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placed in service date) owned by a qualified bor-
rower.
‘‘(B) REFINANCING
RULES.—For purposes
of paragraph (1)(B), a qualified project may be
refinanced with proceeds of a clean renewable en-
ergy bond only if the indebtedness being refi-
nanced (including any obligation directly or in-
directly 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 renewable energy 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 renewable
energy bond,
‘‘(ii) not later than 60 days after pay-
ment of the original expenditure, the quali-
fied issuer adopts an official intent to reim-
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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 renewable energy bond.
‘‘(e) MATURITY LIMITATIONS.—
‘‘(1) DURATION OF TERM.—A bond shall not be
treated as a clean renewable energy bond if the matu-
rity of such bond exceeds the maximum term deter-
mined by the Secretary under paragraph (2) with re-
spect to such bond.
‘‘(2) MAXIMUM
TERM.—During each calendar
month, the Secretary shall determine the maximum
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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 re-
newable energy bond unless it is part of an issue
which provides 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 renewable energy bond limitation of
$1,000,000,000.
‘‘(2) ALLOCATION
BY
SECRETARY.—The Sec-
retary shall allocate the amount described in para-
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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
to be loaned to 2 or more qualified borrowers,
such binding commitment will be incurred with-
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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-
deemed shall be determined in the same manner as
under section 142.
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‘‘(i) SPECIAL RULES RELATING TO ARBITRAGE.—A
bond which is part of an issue shall not be treated as a
clean renewable energy 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
proceeds 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 RENEWABLE ENERGY BOND LEND-
ER.—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 coopera-
tive electric companies and is in existence on Feb-
ruary 1, 2002, and shall include any affiliated entity
which is controlled by such lender.
‘‘(3) GOVERNMENTAL BODY.—The term ‘govern-
mental body’ means any State, territory, possession of
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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 renewable 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—
‘‘(1) BOND.—The term ‘bond’ includes any obli-
gation.
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‘‘(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 renewable energy bond is
held by a regulated investment company, the credit
determined under subsection (a) shall be allowed to
shareholders of such company under procedures pre-
scribed 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
by reason of holding a clean renewable energy bond
on a credit allowance date shall be treated as if it
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were a payment of estimated tax made by the tax-
payer on such date.
‘‘(6) REPORTING.—Issuers of clean renewable en-
ergy bonds shall submit reports similar to the reports
required under section 149(e).
‘‘(m) TERMINATION.—This section shall not apply
with respect to any bond issued after December 31, 2008.’’.
(b) REPORTING.—Subsection (d) of section 6049 (relat-
ing to returns regarding payments of interest) is amended
by adding at the end the following new paragraph:
‘‘(8) REPORTING OF CREDIT ON CLEAN RENEW-
ABLE ENERGY BONDS.—
‘‘(A) IN GENERAL.—For purposes of sub-
section (a), the term ‘interest’ includes amounts
includible in gross income under section 54(g)
and such amounts shall be treated as paid on the
credit allowance date (as defined in section
54(b)(4)).
‘‘(B) REPORTING TO CORPORATIONS, ETC.—
Except as otherwise provided in regulations, in
the case of any interest described in subpara-
graph (A), subsection (b)(4) shall be applied
without regard to subparagraphs (A), (H), (I),
(J), (K), and (L)(i) of such subsection.
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‘‘(C) REGULATORY
AUTHORITY.—The Sec-
retary may prescribe such regulations as are nec-
essary or appropriate to carry out the purposes
of this paragraph, including regulations which
require more frequent or more detailed report-
ing.’’.
(c) CONFORMING AMENDMENTS.—
(1) The table of subparts for part IV of sub-
chapter A of chapter 1 is amended by adding at the
end the following new item:
‘‘SUBPART H. NONREFUNDABLE CREDIT TO HOLDERS OF CERTAIN BONDS.’’.
(2) Section 1397E(c)(2) is amended by inserting
‘‘, and subpart H thereof’’ after ‘‘refundable credits’’.
(3) Section 6401(b)(1) is amended by striking
‘‘and G’’ and inserting ‘‘G, and H’’.
(d) ISSUANCE OF REGULATIONS.—The Secretary of
Treasury shall issue regulations required under section 54
of the Internal Revenue Code of 1986 (as added by this sec-
tion) not later than 120 days after the date of the enactment
of this Act.
(e) EFFECTIVE DATE.—The amendments made by this
section shall apply to bonds issued after December 31, 2005.
SEC. 1505. TREATMENT OF INCOME OF CERTAIN ELECTRIC
COOPERATIVES.
(a) ELIMINATION OF SUNSET ON TREATMENT OF IN-
COME FROM OPEN ACCESS
AND NUCLEAR DECOMMIS-
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SIONING TRANSACTIONS.—Section 501(c)(12)(C) is amend-
ed by striking the last sentence.
(b) ELIMINATION OF SUNSET ON TREATMENT OF IN-
COME
FROM
LOAD
LOSS
TRANSACTIONS.—Section
501(c)(12)(H) is amended by striking clause (x).
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect on the date of the enactment of this
Act.
SEC. 1506. DISPOSITIONS OF TRANSMISSION PROPERTY TO
IMPLEMENT FERC RESTRUCTURING POLICY.
(a) IN GENERAL.—Section 451(i)(3) (defining quali-
fying electric transmission transaction) is amended by
striking ‘‘2007’’ and inserting ‘‘2008’’.
(b) TECHNICAL AMENDMENT RELATED TO SECTION
909 OF THE AMERICAN JOBS CREATION ACT OF 2004.—
Clause (ii) of section 451(i)(4)(B) is amended by striking
‘‘the close of the period applicable under subsection
(a)(2)(B) as extended under paragraph (2)’’ and inserting
‘‘December 31, 2007’’.
(c) EFFECTIVE DATES.—
(1) IN GENERAL.—The amendment made by sub-
section (a) shall apply to transactions occurring after
the date of the enactment of this Act.
(2) TECHNICAL AMENDMENT.—The amendment
made by subsection (b) shall take effect as if included
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in the amendments made by section 909 of the Amer-
ican Jobs Creation Act of 2004.
SEC. 1507. CREDIT FOR PRODUCTION FROM ADVANCED NU-
CLEAR POWER FACILITIES.
(a) IN GENERAL.—Subpart D of part IV of subchapter
A of chapter 1 (relating to business related credits) is
amended by adding after section 45I the following new sec-
tion:
‘‘SEC. 45J. CREDIT FOR PRODUCTION FROM ADVANCED NU-
CLEAR POWER FACILITIES.
‘‘(a) GENERAL RULE.—For purposes of section 38, the
advanced nuclear power facility production credit of any
taxpayer for any taxable year is equal to the product of—
‘‘(1) 1.8 cents, multiplied by
‘‘(2) the kilowatt hours of electricity—
‘‘(A) produced by the taxpayer at an ad-
vanced nuclear power facility during the 8-year
period beginning on the date the facility was
originally placed in service, and
‘‘(B) sold by the taxpayer to an unrelated
person during the taxable year.
‘‘(b) NATIONAL LIMITATION.—
‘‘(1) IN GENERAL.—The amount of credit which
would (but for this subsection and subsection (c)) be
allowed with respect to any facility for any taxable