921 
(A) by reason of any fund which is expected to 
be used to repay such issue if— 
‘‘(i) such fund is funded at a rate not 
more rapid than equal annual installments, 
‘‘(ii) such fund is funded in a manner 
that such fund will not exceed the amount 
necessary to repay the issue if invested at 
the maximum rate permitted under clause 
(iii), and 
‘‘(iii) the yield on such fund is not 
greater than the discount rate determined 
under paragraph (5)(B) with respect to the 
issue. 
‘‘(5) MATURITY LIMITATION.— 
‘‘(A) IN GENERAL.—An issue shall not be 
treated as meeting the requirements of this 
paragraph if the maturity of any bond which is 
part of such issue exceeds the maximum term 
determined by the Secretary under subpara-
graph (B). 
‘‘(B) MAXIMUM TERM.—During each cal-
endar month, the Secretary shall determine the 
maximum term permitted under this paragraph 
for bonds issued during the following calendar 
month. Such maximum term shall be the term
922 
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-ex-
empt obligations 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. 
‘‘(6) PROHIBITION
ON
FINANCIAL
CONFLICTS 
OF INTEREST.—An issue shall be treated as meeting 
the requirements of this paragraph if the issuer cer-
tifies that— 
‘‘(A) applicable State and local law re-
quirements governing conflicts of interest are 
satisfied with respect to such issue, and 
‘‘(B) if the Secretary prescribes additional 
conflicts of interest rules governing the appro-
priate Members of Congress, Federal, State, 
and local officials, and their spouses, such addi-
tional rules are satisfied with respect to such 
issue.
923 
‘‘(e) OTHER DEFINITIONS.—For purposes of this 
subchapter— 
‘‘(1) CREDIT
ALLOWANCE
DATE.—The term 
‘credit allowance date’ means— 
‘‘(A) March 15, 
‘‘(B) June 15, 
‘‘(C) September 15, and 
‘‘(D) December 15. 
Such term includes the last day on which the bond 
is outstanding. 
‘‘(2) BOND.—The term ‘bond’ includes any ob-
ligation. 
‘‘(3) STATE.—The term ‘State’ includes the 
District of Columbia and any possession of the 
United States. 
‘‘(4) AVAILABLE
PROJECT
PROCEEDS.—The 
term ‘available project proceeds’ means— 
‘‘(A) the excess of— 
‘‘(i) the proceeds from the sale of an 
issue, over 
‘‘(ii) the issuance costs financed by 
the issue (to the extent that such costs do 
not exceed 2 percent of such proceeds), 
and
924 
‘‘(B) the proceeds from any investment of 
the excess described in subparagraph (A). 
‘‘(f) CREDIT TREATED AS INTEREST.—For purposes 
of this subtitle, the credit determined under subsection (a) 
shall be treated as interest which is includible in gross in-
come. 
‘‘(g) S CORPORATIONS AND PARTNERSHIPS.—In the 
case of a tax credit bond held by an S corporation or part-
nership, the allocation of the credit allowed by this section 
to the shareholders of such corporation or partners of such 
partnership shall be treated as a distribution. 
‘‘(h) BONDS HELD
BY REGULATED INVESTMENT 
COMPANIES AND REAL ESTATE INVESTMENT TRUSTS.— 
If any qualified tax credit bond is held by a regulated in-
vestment company or a real estate investment trust, the 
credit determined under subsection (a) shall be allowed to 
shareholders of such company or beneficiaries of such 
trust (and any gross income included under subsection (f) 
with respect to such credit shall be treated as distributed 
to such shareholders or beneficiaries) under procedures 
prescribed by the Secretary. 
‘‘(i) CREDITS MAY BE STRIPPED.—Under regula-
tions prescribed by the Secretary— 
‘‘(1) IN GENERAL.—There may be a separation 
(including at issuance) of the ownership of a quali-
925 
fied tax credit bond and the entitlement to the credit 
under this section with respect to such bond. In case 
of any such separation, the credit under this section 
shall be allowed to the person who on the credit al-
lowance date holds the instrument evidencing the en-
titlement to the credit and not to the holder of the 
bond. 
‘‘(2) CERTAIN RULES TO APPLY.—In the case 
of a separation described in paragraph (1), the rules 
of section 1286 shall apply to the qualified tax credit 
bond as if it were a stripped bond and to the credit 
under this section as if it were a stripped coupon. 
‘‘SEC. 54B. 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 pro-
ceeds of such issue are to be used for capital expend-
itures incurred by public power providers or coopera-
tive electric companies for one or more qualified re-
newable energy facilities, 
‘‘(2) the bond is issued by a qualified issuer, 
and
926 
‘‘(3) the issuer designates such bond for pur-
poses 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 DES-
IGNATED.— 
‘‘(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 sub-
section to such issuer. 
‘‘(2) NATIONAL
LIMITATION
ON
AMOUNT
OF 
BONDS DESIGNATED.—There is a national new clean 
renewable energy bond limitation of $2,000,000,000 
which shall be allocated by the Secretary as provided 
in paragraph (3), except that— 
‘‘(A) not more than 60 percent thereof 
may be allocated to qualified projects of public 
power providers, and 
‘‘(B) not more than 40 percent thereof 
may be allocated to qualified projects of cooper-
ative electric companies. 
‘‘(3) METHOD OF ALLOCATION.—
930 
(c) CONFORMING AMENDMENTS.— 
(1) Sections 54(c)(2) and 1400N(l)(3)(B) are 
each amended by striking ‘‘subpart C’’ and inserting 
‘‘subparts C and I’’. 
(2) Section 1397E(c)(2) is amended by striking 
‘‘subpart H’’ and inserting ‘‘subparts H and I’’. 
(3) Section 6401(b)(1) is amended by striking 
‘‘and H’’ and inserting ‘‘H, and I’’. 
(4) The heading of subpart H of part IV of 
subchapter A of chapter 1 is amended by striking 
‘‘Certain Bonds’’ and inserting ‘‘Clean Re-
newable Energy Bonds’’. 
(5) The table of subparts for part IV of sub-
chapter A of chapter 1 is amended by striking the 
item relating to subpart H and inserting the fol-
lowing new items: 
‘‘SUBPART H. NONREFUNDABLE CREDIT TO HOLDERS OF CLEAN RENEWABLE 
ENERGY BONDS. 
‘‘SUBPART I. QUALIFIED TAX CREDIT BONDS.’’. 
(d) EFFECTIVE DATES.—The amendments made by 
this section shall apply to obligations issued after the date 
of the enactment of this Act.
931 
SEC. 11005. EXTENSION AND MODIFICATION OF SPECIAL 
RULE TO IMPLEMENT FERC AND STATE 
ELECTRIC RESTRUCTURING POLICY. 
(a) EXTENSION FOR QUALIFIED ELECTRIC UTILI-
TIES.— 
(1) IN
GENERAL.—Paragraph (3) of section 
451(i) (relating to special rule for sales or disposi-
tions to implement Federal Energy Regulatory Com-
mission or State electric restructuring policy) is 
amended by striking ‘‘before January 1, 2008,’’ and 
inserting ‘‘before January 1, 2010, by a qualified 
electric utility,’’. 
(2) QUALIFIED ELECTRIC UTILITY.—Subsection 
(i) of section 451 is amended by redesignating para-
graphs (6) through (10) as paragraphs (7) through 
(11), respectively, and by inserting after paragraph 
(5) the following new paragraph: 
‘‘(6) QUALIFIED ELECTRIC UTILITY.—For pur-
poses of this subsection, the term ‘qualified electric 
utility’ means— 
‘‘(A) an electric utility (as defined in sec-
tion 3(22) of the Federal Power Act (16 U.S.C. 
796(22))), and 
‘‘(B) any person in the same holding com-
pany system (as defined in section 1262(9) of 
the Public Utility Holding Company Act of
932 
2005 (42 U.S.C. 16451(9))) as an electric util-
ity referred to subparagraph (A).’’. 
(b) EXTENSION
OF PERIOD
FOR TRANSFER
OF 
OPERATIONAL
CONTROL
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 PROP-
ERTY.—Paragraph (5) of section 451(i) is amended by 
adding at the end the following new subparagraph: 
‘‘(C) EXCEPTION FOR PROPERTY LOCATED 
OUTSIDE THE UNITED STATES.—The term ‘ex-
empt utility property’ shall not include any 
property which is located outside the United 
States.’’. 
(d) EFFECTIVE DATES.— 
(1) EXTENSION.—The amendment made by 
subsection (a) shall apply to transactions after De-
cember 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.
933 
(3) EXCEPTION FOR PROPERTY LOCATED OUT-
SIDE THE UNITED STATES.—The amendment made 
by subsection (c) shall apply to transactions after 
the date of the enactment of this Act. 
SEC. 11006. REPEAL OF DOLLAR LIMITATION AND ALLOW-
ANCE AGAINST ALTERNATIVE MINIMUM TAX 
FOR RESIDENTIAL SOLAR AND FUEL CELL 
PROPERTY CREDIT. 
(a) REPEAL OF MAXIMUM DOLLAR LIMITATION.— 
(1) IN
GENERAL.—Subsection (b) of section 
25D (relating to limitations) is amended to read as 
follows: 
‘‘(b) CERTIFICATION OF SOLAR WATER HEATING 
PROPERTY.—No credit shall be allowed under this section 
for an item of property described in subsection (d)(1) un-
less such property is certified for performance by the non- 
profit Solar Rating Certification Corporation or a com-
parable entity endorsed by the government of the State 
in which such property is installed.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Subsection (e) of section 25D is 
amended by striking paragraph (4) and by re-
designating paragraphs (5) through (9) as 
paragraphs (4) through (8), respectively.
934 
(B) Paragraph (1) of section 25C(e) is 
amended by striking ‘‘(8), and (9)’’ and insert-
ing ‘‘and (8) (and paragraph (4) as in effect be-
fore its repeal by the Renewable Energy and 
Energy Conservation Tax Act of 2007)’’. 
(b) CREDIT ALLOWED AGAINST ALTERNATIVE MIN-
IMUM TAX.— 
(1) IN
GENERAL.—Subsection (c) of section 
25D is amended to read as follows: 
‘‘(c) LIMITATION BASED
ON AMOUNT
OF TAX; 
CARRYFORWARD OF UNUSED CREDIT.— 
‘‘(1) 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 the taxable year shall not exceed 
the excess of— 
‘‘(A) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax im-
posed by section 55, over 
‘‘(B) the sum of the credits allowable 
under this subpart (other than this section) and 
section 27 for the taxable year. 
‘‘(2) CARRYFORWARD OF UNUSED CREDIT.— 
‘‘(A) RULE
FOR
YEARS
IN
WHICH
ALL 
PERSONAL
CREDITS
ALLOWED
AGAINST
REG-
936 
(C) Section 25B(g)(2) is amended by strik-
ing ‘‘section 23’’ and inserting ‘‘sections 23 and 
25D’’. 
(D) Section 26(a)(1) is amended by strik-
ing ‘‘and 25B’’ and inserting ‘‘25B, and 25D’’. 
(c) EFFECTIVE DATES.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to expenditures made after 
the date of the enactment of this Act. 
(2) ALLOWANCE AGAINST ALTERNATIVE MIN-
IMUM TAX.— 
(A) IN GENERAL.—The amendments made 
by subsection (b) shall apply to taxable years 
beginning after the date of the enactment of 
this Act. 
(B) APPLICATION OF EGTRRA SUNSET.— 
The amendments made by subparagraphs (A) 
and (B) of subsection (b)(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.
937 
TITLE XII—CONSERVATION 
Subtitle A—Transportation 
SEC. 12001. CREDIT FOR PLUG-IN HYBRID VEHICLES. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 (relating to other credits) is 
amended by adding at the end the following new section: 
‘‘SEC. 30D. PLUG-IN HYBRID VEHICLES. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to the sum of the 
credit amounts determined under subsection (b) with re-
spect to each qualified plug-in hybrid vehicle placed in 
service by the taxpayer during the taxable year. 
‘‘(b) PER VEHICLE DOLLAR LIMITATION.— 
‘‘(1) IN
GENERAL.—The amount determined 
under this subsection with respect to any qualified 
plug-in hybrid vehicle is the sum of the amounts de-
termined under paragraphs (2) and (3) with respect 
to such vehicle. 
‘‘(2) BASE AMOUNT.—The amount determined 
under this paragraph is $4,000. 
‘‘(3) BATTERY CAPACITY.—In the case of vehi-
cle which draws propulsion energy from a battery 
with not less than 5 kilowatt hours of capacity, the 
amount determined under this paragraph is $200,
938 
plus $200 for each kilowatt hour of capacity in ex-
cess of 5 kilowatt hours. The amount determined 
under this paragraph shall not exceed $2,000. 
‘‘(c) APPLICATION WITH OTHER CREDITS.— 
‘‘(1) BUSINESS CREDIT TREATED AS PART OF 
GENERAL BUSINESS CREDIT.—So much of the credit 
which would be allowed under subsection (a) for any 
taxable year (determined without regard to this sub-
section) that is attributable to property of a char-
acter 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 (determined 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 al-
lowed under subsection (a) for any taxable year 
(determined after application of paragraph (1)) 
shall not exceed the excess of—
939 
‘‘(i) the sum of the regular tax liabil-
ity (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. 
‘‘(d) QUALIFIED PLUG-IN HYBRID VEHICLE.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified plug-in 
hybrid vehicle’ means a motor vehicle (as defined in 
section 30(c)(2))— 
‘‘(A) the original use of which commences 
with the taxpayer, 
‘‘(B) which is acquired for use or lease by 
the taxpayer and not for resale, 
‘‘(C) which is made by a manufacturer, 
‘‘(D) which has a gross vehicle weight rat-
ing of less than 14,000 pounds, 
‘‘(E) which has received a certificate of 
conformity under the Clean Air Act and meets 
or exceeds the Bin 5 Tier II emission standard 
established in regulations prescribed by the Ad-
ministrator of the Environmental Protection
940 
Agency under section 202(i) of the Clean Air 
Act for that make and model year vehicle, 
‘‘(F) which is propelled to a significant ex-
tent by an electric motor which draws electricity 
from a battery which— 
‘‘(i) has a capacity of not less than 4 
kilowatt hours, and 
‘‘(ii) is capable of being recharged 
from an external source of electricity, and 
‘‘(G) which either— 
‘‘(i) is also propelled to a significant 
extent by other than an electric motor, or 
‘‘(ii) has a significant onboard source 
of electricity which also recharges the bat-
tery referred to in subparagraph (F). 
‘‘(2) EXCEPTION.—The term ‘qualified plug-in 
hybrid vehicle’ shall not include any vehicle which is 
not a passenger automobile or light truck if such ve-
hicle has a gross vehicle weight rating of less than 
8,500 pounds. 
‘‘(3) OTHER
TERMS.—The terms ‘passenger 
automobile’, ‘light truck’, and ‘manufacturer’ have 
the meanings given such terms in regulations pre-
scribed by the Administrator of the Environmental 
Protection Agency for purposes of the administra-
941 
tion of title II of the Clean Air Act (42 U.S.C. 7521 
et seq.). 
‘‘(4) BATTERY CAPACITY.—The term ‘capacity’ 
means, with respect to any battery, the quantity of 
electricity which the battery is capable of storing, ex-
pressed in kilowatt hours, as measured from a 100 
percent state of charge to a 0 percent state of 
charge. 
‘‘(e) LIMITATION ON NUMBER OF QUALIFIED PLUG- 
IN HYBRID VEHICLES ELIGIBLE FOR CREDIT.— 
‘‘(1) IN GENERAL.—In the case of a qualified 
plug-in hybrid vehicle sold during the phaseout pe-
riod, only the applicable percentage of the credit oth-
erwise allowable under subsection (a) shall be al-
lowed. 
‘‘(2) PHASEOUT PERIOD.—For purposes of this 
subsection, the phaseout period is the period begin-
ning with the second calendar quarter following the 
calendar quarter which includes the first date on 
which the number of qualified plug-in hybrid vehicles 
manufactured by the manufacturer of the vehicle re-
ferred to in paragraph (1) sold for use in the United 
States after the date of the enactment of this sec-
tion, is at least 60,000.
948 
(2) UNIFORM
TREATMENT
OF
DIESEL
PRO-
DUCED FROM BIOMASS.—The amendments made by 
subsection (b) shall apply to fuel produced, and sold 
or used, after the date which is 30 days after the 
date of the enactment of this Act. 
SEC. 12004. CREDIT FOR PRODUCTION OF CELLULOSIC AL-
COHOL. 
(a) IN GENERAL.—Subsection (b) of section 40 is 
amended by redesignating paragraph (5) as paragraph (6) 
and by inserting after paragraph (4) the following new 
paragraph: 
‘‘(5) CELLULOSIC
ALCOHOL
FUEL
PRODUCER 
CREDIT.— 
‘‘(A) IN GENERAL.—The cellulosic alcohol 
fuel producer credit of any cellulosic alcohol fuel 
producer for any taxable year is 50 cents for 
each gallon of qualified cellulosic fuel produc-
tion of such producer. 
‘‘(B) QUALIFIED CELLULOSIC FUEL PRO-
DUCTION.—For purposes of this paragraph, the 
term ‘qualified cellulosic fuel production’ means 
any cellulosic alcohol which is produced by a 
cellulosic alcohol fuel producer, and which dur-
ing the taxable year—
949 
‘‘(i) is sold by such producer to an-
other person— 
‘‘(I) for use by such other person 
in the production of a qualified mix-
ture in such other person’s trade or 
business (other than casual off-farm 
production), 
‘‘(II) for use by such other per-
son as a fuel in a trade or business, 
or 
‘‘(III) who sells such alcohol at 
retail to another person and places 
such alcohol in the fuel tank of such 
other person, or 
‘‘(ii) is used or sold by such producer 
for any purpose described in clause (i). 
‘‘(C) CELLULOSIC
ALCOHOL.—For pur-
poses of this paragraph, the term ‘cellulosic al-
cohol’ means any alcohol which— 
‘‘(i) is produced in the United States 
for use as a fuel in the United States, and 
‘‘(ii) 
is 
derived 
from 
any 
lignocellulosic or hemicellulosic matter that 
is available on a renewable or recurring 
basis.
950 
For purposes of this subparagraph, the term 
‘United States’ includes any possession of the 
United States. 
‘‘(D) CELLULOSIC
ALCOHOL
FUEL
PRO-
DUCER.—For purposes of this paragraph, the 
term ‘cellulosic alcohol fuel producer’ means 
any person who produces cellulosic alcohol in a 
trade or business and is registered with the 
Secretary as a cellulosic alcohol fuel producer. 
‘‘(E) 
ADDITIONAL
DISTILLATION
EX-
CLUDED.—The qualified cellulosic fuel produc-
tion of any producer for any taxable year shall 
not include any alcohol which is purchased by 
the producer and with respect to which such 
producer increases the proof of the alcohol by 
additional distillation.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Subsection (a) of section 40 is amended by 
striking ‘‘plus’’ at the end of paragraph (1), by 
striking ‘‘plus’’ at the end of paragraph (2), by 
striking the period at the end of paragraph (3) and 
inserting ‘‘, plus’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(4) in the case of a cellulosic alcohol fuel pro-
ducer, the cellulosic alcohol fuel producer credit.’’.
951 
(2) Clause (ii) of section 40(d)(3)(C) is amend-
ed by striking ‘‘subsection (b)(4)(B)’’ and inserting 
‘‘paragraph (4)(B) or (5)(B) of subsection (b)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to alcohol produced after December 
31, 2007. 
SEC. 12005. EXTENSION OF TRANSPORTATION FRINGE BEN-
EFIT TO BICYCLE COMMUTERS. 
(a) IN GENERAL.—Paragraph (1) of section 132(f) 
of the Internal Revenue Code of 1986 (relating to general 
rule for qualified transportation fringe) is amended by 
adding at the end the following: 
‘‘(D) Any qualified bicycle commuting re-
imbursement.’’. 
(b) LIMITATION ON EXCLUSION.—Paragraph (2) of 
section 132(f) of such Code is amended by striking ‘‘and’’ 
at the end of subparagraph (A), by striking the period 
at the end of subparagraph (B) and inserting ‘‘, and’’, 
and by adding at the end the following new subparagraph: 
‘‘(C) the applicable annual limitation in 
the case of any qualified bicycle commuting re-
imbursement.’’. 
(c) DEFINITIONS.—Paragraph (5) of section 132(f) 
of such Code (relating to definitions) is amended by add-
ing at the end the following:
952 
‘‘(F) DEFINITIONS RELATED TO BICYCLE 
COMMUTING REIMBURSEMENT.— 
‘‘(i) QUALIFIED BICYCLE COMMUTING 
REIMBURSEMENT.—The term ‘qualified bi-
cycle commuting reimbursement’ means, 
with respect to any calendar year, any em-
ployer reimbursement during the 15-month 
period beginning with the first day of such 
calendar year for reasonable expenses in-
curred by the employee during such cal-
endar year for the purchase of a bicycle 
and bicycle improvements, repair, and stor-
age, if such bicycle is regularly used for 
travel between the employee’s residence 
and place of employment. 
‘‘(ii) APPLICABLE
ANNUAL
LIMITA-
TION.—The term ‘applicable annual limita-
tion’ means, with respect to any employee 
for any calendar year, the product of $20 
multiplied by the number of qualified bicy-
cle commuting months during such year. 
‘‘(iii) 
QUALIFIED
BICYCLE
COM-
MUTING MONTH.—The term ‘qualified bi-
cycle commuting month’ means, with re-
953 
spect to any employee, any month during 
which such employee— 
‘‘(I) regularly uses the bicycle for 
a substantial portion of the travel be-
tween the employee’s residence and 
place of employment, and 
‘‘(II) does not receive any benefit 
described in subparagraph (A), (B), 
or (C) of paragraph (1).’’. 
(d) CONSTRUCTIVE RECEIPT OF BENEFIT.—Para-
graph (4) of section 132(f) is amended by inserting 
‘‘(other than a qualified bicycle commuting reimburse-
ment)’’ after ‘‘qualified transportation fringe’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 12006. MODIFICATION OF LIMITATION ON AUTO-
MOBILE DEPRECIATION. 
(a) IN GENERAL.—Paragraph (5) of section 280F(d) 
of the Internal Revenue Code of 1986 (defining passenger 
automobile) is amended to read as follows: 
‘‘(5) PASSENGER AUTOMOBILE.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘passenger auto-
mobile’ means any 4-wheeled vehicle—
954 
‘‘(i) which is primarily designed or 
which can be used to carry passengers over 
public streets, roads, or highways (except 
any vehicle operated exclusively on a rail or 
rails), and 
‘‘(ii) which is rated at not more than 
14,000 pounds gross vehicle weight. 
‘‘(B) EXCEPTIONS.—The term ‘passenger 
automobile’ shall not include— 
‘‘(i) any exempt-design vehicle, and 
‘‘(ii) any exempt-use vehicle. 
‘‘(C) 
EXEMPT-DESIGN
VEHICLE.—The 
term ‘exempt-design vehicle’ means— 
‘‘(i) any vehicle which, by reason of its 
nature or design, is not likely to be used 
more than a de minimis amount for per-
sonal purposes, and 
‘‘(ii) any vehicle— 
‘‘(I) which is designed to have a 
seating capacity of more than 9 per-
sons behind the driver’s seat, 
‘‘(II) which is equipped with a 
cargo area of at least 5 feet in interior 
length which is an open area or is de-
signed for use as an open area but is
955 
enclosed by a cap and is not readily 
accessible directly from the passenger 
compartment, or 
‘‘(III) has an integral enclosure, 
fully enclosing the driver compartment 
and load carrying device, does not 
have seating rearward of the driver’s 
seat, and has no body section pro-
truding more than 30 inches ahead of 
the leading edge of the windshield. 
‘‘(D) EXEMPT-USE
VEHICLE.—The term 
‘exempt-use vehicle’ means— 
‘‘(i) any ambulance, hearse, or com-
bination ambulance-hearse used by the tax-
payer directly in a trade or business, 
‘‘(ii) any vehicle used by the taxpayer 
directly in the trade or business of trans-
porting persons or property for compensa-
tion or hire, and 
‘‘(iii) any truck or van if substantially 
all of the use of such vehicle by the tax-
payer is directly in— 
‘‘(I) a farming business (within 
the meaning of section 263A(e)(4)),
956 
‘‘(II) the transportation of a sub-
stantial amount of equipment, sup-
plies, or inventory, or 
‘‘(III) the moving or delivery of 
property which requires substantial 
cargo capacity. 
‘‘(E) RECAPTURE.—In the case of any ve-
hicle which is not a passenger automobile by 
reason of being an exempt-use vehicle, if such 
vehicle ceases to be an exempt-use vehicle in 
any taxable year after the taxable year in which 
such vehicle is placed in service, a rule similar 
to the rule of subsection (b) shall apply.’’. 
(b) CONFORMING AMENDMENT.—Section 179(b) of 
such Code (relating to limitations) is amended by striking 
paragraph (6). 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2007. 
SEC. 12007. RESTRUCTURING OF NEW YORK LIBERTY ZONE 
TAX CREDITS. 
(a) IN GENERAL.—Part I of subchapter Y of chapter 
1 is amended by redesignating section 1400L as section 
1400K and by adding at the end the following new section:
957 
‘‘SEC. 1400L. NEW YORK LIBERTY ZONE TAX CREDITS. 
‘‘(a) IN GENERAL.—In the case of a New York Lib-
erty Zone governmental unit, there shall be allowed as a 
credit against any taxes imposed for any payroll period 
by section 3402 for which such governmental unit is liable 
under section 3403 an amount equal to so much of the 
portion of the qualifying project expenditure amount allo-
cated under subsection (b)(3) to such governmental unit 
for the calendar year as is allocated by such governmental 
unit to such period under subsection (b)(4). 
‘‘(b) 
QUALIFYING
PROJECT
EXPENDITURE 
AMOUNT.—For purposes of this section— 
‘‘(1) 
IN
GENERAL.—The 
term 
‘qualifying 
project expenditure amount’ means, with respect to 
any calendar year, the sum of— 
‘‘(A) the total expenditures paid or in-
curred during such calendar year by all New 
York Liberty Zone governmental units and the 
Port Authority of New York and New Jersey 
for any portion of qualifying projects located 
wholly within the City of New York, New York, 
and 
‘‘(B) any such expenditures— 
‘‘(i) paid or incurred in any preceding 
calendar year which begins after the date 
of enactment of this section, and
959 
‘‘(C) 
ANNUAL
LIMIT.—The 
aggregate 
amount which may be allocated under subpara-
graph (A) for any calendar year in the credit 
period shall not exceed the sum of— 
‘‘(i) $169,000,000, plus 
‘‘(ii) the aggregate amount authorized 
to be allocated under this paragraph for all 
preceding calendar years in the credit pe-
riod which was not so allocated. 
‘‘(D) UNALLOCATED AMOUNTS AT END OF 
CREDIT PERIOD.—If, as of the close of the cred-
it period, the amount under subparagraph (B) 
exceeds the aggregate amount allocated under 
subparagraph (A) for all calendar years in the 
credit period, the Governor of the State of New 
York and the Mayor of the City of New York, 
New York, may jointly allocate to New York 
Liberty Zone governmental units for any cal-
endar year in the 5-year period following the 
credit period an amount equal to— 
‘‘(i) the lesser of— 
‘‘(I) such excess, or 
‘‘(II) the qualifying project ex-
penditure amount for such calendar 
year, reduced by
960 
‘‘(ii) the aggregate amount allocated 
under this subparagraph for all preceding 
calendar years. 
‘‘(4) ALLOCATION
TO
PAYROLL
PERIODS.— 
Each New York Liberty Zone governmental unit 
which has been allocated a portion of the qualifying 
project expenditure amount under paragraph (3) for 
a calendar year may allocate such portion to payroll 
periods beginning in such calendar year as such gov-
ernmental unit determines appropriate. 
‘‘(c) CARRYOVER OF UNUSED ALLOCATIONS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), if the amount allocated under subsection 
(b)(3) to a New York Liberty Zone governmental 
unit for any calendar year exceeds the aggregate 
taxes imposed by section 3402 for which such gov-
ernmental unit is liable under section 3403 for peri-
ods beginning in such year, such excess shall be car-
ried to the succeeding calendar year and added to 
the allocation of such governmental unit for such 
succeeding calendar year. 
‘‘(2) REALLOCATION.—If a New York Liberty 
Zone governmental unit does not use an amount al-
located to it under subsection (b)(3) within the time 
prescribed by the Governor of the State of New York
961 
and the Mayor of the City of New York, New York, 
then such amount shall after such time be treated 
for purposes of subsection (b)(3) in the same man-
ner as if it had never been allocated. 
‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) CREDIT PERIOD.—The term ‘credit period’ 
means the 12-year period beginning on January 1, 
2008. 
‘‘(2) NEW
YORK
LIBERTY
ZONE
GOVERN-
MENTAL UNIT.—The term ‘New York Liberty Zone 
governmental unit’ means— 
‘‘(A) the State of New York, 
‘‘(B) the City of New York, New York, and 
‘‘(C) any agency or instrumentality of such 
State or City. 
‘‘(3) TREATMENT OF FUNDS.—Any expenditure 
for a qualifying project taken into account for pur-
poses of the credit under this section shall be consid-
ered State and local funds for the purpose of any 
Federal program. 
‘‘(4) TREATMENT
OF
CREDIT
AMOUNTS
FOR 
PURPOSES OF WITHHOLDING TAXES.—For purposes 
of this title, a New York Liberty Zone governmental 
unit shall be treated as having paid to the Secretary,
962 
on the day on which wages are paid to employees, 
an amount equal to the amount of the credit allowed 
to such entity under subsection (a) with respect to 
such wages, but only if such governmental unit de-
ducts and withholds wages for such payroll period 
under section 3401 (relating to wage withholding). 
‘‘(e) REPORTING.—The Governor of the State of New 
York and the Mayor of the City of New York, New York, 
shall jointly submit to the Secretary an annual report— 
‘‘(1) which certifies— 
‘‘(A) the qualifying project expenditure 
amount for the calendar year, and 
‘‘(B) the amount allocated to each New 
York Liberty Zone governmental unit under 
subsection (b)(3) for the calendar year, and 
‘‘(2) includes such other information as the 
Secretary may require to carry out this section. 
‘‘(f) GUIDANCE.—The Secretary may prescribe such 
guidance as may be necessary or appropriate to ensure 
compliance with the purposes of this section.’’. 
(b) TERMINATION OF SPECIAL ALLOWANCE AND EX-
PENSING.—Subparagraph (A) of section 1400K(b)(2), as 
redesignated by subsection (a), is amended by striking the 
parenthetical therein and inserting ‘‘(in the case of non-
residential real property and residential rental property,
963 
the date of the enactment of the Renewable Energy and 
Energy Conservation Tax Act of 2007 or, if acquired pur-
suant to a binding contract in effect on such enactment 
date, December 31, 2009)’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 38(c)(3)(B) is amended by striking 
‘‘section 
1400L(a)’’ 
and 
inserting 
‘‘section 
1400K(a)’’. 
(2) Section 168(k)(2)(D)(ii) is amended by 
striking ‘‘section 1400L(c)(2)’’ and inserting ‘‘sec-
tion 1400K(c)(2)’’. 
(3) The table of sections for part I of sub-
chapter Y of chapter 1 is amended by redesignating 
the item relating to section 1400L as an item relat-
ing to section 1400K and by inserting after such 
item the following new item: 
‘‘Sec. 1400L. New York Liberty Zone tax credits.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
Subtitle B—Other Conservation 
Provisions 
SEC. 12011. QUALIFIED ENERGY CONSERVATION BONDS. 
(a) IN GENERAL.—Subpart I of part IV of sub-
chapter A of chapter 1, as added by section 104, is amend-
ed by adding at the end the following new section:
964 
‘‘SEC. 54C. QUALIFIED ENERGY CONSERVATION BONDS. 
‘‘(a) QUALIFIED ENERGY CONSERVATION BOND.— 
For purposes of this subchapter, the term ‘qualified en-
ergy conservation bond’ means any bond issued as part 
of an issue if— 
‘‘(1) 100 percent of the available project pro-
ceeds of such issue are to be used for one or more 
qualified conservation purposes, 
‘‘(2) the bond is issued by a State or local gov-
ernment, and 
‘‘(3) the issuer designates such bond for pur-
poses of this section. 
‘‘(b) LIMITATION
ON AMOUNT
OF BONDS DES-
IGNATED.—The maximum aggregate face amount of 
bonds which may be designated under subsection (a) by 
any issuer shall not exceed the limitation amount allocated 
to such issuer under subsection (d). 
‘‘(c) NATIONAL LIMITATION ON AMOUNT OF BONDS 
DESIGNATED.—There is a national qualified energy con-
servation bond limitation of $3,600,000,000. 
‘‘(d) ALLOCATIONS.— 
‘‘(1) IN
GENERAL.—The limitation applicable 
under subsection (c) shall be allocated by the Sec-
retary among the States in proportion to the popu-
lation of the States.
965 
‘‘(2) ALLOCATIONS
TO
LARGEST
LOCAL
GOV-
ERNMENTS.— 
‘‘(A) IN
GENERAL.—In the case of any 
State in which there is a large local govern-
ment, each such local government shall be allo-
cated a portion of such State’s allocation which 
bears the same ratio to the State’s allocation 
(determined without regard to this subpara-
graph) as the population of such large local 
government bears to the population of such 
State. 
‘‘(B) ALLOCATION OF UNUSED LIMITATION 
TO STATE.—The amount allocated under this 
subsection to a large local government may be 
reallocated by such local government to the 
State in which such local government is located. 
‘‘(C) LARGE
LOCAL
GOVERNMENT.—For 
purposes of this section, the term ‘large local 
government’ means any municipality or county 
if such municipality or county has a population 
of 100,000 or more. 
‘‘(3) ALLOCATION
TO
ISSUERS; RESTRICTION 
ON
PRIVATE
ACTIVITY
BONDS.—Any allocation 
under this subsection to a State or large local gov-
ernment shall be allocated by such State or large
966 
local government to issuers within the State in a 
manner that results in not less than 70 percent of 
the allocation to such State or large local govern-
ment being used to designate bonds which are not 
private activity bonds. 
‘‘(e) QUALIFIED
CONSERVATION
PURPOSE.—For 
purposes of this section— 
‘‘(1) IN
GENERAL.—The term ‘qualified con-
servation purpose’ means any of the following: 
‘‘(A) Capital expenditures incurred for 
purposes of— 
‘‘(i) reducing energy consumption in 
publicly-owned buildings by at least 20 
percent, 
‘‘(ii) implementing green community 
programs, or 
‘‘(iii) rural development involving the 
production of electricity from renewable 
energy resources. 
‘‘(B) Expenditures with respect to research 
facilities, and research grants, to support re-
search in— 
‘‘(i) development of cellulosic ethanol 
or other nonfossil fuels,
967 
‘‘(ii) technologies for the capture and 
sequestration of carbon dioxide produced 
through the use of fossil fuels, 
‘‘(iii) increasing the efficiency of exist-
ing technologies for producing nonfossil 
fuels, 
‘‘(iv) automobile battery technologies 
and other technologies to reduce fossil fuel 
consumption in transportation, or 
‘‘(v) technologies to reduce energy use 
in buildings. 
‘‘(C) Mass commuting facilities and related 
facilities that reduce the consumption of energy, 
including expenditures to reduce pollution from 
vehicles used for mass commuting. 
‘‘(D) Demonstration projects designed to 
promote the commercialization of— 
‘‘(i) green building technology, 
‘‘(ii) conversion of agricultural waste 
for use in the production of fuel or other-
wise, 
‘‘(iii) advanced battery manufacturing 
technologies, 
‘‘(iv) technologies to reduce peak use 
of electricity, or
968 
‘‘(v) technologies for the capture and 
sequestration of carbon dioxide emitted 
from combusting fossil fuels in order to 
produce electricity. 
‘‘(E) Public education campaigns to pro-
mote energy efficiency. 
‘‘(2) SPECIAL
RULES
FOR
PRIVATE
ACTIVITY 
BONDS.—For purposes of this section, in the case of 
any private activity bond, the term ‘qualified con-
servation purposes’ shall not include any expenditure 
which is not a capital expenditure. 
‘‘(f) POPULATION.— 
‘‘(1) IN
GENERAL.—The population of any 
State or local government shall be determined for 
purposes of this section as provided in section 146(j) 
for the calendar year which includes the date of the 
enactment of this section. 
‘‘(2) SPECIAL RULE FOR COUNTIES.—In deter-
mining the population of any county for purposes of 
this section, any population of such county which is 
taken into account in determining the population of 
any municipality which is a large local government 
shall not be taken into account in determining the 
population of such county.
969 
‘‘(g) APPLICATION
TO INDIAN TRIBAL GOVERN-
MENTS.—An Indian tribal government shall be treated for 
purposes of this section in the same manner as a large 
local government, except that— 
‘‘(1) an Indian tribal government shall be treat-
ed for purposes of subsection (d) as located within 
a State to the extent of so much of the population 
of such government as resides within such State, 
and 
‘‘(2) any bond issued by an Indian tribal gov-
ernment shall be treated as a qualified energy con-
servation bond only if issued as part of an issue the 
available project proceeds of which are used for pur-
poses for which such Indian tribal government could 
issue bonds to which section 103(a) applies.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Paragraph (1) of section 54A(d), as added 
by section 104, is amended to read as follows: 
‘‘(1) QUALIFIED TAX CREDIT BOND.—The term 
‘qualified tax credit bond’ means— 
‘‘(A) a new clean renewable energy bond, 
or 
‘‘(B) a qualified energy conservation bond, 
which is part of an issue that meets requirements of 
paragraphs (2), (3), (4), and (5).’’.
970 
(2) Subparagraph (C) of section 54A(d)(2), as 
added by section 104, is amended to read as follows: 
‘‘(C) QUALIFIED PURPOSE.—For purposes 
of this paragraph, the term ‘qualified purpose’ 
means— 
‘‘(i) in the case of a new clean renew-
able energy bond, a purpose specified in 
section 54B(a)(1), and 
‘‘(ii) in the case of a qualified energy 
conservation bond, a purpose specified in 
section 54C(a)(1).’’. 
(3) The table of sections for subpart I of part 
IV of subchapter A of chapter 1 is amended by add-
ing at the end the following new item: 
‘‘Sec. 54C. Qualified energy conservation 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. 12012. QUALIFIED RESIDENTIAL ENERGY EFFICIENCY 
ASSISTANCE BONDS. 
(a) IN GENERAL.—Subpart I of part IV of sub-
chapter A of chapter 1 (as amended by this Act) is amend-
ed by adding at the end the following new section:
971 
‘‘SEC. 54D. QUALIFIED RESIDENTIAL ENERGY EFFICIENCY 
ASSISTANCE BONDS. 
‘‘(a) QUALIFIED RESIDENTIAL ENERGY EFFICIENCY 
ASSISTANCE BOND.—For purposes of this subchapter, the 
term ‘qualified residential energy efficiency assistance 
bond’ means any bond issued as part of an issue if— 
‘‘(1) 100 percent of the available project pro-
ceeds of such issue are to be used for 1 or more 
qualified residential energy efficiency assistance pur-
poses, 
‘‘(2) not less than 20 percent of the available 
project proceeds of such issue are to be used for 1 
or more qualified low-income residential energy effi-
ciency assistance purposes, 
‘‘(3) repayments of principal and applicable in-
terest on financing provided by the issue are used 
not later than the close of the 3-month period begin-
ning on the date the prepayment (or complete repay-
ment) is received to redeem bonds which are part of 
the issue or to provide for 1 or more qualified resi-
dential energy efficiency assistance purposes, 
‘‘(4) the bond is issued by a State, and 
‘‘(5) the issuer designates such bond for pur-
poses of this section. 
‘‘(b) LIMITATION
ON AMOUNT
OF BONDS DES-
IGNATED.—The maximum aggregate face amount of
972 
bonds which may be designated under subsection (a) by 
any issuer shall not exceed the limitation amount allocated 
under subsection (d) to such issuer. 
‘‘(c) NATIONAL LIMITATION ON AMOUNT OF BONDS 
DESIGNATED.—There is a national qualified energy con-
servation bond limitation of $2,400,000,000. 
‘‘(d) LIMITATION ALLOCATED AMONG STATES.—The 
limitation under subsection (c) shall be allocated by the 
Secretary among the States in proportion to the popu-
lation of the States. 
‘‘(e) QUALIFIED RESIDENTIAL ENERGY EFFICIENCY 
ASSISTANCE PURPOSE.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified resi-
dential energy efficiency assistance purpose’ means 
any grant or low-interest loan to acquire (including 
reasonable installation costs)— 
‘‘(A) any property which meets (at a min-
imum) the requirements of the Energy Star 
program and which is to be installed in a dwell-
ing unit, 
‘‘(B) any property which uses wind, solar, 
or geothermal energy or qualified fuel cell prop-
erty (as defined in section 48(c)(1)) to generate 
electricity, or to heat or cool water, for use in
973 
a dwelling unit (other than property described 
in section 25D(e)(3)), and 
‘‘(C) any improvements to a dwelling unit 
which are made pursuant to a plan certified by 
an energy efficiency expert that such improve-
ment will yield at least a 20 percent reduction 
in total household energy consumption related 
to heating, cooling, lighting, and appliances. 
‘‘(2) GEOTHERMAL
HEAT
PUMP.—Any geo-
thermal heat pump to provide heating or cooling in 
a dwelling unit described in paragraph (1)(B) shall 
be treated as described in paragraph (1)(B). 
‘‘(3) DOLLAR LIMITATIONS.— 
‘‘(A) IN GENERAL.—Such term shall not 
include any grant or loan for improvements de-
scribed in paragraph (1)(C) with respect to any 
dwelling unit to the extent that such grant or 
loan (when added to all other grants or loans 
for such improvements) exceeds $5,000. 
‘‘(B) INCREASED
LIMITATION
FOR
CER-
TAIN PRINCIPAL RESIDENCES.—In the case of a 
dwelling unit which is used as a principal resi-
dence (within the meaning of section 121) by 
the recipient of the grant or loan referred to in 
subparagraph (A)—
974 
‘‘(i) subparagraph (A) shall be applied 
by substituting ‘$12,000’ for ‘$5,000’ if 
such grant or loan would satisfy the re-
quirements of paragraph (1)(A) if such 
paragraph were applied by substituting ‘50 
percent’ for ‘20 percent’, and 
‘‘(ii) in any case to which clause (i) 
does not apply, subparagraph (A) shall be 
applied 
by 
substituting 
‘$8,000’ 
for 
‘$5,000’ if such grant or loan would satisfy 
the requirements of paragraph (1)(A) if 
such paragraph were applied by sub-
stituting ‘35 percent’ for ‘20 percent’. 
‘‘(4) LOW-INTEREST LOAN.—The term ‘low in-
terest loan’ means any loan which charges interest 
at a rate which does not exceed the applicable Fed-
eral rate in effect under section 1288(b)(1) deter-
mined as of the issuance of the loan. 
‘‘(5) EXCLUSION OF CERTAIN PROPERTY.—The 
following property shall not be taken into account 
for purposes of paragraph (1)(A): 
‘‘(A) Any equipment used in connection 
with a swimming pool, hot tub, or similar prop-
erty. 
‘‘(B) Any television.
975 
‘‘(C) Any device for converting digital sig-
nal to analog. 
‘‘(D) Any DVD player. 
‘‘(E) Any video cassette recorder (VCR). 
‘‘(F) Any audio equipment. 
‘‘(G) Any cordless phone. 
‘‘(H) Any other item of property where 
there is substantial recreational use. 
‘‘(f) QUALIFIED LOW-INCOME RESIDENTIAL EFFI-
CIENCY ASSISTANCE PURPOSE.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The term ‘qualified low-in-
come residential energy efficiency assistance pur-
pose’ means any qualified residential energy effi-
ciency assistance purpose with respect to a dwelling 
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—
976 
‘‘(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.— 
‘‘(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—
977 
‘‘(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-
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
978 
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-
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)
979 
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. 12013. EXTENSION OF ENERGY EFFICIENT COMMER-
CIAL BUILDINGS DEDUCTION. 
Subsection (h) of section 179D (relating to termi-
nation) is amended by striking ‘‘December 31, 2008’’ and 
inserting ‘‘December 31, 2013’’. 
SEC. 12014. 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)—
980 
‘‘(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, 
‘‘(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,
981 
‘‘(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 
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,
982 
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 
7.5 percent more efficient than the applicable 
Department of Energy energy conservation 
standard effective October 2012.’’. 
(b) ELIGIBLE PRODUCTION.—
983 
(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— 
‘‘(1) dishwashers described in subsection (b)(1), 
‘‘(2) clothes washers described in subsection 
(b)(2),
984 
‘‘(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-
ers described in subsection (b)(2)(D) shall not be 
taken into account under paragraph (1).’’. 
(e) QUALIFIED ENERGY EFFICIENT APPLIANCES.—
985 
(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-
tively, and by inserting after paragraph (3) the fol-
lowing new paragraph:
986 
‘‘(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.’’. 
(5) REPLACEMENT OF ENERGY FACTOR.—Sec-
tion 45M(f)(7), as amended by paragraph (4), is 
amended to read as follows:
987 
‘‘(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.
988 
SEC. 12015. FIVE-YEAR APPLICABLE RECOVERY PERIOD 
FOR DEPRECIATION OF QUALIFIED ENERGY 
MANAGEMENT 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-
989 
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.’’.
990 
(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 XIII—REVENUE 
PROVISIONS 
Subtitle A—Denial of Oil and Gas 
Tax Benefits 
SEC. 13001. 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
991 
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. 13002. 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.
992 
SEC. 13003. CLARIFICATION OF DETERMINATION OF FOR-
EIGN 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
993 
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
994 
‘‘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. 13011. 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).’’.
995 
(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-
996 
ficient Transportation Equity Act: A Legacy for 
Users. 
SEC. 13012. 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.’’.
997 
(b) EXCISE TAX CREDIT.—Paragraph (2) of section 
6426(i), 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-
998 
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, 
as 
amended by section 311, 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
999 
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(i).’’. 
(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
1000 
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 XIV—OTHER PROVISIONS 
Subtitle A—Studies 
SEC. 14001. 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.
1001 
(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. 14002. 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 on, 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,
1002 
(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.
1003 
Subtitle B—Application of Certain 
Labor Standards on Projects Fi-
nanced Under Tax Credit Bonds 
SEC. 14011. 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). 
Passed the House of Representatives August 4, 
2007. 
Attest: 
Clerk.