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(1) COMMERCIAL TECHNOLOGY.— 
(A) IN GENERAL.—The term ‘‘commercial 
technology’’ means a technology in general use in 
the commercial marketplace. 
(B) INCLUSIONS.—The term ‘‘commercial 
technology’’ does not include a technology solely 
by use of the technology in a demonstration 
project funded by the Department. 
(2) COST.—The term ‘‘cost’’ has the meaning 
given the term ‘‘cost of a loan guarantee’’ within the 
meaning of section 502(5)(C) of the Federal Credit 
Reform Act of 1990 (2 U.S.C. 661a(5)(C)). 
(3) ELIGIBLE
PROJECT.—The term ‘‘eligible 
project’’ means a project described in section 1403. 
(4) GUARANTEE.— 
(A) IN
GENERAL.—The term ‘‘guarantee’’ 
has the meaning given the term ‘‘loan guar-
antee’’ in section 502 of the Federal Credit Re-
form Act of 1990 (2 U.S.C. 661a). 
(B) INCLUSION.—The term ‘‘guarantee’’ in-
cludes a loan guarantee commitment (as defined 
in section 502 of the Federal Credit Reform Act 
of 1990 (2 U.S.C. 661a)).
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(5) OBLIGATION.—The term ‘‘obligation’’ means 
the loan or other debt obligation that is guaranteed 
under this section. 
SEC. 1402. TERMS AND CONDITIONS. 
(a) IN GENERAL.—Except for division C of Public 
Law 108–324, the Secretary shall make guarantees under 
this or any other Act for projects on such terms and condi-
tions as the Secretary determines, after consultation with 
the Secretary of the Treasury, only in accordance with this 
section. 
(b) SPECIFIC APPROPRIATION OR CONTRIBUTION.—No 
guarantee shall be made unless— 
(1) an appropriation for the cost has been made; 
or 
(2) the Secretary has received from the borrower 
a payment in full for the cost of the obligation and 
deposited the payment into the Treasury. 
(c) AMOUNT.—Unless otherwise provided by law, a 
guarantee by the Secretary shall not exceed an amount 
equal to 80 percent of the project cost of the facility that 
is the subject of the guarantee, as estimated at the time at 
which the guarantee is issued. 
(d) REPAYMENT.— 
(1) IN GENERAL.—No guarantee shall be made 
unless the Secretary determines that there is reason-
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able prospect of repayment of the principal and inter-
est on the obligation by the borrower. 
(2) AMOUNT.—No guarantee shall be made un-
less the Secretary determines that the amount of the 
obligation (when combined with amounts available to 
the borrower from other sources) will be sufficient to 
carry out the project. 
(3) SUBORDINATION.—The obligation shall be 
subject to the condition that the obligation is not sub-
ordinate to other financing. 
(e) INTEREST RATE.—An obligation shall bear interest 
at a rate that does not exceed a level that the Secretary 
determines appropriate, taking into account the prevailing 
rate of interest in the private sector for similar loans and 
risks. 
(f) TERM.—The term of an obligation shall require full 
repayment over a period not to exceed the lesser of— 
(1) 30 years; or 
(2) 90 percent of the projected useful life of the 
physical asset to be financed by the obligation (as de-
termined by the Secretary). 
(g) DEFAULTS.— 
(1) PAYMENT BY SECRETARY.— 
(A) IN GENERAL.—If a borrower defaults on 
the obligation (as defined in regulations promul-
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gated by the Secretary and specified in the guar-
antee contract), the holder of the guarantee shall 
have the right to demand payment of the unpaid 
amount from the Secretary. 
(B) PAYMENT REQUIRED.—Within such pe-
riod as may be specified in the guarantee or re-
lated agreements, the Secretary shall pay to the 
holder of the guarantee the unpaid interest on, 
and unpaid principal of the obligation as to 
which the borrower has defaulted, unless the Sec-
retary finds that there was no default by the bor-
rower in the payment of interest or principal or 
that the default has been remedied. 
(C) FORBEARANCE.—Nothing in this sub-
section precludes any forbearance by the holder 
of the obligation for the benefit of the borrower 
which may be agreed upon by the parties to the 
obligation and approved by the Secretary. 
(2) SUBROGATION.— 
(A) IN GENERAL.—If the Secretary makes a 
payment under paragraph (1), the Secretary 
shall be subrogated to the rights of the recipient 
of the payment as specified in the guarantee or 
related agreements including, where appropriate,
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the authority (notwithstanding any other provi-
sion of law) to— 
(i) complete, maintain, operate, lease, 
or otherwise dispose of any property ac-
quired pursuant to such guarantee or re-
lated agreements; or 
(ii) permit the borrower, pursuant to 
an agreement with the Secretary, to con-
tinue to pursue the purposes of the project 
if the Secretary determines this to be in the 
public interest. 
(B) SUPERIORITY OF RIGHTS.—The rights 
of the Secretary, with respect to any property ac-
quired pursuant to a guarantee or related agree-
ments, shall be superior to the rights of any other 
person with respect to the property. 
(C) TERMS AND CONDITIONS.—A guarantee 
agreement shall include such detailed terms and 
conditions as the Secretary determines appro-
priate to— 
(i) protect the interests of the United 
States in the case of default; and 
(ii) have available all the patents and 
technology necessary for any person selected,
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including the Secretary, to complete and op-
erate the project. 
(3) PAYMENT OF PRINCIPAL AND INTEREST BY 
SECRETARY.—With respect to any obligation guaran-
teed under this section, the Secretary may enter into 
a contract to pay, and pay, holders of the obligation, 
for and on behalf of the borrower, from funds appro-
priated for that purpose, the principal and interest 
payments which become due and payable on the un-
paid balance of the obligation if the Secretary finds 
that— 
(A)(i) the borrower is unable to meet the 
payments and is not in default; 
(ii) it is in the public interest to permit the 
borrower to continue to pursue the purposes of 
the project; and 
(iii) the probable net benefit to the Federal 
Government in paying the principal and interest 
will be greater than that which would result in 
the event of a default; 
(B) the amount of the payment that the 
Secretary is authorized to pay shall be no great-
er than the amount of principal and interest 
that the borrower is obligated to pay under the 
agreement being guaranteed; and
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(C) the borrower agrees to reimburse the 
Secretary for the payment (including interest) 
on terms and conditions that are satisfactory to 
the Secretary. 
(4) ACTION BY ATTORNEY GENERAL.— 
(A) NOTIFICATION.—If the borrower de-
faults on an obligation, the Secretary shall notify 
the Attorney General of the default. 
(B) RECOVERY.—On notification, the Attor-
ney General shall take such action as is appro-
priate to recover the unpaid principal and inter-
est due from— 
(i) such assets of the defaulting bor-
rower as are associated with the obligation; 
or 
(ii) any other security pledged to se-
cure the obligation. 
(h) FEES.— 
(1) IN
GENERAL.—The Secretary shall charge 
and collect fees for guarantees in amounts the Sec-
retary determines are sufficient to cover applicable 
administrative expenses. 
(2) AVAILABILITY.—Fees collected under this 
subsection shall—
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(A) be deposited by the Secretary into the 
Treasury; and 
(B) remain available until expended, subject 
to such other conditions as are contained in an-
nual appropriations Acts. 
(i) RECORDS; AUDITS.— 
(1) IN GENERAL.—A recipient of a guarantee 
shall keep such records and other pertinent documents 
as the Secretary shall prescribe by regulation, includ-
ing such records as the Secretary may require to fa-
cilitate an effective audit. 
(2) ACCESS.—The Secretary and the Comptroller 
General of the United States, or their duly authorized 
representatives, shall have access, for the purpose of 
audit, to the records and other pertinent documents. 
(j) FULL FAITH AND CREDIT.—The full faith and 
credit of the United States is pledged to the payment of 
all guarantees issued under this section with respect to 
principal and interest. 
SEC. 1403. ELIGIBLE PROJECTS. 
(a) IN GENERAL.—The Secretary may make guaran-
tees under this section only for projects that— 
(1) avoid, reduce, or sequester air pollutants or 
anthropogenic emissions of greenhouse gases; and
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(2) employ new or significantly improved tech-
nologies as compared to commercial technologies in 
service in the United States at the time the guarantee 
is issued. 
(b) CATEGORIES.—Projects from the following cat-
egories shall be eligible for a guarantee under this section: 
(1) Renewable energy systems. 
(2) Advanced fossil energy technology (including 
coal gasification meeting the criteria in subsection 
(d)). 
(3) Hydrogen fuel cell technology for residential, 
industrial or transportation applications. 
(4) Advanced nuclear energy facilities. 
(5) Carbon capture and sequestration practices 
and technologies, including agricultural and forestry 
practices that store and sequester carbon. 
(6) Efficient electrical generation, transmission, 
and distribution technologies. 
(7) Efficient end-use energy technologies. 
(8) Notwithstanding subsection (a)(2), produc-
tion facilities for fuel efficient vehicles. 
(c) GASIFICATION PROJECTS.—The Secretary may 
make guarantees for the following gasification projects: 
(1) INTEGRATED GASIFICATION COMBINED CYCLE 
PROJECTS.—Integrated gasification combined cycle
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plants meeting the emission levels under subsection 
(d), including— 
(A) projects for the generation of elec-
tricity— 
(i) for which, during the term of the 
guarantee— 
(I) coal, biomass, petroleum coke, 
or a combination of coal, biomass, and 
petroleum coke will account for at least 
65 percent of annual heat input; and 
(II) electricity will account for at 
least 65 percent of net useful annual 
energy output; 
(ii) that have a design that is deter-
mined by the Secretary to be capable of ac-
commodating the equipment likely to be 
necessary to capture the carbon dioxide that 
would otherwise be emitted in flue gas from 
the plant; 
(iii) that have an assured revenue 
stream that covers project capital and oper-
ating costs (including servicing all debt ob-
ligations covered by the guarantee) that is 
approved by the Secretary and the relevant 
State public utility commission; and
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(iv) on which construction commences 
not later than the date that is 3 years after 
the date of the issuance of the guarantee; 
(B) a project to produce energy from coal 
(of not more than 13,000 Btu/lb and mined in 
the western United States) using appropriate ad-
vanced integrated gasification combined cycle 
technology that minimizes and offers the poten-
tial to sequester carbon dioxide emissions and 
that— 
(i) may include repowering of existing 
facilities; 
(ii) may be built in stages; 
(iii) shall have a combined output of 
at least 100 megawatts; 
(iv) shall be located in a western State 
at an altitude greater than 4,000 feet; and 
(v) shall demonstrate the ability to use 
coal with an energy content of not more 
than 9,000 Btu/lb; 
(C) a project located in a taconite-pro-
ducing region of the United States that is enti-
tled under the law of the State in which the 
plant is located to enter into a long-term con-
tract approved by a State public utility commis-
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HR 6 PAP 
sion to sell at least 450 megawatts of output to 
a utility; and 
(D) facilities that— 
(i) generate 1 or more hydrogen-rich 
and carbon monoxide-rich product streams 
from the gasification of coal or coal waste; 
and 
(ii) use those streams to facilitate the 
production of ultra clean premium fuels 
through the Fischer-Tropsch process. 
(2) INDUSTRIAL GASIFICATION PROJECTS.—Fa-
cilities that gasify coal, biomass, or petroleum coke in 
any combination to produce synthesis gas for use as 
a fuel or feedstock and for which electricity accounts 
for less than 65 percent of the useful energy output of 
the facility. 
(3) 
PETROLEUM
COKE
GASIFICATION 
PROJECTS.—The Secretary is encouraged to make 
loan guarantees under this title available for petro-
leum coke gasification projects. 
(d) EMISSION LEVELS.—In addition to any other ap-
plicable Federal or State emission limitation requirements, 
a project shall attain at least— 
(1) total sulfur dioxide emissions in flue gas 
from the project that do not exceed 0.05 lb/mmBTU;
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(2) a 90-percent removal rate (including any 
fuel pretreatment) of mercury from the coal-derived 
gas, and any other fuel, combusted by the project; 
(3) total nitrogen oxide emissions in the flue gas 
from the project that do not exceed 0.08 lb/mmBTU; 
and 
(4) total particulate emissions in the flue gas 
from the project that do not exceed 0.01 lb/mmBTU. 
(e) QUALIFICATION OF FACILITIES RECEIVING TAX 
CREDITS.—A project that receives tax credits for clean coal 
technology shall not be disqualified from receiving a guar-
antee under this title. 
SEC. 1404. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated such sums as 
are necessary to provide the cost of guarantees under this 
title. 
TITLE XV—ENERGY POLICY TAX 
INCENTIVES 
SEC. 1500. SHORT TITLE; AMENDMENT OF 1986 CODE. 
(a) SHORT TITLE.—This title may be cited as the 
‘‘Energy Policy Tax Incentives Act of 2005’’. 
(b) AMENDMENT OF 1986 CODE.—Except as otherwise 
expressly provided, whenever in this title an amendment 
or repeal is expressed in terms of an amendment to, or re-
peal of, a section or other provision, the reference shall be
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considered to be made to a section or other provision of the 
Internal Revenue Code of 1986. 
Subtitle A—Electricity 
Infrastructure 
SEC. 1501. EXTENSION AND MODIFICATION OF RENEWABLE 
ELECTRICITY PRODUCTION CREDIT. 
(a) 3-YEAR EXTENSION FOR CERTAIN FACILITIES.— 
Section 45(d) (relating to qualified facilities) is amended— 
(1) by striking ‘‘January 1, 2006’’ each place it 
appears in paragraphs (1), (2), (3), (5), (6), and (7) 
and inserting ‘‘January 1, 2009’’, and 
(2) by striking ‘‘January 1, 2006’’ in paragraph 
(4) and inserting ‘‘January 1, 2009 (January 1, 
2006, in the case of a facility using solar energy)’’. 
(b) 
INCREASE
IN
CREDIT
PERIOD.—Section 
45(b)(4)(B) (relating to credit period) is amended— 
(1) by inserting ‘‘or clause (iii)’’ after ‘‘clause 
(ii)’’ in clause (i), and 
(2) by adding at the end the following: 
‘‘(iii) TERMINATION.—Clause (i) shall 
not apply to any facility placed in service 
after the date of the enactment of this 
clause.’’. 
(c) EXPANSION OF QUALIFIED RESOURCES TO IN-
CLUDE FUEL CELLS.—
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(1) IN
GENERAL.—Section 45(c)(1) (defining 
qualified energy resources) 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) fuel cells.’’. 
(2) FUEL CELL FACILITY.—Section 45(d) (relat-
ing to qualified facilities) is amended by adding at 
the end the following new paragraph: 
‘‘(9) FUEL CELL FACILITY.—In the case of a fa-
cility using an integrated system comprised of a fuel 
cell stack assembly and associated balance of plant 
components which converts a fuel into electricity 
using electrochemical means, the term ‘qualified facil-
ity’ means any facility owned by the taxpayer 
which— 
‘‘(A) is originally placed in service after 
December 31, 2005, and before January 1, 2009, 
‘‘(B) has a nameplate capacity rating of at 
least 0.5 megawatt of electricity, and 
‘‘(C) has an electricity-only generation effi-
ciency greater than 30 percent.’’. 
(3) CONFORMING AMENDMENTS RELATING TO CO-
ORDINATION WITH ENERGY CREDIT.—
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HR 6 PAP 
(A) IN GENERAL.—Section 45(e) (relating 
to definitions and special rules) is amended by 
adding at the end the following new paragraph: 
‘‘(10) COORDINATION WITH ENERGY CREDIT.— 
The term ‘qualified facility’ shall not include any 
property described in section 48(a)(3) the basis of 
which is taken into account by the taxpayer for pur-
poses of determining the energy credit under section 
48.’’. 
(B) 
CONFORMING
AMENDMENT.—Section 
45(d)(4) is amended by striking the last sentence. 
(d) EXPANSION OF QUALIFIED RESOURCES TO CER-
TAIN HYDROPOWER.— 
(1) IN
GENERAL.—Section 45(c)(1) (defining 
qualified energy resources), as amended by this Act, 
is amended by striking ‘‘and’’ at the end of subpara-
graph (G), by striking the period at the end of sub-
paragraph (H) and inserting ‘‘, and’’, and by adding 
at the end the following new subparagraph: 
‘‘(I) qualified hydropower production.’’. 
(2) CREDIT RATE.—Section 45(b)(4)(A) (relating 
to credit rate) is amended by striking ‘‘or (7)’’ and 
inserting ‘‘(7), or (10)’’. 
(3) DEFINITION OF RESOURCES.—Section 45(c) 
(relating to qualified energy resources and refined
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coal) is amended by adding at the end the following 
new paragraph: 
‘‘(8) QUALIFIED HYDROPOWER PRODUCTION.— 
‘‘(A) IN GENERAL.—The term ‘qualified hy-
dropower production’ means— 
‘‘(i) in the case of any hydroelectric 
dam which was placed in service on or be-
fore the date of the enactment of this para-
graph, the incremental hydropower produc-
tion for the taxable year, and 
‘‘(ii) in the case of any nonhydro-
electric dam described in subparagraph (C), 
the hydropower production from the facility 
for the taxable year. 
‘‘(B) DETERMINATION OF INCREMENTAL HY-
DROPOWER PRODUCTION.— 
‘‘(i) IN
GENERAL.—For purposes of 
subparagraph (A), incremental hydropower 
production for any taxable year shall be 
equal to the percentage of average annual 
hydropower production at the facility at-
tributable to the efficiency improvements or 
additions of capacity placed in service after 
the date of the enactment of this paragraph, 
determined by using the same water flow
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information used to determine an historic 
average annual hydropower production 
baseline for such facility. Such percentage 
and baseline shall be certified by the Fed-
eral Energy Regulatory Commission. 
‘‘(ii) 
OPERATIONAL
CHANGES
DIS-
REGARDED.—For purposes of clause (i), the 
determination of incremental hydropower 
production shall not be based on any oper-
ational changes at such facility not directly 
associated with the efficiency improvements 
or additions of capacity. 
‘‘(C) NONHYDROELECTRIC DAM.—For pur-
poses of subparagraph (A), a facility is described 
in this subparagraph if— 
‘‘(i) the facility is licensed by the Fed-
eral Energy Regulatory Commission and 
meets all other applicable environmental, li-
censing, and regulatory requirements, 
‘‘(ii) the facility was placed in service 
before the date of the enactment of this 
paragraph and did not produce hydro-
electric power on the date of the enactment 
of this paragraph, and
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‘‘(iii) turbines or other generating de-
vices are to be added to the facility after 
such date to produce hydroelectric power, 
but only if there is not any enlargement of 
the diversion structure, or construction or 
enlargement of a bypass channel, or the im-
poundment or any withholding of any addi-
tional water from the natural stream chan-
nel. 
(4) FACILITIES.—Section 45(d) (relating to 
qualified facilities), as amended by this Act, is 
amended by adding at the end the following new 
paragraph: 
‘‘(10) QUALIFIED
HYDROPOWER
FACILITY.—In 
the case of a facility producing qualified hydroelectric 
production described in subsection (c)(8), the term 
‘qualified facility’ means— 
‘‘(A) in the case of any facility producing 
incremental hydropower production, such facility 
but only to the extent of its incremental hydro-
power production attributable to efficiency im-
provements or additions to capacity described in 
subsection (c)(8)(B) placed in service after the 
date of the enactment of this paragraph and be-
fore January 1, 2009, and
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‘‘(B) any other facility placed in service 
after the date of the enactment of this paragraph 
and before January 1, 2009. 
‘‘(C) CREDIT
PERIOD.—In the case of a 
qualified facility described in subparagraph (A), 
the 10-year period referred to in subsection (a) 
shall be treated as beginning on the date the effi-
ciency improvements or additions to capacity 
are placed in service.’’. 
(e) TECHNICAL AMENDMENT RELATED
TO TRASH 
COMBUSTION FACILITIES.—Section 45(d)(7) (relating to 
trash combustion facilities) is amended by adding at the 
end the following: ‘‘Such term shall include a new unit 
placed in service in connection with a facility placed in 
service on or before the date of the enactment of this para-
graph, but only to the extent of the increased amount of 
electricity produced at the facility by reason of such new 
unit.’’. 
(f) ADDITIONAL TECHNICAL AMENDMENTS RELATED 
TO SECTION 710 OF THE AMERICAN JOBS CREATION ACT 
OF 2004.— 
(1) Clause (ii) of section 45(b)(4)(B) is amended 
by striking ‘‘the date of the enactment of this Act’’ 
and inserting ‘‘January 1, 2005,’’.
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HR 6 PAP 
(2) Clause (ii) of section 45(c)(3)(A) is amended 
by inserting ‘‘or any nonhazardous lignin waste ma-
terial’’ after ‘‘cellulosic waste material’’. 
(3) Subsection (e) of section 45 is amended by 
striking paragraph (6). 
(4)(A) Paragraph (9) of section 45(e) is amended 
to read as follows: 
‘‘(9) COORDINATION
WITH
CREDIT
FOR
PRO-
DUCING FUEL FROM A NONCONVENTIONAL SOURCE.— 
‘‘(A) IN GENERAL.—The term ‘qualified fa-
cility’ shall not include any facility which pro-
duces electricity from gas derived from the bio-
degradation of municipal solid waste if such bio-
degradation occurred in a facility (within the 
meaning of section 29) the production from 
which is allowed as a credit under section 29 for 
the taxable year or any prior taxable year. 
‘‘(B) REFINED COAL FACILITIES.—The term 
‘refined coal production facility’ shall not in-
clude any facility the production from which is 
allowed as a credit under section 29 for the tax-
able year or any prior taxable year.’’. 
(B) Subparagraph (C) of section 45(e)(8) is 
amended by striking ‘‘and (9)’’.
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(5) Subclause (I) of section 168(e)(3)(B)(vi) is 
amended to read as follows: 
‘‘(I) is described in subparagraph 
(A) of section 48(a)(3) (or would be so 
described if ‘solar and wind’ were sub-
stituted for ‘solar’ in clause (i) thereof 
and the last sentence of such section 
did not apply to such subparagraph),’’. 
(6) Paragraph (4) of section 710(g) of the Amer-
ican Jobs Creation Act of 2004 is amended by strik-
ing ‘‘January 1, 2004’’ and inserting ‘‘January 1, 
2005’’. 
(g) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall 
take effect of the date of the enactment of this Act. 
(2) TECHNICAL AMENDMENTS.—The amendments 
made by subsections (e) and (f) shall take effect as if 
included in the amendments made by section 710 of 
the American Jobs Creation Act of 2004. 
SEC. 1502. APPLICATION OF SECTION 45 CREDIT TO AGRI-
CULTURAL COOPERATIVES. 
(a) IN GENERAL.—Section 45(e) (relating to defini-
tions and special rules), as amended by this Act, is amended 
by adding at the end the following:
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‘‘(11) ALLOCATION OF CREDIT TO PATRONS OF 
AGRICULTURAL COOPERATIVE.— 
‘‘(A) ELECTION TO ALLOCATE.— 
‘‘(i) IN GENERAL.—In the case of an 
eligible cooperative organization, any por-
tion of the credit determined under sub-
section (a) for the taxable year may, at the 
election of the organization, be apportioned 
among patrons of the organization on the 
basis of the amount of business done by the 
patrons during the taxable year. 
‘‘(ii) FORM
AND
EFFECT
OF
ELEC-
TION.—An election under clause (i) for any 
taxable year shall be made on a timely filed 
return for such year. Such election, once 
made, shall be irrevocable for such taxable 
year. 
‘‘(B) TREATMENT OF ORGANIZATIONS AND 
PATRONS.—The amount of the credit apportioned 
to any patrons under subparagraph (A)— 
‘‘(i) shall not be included in the 
amount determined under subsection (a) 
with respect to the organization for the tax-
able year, and
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‘‘(ii) shall be included in the amount 
determined under subsection (a) for the tax-
able year of the patrons with or within 
which the taxable year of the organization 
ends. 
‘‘(C) SPECIAL
RULES
FOR
DECREASE
IN 
CREDITS FOR TAXABLE YEAR.—If the amount of 
the credit of a cooperative organization deter-
mined under subsection (a) for a taxable year is 
less than the amount of such credit shown on the 
return of the cooperative organization for such 
year, an amount equal to the excess of— 
‘‘(i) such reduction, over 
‘‘(ii) the amount not apportioned to 
such patrons under subparagraph (A) for 
the taxable year, shall be treated as an in-
crease in tax imposed by this chapter on the 
organization. Such increase shall not be 
treated as tax imposed by this chapter for 
purposes of determining the amount of any 
credit under this subpart or subpart A, B, 
E, or G. 
‘‘(D) ELIGIBLE
COOPERATIVE
DEFINED.— 
For purposes of this section the term ‘eligible co-
operative’ means a cooperative organization de-
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scribed in section 1381(a) which is owned more 
than 50 percent by agricultural producers or by 
entities owned by agricultural producers. For 
this purpose an entity owned by an agricultural 
producer is one that is more than 50 percent 
owned by agricultural producers. 
‘‘(E) WRITTEN
NOTICE
TO
PATRONS.—If 
any portion of the credit available under sub-
section (a) is allocated to patrons under sub-
paragraph (A), the eligible cooperative shall pro-
vide any patron receiving an allocation written 
notice of the amount of the allocation. Such no-
tice shall be provided before the date on which 
the return described in subparagraph (B)(ii) is 
due.’’. 
SEC. 1503. EXPANSION OF RESOURCES TO WAVE, CURRENT, 
TIDAL, AND OCEAN THERMAL ENERGY. 
(a) IN GENERAL.—Section 45(c)(1) (defining qualified 
energy resources), as amended by this Act, is amended by 
striking ‘‘and’’ at the end of subparagraph (H), by striking 
the period at the end of subparagraph (I) and inserting ‘‘, 
and’’, and by adding at the end the following new subpara-
graph: 
‘‘(J) wave, current, tidal, and ocean ther-
mal energy.’’
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HR 6 PAP 
(b) DEFINITION OF RESOURCES.—Section 45(c), as 
amended by this Act, is amended by adding at the end the 
following new paragraph: 
‘‘(9) WAVE, CURRENT, TIDAL, AND OCEAN THER-
MAL ENERGY.—The term ‘wave, current, tidal, and 
ocean thermal energy’ means electricity produced 
from any of the following: 
‘‘(A) Free flowing ocean water derived from 
tidal currents, ocean currents, waves, or estuary 
currents. 
‘‘(B) Ocean thermal energy. 
‘‘(C) Free flowing water in rivers, lakes, 
man made channels, or streams.’’ 
(c) FACILITIES.—Section 45(d), as amended by this 
Act, is amended by adding at the end the following new 
paragraph: 
‘‘(11) WAVE, 
CURRENT, 
TIDAL, 
AND
OCEAN 
THERMAL FACILITY.—In the case of a facility using 
resources described in subparagraph (A), (B), or (C) 
of subsection (c)(9) to produce electricity, the term 
‘qualified facility’ means any facility owned by the 
taxpayer which is originally placed in service after 
the date of the enactment of this paragraph and before 
January 1, 2009, but such term shall not include a
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facility which includes impoundment structures or a 
small irrigation power facility.’’ 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years ending after the date 
of the enactment of this Act. 
SEC. 1504. CLEAN RENEWABLE ENERGY BONDS. 
(a) IN GENERAL.—Part IV of subchapter A of chapter 
1 (relating to credits against tax) is amended by adding 
at the end the following new subpart: 
‘‘Subpart H—Nonrefundable Credit to Holders of 
Certain Bonds 
‘‘Sec. 54. Credit to holders of clean renewable energy bonds. 
‘‘SEC. 54. CREDIT TO HOLDERS OF CLEAN RENEWABLE EN-
ERGY BONDS. 
‘‘(a) ALLOWANCE OF CREDIT.—If a taxpayer holds a 
clean renewable energy 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 de-
termined under this subsection with respect to any 
credit allowance date for a clean renewable energy
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bond is 25 percent of the annual credit determined 
with respect to such bond. 
‘‘(2) ANNUAL CREDIT.—The annual credit deter-
mined with respect to any clean renewable energy 
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 renewable energy 
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 renewable energy bonds 
with a specified maturity or redemption date without 
discount and without interest cost to the qualified 
issuer. 
‘‘(4) CREDIT ALLOWANCE DATE.—For purposes 
of this section, the term ‘credit allowance date’ 
means—
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‘‘(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 REDEMP-
TION.—In the case of a bond which is issued during 
the 3-month period ending on a credit allowance date, 
the amount of the credit determined under this sub-
section with respect to such credit allowance date 
shall be a ratable portion of the credit otherwise deter-
mined 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 section 
55, over 
‘‘(2) the sum of the credits allowable under this 
part (other than subpart C thereof (relating to refund-
able credits) and this subpart) and section 1397E.
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‘‘(d) CLEAN RENEWABLE ENERGY BOND.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘clean renewable 
energy bond’ means any bond issued as part of an 
issue if— 
‘‘(A) the bond is issued by a qualified issuer 
pursuant to an allocation by the Secretary to 
such issuer of a portion of the national clean re-
newable energy bond limitation under subsection 
(f)(2), 
‘‘(B) 95 percent or more of the proceeds 
from the sale of such issue are to be used for cap-
ital expenditures incurred by qualified borrowers 
for 1 or more qualified projects, 
‘‘(C) the qualified issuer designates such 
bond for purposes of this section and the bond is 
in registered form, and 
‘‘(D) the issue meets the requirements of 
subsection (h). 
‘‘(2) 
QUALIFIED
PROJECT; 
SPECIAL
USE 
RULES.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
project’ means any qualified facility (as deter-
mined under section 45(d) without regard to any