116 
‘‘(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).
117 
‘‘(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.—
118 
‘‘(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—
119 
‘‘(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:
120 
‘‘(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,
122 
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.
123 
‘‘(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
124 
‘‘(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
125 
years beginning after December 31, 
1982. 
‘‘(C) REDUCTION
FOR
POST-2008
FOREIGN 
OIL AND GAS LOSSES.—The reduction under this 
paragraph shall be equal to the lesser of— 
‘‘(i) the combined foreign oil and gas 
income of the taxpayer for the taxable year 
(determined without regard to this para-
graph), reduced by an amount equal to the 
reduction under subparagraph (A) for the 
taxable year, or 
‘‘(ii) the excess of— 
‘‘(I) the aggregate amount of for-
eign oil and gas losses for preceding 
taxable years beginning after December 
31, 2008, over 
‘‘(II) so much of such aggregate 
amount as was recharacterized under 
this paragraph for preceding taxable 
years beginning after December 31, 
2008. 
‘‘(D) FOREIGN
OIL
AND
GAS
LOSS
DE-
FINED.—
126 
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, the term ‘foreign oil and 
gas loss’ means the amount by which— 
‘‘(I) the gross income for the tax-
able year from sources without the 
United States and its possessions 
(whether or not the taxpayer chooses 
the benefits of this subpart for such 
taxable year) taken into account in de-
termining the combined foreign oil and 
gas income for such year, is exceeded 
by 
‘‘(II) the sum of the deductions 
properly 
apportioned 
or 
allocated 
thereto. 
‘‘(ii) NET OPERATING LOSS DEDUCTION 
NOT TAKEN INTO ACCOUNT.—For purposes 
of clause (i), the net operating loss deduc-
tion allowable for the taxable year under 
section 172(a) shall not be taken into ac-
count. 
‘‘(iii) EXPROPRIATION AND CASUALTY 
LOSSES
NOT
TAKEN
INTO
ACCOUNT.—For 
purposes of clause (i), there shall not be 
taken into account—
156 
amended by striking ‘‘after December 31, 2007’’ and 
inserting ‘‘after December 31, 2009’’. 
(b) TERMINATION
OF ALTERNATIVE INCREMENTAL 
CREDIT.—Section 41(h) is amended by redesignating para-
graph (2) as paragraph (3), and by inserting after para-
graph (1) the following new paragraph: 
‘‘(2) TERMINATION
OF
ALTERNATIVE
INCRE-
MENTAL CREDIT.—No election under subsection (c)(4) 
shall apply to taxable years beginning after December 
31, 2008.’’. 
(c) MODIFICATION
OF
ALTERNATIVE
SIMPLIFIED 
CREDIT.—Paragraph (5)(A) of section 41(c) (relating to 
election of alternative simplified credit) is amended by 
striking ‘‘12 percent’’ and inserting ‘‘14 percent (12 percent 
in the case of taxable years ending before January 1, 
2009)’’. 
(d) TECHNICAL CORRECTION.—Paragraph (3) of sec-
tion 41(h) is amended to read as follows: 
‘‘(2) COMPUTATION
FOR
TAXABLE
YEAR
IN 
WHICH CREDIT TERMINATES.—In the case of any tax-
able year with respect to which this section applies to 
a number of days which is less than the total number 
of days in such taxable year— 
‘‘(A) the amount determined under sub-
section (c)(1)(B) with respect to such taxable