(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
April 11, 2005. 
SEC. 104. EXPANSION OF AMORTIZATION FOR CERTAIN AT-
MOSPHERIC POLLUTION CONTROL FACILI-
TIES IN CONNECTION WITH PLANTS FIRST 
PLACED IN SERVICE AFTER 1975. 
(a) ELIGIBILITY OF POST-1975 POLLUTION CON-
TROL FACILITIES.—Subsection (d) of section 169 (relat-
ing to definitions) is amended by adding at the end the 
following: 
‘‘(5) SPECIAL RULE RELATING TO CERTAIN AT-
MOSPHERIC
POLLUTION
CONTROL
FACILITIES.—In 
the case of any atmospheric pollution control facility 
which is placed in service after April 11, 2005, and 
used in connection with an electric generation plant 
or other property which is primarily coal fired, para-
graph (1) shall be applied without regard to the 
phrase ‘in operation before January 1, 1976’.’’. 
(b) TECHNICAL AMENDMENT.—Section 169(d)(3) is 
amended by striking ‘‘Health, Education, and Welfare’’ 
and inserting ‘‘Health and Human Services’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to facilities placed in service after 
April 11, 2005.
SEC. 105. MODIFICATION OF CREDIT FOR PRODUCING 
FUEL FROM A NONCONVENTIONAL SOURCE. 
(a) TREATMENT AS BUSINESS CREDIT.—
(1) CREDIT MOVED TO SUBPART RELATING TO 
BUSINESS
RELATED
CREDITS.—The Internal Rev-
enue Code of 1986 is amended by redesignating sec-
tion 29 as section 45J and by moving section 45J 
(as so redesignated) from subpart B of part IV of 
subchapter A of chapter 1 to the end of subpart D 
of part IV of subchapter A of chapter 1. 
(2) CREDIT TREATED AS BUSINESS CREDIT.—
Section 38(b) is amended by striking ‘‘plus’’ at the 
end of paragraph (18), by striking the period at the 
end of paragraph (19) and inserting ‘‘, plus’’, and 
by adding at the end the following: 
‘‘(20) the nonconventional source production 
credit determined under section 45J(a).’’. 
(3) CONFORMING AMENDMENTS.—
(A) Section 30(b)(3)(A) is amended by 
striking ‘‘sections 27 and 29’’ and inserting 
‘‘section 27’’. 
(B) Sections 43(b)(2), 45I(b)(2)(C)(i), and 
613A(c)(6)(C) are each amended by striking 
‘‘section 29(d)(2)(C)’’ and inserting ‘‘section 
45J(d)(2)(C)’’. 
(C) Section 45(e)(9) is amended—
(i) by striking ‘‘section 29’’ and in-
serting ‘‘section 45J’’, and 
(ii) by inserting ‘‘(or under section 29, 
as in effect on the day before the date of 
enactment of this parenthetical, for any 
prior taxable year)’’ before the period at 
the end thereof. 
(D) Section 45I is amended—
(i) in subsection (c)(2)(A) by striking 
‘‘section 29(d)(5))’’ and inserting ‘‘section 
45J(d)(5))’’, and 
(ii) in subsection (d)(3) by striking 
‘‘section 29’’ both places it appears and in-
serting ‘‘section 45J’’. 
(E) Section 45J(a), as redesignated by 
paragraph (1), is amended by striking ‘‘There 
shall be allowed as a credit against the tax im-
posed by this chapter for the taxable year’’ and 
inserting ‘‘For purposes of section 38, if the 
taxpayer elects to have this section apply, the 
nonconventional source production credit deter-
mined under this section for the taxable year 
is’’. 
(F) Section 45J(b), as so redesignated, is 
amended by striking paragraph (6).
(G) Section 53(d)(1)(B)(iii) is amended by 
striking ‘‘under section 29’’ and all that follows 
through ‘‘or not allowed’’. 
(H) Section 55(c)(3) is amended by strik-
ing ‘‘29(b)(6),’’. 
(I) Subsection (a) of section 772 is amend-
ed by inserting ‘‘and’’ at the end of paragraph 
(9), by striking paragraph (10), and by redesig-
nating paragraph (11) as paragraph (10). 
(J) Paragraph (5) of section 772(d) is 
amended by striking ‘‘the foreign tax credit, 
and the credit allowable under section 29’’ and 
inserting ‘‘and the foreign tax credit’’. 
(K) The table of sections for subpart B of 
part IV of subchapter A of chapter 1 is amend-
ed by striking the item relating to section 29. 
(L) The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amend-
ed by inserting after the item relating to section 
45I the following new item:
‘‘Sec. 45J. Credit for producing fuel from a nonconventional source.’’.
(b) AMENDMENTS CONFORMING TO THE REPEAL OF 
THE NATURAL GAS POLICY ACT OF 1978.—
(1) IN GENERAL.—Section 29(c)(2)(A) (before 
redesignation under subsection (a)) is amended—
(A) by inserting ‘‘(as in effect before the 
repeal of such section)’’ after ‘‘1978’’, and 
(B) by striking subsection (e) and redesig-
nating subsections (f) and (g) as subsections (e) 
and (f), respectively. 
(2) 
CONFORMING
AMENDMENTS.—Section 
29(g)(1)(before redesignation under subsection (a) 
and paragraph (1) of this subsection) is amended—
(A) in subparagraph (A) by striking ‘‘sub-
section (f)(1)(B)’’ and inserting ‘‘subsection 
(e)(1)(B)’’, and 
(B) in subparagraph (B) by striking ‘‘sub-
section (f)’’ and inserting ‘‘subsection (e)’’. 
(c) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to credits determined under the Internal 
Revenue Code of 1986 for taxable years ending after 
December 31, 2005. 
(2) SUBSECTION (b).—The amendments made 
by subsection (b) shall take effect on the date of the 
enactment of this Act.
SEC. 106. MODIFICATIONS TO SPECIAL RULES FOR NU-
CLEAR DECOMMISSIONING COSTS. 
(a) REPEAL
OF LIMITATION
ON DEPOSITS INTO 
FUND BASED ON COST OF SERVICE; CONTRIBUTIONS 
AFTER FUNDING PERIOD.—Subsection (b) of section 
468A (relating to special rules for nuclear decommis-
sioning costs) is amended to read as follows: 
‘‘(b) LIMITATION ON AMOUNTS PAID INTO FUND.—
The amount which a taxpayer may pay into the Fund for 
any taxable year shall not exceed the ruling amount appli-
cable to such taxable year.’’. 
(b) TREATMENT
OF CERTAIN DECOMMISSIONING 
COSTS.—
(1) IN GENERAL.—Section 468A is amended by 
redesignating subsections (f) and (g) as subsections 
(g) and (h), respectively, and by inserting after sub-
section (e) the following new subsection: 
‘‘(f) TRANSFERS INTO QUALIFIED FUNDS.—
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(b), any taxpayer maintaining a Fund to which this 
section applies with respect to a nuclear power plant 
may transfer into such Fund not more than an 
amount equal to the present value of the portion of 
the total nuclear decommissioning costs with respect 
to such nuclear power plant previously excluded for 
such nuclear power plant under subsection (d)(2)(A)
as in effect immediately before the date of the enact-
ment of this subsection. 
‘‘(2) 
DEDUCTION
FOR
AMOUNTS
TRANS-
FERRED.—
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (C), the deduction allowed by 
subsection (a) for any transfer permitted by 
this subsection shall be allowed ratably over the 
remaining estimated useful life (within the 
meaning of subsection (d)(2)(A)) of the nuclear 
power plant beginning with the taxable year 
during which the transfer is made. 
‘‘(B) DENIAL
OF
DEDUCTION
FOR
PRE-
VIOUSLY DEDUCTED AMOUNTS.—No deduction 
shall be allowed for any transfer under this sub-
section of an amount for which a deduction was 
previously allowed to the taxpayer (or a prede-
cessor) or a corresponding amount was not in-
cluded in gross income of the taxpayer (or a 
predecessor). For purposes of the preceding 
sentence, a ratable portion of each transfer 
shall be treated as being from previously de-
ducted or excluded amounts to the extent there-
of.
‘‘(C) TRANSFERS OF QUALIFIED FUNDS.—
If—
‘‘(i) any transfer permitted by this 
subsection is made to any Fund to which 
this section applies, and 
‘‘(ii) such Fund is transferred there-
after, 
any deduction under this subsection for taxable 
years ending after the date that such Fund is 
transferred shall be allowed to the transferor 
for the taxable year which includes such date. 
‘‘(D) SPECIAL RULES.—
‘‘(i) GAIN OR LOSS NOT RECOGNIZED 
ON TRANSFERS TO FUND.—No gain or loss 
shall be recognized on any transfer de-
scribed in paragraph (1). 
‘‘(ii) TRANSFERS
OF
APPRECIATED 
PROPERTY TO FUND.—If appreciated prop-
erty is transferred in a transfer described 
in paragraph (1), the amount of the deduc-
tion shall not exceed the adjusted basis of 
such property. 
‘‘(3) NEW RULING AMOUNT REQUIRED.—Para-
graph (1) shall not apply to any transfer unless the
taxpayer requests from the Secretary a new schedule 
of ruling amounts in connection with such transfer. 
‘‘(4) NO
BASIS
IN
QUALIFIED
FUNDS.—Not-
withstanding any other provision of law, the tax-
payer’s basis in any Fund to which this section ap-
plies shall not be increased by reason of any transfer 
permitted by this subsection.’’. 
(2) NEW RULING AMOUNT TO TAKE INTO AC-
COUNT TOTAL COSTS.—Subparagraph (A) of section 
468A(d)(2) (defining ruling amount) is amended to 
read as follows: 
‘‘(A) fund the total nuclear decommis-
sioning costs with respect to such power plant 
over the estimated useful life of such power 
plant, and’’. 
(c) TECHNICAL AMENDMENTS.—Section 468A(e)(2) 
(relating to taxation of Fund) is amended—
(1) by striking ‘‘rate set forth in subparagraph 
(B)’’ in subparagraph (A) and inserting ‘‘rate of 20 
percent’’, 
(2) by striking subparagraph (B), and 
(3) by redesignating subparagraphs (C) and 
(D) as subparagraphs (B) and (C), respectively.
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2005. 
SEC. 107. ARBITRAGE RULES NOT TO APPLY TO PREPAY-
MENTS FOR NATURAL GAS. 
(a) IN GENERAL.—Subsection (b) of section 148 (re-
lating to higher yielding investments) is amended by add-
ing at the end the following new paragraph: 
‘‘(4) SAFE
HARBOR
FOR
PREPAID
NATURAL 
GAS.—
‘‘(A) IN GENERAL.—The term ‘investment-
type property’ does not include a prepayment 
under a qualified natural gas supply contract. 
‘‘(B) QUALIFIED
NATURAL
GAS
SUPPLY 
CONTRACT.—For purposes of this paragraph, 
the term ‘qualified natural gas supply contract’ 
means any contract to acquire natural gas for 
resale by a utility owned by a governmental 
unit if the amount of gas permitted to be ac-
quired under the contract by the utility during 
any year does not exceed the sum of—
‘‘(i) the annual average amount dur-
ing the testing period of natural gas pur-
chased (other than for resale) by cus-