105 
SEC. 508. EXTENSION OF CREDIT RESIDENTIAL ENERGY EF-
FICIENT PROPERTY. 
(a) IN GENERAL.—Section 25D(g) of the Internal 
Revenue Code of 1986 is amended by striking ‘‘December 
31, 2007’’ and inserting ‘‘December 31, 2012’’. 
(b) EFFECTIVE DATE.—The amendment 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. 509. CLEAN ENERGY COAL BONDS. 
(a) IN GENERAL.—Subpart H of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 54A. CREDIT TO HOLDERS OF CLEAN ENERGY COAL 
BONDS. 
‘‘(a) ALLOWANCE OF CREDIT.—If a taxpayer holds 
a clean energy coal bond on 1 or more credit allowance 
dates of the bond occurring during any taxable year, there 
shall be allowed as a credit against the tax imposed by 
this chapter for the taxable year an amount equal to the 
sum of the credits determined under subsection (b) with 
respect to such dates. 
‘‘(b) AMOUNT OF CREDIT.— 
‘‘(1) IN GENERAL.—The amount of the credit 
determined under this subsection with respect to any 
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credit allowance date for a clean energy coal bond is 
25 percent of the annual credit determined with re-
spect to such bond. 
‘‘(2) ANNUAL CREDIT.—The annual credit de-
termined with respect to any clean energy coal bond 
is the product of— 
‘‘(A) the credit rate determined by the Sec-
retary under paragraph (3) for the day on 
which such bond was sold, multiplied by 
‘‘(B) the outstanding face amount of the 
bond. 
‘‘(3) DETERMINATION.—For purposes of para-
graph (2), with respect to any clean energy coal 
bond, the Secretary shall determine daily or cause to 
be determined daily a credit rate which shall apply 
to the first day on which there is a binding, written 
contract for the sale or exchange of the bond. The 
credit rate for any day is the credit rate which the 
Secretary or the Secretary’s designee estimates will 
permit the issuance of clean energy coal bonds with 
a specified maturity or redemption date without dis-
count and without interest cost to the qualified 
issuer. 
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‘‘(4) CREDIT ALLOWANCE DATE.—For purposes 
of this section, the term ‘credit allowance date’ 
means— 
‘‘(A) March 15, 
‘‘(B) June 15, 
‘‘(C) September 15, and 
‘‘(D) December 15. 
Such term also includes the last day on which the 
bond is outstanding. 
‘‘(5) SPECIAL RULE FOR ISSUANCE AND RE-
DEMPTION.—In the case of a bond which is issued 
during the 3-month period ending on a credit allow-
ance date, the amount of the credit determined 
under this subsection with respect to such credit al-
lowance date shall be a ratable portion of the credit 
otherwise determined based on the portion of the 3- 
month period during which the bond is outstanding. 
A similar rule shall apply when the bond is redeemed 
or matures. 
‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.—The 
credit allowed under subsection (a) for any taxable year 
shall not exceed the excess of— 
‘‘(1) the sum of the regular tax liability (as de-
fined in section 26(b)) plus the tax imposed by sec-
tion 55, over 
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‘‘(2) the sum of the credits allowable under this 
part (other than subpart C thereof (relating to re-
fundable 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 Sec-
retary to such issuer of a portion of the na-
tional clean energy 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 
capital expenditures incurred by qualified bor-
rowers 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.— 
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‘‘(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 enact-
ment 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-
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fied issuer adopts an official intent to re-
imburse 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 pre-
scribe regulations specifying remedial actions 
that may be taken (including conditions to tak-
ing such remedial actions) to prevent an action 
described in the preceding sentence from caus-
ing 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. 
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