†
991
HR 6 EAS
‘‘(1) the sum of the regular tax liability (as de-
fined in section 26(b)) plus the tax imposed by section
55, over
‘‘(2) the sum of the credits allowable under this
part (other than subpart C thereof (relating to refund-
able credits) and this section) and section 1397E.
‘‘(d) CLEAN ENERGY COAL BOND.—For purposes of
this section—
‘‘(1) IN GENERAL.—The term ‘clean energy coal
bond’ means any bond issued as part of an issue if—
‘‘(A) the bond is issued by a qualified issuer
pursuant to an allocation by the Secretary to
such issuer of a portion of the national clean en-
ergy coal bond limitation under subsection (f)(2),
‘‘(B) 95 percent or more of the proceeds
from the sale of such issue are to be used for cap-
ital expenditures incurred by qualified borrowers
for 1 or more qualified projects,
‘‘(C) the qualified issuer designates such
bond for purposes of this section and the bond is
in registered form, and
‘‘(D) the issue meets the requirements of
subsection (h).
‘‘(2) 
QUALIFIED
PROJECT; 
SPECIAL
USE
RULES.—
†
992
HR 6 EAS
‘‘(A) IN
GENERAL.—The term ‘qualified
project’ means a qualifying advanced coal
project (as defined in section 48A(c)(1)) placed
in service by a qualified borrower.
‘‘(B) REFINANCING
RULES.—For purposes
of paragraph (1)(B), a qualified project may be
refinanced with proceeds of a clean energy coal
bond only if the indebtedness being refinanced
(including any obligation directly or indirectly
refinanced by such indebtedness) was originally
incurred by a qualified borrower after the date
of the enactment of this section.
‘‘(C) REIMBURSEMENT.—For purposes of
paragraph (1)(B), a clean energy coal bond may
be issued to reimburse a qualified borrower for
amounts paid after the date of the enactment of
this section with respect to a qualified project,
but only if—
‘‘(i) prior to the payment of the origi-
nal expenditure, the qualified borrower de-
clared its intent to reimburse such expendi-
ture with the proceeds of a clean energy coal
bond,
‘‘(ii) not later than 60 days after pay-
ment of the original expenditure, the quali-
†
993
HR 6 EAS
fied issuer adopts an official intent to reim-
burse the original expenditure with such
proceeds, and
‘‘(iii) the reimbursement is made not
later than 18 months after the date the
original expenditure is paid.
‘‘(D) TREATMENT OF CHANGES IN USE.—
For purposes of paragraph (1)(B), the proceeds
of an issue shall not be treated as used for a
qualified project to the extent that a qualified
borrower takes any action within its control
which causes such proceeds not to be used for a
qualified project. The Secretary shall prescribe
regulations specifying remedial actions that may
be taken (including conditions to taking such re-
medial actions) to prevent an action described in
the preceding sentence from causing a bond to
fail to be a clean energy coal bond.
‘‘(e) MATURITY LIMITATIONS.—
‘‘(1) DURATION OF TERM.—A bond shall not be
treated as a clean energy coal bond if the maturity
of such bond exceeds the maximum term determined
by the Secretary under paragraph (2) with respect to
such bond.
†
994
HR 6 EAS
‘‘(2) MAXIMUM
TERM.—During each calendar
month, the Secretary shall determine the maximum
term permitted under this paragraph for bonds issued
during the following calendar month. Such maximum
term shall be the term which the Secretary estimates
will result in the present value of the obligation to
repay the principal on the bond being equal to 50
percent of the face amount of such bond. Such present
value shall be determined using as a discount rate the
average annual interest rate of tax of tax-exempt obli-
gations having a term of 10 years or more which are
issued during the month. If the term as so determined
is not a multiple of a whole year, such term shall be
rounded to the next highest whole year.
‘‘(3) RATABLE
PRINCIPAL
AMORTIZATION
RE-
QUIRED.—A bond shall not be treated as a clean en-
ergy coal bond unless it is part of an issue which pro-
vides for an equal amount of principal to be paid by
the qualified issuer during each calendar year that
the issue is outstanding.
‘‘(f) LIMITATION
ON
AMOUNT
OF
BONDS
DES-
IGNATED.—
‘‘(1) NATIONAL
LIMITATION.—There is a na-
tional 
clean 
energy 
coal 
bond 
limitation 
of
$1,000,000,000.
†
995
HR 6 EAS
‘‘(2) ALLOCATION
BY
SECRETARY.—The Sec-
retary shall allocate the amount described in para-
graph (1) among qualified projects in such manner as
the Secretary determines appropriate.
‘‘(g) CREDIT INCLUDED IN GROSS INCOME.—Gross in-
come includes the amount of the credit allowed to the tax-
payer under this section (determined without regard to sub-
section (c)) and the amount so included shall be treated as
interest income.
‘‘(h) SPECIAL RULES RELATING TO EXPENDITURES.—
‘‘(1) IN GENERAL.—An issue shall be treated as
meeting the requirements of this subsection if, as of
the date of issuance, the qualified issuer reasonably
expects—
‘‘(A) at least 95 percent of the proceeds from
the sale of the issue are to be spent for 1 or more
qualified projects within the 5-year period begin-
ning on the date of issuance of the clean energy
bond,
‘‘(B) a binding commitment with a third
party to spend at least 10 percent of the proceeds
from the sale of the issue will be incurred within
the 6-month period beginning on the date of
issuance of the clean energy bond or, in the case
of a clean energy bond the proceeds of which are
†
996
HR 6 EAS
to be loaned to 2 or more qualified borrowers,
such binding commitment will be incurred with-
in the 6-month period beginning on the date of
the loan of such proceeds to a qualified borrower,
and
‘‘(C) such projects will be completed with
due diligence and the proceeds from the sale of
the issue will be spent with due diligence.
‘‘(2) EXTENSION OF PERIOD.—Upon submission
of a request prior to the expiration of the period de-
scribed in paragraph (1)(A), the Secretary may ex-
tend such period if the qualified issuer establishes that
the failure to satisfy the 5-year requirement is due to
reasonable cause and the related projects will continue
to proceed with due diligence.
‘‘(3) FAILURE TO SPEND REQUIRED AMOUNT OF
BOND PROCEEDS WITHIN 5 YEARS.—To the extent that
less than 95 percent of the proceeds of such issue are
expended by the close of the 5-year period beginning
on the date of issuance (or if an extension has been
obtained under paragraph (2), by the close of the ex-
tended period), the qualified issuer shall redeem all of
the nonqualified bonds within 90 days after the end
of such period. For purposes of this paragraph, the
amount of the nonqualified bonds required to be re-
†
997
HR 6 EAS
deemed shall be determined in the same manner as
under section 142.
‘‘(i) SPECIAL RULES RELATING TO ARBITRAGE.—A
bond which is part of an issue shall not be treated as a
clean energy coal bond unless, with respect to the issue of
which the bond is a part, the qualified issuer satisfies the
arbitrage requirements of section 148 with respect to pro-
ceeds of the issue.
‘‘(j) COOPERATIVE ELECTRIC COMPANY; QUALIFIED
ENERGY TAX CREDIT BOND LENDER; GOVERNMENTAL
BODY; QUALIFIED
BORROWER.—For purposes of this
section—
‘‘(1) COOPERATIVE
ELECTRIC
COMPANY.—The
term ‘cooperative electric company’ means a mutual
or cooperative electric company described in section
501(c)(12) or section 1381(a)(2)(C), or a not-for-prof-
it electric utility which has received a loan or loan
guarantee under the Rural Electrification Act.
‘‘(2) CLEAN ENERGY BOND LENDER.—The term
‘clean energy bond lender’ means a lender which is a
cooperative which is owned by, or has outstanding
loans to, 100 or more cooperative electric companies
and is in existence on February 1, 2002, and shall in-
clude any affiliated entity which is controlled by such
lender.
†
998
HR 6 EAS
‘‘(3) GOVERNMENTAL BODY.—The term ‘govern-
mental body’ means any State, territory, possession of
the United States, the District of Columbia, Indian
tribal government, and any political subdivision
thereof.
‘‘(4) QUALIFIED
ISSUER.—The term ‘qualified
issuer’ means—
‘‘(A) a clean energy bond lender,
‘‘(B) a cooperative electric company,
‘‘(C) a governmental body, or
‘‘(D) the Tennessee Valley Authority.
‘‘(5) QUALIFIED BORROWER.—The term ‘quali-
fied borrower’ means—
‘‘(A) a mutual or cooperative electric com-
pany 
described 
in 
section 
501(c)(12) 
or
1381(a)(2)(C),
‘‘(B) a governmental body, or
‘‘(C) the Tennessee Valley Authority.
‘‘(k) SPECIAL RULES RELATING TO POOL BONDS.—
No portion of a pooled financing bond may be allocable to
any loan unless the borrower has entered into a written
loan commitment for such portion prior to the issue date
of such issue.
‘‘(l) OTHER DEFINITIONS AND SPECIAL RULES.—For
purposes of this section—
†
999
HR 6 EAS
‘‘(1) BOND.—The term ‘bond’ includes any obli-
gation.
‘‘(2) POOLED
FINANCING
BOND.—The term
‘pooled financing bond’ shall have the meaning given
such term by section 149(f)(4)(A).
‘‘(3) PARTNERSHIP; S CORPORATION; AND OTHER
PASS-THRU ENTITIES.—
‘‘(A) IN GENERAL.—Under regulations pre-
scribed by the Secretary, in the case of a part-
nership, trust, S corporation, or other pass-thru
entity, rules similar to the rules of section 41(g)
shall apply with respect to the credit allowable
under subsection (a).
‘‘(B) NO BASIS ADJUSTMENT.—Rules simi-
lar to the rules under section 1397E(i)(2) shall
apply.
‘‘(4) BONDS HELD BY REGULATED INVESTMENT
COMPANIES.—If any clean energy coal bond is held by
a regulated investment company, the credit deter-
mined under subsection (a) shall be allowed to share-
holders of such company under procedures prescribed
by the Secretary.
‘‘(5) TREATMENT
FOR
ESTIMATED
TAX
PUR-
POSES.—Solely for purposes of sections 6654 and
6655, the credit allowed by this section to a taxpayer