H. R. 1424—53 
to the credit allowable under subsection (a) for such suc-
ceeding taxable year.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 23(b)(4)(B) is amended by inserting ‘‘and 
section 25D’’ after ‘‘this section’’. 
(B) Section 24(b)(3)(B) is amended by striking ‘‘and 
25B’’ and inserting ‘‘, 25B, and 25D’’. 
(C) Section 25B(g)(2) is amended by striking ‘‘section 
23’’ and inserting ‘‘sections 23 and 25D’’. 
(D) Section 26(a)(1) is amended by striking ‘‘and 25B’’ 
and inserting ‘‘25B, and 25D’’. 
(f) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in paragraph (2), the 
amendments made by this section shall apply to taxable years 
beginning after December 31, 2007. 
(2) SOLAR ELECTRIC PROPERTY LIMITATION.—The amend-
ments made by subsection (b) shall apply to taxable years 
beginning after December 31, 2008. 
(3) APPLICATION
OF
EGTRRA
SUNSET.—The amendments 
made by subparagraphs (A) and (B) of subsection (e)(2) shall 
be subject to title IX of the Economic Growth and Tax Relief 
Reconciliation Act of 2001 in the same manner as the provisions 
of such Act to which such amendments relate. 
SEC. 107. NEW CLEAN RENEWABLE ENERGY BONDS. 
(a) IN GENERAL.—Subpart I of part IV of subchapter A of 
chapter 1 is amended by adding at the end the following new 
section: 
‘‘SEC. 54C. NEW CLEAN RENEWABLE ENERGY BONDS. 
‘‘(a) NEW CLEAN RENEWABLE ENERGY BOND.—For purposes of 
this subpart, the term ‘new clean renewable energy bond’ means 
any bond issued as part of an issue if— 
‘‘(1) 100 percent of the available project proceeds of such 
issue are to be used for capital expenditures incurred by govern-
mental bodies, public power providers, or cooperative electric 
companies for one or more qualified renewable energy facilities, 
‘‘(2) the bond is issued by a qualified issuer, and 
‘‘(3) the issuer designates such bond for purposes of this 
section. 
‘‘(b) REDUCED CREDIT AMOUNT.—The annual credit determined 
under section 54A(b) with respect to any new clean renewable 
energy bond shall be 70 percent of the amount so determined 
without regard to this subsection. 
‘‘(c) LIMITATION ON AMOUNT OF BONDS DESIGNATED.— 
‘‘(1) IN GENERAL.—The maximum aggregate face amount 
of bonds which may be designated under subsection (a) by 
any issuer shall not exceed the limitation amount allocated 
under this subsection to such issuer. 
‘‘(2) NATIONAL
LIMITATION
ON
AMOUNT
OF
BONDS
DES-
IGNATED.—There is a national new clean renewable energy 
bond limitation of $800,000,000 which shall be allocated by 
the Secretary as provided in paragraph (3), except that— 
‘‘(A) not more than 331⁄3 percent thereof may be allo-
cated to qualified projects of public power providers, 
‘‘(B) not more than 331⁄3 percent thereof may be allo-
cated to qualified projects of governmental bodies, and
H. R. 1424—54 
‘‘(C) not more than 331⁄3 percent thereof may be allo-
cated to qualified projects of cooperative electric companies. 
‘‘(3) METHOD OF ALLOCATION.— 
‘‘(A) ALLOCATION AMONG PUBLIC POWER PROVIDERS.— 
After the Secretary determines the qualified projects of 
public power providers which are appropriate for receiving 
an allocation of the national new clean renewable energy 
bond limitation, the Secretary shall, to the maximum extent 
practicable, make allocations among such projects in such 
manner that the amount allocated to each such project 
bears the same ratio to the cost of such project as the 
limitation under paragraph (2)(A) bears to the cost of all 
such projects. 
‘‘(B) ALLOCATION AMONG GOVERNMENTAL BODIES AND 
COOPERATIVE
ELECTRIC
COMPANIES.—The Secretary shall 
make allocations of the amount of the national new clean 
renewable energy bond limitation described in paragraphs 
(2)(B) and (2)(C) among qualified projects of governmental 
bodies and cooperative electric companies, respectively, in 
such manner as the Secretary determines appropriate. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED RENEWABLE ENERGY FACILITY.—The term 
‘qualified renewable energy facility’ means a qualified facility 
(as determined under section 45(d) without regard to para-
graphs (8) and (10) thereof and to any placed in service date) 
owned by a public power provider, a governmental body, or 
a cooperative electric company. 
‘‘(2) PUBLIC POWER PROVIDER.—The term ‘public power pro-
vider’ means a State utility with a service obligation, as such 
terms are defined in section 217 of the Federal Power Act 
(as in effect on the date of the enactment of this paragraph). 
‘‘(3) GOVERNMENTAL BODY.—The term ‘governmental body’ 
means any State or Indian tribal government, or any political 
subdivision thereof. 
‘‘(4) COOPERATIVE ELECTRIC COMPANY.—The term ‘coopera-
tive electric company’ means a mutual or cooperative electric 
company described in section 501(c)(12) or section 1381(a)(2)(C). 
‘‘(5) CLEAN RENEWABLE ENERGY BOND LENDER.—The term 
‘clean renewable 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 exist-
ence on February 1, 2002, and shall include any affiliated 
entity which is controlled by such lender. 
‘‘(6) QUALIFIED ISSUER.—The term ‘qualified issuer’ means 
a public power provider, a cooperative electric company, a 
governmental body, a clean renewable energy bond lender, or 
a not-for-profit electric utility which has received a loan or 
loan guarantee under the Rural Electrification Act.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Paragraph (1) of section 54A(d) is amended to read 
as follows: 
‘‘(1) QUALIFIED TAX CREDIT BOND.—The term ‘qualified tax 
credit bond’ means— 
‘‘(A) a qualified forestry conservation bond, or 
‘‘(B) a new clean renewable energy bond, 
which is part of an issue that meets requirements of paragraphs 
(2), (3), (4), (5), and (6).’’.
H. R. 1424—55 
(2) Subparagraph (C) of section 54A(d)(2) is amended to 
read as follows: 
‘‘(C) QUALIFIED PURPOSE.—For purposes of this para-
graph, the term ‘qualified purpose’ means— 
‘‘(i) in the case of a qualified forestry conservation 
bond, a purpose specified in section 54B(e), and 
‘‘(ii) in the case of a new clean renewable energy 
bond, a purpose specified in section 54C(a)(1).’’. 
(3) The table of sections for subpart I of part IV of sub-
chapter A of chapter 1 is amended by adding at the end the 
following new item: 
‘‘Sec. 54C. Qualified clean renewable energy bonds.’’. 
(c) EXTENSION FOR CLEAN RENEWABLE ENERGY BONDS.—Sub-
section (m) of section 54 is amended by striking ‘‘December 31, 
2008’’ and inserting ‘‘December 31, 2009’’. 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to obligations issued after the date of the enactment 
of this Act. 
SEC. 108. CREDIT FOR STEEL INDUSTRY FUEL. 
(a) TREATMENT AS REFINED COAL.— 
(1) IN GENERAL.—Subparagraph (A) of section 45(c)(7) of 
the Internal Revenue Code of 1986 (relating to refined coal), 
as amended by this Act, is amended to read as follows: 
‘‘(A) IN
GENERAL.—The term ‘refined coal’ means a 
fuel— 
‘‘(i) which— 
‘‘(I) is a liquid, gaseous, or solid fuel produced 
from coal (including lignite) or high carbon fly 
ash, including such fuel used as a feedstock, 
‘‘(II) is sold by the taxpayer with the reason-
able expectation that it will be used for purpose 
of producing steam, 
‘‘(III) is certified by the taxpayer as resulting 
(when used in the production of steam) in a quali-
fied emission reduction, and 
‘‘(IV) is produced in such a manner as to result 
in an increase of at least 50 percent in the market 
value of the refined coal (excluding any increase 
caused by materials combined or added during 
the production process), as compared to the value 
of the feedstock coal, or 
‘‘(ii) which is steel industry fuel.’’. 
(2) STEEL INDUSTRY FUEL DEFINED.—Paragraph (7) of sec-
tion 45(c) of such Code is amended by adding at the end 
the following new subparagraph: 
‘‘(C) STEEL INDUSTRY FUEL.— 
‘‘(i) IN GENERAL.—The term ‘steel industry fuel’ 
means a fuel which— 
‘‘(I) is produced through a process of liquifying 
coal waste sludge and distributing it on coal, and 
‘‘(II) is used as a feedstock for the manufacture 
of coke. 
‘‘(ii) COAL WASTE SLUDGE.—The term ‘coal waste 
sludge’ means the tar decanter sludge and related
H. R. 1424—56 
byproducts of the coking process, including such mate-
rials that have been stored in ground, in tanks and 
in lagoons, that have been treated as hazardous wastes 
under applicable Federal environmental rules absent 
liquefaction and processing with coal into a feedstock 
for the manufacture of coke.’’. 
(b) CREDIT AMOUNT.— 
(1) IN
GENERAL.—Paragraph (8) of section 45(e) of the 
Internal Revenue Code of 1986 (relating to refined coal produc-
tion facilities) is amended by adding at the end the following 
new subparagraph 
‘‘(D) SPECIAL RULE FOR STEEL INDUSTRY FUEL.— 
‘‘(i) IN GENERAL.—In the case of a taxpayer who 
produces steel industry fuel— 
‘‘(I) this paragraph shall be applied separately 
with respect to steel industry fuel and other 
refined coal, and 
‘‘(II) in applying this paragraph to steel 
industry fuel, the modifications in clause (ii) shall 
apply. 
‘‘(ii) MODIFICATIONS.— 
‘‘(I) CREDIT AMOUNT.—Subparagraph (A) shall 
be applied by substituting ‘$2 per barrel-of-oil 
equivalent’ for ‘$4.375 per ton’. 
‘‘(II) CREDIT PERIOD.—In lieu of the 10-year 
period referred to in clauses (i) and (ii)(II) of 
subparagraph (A), the credit period shall be the 
period beginning on the later of the date such 
facility was originally placed in service, the date 
the modifications described in clause (iii) were 
placed in service, or October 1, 2008, and ending 
on the later of December 31, 2009, or the date 
which is 1 year after the date such facility or 
the modifications described in clause (iii) were 
placed in service. 
‘‘(III) NO PHASEOUT.—Subparagraph (B) shall 
not apply. 
‘‘(iii) MODIFICATIONS.—The modifications described 
in this clause are modifications to an existing facility 
which allow such facility to produce steel industry 
fuel. 
‘‘(iv) BARREL-OF-OIL EQUIVALENT.—For purposes of 
this subparagraph, a barrel-of-oil equivalent is the 
amount of steel industry fuel that has a Btu content 
of 5,800,000 Btus.’’. 
(2) INFLATION ADJUSTMENT.—Paragraph (2) of section 45(b) 
of such Code is amended by inserting ‘‘the $3 amount in sub-
section (e)(8)(D)(ii)(I),’’ after ‘‘subsection (e)(8)(A),’’. 
(c) TERMINATION.—Paragraph (8) of section 45(d) of the Internal 
Revenue Code of 1986 (relating to refined coal production facility), 
as amended by this Act, is amended to read as follows: 
‘‘(8) REFINED COAL PRODUCTION FACILITY.—In the case of 
a facility that produces refined coal, the term ‘refined coal 
production facility’ means— 
‘‘(A) with respect to a facility producing steel industry 
fuel, any facility (or any modification to a facility) which 
is placed in service before January 1, 2010, and
H. R. 1424—57 
‘‘(B) with respect to any other facility producing refined 
coal, any facility placed in service after the date of the 
enactment of the American Jobs Creation Act of 2004 and 
before January 1, 2010.’’. 
(d) COORDINATION WITH CREDIT FOR PRODUCING FUEL FROM 
A NONCONVENTIONAL SOURCE.— 
(1) IN GENERAL.—Subparagraph (B) of section 45(e)(9) of 
the Internal Revenue Code of 1986 is amended— 
(A) by striking ‘‘The term’’ and inserting the following: 
‘‘(i) IN GENERAL.—The term’’, and 
(B) by adding at the end the following new clause: 
‘‘(ii) EXCEPTION FOR STEEL INDUSTRY COAL.—In the 
case of a facility producing steel industry fuel, clause 
(i) shall not apply to so much of the refined coal pro-
duced at such facility as is steel industry fuel.’’. 
(2) NO DOUBLE BENEFIT.—Section 45K(g)(2) of such Code 
is amended by adding at the end the following new subpara-
graph: 
‘‘(E) COORDINATION WITH SECTION 45.—No credit shall 
be allowed with respect to any qualified fuel which is 
steel industry fuel (as defined in section 45(c)(7)) if a credit 
is allowed to the taxpayer for such fuel under section 
45.’’. 
(e) EFFECTIVE DATE.—The amendments made by this section 
shall apply to fuel produced and sold after September 30, 2008. 
SEC. 109. SPECIAL RULE TO IMPLEMENT FERC AND STATE ELECTRIC 
RESTRUCTURING POLICY. 
(a) EXTENSION FOR QUALIFIED ELECTRIC UTILITIES.— 
(1) IN GENERAL.—Paragraph (3) of section 451(i) is amended 
by inserting ‘‘(before January 1, 2010, in the case of a qualified 
electric utility)’’ after ‘‘January 1, 2008’’. 
(2) QUALIFIED ELECTRIC UTILITY.—Subsection (i) of section 
451 is amended by redesignating paragraphs (6) through (10) 
as paragraphs (7) through (11), respectively, and by inserting 
after paragraph (5) the following new paragraph: 
‘‘(6) QUALIFIED
ELECTRIC
UTILITY.—For purposes of this 
subsection, the term ‘qualified electric utility’ means a person 
that, as of the date of the qualifying electric transmission 
transaction, is vertically integrated, in that it is both— 
‘‘(A) a transmitting utility (as defined in section 3(23) 
of the Federal Power Act (16 U.S.C. 796(23))) with respect 
to the transmission facilities to which the election under 
this subsection applies, and 
‘‘(B) an electric utility (as defined in section 3(22) of 
the Federal Power Act (16 U.S.C. 796(22))).’’. 
(b) EXTENSION OF PERIOD FOR TRANSFER OF OPERATIONAL CON-
TROL AUTHORIZED BY FERC.—Clause (ii) of section 451(i)(4)(B) is 
amended by striking ‘‘December 31, 2007’’ and inserting ‘‘the date 
which is 4 years after the close of the taxable year in which 
the transaction occurs’’. 
(c) PROPERTY LOCATED OUTSIDE
THE UNITED STATES NOT 
TREATED AS EXEMPT UTILITY PROPERTY.—Paragraph (5) of section 
451(i) is amended by adding at the end the following new subpara-
graph: 
‘‘(C) EXCEPTION FOR PROPERTY LOCATED OUTSIDE THE 
UNITED STATES.—The term ‘exempt utility property’ shall
H. R. 1424—58 
not include any property which is located outside the 
United States.’’. 
(d) EFFECTIVE DATES.— 
(1) EXTENSION.—The amendments made by subsection (a) 
shall apply to transactions after December 31, 2007. 
(2) TRANSFERS OF OPERATIONAL CONTROL.—The amendment 
made by subsection (b) shall take effect as if included in section 
909 of the American Jobs Creation Act of 2004. 
(3) EXCEPTION FOR PROPERTY LOCATED OUTSIDE THE UNITED 
STATES.—The amendment made by subsection (c) shall apply 
to transactions after the date of the enactment of this Act. 
Subtitle B—Carbon Mitigation and Coal 
Provisions 
SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED COAL 
PROJECT INVESTMENT CREDIT. 
(a) MODIFICATION
OF
CREDIT
AMOUNT.—Section 48A(a) is 
amended by striking ‘‘and’’ at the end of paragraph (1), by striking 
the period at the end of paragraph (2) and inserting ‘‘, and’’, and 
by adding at the end the following new paragraph: 
‘‘(3) 30 percent of the qualified investment for such taxable 
year in the case of projects described in clause (iii) of subsection 
(d)(3)(B).’’. 
(b) EXPANSION OF AGGREGATE CREDITS.—Section 48A(d)(3)(A) 
is 
amended 
by 
striking 
‘‘$1,300,000,000’’ 
and 
inserting 
‘‘$2,550,000,000’’. 
(c) AUTHORIZATION OF ADDITIONAL PROJECTS.— 
(1) IN GENERAL.—Subparagraph (B) of section 48A(d)(3) 
is amended to read as follows: 
‘‘(B) PARTICULAR PROJECTS.—Of the dollar amount in 
subparagraph (A), the Secretary is authorized to certify— 
‘‘(i) $800,000,000 for integrated gasification com-
bined cycle projects the application for which is sub-
mitted during the period described in paragraph 
(2)(A)(i), 
‘‘(ii) $500,000,000 for projects which use other 
advanced 
coal-based 
generation 
technologies 
the 
application for which is submitted during the period 
described in paragraph (2)(A)(i), and 
‘‘(iii) 
$1,250,000,000 
for 
advanced 
coal-based 
generation technology projects the application for 
which is submitted during the period described in para-
graph (2)(A)(ii).’’. 
(2) APPLICATION
PERIOD
FOR
ADDITIONAL
PROJECTS.— 
Subparagraph (A) of section 48A(d)(2) is amended to read as 
follows: 
‘‘(A) APPLICATION PERIOD.—Each applicant for certifi-
cation under this paragraph shall submit an application 
meeting the requirements of subparagraph (B). An 
applicant may only submit an application— 
‘‘(i) for an allocation from the dollar amount speci-
fied in clause (i) or (ii) of paragraph (3)(B) during 
the 3-year period beginning on the date the Secretary 
establishes the program under paragraph (1), and
H. R. 1424—59 
‘‘(ii) for an allocation from the dollar amount speci-
fied in paragraph (3)(B)(iii) during the 3-year period 
beginning at the earlier of the termination of the period 
described in clause (i) or the date prescribed by the 
Secretary.’’. 
(3) CAPTURE AND SEQUESTRATION OF CARBON DIOXIDE EMIS-
SIONS REQUIREMENT.— 
(A) IN
GENERAL.—Section 48A(e)(1) is amended by 
striking ‘‘and’’ at the end of subparagraph (E), by striking 
the period at the end of subparagraph (F) and inserting 
‘‘; and’’, and by adding at the end the following new 
subparagraph: 
‘‘(G) in the case of any project the application for which 
is submitted during the period described in subsection 
(d)(2)(A)(ii), the project includes equipment which separates 
and sequesters at least 65 percent (70 percent in the case 
of an application for reallocated credits under subsection 
(d)(4)) of such project’s total carbon dioxide emissions.’’. 
(B) HIGHEST PRIORITY FOR PROJECTS WHICH SEQUESTER 
CARBON DIOXIDE EMISSIONS.—Section 48A(e)(3) is amended 
by striking ‘‘and’’ at the end of subparagraph (A)(iii), by 
striking the period at the end of subparagraph (B)(iii) and 
inserting ‘‘, and’’, and by adding at the end the following 
new subparagraph: 
‘‘(C) give highest priority to projects with the greatest 
separation and sequestration percentage of total carbon 
dioxide emissions.’’. 
(C) 
RECAPTURE
OF
CREDIT
FOR
FAILURE
TO 
SEQUESTER.—Section 48A is amended by adding at the 
end the following new subsection: 
‘‘(i) RECAPTURE OF CREDIT FOR FAILURE TO SEQUESTER.—The 
Secretary shall provide for recapturing the benefit of any credit 
allowable under subsection (a) with respect to any project which 
fails to attain or maintain the separation and sequestration require-
ments of subsection (e)(1)(G).’’. 
(4) ADDITIONAL PRIORITY FOR RESEARCH PARTNERSHIPS.— 
Section 48A(e)(3)(B), as amended by paragraph (3)(B), is 
amended— 
(A) by striking ‘‘and’’ at the end of clause (ii), 
(B) by redesignating clause (iii) as clause (iv), and 
(C) by inserting after clause (ii) the following new 
clause: 
‘‘(iii) applicant participants who have a research 
partnership with an eligible educational institution (as 
defined in section 529(e)(5)), and’’. 
(5) CLERICAL AMENDMENT.—Section 48A(e)(3) is amended 
by striking ‘‘INTEGRATED GASIFICATION COMBINED CYCLE’’ in the 
heading and inserting ‘‘CERTAIN’’. 
(d) DISCLOSURE OF ALLOCATIONS.—Section 48A(d) is amended 
by adding at the end the following new paragraph: 
‘‘(5) DISCLOSURE
OF
ALLOCATIONS.—The Secretary shall, 
upon making a certification under this subsection or section 
48B(d), publicly disclose the identity of the applicant and the 
amount of the credit certified with respect to such applicant.’’. 
(e) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as otherwise provided in this sub-
section, the amendments made by this section shall apply to
H. R. 1424—60 
credits the application for which is submitted during the period 
described in section 48A(d)(2)(A)(ii) of the Internal Revenue 
Code of 1986 and which are allocated or reallocated after the 
date of the enactment of this Act. 
(2) DISCLOSURE OF ALLOCATIONS.—The amendment made 
by subsection (d) shall apply to certifications made after the 
date of the enactment of this Act. 
(3) CLERICAL AMENDMENT.—The amendment made by sub-
section (c)(5) shall take effect as if included in the amendment 
made by section 1307(b) of the Energy Tax Incentives Act 
of 2005. 
SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFICATION 
INVESTMENT CREDIT. 
(a) MODIFICATION
OF
CREDIT
AMOUNT.—Section 48B(a) is 
amended by inserting ‘‘(30 percent in the case of credits allocated 
under subsection (d)(1)(B))’’ after ‘‘20 percent’’. 
(b) EXPANSION OF AGGREGATE CREDITS.—Section 48B(d)(1) is 
amended by striking ‘‘shall not exceed $350,000,000’’ and all that 
follows and inserting ‘‘shall not exceed— 
‘‘(A) $350,000,000, plus 
‘‘(B) $250,000,000 for qualifying gasification projects 
that include equipment which separates and sequesters 
at least 75 percent of such project’s total carbon dioxide 
emissions.’’. 
(c) RECAPTURE OF CREDIT FOR FAILURE TO SEQUESTER.—Section 
48B is amended by adding at the end the following new subsection: 
‘‘(f) RECAPTURE OF CREDIT FOR FAILURE TO SEQUESTER.—The 
Secretary shall provide for recapturing the benefit of any credit 
allowable under subsection (a) with respect to any project which 
fails to attain or maintain the separation and sequestration require-
ments for such project under subsection (d)(1).’’. 
(d) SELECTION PRIORITIES.—Section 48B(d) is amended by 
adding at the end the following new paragraph: 
‘‘(4) SELECTION PRIORITIES.—In determining which quali-
fying gasification projects to certify under this section, the 
Secretary shall— 
‘‘(A) give highest priority to projects with the greatest 
separation and sequestration percentage of total carbon 
dioxide emissions, and 
‘‘(B) give high priority to applicant participants who 
have a research partnership with an eligible educational 
institution (as defined in section 529(e)(5)).’’. 
(e) ELIGIBLE
PROJECTS
INCLUDE
TRANSPORTATION
GRADE 
LIQUID
FUELS.—Section 48B(c)(7) (defining eligible entity) is 
amended by striking ‘‘and’’ at the end of subparagraph (F), by 
striking the period at the end of subparagraph (G) and inserting 
‘‘, and’’, and by adding at the end the following new subparagraph: 
‘‘(H) transportation grade liquid fuels.’’. 
(f) EFFECTIVE DATE.—The amendments made by this section 
shall apply to credits described in section 48B(d)(1)(B) of the 
Internal Revenue Code of 1986 which are allocated or reallocated 
after the date of the enactment of this Act. 
SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX; FUNDING OF 
BLACK LUNG DISABILITY TRUST FUND. 
(a) EXTENSION OF TEMPORARY INCREASE.—Paragraph (2) of sec-
tion 4121(e) is amended—
H. R. 1424—61 
(1) by striking ‘‘January 1, 2014’’ in subparagraph (A) 
and inserting ‘‘December 31, 2018’’, and 
(2) by striking ‘‘January 1 after 1981’’ in subparagraph 
(B) and inserting ‘‘December 31 after 2007’’. 
(b) RESTRUCTURING OF TRUST FUND DEBT.— 
(1) DEFINITIONS.—For purposes of this subsection— 
(A) MARKET VALUE OF THE OUTSTANDING REPAYABLE 
ADVANCES, PLUS ACCRUED INTEREST.—The term ‘‘market 
value of the outstanding repayable advances, plus accrued 
interest’’ means the present value (determined by the Sec-
retary of the Treasury as of the refinancing date and using 
the Treasury rate as the discount rate) of the stream of 
principal and interest payments derived assuming that 
each repayable advance that is outstanding on the refi-
nancing date is due on the 30th anniversary of the end 
of the fiscal year in which the advance was made to the 
Trust Fund, and that all such principal and interest pay-
ments are made on September 30 of the applicable fiscal 
year. 
(B) REFINANCING DATE.—The term ‘‘refinancing date’’ 
means the date occurring 2 days after the enactment of 
this Act. 
(C) 
REPAYABLE
ADVANCE.—The 
term 
‘‘repayable 
advance’’ means an amount that has been appropriated 
to the Trust Fund in order to make benefit payments 
and other expenditures that are authorized under section 
9501 of the Internal Revenue Code of 1986 and are required 
to be repaid when the Secretary of the Treasury determines 
that monies are available in the Trust Fund for such pur-
pose. 
(D) TREASURY RATE.—The term ‘‘Treasury rate’’ means 
a rate determined by the Secretary of the Treasury, taking 
into consideration current market yields on outstanding 
marketable obligations of the United States of comparable 
maturities. 
(E) TREASURY 1-YEAR RATE.—The term ‘‘Treasury 1- 
year rate’’ means a rate determined by the Secretary of 
the Treasury, taking into consideration current market 
yields on outstanding marketable obligations of the United 
States with remaining periods to maturity of approximately 
1 year, to have been in effect as of the close of business 
1 business day prior to the date on which the Trust Fund 
issues obligations to the Secretary of the Treasury under 
paragraph (2)(B). 
(2) REFINANCING OF OUTSTANDING PRINCIPAL OF REPAYABLE 
ADVANCES AND UNPAID INTEREST ON SUCH ADVANCES.— 
(A) TRANSFER TO GENERAL FUND.—On the refinancing 
date, the Trust Fund shall repay the market value of 
the outstanding repayable advances, plus accrued interest, 
by transferring into the general fund of the Treasury the 
following sums: 
(i) The proceeds from obligations that the Trust 
Fund shall issue to the Secretary of the Treasury in 
such amounts as the Secretaries of Labor and the 
Treasury shall determine and bearing interest at the 
Treasury rate, and that shall be in such forms and 
denominations and be subject to such other terms and
H. R. 1424—62 
conditions, including maturity, as the Secretary of the 
Treasury shall prescribe. 
(ii) All, or that portion, of the appropriation made 
to the Trust Fund pursuant to paragraph (3) that 
is needed to cover the difference defined in that para-
graph. 
(B) REPAYMENT OF OBLIGATIONS.—In the event that 
the Trust Fund is unable to repay the obligations that 
it has issued to the Secretary of the Treasury under 
subparagraph (A)(i) and this subparagraph, or is unable 
to make benefit payments and other authorized expendi-
tures, the Trust Fund shall issue obligations to the Sec-
retary of the Treasury in such amounts as may be nec-
essary to make such repayments, payments, and expendi-
tures, with a maturity of 1 year, and bearing interest 
at the Treasury 1-year rate. These obligations shall be 
in such forms and denominations and be subject to such 
other terms and conditions as the Secretary of the Treasury 
shall prescribe. 
(C) AUTHORITY
TO
ISSUE
OBLIGATIONS.—The Trust 
Fund is authorized to issue obligations to the Secretary 
of the Treasury under subparagraphs (A)(i) and (B). The 
Secretary of the Treasury is authorized to purchase such 
obligations of the Trust Fund. For the purposes of making 
such purchases, the Secretary of the Treasury may use 
as a public debt transaction the proceeds from the sale 
of any securities issued under chapter 31 of title 31, United 
States Code, and the purposes for which securities may 
be issued under such chapter are extended to include any 
purchase of such Trust Fund obligations under this 
subparagraph. 
(3) ONE-TIME
APPROPRIATION.—There is hereby appro-
priated to the Trust Fund an amount sufficient to pay to 
the general fund of the Treasury the difference between— 
(A) the market value of the outstanding repayable 
advances, plus accrued interest; and 
(B) the proceeds from the obligations issued by the 
Trust Fund to the Secretary of the Treasury under para-
graph (2)(A)(i). 
(4) PREPAYMENT OF TRUST FUND OBLIGATIONS.—The Trust 
Fund is authorized to repay any obligation issued to the Sec-
retary of the Treasury under subparagraphs (A)(i) and (B) 
of paragraph (2) prior to its maturity date by paying a prepay-
ment price that would, if the obligation being prepaid (including 
all unpaid interest accrued thereon through the date of prepay-
ment) were purchased by a third party and held to the maturity 
date of such obligation, produce a yield to the third-party pur-
chaser for the period from the date of purchase to the maturity 
date of such obligation substantially equal to the Treasury 
yield on outstanding marketable obligations of the United 
States having a comparable maturity to this period. 
SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EXCISE TAX 
TO CERTAIN COAL PRODUCERS AND EXPORTERS. 
(a) REFUND.— 
(1) COAL PRODUCERS.—
H. R. 1424—63 
(A) IN GENERAL.—Notwithstanding subsections (a)(1) 
and (c) of section 6416 and section 6511 of the Internal 
Revenue Code of 1986, if— 
(i) a coal producer establishes that such coal pro-
ducer, or a party related to such coal producer, 
exported coal produced by such coal producer to a 
foreign country or shipped coal produced by such coal 
producer to a possession of the United States, or caused 
such coal to be exported or shipped, the export or 
shipment of which was other than through an exporter 
who meets the requirements of paragraph (2), 
(ii) such coal producer filed an excise tax return 
on or after October 1, 1990, and on or before the 
date of the enactment of this Act, and 
(iii) such coal producer files a claim for refund 
with the Secretary not later than the close of the 
30-day period beginning on the date of the enactment 
of this Act, 
then the Secretary shall pay to such coal producer an 
amount equal to the tax paid under section 4121 of such 
Code on such coal exported or shipped by the coal producer 
or a party related to such coal producer, or caused by 
the coal producer or a party related to such coal producer 
to be exported or shipped. 
(B) SPECIAL RULES FOR CERTAIN TAXPAYERS.—For pur-
poses of this section— 
(i) IN
GENERAL.—If a coal producer or a party 
related to a coal producer has received a judgment 
described in clause (iii), such coal producer shall be 
deemed to have established the export of coal to a 
foreign country or shipment of coal to a possession 
of the United States under subparagraph (A)(i). 
(ii) AMOUNT OF PAYMENT.—If a taxpayer described 
in clause (i) is entitled to a payment under subpara-
graph (A), the amount of such payment shall be 
reduced by any amount paid pursuant to the judgment 
described in clause (iii). 
(iii) 
JUDGMENT
DESCRIBED.—A 
judgment 
is 
described in this subparagraph if such judgment— 
(I) is made by a court of competent jurisdiction 
within the United States, 
(II) relates to the constitutionality of any tax 
paid on exported coal under section 4121 of the 
Internal Revenue Code of 1986, and 
(III) is in favor of the coal producer or the 
party related to the coal producer. 
(2) EXPORTERS.—Notwithstanding subsections (a)(1) and (c) 
of section 6416 and section 6511 of the Internal Revenue Code 
of 1986, and a judgment described in paragraph (1)(B)(iii) of 
this subsection, if— 
(A) an exporter establishes that such exporter exported 
coal to a foreign country or shipped coal to a possession 
of the United States, or caused such coal to be so exported 
or shipped, 
(B) such exporter filed a tax return on or after October 
1, 1990, and on or before the date of the enactment of 
this Act, and
H. R. 1424—64 
(C) such exporter files a claim for refund with the 
Secretary not later than the close of the 30-day period 
beginning on the date of the enactment of this Act, 
then the Secretary shall pay to such exporter an amount equal 
to $0.825 per ton of such coal exported by the exporter or 
caused to be exported or shipped, or caused to be exported 
or shipped, by the exporter. 
(b) LIMITATIONS.—Subsection (a) shall not apply with respect 
to exported coal if a settlement with the Federal Government has 
been made with and accepted by, the coal producer, a party related 
to such coal producer, or the exporter, of such coal, as of the 
date that the claim is filed under this section with respect to 
such exported coal. For purposes of this subsection, the term ‘‘settle-
ment with the Federal Government’’ shall not include any settle-
ment or stipulation entered into as of the date of the enactment 
of this Act, the terms of which contemplate a judgment concerning 
which any party has reserved the right to file an appeal, or has 
filed an appeal. 
(c) SUBSEQUENT REFUND PROHIBITED.—No refund shall be made 
under this section to the extent that a credit or refund of such 
tax on such exported or shipped coal has been paid to any person. 
(d) DEFINITIONS.—For purposes of this section— 
(1) COAL PRODUCER.—The term ‘‘coal producer’’ means the 
person in whom is vested ownership of the coal immediately 
after the coal is severed from the ground, without regard to 
the existence of any contractual arrangement for the sale or 
other disposition of the coal or the payment of any royalties 
between the producer and third parties. The term includes 
any person who extracts coal from coal waste refuse piles 
or from the silt waste product which results from the wet 
washing (or similar processing) of coal. 
(2) EXPORTER.—The term ‘‘exporter’’ means a person, other 
than a coal producer, who does not have a contract, fee arrange-
ment, or any other agreement with a producer or seller of 
such coal to export or ship such coal to a third party on 
behalf of the producer or seller of such coal and— 
(A) is indicated in the shipper’s export declaration or 
other documentation as the exporter of record, or 
(B) actually exported such coal to a foreign country 
or shipped such coal to a possession of the United States, 
or caused such coal to be so exported or shipped. 
(3) RELATED PARTY.—The term ‘‘a party related to such 
coal producer’’ means a person who— 
(A) is related to such coal producer through any degree 
of common management, stock ownership, or voting control, 
(B) is related (within the meaning of section 144(a)(3) 
of the Internal Revenue Code of 1986) to such coal producer, 
or 
(C) has a contract, fee arrangement, or any other agree-
ment with such coal producer to sell such coal to a third 
party on behalf of such coal producer. 
(4) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 
of Treasury or the Secretary’s designee. 
(e) TIMING OF REFUND.—With respect to any claim for refund 
filed pursuant to this section, the Secretary shall determine whether 
the requirements of this section are met not later than 180 days 
after such claim is filed. If the Secretary determines that the
H. R. 1424—65 
requirements of this section are met, the claim for refund shall 
be paid not later than 180 days after the Secretary makes such 
determination. 
(f) INTEREST.—Any refund paid pursuant to this section shall 
be paid by the Secretary with interest from the date of overpayment 
determined by using the overpayment rate and method under sec-
tion 6621 of the Internal Revenue Code of 1986. 
(g) DENIAL
OF DOUBLE BENEFIT.—The payment under sub-
section (a) with respect to any coal shall not exceed— 
(1) in the case of a payment to a coal producer, the amount 
of tax paid under section 4121 of the Internal Revenue Code 
of 1986 with respect to such coal by such coal producer or 
a party related to such coal producer, and 
(2) in the case of a payment to an exporter, an amount 
equal to $0.825 per ton with respect to such coal exported 
by the exporter or caused to be exported by the exporter. 
(h) APPLICATION
OF SECTION.—This section applies only to 
claims on coal exported or shipped on or after October 1, 1990, 
through the date of the enactment of this Act. 
(i) STANDING NOT CONFERRED.— 
(1) EXPORTERS.—With respect to exporters, this section 
shall not confer standing upon an exporter to commence, or 
intervene in, any judicial or administrative proceeding con-
cerning a claim for refund by a coal producer of any Federal 
or State tax, fee, or royalty paid by the coal producer. 
(2) COAL PRODUCERS.—With respect to coal producers, this 
section shall not confer standing upon a coal producer to com-
mence, or intervene in, any judicial or administrative pro-
ceeding concerning a claim for refund by an exporter of any 
Federal or State tax, fee, or royalty paid by the producer 
and alleged to have been passed on to an exporter. 
SEC. 115. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRATION. 
(a) IN GENERAL.—Subpart D of part IV of subchapter A of 
chapter 1 (relating to business credits) is amended by adding at 
the end the following new section: 
‘‘SEC. 45Q. 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 the sum of— 
‘‘(1) $20 per metric ton of qualified carbon dioxide which 
is— 
‘‘(A) captured by the taxpayer at a qualified facility, 
and 
‘‘(B) disposed of by the taxpayer in secure geological 
storage, and 
‘‘(2) $10 per metric ton of qualified carbon dioxide which 
is— 
‘‘(A) captured by the taxpayer at a qualified facility, 
and 
‘‘(B) 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 sec-
tion— 
‘‘(1) IN
GENERAL.—The term ‘qualified carbon dioxide’ 
means carbon dioxide captured from an industrial source 
which—
H. R. 1424—66 
‘‘(A) would otherwise be released into the atmosphere 
as industrial emission of greenhouse gas, and 
‘‘(B) is measured at the source of capture and verified 
at the point of disposal or injection. 
‘‘(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 re-captured, 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 metric tons of 
carbon dioxide during the taxable year. 
‘‘(d) SPECIAL RULES AND OTHER DEFINITIONS.—For purposes 
of this section— 
‘‘(1) ONLY
CARBON
DIOXIDE
CAPTURED
AND
DISPOSED
OF 
OR USED WITHIN THE UNITED STATES TAKEN INTO ACCOUNT.— 
The credit under this section shall apply only with respect 
to qualified carbon dioxide the capture and disposal or use 
of which is within— 
‘‘(A) the United States (within the meaning of section 
638(1)), or 
‘‘(B) a possession of the United States (within the 
meaning of section 638(2)). 
‘‘(2) SECURE GEOLOGICAL STORAGE.—The Secretary, in con-
sultation with the Administrator of the Environmental Protec-
tion Agency, shall establish regulations for determining ade-
quate security measures for the geological storage of carbon 
dioxide under subsection (a)(1)(B) such that the carbon dioxide 
does not escape into the atmosphere. Such term shall include 
storage at deep saline formations and unminable coal seems 
under such conditions as the Secretary may determine under 
such regulations. 
‘‘(3) TERTIARY INJECTANT.—The term ‘tertiary injectant’ has 
the same meaning as when used within section 193(b)(1). 
‘‘(4) QUALIFIED ENHANCED OIL OR NATURAL GAS RECOVERY 
PROJECT.—The term ‘qualified enhanced oil or natural gas 
recovery project’ has the meaning given the term ‘qualified 
enhanced oil recovery project’ by section 43(c)(2), by substituting 
‘crude oil or natural gas’ for ‘crude oil’ in subparagraph (A)(i) 
thereof. 
‘‘(5) CREDIT ATTRIBUTABLE TO TAXPAYER.—Any credit under 
this section shall be attributable to the person that captures 
and physically or contractually ensures the disposal of or the 
use as a tertiary injectant of the qualified carbon dioxide, 
except to the extent provided in regulations prescribed by the 
Secretary. 
‘‘(6) RECAPTURE.—The Secretary shall, by regulations, pro-
vide for recapturing the benefit of any credit allowable under 
subsection (a) with respect to any qualified carbon dioxide 
which ceases to be captured, disposed of, or used as a tertiary 
injectant in a manner consistent with the requirements of 
this section.
H. R. 1424—67 
‘‘(7) 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) (relating to gen-
eral business credit) is amended by striking ‘‘plus’’ at the end 
of paragraph (32), by striking the period at the end of paragraph 
(33) and inserting ‘‘, plus’’, and by adding at the end of following 
new paragraph: 
‘‘(34) the carbon dioxide sequestration credit determined 
under section 45Q(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections for subpart 
B of part IV of subchapter A of chapter 1 (relating to other credits) 
is amended by adding at the end the following new section: 
‘‘Sec. 45Q. Credit for carbon dioxide sequestration.’’. 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to carbon dioxide captured after the date of the enact-
ment of this Act. 
SEC. 116. CERTAIN INCOME AND GAINS RELATING TO INDUSTRIAL 
SOURCE CARBON DIOXIDE TREATED AS QUALIFYING 
INCOME FOR PUBLICLY TRADED PARTNERSHIPS. 
(a) IN
GENERAL.—Subparagraph (E) of section 7704(d)(1) 
(defining qualifying income) is amended by inserting ‘‘or industrial 
source carbon dioxide’’ after ‘‘timber)’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall take effect on the date of the enactment of this Act, in 
taxable years ending after such date. 
SEC. 117. CARBON AUDIT OF THE TAX CODE. 
(a) STUDY.—The Secretary of the Treasury shall enter into 
an agreement with the National Academy of Sciences to undertake 
a comprehensive review of the Internal Revenue Code of 1986 
to identify the types of and specific tax provisions that have the 
largest effects on carbon and other greenhouse gas emissions and 
to estimate the magnitude of those effects. 
(b) REPORT.—Not later than 2 years after the date of enactment 
of this Act, the National Academy of Sciences shall submit to 
Congress a report containing the results of study authorized under 
this section. 
(c) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 
to be appropriated to carry out this section $1,500,000 for the 
period of fiscal years 2009 and 2010.
H. R. 1424—68 
TITLE II—TRANSPORTATION AND DO-
MESTIC FUEL SECURITY PROVISIONS 
SEC. 201. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS DEPRECIA-
TION FOR BIOMASS ETHANOL PLANT PROPERTY. 
(a) IN GENERAL.—Paragraph (3) of section 168(l) is amended 
to read as follows: 
‘‘(3) CELLULOSIC
BIOFUEL.—The term ‘cellulosic biofuel’ 
means any liquid fuel which is produced from any lignocellulosic 
or hemicellulosic matter that is available on a renewable or 
recurring basis.’’. 
(b) CONFORMING AMENDMENTS.—Subsection (l) of section 168 
is amended— 
(1) by striking ‘‘cellulosic biomass ethanol’’ each place it 
appears and inserting ‘‘cellulosic biofuel’’, 
(2) by striking ‘‘CELLULOSIC BIOMASS ETHANOL’’ in the 
heading of such subsection and inserting ‘‘CELLULOSIC 
BIOFUEL’’, and 
(3) by striking ‘‘CELLULOSIC
BIOMASS
ETHANOL’’ in the 
heading of paragraph (2) thereof and inserting ‘‘CELLULOSIC 
BIOFUEL’’. 
(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, in taxable years ending after such date. 
SEC. 202. CREDITS FOR BIODIESEL AND RENEWABLE DIESEL. 
(a) IN GENERAL.—Sections 40A(g), 6426(c)(6), and 6427(e)(5)(B) 
are each amended by striking ‘‘December 31, 2008’’ and inserting 
‘‘December 31, 2009’’. 
(b) INCREASE IN RATE OF CREDIT.— 
(1) INCOME TAX CREDIT.—Paragraphs (1)(A) and (2)(A) of 
section 40A(b) are each amended by striking ‘‘50 cents’’ and 
inserting ‘‘$1.00’’. 
(2) EXCISE TAX CREDIT.—Paragraph (2) of section 6426(c) 
is amended to read as follows: 
‘‘(2) APPLICABLE AMOUNT.—For purposes of this subsection, 
the applicable amount is $1.00.’’. 
(3) CONFORMING AMENDMENTS.— 
(A) Subsection (b) of section 40A is amended by striking 
paragraph (3) and by redesignating paragraphs (4) and 
(5) as paragraphs (3) and (4), respectively. 
(B) Paragraph (2) of section 40A(f) is amended to read 
as follows: 
‘‘(2) EXCEPTION.—Subsection (b)(4) shall not apply with 
respect to renewable diesel.’’. 
(C) Paragraphs (2) and (3) of section 40A(e) are each 
amended by striking ‘‘subsection (b)(5)(C)’’ and inserting 
‘‘subsection (b)(4)(C)’’. 
(D) Clause (ii) of section 40A(d)(3)(C) is amended by 
striking ‘‘subsection (b)(5)(B)’’ and inserting ‘‘subsection 
(b)(4)(B)’’. 
(c) UNIFORM TREATMENT
OF DIESEL PRODUCED FROM BIO-
MASS.—Paragraph (3) of section 40A(f) is amended— 
(1) by striking ‘‘diesel fuel’’ and inserting ‘‘liquid fuel’’, 
(2) by striking ‘‘using a thermal depolymerization process’’, 
and
H. R. 1424—69 
(3) by inserting ‘‘, or other equivalent standard approved 
by the Secretary’’ after ‘‘D396’’. 
(d) COPRODUCTION OF RENEWABLE DIESEL WITH PETROLEUM 
FEEDSTOCK.— 
(1) IN
GENERAL.—Paragraph (3) of section 40A(f) is 
amended by adding at the end the following new sentences: 
‘‘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 section 45K(c)(3).’’. 
(2) CONFORMING
AMENDMENT.—Paragraph (3) of section 
40A(f) is amended by striking ‘‘(as defined in section 45K(c)(3))’’. 
(e) ELIGIBILITY OF CERTAIN AVIATION FUEL.—Subsection (f) of 
section 40A (relating to renewable diesel) is amended by adding 
at the end the following new paragraph: 
‘‘(4) CERTAIN AVIATION FUEL.— 
‘‘(A) IN GENERAL.—Except as provided in the last 3 
sentences of paragraph (3), the term ‘renewable diesel’ 
shall include fuel derived from biomass which meets the 
requirements of a Department of Defense specification for 
military jet fuel or an American Society of Testing and 
Materials specification for aviation turbine fuel. 
‘‘(B) APPLICATION OF MIXTURE CREDITS.—In the case 
of fuel which is treated as renewable diesel solely by reason 
of subparagraph (A), subsection (b)(1) and section 6426(c) 
shall be applied with respect to such fuel by treating ker-
osene as though it were diesel fuel.’’. 
(f) MODIFICATION
RELATING
TO
DEFINITION
OF
AGRI-BIO-
DIESEL.—Paragraph (2) of section 40A(d) (relating to agri-biodiesel) 
is amended by striking ‘‘and mustard seeds’’ and inserting ‘‘mustard 
seeds, and camelina’’. 
(g) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided in this sub-
section, the amendments made by this section shall apply to 
fuel produced, and sold or used, after December 31, 2008. 
(2) COPRODUCTION OF RENEWABLE DIESEL WITH PETROLEUM 
FEEDSTOCK.—The amendment made by subsection (d) shall 
apply to fuel produced, and sold or used, after the date of 
the enactment of this Act. 
SEC. 203. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED 
TO PROVIDE AN INCENTIVE FOR UNITED STATES PRODUC-
TION. 
(a) ALCOHOL FUELS CREDIT.—Subsection (d) of section 40 is 
amended by adding at the end the following new paragraph: 
‘‘(7) LIMITATION
TO
ALCOHOL
WITH
CONNECTION
TO
THE 
UNITED STATES.—No credit shall be determined under this sec-
tion with respect to any alcohol 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.’’. 
(b) BIODIESEL FUELS CREDIT.—Subsection (d) of section 40A 
is amended by adding at the end the following new paragraph: 
‘‘(5) LIMITATION TO BIODIESEL WITH CONNECTION TO THE 
UNITED STATES.—No credit shall be determined under this sec-
tion with respect to any biodiesel which is produced outside 
the United States for use as a fuel outside the United States.
H. R. 1424—70 
For purposes of this paragraph, the term ‘United States’ 
includes any possession of the United States.’’. 
(c) EXCISE TAX CREDIT.— 
(1) IN GENERAL.—Section 6426 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.’’. 
(2) CONFORMING
AMENDMENT.—Subsection (e) of section 
6427 is amended by redesignating 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 payable 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.—The amendments made by this section 
shall apply to claims for credit or payment made on or after May 
15, 2008. 
SEC. 204. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL 
CREDIT. 
(a) EXTENSION.— 
(1) ALTERNATIVE FUEL CREDIT.—Paragraph (4) of section 
6426(d) (relating to alternative fuel credit) is amended by 
striking ‘‘September 30, 2009’’ and inserting ‘‘December 31, 
2009’’. 
(2) ALTERNATIVE FUEL MIXTURE CREDIT.—Paragraph (3) of 
section 6426(e) (relating to alternative fuel mixture credit) is 
amended by striking ‘‘September 30, 2009’’ and inserting 
‘‘December 31, 2009’’. 
(3) PAYMENTS.—Subparagraph (C) of section 6427(e)(5) 
(relating to termination) is amended by striking ‘‘September 
30, 2009’’ and inserting ‘‘December 31, 2009’’. 
(b) MODIFICATIONS.— 
(1) ALTERNATIVE
FUEL
TO
INCLUDE
COMPRESSED
OR 
LIQUIFIED
BIOMASS
GAS.—Paragraph (2) of section 6426(d) 
(relating to alternative fuel credit) is amended by striking ‘‘and’’ 
at the end of subparagraph (E), by redesignating subparagraph 
(F) as subparagraph (G), and by inserting after subparagraph 
(E) the following new subparagraph: 
‘‘(F) compressed or liquefied gas derived from biomass 
(as defined in section 45K(c)(3)), and’’. 
(2) CREDIT ALLOWED FOR AVIATION USE OF FUEL.—Para-
graph (1) of section 6426(d) is amended by inserting ‘‘sold 
by the taxpayer for use as a fuel in aviation,’’ after ‘‘motorboat,’’. 
(c) CARBON CAPTURE REQUIREMENT FOR CERTAIN FUELS.—
H. R. 1424—71 
(1) IN
GENERAL.—Subsection (d) of section 6426, as 
amended by subsection (a), is amended by redesignating para-
graph (4) as paragraph (5) and by inserting after paragraph 
(3) the following new paragraph: 
‘‘(4) CARBON CAPTURE REQUIREMENT.— 
‘‘(A) IN GENERAL.—The requirements of this paragraph 
are met if the fuel is certified, under such procedures 
as required by the Secretary, as having been derived from 
coal produced at a gasification facility which separates 
and sequesters not less than the applicable percentage 
of such facility’s total carbon dioxide emissions. 
‘‘(B) 
APPLICABLE
PERCENTAGE.—For 
purposes 
of 
subparagraph (A), the applicable percentage is— 
‘‘(i) 50 percent in the case of fuel produced after 
September 30, 2009, and on or before December 30, 
2009, and 
‘‘(ii) 75 percent in the case of fuel produced after 
December 30, 2009.’’. 
(2) CONFORMING AMENDMENT.—Subparagraph (E) of section 
6426(d)(2) is amended by inserting ‘‘which meets the require-
ments of paragraph (4) and which is’’ after ‘‘any liquid fuel’’. 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to fuel sold or used after the date of the enactment 
of this Act. 
SEC. 205. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE 
MOTOR VEHICLES. 
(a) PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE CREDIT.—Subpart 
B of part IV of subchapter A of chapter 1 (relating to other credits) 
is amended by adding at the end the following new section: 
‘‘SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR 
VEHICLES. 
‘‘(a) ALLOWANCE OF CREDIT.— 
‘‘(1) IN GENERAL.—There shall be allowed as a credit against 
the tax imposed by this chapter for the taxable year an amount 
equal to the applicable amount with respect to each new quali-
fied plug-in electric drive motor vehicle placed in service by 
the taxpayer during the taxable year. 
‘‘(2) APPLICABLE AMOUNT.—For purposes of paragraph (1), 
the applicable amount is sum of— 
‘‘(A) $2,500, plus 
‘‘(B) $417 for each kilowatt hour of traction battery 
capacity in excess of 4 kilowatt hours. 
‘‘(b) LIMITATIONS.— 
‘‘(1) LIMITATION BASED ON WEIGHT.—The amount of the 
credit allowed under subsection (a) by reason of subsection 
(a)(2) shall not exceed— 
‘‘(A) $7,500, in the case of any new qualified plug- 
in electric drive motor vehicle with a gross vehicle weight 
rating of not more than 10,000 pounds, 
‘‘(B) $10,000, in the case of any new qualified plug- 
in electric drive motor vehicle with a gross vehicle weight 
rating of more than 10,000 pounds but not more than 
14,000 pounds, 
‘‘(C) $12,500, in the case of any new qualified plug- 
in electric drive motor vehicle with a gross vehicle weight
H. R. 1424—72 
rating of more than 14,000 pounds but not more than 
26,000 pounds, and 
‘‘(D) $15,000, in the case of any new qualified plug- 
in electric drive motor vehicle with a gross vehicle weight 
rating of more than 26,000 pounds. 
‘‘(2) LIMITATION ON NUMBER OF PASSENGER VEHICLES AND 
LIGHT TRUCKS ELIGIBLE FOR CREDIT.— 
‘‘(A) IN GENERAL.—In the case of a new qualified plug- 
in electric drive motor vehicle sold during the phaseout 
period, only the applicable percentage of the credit other-
wise allowable under subsection (a) shall be allowed. 
‘‘(B) PHASEOUT
PERIOD.—For purposes of this sub-
section, the phaseout period is the period beginning with 
the second calendar quarter following the calendar quarter 
which includes the first date on which the total number 
of such new qualified plug-in electric drive motor vehicles 
sold for use in the United States after December 31, 2008, 
is at least 250,000. 
‘‘(C) 
APPLICABLE
PERCENTAGE.—For 
purposes 
of 
subparagraph (A), the applicable percentage is— 
‘‘(i) 50 percent for the first 2 calendar quarters 
of the phaseout period, 
‘‘(ii) 25 percent for the 3d and 4th calendar quar-
ters of the phaseout period, and 
‘‘(iii) 0 percent for each calendar quarter thereafter. 
‘‘(D) CONTROLLED GROUPS.—Rules similar to the rules 
of section 30B(f)(4) shall apply for purposes of this sub-
section. 
‘‘(c) 
NEW
QUALIFIED
PLUG-IN
ELECTRIC
DRIVE
MOTOR 
VEHICLE.—For purposes of this section, the term ‘new qualified 
plug-in electric drive motor vehicle’ means a motor vehicle— 
‘‘(1) which draws propulsion using a traction battery with 
at least 4 kilowatt hours of capacity, 
‘‘(2) which uses an offboard source of energy to recharge 
such battery, 
‘‘(3) which, in the case of a passenger vehicle or light 
truck which has a gross vehicle weight rating of not more 
than 8,500 pounds, has received a certificate of conformity 
under the Clean Air Act and meets or exceeds the equivalent 
qualifying California low emission vehicle standard under sec-
tion 243(e)(2) of the Clean Air Act for that make and model 
year, and 
‘‘(A) in the case of a vehicle having a gross vehicle 
weight rating of 6,000 pounds or less, the Bin 5 Tier 
II emission standard established in regulations prescribed 
by the Administrator of the Environmental Protection 
Agency under section 202(i) of the Clean Air Act for that 
make and model year vehicle, and 
‘‘(B) in the case of a vehicle having a gross vehicle 
weight rating of more than 6,000 pounds but not more 
than 8,500 pounds, the Bin 8 Tier II emission standard 
which is so established, 
‘‘(4) the original use of which commences with the taxpayer, 
‘‘(5) which is acquired for use or lease by the taxpayer 
and not for resale, and 
‘‘(6) which is made by a manufacturer. 
‘‘(d) APPLICATION WITH OTHER CREDITS.—
H. R. 1424—73 
‘‘(1) BUSINESS CREDIT TREATED AS PART OF GENERAL BUSI-
NESS CREDIT.—So much of the credit which would be allowed 
under subsection (a) for any taxable year (determined without 
regard to this subsection) that is attributable to property of 
a character subject to an allowance for depreciation shall be 
treated as a credit listed in section 38(b) for such taxable 
year (and not allowed under subsection (a)). 
‘‘(2) PERSONAL CREDIT.— 
‘‘(A) IN GENERAL.—For purposes of this title, the credit 
allowed under subsection (a) for any taxable year (deter-
mined after application of paragraph (1)) shall be treated 
as a credit allowable under subpart A for such taxable 
year. 
‘‘(B) LIMITATION BASED ON AMOUNT OF TAX.—In the 
case of a taxable year to which section 26(a)(2) does not 
apply, the credit allowed under subsection (a) for any tax-
able year (determined after application of paragraph (1)) 
shall not exceed the excess of— 
‘‘(i) the sum of the regular tax liability (as defined 
in section 26(b)) plus the tax imposed by section 55, 
over 
‘‘(ii) the sum of the credits allowable under subpart 
A (other than this section and sections 23 and 25D) 
and section 27 for the taxable year. 
‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.—For purposes 
of this section— 
‘‘(1) MOTOR VEHICLE.—The term ‘motor vehicle’ has the 
meaning given such term by section 30(c)(2). 
‘‘(2) OTHER
TERMS.—The terms ‘passenger automobile’, 
‘light truck’, and ‘manufacturer’ have the meanings given such 
terms in regulations prescribed by the Administrator of the 
Environmental Protection Agency for purposes of the adminis-
tration of title II of the Clean Air Act (42 U.S.C. 7521 et 
seq.). 
‘‘(3) 
TRACTION
BATTERY
CAPACITY.—Traction 
battery 
capacity shall be measured in kilowatt hours from a 100 percent 
state of charge to a zero percent state of charge. 
‘‘(4) REDUCTION IN BASIS.—For purposes of this subtitle, 
the basis of any property for which a credit is allowable under 
subsection (a) shall be reduced by the amount of such credit 
so allowed. 
‘‘(5) NO DOUBLE BENEFIT.—The amount of any deduction 
or other credit allowable under this chapter for a new qualified 
plug-in electric drive motor vehicle shall be reduced by the 
amount of credit allowed under subsection (a) for such vehicle 
for the taxable year. 
‘‘(6) PROPERTY USED BY TAX-EXEMPT ENTITY.—In the case 
of a vehicle the use of which is described in paragraph (3) 
or (4) of section 50(b) and which is not subject to a lease, 
the person who sold such vehicle to the person or entity using 
such vehicle shall be treated as the taxpayer that placed such 
vehicle in service, but only if such person clearly discloses 
to such person or entity in a document the amount of any 
credit allowable under subsection (a) with respect to such 
vehicle (determined without regard to subsection (b)(2)). 
‘‘(7) PROPERTY
USED
OUTSIDE
UNITED
STATES, ETC., NOT 
QUALIFIED.—No credit shall be allowable under subsection (a)
H. R. 1424—74 
with respect to any property referred to in section 50(b)(1) 
or with respect to the portion of the cost of any property 
taken into account under section 179. 
‘‘(8) RECAPTURE.—The Secretary shall, by regulations, pro-
vide for recapturing the benefit of any credit allowable under 
subsection (a) with respect to any property which ceases to 
be property eligible for such credit (including recapture in the 
case of a lease period of less than the economic life of a 
vehicle). 
‘‘(9) ELECTION TO NOT TAKE CREDIT.—No credit shall be 
allowed under subsection (a) for any vehicle if the taxpayer 
elects not to have this section apply to such vehicle. 
‘‘(10) INTERACTION WITH AIR QUALITY AND MOTOR VEHICLE 
SAFETY STANDARDS.—Unless otherwise provided in this section, 
a motor vehicle shall not be considered eligible for a credit 
under this section unless such vehicle is in compliance with— 
‘‘(A) the applicable provisions of the Clean Air Act 
for the applicable make and model year of the vehicle 
(or applicable air quality provisions of State law in the 
case of a State which has adopted such provision under 
a waiver under section 209(b) of the Clean Air Act), and 
‘‘(B) the motor vehicle safety provisions of sections 
30101 through 30169 of title 49, United States Code. 
‘‘(f) REGULATIONS.— 
‘‘(1) IN GENERAL.—Except as provided in paragraph (2), 
the Secretary shall promulgate such regulations as necessary 
to carry out the provisions of this section. 
‘‘(2) COORDINATION IN PRESCRIPTION OF CERTAIN REGULA-
TIONS.—The Secretary of the Treasury, in coordination with 
the Secretary of Transportation and the Administrator of the 
Environmental Protection Agency, shall prescribe such regula-
tions as necessary to determine whether a motor vehicle meets 
the requirements to be eligible for a credit under this section. 
‘‘(g) TERMINATION.—This section shall not apply to property 
purchased after December 31, 2014.’’. 
(b) 
COORDINATION
WITH
ALTERNATIVE
MOTOR
VEHICLE 
CREDIT.—Section 30B(d)(3) is amended by adding at the end the 
following new subparagraph: 
‘‘(D) EXCLUSION
OF
PLUG-IN
VEHICLES.—Any vehicle 
with respect to which a credit is allowable under section 
30D (determined without regard to subsection (d) thereof) 
shall not be taken into account under this section.’’. 
(c) CREDIT MADE PART OF GENERAL BUSINESS CREDIT.—Section 
38(b), as amended by this Act, is amended by striking ‘‘plus’’ at 
the end of paragraph (33), by striking the period at the end of 
paragraph (34) and inserting ‘‘plus’’, and by adding at the end 
the following new paragraph: 
‘‘(35) the portion of the new qualified plug-in electric drive 
motor vehicle credit to which section 30D(d)(1) applies.’’. 
(d) CONFORMING AMENDMENTS.— 
(1)(A) Section 24(b)(3)(B), as amended by section 106, is 
amended by striking ‘‘and 25D’’ and inserting ‘‘25D, and 30D’’. 
(B) Section 25(e)(1)(C)(ii) is amended by inserting ‘‘30D,’’ 
after ‘‘25D,’’. 
(C) Section 25B(g)(2), as amended by section 106, is 
amended by striking ‘‘and 25D’’ and inserting ‘‘, 25D, and 
30D’’.