by 
the Secretary shall be the Cochairman of each study 
committee. 
(3) The members of study committees shall be 
selected from the Council membership on the basis 
of their training, experience, and general qualifica-
tions to deal with the matters assigned. 
SEC. 186. NUCLEAR WASTE MANAGEMENT. 
(a) HIGH LEVEL WASTE AUTHORITY.— 
(1) ESTABLISHMENT.—Not later than the ear-
lier of— 
(A) 90 days after the submittal of a license 
application for a repository at Yucca Mountain; 
or 
(B) 1 year after the date of enactment of 
this Act, 
the President shall establish a High Level Waste 
Authority (in this section referred to as the ‘‘Au-
thority’’). 
(2) DUTIES.—The Authority— 
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(A) shall assume the responsibilities of the 
Secretary of Energy with respect to contracts 
entered into under section 302(a) of the Nu-
clear Waste Policy Act of 1982 (42 U.S.C. 
10222(a)); 
(B) shall consider, as appropriate, all rea-
sonable used fuel options in addition to direct 
disposal, including recycling, interim storage, 
and alternate geologic repository sites outside 
the State of Nevada; 
(C) may enter into contracts with civilian 
nuclear power reactor owners and operators for 
used fuel management, including recycling, fuel 
fabrication, and sale or disposition of materials 
derived from recycling; and 
(D) may negotiate with willing host com-
munities or States for supporting facilities and 
activities. 
(3) MEMBERSHIP.—The Authority shall consist 
of 7 members, to be appointed by the President, 
with the advice and consent of the Senate, from 
among individuals who— 
(A) are United States citizens; 
(B) have experience in nuclear industry 
corporate management; and 
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(C) have large corporation management ex-
pertise. 
(4) TERMS.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), members of the Authority 
shall serve for terms of 5 years, and may serve 
for not more than 2 terms. 
(B) INITIAL
TERMS.—Of the individuals 
appointed initially to the Authority— 
(i) 2 shall be appointed for an initial 
term of 5 years; 
(ii) 2 shall be appointed for an initial 
term of 4 years; 
(iii) 2 shall be appointed for an initial 
term of 3 years; and 
(iv) 1 shall be appointed for an initial 
term of 2 years. 
(C) VACANCIES.—The President, with the 
advice and consent of the Senate, shall appoint 
individuals to fill vacancies on the Authority, in 
the same manner as the original appointment 
was made, to serve for the remainder of the 
term vacated. 
(5) TRAVEL EXPENSES AND PER DIEM.—Mem-
bers of the Authority shall be reimbursed by the Au-
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183 
thority for travel expenses incurred as part of their 
service on the Authority, including per diem in lieu 
of subsistence in accordance with subchapter I of 
chapter 57 of title 5, United States Code, for each 
day on which they are engaged in the business of the 
Authority. 
(6) REPORT TO CONGRESS.—Not later than 1 
year after the Authority is established under para-
graph (1), and annually thereafter, the Authority 
shall transmit to the Congress a report on its activi-
ties. 
(b) RECYCLING REGULATIONS.—Not later than 1 
year after the date of enactment of this Act, the Nuclear 
Regulatory Commission, in collaboration with the Sec-
retary of Energy, shall issue regulations for licensing fa-
cilities for the recovery and use of plutonium from used 
fuel recycling that provide appropriate protections for the 
common defense and security. 
(c) FUNDING.—The Authority’s activities shall be 
funded through— 
(1) the Nuclear Waste Fund established under 
section 302(c) of the Nuclear Waste Policy Act of 
1982 (42 U.S.C. 10222(c)); 
(2) appropriations authorized under subsection 
(e); and 
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(3) any contributions provided by State or local 
governments or from the private sector. 
(d) RESEARCH
AND DEVELOPMENT.—Nothing in 
this section shall be construed to reduce the responsibility 
of the Secretary of Energy to conduct research and devel-
opment on advanced nuclear fuel cycles and separation 
technologies. 
(e) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary of En-
ergy for carrying out this section such sums as may be 
necessary. 
TITLE II—INCREASE OUR 
UTILIZATION EFFICIENCY 
Subtitle A—Coal to Liquids 
SEC. 201. LOCATION OF COAL-TO-LIQUID MANUFACTURING 
FACILITIES. 
The Secretary of Energy, in coordination with the 
head of any affected agency, shall promulgate such regula-
tions as the Secretary determines to be necessary to sup-
port the development on Federal land (including land of 
the Department of Energy, military bases, and military 
installations closed or realigned under the defense base 
closure and realignment) of coal-to-liquid manufacturing 
facilities and associated infrastructure, including the cap-
ture, transportation, or sequestration of carbon dioxide. 
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SEC. 202. AUTHORIZATION TO CONDUCT RESEARCH, DE-
VELOPMENT, TESTING, AND EVALUATION OF 
ASSURED DOMESTIC FUELS. 
Of the amount authorized to be appropriated for the 
Air Force for research, development, test, and evaluation, 
$10,000,000 may be made available for the Air Force Re-
search Laboratory to continue support efforts to test, 
qualify, and procure synthetic fuels developed from coal 
for aviation jet use. 
SEC. 203. COAL-TO-LIQUID LONG-TERM FUEL PROCURE-
MENT AND DEPARTMENT OF DEFENSE DE-
VELOPMENT. 
Section 2922a of title 10, United States Code is 
amended— 
(1) in subsection (b)— 
(A) by inserting ‘‘(1)’’ before ‘‘The Sec-
retary’’; and 
(B) by adding at the end the following: 
‘‘(2)(A) The Secretary of Defense may enter into con-
tracts or other agreements with private companies or other 
entities to develop and operate coal-to-liquid manufac-
turing facilities on or near military installations. 
‘‘(B) In entering into contracts and other agreements 
under subparagraph (A), the Secretary shall consider land 
availability, testing opportunities, and proximity to raw 
materials.’’; and 
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(2) in subsection (d)— 
(A) by striking ‘‘Subject to applicable pro-
visions of law, any’’ and inserting ‘‘Any’’; 
(B) by inserting after ‘‘covered fuel’’ the 
following: ‘‘or coal-to-liquid fuel’’; and 
(C) by striking ‘‘1 or more years’’ and in-
serting ‘‘up to 25 years’’. 
Subtitle B—Energy Tax Provisions 
SEC. 211. SHORT TITLE; AMENDMENT OF 1986 CODE. 
(a) SHORT TITLE.—This subtitle may be cited as the 
‘‘Renewable Energy and Energy Conservation Tax Act of 
2008’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this subtitle an 
amendment or repeal is expressed in terms of an amend-
ment to, or repeal of, a section or other provision, the ref-
erence shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986. 
PART 1—PRODUCTION INCENTIVES 
SEC. 221. EXTENSION AND MODIFICATION OF RENEWABLE 
ENERGY CREDIT. 
(a) EXTENSION OF CREDIT.—Each of the following 
provisions of section 45(d) (relating to qualified facilities) 
is amended by striking ‘‘January 1, 2009’’ and inserting 
‘‘January 1, 2012’’: 
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(1) Paragraph (1). 
(2) Clauses (i) and (ii) of paragraph (2)(A). 
(3) Clauses (i)(I) and (ii) of paragraph (3)(A). 
(4) Paragraph (4). 
(5) Paragraph (5). 
(6) Paragraph (6). 
(7) Paragraph (7). 
(8) Subparagraphs (A) and (B) of paragraph 
(9). 
(b) MODIFICATION OF CREDIT PHASEOUT.— 
(1) REPEAL OF PHASEOUT.—Subsection (b) of 
section 45 is amended— 
(A) by striking paragraph (1), and 
(B) by striking ‘‘the 8 cent amount in 
paragraph (1),’’ in paragraph (2) thereof. 
(2) LIMITATION BASED ON INVESTMENT IN FA-
CILITY.—Subsection (b) of section 45 is amended by 
inserting before paragraph (2) the following new 
paragraph: 
‘‘(1) LIMITATION
BASED
ON
INVESTMENT
IN 
FACILITY.— 
‘‘(A) IN
GENERAL.—In the case of any 
qualified facility originally placed in service 
after December 31, 2009, the amount of the 
credit determined under subsection (a) for any 
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188 
taxable year with respect to electricity produced 
at such facility shall not exceed the product 
of— 
‘‘(i) the applicable percentage with re-
spect to such facility, multiplied by 
‘‘(ii) the eligible basis of such facility. 
‘‘(B) CARRYFORWARD OF UNUSED LIMITA-
TION AND EXCESS CREDIT.— 
‘‘(i) UNUSED
LIMITATION.—If the 
limitation imposed under subparagraph (A) 
with respect to any facility for any taxable 
year exceeds the prelimitation credit for 
such facility for such taxable year, the lim-
itation imposed under subparagraph (A) 
with respect to such facility for the suc-
ceeding taxable year shall be increased by 
the amount of such excess. 
‘‘(ii) 
EXCESS
CREDIT.—If 
the 
prelimitation credit with respect to any fa-
cility for any taxable year exceeds the limi-
tation imposed under subparagraph (A) 
with respect to such facility for such tax-
able year, the credit determined under sub-
section (a) with respect to such facility for 
the succeeding taxable year (determined 
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189 
before the application of subparagraph (A) 
for such succeeding taxable year) shall be 
increased by the amount of such excess. 
With respect to any facility, no amount 
may be carried forward under this clause 
to any taxable year beginning after the 10- 
year 
period 
described 
in 
subsection 
(a)(2)(A)(ii) with respect to such facility. 
‘‘(iii) PRELIMITATION
CREDIT.—The 
term ‘prelimitation credit’ with respect to 
any facility for a taxable year means the 
credit determined under subsection (a) 
with respect to such facility for such tax-
able year, determined without regard to 
subparagraph (A) and after taking into ac-
count any increase for such taxable year 
under clause (ii). 
‘‘(C) 
APPLICABLE
PERCENTAGE.—For 
purposes of this paragraph— 
‘‘(i) IN GENERAL.—The term ‘applica-
ble percentage’ means, with respect to any 
facility, the appropriate percentage pre-
scribed by the Secretary for the month in 
which such facility is originally placed in 
service. 
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‘‘(ii) METHOD
OF
PRESCRIBING
AP-
PLICABLE PERCENTAGES.—The applicable 
percentages prescribed by the Secretary for 
any month under clause (i) shall be per-
centages which yield over a 10-year period 
amounts of limitation under subparagraph 
(A) which have a present value equal to 35 
percent of the eligible basis of the facility. 
‘‘(iii) METHOD
OF
DISCOUNTING.— 
The present value under clause (ii) shall be 
determined— 
‘‘(I) as of the last day of the 1st 
year of the 10-year period referred to 
in clause (ii), 
‘‘(II) by using a discount rate 
equal to the greater of 110 percent of 
the Federal long-term rate as in effect 
under section 1274(d) for the month 
preceding the month for which the ap-
plicable percentage is being pre-
scribed, or 4.5 percent, and 
‘‘(III) by taking into account the 
limitation under subparagraph (A) for 
any year on the last day of such year. 
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‘‘(D) ELIGIBLE
BASIS.—For purposes of 
this paragraph— 
‘‘(i) IN GENERAL.—The term ‘eligible 
basis’ means, with respect to any facility, 
the sum of— 
‘‘(I) the basis of such facility de-
termined as of the time that such fa-
cility is originally placed in service, 
and 
‘‘(II) the portion of the basis of 
any shared qualified property which is 
properly allocable to such facility 
under clause (ii). 
‘‘(ii) RULES FOR ALLOCATION.—For 
purposes of subclause (II) of clause (i), the 
basis of shared qualified property shall be 
allocated among all qualified facilities 
which are projected to be placed in service 
and which require utilization of such prop-
erty in proportion to projected generation 
from such facilities. 
‘‘(iii) 
SHARED
QUALIFIED
PROP-
ERTY.—For purposes of this paragraph, 
the term ‘shared qualified property’ means, 
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192 
with respect to any facility, any property 
described in section 168(e)(3)(B)(vi)— 
‘‘(I) which a qualified facility will 
require for utilization of such facility, 
and 
‘‘(II) which is not a qualified fa-
cility. 
‘‘(iv) SPECIAL
RULE
RELATING
TO 
GEOTHERMAL FACILITIES.—In the case of 
any qualified facility using geothermal en-
ergy to produce electricity, the basis of 
such facility for purposes of this paragraph 
shall be determined as though intangible 
drilling and development costs described in 
section 263(c) were capitalized rather than 
expensed. 
‘‘(E) SPECIAL RULE FOR FIRST AND LAST 
YEAR OF CREDIT PERIOD.—In the case of any 
taxable year any portion of which is not within 
the 10-year period described in subsection 
(a)(2)(A)(ii) with respect to any facility, the 
amount of the limitation under subparagraph 
(A) with respect to such facility shall be re-
duced by an amount which bears the same ratio 
to the amount of such limitation (determined 
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193 
without regard to this subparagraph) as such 
portion of the taxable year which is not within 
such period bears to the entire taxable year. 
‘‘(F) ELECTION TO TREAT ALL FACILITIES 
PLACED IN SERVICE IN A YEAR AS 1 FACIL-
ITY.—At the election of the taxpayer, all quali-
fied facilities which are part of the same project 
and which are placed in service during the same 
calendar year shall be treated for purposes of 
this section as 1 facility which is placed in serv-
ice at the mid-point of such year or the first 
day of the following calendar year.’’. 
(c) TRASH FACILITY CLARIFICATION.—Paragraph 
(7) of section 45(d) is amended— 
(1) by striking ‘‘facility which burns’’ and in-
serting ‘‘facility (other than a facility described in 
paragraph (6)) which uses’’, and 
(2) by striking ‘‘COMBUSTION’’. 
(d) EXPANSION OF BIOMASS FACILITIES.— 
(1) OPEN-LOOP
BIOMASS
FACILITIES.—Para-
graph (3) of section 45(d) is amended by redesig-
nating subparagraph (B) as subparagraph (C) and 
by inserting after subparagraph (A) the following 
new subparagraph: 
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194 
‘‘(B) EXPANSION
OF
FACILITY.—Such 
term shall include a new unit placed in service 
after the date of the enactment of this subpara-
graph in connection with a facility described in 
subparagraph (A), but only to the extent of the 
increased amount of electricity produced at the 
facility by reason of such new unit.’’. 
(2) CLOSED-LOOP BIOMASS FACILITIES.—Para-
graph (2) of section 45(d) is amended by redesig-
nating subparagraph (B) as subparagraph (C) and 
inserting after subparagraph (A) the following new 
subparagraph: 
‘‘(B) EXPANSION
OF
FACILITY.—Such 
term shall include a new unit placed in service 
after the date of the enactment of this subpara-
graph in connection with a facility described in 
subparagraph (A)(i), but only to the extent of 
the increased amount of electricity produced at 
the facility by reason of such new unit.’’. 
(e) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to property originally placed 
in service after December 31, 2008. 
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195 
(2) REPEAL
OF
CREDIT
PHASEOUT.—The 
amendments made by subsection (b)(1) shall apply 
to taxable years ending after December 31, 2008. 
(3) LIMITATION BASED ON INVESTMENT IN FA-
CILITY.—The amendment made by subsection (b)(2) 
shall apply to property originally placed in service 
after December 31, 2009. 
(4) TRASH
FACILITY
CLARIFICATION.—The 
amendments made by subsection (c) shall apply to 
electricity produced and sold after the date of the 
enactment of this Act. 
(5) EXPANSION OF BIOMASS FACILITIES.—The 
amendments made by subsection (d) shall apply to 
property placed in service after the date of the en-
actment of this Act. 
SEC. 222. PRODUCTION CREDIT FOR ELECTRICITY PRO-
DUCED FROM MARINE RENEWABLES. 
(a) IN GENERAL.—Paragraph (1) of section 45(c) 
(relating to resources) is amended by striking ‘‘and’’ at 
the end of subparagraph (G), by striking the period at 
the end of subparagraph (H) and inserting ‘‘, and’’, and 
by adding at the end the following new subparagraph: 
‘‘(I) marine and hydrokinetic renewable en-
ergy.’’. 
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(b) MARINE RENEWABLES.—Subsection (c) of sec-
tion 45 is amended by adding at the end the following 
new paragraph: 
‘‘(10) MARINE
AND
HYDROKINETIC
RENEW-
ABLE ENERGY.— 
‘‘(A) IN GENERAL.—The term ‘marine and 
hydrokinetic renewable energy’ means energy 
derived from— 
‘‘(i) waves, tides, and currents in 
oceans, estuaries, and tidal areas, 
‘‘(ii) free flowing water in rivers, 
lakes, and streams, 
‘‘(iii) free flowing water in an irriga-
tion system, canal, or other man-made 
channel, including projects that utilize non-
mechanical structures to accelerate the 
flow of water for electric power production 
purposes, or 
‘‘(iv) differentials in ocean tempera-
ture (ocean thermal energy conversion). 
‘‘(B) EXCEPTIONS.—Such term shall not 
include any energy which is derived from any 
source which utilizes a dam, diversionary struc-
ture (except as provided in subparagraph 
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197 
(A)(iii)), or impoundment for electric power 
production purposes.’’. 
(c) DEFINITION
OF FACILITY.—Subsection (d) of 
section 45 is amended by adding at the end the following 
new paragraph: 
‘‘(11) MARINE
AND
HYDROKINETIC
RENEW-
ABLE ENERGY FACILITIES.—In the case of a facility 
producing electricity from marine and hydrokinetic 
renewable energy, the term ‘qualified facility’ means 
any facility owned by the taxpayer— 
‘‘(A) which has a nameplate capacity rat-
ing of at least 150 kilowatts, and 
‘‘(B) which is originally placed in service 
on or after the date of the enactment of this 
paragraph and before January 1, 2012.’’. 
(d) CREDIT RATE.—Subparagraph (A) of section 
45(b)(4) is amended by striking ‘‘or (9)’’ and inserting 
‘‘(9), or (11)’’. 
(e) 
COORDINATION
WITH
SMALL
IRRIGATION 
POWER.—Paragraph (5) of section 45(d), as amended by 
section 221(a), is amended by striking ‘‘January 1, 2012’’ 
and inserting ‘‘the date of the enactment of paragraph 
(11)’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to electricity produced and sold 
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198 
after the date of the enactment of this Act, in taxable 
years ending after such date. 
SEC. 223. EXTENSION OF ELECTRICITY PRODUCTION TAX 
CREDIT TO ELECTRICITY PRODUCED FROM 
THE PRODUCTION OF SUBSTITUTE NATURAL 
GAS FROM REFINED COAL OR PETCOKE. 
(a) REFINED COAL.—Clauses (i) and (ii) of section 
45(c)(7)(A) of the Internal Revenue Code of 1986 (defin-
ing refined coal) are amended to read as follows: 
‘‘(i) is a liquid, gaseous or solid fuel 
produced from coal (including lignite), high 
carbon fly ash or petroleum coke, in each 
case including such fuel used as a feed-
stock, 
‘‘(ii) is sold by the taxpayer with the 
reasonable expectation that it will be used 
for the purpose of producing steam, heat, 
or electricity,’’. 
(b) SPECIAL RULES RELATING TO REFINED COAL 
PRODUCTION FACILITIES.—Subparagraph (A) of section 
45(e)(8) of such Code (determination of credit amount) 
is amended to read as follows: 
‘‘(A) 
DETERMINATION
OF
CREDIT 
AMOUNT.—In the case of a producer of refined 
coal, the credit determined under this section 
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(without regard to this paragraph) for any tax-
able year— 
‘‘(i) shall be— 
‘‘(I) in the case of the production 
of electricity, be 2.0 cents multiplied 
by the kilowatt hours of electricity 
produced, and 
‘‘(II) in any other case, be 
$4.375 per ton of qualified refined 
coal produced (or, in the case of re-
fined coal that is a liquid or gaseous 
fuel, 40 cents per million BTU of re-
fined coal), and 
‘‘(ii) for electricity or refined coal (as 
the case may be)— 
‘‘(I) produced by the taxpayer at 
a refined coal production facility dur-
ing the 10-year period beginning on 
the date the facility was originally 
placed in service, and 
‘‘(II) sold by the taxpayer to an 
unrelated person during such 10-year 
period and such taxable year.’’. 
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(c) INFLATION ADJUSTMENT.—Section 45(b)(2) of 
such Code (related to credit and phaseout adjustment 
based on inflation) is amended by— 
(1) inserting ‘‘and the 40 cents per million 
BTU amount’’ after ‘‘$4.375 amount’’, and 
(2) striking ‘‘and’’ after ‘‘subsection (e)(8)(A),’’ 
and inserting ‘‘the $4.375 amount’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to refined coal produced and sold 
after December 31, 2010. 
SEC. 224. EXTENSION AND MODIFICATION OF ENERGY 
CREDIT. 
(a) EXTENSION OF CREDIT.— 
(1) SOLAR
ENERGY
PROPERTY.—Paragraphs 
(2)(A)(i)(II) and (3)(A)(ii) of section 48(a) (relating 
to energy credit) are each amended by striking 
‘‘January 1, 2009’’ and inserting ‘‘January 1, 
2017’’. 
(2) FUEL CELL PROPERTY.—Subparagraph (E) 
of section 48(c)(1) (relating to qualified fuel cell 
property) is amended by striking ‘‘December 31, 
2008’’ and inserting ‘‘December 31, 2016’’. 
(b) ALLOWANCE OF ENERGY CREDIT AGAINST AL-
TERNATIVE MINIMUM TAX.—Subparagraph (B) of section 
38(c)(4) (relating to specified credits) is amended by strik-
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ing ‘‘and’’ at the end of clause (iii), by striking the period 
at the end of clause (iv) and inserting ‘‘, and’’, and by 
adding at the end the following new clause: 
‘‘(v) the credit determined under sec-
tion 46 to the extent that such credit is at-
tributable to the energy credit determined 
under section 48.’’. 
(c) INCREASE OF CREDIT LIMITATION FOR FUEL 
CELL PROPERTY.—Subparagraph (B) of section 48(c)(1) 
is amended by striking ‘‘$500’’ and inserting ‘‘$1,500’’. 
(d) PUBLIC ELECTRIC UTILITY PROPERTY TAKEN 
INTO ACCOUNT.— 
(1) IN
GENERAL.—Paragraph (3) of section 
48(a) is amended by striking the second sentence 
thereof. 
(2) CONFORMING AMENDMENTS.— 
(A) Paragraph (1) of section 48(c) is 
amended by striking subparagraph (D) and re-
designating subparagraph (E) as subparagraph 
(D). 
(B) Paragraph (2) of section 48(c) is 
amended by striking subparagraph (D) and re-
designating subparagraph (E) as subparagraph 
(D). 
(e) EFFECTIVE DATE.— 
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(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall take effect on the date of the en-
actment of this Act. 
(2) ALLOWANCE AGAINST ALTERNATIVE MIN-
IMUM TAX.—The amendments made by subsection 
(b) shall apply to credits determined under section 
46 of the Internal Revenue Code of 1986 in taxable 
years beginning after the date of the enactment of 
this Act and to carrybacks of such credits. 
(3) INCREASE IN LIMITATION FOR FUEL CELL 
PROPERTY.—The amendment made by subsection 
(c) shall apply to periods after the date of the enact-
ment of this Act, in taxable years ending after such 
date, under rules similar to the rules of section 
48(m) of the Internal Revenue Code of 1986 (as in 
effect on the day before the date of the enactment 
of the Revenue Reconciliation Act of 1990). 
(4) PUBLIC
ELECTRIC
UTILITY
PROPERTY.— 
The amendments made by subsection (d) shall apply 
to periods after February 13, 2008, in taxable years 
ending after such date, under rules similar to the 
rules of section 48(m) of the Internal Revenue Code 
of 1986 (as in effect on the day before the date of 
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the enactment of the Revenue Reconciliation Act of 
1990). 
SEC. 225. NEW CLEAN RENEWABLE ENERGY BONDS. 
(a) IN GENERAL.—Part IV of subchapter A of chap-
ter 1 (relating to credits against tax) is amended by add-
ing at the end the following new subpart: 
‘‘Subpart I—Qualified Tax Credit Bonds 
‘‘Sec. 54A. Credit to holders of qualified tax credit bonds. 
‘‘Sec. 54B. New clean renewable energy bonds. 
‘‘SEC. 54A. CREDIT TO HOLDERS OF QUALIFIED TAX CRED-
IT BONDS. 
‘‘(a) ALLOWANCE OF CREDIT.—If a taxpayer holds 
a qualified tax credit bond on one or more credit allowance 
dates of the bond during any taxable year, there shall be 
allowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to the sum of the 
credits determined under subsection (b) with respect to 
such dates. 
‘‘(b) AMOUNT OF CREDIT.— 
‘‘(1) IN GENERAL.—The amount of the credit 
determined under this subsection with respect to any 
credit allowance date for a qualified tax credit bond 
is 25 percent of the annual credit determined with 
respect to such bond. 
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‘‘(2) ANNUAL CREDIT.—The annual credit de-
termined with respect to any qualified tax credit 
bond is the product of— 
‘‘(A) the applicable credit rate, multiplied 
by 
‘‘(B) the outstanding face amount of the 
bond. 
‘‘(3) APPLICABLE CREDIT RATE.—For purposes 
of paragraph (2), the applicable credit rate is the 
rate which the Secretary estimates will permit the 
issuance of qualified tax credit bonds with a speci-
fied maturity or redemption date without discount 
and without interest cost to the qualified issuer. The 
applicable credit rate with respect to any qualified 
tax credit bond shall be determined as of the first 
day on which there is a binding, written contract for 
the sale or exchange of the bond. 
‘‘(4) SPECIAL RULE FOR ISSUANCE AND RE-
DEMPTION.—In the case of a bond which is issued 
during the 3-month period ending on a credit allow-
ance date, the amount of the credit determined 
under this subsection with respect to such credit al-
lowance date shall be a ratable portion of the credit 
otherwise determined based on the portion of the 3- 
month period during which the bond is outstanding. 
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A similar rule shall apply when the bond is redeemed 
or matures. 
‘‘(c) 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— 
‘‘(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 subpart C and this 
subpart). 
‘‘(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 (determined be-
fore the application of paragraph (1) for such suc-
ceeding taxable year). 
‘‘(d) QUALIFIED TAX CREDIT BOND.—For purposes 
of this section— 
‘‘(1) QUALIFIED TAX CREDIT BOND.—The term 
‘qualified tax credit bond’ means a new clean renew-
able energy bond which is part of an issue that 
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meets the requirements of paragraphs (2), (3), (4), 
(5), and (6). 
‘‘(2) SPECIAL RULES RELATING TO EXPENDI-
TURES.— 
‘‘(A) IN
GENERAL.—An issue shall be 
treated as meeting the requirements of this 
paragraph if, as of the date of issuance, the 
issuer reasonably expects— 
‘‘(i) 100 percent or more of the avail-
able project proceeds to be spent for 1 or 
more qualified purposes within the 3-year 
period beginning on such date of issuance, 
and 
‘‘(ii) a binding commitment with a 
third party to spend at least 10 percent of 
such available project proceeds will be in-
curred within the 6-month period begin-
ning on such date of issuance. 
‘‘(B) 
FAILURE
TO
SPEND
REQUIRED 
AMOUNT
OF
BOND
PROCEEDS
WITHIN
YEARS.— 
‘‘(i) IN GENERAL.—To the extent that 
less than 100 percent of the available 
project proceeds of the issue are expended 
by the close of the expenditure period for 
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1 or more qualified purposes, the issuer 
shall redeem all of the nonqualified bonds 
within 90 days after the end of such pe-
riod. For purposes of this paragraph, the 
amount of the nonqualified bonds required 
to be redeemed shall be determined in the 
same manner as under section 142. 
‘‘(ii) 
EXPENDITURE
PERIOD.—For 
purposes of this subpart, the term ‘expend-
iture period’ means, with respect to any 
issue, the 3-year period beginning on the 
date of issuance. Such term shall include 
any extension of such period under clause 
(iii). 
‘‘(iii) EXTENSION OF PERIOD.—Upon 
submission of a request prior to the expira-
tion of the expenditure period (determined 
without regard to any extension under this 
clause), the Secretary may extend such pe-
riod if the issuer establishes that the fail-
ure to expend the proceeds within the 
original expenditure period is due to rea-
sonable cause and the expenditures for 
qualified purposes will continue to proceed 
with due diligence. 
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208 
‘‘(C) QUALIFIED PURPOSE.—For purposes 
of this paragraph, the term ‘qualified purpose’ 
means a purpose specified in section 54B(a)(1). 
‘‘(D) REIMBURSEMENT.—For purposes of 
this subtitle, available project proceeds of an 
issue shall be treated as spent for a qualified 
purpose if such proceeds are used to reimburse 
the issuer for amounts paid for a qualified pur-
pose after the date that the Secretary makes an 
allocation of bond limitation with respect to 
such issue, but only if— 
‘‘(i) prior to the payment of the origi-
nal expenditure, the issuer declared its in-
tent to reimburse such expenditure with 
the proceeds of a qualified tax credit bond, 
‘‘(ii) not later than 60 days after pay-
ment of the original expenditure, the issuer 
adopts an official intent to reimburse 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. 
‘‘(3) REPORTING.—An issue shall be treated as 
meeting the requirements of this paragraph if the 
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issuer of qualified tax credit bonds submits reports 
similar to the reports required under section 149(e). 
‘‘(4) SPECIAL
RULES
RELATING
TO
ARBI-
TRAGE.— 
‘‘(A) IN
GENERAL.—An issue shall be 
treated as meeting the requirements of this 
paragraph if the issuer satisfies the require-
ments of section 148 with respect to the pro-
ceeds of the issue. 
‘‘(B) SPECIAL
RULE
FOR
INVESTMENTS 
DURING EXPENDITURE PERIOD.—An issue shall 
not be treated as failing to meet the require-
ments of subparagraph (A) by reason of any in-
vestment of available project proceeds during 
the expenditure period. 
‘‘(C) 
SPECIAL
RULE
FOR
RESERVE 
FUNDS.—An issue shall not be treated as fail-
ing to meet the requirements of subparagraph 
(A) by reason of any fund which is expected to 
be used to repay such issue if— 
‘‘(i) such fund is funded at a rate not 
more rapid than equal annual installments, 
‘‘(ii) such fund is funded in a manner 
reasonably expected to result in an amount 
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not greater than an amount necessary to 
repay the issue, and 
‘‘(iii) the yield on such fund is not 
greater than the discount rate determined 
under paragraph (5)(B) with respect to the 
issue. 
‘‘(5) MATURITY LIMITATION.— 
‘‘(A) IN GENERAL.—An issue shall not be 
treated as meeting the requirements of this 
paragraph if the maturity of any bond which is 
part of such issue exceeds the maximum term 
determined by the Secretary under subpara-
graph (B). 
‘‘(B) MAXIMUM TERM.—During each cal-
endar month, the Secretary shall determine the 
maximum 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-ex-
empt obligations having a term of 10 years or 
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211 
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. 
‘‘(6) PROHIBITION
ON
FINANCIAL
CONFLICTS 
OF INTEREST.—An issue shall be treated as meeting 
the requirements of this paragraph if the issuer cer-
tifies that— 
‘‘(A) applicable State and local law re-
quirements governing conflicts of interest are 
satisfied with respect to such issue, and 
‘‘(B) if the Secretary prescribes additional 
conflicts of interest rules governing the appro-
priate Members of Congress, Federal, State, 
and local officials, and their spouses, such addi-
tional rules are satisfied with respect to such 
issue. 
‘‘(e) OTHER DEFINITIONS.—For purposes of this 
subchapter— 
‘‘(1) CREDIT
ALLOWANCE
DATE.—The term 
‘credit allowance date’ means— 
‘‘(A) March 15, 
‘‘(B) June 15, 
‘‘(C) September 15, and 
‘‘(D) December 15. 
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212 
Such term includes the last day on which the bond 
is outstanding. 
‘‘(2) BOND.—The term ‘bond’ includes any ob-
ligation. 
‘‘(3) STATE.—The term ‘State’ includes the 
District of Columbia and any possession of the 
United States. 
‘‘(4) AVAILABLE
PROJECT
PROCEEDS.—The 
term ‘available project proceeds’ means— 
‘‘(A) the excess of— 
‘‘(i) the proceeds from the sale of an 
issue, over 
‘‘(ii) the issuance costs financed by 
the issue (to the extent that such costs do 
not exceed 2 percent of such proceeds), 
and 
‘‘(B) the proceeds from any investment of 
the excess described in subparagraph (A). 
‘‘(f) CREDIT TREATED AS INTEREST.—For purposes 
of this subtitle, the credit determined under subsection (a) 
shall be treated as interest which is includible in gross in-
come. 
‘‘(g) S CORPORATIONS AND PARTNERSHIPS.—In the 
case of a tax credit bond held by an S corporation or part-
nership, the allocation of the credit allowed by this section 
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213 
to the shareholders of such corporation or partners of such 
partnership shall be treated as a distribution. 
‘‘(h) BONDS HELD
BY REGULATED INVESTMENT 
COMPANIES AND REAL ESTATE INVESTMENT TRUSTS.— 
If any qualified tax credit bond is held by a regulated in-
vestment company or a real estate investment trust, the 
credit determined under subsection (a) shall be allowed to 
shareholders of such company or beneficiaries of such 
trust (and any gross income included under subsection (f) 
with respect to such credit shall be treated as distributed 
to such shareholders or beneficiaries) under procedures 
prescribed by the Secretary. 
‘‘(i) CREDITS MAY BE STRIPPED.—Under regula-
tions prescribed by the Secretary— 
‘‘(1) IN GENERAL.—There may be a separation 
(including at issuance) of the ownership of a quali-
fied tax credit bond and the entitlement to the credit 
under this section with respect to such bond. In case 
of any such separation, the credit under this section 
shall be allowed to the person who on the credit al-
lowance date holds the instrument evidencing the en-
titlement to the credit and not to the holder of the 
bond. 
‘‘(2) CERTAIN RULES TO APPLY.—In the case 
of a separation described in paragraph (1), the rules 
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214 
of section 1286 shall apply to the qualified tax credit 
bond as if it were a stripped bond and to the credit 
under this section as if it were a stripped coupon. 
‘‘SEC. 54B. NEW CLEAN RENEWABLE ENERGY BONDS. 
‘‘(a) NEW CLEAN RENEWABLE ENERGY BOND.—For 
purposes of this subpart, the term ‘new clean renewable 
energy bond’ means any bond issued as part of an issue 
if— 
‘‘(1) 100 percent of the available project pro-
ceeds of such issue are to be used for capital expend-
itures incurred by public power providers or coopera-
tive electric companies for one or more qualified re-
newable energy facilities, 
‘‘(2) the bond is issued by a qualified issuer, 
and 
‘‘(3) the issuer designates such bond for pur-
poses of this section. 
‘‘(b) REDUCED CREDIT AMOUNT.—The annual credit 
determined under section 54A(b) with respect to any new 
clean renewable energy bond shall be 70 percent of the 
amount so determined without regard to this subsection. 
‘‘(c) LIMITATION
ON AMOUNT
OF BONDS DES-
IGNATED.— 
‘‘(1) IN
GENERAL.—The maximum aggregate 
face amount of bonds which may be designated 
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215 
under subsection (a) by any issuer shall not exceed 
the limitation amount allocated under this sub-
section to such issuer. 
‘‘(2) NATIONAL
LIMITATION
ON
AMOUNT
OF 
BONDS DESIGNATED.—There is a national new clean 
renewable energy bond limitation of $2,000,000,000 
which shall be allocated by the Secretary as provided 
in paragraph (3), except that— 
‘‘(A) not more than 60 percent thereof 
may be allocated to qualified projects of public 
power providers, and 
‘‘(B) not more than 40 percent thereof 
may be allocated to qualified projects of cooper-
ative electric companies. 
‘‘(3) METHOD OF ALLOCATION.— 
‘‘(A) ALLOCATION AMONG PUBLIC POWER 
PROVIDERS.—After the Secretary determines 
the qualified projects of public power providers 
which are appropriate for receiving an alloca-
tion of the national new clean renewable energy 
bond limitation, the Secretary shall, to the max-
imum extent practicable, make allocations 
among such projects in such manner that the 
amount allocated to each such project bears the 
same ratio to the cost of such project as the 
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216 
limitation under subparagraph (2)(A) bears to 
the cost of all such projects. 
‘‘(B) ALLOCATION
AMONG
COOPERATIVE 
ELECTRIC
COMPANIES.—The Secretary shall 
make allocations of the amount of the national 
new clean renewable energy bond limitation de-
scribed in paragraph (2)(B) among qualified 
projects of cooperative electric companies in 
such manner as the Secretary determines ap-
propriate. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED RENEWABLE ENERGY FACIL-
ITY.—The term ‘qualified renewable energy facility’ 
means a qualified facility (as determined under sec-
tion 45(d) without regard to paragraphs (8) and 
(10) thereof and to any placed in service date) 
owned by a public power provider or a cooperative 
electric company. 
‘‘(2) PUBLIC
POWER
PROVIDER.—The term 
‘public power provider’ means a State utility with a 
service obligation, as such terms are defined in sec-
tion 217 of the Federal Power Act (as in effect on 
the date of the enactment of this paragraph). 
‘‘(3) COOPERATIVE ELECTRIC COMPANY.—The 
term ‘cooperative electric company’ means a mutual 
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217 
or cooperative electric company described in section 
501(c)(12) or section 1381(a)(2)(C). 
‘‘(4) CLEAN RENEWABLE ENERGY BOND LEND-
ER.—The term ‘clean renewable energy bond lender’ 
means a lender which is a cooperative which is 
owned by, or has outstanding loans to, 100 or more 
cooperative electric companies and is in existence on 
February 1, 2002, and shall include any affiliated 
entity which is controlled by such lender. 
‘‘(5) QUALIFIED ISSUER.—The term ‘qualified 
issuer’ means a public power provider, a cooperative 
electric company, a clean renewable energy bond 
lender, or a not-for-profit electric utility which has 
received a loan or loan guarantee under the Rural 
Electrification Act.’’. 
(b) REPORTING.—Subsection (d) of section 6049 (re-
lating to returns regarding payments of interest) is 
amended by adding at the end the following new para-
graph: 
‘‘(9) REPORTING
OF
CREDIT
ON
QUALIFIED 
TAX CREDIT BONDS.— 
‘‘(A) IN GENERAL.—For purposes of sub-
section (a), the term ‘interest’ includes amounts 
includible in gross income under section 54A 
and such amounts shall be treated as paid on 
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218 
the credit allowance date (as defined in section 
54A(e)(1)). 
‘‘(B) 
REPORTING
TO
CORPORATIONS, 
ETC.—Except as otherwise provided in regula-
tions, in the case of any interest described in 
subparagraph (A) of this paragraph, subsection 
(b)(4) of this section shall be applied without 
regard to subparagraphs (A), (H), (I), (J), (K), 
and (L)(i). 
‘‘(C) REGULATORY AUTHORITY.—The Sec-
retary may prescribe such regulations as are 
necessary or appropriate to carry out the pur-
poses of this paragraph, including regulations 
which require more frequent or more detailed 
reporting.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Sections 54(c)(2) and 1400N(l)(3)(B) are 
each amended by striking ‘‘subpart C’’ and inserting 
‘‘subparts C and I’’. 
(2) Section 1397E(c)(2) is amended by striking 
‘‘subpart H’’ and inserting ‘‘subparts H and I’’. 
(3) Section 6401(b)(1) is amended by striking 
‘‘and H’’ and inserting ‘‘H, and I’’. 
(4) The heading of subpart H of part IV of 
subchapter A of chapter 1 is amended by striking 
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219 
‘‘Certain Bonds’’ and inserting ‘‘Clean Re-
newable Energy Bonds’’. 
(5) The table of subparts for part IV of sub-
chapter A of chapter 1 is amended by striking the 
item relating to subpart H and inserting the fol-
lowing new items: 
‘‘SUBPART H. NONREFUNDABLE CREDIT TO HOLDERS OF CLEAN RENEWABLE 
ENERGY BONDS. 
‘‘SUBPART I. QUALIFIED TAX CREDIT BONDS.’’. 
(d) EFFECTIVE DATES.—The amendments made by 
this section shall apply to obligations issued after the date 
of the enactment of this Act. 
SEC. 226. EXTENSION AND MODIFICATION OF 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) (relating to special rule for sales or disposi-
tions to implement Federal Energy Regulatory Com-
mission or State electric restructuring policy) is 
amended by inserting ‘‘(before January 1, 2010, in 
the case of a qualified electric utility)’’ after ‘‘Janu-
ary 1, 2008’’. 
(2) QUALIFIED ELECTRIC UTILITY.—Subsection 
(i) of section 451 is amended by redesignating para-
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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 trans-
mission facilities to which the election under 
this subsection applies, and 
‘‘(B) an electric utility (as defined in sec-
tion 3(22) of the Federal Power Act (16 U.S.C. 
796(22))).’’. 
(b) EXTENSION
OF PERIOD
FOR TRANSFER
OF 
OPERATIONAL
CONTROL
AUTHORIZED
BY
FERC.— 
Clause (ii) of section 451(i)(4)(B) is amended by striking 
‘‘December 31, 2007’’ and inserting ‘‘the date which is 
4 years after the close of the taxable year in which the 
transaction occurs’’. 
(c) PROPERTY LOCATED OUTSIDE
THE UNITED 
STATES NOT TREATED
AS EXEMPT UTILITY PROP-
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ERTY.—Paragraph (5) of section 451(i) is amended by 
adding at the end the following new subparagraph: 
‘‘(C) EXCEPTION FOR PROPERTY LOCATED 
OUTSIDE THE UNITED STATES.—The term ‘ex-
empt utility property’ shall not include any 
property which is located outside the United 
States.’’. 
(d) EFFECTIVE DATES.— 
(1) EXTENSION.—The amendments made by 
subsection (a) shall apply to transactions after De-
cember 31, 2007. 
(2) TRANSFERS OF OPERATIONAL CONTROL.— 
The amendment made by subsection (b) shall take 
effect as if included in section 909 of the American 
Jobs Creation Act of 2004. 
(3) EXCEPTION FOR PROPERTY LOCATED OUT-
SIDE THE UNITED STATES.—The amendment made 
by subsection (c) shall apply to transactions after 
the date of the enactment of this Act. 
SEC. 227. EXTENSION AND MODIFICATION OF CREDIT FOR 
RESIDENTIAL 
ENERGY 
EFFICIENT 
PROP-
ERTY. 
(a) EXTENSION.—Section 25D(g) (relating to termi-
nation) is amended by striking ‘‘December 31, 2008’’ and 
inserting ‘‘December 31, 2014’’. 
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222 
(b) MAXIMUM CREDIT FOR SOLAR ELECTRIC PROP-
ERTY.— 
(1) IN GENERAL.—Section 25D(b)(1)(A) (relat-
ing to maximum credit) is amended by striking 
‘‘$2,000’’ and inserting ‘‘$4,000’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
25D(e)(4)(A)(i) is amended by striking ‘‘$6,667’’ 
and inserting ‘‘$13,333’’. 
(c) CREDIT FOR RESIDENTIAL WIND PROPERTY.— 
(1) IN GENERAL.—Section 25D(a) (relating to 
allowance of credit) is amended by striking ‘‘and’’ at 
the end of paragraph (2), by striking the period at 
the end of paragraph (3) and inserting ‘‘, and’’, and 
by adding at the end the following new paragraph: 
‘‘(4) 30 percent of the qualified small wind en-
ergy property expenditures made by the taxpayer 
during such year.’’. 
(2) LIMITATION.—Section 25D(b)(1) (relating 
to maximum credit) is amended by striking ‘‘and’’ at 
the end of subparagraph (B), by striking the period 
at the end of subparagraph (C) and inserting ‘‘, 
and’’, and by adding at the end the following new 
subparagraph: 
‘‘(D) $500 with respect to each half kilo-
watt of capacity (not to exceed $4,000) of wind 
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turbines for which qualified small wind energy 
property expenditures are made.’’. 
(3) QUALIFIED
SMALL
WIND
ENERGY
PROP-
ERTY EXPENDITURES.— 
(A) IN GENERAL.—Section 25D(d) (relat-
ing to definitions) is amended by adding at the 
end the following new paragraph: 
‘‘(4) QUALIFIED SMALL WIND ENERGY PROP-
ERTY
EXPENDITURE.—The term ‘qualified small 
wind energy property expenditure’ means an expend-
iture for property which uses a wind turbine to gen-
erate electricity for use in connection with a dwelling 
unit located in the United States and used as a resi-
dence by the taxpayer.’’. 
(B) 
NO
DOUBLE
BENEFIT.—Section 
45(d)(1) (relating to wind facility) is amended 
by adding at the end the following new sen-
tence: ‘‘Such term shall not include any facility 
with respect to which any qualified small wind 
energy property expenditure (as defined in sub-
section (d)(4) of section 25D) is taken into ac-
count in determining the credit under such sec-
tion.’’. 
(4) MAXIMUM
EXPENDITURES
IN
CASE
OF 
JOINT OCCUPANCY.—Section 25D(e)(4)(A) (relating 
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224 
to maximum expenditures) is amended by striking 
‘‘and’’ at the end of clause (ii), by striking the pe-
riod at the end of clause (iii) and inserting ‘‘, and’’, 
and by adding at the end the following new clause: 
‘‘(iv) $1,667 in the case of each half 
kilowatt 
of 
capacity 
(not 
to 
exceed 
$13,333) of wind turbines for which quali-
fied small wind energy property expendi-
tures are made.’’. 
(d) CREDIT FOR GEOTHERMAL HEAT PUMP SYS-
TEMS.— 
(1) IN GENERAL.—Section 25D(a) (relating to 
allowance of credit), as amended by subsection (c), 
is amended by striking ‘‘and’’ at the end of para-
graph (3), by striking the period at the end of para-
graph (4) and inserting ‘‘, and’’, and by adding at 
the end the following new paragraph: 
‘‘(5) 30 percent of the qualified geothermal 
heat pump property expenditures made by the tax-
payer during such year.’’. 
(2) LIMITATION.—Section 25D(b)(1) (relating 
to maximum credit), as amended by subsection (c), 
is amended by striking ‘‘and’’ at the end of subpara-
graph (C), by striking the period at the end of sub-
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225 
paragraph (D) and inserting ‘‘, and’’, and by adding 
at the end the following new subparagraph: 
‘‘(E) $2,000 with respect to any qualified 
geothermal heat pump property expenditures.’’. 
(3) QUALIFIED
GEOTHERMAL
HEAT
PUMP 
PROPERTY
EXPENDITURE.—Section 25D(d) (relat-
ing to definitions), as amended by subsection (c), is 
amended by adding at the end the following new 
paragraph: 
‘‘(5) QUALIFIED
GEOTHERMAL
HEAT
PUMP 
PROPERTY EXPENDITURE.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
geothermal heat pump property expenditure’ 
means an expenditure for qualified geothermal 
heat pump property installed on or in connec-
tion with a dwelling unit located in the United 
States and used as a residence by the taxpayer. 
‘‘(B) 
QUALIFIED
GEOTHERMAL
HEAT 
PUMP
PROPERTY.—The term ‘qualified geo-
thermal heat pump property’ means any equip-
ment which— 
‘‘(i) uses the ground or ground water 
as a thermal energy source to heat the 
dwelling unit referred to in subparagraph 
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226 
(A) or as a thermal energy sink to cool 
such dwelling unit, and 
‘‘(ii) meets the requirements of the 
Energy Star program which are in effect 
at the time that the expenditure for such 
equipment is made.’’. 
(4) MAXIMUM
EXPENDITURES
IN
CASE
OF 
JOINT OCCUPANCY.—Section 25D(e)(4)(A) (relating 
to maximum expenditures), as amended by sub-
section (c), is amended by striking ‘‘and’’ at the end 
of clause (iii), by striking the period at the end of 
clause (iv) and inserting ‘‘, and’’, and by adding at 
the end the following new clause: 
‘‘(v) $6,667 in the case of any quali-
fied geothermal heat pump property ex-
penditures.’’. 
(e) CREDIT ALLOWED AGAINST ALTERNATIVE MIN-
IMUM TAX.— 
(1) IN
GENERAL.—Subsection (c) of section 
25D is amended to read as follows: 
‘‘(c) LIMITATION BASED
ON AMOUNT
OF TAX; 
CARRYFORWARD OF UNUSED CREDIT.— 
‘‘(1) LIMITATION
BASED
ON
AMOUNT
OF 
TAX.—In the case of a taxable year to which section 
26(a)(2) does not apply, the credit allowed under 
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227 
subsection (a) for the taxable year shall not exceed 
the excess of— 
‘‘(A) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax im-
posed by section 55, over 
‘‘(B) the sum of the credits allowable 
under this subpart (other than this section) and 
section 27 for the taxable year. 
‘‘(2) CARRYFORWARD OF UNUSED CREDIT.— 
‘‘(A) RULE
FOR
YEARS
IN
WHICH
ALL 
PERSONAL
CREDITS
ALLOWED
AGAINST
REG-
ULAR
AND
ALTERNATIVE
MINIMUM
TAX.—In 
the case of a taxable year to which section 
26(a)(2) applies, if the credit allowable under 
subsection (a) exceeds the limitation imposed by 
section 26(a)(2) for such taxable year reduced 
by the sum of the credits allowable under this 
subpart (other than this section), such excess 
shall be carried to the succeeding taxable year 
and added to the credit allowable under sub-
section (a) for such succeeding taxable year. 
‘‘(B) RULE
FOR
OTHER
YEARS.—In the 
case of a taxable year to which section 26(a)(2) 
does not apply, if the credit allowable under 
subsection (a) exceeds the limitation imposed by 
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228 
paragraph (1) for such taxable year, such ex-
cess shall be carried to the succeeding taxable 
year and added to the credit allowable under 
subsection (a) for such succeeding taxable 
year.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 23(b)(4)(B) is amended by in-
serting ‘‘and section 25D’’ after ‘‘this section’’. 
(B) Section 24(b)(3)(B) is amended by 
striking ‘‘and 25B’’ and inserting ‘‘, 25B, and 
25D’’. 
(C) Section 25B(g)(2) is amended by strik-
ing ‘‘section 23’’ and inserting ‘‘sections 23 and 
25D’’. 
(D) Section 26(a)(1) is amended by strik-
ing ‘‘and 25B’’ and inserting ‘‘25B, and 25D’’. 
(f) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2007. 
(2) APPLICATION
OF
EGTRRA
SUNSET.—The 
amendments made by subparagraphs (A) and (B) of 
subsection (e)(2) shall be subject to title IX of the 
Economic Growth and Tax Relief Reconciliation Act 
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229 
of 2001 in the same manner as the provisions of 
such Act to which such amendments relate. 
PART 2—TRANSPORTATION CONSERVATION 
INCENTIVES 
Subpart A—Vehicles 
SEC. 231. CREDIT FOR PLUG-IN HYBRID VEHICLES. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 (relating to other credits) is 
amended by adding at the end the following new section: 
‘‘SEC. 30D. PLUG-IN HYBRID VEHICLES. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to the sum of the 
credit amounts determined under subsection (b) with re-
spect to each qualified plug-in hybrid vehicle placed in 
service by the taxpayer during the taxable year. 
‘‘(b) PER VEHICLE DOLLAR LIMITATION.— 
‘‘(1) IN
GENERAL.—The amount determined 
under this subsection with respect to any qualified 
plug-in hybrid vehicle is the sum of the amounts de-
termined under paragraphs (2) and (3) with respect 
to such vehicle. 
‘‘(2) BASE AMOUNT.—The amount determined 
under this paragraph is $4,000. 
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230 
‘‘(3) BATTERY CAPACITY.—In the case of vehi-
cle which draws propulsion energy from a battery 
with not less than 5 kilowatt hours of capacity, the 
amount determined under this paragraph is $200, 
plus $200 for each kilowatt hour of capacity in ex-
cess of 5 kilowatt hours. The amount determined 
under this paragraph shall not exceed $2,000. 
‘‘(c) APPLICATION WITH OTHER CREDITS.— 
‘‘(1) BUSINESS CREDIT TREATED AS PART OF 
GENERAL BUSINESS CREDIT.—So much of the credit 
which would be allowed under subsection (a) for any 
taxable year (determined without regard to this sub-
section) that is attributable to property of a char-
acter subject to an allowance for depreciation shall 
be treated as a credit listed in section 38(b) for such 
taxable year (and not allowed under subsection (a)). 
‘‘(2) PERSONAL CREDIT.— 
‘‘(A) IN GENERAL.—For purposes of this 
title, the credit allowed under subsection (a) for 
any taxable year (determined after application 
of paragraph (1)) shall be treated as a credit 
allowable under subpart A for such taxable 
year. 
‘‘(B) LIMITATION BASED ON AMOUNT OF 
TAX.—In the case of a taxable year to which 
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231 
section 26(a)(2) does not apply, the credit al-
lowed under subsection (a) for any taxable year 
(determined after application of paragraph (1)) 
shall not exceed the excess of— 
‘‘(i) the sum of the regular tax liabil-
ity (as defined in section 26(b)) plus the 
tax imposed by section 55, over 
‘‘(ii) the sum of the credits allowable 
under subpart A (other than this section 
and sections 23 and 25D) and section 27 
for the taxable year. 
‘‘(d) QUALIFIED PLUG-IN HYBRID VEHICLE.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified plug-in 
hybrid vehicle’ means a motor vehicle (as defined in 
section 30(c)(2))— 
‘‘(A) the original use of which commences 
with the taxpayer, 
‘‘(B) which is acquired for use or lease by 
the taxpayer and not for resale, 
‘‘(C) which is made by a manufacturer, 
‘‘(D) which has a gross vehicle weight rat-
ing of less than 14,000 pounds, 
‘‘(E) which has received a certificate of 
conformity under the Clean Air Act and meets 
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232 
or exceeds the Bin 5 Tier II emission standard 
established in regulations prescribed by the Ad-
ministrator of the Environmental Protection 
Agency under section 202(i) of the Clean Air 
Act for that make and model year vehicle, 
‘‘(F) which is propelled to a significant ex-
tent by an electric motor which draws electricity 
from a battery which— 
‘‘(i) has a capacity of not less than 4 
kilowatt hours, and 
‘‘(ii) is capable of being recharged 
from an external source of electricity, and 
‘‘(G) which either— 
‘‘(i) is also propelled to a significant 
extent by other than an electric motor, or 
‘‘(ii) has a significant onboard source 
of electricity which also recharges the bat-
tery referred to in subparagraph (F). 
‘‘(2) EXCEPTION.—The term ‘qualified plug-in 
hybrid vehicle’ shall not include any vehicle which is 
not a passenger automobile or light truck if such ve-
hicle has a gross vehicle weight rating of less than 
8,500 pounds. 
‘‘(3) OTHER
TERMS.—The terms ‘passenger 
automobile’, ‘light truck’, and ‘manufacturer’ have 
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233 
the meanings given such terms in regulations pre-
scribed by the Administrator of the Environmental 
Protection Agency for purposes of the administra-
tion of title II of the Clean Air Act (42 U.S.C. 7521 
et seq.). 
‘‘(4) BATTERY CAPACITY.—The term ‘capacity’ 
means, with respect to any battery, the quantity of 
electricity which the battery is capable of storing, ex-
pressed in kilowatt hours, as measured from a 100 
percent state of charge to a 0 percent state of 
charge. 
‘‘(e) LIMITATION ON NUMBER OF QUALIFIED PLUG- 
IN HYBRID VEHICLES ELIGIBLE FOR CREDIT.— 
‘‘(1) IN GENERAL.—In the case of a qualified 
plug-in hybrid vehicle sold during the phaseout pe-
riod, only the applicable percentage of the credit oth-
erwise allowable under subsection (a) shall be al-
lowed. 
‘‘(2) PHASEOUT PERIOD.—For purposes of this 
subsection, the phaseout period is the period begin-
ning with the second calendar quarter following the 
calendar quarter which includes the first date on 
which the number of qualified plug-in hybrid vehicles 
manufactured by the manufacturer of the vehicle re-
ferred to in paragraph (1) sold for use in the United 
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234 
States after the date of the enactment of this sec-
tion, is at least 60,000. 
‘‘(3) APPLICABLE PERCENTAGE.—For purposes 
of paragraph (1), the applicable percentage is— 
‘‘(A) 50 percent for the first 2 calendar 
quarters of the phaseout period, 
‘‘(B) 25 percent for the 3d and 4th cal-
endar quarters of the phaseout period, and 
‘‘(C) 0 percent for each calendar quarter 
thereafter. 
‘‘(4) CONTROLLED GROUPS.—Rules similar to 
the rules of section 30B(f)(4) shall apply for pur-
poses of this subsection. 
‘‘(f) SPECIAL RULES.— 
‘‘(1) BASIS
REDUCTION.—The basis of any 
property for which a credit is allowable under sub-
section (a) shall be reduced by the amount of such 
credit (determined without regard to subsection (c)). 
‘‘(2) RECAPTURE.—The Secretary shall, by reg-
ulations, provide for recapturing the benefit of any 
credit allowable under subsection (a) with respect to 
any property which ceases to be property eligible for 
such credit. 
‘‘(3) 
PROPERTY
USED
OUTSIDE
UNITED 
STATES, ETC., NOT QUALIFIED.—No credit shall be 
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235 
allowed under subsection (a) with respect to any 
property referred to in section 50(b)(1) or with re-
spect to the portion of the cost of any property 
taken into account under section 179. 
‘‘(4) ELECTION
NOT
TO
TAKE
CREDIT.—No 
credit shall be allowed under subsection (a) for any 
vehicle if the taxpayer elects to not have this section 
apply to such vehicle. 
‘‘(5) PROPERTY USED BY TAX-EXEMPT ENTITY; 
INTERACTION WITH AIR QUALITY AND MOTOR VEHI-
CLE SAFETY STANDARDS.—Rules similar to the rules 
of paragraphs (6) and (10) of section 30B(h) shall 
apply for purposes of this section.’’. 
(b) PLUG-IN VEHICLES NOT TREATED
AS NEW 
QUALIFIED HYBRID VEHICLES.—Section 30B(d)(3) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(D) EXCLUSION OF PLUG-IN VEHICLES.— 
Any vehicle with respect to which a credit is al-
lowable under section 30D (determined without 
regard to subsection (c) thereof) shall not be 
taken into account under this section.’’. 
(c) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Section 38(b) is amended— 
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236 
(1) by striking ‘‘and’’ each place it appears at 
the end of any paragraph, 
(2) by striking ‘‘plus’’ each place it appears at 
the end of any paragraph, 
(3) by striking the period at the end of para-
graph (31) and inserting ‘‘, plus’’, and 
(4) by adding at the end the following new 
paragraph: 
‘‘(32) the portion of the plug-in hybrid vehicle 
credit to which section 30D(c)(1) applies.’’. 
(d) CONFORMING AMENDMENTS.— 
(1)(A) Section 24(b)(3)(B), as amended by this 
Act, is amended by striking ‘‘and 25D’’ and insert-
ing ‘‘25D, and 30D’’. 
(B) Section 25(e)(1)(C)(ii) is amended by in-
serting ‘‘30D,’’ after ‘‘25D,’’. 
(C) Section 25B(g)(2), as amended by this Act, 
is amended by striking ‘‘and 25D’’ and inserting ‘‘, 
25D, and 30D’’. 
(D) Section 26(a)(1), as amended by this Act, 
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’’. 
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(2) Section 1016(a) is amended by striking 
‘‘and’’ at the end of paragraph (35), by striking the 
period at the end of paragraph (36) and inserting ‘‘, 
and’’, and by adding at the end the following new 
paragraph: 
‘‘(37) to the extent provided in section 
30D(f)(1).’’. 
(3) Section 6501(m) is amended by inserting 
‘‘30D(f)(4),’’ after ‘‘30C(e)(5),’’. 
(4) The table of sections for subpart B of part 
IV of subchapter A of chapter 1 is amended by add-
ing at the end the following new item: 
‘‘Sec. 30D. Plug-in hybrid vehicles.’’. 
(e) TREATMENT OF ALTERNATIVE MOTOR VEHICLE 
CREDIT AS A PERSONAL CREDIT.— 
(1) IN
GENERAL.—Paragraph (2) of section 
30B(g) is amended to read as follows: 
‘‘(2) PERSONAL
CREDIT.—The credit allowed 
under subsection (a) for any taxable year (after ap-
plication of paragraph (1)) shall be treated as a 
credit allowable under subpart A for such taxable 
year.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Subparagraph (A) of section 30C(d)(2) 
is amended by striking ‘‘sections 27, 30, and 
30B’’ and inserting ‘‘sections 27 and 30’’. 
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238 
(B) Paragraph (3) of section 55(c) is 
amended by striking ‘‘30B(g)(2),’’. 
(f) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2008. 
(2) TREATMENT OF ALTERNATIVE MOTOR VE-
HICLE CREDIT AS PERSONAL CREDIT.—The amend-
ments made by subsection (e) shall apply to taxable 
years beginning after December 31, 2007. 
(g) APPLICATION
OF
EGTRRA SUNSET.—The 
amendment made by subsection (d)(1)(A) shall be subject 
to title IX of the Economic Growth and Tax Relief Rec-
onciliation Act of 2001 in the same manner as the provi-
sion of such Act to which such amendment relates. 
SEC. 232. EXTENSION AND MODIFICATION OF ALTER-
NATIVE FUEL VEHICLE REFUELING PROP-
ERTY CREDIT. 
(a) INCREASE IN CREDIT AMOUNT.—Section 30C 
(relating to alternative fuel vehicle refueling property cred-
it) is amended— 
(1) by striking ‘‘30 percent’’ in subsection (a) 
and inserting ‘‘50 percent’’, and 
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(2) by striking ‘‘$30,000’’ in subsection (b)(1) 
and inserting ‘‘$50,000’’. 
(b) EXTENSION OF CREDIT.—Paragraph (2) of sec-
tion 30C(g) (relating to termination) is amended by strik-
ing ‘‘December 31, 2009’’ and inserting ‘‘December 31, 
2010’’. 
(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. 233. MODIFICATION OF LIMITATION ON AUTOMOBILE 
DEPRECIATION. 
(a) IN GENERAL.—Paragraph (5) of section 280F(d) 
(defining passenger automobile) is amended to read as fol-
lows: 
‘‘(5) PASSENGER AUTOMOBILE.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘passenger auto-
mobile’ means any 4-wheeled vehicle— 
‘‘(i) which is primarily designed or 
which can be used to carry passengers over 
public streets, roads, or highways (except 
any vehicle operated exclusively on a rail or 
rails), and 
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‘‘(ii) which is rated at not more than 
14,000 pounds gross vehicle weight. 
‘‘(B) EXCEPTIONS.—The term ‘passenger 
automobile’ shall not include— 
‘‘(i) any exempt-design vehicle, and 
‘‘(ii) any exempt-use vehicle. 
‘‘(C) 
EXEMPT-DESIGN
VEHICLE.—The 
term ‘exempt-design vehicle’ means— 
‘‘(i) any vehicle which, by reason of its 
nature or design, is not likely to be used 
more than a de minimis amount for per-
sonal purposes, and 
‘‘(ii) any vehicle— 
‘‘(I) which is designed to have a 
seating capacity of more than 9 per-
sons behind the driver’s seat, 
‘‘(II) which is equipped with a 
cargo area of at least 5 feet in interior 
length which is an open area or is de-
signed for use as an open area but is 
enclosed by a cap and is not readily 
accessible directly from the passenger 
compartment, or 
‘‘(III) has an integral enclosure, 
fully enclosing the driver compartment 
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241 
and load carrying device, does not 
have seating rearward of the driver’s 
seat, and has no body section pro-
truding more than 30 inches ahead of 
the leading edge of the windshield. 
‘‘(D) EXEMPT-USE
VEHICLE.—The term 
‘exempt-use vehicle’ means— 
‘‘(i) any ambulance, hearse, or com-
bination ambulance-hearse used by the tax-
payer directly in a trade or business, 
‘‘(ii) any vehicle used by the taxpayer 
directly in the trade or business of trans-
porting persons or property for compensa-
tion or hire, and 
‘‘(iii) any truck or van if substantially 
all of the use of such vehicle by the tax-
payer is directly in— 
‘‘(I) a farming business (within 
the meaning of section 263A(e)(4)), 
‘‘(II) the transportation of a sub-
stantial amount of equipment, sup-
plies, or inventory, or 
‘‘(III) the moving or delivery of 
property which requires substantial 
cargo capacity. 
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‘‘(E) RECAPTURE.—In the case of any ve-
hicle which is not a passenger automobile by 
reason of being an exempt-use vehicle, if such 
vehicle ceases to be an exempt-use vehicle in 
any taxable year after the taxable year in which 
such vehicle is placed in service, a rule similar 
to the rule of subsection (b) shall apply.’’. 
(b) CONFORMING AMENDMENT.—Section 179(b) (re-
lating to limitations) is amended by striking paragraph 
(6). 
(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. 
Subpart B—Fuels 
SEC. 241. EXTENSION AND MODIFICATION OF CREDITS FOR 
BIODIESEL AND RENEWABLE DIESEL. 
(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, 2010’’. 
(b) 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’’, 
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243 
(2) 
by 
striking 
‘‘using 
a 
thermal 
depolymerization process’’, and 
(3) by striking ‘‘or D396’’ in subparagraph (B) 
and inserting ‘‘or other equivalent standard ap-
proved by the Secretary for fuels to be used in die-
sel-powered highway vehicles’’. 
(c) COPRODUCTION OF RENEWABLE DIESEL WITH 
PETROLEUM FEEDSTOCK.— 
(1) IN
GENERAL.—Paragraph (3) of section 
40A(f) (defining renewable diesel) is amended by 
adding at the end the following flush sentence: 
‘‘Such term does not include any fuel derived from 
coprocessing biomass with a feedstock which is not 
biomass. For purposes of this paragraph, the term 
‘biomass’ has the meaning given such term by sec-
tion 45K(c)(3).’’. 
(2) CONFORMING AMENDMENT.—Paragraph (3) 
of section 40A(f) is amended by striking ‘‘(as de-
fined in section 45K(c)(3))’’. 
(d) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to fuel produced, and sold or 
used, after December 31, 2008. 
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244 
(2) COPRODUCTION
OF
RENEWABLE
DIESEL 
WITH PETROLEUM FEEDSTOCK.—The amendments 
made by subsection (c) shall apply to fuel produced, 
and sold or used, after February 13, 2008. 
SEC. 242. CLARIFICATION THAT CREDITS FOR FUEL ARE 
DESIGNED TO PROVIDE AN INCENTIVE FOR 
UNITED STATES PRODUCTION. 
(a) BIODIESEL FUELS CREDIT.—Paragraph (5) of 
section 40A(d), as added by subsection (c), is amended 
to read as follows: 
‘‘(5) LIMITATION TO BIODIESEL WITH CONNEC-
TION TO THE UNITED STATES.—No credit shall be 
determined under this section with respect to any 
biodiesel unless— 
‘‘(A) such biodiesel is produced in the 
United States for use as a fuel in the United 
States, and 
‘‘(B) the taxpayer obtains a certification 
(in such form and manner as prescribed by the 
Secretary) from the producer of the biodiesel 
which identifies the product produced and the 
location of such production. 
For purposes of this paragraph, the term ‘United 
States’ includes any possession of the United 
States.’’. 
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245 
(b) EXCISE TAX CREDIT.—Paragraph (2) of section 
6426(h), as added by subsection (c), is amended to read 
as follows: 
‘‘(2) BIODIESEL AND ALTERNATIVE FUELS.— 
No credit shall be determined under this section 
with respect to any biodiesel or alternative fuel un-
less— 
‘‘(A) such biodiesel or alternative fuel is 
produced in the United States for use as a fuel 
in the United States, and 
‘‘(B) the taxpayer obtains a certification 
(in such form and manner as prescribed by the 
Secretary) from the producer of such biodiesel 
or alternative fuel which identifies the product 
produced and the location of such production.’’. 
(c) PROVISIONS CLARIFYING TREATMENT OF FUELS 
WITH NO NEXUS TO THE UNITED STATES.— 
(1) ALCOHOL FUELS CREDIT.—Subsection (d) 
of section 40 is amended by adding at the end the 
following new paragraph: 
‘‘(6) LIMITATION TO ALCOHOL WITH CONNEC-
TION TO THE UNITED STATES.—No credit shall be 
determined under this section with respect to any al-
cohol which is produced outside the United States 
for use as a fuel outside the United States. For pur-
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246 
poses of this paragraph, the term ‘United States’ in-
cludes any possession of the United States.’’. 
(2) BIODIESEL FUELS CREDIT.—Subsection (d) 
of section 40A is amended by adding at the end the 
following new paragraph: 
‘‘(5) LIMITATION TO BIODIESEL WITH CONNEC-
TION TO THE UNITED STATES.—No credit shall be 
determined under this section with respect to any 
biodiesel which is produced outside the United 
States for use as a fuel outside the United States. 
For purposes of this paragraph, the term ‘United 
States’ includes any possession of the United 
States.’’. 
(3) EXCISE TAX CREDIT.— 
(A) IN GENERAL.—Section 6426 is amend-
ed by adding at the end the following new sub-
section: 
‘‘(h) LIMITATION TO FUELS WITH CONNECTION TO 
THE UNITED STATES.— 
‘‘(1) ALCOHOL.—No credit shall be determined 
under this section with respect to any alcohol which 
is produced outside the United States for use as a 
fuel outside the United States. 
‘‘(2) BIODIESEL AND ALTERNATIVE FUELS.— 
No credit shall be determined under this section 
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247 
with respect to any biodiesel or alternative fuel 
which is produced outside the United States for use 
as a fuel outside the United States. 
For purposes of this subsection, the term ‘United States’ 
includes any possession of the United States.’’. 
(B) 
CONFORMING
AMENDMENT.—Sub-
section (e) of section 6427 is amended by redes-
ignating paragraph (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(h).’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to fuel produced, and sold or used, after 
December 31, 2008. 
(2) PROVISIONS
CLARIFYING
TREATMENT
OF 
FUELS WITH NO NEXUS TO THE UNITED STATES.— 
(A) IN
GENERAL.—Except as otherwise 
provided in this paragraph, the amendments 
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248 
made by subsection (c) shall take effect as if in-
cluded in section 301 of the American Jobs 
Creation Act of 2004. 
(B) ALTERNATIVE
FUEL
CREDITS.—So 
much of the amendments made by subsection 
(c) as relate to the alternative fuel credit or the 
alternative fuel mixture credit shall take effect 
as if included in section 11113 of the Safe, Ac-
countable, Flexible, Efficient Transportation 
Equity Act: A Legacy for Users. 
(C) RENEWABLE DIESEL.—So much of the 
amendments made by subsection (c) as relate to 
renewable diesel shall take effect as if included 
in section 1346 of the Energy Policy Act of 
2005. 
SEC. 243. CREDIT FOR PRODUCTION OF CELLULOSIC ALCO-
HOL. 
(a) IN GENERAL.—Subsection (b) of section 40 is 
amended by redesignating paragraph (5) as paragraph (6) 
and by inserting after paragraph (4) the following new 
paragraph: 
‘‘(5) CELLULOSIC
ALCOHOL
FUEL
PRODUCER 
CREDIT.— 
‘‘(A) IN GENERAL.—The cellulosic alcohol 
fuel producer credit of any cellulosic alcohol fuel 
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249 
producer for any taxable year is 50 cents for 
each gallon of qualified cellulosic fuel produc-
tion of such producer. 
‘‘(B) QUALIFIED CELLULOSIC FUEL PRO-
DUCTION.—For purposes of this paragraph, the 
term ‘qualified cellulosic fuel production’ means 
any cellulosic alcohol which is produced by a 
cellulosic alcohol fuel producer, and which dur-
ing the taxable year— 
‘‘(i) is sold by such producer to an-
other person— 
‘‘(I) for use by such other person 
in the production of a qualified mix-
ture in such other person’s trade or 
business (other than casual off-farm 
production), 
‘‘(II) for use by such other per-
son as a fuel in a trade or business, 
or 
‘‘(III) who sells such alcohol at 
retail to another person and places 
such alcohol in the fuel tank of such 
other person, or 
‘‘(ii) is used or sold by such producer 
for any purpose described in clause (i). 
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250 
‘‘(C) CELLULOSIC
ALCOHOL.—For pur-
poses of this paragraph, the term ‘cellulosic al-
cohol’ means any alcohol which— 
‘‘(i) is produced in the United States 
for use as a fuel in the United States, and 
‘‘(ii) 
is 
derived 
from 
any 
lignocellulosic or hemicellulosic matter that 
is available on a renewable or recurring 
basis. 
For purposes of this subparagraph, the term 
‘United States’ includes any possession of the 
United States. 
‘‘(D) CELLULOSIC
ALCOHOL
FUEL
PRO-
DUCER.—For purposes of this paragraph, the 
term ‘cellulosic alcohol fuel producer’ means 
any person who produces cellulosic alcohol in a 
trade or business and is registered with the 
Secretary as a cellulosic alcohol fuel producer. 
‘‘(E) 
ADDITIONAL
DISTILLATION
EX-
CLUDED.—The qualified cellulosic fuel produc-
tion of any producer for any taxable year shall 
not include any alcohol which is purchased by 
the producer and with respect to which such 
producer increases the proof of the alcohol by 
additional distillation.’’. 
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251 
(b) CONFORMING AMENDMENTS.— 
(1) Subsection (a) of section 40 is amended by 
striking ‘‘plus’’ at the end of paragraph (1), by 
striking ‘‘plus’’ at the end of paragraph (2), by 
striking the period at the end of paragraph (3) and 
inserting ‘‘, plus’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(4) in the case of a cellulosic alcohol fuel pro-
ducer, the cellulosic alcohol fuel producer credit.’’. 
(2) Clause (ii) of section 40(d)(3)(C) is amend-
ed by striking ‘‘subsection (b)(4)(B)’’ and inserting 
‘‘paragraph (4)(B) or (5)(B) of subsection (b)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to alcohol produced after December 
31, 2008. 
SEC. 244. EXTENSION FOR CREDIT FOR ALTERNATIVE 
FUELS AND MIXTURES DERIVED FROM COAL 
(INCLUDING PEAT) THROUGH THE FISCHER- 
TROPSCH PROCESS. 
(a) IN GENERAL.—Subsections (d)(4) and (e)(3) of 
section 6426 of the Internal Revenue Code of 1986 (relat-
ing to termination of credits for alternative fuels and mix-
tures) are each amended by inserting ‘‘and September 30, 
2020, in the case of any sale or use involving any liquid 
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252 
fuel derived from coal (including peat) through the Fisch-
er-Tropsch process’’ after ‘‘hydrogen’’. 
(b) FUELS NOT USED FOR TAXABLE PURPOSES.— 
(1) IN
GENERAL.—Paragraph (5) of section 
6427(e) of such Code (relating to termination) is 
amended by striking ‘‘and’’ at the end of subpara-
graph (C), by striking the period at the end of sub-
paragraph (D) and inserting ‘‘, and’’, and by insert-
ing after subparagraph (D) the following new sub-
paragraph: 
‘‘(E) any alternative fuel or alternative fuel 
mixture (as so defined) involving fuel derived 
from coal (including peat) through the Fischer- 
Tropsch process sold or used after September 
30, 2020.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
6427(e)(5)(C) is amended by striking ‘‘subpara-
graph (D)’’ and inserting ‘‘subparagraphs (D) and 
(E)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to any sale or use for any period 
after September 30, 2009. 
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253 
PART 3—OTHER CONSERVATION PROVISIONS 
SEC. 251. QUALIFIED ENERGY CONSERVATION BONDS. 
(a) IN GENERAL.—Subpart I of part IV of sub-
chapter A of chapter 1, as added by section 104, is amend-
ed by adding at the end the following new section: 
‘‘SEC. 54C. QUALIFIED ENERGY CONSERVATION BONDS. 
‘‘(a) QUALIFIED ENERGY CONSERVATION BOND.— 
For purposes of this subchapter, the term ‘qualified en-
ergy conservation bond’ means any bond issued as part 
of an issue if— 
‘‘(1) 100 percent of the available project pro-
ceeds of such issue are to be used for 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 pur-
poses of this section. 
‘‘(b) 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 (d). 
‘‘(c) NATIONAL LIMITATION ON AMOUNT OF BONDS 
DESIGNATED.—There is a national qualified energy con-
servation bond limitation of $3,600,000,000. 
‘‘(d) ALLOCATIONS.— 
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254 
‘‘(1) IN
GENERAL.—The limitation applicable 
under subsection (c) shall be allocated by the Sec-
retary among the States in proportion to the popu-
lation of the States. 
‘‘(2) ALLOCATIONS
TO
LARGEST
LOCAL
GOV-
ERNMENTS.— 
‘‘(A) IN
GENERAL.—In the case of any 
State in which there is a large local govern-
ment, each such local government shall be allo-
cated a portion of such State’s allocation which 
bears the same ratio to the State’s allocation 
(determined without regard to this subpara-
graph) as the population of such large local 
government bears to the population of such 
State. 
‘‘(B) ALLOCATION OF UNUSED LIMITATION 
TO STATE.—The amount allocated under this 
subsection to a large local government may be 
reallocated by such local government to the 
State in which such local government is located. 
‘‘(C) LARGE
LOCAL
GOVERNMENT.—For 
purposes of this section, the term ‘large local 
government’ means any municipality or county 
if such municipality or county has a population 
of 100,000 or more. 
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255 
‘‘(3) ALLOCATION
TO
ISSUERS; RESTRICTION 
ON
PRIVATE
ACTIVITY
BONDS.—Any allocation 
under this subsection to a State or large local gov-
ernment shall be allocated by such State or large 
local government to issuers within the State in a 
manner that results in not less than 70 percent of 
the allocation to such State or large local govern-
ment being used to designate bonds which are not 
private activity bonds. 
‘‘(e) QUALIFIED
CONSERVATION
PURPOSE.—For 
purposes of this section— 
‘‘(1) IN
GENERAL.—The term ‘qualified con-
servation purpose’ means any of the following: 
‘‘(A) Capital expenditures incurred for 
purposes of— 
‘‘(i) reducing energy consumption in 
publicly-owned buildings by at least 20 
percent, 
‘‘(ii) implementing green community 
programs, 
‘‘(iii) rural development involving the 
production of electricity from renewable 
energy resources, or 
‘‘(iv) any qualified facility (as deter-
mined under section 45(d) without regard 
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256 
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— 
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257 
‘‘(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 combusting fossil fuels in order to 
produce electricity. 
‘‘(E) Public education campaigns to pro-
mote energy efficiency. 
‘‘(2) SPECIAL
RULES
FOR
PRIVATE
ACTIVITY 
BONDS.—For purposes of this section, in the case of 
any private activity bond, the term ‘qualified con-
servation purposes’ shall not include any expenditure 
which is not a capital expenditure. 
‘‘(f) POPULATION.— 
‘‘(1) IN
GENERAL.—The population of any 
State or local government shall be determined for 
purposes of this section as provided in section 146(j) 
for the calendar year which includes the date of the 
enactment of this section. 
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258 
‘‘(2) SPECIAL RULE FOR COUNTIES.—In deter-
mining the population of any county for purposes of 
this section, any population of such county which is 
taken into account in determining the population of 
any municipality which is a large local government 
shall not be taken into account in determining the 
population of such county. 
‘‘(g) APPLICATION
TO INDIAN TRIBAL GOVERN-
MENTS.—An Indian tribal government shall be treated for 
purposes of this section in the same manner as a large 
local government, except that— 
‘‘(1) an Indian tribal government shall be treat-
ed for purposes of subsection (d) as located within 
a State to the extent of so much of the population 
of such government as resides within such State, 
and 
‘‘(2) any bond issued by an Indian tribal gov-
ernment shall be treated as a qualified energy con-
servation bond only if issued as part of an issue the 
available project proceeds of which are used for pur-
poses for which such Indian tribal government could 
issue bonds to which section 103(a) applies.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Paragraph (1) of section 54A(d), as added 
by section 104, is amended to read as follows: 
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259 
‘‘(1) QUALIFIED TAX CREDIT BOND.—The term 
‘qualified tax credit bond’ means— 
‘‘(A) a new clean renewable energy bond, 
or 
‘‘(B) a qualified energy conservation bond, 
which is part of an issue that meets requirements of 
paragraphs (2), (3), (4), (5), and (6).’’. 
(2) Subparagraph (C) of section 54A(d)(2), as 
added by section 104, is amended to read as follows: 
‘‘(C) QUALIFIED PURPOSE.—For purposes 
of this paragraph, the term ‘qualified purpose’ 
means— 
‘‘(i) in the case of a new clean renew-
able energy bond, a purpose specified in 
section 54B(a)(1), and 
‘‘(ii) in the case of a qualified energy 
conservation bond, a purpose specified in 
section 54C(a)(1).’’. 
(3) The table of sections for subpart I of part 
IV of subchapter A of chapter 1 is amended by add-
ing at the end the following new item: 
‘‘Sec. 54C. Qualified energy conservation bonds.’’. 
(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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SEC. 252. EXTENSION AND MODIFICATION OF CREDIT FOR 
NONBUSINESS ENERGY PROPERTY. 
(a) EXTENSION OF CREDIT.—Section 25C(g) (relat-
ing to termination) is amended by striking ‘‘December 31, 
2007’’ and inserting ‘‘December 31, 2009’’. 
(b) QUALIFIED BIOMASS FUEL PROPERTY.— 
(1) IN GENERAL.—Section 25C(d)(3) is amend-
ed— 
(A) by striking ‘‘and’’ at the end of sub-
paragraph (D), 
(B) by striking the period at the end of 
subparagraph (E) and inserting ‘‘, and’’, and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(F) a stove which uses the burning of bio-
mass fuel to heat a dwelling unit located in the 
United States and used as a residence by the 
taxpayer, or to heat water for use in such a 
dwelling unit, and which has a thermal effi-
ciency rating of at least 75 percent.’’. 
(2) BIOMASS FUEL.—Section 25C(d) (relating 
to residential energy property expenditures) is 
amended by adding at the end the following new 
paragraph: 
‘‘(6) BIOMASS FUEL.—The term ‘biomass fuel’ 
means any plant-derived fuel available on a renew-
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261 
able or recurring basis, including agricultural crops 
and trees, wood and wood waste and residues (in-
cluding wood pellets), plants (including aquatic 
plants), grasses, residues, and fibers.’’. 
(c) COORDINATION WITH CREDIT FOR QUALIFIED 
GEOTHERMAL HEAT PUMP PROPERTY EXPENDITURES.— 
(1) IN
GENERAL.—Paragraph (3) of section 
25C(d) is amended by striking subparagraph (C) 
and by redesignating subparagraphs (D) and (E) as 
subparagraphs (C) and (D), 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 re-
spect 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 
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262 
‘‘(ii) may be based on the certified 
data of the Air Conditioning and Refrig-
eration Institute that are prepared in part-
nership with the Consortium for Energy 
Efficiency.’’. 
(d) EFFECTIVE DATE.—The amendments made this 
section shall apply to expenditures made after December 
31, 2007. 
SEC. 253. EXTENSION OF ENERGY EFFICIENT COMMERCIAL 
BUILDINGS DEDUCTION. 
Subsection (h) of section 179D (relating to termi-
nation) is amended by striking ‘‘December 31, 2008’’ and 
inserting ‘‘December 31, 2013’’. 
SEC. 254. MODIFICATIONS OF ENERGY EFFICIENT APPLI-
ANCE CREDIT FOR APPLIANCES PRODUCED 
AFTER 2007. 
(a) IN GENERAL.—Subsection (b) of section 45M (re-
lating to applicable amount) 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 
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263 
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 gallons per cycle for dishwashers de-
signed for greater 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 cal-
endar year 2008 which meets or exceeds a 1.72 
modified 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 cal-
endar year 2008 or 2009 which meets or ex-
ceeds 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 
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‘‘(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. 
‘‘(3) REFRIGERATORS.—The applicable amount 
is— 
‘‘(A) $50 in the case of a refrigerator 
which is manufactured in calendar year 2008, 
and consumes 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 stand-
ards, 
‘‘(C) $100 in the case of a refrigerator 
which is manufactured in calendar year 2008, 
2009, or 2010, and consumes at least 25 per-
cent but not more than 29.9 percent less kilo-
watt hours per year than the 2001 energy con-
servation standards, and 
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265 
‘‘(D) $200 in the case of a refrigerator 
manufactured in calendar year 2008, 2009, or 
2010 and which consumes at least 30 percent 
less energy than the 2001 energy conservation 
standards.’’. 
(b) ELIGIBLE PRODUCTION.— 
(1) SIMILAR
TREATMENT
FOR
ALL
APPLI-
ANCES.—Subsection (c) of section 45M (relating to 
eligible production) is amended— 
(A) by striking paragraph (2), 
(B) by striking ‘‘(1) IN GENERAL’’ and all 
that follows through ‘‘the eligible’’ and inserting 
‘‘The eligible’’, and 
(C) by moving the text of such subsection 
in line with the subsection heading and redesig-
nating subparagraphs (A) and (B) as para-
graphs (1) and (2), respectively. 
(2) MODIFICATION
OF
BASE
PERIOD.—Para-
graph (2) of section 45M(c), as amended by para-
graph (1) of this section, is amended by striking ‘‘3- 
calendar year’’ and inserting ‘‘2-calendar year’’. 
(c) TYPES OF ENERGY EFFICIENT APPLIANCES.— 
Subsection (d) of section 45M (defining types of energy 
efficient appliances) is amended to read as follows: 
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266 
‘‘(d) TYPES OF ENERGY EFFICIENT APPLIANCE.— 
For purposes of this section, the types of energy efficient 
appliances are— 
‘‘(1) dishwashers described in subsection (b)(1), 
‘‘(2) clothes washers described in subsection 
(b)(2), and 
‘‘(3) 
refrigerators 
described 
in 
subsection 
(b)(3).’’. 
(d) AGGREGATE CREDIT AMOUNT ALLOWED.— 
(1) INCREASE IN LIMIT.—Paragraph (1) of sec-
tion 45M(e) (relating to aggregate credit amount al-
lowed) 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 tax-
able 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 
described in subsection (b)(3)(D) and clothes wash-
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267 
ers 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) (defining qualified energy efficient appliance) 
is amended to read as follows: 
‘‘(1) QUALIFIED
ENERGY
EFFICIENT
APPLI-
ANCE.—The term ‘qualified energy efficient appli-
ance’ means— 
‘‘(A) any dishwasher described in sub-
section (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) (de-
fining clothes washer) is amended by inserting 
‘‘commercial’’ before ‘‘residential’’ the second place 
it appears. 
(3) TOP-LOADING
CLOTHES
WASHER.—Sub-
section (f) of section 45M (relating to definitions) is 
amended by redesignating paragraphs (4), (5), (6), 
and (7) as paragraphs (5), (6), (7), and (8), respec-
tively, and by inserting after paragraph (3) the fol-
lowing new paragraph: 
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268 
‘‘(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.—Sec-
tion 45M(f)(6), as redesignated by paragraph (3), is 
amended to read as follows: 
‘‘(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
CONSUMP-
TION FACTOR.—Section 45M(f) (relating to defini-
tions), 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 weight-
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269 
ed 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 De-
cember 31, 2007. 
SEC. 255. FIVE-YEAR APPLICABLE RECOVERY PERIOD FOR 
DEPRECIATION OF QUALIFIED ENERGY MAN-
AGEMENT DEVICES. 
(a) IN GENERAL.—Section 168(e)(3)(B) (relating to 
5-year property) is amended by striking ‘‘and’’ at the end 
of clause (v), by striking the period at the end of clause 
(vi) and inserting ‘‘, and’’, and by inserting after clause 
(vi) the following new clause: 
‘‘(vii) any qualified energy manage-
ment device.’’. 
(b) DEFINITION OF QUALIFIED ENERGY MANAGE-
MENT DEVICE.—Section 168(i) (relating to definitions 
and special rules) is amended by inserting at the end the 
following new paragraph: 
‘‘(18) QUALIFIED
ENERGY
MANAGEMENT
DE-
VICE.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
energy management device’ means any energy 
management device which is installed on real 
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270 
property of a customer of the taxpayer and is 
placed in service by a taxpayer who— 
‘‘(i) is a supplier of electric energy or 
a provider of electric energy services, and 
‘‘(ii) provides all commercial and resi-
dential customers of such supplier or pro-
vider with net metering upon the request 
of such customer. 
‘‘(B) ENERGY
MANAGEMENT
DEVICE.— 
For purposes of subparagraph (A), the term 
‘energy management device’ means any time- 
based meter and related communication equip-
ment which is capable of being used by the tax-
payer as part of a system that— 
‘‘(i) measures and records electricity 
usage data on a time-differentiated basis 
in at least 24 separate time segments per 
day, 
‘‘(ii) provides for the exchange of in-
formation between supplier or provider and 
the customer’s energy management device 
in support of time-based rates or other 
forms of demand response, and 
‘‘(iii) provides data to such supplier or 
provider so that the supplier or provider 
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271 
can provide energy usage information to 
customers electronically. 
‘‘(C) NET
METERING.—For purposes of 
subparagraph (A), the term ‘net metering’ 
means allowing customers a credit for providing 
electricity to the supplier or provider.’’. 
(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. 256. CLARIFICATION OF ELIGIBILITY FOR CERTAIN 
FUELS CREDITS FOR FUEL WITH INSUFFI-
CIENT NEXUS TO THE UNITED STATES. 
(a) IN GENERAL.— 
(1) ALCOHOL CREDIT.—Subsection (d) of sec-
tion 40 is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(6) LIMITATION TO ALCOHOL WITH CONNEC-
TION TO THE UNITED STATES.— 
‘‘(A) ALCOHOL CREDIT.—No alcohol credit 
shall be determined under this section with re-
spect to any alcohol unless such alcohol is pro-
duced in the United States for consumption in 
the United States or entered into the United 
States for consumption in the United States. 
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272 
‘‘(B) ALCOHOL MIXTURE CREDIT.—No al-
cohol mixture credit shall be determined under 
this section with respect to any mixture unless 
such mixture is produced in the United States 
for consumption in the United States or entered 
into the United States for consumption in the 
United States. 
‘‘(C) NO
CREDITS
FOR
ALCOHOL
DES-
TINED FOR EXPORT.—No credit (other than the 
small ethanol producer credit) shall be deter-
mined under this section with respect to any 
mixture or alcohol if such mixture or alcohol is 
destined for export from the United States (as 
determined by the Secretary). 
‘‘(D) SPECIAL
RULE
FOR
SMALL
PRO-
DUCER CREDITS.—No small ethanol producer 
credit, small cellulosic alcohol producer credit, 
or small fossil free alcohol producer credit shall 
be determined under this section with respect to 
any alcohol unless such alcohol is produced in 
the United States.’’. 
(2) BIODIESEL CREDIT.—Subsection (d) of sec-
tion 40A is amended by adding at the end the fol-
lowing new paragraph: 
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273 
‘‘(5) LIMITATION TO BIODIESEL WITH CONNEC-
TION TO THE UNITED STATES.— 
‘‘(A) BIODIESEL
CREDIT.—No biodiesel 
credit shall be determined under this section 
with respect to any biodiesel unless such bio-
diesel is produced in the United States for con-
sumption in the United States or is entered into 
the United States for consumption in the 
United States. 
‘‘(B) BIODIESEL
MIXTURE
CREDIT.—No 
biodiesel mixture credit shall be determined 
under this section with respect to any mixture 
unless such mixture is produced in the United 
States for consumption in the United States or 
is entered into the United States for consump-
tion in the United States. 
‘‘(C) NO
CREDITS
FOR
BIODIESEL
DES-
TINED FOR EXPORT.—No credit (other than the 
small agri-biodiesel producer credit) shall be de-
termined under this section with respect to any 
mixture or biodiesel if such mixture or biodiesel 
is destined for export from the United States 
(as determined by the Secretary). 
‘‘(D) SPECIAL RULE FOR SMALL AGRI-BIO-
DIESEL PRODUCER CREDIT.—No small agri-bio-
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274 
diesel producer credit shall be determined under 
this section with respect to any agri-biodiesel 
unless such agri-biodiesel is produced in the 
United States.’’. 
(3) EXCISE
TAX
CREDITS.—Section 6426 is 
amended by adding at the end the following new 
subsection: 
‘‘(h) LIMITATION TO FUELS WITH CONNECTION TO 
THE UNITED STATES.— 
‘‘(1) MIXTURE
CREDITS.—No credit shall be 
determined under this section with respect to any 
mixture unless such mixture is produced in the 
United States for consumption in the United States 
or is entered into the United States for consumption 
in the United States. 
‘‘(2) ALTERNATIVE FUEL CREDIT.—No alter-
native fuel credit shall be determined under this sec-
tion with respect to any alternative fuel unless such 
alternative fuel is produced in the United States for 
consumption in the United States or is entered into 
the United States for consumption in the United 
States. 
‘‘(3) NO CREDITS FOR FUELS DESTINED FOR 
EXPORT.—No credit shall be determined under this 
section with respect to any mixture or alternative 
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275 
fuel if such mixture or alternative fuel is destined 
for export from the United States (as determined by 
the Secretary).’’. 
(4) PAYMENTS.—Subsection (e) of section 6427 
is amended by redesignating paragraph (5) as para-
graph (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(h).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to fuel sold or used after the date 
of the enactment of this Act. 
TITLE III—RESEARCH AND 
DEVELOPMENT 
SEC. 301. BLENDED FUELS. 
The Secretary shall carry out a program of research, 
development, and demonstration as it relates to the blend-
ing of transportation fuels derived from coal-to-liquids and 
the blending thereof with transportation fuels derived 
from renewable sources, including biomass (as defined in 
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section 932 of the Energy Policy Act of 2005). The pro-
gram shall focus on— 
(1) maximizing the fungibility and supply of 
blended transportation fuels; 
(2) the viability of the blend as a cost competi-
tive replacement for transportation fuels; 
(3) evaluation of the environmental con-
sequences of the blend on evaporative and exhaust 
emissions from on-road and off-road engines; 
(4) the quality of the resultant blend at varying 
concentrations of biofuel; and 
(5) other areas the Secretary considers appro-
priate. 
SEC. 302. CELLULOSIC ETHANOL. 
(a) BIOENERGY RESEARCH CENTERS.—The Sec-
retary of Energy shall maintain 4 Bioenergy Research 
Centers to address scientific problems that are inherently 
interdisciplinary and will require scientific expertise and 
technological capabilities that span the physical and bio-
logical sciences, including genomics, microbial and plant 
biology, analytical chemistry, computational biology and 
bioinformatics, and engineering. Universities, national lab-
oratories, nonprofit agencies, and private firms, as well as 
consortia comprising of partnerships of two or more such 
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277 
institutions, will be eligible for funding to establish and 
operate a Research Center. 
(b) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated for the Bioenergy Re-
search Centers described in subsection (a) $25,000,000 
for each of the fiscal years 2009 through 2013. 
Æ 
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