216 
(1) SIMILAR
TREATMENT
FOR
ALL
APPLI-
ANCES.—Subsection (c) of section 45M is amended— 
(A) by striking paragraph (2), 
(B) by striking ‘‘(1) IN GENERAL’’ and all 
that follows through ‘‘the eligible’’ and inserting 
‘‘The eligible’’, 
(C) by moving the text of such subsection in 
line with the subsection heading, and 
(D) by redesignating subparagraphs (A) 
and (B) as paragraphs (1) and (2), respectively, 
and by moving such paragraphs 2 ems to the 
left. 
(2) MODIFICATION
OF
BASE
PERIOD.—Para-
graph (2) of section 45M(c), as amended by para-
graph (1), is amended by striking ‘‘3-calendar year’’ 
and inserting ‘‘2-calendar year’’. 
(c) TYPES OF ENERGY EFFICIENT APPLIANCES.—Sub-
section (d) of section 45M is amended to read as follows: 
‘‘(d) TYPES OF ENERGY EFFICIENT APPLIANCE.—For 
purposes of this section, the types of energy efficient appli-
ances are— 
‘‘(1) dishwashers described in subsection (b)(1), 
‘‘(2) clothes washers described in subsection 
(b)(2), and
217 
‘‘(3) 
refrigerators 
described 
in 
subsection 
(b)(3).’’. 
(d) AGGREGATE CREDIT AMOUNT ALLOWED.— 
(1) INCREASE IN LIMIT.—Paragraph (1) of sec-
tion 45M(e) is amended to read as follows: 
‘‘(1) AGGREGATE CREDIT AMOUNT ALLOWED.— 
The aggregate amount of credit allowed under sub-
section (a) with respect to a taxpayer for any taxable 
year shall not exceed $75,000,000 reduced by the 
amount of the credit allowed under subsection (a) to 
the taxpayer (or any predecessor) for all prior taxable 
years beginning after December 31, 2007.’’. 
(2) EXCEPTION
FOR
CERTAIN
REFRIGERATOR 
AND CLOTHES WASHERS.—Paragraph (2) of section 
45M(e) is amended to read as follows: 
‘‘(2) AMOUNT ALLOWED FOR CERTAIN REFRIG-
ERATORS AND CLOTHES WASHERS.—Refrigerators de-
scribed in subsection (b)(3)(D) and clothes washers 
described in subsection (b)(2)(D) shall not be taken 
into account under paragraph (1).’’. 
(e) QUALIFIED ENERGY EFFICIENT APPLIANCES.— 
(1) IN
GENERAL.—Paragraph (1) of section 
45M(f) is amended to read as follows:
218 
‘‘(1) QUALIFIED
ENERGY
EFFICIENT
APPLI-
ANCE.—The term ‘qualified energy efficient appliance’ 
means— 
‘‘(A) any dishwasher described in subsection 
(b)(1), 
‘‘(B) any clothes washer described in sub-
section (b)(2), and 
‘‘(C) any refrigerator described in sub-
section (b)(3).’’. 
(2) CLOTHES
WASHER.—Section 45M(f)(3) is 
amended by inserting ‘‘commercial’’ before ‘‘residen-
tial’’ the second place it appears. 
(3) 
TOP-LOADING
CLOTHES
WASHER.—Sub-
section (f) of section 45M is amended by redesignating 
paragraphs (4), (5), (6), and (7) as paragraphs (5), 
(6), (7), and (8), respectively, and by inserting after 
paragraph (3) the following new paragraph: 
‘‘(4) 
TOP-LOADING
CLOTHES
WASHER.—The 
term ‘top-loading clothes washer’ means a clothes 
washer which has the clothes container compartment 
access located on the top of the machine and which 
operates on a vertical axis.’’. 
(4) REPLACEMENT OF ENERGY FACTOR.—Section 
45M(f)(6), as redesignated by paragraph (3), is 
amended to read as follows:
219 
‘‘(6) MODIFIED
ENERGY
FACTOR.—The term 
‘modified energy factor’ means the modified energy 
factor established by the Department of Energy for 
compliance with the Federal energy conservation 
standard.’’. 
(5) GALLONS PER CYCLE; WATER CONSUMPTION 
FACTOR.—Section 45M(f), as amended by paragraph 
(3), is amended by adding at the end the following: 
‘‘(9) GALLONS PER CYCLE.—The term ‘gallons 
per cycle’ means, with respect to a dishwasher, the 
amount of water, expressed in gallons, required to 
complete a normal cycle of a dishwasher. 
‘‘(10) WATER CONSUMPTION FACTOR.—The term 
‘water consumption factor’ means, with respect to a 
clothes washer, the quotient of the total weighted per- 
cycle water consumption divided by the cubic foot (or 
liter) capacity of the clothes washer.’’. 
(f) EFFECTIVE DATE.—The amendments made by this 
section shall apply to appliances produced after December 
31, 2007. 
SEC. 306. ACCELERATED RECOVERY PERIOD FOR DEPRE-
CIATION OF SMART METERS AND SMART 
GRID SYSTEMS. 
(a) IN GENERAL.—Section 168(e)(3)(D) is amended 
by striking ‘‘and’’ at the end of clause (i), by striking the
220 
period at the end of clause (ii) and inserting a comma, and 
by inserting after clause (ii) the following new clauses: 
‘‘(iii) any qualified smart electric 
meter, and 
‘‘(iv) any qualified smart electric grid 
system.’’. 
(b) DEFINITIONS.—Section 168(i) is amended by in-
serting at the end the following new paragraph: 
‘‘(18) QUALIFIED SMART ELECTRIC METERS.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
smart electric meter’ means any smart electric 
meter which— 
‘‘(i) is placed in service by a taxpayer 
who is a supplier of electric energy or a 
provider of electric energy services, and 
‘‘(ii) does not have a class life (deter-
mined without regard to subsection (e)) of 
less than 10 years. 
‘‘(B) SMART ELECTRIC METER.—For pur-
poses of subparagraph (A), the term ‘smart elec-
tric meter’ means any time-based meter and re-
lated communication equipment which is capable 
of being used by the taxpayer as part of a system 
that—
221 
‘‘(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 infor-
mation between supplier or provider and 
the customer’s electric meter in support of 
time-based rates or other forms of demand 
response, 
‘‘(iii) provides data to such supplier or 
provider so that the supplier or provider 
can provide energy usage information to 
customers electronically, and 
‘‘(iv) provides net metering. 
‘‘(19) QUALIFIED SMART ELECTRIC GRID SYS-
TEMS.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
smart electric grid system’ means any smart 
grid property which— 
‘‘(i) is used as part of a system for 
electric distribution grid communications, 
monitoring, and management placed in 
service by a taxpayer who is a supplier of 
electric energy or a provider of electric en-
ergy services, and
222 
‘‘(ii) does not have a class life (deter-
mined without regard to subsection (e)) of 
less than 10 years. 
‘‘(B) SMART GRID PROPERTY.—For the pur-
poses of subparagraph (A), the term ‘smart grid 
property’ means electronics and related equip-
ment that is capable of— 
‘‘(i) sensing, collecting, and monitoring 
data of or from all portions of a utility’s 
electric distribution grid, 
‘‘(ii) providing real-time, two-way 
communications to monitor or manage such 
grid, and 
‘‘(iii) providing real time analysis of 
and event prediction based upon collected 
data that can be used to improve electric 
distribution system reliability, quality, and 
performance.’’. 
(c) CONTINUED APPLICATION OF 150 PERCENT DE-
CLINING BALANCE METHOD.—Paragraph (2) of section 
168(b) is amended by striking ‘‘or’’ at the end of subpara-
graph (B), by redesignating subparagraph (C) as subpara-
graph (D), and by inserting after subparagraph (B) the fol-
lowing new subparagraph:
223 
‘‘(C) any property (other than property de-
scribed in paragraph (3)) which is a qualified 
smart electric meter or qualified smart electric 
grid system, or’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to property placed in service after the 
date of the enactment of this Act. 
SEC. 307. QUALIFIED GREEN BUILDING AND SUSTAINABLE 
DESIGN PROJECTS. 
(a) IN GENERAL.—Paragraph (8) of section 142(l) is 
amended by striking ‘‘September 30, 2009’’ and inserting 
‘‘September 30, 2012’’. 
(b) TREATMENT OF CURRENT REFUNDING BONDS.— 
Paragraph (9) of section 142(l) is amended by striking ‘‘Oc-
tober 1, 2009’’ and inserting ‘‘October 1, 2012’’. 
(c) ACCOUNTABILITY.—The second sentence of section 
701(d) of the American Jobs Creation Act of 2004 is amend-
ed by striking ‘‘issuance,’’ and inserting ‘‘issuance of the 
last issue with respect to such project,’’. 
SEC. 308. SPECIAL DEPRECIATION ALLOWANCE FOR CER-
TAIN REUSE AND RECYCLING PROPERTY. 
(a) IN GENERAL.—Section 168 is amended by adding 
at the end the following new subsection: 
‘‘(m) SPECIAL ALLOWANCE FOR CERTAIN REUSE AND 
RECYCLING PROPERTY.—
224 
‘‘(1) IN GENERAL.—In the case of any qualified 
reuse and recycling property— 
‘‘(A) the depreciation deduction provided by 
section 167(a) for the taxable year in which such 
property is placed in service shall include an al-
lowance equal to 50 percent of the adjusted basis 
of the qualified reuse and recycling property, 
and 
‘‘(B) the adjusted basis of the qualified reuse 
and recycling property shall be reduced by the 
amount of such deduction before computing the 
amount otherwise allowable as a depreciation de-
duction under this chapter for such taxable year 
and any subsequent taxable year. 
‘‘(2) QUALIFIED REUSE AND RECYCLING PROP-
ERTY.—For purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
reuse and recycling property’ means any reuse 
and recycling property— 
‘‘(i) to which this section applies, 
‘‘(ii) which has a useful life of at least 
5 years, 
‘‘(iii) the original use of which com-
mences with the taxpayer after August 31, 
2008, and
225 
‘‘(iv) which is— 
‘‘(I) acquired by purchase (as de-
fined in section 179(d)(2)) by the tax-
payer after August 31, 2008, but only 
if no written binding contract for the 
acquisition was in effect before Sep-
tember 1, 2008, or 
‘‘(II) acquired by the taxpayer 
pursuant to a written binding contract 
which was entered into after August 
31, 2008. 
‘‘(B) EXCEPTIONS.— 
‘‘(i) BONUS DEPRECIATION PROPERTY 
UNDER SUBSECTION (k).—The term ‘quali-
fied reuse and recycling property’ shall not 
include any property to which section 
168(k) applies. 
‘‘(ii) 
ALTERNATIVE
DEPRECIATION 
PROPERTY.—The term ‘qualified reuse and 
recycling property’ shall not include any 
property to which the alternative deprecia-
tion system under subsection (g) applies, de-
termined without regard to paragraph (7) 
of subsection (g) (relating to election to have 
system apply).
226 
‘‘(iii) ELECTION OUT.—If a taxpayer 
makes an election under this clause with re-
spect to any class of property for any tax-
able year, this subsection shall not apply to 
all property in such class placed in service 
during such taxable year. 
‘‘(C) 
SPECIAL
RULE
FOR
SELF-CON-
STRUCTED PROPERTY.—In the case of a taxpayer 
manufacturing, constructing, or producing prop-
erty for the taxpayer’s own use, the requirements 
of clause (iv) of subparagraph (A) shall be treat-
ed as met if the taxpayer begins manufacturing, 
constructing, or producing the property after Au-
gust 31, 2008. 
‘‘(D) DEDUCTION ALLOWED IN COMPUTING 
MINIMUM TAX.—For purposes of determining al-
ternative minimum taxable income under section 
55, the deduction under subsection (a) for quali-
fied reuse and recycling property shall be deter-
mined under this section without regard to any 
adjustment under section 56. 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) REUSE AND RECYCLING PROPERTY.—
227 
‘‘(i) IN
GENERAL.—The term ‘reuse 
and recycling property’ means any machin-
ery and equipment (not including buildings 
or real estate), along with all appurtenances 
thereto, including software necessary to op-
erate such equipment, which is used exclu-
sively to collect, distribute, or recycle quali-
fied reuse and recyclable materials. 
‘‘(ii) EXCLUSION.—Such term does not 
include rolling stock or other equipment 
used to transport reuse and recyclable mate-
rials. 
‘‘(B) QUALIFIED REUSE AND RECYCLABLE 
MATERIALS.— 
‘‘(i) IN GENERAL.—The term ‘qualified 
reuse and recyclable materials’ means scrap 
plastic, scrap glass, scrap textiles, scrap 
rubber, scrap packaging, recovered fiber, 
scrap ferrous and nonferrous metals, or elec-
tronic scrap generated by an individual or 
business. 
‘‘(ii) ELECTRONIC
SCRAP.—For pur-
poses of clause (i), the term ‘electronic 
scrap’ means—
228 
‘‘(I) any cathode ray tube, flat 
panel screen, or similar video display 
device with a screen size greater than 
4 inches measured diagonally, or 
‘‘(II) any central processing unit. 
‘‘(C) RECYCLING OR RECYCLE.—The term 
‘recycling’ or ‘recycle’ means that process (in-
cluding sorting) by which worn or superfluous 
materials are manufactured or processed into 
specification grade commodities that are suitable 
for use as a replacement or substitute for virgin 
materials in manufacturing tangible consumer 
and commercial products, including packaging.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to property placed in service after Au-
gust 31, 2008. 
TITLE IV—REVENUE 
PROVISIONS 
SEC. 401. LIMITATION OF DEDUCTION FOR INCOME ATTRIB-
UTABLE TO DOMESTIC PRODUCTION OF OIL, 
GAS, OR PRIMARY PRODUCTS THEREOF. 
(a) IN GENERAL.—Section 199(d) is amended by re-
designating paragraph (9) as paragraph (10) and by in-
serting after paragraph (8) the following new paragraph:
229 
‘‘(9) SPECIAL RULE FOR TAXPAYERS WITH OIL 
RELATED
QUALIFIED
PRODUCTION
ACTIVITIES
IN-
COME.— 
‘‘(A) IN GENERAL.—If a taxpayer has oil 
related qualified production activities income for 
any taxable year beginning after 2009, the 
amount otherwise allowable as a deduction under 
subsection (a) shall be reduced by 3 percent of 
the least of— 
‘‘(i) the oil related qualified production 
activities income of the taxpayer for the 
taxable year, 
‘‘(ii) the qualified production activities 
income of the taxpayer for the taxable year, 
or 
‘‘(iii) taxable income (determined with-
out regard to this section). 
‘‘(B) OIL RELATED QUALIFIED PRODUCTION 
ACTIVITIES INCOME.—For purposes of this para-
graph, the term ‘oil related qualified production 
activities income’ means for any taxable year the 
qualified production activities income which is 
attributable to the production, refining, proc-
essing, transportation, or distribution of oil, gas,
230 
or any primary product thereof during such tax-
able year. 
‘‘(C) PRIMARY PRODUCT.—For purposes of 
this paragraph, the term ‘primary product’ has 
the same meaning as when used in section 
927(a)(2)(C), as in effect before its repeal.’’. 
(b) CONFORMING
AMENDMENT.—Section 199(d)(2) 
(relating to application to individuals) is amended by 
striking ‘‘subsection (a)(1)(B)’’ and inserting ‘‘subsections 
(a)(1)(B) and (d)(9)(A)(iii)’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
SEC. 402. ELIMINATION OF THE DIFFERENT TREATMENT OF 
FOREIGN OIL AND GAS EXTRACTION INCOME 
AND FOREIGN OIL RELATED INCOME FOR 
PURPOSES OF THE FOREIGN TAX CREDIT. 
(a) IN GENERAL.—Subsections (a) and (b) of section 
907 (relating to special rules in case of foreign oil and gas 
income) are amended to read as follows: 
‘‘(a) REDUCTION IN AMOUNT ALLOWED AS FOREIGN 
TAX UNDER SECTION 901.—In applying section 901, the 
amount of any foreign oil and gas taxes paid or accrued 
(or deemed to have been paid) during the taxable year 
which would (but for this subsection) be taken into account
231 
for purposes of section 901 shall be reduced by the amount 
(if any) by which the amount of such taxes exceeds the prod-
uct of— 
‘‘(1) the amount of the combined foreign oil and 
gas income for the taxable year, 
‘‘(2) multiplied by— 
‘‘(A) in the case of a corporation, the per-
centage which is equal to the highest rate of tax 
specified under section 11(b), or 
‘‘(B) in the case of an individual, a fraction 
the numerator of which is the tax against which 
the credit under section 901(a) is taken and the 
denominator of which is the taxpayer’s entire 
taxable income. 
‘‘(b) COMBINED FOREIGN OIL AND GAS INCOME; FOR-
EIGN OIL AND GAS TAXES.—For purposes of this section— 
‘‘(1) COMBINED
FOREIGN
OIL
AND
GAS
IN-
COME.—The term ‘combined foreign oil and gas in-
come’ means, with respect to any taxable year, the 
sum of— 
‘‘(A) foreign oil and gas extraction income, 
and 
‘‘(B) foreign oil related income.
232 
‘‘(2) FOREIGN OIL AND GAS TAXES.—The term 
‘foreign oil and gas taxes’ means, with respect to any 
taxable year, the sum of— 
‘‘(A) oil and gas extraction taxes, and 
‘‘(B) any income, war profits, and excess 
profits taxes paid or accrued (or deemed to have 
been paid or accrued under section 902 or 960) 
during the taxable year with respect to foreign 
oil related income (determined without regard to 
subsection (c)(4)) or loss which would be taken 
into account for purposes of section 901 without 
regard to this section.’’. 
(b) RECAPTURE OF FOREIGN OIL AND GAS LOSSES.— 
Paragraph (4) of section 907(c) (relating to recapture of 
foreign oil and gas extraction losses by recharacterizing 
later extraction income) is amended to read as follows: 
‘‘(4) RECAPTURE
OF
FOREIGN
OIL
AND
GAS 
LOSSES
BY
RECHARACTERIZING
LATER
COMBINED 
FOREIGN OIL AND GAS INCOME.— 
‘‘(A) IN GENERAL.—The combined foreign 
oil and gas income of a taxpayer for a taxable 
year (determined without regard to this para-
graph) shall be reduced— 
‘‘(i) first by the amount determined 
under subparagraph (B), and
233 
‘‘(ii) then by the amount determined 
under subparagraph (C). 
The aggregate amount of such reductions shall be 
treated as income (from sources without the 
United States) which is not combined foreign oil 
and gas income. 
‘‘(B) REDUCTION
FOR
PRE-2009
FOREIGN 
OIL EXTRACTION LOSSES.—The reduction under 
this paragraph shall be equal to the lesser of— 
‘‘(i) the foreign oil and gas extraction 
income of the taxpayer for the taxable year 
(determined without regard to this para-
graph), or 
‘‘(ii) the excess of— 
‘‘(I) the aggregate amount of for-
eign oil extraction losses for preceding 
taxable years beginning after December 
31, 1982, and before January 1, 2009, 
over 
‘‘(II) so much of such aggregate 
amount as was recharacterized under 
this paragraph (as in effect before and 
after the date of the enactment of the 
Energy Improvement and Extension 
Act of 2008) for preceding taxable