unit which is occupied (at the time of the grant or 
loan) by individuals whose income is 50 percent or 
less of area median gross income. Rules similar to 
the rules of section 142(d)(2)(B) shall apply for pur-
poses of this paragraph. 
‘‘(2) RESTRICTION
TO
GRANTS.—Such term 
shall not include any loan. 
‘‘(g) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) APPLICABLE INTEREST.—The term ‘appli-
cable interest’ means, with respect to any loan, so 
much of any interest on such loan which exceeds 1 
percentage point. 
‘‘(2) SPECIAL
RULE
RELATING
TO
ARBI-
TRAGE.—An issue shall not be treated as failing to 
meet the requirements of section 54A(d)(4)(A) by 
reason of any investment of available project pro-
ceeds in 1 or more qualified residential energy effi-
ciency assistance purposes. 
‘‘(3) POPULATION.—The population of any 
State or local government shall be determined as 
provided in section 146(j) for the calendar year 
which includes the date of the enactment of this sec-
tion. 
‘‘(4) REPORTING.— 
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‘‘(A) REPORTS
BY
ISSUERS.—Issuers of 
qualified residential energy efficiency assistance 
bonds shall, not later than 6 months after the 
expenditure period (as defined in section 54A) 
and annually thereafter until the last such bond 
is redeemed, submit reports to the Secretary re-
garding such bonds, including information re-
garding— 
‘‘(i) the number and monetary value 
of loans and grants provided and the pur-
poses for which provided, 
‘‘(ii) the number of dwelling units the 
energy efficiency of which improved as re-
sult of such loans and grants, 
‘‘(iii) the types of property described 
in subsection (e)(1)(A) installed as a result 
of such loans and grants and the projected 
energy savings with respect to such prop-
erty, 
‘‘(iv) the types of property described 
in subsection (e)(1)(B) installed as a result 
of such loans and grants and the projected 
production of such property, and 
‘‘(v) the projected energy savings as a 
result of such loans and grants for im-
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provements 
described 
in 
subsection 
(e)(1)(C). 
‘‘(B) REPORT
TO
CONGRESS.—Not later 
than 12 months after receipt of the first report 
under subparagraph (A) and annually there-
after until the last such report is required to be 
submitted, the Secretary, in consultation with 
the Secretary of Energy and the Administrator 
of the Environmental Protection Agency, shall 
submit a report to Congress regarding the bond 
program under this section, including informa-
tion regarding— 
‘‘(i) the aggregate of each category of 
information described in subparagraph (A) 
(including any independent assessment of 
projected energy savings), and 
‘‘(ii) an estimate of the amount of 
greenhouse gas emissions reduced as a re-
sult of such bond program.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Paragraph (1) of section 54A(d), as added 
by section 104 and amended by section 211, is 
amended by striking ‘‘or’’ at the end of subpara-
graph (A), by inserting ‘‘or’’ at the end of subpara-
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graph (B), and by inserting after subparagraph (B) 
the following new subparagraph: 
‘‘(C) a qualified residential energy effi-
ciency assistance bond,’’. 
(2) Subparagraph (C) of section 54A(d)(2), as 
added by section 104 and amended by section 211, 
is amended by striking ‘‘and’’ at the end of clause 
(i), by striking the period at the end of clause (ii) 
and inserting ‘‘, and’’, and by adding at the end the 
following new clause: 
‘‘(iii) in the case of a qualified resi-
dential energy efficiency assistance bond, a 
purpose specified in section 54D(a)(1).’’. 
(3) The table of sections for subpart I of part 
IV of subchapter A of chapter 1, as amended by this 
Act, is amended by adding at the end the following 
new item: 
‘‘Sec. 54D. Qualified residential energy efficiency assistance bonds.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after the date 
of the enactment of this Act. 
SEC. 213. EXTENSION OF ENERGY EFFICIENT COMMERCIAL 
BUILDINGS DEDUCTION. 
Subsection (h) of section 179D (relating to termi-
nation) is amended by striking ‘‘December 31, 2008’’ and 
inserting ‘‘December 31, 2013’’. 
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SEC. 214. MODIFICATIONS OF ENERGY EFFICIENT APPLI-
ANCE CREDIT FOR APPLIANCES PRODUCED 
AFTER 2007. 
(a) IN GENERAL.—Subsection (b) of section 45M (re-
lating to applicable amount) is amended to read as follows: 
‘‘(b) APPLICABLE AMOUNT.—For purposes of sub-
section (a)— 
‘‘(1) DISHWASHERS.—The applicable amount 
is— 
‘‘(A) $45 in the case of a dishwasher which 
is manufactured in calendar year 2008 or 2009 
and which uses no more than 324 kilowatt 
hours per year and 5.8 gallons per cycle, and 
‘‘(B) $75 in the case of a dishwasher 
which is manufactured in calendar year 2008, 
2009, or 2010 and which uses no more than 
307 kilowatt hours per year and 5.0 gallons per 
cycle (5.5 gallons per cycle for dishwashers de-
signed for greater than 12 place settings). 
‘‘(2) 
CLOTHES
WASHERS.—The 
applicable 
amount is— 
‘‘(A) $75 in the case of a residential top- 
loading clothes washer manufactured in cal-
endar year 2008 which meets or exceeds a 1.72 
modified energy factor and does not exceed a 
8.0 water consumption factor, 
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‘‘(B) $125 in the case of a residential top- 
loading clothes washer manufactured in cal-
endar year 2008 or 2009 which meets or ex-
ceeds a 1.8 modified energy factor and does not 
exceed a 7.5 water consumption factor, 
‘‘(C) $150 in the case of a residential or 
commercial clothes washer manufactured in cal-
endar year 2008, 2009 or 2010 which meets or 
exceeds 2.0 modified energy factor and does not 
exceed a 6.0 water consumption factor, and 
‘‘(D) $250 in the case of a residential or 
commercial clothes washer manufactured in cal-
endar year 2008, 2009, or 2010 which meets or 
exceeds 2.2 modified energy factor and does not 
exceed a 4.5 water consumption factor. 
‘‘(3) REFRIGERATORS.—The applicable amount 
is— 
‘‘(A) $50 in the case of a refrigerator 
which is manufactured in calendar year 2008, 
and consumes at least 20 percent but not more 
than 22.9 percent less kilowatt hours per year 
than the 2001 energy conservation standards, 
‘‘(B) $75 in the case of a refrigerator 
which is manufactured in calendar year 2008 or 
2009, and consumes at least 23 percent but no 
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more than 24.9 percent less kilowatt hours per 
year than the 2001 energy conservation stand-
ards, 
‘‘(C) $100 in the case of a refrigerator 
which is manufactured in calendar year 2008, 
2009 or 2010, and consumes at least 25 per-
cent but not more than 29.9 percent less kilo-
watt hours per year than the 2001 energy con-
servation standards, and 
‘‘(D) $200 in the case of a refrigerator 
manufactured in calendar year 2008, 2009 or 
2010 and which consumes at least 30 percent 
less energy than the 2001 energy conservation 
standards. 
‘‘(4) DEHUMIDIFIERS.—The applicable amount 
is— 
‘‘(A) $15 in the case of a dehumidifier 
manufactured in calendar year 2008 that has a 
capacity less than or equal to 45 pints per day 
and is 7.5 percent more efficient than the appli-
cable Department of Energy energy conserva-
tion standard effective October 2012, and 
‘‘(B) $25 in the case of a dehumidifier 
manufactured in calendar year 2008 that has a 
capacity greater than 45 pints per day and is 
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7.5 percent more efficient than the applicable 
Department of Energy energy conservation 
standard effective October 2012.’’. 
(b) ELIGIBLE PRODUCTION.— 
(1) SIMILAR
TREATMENT
FOR
ALL
APPLI-
ANCES.—Subsection (c) of section 45M (relating to 
eligible production) is amended— 
(A) by striking paragraph (2), 
(B) by striking ‘‘(1) IN GENERAL’’ and all 
that follows through ‘‘the eligible’’ and inserting 
‘‘The eligible’’, and 
(C) by moving the text of such subsection 
in line with the subsection heading and redesig-
nating subparagraphs (A) and (B) as para-
graphs (1) and (2), respectively. 
(2) MODIFICATION
OF
BASE
PERIOD.—Para-
graph (2) of section 45M(c), as amended by para-
graph (1) of this section, is amended by striking ‘‘3- 
calendar year’’ and inserting ‘‘2-calendar year’’. 
(c) TYPES OF ENERGY EFFICIENT APPLIANCES.— 
Subsection (d) of section 45M (defining types of energy 
efficient appliances) is amended to read as follows: 
‘‘(d) TYPES OF ENERGY EFFICIENT APPLIANCE.— 
For purposes of this section, the types of energy efficient 
appliances are— 
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‘‘(1) dishwashers described in subsection (b)(1), 
‘‘(2) clothes washers described in subsection 
(b)(2), 
‘‘(3) 
refrigerators 
described 
in 
subsection 
(b)(3), and 
‘‘(4) dehumidifiers described in subsection 
(b)(4).’’. 
(d) AGGREGATE CREDIT AMOUNT ALLOWED.— 
(1) INCREASE IN LIMIT.—Paragraph (1) of sec-
tion 45M(e) (relating to aggregate credit amount al-
lowed) is amended to read as follows: 
‘‘(1) AGGREGATE CREDIT AMOUNT ALLOWED.— 
The aggregate amount of credit allowed under sub-
section (a) with respect to a taxpayer for any tax-
able year shall not exceed $75,000,000 reduced by 
the amount of the credit allowed under subsection 
(a) to the taxpayer (or any predecessor) for all prior 
taxable years beginning after December 31, 2007.’’. 
(2) EXCEPTION FOR CERTAIN REFRIGERATOR 
AND CLOTHES WASHERS.—Paragraph (2) of section 
45M(e) is amended to read as follows: 
‘‘(2) AMOUNT ALLOWED FOR CERTAIN REFRIG-
ERATORS
AND
CLOTHES
WASHERS.—Refrigerators 
described in subsection (b)(3)(D) and clothes wash-
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ers described in subsection (b)(2)(D) shall not be 
taken into account under paragraph (1).’’. 
(e) QUALIFIED ENERGY EFFICIENT APPLIANCES.— 
(1) IN
GENERAL.—Paragraph (1) of section 
45M(f) (defining qualified energy efficient appliance) 
is amended to read as follows: 
‘‘(1) QUALIFIED
ENERGY
EFFICIENT
APPLI-
ANCE.—The term ‘qualified energy efficient appli-
ance’ means— 
‘‘(A) any dishwasher described in sub-
section (b)(1), 
‘‘(B) any clothes washer described in sub-
section (b)(2), 
‘‘(C) any refrigerator described in sub-
section (b)(3), and 
‘‘(D) any dehumidifier described in sub-
section (b)(4).’’. 
(2) CLOTHES WASHER.—Section 45M(f)(3) (de-
fining clothes washer) is amended by inserting 
‘‘commercial’’ before ‘‘residential’’ the second place 
it appears. 
(3) TOP-LOADING
CLOTHES
WASHER.—Sub-
section (f) of section 45M (relating to definitions) is 
amended by redesignating paragraphs (4), (5), (6), 
and (7) as paragraphs (5), (6), (7), and (8), respec-
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tively, and by inserting after paragraph (3) the fol-
lowing new paragraph: 
‘‘(4) TOP-LOADING
CLOTHES
WASHER.—The 
term ‘‘top-loading clothes washer’’ means a clothes 
washer which has the clothes container compartment 
access located on the top of the machine and which 
operates on a vertical axis.’’. 
(4) DEHUMIDIFIER.—Subsection (f) of section 
45M, as amended by paragraph (3), is amended by 
redesignating paragraphs (6), (7), and (8) as para-
graphs (7), (8) and (9), respectively, and by insert-
ing after paragraph (5) the following new para-
graph: 
‘‘(6) DEHUMIDIFIER.—The term ‘dehumidifier’ 
means a self-contained, electrically operated, and 
mechanically refrigerated encased assembly con-
sisting of— 
‘‘(A) a refrigerated surface that condenses 
moisture from the atmosphere, 
‘‘(B) a refrigerating system, including an 
electric motor, 
‘‘(C) an air-circulating fan, and 
‘‘(D) means for collecting or disposing of 
condensate.’’. 
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(5) REPLACEMENT OF ENERGY FACTOR.—Sec-
tion 45M(f)(7), as amended by paragraph (4), is 
amended to read as follows: 
‘‘(7) MODIFIED
ENERGY
FACTOR.—The term 
‘modified energy factor’ means the modified energy 
factor established by the Department of Energy for 
compliance with the Federal energy conservation 
standard.’’. 
(6) GALLONS
PER
CYCLE; WATER
CONSUMP-
TION FACTOR.—Section 45M(f) (relating to defini-
tions) is amended by adding at the end the fol-
lowing: 
‘‘(10) GALLONS PER CYCLE.—The term ‘gallons 
per cycle’ means, with respect to a dishwasher, the 
amount of water, expressed in gallons, required to 
complete a normal cycle of a dishwasher. 
‘‘(11) WATER
CONSUMPTION
FACTOR.—The 
term ‘water consumption factor’ means, with respect 
to a clothes washer, the quotient of the total weight-
ed per-cycle water consumption divided by the cubic 
foot (or liter) capacity of the clothes washer.’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to appliances produced after De-
cember 31, 2007. 
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SEC. 215. FIVE-YEAR APPLICABLE RECOVERY PERIOD FOR 
DEPRECIATION OF QUALIFIED ENERGY MAN-
AGEMENT DEVICES. 
(a) IN GENERAL.—Section 168(e)(3)(B) (relating to 
5-year property) is amended by striking ‘‘and’’ at the end 
of clause (v), by striking the period at the end of clause 
(vi) and inserting ‘‘, and’’, and by inserting after clause 
(vi) the following new clause: 
‘‘(vii) any qualified energy manage-
ment device.’’. 
(b) DEFINITION OF QUALIFIED ENERGY MANAGE-
MENT DEVICE.—Section 168(i) (relating to definitions 
and special rules) is amended by inserting at the end the 
following new paragraph: 
‘‘(18) QUALIFIED
ENERGY
MANAGEMENT
DE-
VICE.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
energy management device’ means any energy 
management device which is installed on real 
property of a customer of the taxpayer and is 
placed in service by a taxpayer who— 
‘‘(i) is a supplier of electric energy or 
a provider of electric energy services, and 
‘‘(ii) provides all commercial and resi-
dential customers of such supplier or pro-
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vider with net metering upon the request 
of such customer. 
‘‘(B) ENERGY
MANAGEMENT
DEVICE.— 
For purposes of subparagraph (A), the term 
‘energy management device’ means any time- 
based meter and related communication equip-
ment which is capable of being used by the tax-
payer as part of a system that— 
‘‘(i) measures and records electricity 
usage data on a time-differentiated basis 
in at least 24 separate time segments per 
day, 
‘‘(ii) provides for the exchange of in-
formation between supplier or provider and 
the customer’s energy management device 
in support of time-based rates or other 
forms of demand response, and 
‘‘(iii) provides data to such supplier or 
provider so that the supplier or provider 
can provide energy usage information to 
customers electronically. 
‘‘(C) NET
METERING.—For purposes of 
subparagraph (A), the term ‘net metering’ 
means allowing customers a credit for providing 
electricity to the supplier or provider.’’. 
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(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. 
TITLE III—REVENUE 
PROVISIONS 
Subtitle A—Denial of Oil and Gas 
Tax Benefits 
SEC. 301. DENIAL OF DEDUCTION FOR INCOME ATTRIB-
UTABLE TO DOMESTIC PRODUCTION OF OIL, 
NATURAL 
GAS, 
OR 
PRIMARY 
PRODUCTS 
THEREOF. 
(a) IN GENERAL.—Subparagraph (B) of section 
199(c)(4) (relating to exceptions) is amended by striking 
‘‘or’’ at the end of clause (ii), by striking the period at 
the end of clause (iii) and inserting ‘‘, or’’, and by insert-
ing after clause (iii) the following new clause: 
‘‘(iv) the sale, exchange, or other dis-
position of oil, natural gas, or any primary 
product thereof.’’. 
(b) PRIMARY PRODUCT.—Section 199(c)(4)(B) is 
amended by adding at the end the following flush sen-
tence: 
‘‘For purposes of clause (iv), the term ‘primary 
product’ has the same meaning as when used in 
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section 927(a)(2)(C), as in effect before its re-
peal.’’. 
(c) CONFORMING AMENDMENTS.—Section 199(c)(4) 
is amended— 
(1) in subparagraph (A)(i)(III) by striking 
‘‘electricity, natural gas,’’ and inserting ‘‘electricity’’, 
and 
(2) in subparagraph (B)(ii) by striking ‘‘elec-
tricity, natural gas,’’ and inserting ‘‘electricity’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 302. 7-YEAR AMORTIZATION OF GEOLOGICAL AND 
GEOPHYSICAL EXPENDITURES FOR CERTAIN 
MAJOR INTEGRATED OIL COMPANIES. 
(a) IN GENERAL.—Subparagraph (A) of section 
167(h)(5) (relating to special rule for major integrated oil 
companies) is amended by striking ‘‘5-year’’ and inserting 
‘‘7-year’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts paid or incurred after 
the date of the enactment of this Act. 
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SEC. 303. CLARIFICATION OF DETERMINATION OF FOREIGN 
OIL AND GAS EXTRACTION INCOME. 
(a) IN GENERAL.—Paragraph (1) of section 907(c) 
is amended by redesignating subparagraph (B) as sub-
paragraph (C), by striking ‘‘or’’ at the end of subpara-
graph (A), and by inserting after subparagraph (A) the 
following new subparagraph: 
‘‘(B) so much of any transportation of 
such minerals as occurs before the fair market 
value event, or’’. 
(b) FAIR MARKET VALUE EVENT.—Subsection (c) of 
section 907 is amended by adding at the end the following 
new paragraph: 
‘‘(6) FAIR MARKET VALUE EVENT.—For pur-
poses of this section, the term ‘fair market value 
event’ means, with respect to any mineral, the first 
point in time at which such mineral— 
‘‘(A) has a fair market value which can be 
determined on the basis of a transfer, which is 
an arm’s length transaction, of such mineral 
from the taxpayer to a person who is not re-
lated (within the meaning of section 482) to 
such taxpayer, or 
‘‘(B) is at a location at which the fair mar-
ket value is readily ascertainable by reason of 
transactions among unrelated third parties with 
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respect to the same mineral (taking into ac-
count source, location, quality, and chemical 
composition).’’. 
(c) SPECIAL
RULE
FOR
CERTAIN
PETROLEUM 
TAXES.—Subsection (c) of section 907, as amended by 
subsection (b), is amended to by adding at the end the 
following new paragraph: 
‘‘(7) OIL AND GAS TAXES.—In the case of any 
tax imposed by a foreign country which is limited in 
its application to taxpayers engaged in oil or gas ac-
tivities— 
‘‘(A) the term ‘oil and gas extraction taxes’ 
shall include such tax, 
‘‘(B) the term ‘foreign oil and gas extrac-
tion income’ shall include any taxable income 
which is taken into account in determining such 
tax (or is directly attributable to the activity to 
which such tax relates), and 
‘‘(C) the term ‘foreign oil related income’ 
shall not include any taxable income which is 
treated as foreign oil and gas extraction income 
under subparagraph (B).’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Subparagraph (C) of section 907(c)(1), as 
redesignated by this section, is amended by inserting 
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‘‘or used by the taxpayer in the activity described in 
subparagraph (B)’’ before the period at the end. 
(2) Subparagraph (B) of section 907(c)(2) is 
amended to read as follows: 
‘‘(B) so much of the transportation of such 
minerals or primary products as is not taken into 
account under paragraph (1)(B),’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Subtitle B—Clarification of 
Eligibility for Certain Fuel Credits 
SEC. 311. CLARIFICATION OF ELIGIBILITY FOR RENEW-
ABLE DIESEL CREDIT. 
(a) COPRODUCTION
WITH
PETROLEUM
FEED-
STOCK.— 
(1) IN
GENERAL.—Paragraph (3) of section 
40A(f) (defining renewable diesel) is amended by 
adding at the end the following flush sentence: 
‘‘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 sec-
tion 45K(c)(3).’’. 
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(2) CONFORMING AMENDMENT.—Paragraph (3) 
of section 40A(f) is amended by striking ‘‘(as de-
fined in section 45K(c)(3))’’. 
(b) CLARIFICATION
OF ELIGIBILITY
FOR ALTER-
NATIVE FUEL CREDIT.— 
(1) IN GENERAL.—Subparagraph (F) of section 
6426(d)(2) is amended by striking ‘‘hydrocarbons’’ 
and inserting ‘‘fuel’’. 
(2) CONFORMING AMENDMENT.—Section 6426 
is amended by adding at the end the following new 
subsection: 
‘‘(h) DENIAL OF DOUBLE BENEFIT.—No credit shall 
be determined under subsection (d) or (e) with respect to 
any fuel with respect to which credit may be determined 
under subsection (b) or (c) or under section 40 or 40A.’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to fuel produced, and sold or used, after 
June 30, 2007. 
(2) CLARIFICATION
OF
ELIGIBILITY
FOR
AL-
TERNATIVE FUEL CREDIT.—The amendment made 
by subsection (b) shall take effect as if included in 
section 11113 of the Safe, Accountable, Flexible, Ef-
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ficient Transportation Equity Act: A Legacy for 
Users. 
SEC. 312. CLARIFICATION THAT CREDITS FOR FUEL ARE 
DESIGNED TO PROVIDE AN INCENTIVE FOR 
UNITED STATES PRODUCTION. 
(a) BIODIESEL FUELS CREDIT.—Paragraph (5) of 
section 40A(d), as added by subsection (c), is amended 
to read as follows: 
‘‘(5) LIMITATION TO BIODIESEL WITH CONNEC-
TION TO THE UNITED STATES.—No credit shall be 
determined under this section with respect to any 
biodiesel unless— 
‘‘(A) such biodiesel is produced in the 
United States for use as a fuel in the United 
States, and 
‘‘(B) the taxpayer obtains a certification 
(in such form and manner as prescribed by the 
Secretary) from the producer of the biodiesel 
which identifies the product produced and the 
location of such production. 
For purposes of this paragraph, the term ‘United 
States’ includes any possession of the United 
States.’’. 
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(b) EXCISE TAX CREDIT.—Paragraph (2) of section 
6426(h), as added by subsection (c), is amended to read 
as follows: 
‘‘(2) BIODIESEL AND ALTERNATIVE FUELS.— 
No credit shall be determined under this section 
with respect to any biodiesel or alternative fuel un-
less— 
‘‘(A) such biodiesel or alternative fuel is 
produced in the United States for use as a fuel 
in the United States, and 
‘‘(B) the taxpayer obtains a certification 
(in such form and manner as prescribed by the 
Secretary) from the producer of such biodiesel 
or alternative fuel which identifies the product 
produced and the location of such production.’’. 
(c) PROVISIONS CLARIFYING TREATMENT OF FUELS 
WITH NO NEXUS TO THE UNITED STATES.— 
(1) ALCOHOL FUELS CREDIT.—Subsection (d) 
of section 40 is amended by adding at the end the 
following new paragraph: 
‘‘(6) LIMITATION TO ALCOHOL WITH CONNEC-
TION TO THE UNITED STATES.—No credit shall be 
determined under this section with respect to any al-
cohol which is produced outside the United States 
for use as a fuel outside the United States. For pur-
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poses of this paragraph, the term ‘United States’ in-
cludes any possession of the United States’’. 
(2) BIODIESEL FUELS CREDIT.—Subsection (d) 
of section 40A is amended by adding at the end the 
following new paragraph: 
‘‘(5) LIMITATION TO BIODIESEL WITH CONNEC-
TION TO THE UNITED STATES.—No credit shall be 
determined under this section with respect to any 
biodiesel 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’’. 
(3) EXCISE TAX CREDIT.— 
(A) IN GENERAL.—Section 6426 is amend-
ed by adding at the end the following new sub-
section: 
‘‘(h) 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 
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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.’’. 
(B) 
CONFORMING
AMENDMENT.—Sub-
section (e) of section 6427 is amended by redes-
ignating 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 pay-
able 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(h).’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to fuel produced, and sold or used, after 
the date of the enactment of this Act. 
(2) PROVISIONS
CLARIFYING
TREATMENT
OF 
FUELS WITH NO NEXUS TO THE UNITED STATES.— 
(A) IN
GENERAL.—Except as otherwise 
provided in this paragraph, the amendments 
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made by subsection (c) shall take effect as if in-
cluded in section 301 of the American Jobs 
Creation Act of 2004. 
(B) ALTERNATIVE
FUEL
CREDITS.—So 
much of the amendments made by subsection 
(c) as relate to the alternative fuel credit or the 
alternative fuel mixture credit shall take effect 
as if included in section 11113 of the Safe, Ac-
countable, Flexible, Efficient Transportation 
Equity Act: A Legacy for Users. 
(C) RENEWABLE DIESEL.—So much of the 
amendments made by subsection (c) as relate to 
renewable diesel shall take effect as if included 
in section 1346 of the Energy Policy Act of 
2005. 
TITLE IV—OTHER PROVISIONS 
Subtitle A—Studies 
SEC. 401. 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 Inter-
nal Revenue Code of 1986 to identify the types of and 
specific tax provisions that have the largest effects on car-
bon and other greenhouse gas emissions and to estimate 
the magnitude of those effects. 
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(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 2008 and 2009. 
SEC. 402. COMPREHENSIVE STUDY OF BIOFUELS. 
(a) STUDY.—The Secretary of the Treasury, in con-
sultation with the Secretary of Agriculture, the Secretary 
of Energy, and the Administrator of the Environmental 
Protection Agency, shall enter into an agreement with the 
National Academy of Sciences to produce an analysis of 
current scientific findings to determine— 
(1) current biofuels production, as well as pro-
jections for future production, 
(2) the maximum amount of biofuels production 
capable on United States farmland, 
(3) the domestic effects of a dramatic increase 
in biofuels production, for example— 
(A) the price of fuel, 
(B) the price of land in rural and subur-
ban communities, 
(C) crop acreage and other land use, 
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(D) the environment, due to changes in 
crop acreage, fertilizer use, runoff, water use, 
emissions from vehicles utilizing biofuels, and 
other factors, 
(E) the price of feed, 
(F) the selling price of grain crops, 
(G) exports and imports of grains, 
(H) taxpayers, through cost or savings to 
commodity crop payments, and 
(I) the expansion of refinery capacity, 
(4) the ability to convert corn ethanol plants for 
other uses, such as cellulosic ethanol or biodiesel, 
(5) a comparative analysis of corn ethanol 
versus other biofuels and renewable energy sources, 
considering cost, energy output, and ease of imple-
mentation, and 
(6) the need for additional scientific inquiry, 
and specific areas of interest for future research. 
(b) REPORT.—The National Academy of Sciences 
shall submit an initial report of the findings of the report 
required under subsection (a) to the Congress not later 
than 3 months after the date of the enactment of this Act, 
and a final report not later than 6 months after such date 
of enactment. 
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100 
Subtitle B—Application of Certain 
Labor Standards on Projects Fi-
nanced Under Tax Credit Bonds 
SEC. 411. APPLICATION OF CERTAIN LABOR STANDARDS 
ON PROJECTS FINANCED UNDER TAX CREDIT 
BONDS. 
Subchapter IV of chapter 31 of title 40, United 
States Code, shall apply to projects financed with the pro-
ceeds of any tax credit bond (as defined in section 54A 
of the Internal Revenue Code of 1986). 
Æ 
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