194 
(1) IN
GENERAL.—Paragraph (3) of section 
25C(d), as amended by subsection (b), is amended 
by striking subparagraph (C) and by redesignating 
subparagraphs (D), (E), and (F) as subparagraphs 
(C), (D), and (E), 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 
‘‘(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.’’. 
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195 
(d) EFFECTIVE DATE.—The amendments made this 
section shall apply to expenditures made after December 
31, 2007. 
SEC. 573. ENERGY EFFICIENT COMMERCIAL BUILDINGS DE-
DUCTION. 
Subsection (h) of section 179D is amended by strik-
ing ‘‘December 31, 2008’’ and inserting ‘‘December 31, 
2013’’. 
SEC. 574. MODIFICATIONS OF ENERGY EFFICIENT APPLI-
ANCE CREDIT FOR APPLIANCES PRODUCED 
AFTER 2007. 
(a) IN GENERAL.—Subsection (b) of section 45M 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 
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 
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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 
‘‘(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. 
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197 
‘‘(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 
‘‘(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.— 
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198 
(1) SIMILAR
TREATMENT
FOR
ALL
APPLI-
ANCES.—Subsection (c) of section 45M is amend-
ed— 
(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.— 
Subsection (d) of section 45M (defining types of energy 
efficient appliances) is amended to read as follows: 
‘‘(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), 
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199 
‘‘(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) 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-
ers described in subsection (b)(2)(D) shall not be 
taken into account under paragraph (1).’’. 
(e) QUALIFIED ENERGY EFFICIENT APPLIANCES.— 
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201 
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), 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-
ed per-cycle water consumption divided by the cubic 
foot (or liter) capacity of the clothes washer.’’. 
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202 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to appliances produced after De-
cember 31, 2007. 
SEC. 575. 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 
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 is placed in service by a taxpayer 
who is a supplier of electric energy or a pro-
vider of electric energy services. 
‘‘(B) SMART ELECTRIC METER.—For pur-
poses of subparagraph (A), the term ‘smart 
electric meter’ means any time-based meter and 
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203 
related communication equipment which is ca-
pable of being used by the taxpayer 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 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 used as part of a system for elec-
tric distribution grid communications, moni-
toring, and management placed in service by a 
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204 
taxpayer who is a supplier of electric energy or 
a provider of electric energy services. 
‘‘(B) SMART
GRID
PROPERTY.—For the 
purposes of subparagraph (A), the term ‘smart 
grid property’ means electronics and related 
equipment that is capable of— 
‘‘(i) sensing, collecting, and moni-
toring 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 
following new subparagraph: 
‘‘(C) any property (other than property de-
scribed in paragraph (3)) which is a qualified 
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205 
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. 576. QUALIFIED GREEN BUILDING AND SUSTAINABLE 
DESIGN PROJECTS. 
(a) IN GENERAL.—Paragraph (8) of section 142(l) 
is amended by striking ‘‘September 30, 2009’’ and insert-
ing ‘‘September 30, 2012’’. 
(b) 
TREATMENT
OF
CURRENT
REFUNDING 
BONDS.—Paragraph (9) of section 142(l) is amended by 
striking ‘‘October 1, 2009’’ and inserting ‘‘October 1, 
2012’’. 
(c) ACCOUNTABILITY.—The second sentence of sec-
tion 701(d) of the American Jobs Creation Act of 2004 
is amended by striking ‘‘issuance,’’ and inserting 
‘‘issuance of the last issue with respect to such project,’’. 
Subpart D—Geothermal Incentives 
SEC. 581. ENERGY CREDIT FOR GEOTHERMAL HEAT PUMP 
SYSTEMS. 
(a) IN GENERAL.—Subparagraph (A) of section 
48(a)(3) of the Internal Revenue Code of 1986 is amended 
by striking ‘‘or’’ at the end of clause (iii), by inserting 
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206 
‘‘or’’ at the end of clause (iv), and by adding at the end 
the following new clause: 
‘‘(v) equipment which uses the ground 
or ground water as a thermal energy 
source to heat a structure or as a thermal 
energy sink to cool a structure,’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
the date of the enactment of this Act. 
SEC. 582. 3-YEAR ACCELERATED DEPRECIATION PERIOD 
FOR GEOTHERMAL HEAT PUMP SYSTEMS. 
(a) IN GENERAL.—Subparagraph (A) of section 
168(e)(3) of the Internal Revenue Code of 1986 is amend-
ed by striking ‘‘and’’ at the end of clause (ii), by striking 
the period at the end of clause (iii) and inserting ‘‘, and’’, 
and by adding at the end the following new clause: 
‘‘(iv) any property which is described 
in clause (v) of section 48(a)(3)(A).’’. 
(b) CONFORMING AMENDMENT.—Subclause (I) of 
section 168(e)(3)(B)(vi) of such Code is amended by in-
serting ‘‘clause (i), (ii), (iii), or (iv) of’’ before ‘‘subpara-
graph (A)’’. 
(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. 
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207 
TITLE VI—INCREASED 
DOMESTIC PRODUCTION 
Subtitle A—Outer Continental 
Shelf 
SEC. 601. PROHIBITION ON LEASING. 
(a) PROHIBITION.—The Outer Continental Shelf 
Lands Act (43 U.S.C. 1331 et seq.) notwithstanding, the 
Secretary shall not take nor authorize any action related 
to oil and gas preleasing or leasing of any area of the 
Outer Continental Shelf that was not available for oil and 
gas leasing as of July 1, 2008, unless that action is ex-
pressly authorized by this subtitle or a statute enacted by 
Congress after the date of enactment of this Act. 
(b) TREATMENT OF AREAS IN GULF OF MEXICO.— 
For purposes of this subtitle, such action with respect to 
an area referred to in section 104(a) of the Gulf of Mexico 
Energy Security Act of 2006 (title I of division C of Public 
Law 109–432; 42 U.S.C. 1331 note) taken or authorized 
after the period referred to in that section shall be treated 
as authorized by this subtitle, and such leasing of such 
area shall be treated as authorized under section 602(a). 
SEC. 602. OPENING OF CERTAIN AREAS TO OIL AND GAS 
LEASING. 
(a) LEASING
AUTHORIZED.—The Secretary may 
offer for oil and gas leasing, preleasing, or other related 
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208 
activities, in accordance with this section and the Outer 
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) and 
subject to subsection (b) of this section, section 603 of 
this Act, and section 307 of the Coastal Zone Management 
Act of 1972 (16 U.S.C. 1456), any area— 
(1) that is in any Outer Continental Shelf Plan-
ning Area in the Atlantic Ocean or Pacific Ocean 
that is located farther than 50 miles from the coast-
line; and 
(2) that was not otherwise available for oil and 
gas leasing, preleasing, and other related activities 
as of July 1, 2008. 
(b) INCLUSION IN LEASING PROGRAM REQUIRED.— 
An area may be offered for lease under this section only 
if it has been included in an Outer Continental Shelf leas-
ing program approved by the Secretary in accordance with 
section 18 of the Outer Continental Shelf Lands Act (43 
U.S.C. 1344). 
(c) REQUIREMENT TO CONDUCT LEASE SALES.—As 
soon as practicable, consistent with subsection (b) and sec-
tion 603(a), but not later than 3 years after the date of 
enactment of this Act, and as appropriate thereafter, the 
Secretary shall conduct oil and gas lease sales under the 
Outer Continental Shelf lands Act (43 U.S.C. 1331 et 
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209 
seq.) for areas that are made available for leasing by this 
section. 
SEC. 603. COASTAL STATE ROLES AND RESPONSIBILITIES. 
(a) STATE APPROVAL OF CERTAIN LEASING RE-
QUIRED.—The Secretary may not conduct any oil and gas 
leasing or preleasing activity in any area made available 
for oil and gas leasing by section 602(a) that is located 
within 100 miles from the coastline and within the sea-
ward lateral boundaries of an adjacent State, unless the 
adjacent State has enacted a law approving of the issuance 
of such leasing by the Secretary. 
(b) CONSULTATION WITH ADJACENT AND NEIGH-
BORING STATES.— 
(1) IN GENERAL.—In addition to the consulta-
tion provided for under section 19 of the Outer Con-
tinental Shelf Lands Act (43 U.S.C. 1345), the Gov-
ernor of a State that has a coastline within 100 
miles of an area of the Outer Continental Shelf 
being considered for oil and gas leasing and made 
available for such leasing by section 602(a) may sub-
mit recommendations to the Secretary with respect 
to— 
(A) the size, timing, or location of a pro-
posed lease sale; or 
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210 
(B) a proposed development and produc-
tion plan. 
(2) REQUIREMENTS.—Subsections (b), (c), and 
(d) of section 19 of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1345) shall apply to the rec-
ommendations provided for in paragraph (1). 
SEC. 604. PROTECTION OF THE ENVIRONMENT AND CON-
SERVATION OF THE NATURAL RESOURCES 
OF THE OUTER CONTINENTAL SHELF. 
The Secretary— 
(1) shall ensure that any activity under this 
subtitle is carried out in a manner that provides for 
the protection of the coastal environment, marine 
environment, and human environment of State 
coastal zones and the Outer Continental Shelf; and 
(2) shall review all Federal regulations that are 
otherwise applicable to activities authorized by this 
subtitle to ensure environmentally sound oil and gas 
operations on the Outer Continental Shelf. 
SEC. 605. LIMITATIONS. 
(a) COMPLIANCE WITH MEMORANDUM.—Any oil and 
gas leasing of areas of the Outer Continental Shelf shall 
be conducted in accordance with the document entitled 
‘‘Memorandum of Agreement between the Department of 
Defense and the Department of the Interior on Mutual 
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211 
Concerns On The Outer Continental Shelf’’ and dated 
July 2, 1983, and such revisions thereto as may be agreed 
to by the Secretary of Defense and the Secretary of the 
Interior; except that no such revisions may be made prior 
to January 21, 2009. 
(b) NATIONAL
SECURITY.—Notwithstanding sub-
section (a), the United States reserves the right to des-
ignate by and through the Secretary of Defense, with the 
approval of the President, national defense areas on the 
Outer Continental Shelf pursuant to section 12(d) of the 
Outer Continental Shelf Lands Act (43 U.S.C. 1341(d)). 
SEC. 606. PROHIBITION ON LEASING IN CERTAIN FEDERAL 
PROTECTED AREAS. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of this or any other Federal law, no lease or other 
authorization may be issued by the Federal Government 
that authorizes exploration, development, or production of 
oil or natural gas in— 
(1) any marine national monument or national 
marine sanctuary; or 
(2) the fishing grounds known as Georges Bank 
in the waters of the United States, which is one of 
the largest and historically important fishing 
grounds of the United States. 
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212 
(b) IDENTIFICATION OF COORDINATES OF GEORGES 
BANK.—The Secretary of Commerce, after publication of 
public notice and an opportunity for public comment, shall 
identify the specific coordinates that delineate Georges 
Bank in the waters of the United States for purposes of 
subsection (a). 
SEC. 607. NO EFFECT ON APPLICABLE LAW. 
Except as otherwise specifically provided in this sub-
title, nothing in this subtitle waives or modifies any appli-
cable environmental or other law. 
SEC. 608. BUY AMERICAN REQUIREMENTS. 
(a) IN GENERAL.—It is the intent of Congress that 
this Act, among other things, result in a healthy and grow-
ing American industrial, manufacturing, transportation, 
and service sector employing the vast talents of America’s 
workforce to assist in the development of energy from do-
mestic sources. Moreover, the Congress intends to monitor 
the deployment of personnel and material onshore and off-
shore to encourage the development of American tech-
nology and manufacturing to enable United States work-
ers to benefit from this Act by good jobs and careers, as 
well as the establishment of important industrial facilities 
to support expanded access to American resources. 
(b) SAFEGUARD FOR EXTRAORDINARY ABILITY.— 
Section 30(a) of the Outer Continental Shelf Lands Act 
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213 
(43 U.S.C. 1356(a)) is amended in the matter preceding 
paragraph (1) by striking ‘‘regulations which’’ and insert-
ing ‘‘regulations that shall be supplemental and com-
plimentary with and under no circumstances a substi-
tution for the provisions of the Constitution and laws of 
the United States extended to the subsoil and seabed of 
the outer Continental Shelf pursuant to section 4 of this 
Act, except insofar as such laws would otherwise apply to 
individuals who have extraordinary ability in the sciences, 
arts, education, or business, which has been demonstrated 
by sustained national or international acclaim, and that’’. 
SEC. 609. SMALL, WOMAN-OWNED, AND MINORITY-OWNED 
BUSINESSES. 
Section 8 of the Outer Continental Shelf Lands Act 
(43 U.S.C. 1337) is amended by adding at the end the 
following: 
‘‘(q) OPPORTUNITIES FOR LEASING.—The Secretary 
shall establish goals to ensure equal opportunity to bid on 
offshore leases for qualified small, women-owned, and mi-
nority-owned exploration and production companies and 
may implement, where appropriate, outreach programs for 
qualified historically underutilized exploration and produc-
tion companies to participate in the bidding process for 
offshore leases.’’. 
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214 
SEC. 610. OCS JOINT PERMITTING OFFICES. 
(a) ESTABLISHMENT.—The Secretary of the Interior 
(referred to in this section as the ‘‘Secretary’’) shall estab-
lish Federal OCS Joint Regional Permitting Offices (re-
ferred to in this section as the ‘‘Regional Permitting Of-
fices’’) in accordance with this section. 
(b) MEMORANDUM OF UNDERSTANDING.—Not later 
than 90 days after the date of enactment of this Act, the 
Secretary shall enter into a memorandum of under-
standing for purposes of this section with— 
(1) the Secretary of Commerce; 
(2) the Administrator of the Environmental 
Protection Agency; and 
(3) the Chief of Engineers. 
(c) DESIGNATION OF QUALIFIED STAFF.— 
(1) IN GENERAL.—Not later than 30 days after 
the date of the signing of the memorandum of un-
derstanding under subsection (b), all Federal signa-
tory parties shall assign to each of the Regional Per-
mitting Offices identified in subsection (d) a suffi-
cient number of employees with expertise to address 
the full spectrum of agency regulatory issues relat-
ing to the Regional Permitting Office in which the 
employee is employed, including, as applicable, par-
ticular expertise in— 
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215 
(A) the consultations and the preparation 
of biological opinions under section 7 of the En-
dangered Species Act of 1973 (16 U.S.C.1536); 
(B) permits under section 404 of Federal 
Water Pollution Control Act (33 U.S.C. 1344); 
(C) regulatory matters under the Clean Air 
Act (42 U.S.C. 7401 et seq.); 
(D) the consultations and preparation of 
documents under the Marine Mammal Protec-
tion Act of 1972 (16 U.S.C. 1361 et seq.); and 
(E) the preparation of analyses under the 
National Environmental Policy Act of 1969 (42 
U.S.C. 4321 et seq.). 
(2) DUTIES.—Each employee assigned under 
paragraph (1) shall— 
(A) not later than 90 days after the date 
of assignment, report to the Minerals Manage-
ment Service Regional Director in the Regional 
Permitting Office to which the employee is as-
signed; 
(B) be responsible for all issues relating to 
the jurisdiction of the home office or agency of 
the employee; and 
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(C) participate as part of the team of per-
sonnel working on proposed energy projects, 
planning, and environmental analyses. 
(d) REGIONAL
PERMITTING
OFFICES.—The fol-
lowing Minerals Management Service Regional Head-
quarters shall serve as the Regional Permitting Offices: 
(1) Anchorage, Alaska. 
(2) New Orleans, Louisiana. 
(3) MMS Pacific Regional Headquarters. 
(4) MMS Atlantic Regional Headquarters. 
(e) REPORTS.—Not later than 3 years after the date 
of enactment of this Act, the Secretary shall submit to 
Congress a report that describes the results of the Re-
gional Permitting Offices. 
(f) TRANSFER OF FUND.—For the purposes of co-
ordination and processing of oil and gas use authorization 
on the Federal Outer Continental Shelf under the admin-
istration of the Regional Permitting Offices identified in 
subsection (d), the Secretary may authorize the expendi-
ture or transfer of such funds as are necessary to— 
(1) the United States Fish and Wildlife Service; 
(2) the Bureau of Indian Affairs; 
(3) the Environmental Protection Agency; 
(4) the National Oceanic and Atmospheric Ad-
ministration; and 
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(5) the Corps of Engineers. 
SEC. 611. DEFINITIONS. 
In this subtitle: 
(1) ADJACENT
STATE.—The term ‘‘adjacent 
State’’ means, with respect to any program, plan, 
lease sale, leased tract, or other activity, proposed, 
conducted, or approved in accordance with the Outer 
Continental Shelf Lands Act (43 U.S.C. 1331 et 
seq.), the State, the laws of which are declared pur-
suant to section 4(a)(2) of the Outer Continental 
Shelf Lands Act (43 U.S.C. 1333(a)(2)) to be the 
law of the United States for the portion of the Outer 
Continental Shelf on which the program, plan, lease 
sale, leased tract, or activity is, or is proposed to be, 
conducted. 
(2) 
COASTAL
ENVIRONMENT.—The 
term 
‘‘coastal environment’’ has the meaning given that 
term in the Outer Continental Shelf Lands Act (43 
U.S.C. 1331 et seq.). 
(3) COASTAL ZONE.—The term ‘‘coastal zone’’ 
has the meaning given that term in the Outer Conti-
nental Shelf Lands Act (43 U.S.C. 1331 et seq.). 
(4) COASTLINE.—The term ‘‘coastline’’ has the 
meaning given the term ‘‘coast line’’ under section 
2 of the Submerged Lands Act (43 U.S.C. 1301). 
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terior shall not issue to a person any new lease that au-
thorizes the exploration for or production of oil or natural 
gas, under section 17 of the Mineral Leasing Act (33 
U.S.C. 226), the Mineral Leasing Act for Acquired Lands 
Act (30 U.S.C. 351 et seq.), the Outer Continental Shelf 
Lands Act (43 U.S.C. 1331 et seq.), or any other law au-
thorizing the issuance of oil and gas leases on Federal 
lands or submerged lands, unless— 
(1) the person certifies for each existing lease 
under such Acts for the production of oil or gas with 
respect to which the person is a lessee, that the per-
son is diligently developing the Federal lands that 
are subject to the lease in order to produce oil or 
natural gas or is producing oil or natural gas from 
such land; or 
(2) the person has relinquished all ownership 
interest in all Federal oil and gas leases under which 
oil and gas is not being diligently developed. 
(b) DILIGENT DEVELOPMENT.—The Secretary shall 
issue regulations within 180 days after the date of enact-
ment of this Act that establish what constitutes ‘‘diligently 
developing’’ for purposes of this Act. 
(c) FAILURE TO COMPLY WITH REQUIREMENTS.— 
Any person who fails to comply with the requirements of 
this section or any regulation or order issued to implement 
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220 
this section shall be liable for a civil penalty under section 
109 of the Federal Oil and Gas Royalty Management Act 
of 1982 (30 U.S.C. 1719). 
(d) LESSEE DEFINED.—In this section the term ‘‘les-
see’’— 
(1) includes any person or other entity that 
controls, is controlled by, or is in or under common 
control with, a lessee; and 
(2) does not include any person who does not 
hold more than a minority ownership interest in a 
lease under an Act referred to in subsection (a) au-
thorizing the exploration for or production of oil or 
natural gas. 
SEC. 622. FAIR RETURN ON PRODUCTION OF FEDERAL OIL 
AND GAS RESOURCES. 
(a) ROYALTY PAYMENTS.—The Secretary of the In-
terior shall take all steps necessary to ensure that lessees 
under leases for exploration, development, and production 
of oil and natural gas on Federal lands, including leases 
under the Mineral Leasing Act (30 U.S.C. 181 et seq.), 
the Mineral Leasing Act for Acquired Lands (30 U.S.C. 
351 et seq.), the Outer Continental Shelf Lands Act (30 
U.S.C. 1331 et seq.), and all other mineral leasing laws, 
are making prompt, transparent, and accurate royalty 
payments under such leases. 
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221 
(b) RECOMMENDATIONS
FOR
LEGISLATIVE
AC-
TION.—In order to facilitate implementation of subsection 
(a), the Secretary of the Interior shall, within 180 days 
after the date of the enactment of this Act and in con-
sultation with the affected States, prepare and transmit 
to Congress recommendations for legislative action to im-
prove the accurate collection of Federal oil and gas royal-
ties. 
Subtitle C—Coal Innovation Direct 
Loan Program 
SEC. 631. COAL INNOVATION DIRECT LOAN PROGRAM. 
(a) IN GENERAL.—Title XXXI of the Energy Policy 
Act of 1992 (42 U.S.C. 13571 et seq.) is amended by add-
ing at the end the following: 
‘‘SEC. 3105. COAL INNOVATION DIRECT LOAN PROGRAM. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) CARBON
CAPTURE.—The term ‘carbon 
capture’ means the capture, separation, and com-
pression of carbon dioxide that would otherwise be 
released to the atmosphere at a facility in the pro-
duction of end products of a project prior to trans-
portation of the carbon dioxide to a long-term stor-
age site. 
‘‘(2) COAL-TO-LIQUID
PRODUCT.—The term 
‘coal-to-liquid product’ means a liquid fuel resulting 
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222 
from the conversion of a feedstock, as described in 
this section. 
‘‘(3) COMBUSTIBLE END PRODUCT.—The term 
‘combustible end product’ means any product of a 
facility intended to be used as a combustible fuel. 
‘‘(4) CONVENTIONAL
BASELINE
EMISSIONS.— 
The term ‘conventional baseline emissions’ means— 
‘‘(A) the lifecycle greenhouse gas emissions 
of a facility that produces combustible end 
products, using petroleum as a feedstock, that 
are equivalent to combustible end products pro-
duced by a facility of comparable size through 
an eligible project; 
‘‘(B) in the case of noncombustible prod-
ucts produced through an eligible project, the 
average lifecycle greenhouse gas emissions emit-
ted by projects that— 
‘‘(i) are of comparable size; and 
‘‘(ii) 
produce 
equivalent 
products 
using conventional feedstocks; and 
‘‘(C) in the case of synthesized gas in-
tended for use as a combustible fuel in lieu of 
natural gas produced by an eligible project, the 
lifecycle greenhouse gas emissions that would 
result from equivalent use of natural gas. 
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223 
‘‘(5) ELIGIBLE
PROJECT.—The term ‘eligible 
project’ means a project— 
‘‘(A) that employs gasification technology 
or another conversion process for feedstocks de-
scribed in this section; and 
‘‘(B) for which— 
‘‘(i) the annual lifecycle greenhouse 
gas emissions of the project are at least 20 
percent lower than conventional baseline 
emissions; 
‘‘(ii) at least 75 percent of the carbon 
dioxide that would otherwise be released to 
the atmosphere at the facility in the pro-
duction of end products of the project is 
captured for long-term storage; 
‘‘(iii) the individual or entity carrying 
out the eligible project has entered into an 
enforceable agreement with the Secretary 
to implement carbon capture at the per-
centage that, by the end of the 5-year pe-
riod after commencement of commercial 
operation of the eligible project— 
‘‘(I) represents the best available 
technology; and 
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224 
‘‘(II) achieves a reduction in car-
bon emissions that is not less than 75 
percent; and 
‘‘(iv) in the opinion of the Secretary, 
sufficient commitments have been secured 
to achieve long-term storage of captured 
carbon dioxide beginning as of the date of 
commencement of commercial operation of 
the project. 
‘‘(6) FACILITY.—The term ‘facility’ means a fa-
cility at which the conversion of feedstocks to end 
products takes place. 
‘‘(7) GASIFICATION
TECHNOLOGY.—The term 
‘gasification technology’ means any process that con-
verts coal, petroleum residue, renewable biomass, or 
other material that is recovered for energy or feed-
stock value into a synthesis gas composed primarily 
of carbon monoxide and hydrogen for direct use or 
subsequent chemical or physical conversion. 
‘‘(8) GREENHOUSE GAS.—The term ‘greenhouse 
gas’ means any of— 
‘‘(A) carbon dioxide; 
‘‘(B) methane; 
‘‘(C) nitrous oxide; 
‘‘(D) hydrofluorocarbons; 
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225 
‘‘(E) perfluorocarbons; and 
‘‘(F) sulfur hexafluoride. 
‘‘(9) LIFECYCLE
GREENHOUSE
GAS
EMIS-
SIONS.—The term ‘lifecycle greenhouse gas emis-
sions’ means the aggregate quantity of greenhouse 
gases attributable to the production and transpor-
tation of end products at a facility, including the 
production, extraction, cultivation, distribution, mar-
keting, and transportation of feedstocks, and the 
subsequent distribution and use of any combustible 
end products, as modified by deducting, as deter-
mined by the Administrator of the Environmental 
Protection Agency— 
‘‘(A) any greenhouse gases captured at the 
facility and sequestered; 
‘‘(B) the carbon content, expressed in units 
of carbon dioxide equivalent, of any feedstock 
that is renewable biomass; and 
‘‘(C) the carbon content, expressed in units 
of carbon dioxide equivalent, of any end prod-
ucts that do not result in the release of carbon 
dioxide to the atmosphere. 
‘‘(10) LONG-TERM STORAGE.—The term ‘long- 
term storage’ means sequestration with an expected 
maximum rate of carbon dioxide leakage over a spec-
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226 
ified period of time that is consistent with the objec-
tive of reducing atmospheric concentrations of car-
bon dioxide, subject to a permit issued pursuant to 
law in effect as of the date of the sequestration. 
‘‘(11) RENEWABLE
BIOMASS.—The term ‘re-
newable biomass’ has the definition given the term 
in section 102 of the Renewable Fuels, Consumer 
Protection, and Energy Efficiency Act of 2007. 
‘‘(12) SEQUESTRATION.—The term ‘sequestra-
tion’ means the placement of carbon dioxide in a ge-
ological formation, including— 
‘‘(A) an operating oil and gas field; 
‘‘(B) coal bed methane recovery; 
‘‘(C) a depleted oil and gas field; 
‘‘(D) an unmineable coal seam; 
‘‘(E) a deep saline formation; and 
‘‘(F) a deep geological systems containing 
basalt formations. 
‘‘(b) FEED ASSISTANCE PROGRAM.— 
‘‘(1) IN GENERAL.—Subject to paragraph (3), 
and in accordance with section 988 of the Energy 
Policy Act of 2005 (42 U.S.C. 16352), not later 
than 1 year after the date of the enactment of this 
section, the Secretary shall carry out a program to 
provide grants for use in obtaining or carrying out 
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227 
any services necessary for the planning, permitting, 
and construction of an eligible project. 
‘‘(2) SELECTION OF ELIGIBLE PROJECTS.—The 
Secretary shall select eligible projects to receive 
grants under this section— 
‘‘(A) through the conduct of a reverse auc-
tion, in which eligible projects proposed to be 
carried out that have the greatest rate of car-
bon capture and long-term storage, and the 
lowest lifecycle greenhouse gas emissions, are 
given priority; 
‘‘(B) that, taken together, would— 
‘‘(i) represent a variety of geo-
graphical regions; 
‘‘(ii) use a variety of feedstocks and 
types of coal; and 
‘‘(iii) to the extent consistent with 
achieving long-term storage, represent a 
variety of geological formations; and 
‘‘(C) for which eligible projects, in the 
opinion of the Secretary— 
‘‘(i) each award recipient is financially 
viable without the receipt of additional 
Federal funding associated with the pro-
posed project; 
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228 
‘‘(ii) each recipient will provide suffi-
cient information to the Secretary for the 
Secretary to ensure that the qualified in-
vestment is expended efficiently and effec-
tively; 
‘‘(iii) a market exists for the products 
of the proposed project, as evidenced by 
contracts or written statements of intent 
from potential customers; 
‘‘(iv) the project team of each recipi-
ent is competent in the construction and 
operation of the gasification technology 
proposed; and 
‘‘(v) each recipient has met such other 
criteria as may be established and pub-
lished by the Secretary. 
‘‘(3) MAXIMUM AMOUNT OF GRANTS.—In car-
rying out this subsection, the Secretary shall provide 
not more than— 
‘‘(A) $20,000,000 in grant funds for any 
eligible project; and 
‘‘(B) $200,000,000 in grant funds, in the 
aggregate, for all eligible projects. 
‘‘(c) DIRECT LOAN PROGRAM.— 
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229 
‘‘(1) IN GENERAL.—Not later than 1 year after 
the date of enactment of this section, and subject to 
funds being made available in advance through ap-
propriations Acts, the Secretary shall carry out a 
program to provide a total of not more than 
$10,000,000,000 in loans to eligible individuals and 
entities (as determined by the Secretary) for use in 
carrying out eligible projects. 
‘‘(2) APPLICATION.—An applicant for a loan 
under this section shall comply with the terms and 
conditions in section 215(b)(3) of the Renewable 
Fuels, Consumer Protection, and Energy Efficiency 
Act of 2007 in the same manner in which applicants 
for Renewable Energy Construction grants are re-
quired to comply with that section. 
‘‘(3) SELECTION OF ELIGIBLE PROJECTS.—The 
Secretary shall select eligible projects to receive 
loans under this section— 
‘‘(A) through the conduct of a reverse auc-
tion, in which eligible projects proposed to be 
carried out that have the greatest rate of car-
bon capture and long-term storage, and the 
lowest lifecycle greenhouse gas emissions, are 
given priority; 
‘‘(B) that, taken together, would— 
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‘‘(i) represent a variety of geographic 
regions; 
‘‘(ii) use a variety of types of feed-
stocks and coal; and 
‘‘(iii) to the extent consistent with 
achieving long-term storage, represent a 
variety of geological formations; and 
‘‘(C) for which eligible projects, in the 
opinion of the Secretary— 
‘‘(i) each award recipient is financially 
viable without the receipt of additional 
Federal funding associated with the pro-
posed project; 
‘‘(ii) each recipient will provide suffi-
cient information to the Secretary for the 
Secretary to ensure that the qualified in-
vestment is expended efficiently and effec-
tively; 
‘‘(iii) a market exists for the products 
of the proposed project, as evidenced by 
contracts or written statements of intent 
from potential customers; 
‘‘(iv) the project team of each recipi-
ent is competent in the construction and 
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231 
operation of the gasification technology 
proposed; and 
‘‘(v) each recipient has met such other 
criteria as may be established and pub-
lished by the Secretary. 
‘‘(4) USE OF LOAN FUNDS.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), funds from a loan provided under 
this section may be used to pay up to 100 per-
cent of the costs of capital associated with re-
ducing lifecycle greenhouse gas emissions at the 
facility (including carbon dioxide capture, com-
pression, and long-term storage, cogeneration, 
and gasification of biomass) carried out as part 
of an eligible project. 
‘‘(B) TOTAL PROJECT COST.—Funds from 
a loan provided under this section may not be 
used to pay more than 50 percent of the total 
cost of an eligible project. 
‘‘(5) RATES, TERMS, AND
REPAYMENT
OF 
LOANS.—A loan provided under this section— 
‘‘(A) shall have an interest rate that, as of 
the date on which the loan is made, is equal to 
the cost of funds to the Department of the 
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232 
Treasury for obligations of comparable matu-
rity; 
‘‘(B) shall have a term equal to the lesser 
of— 
‘‘(i) the projected life, in years, of the 
eligible project to be carried out using 
funds from the loan, as determined by the 
Secretary; and 
‘‘(ii) 25 years; 
‘‘(C) may be subject to a deferral in repay-
ment for not more than 5 years after the date 
on which the eligible project carried out using 
funds from the loan first begins operations, as 
determined by the Secretary; and 
‘‘(D) shall be made on the condition that 
the Secretary shall be subrogated to the rights 
of the recipient of the payment as specified in 
the loan or related agreements, including, as 
appropriate, the authority (notwithstanding any 
other provision of law)— 
‘‘(i) to complete, maintain, operate, 
lease, or otherwise dispose of any property 
acquired pursuant to the guarantee or a 
related agreement; or 
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233 
‘‘(ii) to permit the borrower, pursuant 
to an agreement with the Secretary, to 
continue to pursue the purposes of the 
project, if the Secretary determines the 
pursuit to be in the public interest. 
‘‘(6) METHODOLOGY.—Not later than 18 
months after the date of enactment of this section, 
the Administrator of the Environmental Protection 
Agency shall, by regulation, establish a methodology 
for use in determining the lifecycle greenhouse gas 
emissions of products produced using gasification 
technology. 
‘‘(d) STUDY
OF
MAINTAINING
COAL-TO-LIQUID 
PRODUCTS IN STRATEGIC PETROLEUM RESERVE.—Not 
later than 1 year after the date of enactment of this sec-
tion, the Secretary and the Secretary of Defense shall— 
‘‘(1) conduct a study of the feasibility and suit-
ability of maintaining coal-to-liquid products in the 
Strategic Petroleum Reserve; and 
‘‘(2) submit to the Committee on Energy and 
Natural Resources and the Committee on Armed 
Services of the Senate and the Committee on Energy 
and Commerce and the Committee on Armed Serv-
ices of the House of Representatives a report de-
scribing the results of the study. 
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234 
‘‘(e) REPORT
ON EMISSIONS
OF COAL-TO-LIQUID 
PRODUCTS USED AS TRANSPORTATION FUELS.— 
‘‘(1) IN
GENERAL.—In cooperation with the 
Secretary, the Secretary of Defense, the Adminis-
trator of the Federal Aviation Administration, and 
the Secretary of Health and Human Services, the 
Administrator of the Environmental Protection 
Agency shall— 
‘‘(A) carry out a research and demonstra-
tion program to evaluate the emissions of the 
use of coal-to-liquid fuel for transportation, in-
cluding diesel and jet fuel; 
‘‘(B) evaluate the effect of using coal-to- 
liquid transportation fuel on emissions of vehi-
cles, including motor vehicles and nonroad vehi-
cles, and aircraft (as those terms are defined in 
sections 216 and 234, respectively, of the Clean 
Air Act (42 U.S.C. 7550, 7574)); and 
‘‘(C) in accordance with paragraph (4), 
submit to Congress a report on the effect on air 
and water quality, water scarcity, land use, and 
public health of using coal-to-liquid fuel in the 
transportation sector. 
‘‘(2) GUIDANCE AND TECHNICAL SUPPORT.— 
The Administrator of the Environmental Protection 
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Agency, in consultation with the Secretary, shall 
issue any guidance or technical support documents 
necessary to facilitate the effective use of coal-to-liq-
uid fuel and blends under this subsection. 
‘‘(3) REQUIREMENTS.—The program described 
in paragraph (1)(A) shall take into consideration— 
‘‘(A) the use of neat (100 percent) coal-to- 
liquid fuel and blends of coal-to-liquid fuels 
with conventional crude oil-derived fuel for 
heavy-duty and light-duty diesel engines and 
the aviation sector; 
‘‘(B) the production costs associated with 
domestic production of those fuels and prices 
for consumers; and 
‘‘(C) the overall greenhouse gas effects of 
substituting coal-derived fuels for crude oil-de-
rived fuels. 
‘‘(4) REPORTS.—The Administrator of the En-
vironmental Protection Agency shall submit to the 
Committee on Energy and Natural Resources of the 
Senate and the Committee on Energy and Com-
merce of the House of Representatives— 
‘‘(A) not later than 180 days after the date 
of enactment of this section, an interim report 
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236 
on actions taken to carry out this subsection; 
and 
‘‘(B) not later than 1 year after the date 
of enactment of this section, a final report on 
actions taken to carry out this subsection. 
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section.’’. 
(b) CONFORMING AMENDMENT.—The table of con-
tents of the Energy Policy Act of 1992 (42 U.S.C. prec. 
13201) is amended by adding at the end of the items relat-
ing to title XXXI the following: 
‘‘Sec. 3105. Coal innovation direct loan program.’’. 
Subtitle D—Nuclear Power 
SEC. 641. NUCLEAR REGULATORY COMMISSION. 
(a) There are authorized to be appropriated to the 
Nuclear Regulatory Commission such sums as are nec-
essary for the Commission to establish an additional 60 
full-time equivalent positions to— 
(1) expedite the processing of applications for 
new nuclear plants; 
(2) streamline the licensing process; and 
(3) provide additional safety oversight for cur-
rent and new facilities. 
(b) There are authorized to be appropriated to the 
Nuclear Regulatory Commission for the Inspector Gen-
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237 
eral’s Office such sums as are necessary for the Inspector 
General’s Office to establish an additional 5 full-time 
equivalent positions to assist with ongoing audits and in-
vestigations. 
SEC. 642. NUCLEAR ENERGY WORKFORCE. 
Section 1101 of the Energy Policy Act of 2005 (42 
U.S.C. 16411) is amended— 
(1) in subsection (b)(1)— 
(A) in subparagraph (A), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (B), by striking the 
period and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(C) nuclear utility and nuclear energy 
product and service industries.’’; 
(2) by redesignating subsection (d) as sub-
section (e); and 
(3) by inserting after subsection (c) the fol-
lowing: 
‘‘(d) WORKFORCE TRAINING.— 
‘‘(1) IN GENERAL.—The Secretary of Labor, in 
cooperation with the Secretary, shall promulgate 
regulations to implement a program to provide 
grants to enhance workforce training for any occu-
pation in the workforce of the nuclear utility and nu-
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clear energy products and services industries for 
which a shortage is identified or predicted in the re-
port under subsection (b)(2). 
‘‘(2) CONSULTATION.—In carrying out this sub-
section, the Secretary of Labor shall consult with 
representatives of the nuclear utility and nuclear en-
ergy products and services industries, including or-
ganized labor organizations and multiemployer asso-
ciations that jointly sponsor apprenticeship pro-
grams that provide training for skills needed in 
those industries. 
‘‘(3) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated to the Sec-
retary of Labor, working in coordination with the 
Secretary 
and 
the 
Secretary 
of 
Education, 
$20,000,000 for each of fiscal years 2009 through 
2013 to carry out this subsection.’’. 
SEC. 643. INTERAGENCY WORKING GROUP TO PROMOTE 
DOMESTIC MANUFACTURING BASE FOR NU-
CLEAR COMPONENTS AND EQUIPMENT. 
(a) PURPOSES.—The purposes of this section are— 
(1) to increase the competitiveness of the 
United States nuclear energy products and services 
industries; 
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(2) to identify the stimulus or incentives nec-
essary to cause United States manufacturers of nu-
clear energy products to expand manufacturing ca-
pacity; 
(3) to facilitate the export of United States nu-
clear energy products and services; 
(4) to reduce the trade deficit of the United 
States through the export of United States nuclear 
energy products and services; 
(5) to retain and create nuclear energy manu-
facturing and related service jobs in the United 
States; 
(6) to encourage new manufacturing tech-
nologies to address industry challenges, such spent 
fuel recycling; 
(7) to integrate the objectives described in para-
graphs (1) through (5), in a manner consistent with 
the interests of the United States, into the foreign 
policy of the United States; and 
(8) to authorize funds for increasing United 
States capacity to manufacture nuclear energy prod-
ucts and supply nuclear energy services. 
(b) ESTABLISHMENT.— 
(1) IN
GENERAL.—There is established an 
interagency working group (referred to in this sec-
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tion as the ‘‘Working Group’’) that, in consultation 
with representative industry organizations, manufac-
turers of nuclear energy products, and other stake-
holder groups, shall make recommendations to co-
ordinate the actions and programs of the Federal 
Government in order to promote increasing domestic 
manufacturing capacity and export of domestic nu-
clear energy products and services. 
(2) COMPOSITION.—The Working Group shall 
be composed of— 
(A) the Secretary of Energy (or a des-
ignee), who shall serve as Chairperson of the 
Working Group; and 
(B) representatives of— 
(i) the Department of Energy; 
(ii) the Department of Commerce; 
(iii) the Department of Defense; 
(iv) the Department of Treasury; 
(v) the Department of State; 
(vi) the Environmental Protection 
Agency; 
(vii) the United States Agency for 
International Development; 
(viii) the Export-Import Bank of the 
United States; 
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(ix) the Trade and Development 
Agency; 
(x) the Small Business Administra-
tion; 
(xi) the Office of the United States 
Trade Representative; and 
(xii) other Federal agencies, as deter-
mined by the President. 
(c) DUTIES
OF WORKING GROUP.—The Working 
Group shall— 
(1) not later than 180 days after the date of 
enactment of this Act, identify the actions necessary 
to promote the safe development and application in 
foreign countries of nuclear energy products and 
services— 
(A) to increase electricity generation from 
nuclear energy sources through development of 
new generation facilities; 
(B) to improve the efficiency, safety, and 
reliability of existing nuclear generating facili-
ties through modifications; and 
(C) enhance the safe treatment, handling, 
storage, and disposal of used nuclear fuel; 
(2) not later than 180 days after the date of 
enactment of this Act, identify— 
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(A) mechanisms (including tax stimuli for 
investment, loans and loan guarantees, and 
grants) necessary for United States companies 
to increase— 
(i) the capacity of the companies to 
produce or provide nuclear energy products 
and services; and 
(ii) exports of nuclear energy products 
and services; and 
(B) administrative or legislative initiatives 
that are necessary— 
(i) to encourage United States compa-
nies to increase the manufacturing capac-
ity of the companies for nuclear energy 
products; 
(ii) to provide technical and financial 
assistance and support to small and mid- 
sized businesses to establish quality assur-
ance programs in accordance with domestic 
and international nuclear quality assurance 
code requirements; 
(iii) to encourage, through financial 
incentives, private sector capital invest-
ment to expand manufacturing capacity; 
and 
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(iv) to provide technical assistance 
and financial incentives to small and mid- 
sized businesses to develop the workforce 
necessary to increase manufacturing capac-
ity and meet domestic and international 
nuclear quality assurance code require-
ments; 
(3) not later than 270 days after the date of 
enactment of this Act, submit to Congress a report 
that describes the findings of the Working Group 
under paragraphs (1) and (2), including rec-
ommendations for new legislative authority, as nec-
essary; and 
(4) encourage the agencies represented by mem-
bership in the Working Group— 
(A) to provide technical training and edu-
cation for international development personnel 
and local users in other countries; 
(B) to provide financial and technical as-
sistance to nonprofit institutions that support 
the marketing and export efforts of domestic 
companies that provide nuclear energy products 
and services; 
(C) to develop nuclear energy projects in 
foreign countries; 
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244 
(D) to provide technical assistance and 
training materials to loan officers of the World 
Bank, international lending institutions, com-
mercial and energy attaches at embassies of the 
United States, and other appropriate personnel 
in order to provide information about nuclear 
energy products and services to foreign govern-
ments or other potential project sponsors; 
(E) to support, through financial incen-
tives, private sector efforts to commercialize 
and export nuclear energy products and services 
in accordance with the subsidy codes of the 
World Trade Organization; and 
(F) to augment budgets for trade and de-
velopment programs in order to support pre- 
feasibility or feasibility studies for projects that 
use nuclear energy products and services. 
(d) PERSONNEL AND SERVICE MATTERS.—The Sec-
retary and the heads of agencies represented by member-
ship in the Working Group shall detail such personnel and 
furnish such services to the Working Group, with or with-
out reimbursement, as are necessary to carry out the func-
tions of the Working Group. 
(e) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to the Secretary to carry 
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out this section $20,000,000 for each of fiscal years 2009 
through 2013. 
Subtitle E—Carbon Sequestrations 
SEC. 651. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRA-
TION. 
(a) IN GENERAL.—of part IV of subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 (relating 
to business related credits) is amended by adding at the 
end the following new section: 
‘‘SEC. 45R. CREDIT FOR CARBON DIOXIDE SEQUESTRATION. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
the carbon dioxide sequestration credit for any taxable 
year is an amount equal to $15 per metric ton of qualified 
carbon dioxide which is— 
‘‘(1) captured by the taxpayer at a qualified fa-
cility, and 
‘‘(2) used by the taxpayer as a tertiary 
injectant in a qualified enhanced oil or natural gas 
recovery project. 
‘‘(b) QUALIFIED CARBON DIOXIDE.—For purposes of 
this section— 
‘‘(1) IN GENERAL.—The term ‘qualified carbon 
dioxide’ means carbon dioxide captured from an in-
dustrial source which— 
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‘‘(A) would otherwise be released into the 
atmosphere as industrial emission of green-
house gas, and 
‘‘(B) is measured at the source of capture 
and verified at the point of disposal or injec-
tion. 
‘‘(2) RECYCLED CARBON DIOXIDE.—The term 
‘qualified carbon dioxide’ includes the initial deposit 
of captured carbon dioxide used as a tertiary 
injectant. Such term does not include carbon dioxide 
that is recaptured, recycled, and re-injected as part 
of the enhanced oil and natural gas recovery process. 
‘‘(c) QUALIFIED FACILITY.—For purposes of this 
section, the term ‘qualified facility’ means any industrial 
facility— 
‘‘(1) which is owned by the taxpayer, 
‘‘(2) at which carbon capture equipment is 
placed in service, and 
‘‘(3) which captures not less than 500,000 met-
ric tons of carbon dioxide during the taxable year. 
‘‘(d) SPECIAL RULES AND OTHER DEFINITIONS.— 
For purposes of this section— 
‘‘(1) ONLY CARBON DIOXIDE CAPTURED WITH-
IN THE UNITED STATES TAKEN INTO ACCOUNT.— 
The credit under this section shall apply only with 
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respect to qualified carbon dioxide the capture of 
which is within— 
‘‘(A) the United States (within the mean-
ing of section 638(1)), or 
‘‘(B) a possession of the United States 
(within the meaning of section 638(2)). 
‘‘(2) TERTIARY
INJECTANT.—The term ‘ter-
tiary injectant’ has the same meaning as when used 
within section 193(b)(1). 
‘‘(3) QUALIFIED ENHANCED OIL OR NATURAL 
GAS RECOVERY PROJECT.—The term ‘qualified en-
hanced oil or natural gas recovery project’ has the 
meaning given the term ‘qualified enhanced oil re-
covery project’ by section 43(c)(2), by substituting 
‘crude oil or natural gas’ for ‘crude oil’ in subpara-
graph (A)(i) thereof. 
‘‘(4) CREDIT ATTRIBUTABLE TO TAXPAYER.— 
Any credit under this section shall be attributable to 
the person that captures and physically or contrac-
tually ensures the use as a tertiary injectant of the 
qualified carbon dioxide, except to the extent pro-
vided in regulations prescribed by the Secretary. 
‘‘(5) RECAPTURE.—The Secretary shall, by reg-
ulations, provide for recapturing the benefit of any 
credit allowable under subsection (a) with respect to 
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248 
any qualified carbon dioxide which ceases to be cap-
tured or used as a tertiary injectant in a manner 
consistent with the requirements of this section. 
‘‘(6) INFLATION ADJUSTMENT.—In the case of 
any taxable year beginning in a calendar year after 
2009, there shall be substituted for each dollar 
amount contained in subsection (a) an amount equal 
to the product of— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the inflation adjustment factor for 
such calendar year determined under section 
43(b)(3)(B) for such calendar year, determined 
by substituting ‘2008’ for ‘1990’. 
‘‘(e) APPLICATION OF SECTION.—The credit under 
this section shall apply with respect to qualified carbon 
dioxide before the end of the calendar year in which the 
Secretary, in consultation with the Administrator of the 
Environmental 
Protection 
Agency, 
certifies 
that 
75,000,000 metric tons of qualified carbon dioxide have 
been captured and disposed of or used as a tertiary 
injectant.’’. 
(b) CONFORMING AMENDMENT.—Section 38(b) of 
the Internal Revenue Code of 1986 (relating to general 
business credit), as amended by this Act, is amended by 
striking ‘‘plus’’ at the end of paragraph (36), by striking 
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249 
the period at the end of paragraph (37) and inserting ‘‘, 
plus’’, and by adding at the end of following new para-
graph: 
‘‘(38) the carbon dioxide sequestration credit 
determined under section 45R(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to other 
credits), as amended by this Act, is amended by adding 
at the end the following new section: 
‘‘Sec. 45R. Credit for carbon dioxide sequestration.’’. 
(d) EFFECTIVE DATE.—The amendments made by 2 
this section shall apply carbon dioxide captured after the 
date of the enactment of this Act. 
TITLE VII—OFFSETS 
SEC. 700. REFERENCE. 
Except as otherwise expressly provided, whenever in 
this title an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a 
section or other provision of the Internal Revenue Code 
of 1986. 
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Subtitle A—Ending Unneeded Tax 
Breaks 
SEC. 701. LIMITATION OF DEDUCTION FOR INCOME AT-
TRIBUTABLE TO DOMESTIC PRODUCTION OF 
OIL, GAS, OR PRIMARY PRODUCTS THEREOF. 
(a) DENIAL
OF DEDUCTION
FOR MAJOR INTE-
GRATED OIL COMPANIES AND STATE-OWNED OIL COMPA-
NIES FOR INCOME ATTRIBUTABLE TO DOMESTIC PRO-
DUCTION OF OIL, GAS, OR PRIMARY PRODUCTS THERE-
OF.— 
(1) IN GENERAL.—Subparagraph (B) of section 
199(c)(4) of the Internal Revenue Code of 1986 (re-
lating to exceptions) is amended by striking ‘‘or’’ at 
the end of clause (ii), by striking the period at the 
end of clause (iii) and inserting ‘‘, or’’, and by in-
serting after clause (iii) the following new clause: 
‘‘(iv) in the case of any disqualified oil 
company, the production, refining, proc-
essing, transportation, or distribution of 
oil, gas, or any primary product thereof.’’. 
(2) 
DISQUALIFIED
OIL
COMPANY.—Section 
199(c) of such Code is amended by adding at the 
end the following new paragraph: 
‘‘(8) DISQUALIFIED OIL COMPANY.— 
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‘‘(B) IN GENERAL.—The term ‘disqualified 
oil company’ means— 
‘‘(i) any major integrated oil company 
(as defined in section 167(h)(5)(B)) during 
any taxable year described in section 
167(h)(5)(B), or 
‘‘(ii) any controlled commercial entity 
(as defined in section 892(a)(2)(B)) the 
commercial activities of which during the 
taxable year includes the production, refin-
ing, processing, transportation, or distribu-
tion of oil, gas, or any primary product 
thereof. 
‘‘(C) PRIMARY PRODUCT.—The term ‘pri-
mary product’ has the same meaning as when 
used in section 927(a)(2)(C), as in effect before 
its repeal.’’. 
(b) LIMITATION ON OIL RELATED QUALIFIED PRO-
DUCTION ACTIVITIES INCOME FOR TAXPAYERS OTHER 
THAN MAJOR INTEGRATED OIL COMPANIES AND STATE 
OWNED OIL COMPANIES.— 
(1) IN GENERAL.—Section 199(d) of the Inter-
nal Revenue Code of 1986 is amended by redesig-
nating paragraph (9) as paragraph (10) and by in-
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serting after paragraph (8) the following new para-
graph: 
‘‘(9) SPECIAL RULE FOR TAXPAYERS WITH OIL 
RELATED
QUALIFIED
PRODUCTION
ACTIVITIES
IN-
COME.— 
‘‘(A) IN GENERAL.—If a taxpayer (other 
than a disqualified oil company) has oil related 
qualified production activities income for any 
taxable year beginning after 2009, the amount 
of the deduction under subsection (a) shall be 
reduced by 3 percent of the least of— 
‘‘(i) the oil related qualified produc-
tion 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 
without regard to this section). 
‘‘(B) OIL
RELATED
QUALIFIED
PRODUC-
TION
ACTIVITIES
INCOME.—The term ‘oil re-
lated qualified production activities income’ 
means for any taxable year the qualified pro-
duction activities income which is attributable 
to the production, refining, processing, trans-
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253 
portation, or distribution of oil, gas, or any pri-
mary product thereof during such taxable 
year.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
199(d)(2) of such Code (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 
December 31, 2008. 
SEC. 702. 7-YEAR AMORTIZATION OF GEOLOGICAL AND 
GEOPHYSICAL EXPENDITURES FOR CERTAIN 
MAJOR INTEGRATED OIL COMPANIES. 
(a) IN GENERAL.—Subparagraph (A) of section 
167(h)(5) (relating to special rule for major integrated oil 
companies) is amended by striking ‘‘5-year’’ and inserting 
‘‘7-year’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts paid or incurred after 
the date of the enactment of this Act. 
SEC. 703. CLARIFICATION OF DETERMINATION OF FOREIGN 
OIL AND GAS EXTRACTION INCOME. 
(a) IN GENERAL.—Paragraph (1) of section 907(c) 
is amended by redesignating subparagraph (B) as sub-
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paragraph (C), by striking ‘‘or’’ at the end of subpara-
graph (A), and by inserting after subparagraph (A) the 
following new subparagraph: 
‘‘(B) so much of any transportation of 
such minerals as occurs before the fair market 
value event, or’’. 
(b) FAIR MARKET VALUE EVENT.—Subsection (c) of 
section 907 is amended by adding at the end the following 
new paragraph: 
‘‘(6) FAIR MARKET VALUE EVENT.—For pur-
poses of this section, the term ‘fair market value 
event’ means, with respect to any mineral, the first 
point in time at which such mineral— 
‘‘(A) has a fair market value which can be 
determined on the basis of a transfer, which is 
an arm’s length transaction, of such mineral 
from the taxpayer to a person who is not re-
lated (within the meaning of section 482) to 
such taxpayer, or 
‘‘(B) is at a location at which the fair mar-
ket value is readily ascertainable by reason of 
transactions among unrelated third parties with 
respect to the same mineral (taking into ac-
count source, location, quality, and chemical 
composition).’’. 
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(c) SPECIAL
RULE
FOR
CERTAIN
PETROLEUM 
TAXES.—Subsection (c) of section 907, as amended by 
subsection (b), is amended to by adding at the end the 
following new paragraph: 
‘‘(7) OIL AND GAS TAXES.—In the case of any 
tax imposed by a foreign country which is limited in 
its application to taxpayers engaged in oil or gas ac-
tivities— 
‘‘(A) the term ‘oil and gas extraction taxes’ 
shall include such tax, 
‘‘(B) the term ‘foreign oil and gas extrac-
tion income’ shall include any taxable income 
which is taken into account in determining such 
tax (or is directly attributable to the activity to 
which such tax relates), and 
‘‘(C) the term ‘foreign oil related income’ 
shall not include any taxable income which is 
treated as foreign oil and gas extraction income 
under subparagraph (B).’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Subparagraph (C) of section 907(c)(1), as 
redesignated by this section, is amended by inserting 
‘‘or used by the taxpayer in the activity described in 
subparagraph (B)’’ before the period at the end. 
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(2) Subparagraph (B) of section 907(c)(2) is 
amended to read as follows: 
‘‘(B) so much of the transportation of such 
minerals or primary products as is not taken 
into account under paragraph (1)(B),’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 704. CLARIFICATION OF ELIGIBILITY FOR RENEW-
ABLE DIESEL CREDIT. 
(a) COPRODUCTION
WITH
PETROLEUM
FEED-
STOCK.— 
(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))’’. 
(b) CLARIFICATION
OF ELIGIBILITY
FOR ALTER-
NATIVE FUEL CREDIT.— 
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(1) IN GENERAL.—Subparagraph (F) of section 
6426(d)(2) is amended by striking ‘‘hydrocarbons’’ 
and inserting ‘‘fuel’’. 
(2) CONFORMING AMENDMENT.—Section 6426 
is amended by adding at the end the following new 
subsection: 
‘‘(h) DENIAL OF DOUBLE BENEFIT.—No credit shall 
be determined under subsection (d) or (e) with respect to 
any fuel with respect to which credit may be determined 
under subsection (b) or (c) or under section 40 or 40A.’’. 
(c) 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 
June 30, 2007. 
(2) CLARIFICATION
OF
ELIGIBILITY
FOR
AL-
TERNATIVE FUEL CREDIT.—The amendment made 
by subsection (b) shall take effect as if included in 
section 11113 of the Safe, Accountable, Flexible, Ef-
ficient Transportation Equity Act: A Legacy for 
Users. 
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258 
SEC. 705. 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.’’. 
(b) EXCISE TAX CREDIT.—Paragraph (2) of section 
6426(i), as added by subsection (c), is amended to read 
as follows: 
‘‘(2) BIODIESEL AND ALTERNATIVE FUELS.— 
No credit shall be determined under this section 
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259 
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-
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: 
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260 
‘‘(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, 
as 
amended by this Act, is amended by adding at 
the end the following new subsection: 
‘‘(i) 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 
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.’’. 
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261 
(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(i).’’. 
(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 
the date of the enactment of this Act. 
(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 
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 
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262 
(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. 
Subtitle B—Additional Revenue 
Provisions 
SEC. 
711. 
NONQUALIFIED 
DEFERRED 
COMPENSATION 
FROM CERTAIN TAX INDIFFERENT PARTIES. 
(a) IN GENERAL.—Subpart B of part II of sub-
chapter E of chapter 1 is amended by inserting after sec-
tion 457 the following new section: 
‘‘SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION 
FROM CERTAIN TAX INDIFFERENT PARTIES. 
‘‘(a) IN GENERAL.—Any compensation which is de-
ferred under a nonqualified deferred compensation plan of 
a nonqualified entity shall be includible in gross income 
when there is no substantial risk of forfeiture of the rights 
to such compensation. 
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263 
‘‘(b) NONQUALIFIED ENTITY.—For purposes of this 
section, the term ‘nonqualified entity’ means— 
‘‘(1) any foreign corporation unless substan-
tially all of its income is— 
‘‘(A) effectively connected with the conduct 
of a trade or business in the United States, or 
‘‘(B) subject to a comprehensive foreign in-
come tax, and 
‘‘(2) any partnership unless substantially all of 
its income is allocated to persons other than— 
‘‘(A) foreign persons with respect to whom 
such income is not subject to a comprehensive 
foreign income tax, and 
‘‘(B) organizations which are exempt from 
tax under this title. 
‘‘(c) DETERMINABILITY OF AMOUNTS OF COMPENSA-
TION.— 
‘‘(1) IN GENERAL.—If the amount of any com-
pensation is not determinable at the time that such 
compensation is otherwise includible in gross income 
under subsection (a)— 
‘‘(A) such amount shall be so includible in 
gross income when determinable, and 
‘‘(B) the tax imposed under this chapter 
for the taxable year in which such compensation 
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264 
is includible in gross income shall be increased 
by the sum of— 
‘‘(i) the amount of interest determined 
under paragraph (2), and 
‘‘(ii) an amount equal to 20 percent of 
the amount of such compensation. 
‘‘(2) INTEREST.—For purposes of paragraph 
(1)(B)(i), the interest determined under this para-
graph for any taxable year is the amount of interest 
at the underpayment rate under section 6621 plus 
1 percentage point on the underpayments that would 
have occurred had the deferred compensation been 
includible in gross income for the taxable year in 
which first deferred or, if later, the first taxable year 
in which such deferred compensation is not subject 
to a substantial risk of forfeiture. 
‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.— 
For purposes of this section— 
‘‘(1) SUBSTANTIAL RISK OF FORFEITURE.— 
‘‘(A) IN GENERAL.—The rights of a person 
to compensation shall be treated as subject to 
a substantial risk of forfeiture only if such per-
son’s rights to such compensation are condi-
tioned upon the future performance of substan-
tial services by any individual. 
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265 
‘‘(B) 
EXCEPTION
FOR
COMPENSATION 
BASED ON GAIN RECOGNIZED ON AN INVEST-
MENT ASSET.— 
‘‘(i) IN GENERAL.—To the extent pro-
vided in regulations prescribed by the Sec-
retary, if compensation is determined solely 
by reference to the amount of gain recog-
nized on the disposition of an investment 
asset, such compensation shall be treated 
as subject to a substantial risk of for-
feiture until the date of such disposition. 
‘‘(ii) INVESTMENT ASSET.—For pur-
poses of clause (i), the term ‘investment 
asset’ means any single asset (other than 
an investment fund or similar entity)— 
‘‘(I) acquired directly by an in-
vestment fund or similar entity, 
‘‘(II) with respect to which such 
entity does not (nor does any person 
related to such entity) participate in 
the active management of such asset 
(or if such asset is an interest in an 
entity, in the active management of 
the activities of such entity), and 
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266 
‘‘(III) substantially all of any 
gain on the disposition of which (other 
than such deferred compensation) is 
allocated to investors in such entity. 
‘‘(iii) COORDINATION
WITH
SPECIAL 
RULE.—Paragraph (3)(B) shall not apply 
to any compensation to which clause (i) 
applies. 
‘‘(2) COMPREHENSIVE FOREIGN INCOME TAX.— 
The term ‘comprehensive foreign income tax’ means, 
with respect to any foreign person, the income tax 
of a foreign country if— 
‘‘(A) such person is eligible for the benefits 
of a comprehensive income tax treaty between 
such foreign country and the United States, or 
‘‘(B) such person demonstrates to the sat-
isfaction of the Secretary that such foreign 
country has a comprehensive income tax. 
‘‘(3) NONQUALIFIED
DEFERRED
COMPENSA-
TION PLAN.— 
‘‘(A) 
IN
GENERAL.—The 
term 
‘non-
qualified deferred compensation plan’ has the 
meaning 
given 
such 
term 
under 
section 
409A(d), except that such term shall include 
any plan that provides a right to compensation 
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267 
based on the appreciation in value of a specified 
number of equity units of the service recipient. 
‘‘(B) 
EXCEPTION.—Compensation 
shall 
not be treated as deferred for purposes of this 
section if the service provider receives payment 
of such compensation not later than 12 months 
after the end of the taxable year of the service 
recipient during which the right to the payment 
of such compensation is no longer subject to a 
substantial risk of forfeiture. 
‘‘(4) EXCEPTION FOR CERTAIN COMPENSATION 
WITH
RESPECT
TO
EFFECTIVELY
CONNECTED
IN-
COME.—In the case a foreign corporation with in-
come which is taxable under section 882, this section 
shall not apply to compensation which, had such 
compensation had been paid in cash on the date that 
such compensation ceased to be subject to a sub-
stantial risk of forfeiture, would have been deduct-
ible by such foreign corporation against such income. 
‘‘(5) APPLICATION OF RULES.—Rules similar to 
the rules of paragraphs (5) and (6) of section 
409A(d) shall apply. 
‘‘(e) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be necessary or appropriate to 
carry out the purposes of this section, including regula-
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268 
tions disregarding a substantial risk of forfeiture in cases 
where necessary to carry out the purposes of this sec-
tion.’’. 
(b) CONFORMING AMENDMENT.—Section 26(b)(2) is 
amended by striking ‘‘and’’ at the end of subparagraph 
(U), by striking the period at the end of subparagraph 
(V) and inserting ‘‘, and’’, and by adding at the end the 
following new subparagraph: 
‘‘(W) section 457A(c)(1)(B) (relating to 
determinability of amounts of compensation).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
of subpart B of part II of subchapter E of chapter 1 is 
amended by inserting after the item relating to section 
457 the following new item: 
‘‘Sec. 457A. Nonqualified deferred compensation from certain tax indifferent 
parties.’’. 
(d) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to amounts deferred which 
are attributable to services performed after Decem-
ber 31, 2008. 
(2) APPLICATION TO EXISTING DEFERRALS.— 
In the case of any amount deferred to which the 
amendments made by this section do not apply solely 
by reason of the fact that the amount is attributable 
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269 
to services performed before January 1, 2009, to the 
extent such amount is not includible in gross income 
in a taxable year beginning before 2018, such 
amounts shall be includible in gross income in the 
later of— 
(A) the last taxable year beginning before 
2018, or 
(B) the taxable year in which there is no 
substantial risk of forfeiture of the rights to 
such compensation (determined in the same 
manner as determined for purposes of section 
457A of the Internal Revenue Code of 1986, as 
added by this section). 
(3) CHARITABLE CONTRIBUTIONS OF EXISTING 
DEFERRALS PERMITTED.— 
(A) IN GENERAL.—Subsection (b) of sec-
tion 170 of the Internal Revenue Code of 1986 
shall not apply to (and subsections (b) and (d) 
of such section shall be applied without regard 
to) so much of the taxpayer’s qualified con-
tributions made during the taxpayer’s last tax-
able year beginning before 2018 as does not ex-
ceed the taxpayer’s qualified inclusion amount. 
For purposes of subsection (b) of section 170 of 
such Code, the taxpayer’s contribution base for 
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270 
such last taxable year shall be reduced by the 
amount of the taxpayer’s qualified contributions 
to which such subsection does not apply by rea-
son the preceding sentence. 
(B) 
QUALIFIED
CONTRIBUTIONS.—For 
purposes of this paragraph, the term ‘‘qualified 
contributions’’ means the aggregate charitable 
contributions (as defined in section 170(c) of 
such Code) paid in cash by the taxpayer to or-
ganizations described in section 170(b)(1)(A) of 
such Code (other than any organization de-
scribed in section 509(a)(3) of such Code or 
any fund or account described in section 
4966(d)(2) of such Code). 
(C) QUALIFIED INCLUSION AMOUNT.—For 
purposes of this paragraph, the term ‘‘qualified 
inclusion amount’’ means the amount includible 
in the taxpayer’s gross income for the last tax-
able year beginning before 2018 by reason of 
paragraph (2). 
(4) ACCELERATED PAYMENTS.—No later than 
120 days after the date of the enactment of this Act, 
the Secretary shall issue guidance providing a lim-
ited period of time during which a nonqualified de-
ferred compensation arrangement attributable to 
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271 
services performed on or before December 31, 2008, 
may, without violating the requirements of section 
409A(a) of the Internal Revenue Code of 1986, be 
amended to conform the date of distribution to the 
date the amounts are required to be included in in-
come. 
(5) CERTAIN BACK-TO-BACK ARRANGEMENTS.— 
If the taxpayer is also a service recipient and main-
tains one or more nonqualified deferred compensa-
tion arrangements for its service providers under 
which any amount is attributable to services per-
formed on or before December 31, 2008, the guid-
ance issued under paragraph (4) shall permit such 
arrangements to be amended to conform the dates of 
distribution under such arrangement to the date 
amounts are required to be included in the income 
of such taxpayer under this subsection. 
(6) ACCELERATED PAYMENT NOT TREATED AS 
MATERIAL
MODIFICATION.—Any amendment to a 
nonqualified deferred compensation arrangement 
made pursuant to paragraph (4) or (5) shall not be 
treated as a material modification of the arrange-
ment for purposes of section 409A of the Internal 
Revenue Code of 1986. 
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