ties will have on fish and wildlife, their habitat, sub-
sistence resources, and the environment; 
(2) a plan be implemented to avoid, minimize, 
and mitigate (in that order and to the extent prac-
ticable) any significant adverse effect identified 
under paragraph (1); and 
(3) the development of the plan shall occur 
after consultation with the agency or agencies hav-
ing jurisdiction over matters mitigated by the plan. 
(c) REGULATIONS TO PROTECT COASTAL PLAIN 
FISH AND WILDLIFE RESOURCES, SUBSISTENCE USERS, 
AND THE ENVIRONMENT.—Before implementing the leas-
ing program authorized by this subtitle, the Secretary 
shall prepare and promulgate regulations, lease terms, 
conditions, restrictions, prohibitions, stipulations, and 
other measures designed to ensure that the activities un-
dertaken on the Coastal Plain under this subtitle are con-
ducted in a manner consistent with the purposes and envi-
ronmental requirements of this subtitle. 
(d) COMPLIANCE WITH FEDERAL AND STATE ENVI-
RONMENTAL LAWS AND OTHER REQUIREMENTS.—The 
proposed regulations, lease terms, conditions, restrictions, 
prohibitions, and stipulations for the leasing program 
under this subtitle shall require compliance with all appli-
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cable provisions of Federal and State environmental law, 
and shall also require the following: 
(1) Standards at least as effective as the safety 
and environmental mitigation measures set forth in 
items 1 through 29 at pages 167 through 169 of the 
‘‘Final Legislative Environmental Impact State-
ment’’ (April 1987) on the Coastal Plain. 
(2) Seasonal limitations on exploration, develop-
ment, and related activities, where necessary, to 
avoid significant adverse effects during periods of 
concentrated fish and wildlife breeding, denning, 
nesting, spawning, and migration. 
(3) Design safety and construction standards 
for all pipelines and any access and service roads, 
that— 
(A) minimize, to the maximum extent pos-
sible, adverse effects upon the passage of mi-
gratory species such as caribou; and 
(B) minimize adverse effects upon the flow 
of surface water by requiring the use of cul-
verts, bridges, and other structural devices. 
(4) Prohibitions on general public access and 
use on all pipeline access and service roads. 
(5) Stringent reclamation and rehabilitation re-
quirements, consistent with the standards set forth 
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in this subtitle, requiring the removal from the 
Coastal Plain of all oil and gas development and 
production facilities, structures, and equipment upon 
completion of oil and gas production operations, ex-
cept that the Secretary may exempt from the re-
quirements of this paragraph those facilities, struc-
tures, or equipment that the Secretary determines 
would assist in the management of the Arctic Na-
tional Wildlife Refuge and that are donated to the 
United States for that purpose. 
(6) Appropriate prohibitions or restrictions on 
access by all modes of transportation. 
(7) Appropriate prohibitions or restrictions on 
sand and gravel extraction. 
(8) Consolidation of facility siting. 
(9) Appropriate prohibitions or restrictions on 
use of explosives. 
(10) Avoidance, to the extent practicable, of 
springs, streams, and river system; the protection of 
natural surface drainage patterns, wetlands, and ri-
parian habitats; and the regulation of methods or 
techniques for developing or transporting adequate 
supplies of water for exploratory drilling. 
(11) Avoidance or minimization of air traffic-re-
lated disturbance to fish and wildlife. 
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(12) Treatment and disposal of hazardous and 
toxic wastes, solid wastes, reserve pit fluids, drilling 
muds and cuttings, and domestic wastewater, includ-
ing an annual waste management report, a haz-
ardous materials tracking system, and a prohibition 
on chlorinated solvents, in accordance with applica-
ble Federal and State environmental law. 
(13) Fuel storage and oil spill contingency plan-
ning. 
(14) Research, monitoring, and reporting re-
quirements. 
(15) Field crew environmental briefings. 
(16) Avoidance of significant adverse effects 
upon subsistence hunting, fishing, and trapping by 
subsistence users. 
(17) Compliance with applicable air and water 
quality standards. 
(18) Appropriate seasonal and safety zone des-
ignations around well sites, within which subsistence 
hunting and trapping shall be limited. 
(19) Reasonable stipulations for protection of 
cultural and archeological resources. 
(20) All other protective environmental stipula-
tions, restrictions, terms, and conditions deemed 
necessary by the Secretary. 
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(e) CONSIDERATIONS.—In preparing and promul-
gating regulations, lease terms, conditions, restrictions, 
prohibitions, and stipulations under this section, the Sec-
retary shall consider the following: 
(1) The stipulations and conditions that govern 
the National Petroleum Reserve-Alaska leasing pro-
gram, as set forth in the 1999 Northeast National 
Petroleum Reserve-Alaska Final Integrated Activity 
Plan/Environmental Impact Statement. 
(2) The environmental protection standards 
that governed the initial Coastal Plain seismic explo-
ration program under parts 37.31 to 37.33 of title 
50, Code of Federal Regulations. 
(3) The land use stipulations for exploratory 
drilling on the KIC–ASRC private lands that are set 
forth in Appendix 2 of the August 9, 1983, agree-
ment between Arctic Slope Regional Corporation and 
the United States. 
(f) FACILITY CONSOLIDATION PLANNING.— 
(1) IN GENERAL.—The Secretary shall, after 
providing for public notice and comment, prepare 
and update periodically a plan to govern, guide, and 
direct the siting and construction of facilities for the 
exploration, development, production, and transpor-
tation of Coastal Plain oil and gas resources. 
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(1) DEADLINE.—Subject to paragraph (2), any 
complaint seeking judicial review of any provision of 
this Act or any action of the Secretary under this 
subtitle shall be filed— 
(A) except as provided in subparagraph 
(B), within the 90-day period beginning on the 
date of the action being challenged; or 
(B) in the case of a complaint based solely 
on grounds arising after such period, within 90 
days after the complainant knew or reasonably 
should have known of the grounds for the com-
plaint. 
(2) VENUE.—Any complaint seeking judicial re-
view of any provision of this subtitle or any action 
of the Secretary under this subtitle may be filed only 
in the United States Court of Appeals for the Dis-
trict of Columbia. 
(3) LIMITATION
ON
SCOPE
OF
CERTAIN
RE-
VIEW.—Judicial review of a Secretarial decision to 
conduct a lease sale under this subtitle, including 
the environmental analysis thereof, shall be limited 
to whether the Secretary has complied with the 
terms of this subtitle and shall be based upon the 
administrative record of that decision. The Sec-
retary’s identification of a preferred course of action 
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to enable leasing to proceed and the Secretary’s 
analysis of environmental effects under this subtitle 
shall be presumed to be correct unless shown other-
wise by clear and convincing evidence to the con-
trary. 
(b) LIMITATION ON OTHER REVIEW.—Actions of the 
Secretary with respect to which review could have been 
obtained under this section shall not be subject to judicial 
review in any civil or criminal proceeding for enforcement. 
SEC. 329. FEDERAL AND STATE DISTRIBUTION OF REVE-
NUES. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, of the amount of adjusted bonus, rental, and 
royalty revenues from Federal oil and gas leasing and op-
erations authorized under this subtitle— 
(1) 25 percent shall be paid to the State of 
Alaska; and 
(2) except as provided in section 432(d), the 
balance shall be deposited into the Treasury as mis-
cellaneous receipts. 
(b) PAYMENTS TO ALASKA.—Payments to the State 
of Alaska under this section shall be made semiannually. 
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SEC. 330. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN. 
(a) IN GENERAL.—The Secretary shall issue rights- 
of-way and easements across the Coastal Plain for the 
transportation of oil and gas— 
(1) except as provided in paragraph (2), under 
section 28 of the Mineral Leasing Act (30 U.S.C. 
185), without regard to title XI of the Alaska Na-
tional Interest Lands Conservation Act (30 U.S.C. 
3161 et seq.); and 
(2) under title XI of the Alaska National Inter-
est Lands Conservation Act (30 U.S.C. 3161 et 
seq.), for access authorized by sections 1110 and 
1111 of that Act (16 U.S.C. 3170 and 3171). 
(b) TERMS AND CONDITIONS.—The Secretary shall 
include in any right-of-way or easement issued under sub-
section (a) such terms and conditions as may be necessary 
to ensure that transportation of oil and gas does not result 
in a significant adverse effect on the fish and wildlife, sub-
sistence resources, their habitat, and the environment of 
the Coastal Plain, including requirements that facilities be 
sited or designed so as to avoid unnecessary duplication 
of roads and pipelines. 
(c) REGULATIONS.—The Secretary shall include in 
regulations under section 423(g) provisions granting 
rights-of-way and easements described in subsection (a) 
of this section. 
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SEC. 331. CONVEYANCE. 
In order to maximize Federal revenues by removing 
clouds on title to lands and clarifying land ownership pat-
terns within the Coastal Plain, the Secretary, notwith-
standing the provisions of section 1302(h)(2) of the Alas-
ka National Interest Lands Conservation Act (16 U.S.C. 
3192(h)(2)), shall convey— 
(1) to the Kaktovik Inupiat Corporation the 
surface estate of the lands described in paragraph 1 
of Public Land Order 6959, to the extent necessary 
to fulfill the Corporation’s entitlement under sec-
tions 12 and 14 of the Alaska Native Claims Settle-
ment Act (43 U.S.C. 1611 and 1613) in accordance 
with the terms and conditions of the Agreement be-
tween the Department of the Interior, the United 
States Fish and Wildlife Service, the Bureau of 
Land Management, and the Kaktovik Inupiat Cor-
poration effective January 22, 1993; and 
(2) to the Arctic Slope Regional Corporation 
the remaining subsurface estate to which it is enti-
tled pursuant to the August 9, 1983, agreement be-
tween the Arctic Slope Regional Corporation and the 
United States of America. 
SEC. 332. LOCAL GOVERNMENT IMPACT AID AND COMMU-
NITY SERVICE ASSISTANCE. 
(a) FINANCIAL ASSISTANCE AUTHORIZED.— 
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(1) IN
GENERAL.—The Secretary may use 
amounts available from the Coastal Plain Local Gov-
ernment Impact Aid Assistance Fund established by 
subsection (d) to provide timely financial assistance 
to entities that are eligible under paragraph (2) and 
that are directly impacted by the exploration for or 
production of oil and gas on the Coastal Plain under 
this subtitle. 
(2) ELIGIBLE
ENTITIES.—The North Slope 
Borough, the City of Kaktovik, and any other bor-
ough, municipal subdivision, village, or other com-
munity in the State of Alaska that is directly im-
pacted by exploration for, or the production of, oil 
or gas on the Coastal Plain under this Act, as deter-
mined by the Secretary, shall be eligible for financial 
assistance under this section. 
(b) USE
OF
ASSISTANCE.—Financial assistance 
under this section may be used only for— 
(1) planning for mitigation of the potential ef-
fects of oil and gas exploration and development on 
environmental, social, cultural, recreational, and sub-
sistence values; 
(2) implementing mitigation plans and main-
taining mitigation projects; 
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(3) developing, carrying out, and maintaining 
projects and programs that provide new or expanded 
public facilities and services to address needs and 
problems associated with such effects, including fire- 
fighting, police, water, waste treatment, medivac, 
and medical services; and 
(4) establishment of a coordination office, by 
the north slope borough, in the City of Kaktovik, 
which shall— 
(A) coordinate with and advise developers 
on local conditions, impact, and history of the 
areas utilized for development; and 
(B) provide to the Committee on Resources 
of the House of Representatives and the Com-
mittee on Energy and Natural Resources of the 
Senate an annual report on the status of co-
ordination between developers and the commu-
nities affected by development. 
(c) APPLICATION.— 
(1) IN GENERAL.—Any community that is eligi-
ble for assistance under this section may submit an 
application for such assistance to the Secretary, in 
such form and under such procedures as the Sec-
retary may prescribe by regulation. 
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(2) NORTH SLOPE BOROUGH COMMUNITIES.—A 
community located in the North Slope Borough may 
apply for assistance under this section either directly 
to the Secretary or through the North Slope Bor-
ough 
(3) APPLICATION ASSISTANCE.—The Secretary 
shall work closely with and assist the North Slope 
Borough and other communities eligible for assist-
ance under this section in developing and submitting 
applications for assistance under this section. 
(d) ESTABLISHMENT OF FUND.— 
(1) IN GENERAL.—There is established in the 
Treasury the Coastal Plain Local Government Im-
pact Aid Assistance Fund. 
(2) USE.—Amounts in the fund may be used 
only for providing financial assistance under this 
section. 
(3) DEPOSITS.—Subject to paragraph (4), there 
shall be deposited into the fund amounts received by 
the United States as revenues derived from rents, 
bonuses, and royalties from Federal leases and lease 
sales authorized under this subtitle. 
(4) LIMITATION
ON
DEPOSITS.—The total 
amount in the fund may not exceed $11,000,000. 
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(5) INVESTMENT
OF
BALANCES.—The Sec-
retary of the Treasury shall invest amounts in the 
fund in interest bearing government securities. 
(e) AUTHORIZATION OF APPROPRIATIONS.—To pro-
vide financial assistance under this section there is author-
ized to be appropriated to the Secretary from the Coastal 
Plain Local Government Impact Aid Assistance Fund 
$5,000,000 for each fiscal year. 
TITLE IV—GAS PRICE TAX CRED-
IT FOR FAMILIES AND BUSI-
NESSES 
SEC. 401. DEDUCTION FOR CERTAIN COMMUTING EX-
PENSES OF INDIVIDUALS. 
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
additional itemized deductions) is amended by redesig-
nating section 224 as section 225 and by inserting after 
section 223 the following new section: 
‘‘SEC. 224. CERTAIN COMMUTING EXPENSES. 
‘‘(a) IN GENERAL.—In the case of an individual, 
there shall be allowed as a deduction an amount equal to 
the applicable percentage of the amount paid or incurred 
by the taxpayer during the taxable year for qualified com-
muting expenses of the taxpayer, his spouse, and depend-
ents. 
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‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 
this section— 
‘‘(1) IN GENERAL.—The term ‘applicable per-
centage’ means, with respect to the expenses of any 
individual in connection with a round-trip commute 
of a certain number of miles, the percentage deter-
mined in accordance with the following table: 
‘‘In the case of a 
The applicable 
round-trip commute of: 
percentage is: 
Less than 10 miles ............................................................
10 percent
At least 10 miles, but not greater than 15 miles .............
30 percent
At least 15 miles, but not greater than 25 miles .............
50 percent
At least 25 miles ...............................................................
75 percent. 
‘‘(2) SPECIAL RULE FOR HIGH GAS MILEAGE 
VEHICLES
AND
CARPOOLERS.—Notwithstanding 
paragraph (1), the applicable percentage shall be 
100 percent with respect to any round-trip commute 
which is made— 
‘‘(A) in a motor vehicle which has a gaso-
line equivalent fuel efficiency of more than 40 
miles per gallon, or 
‘‘(B) in a motor vehicle while carrying car-
pooling passengers. 
‘‘(c) DEFINITIONS RELATED TO COMMUTING.—For 
purposes of this section— 
‘‘(1) QUALIFIED COMMUTING EXPENSES.—The 
term ‘qualified commuting expenses’ means reason-
able expenses paid or incurred for transportation in 
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connection with travel between an individual’s resi-
dence and place of employment. 
‘‘(2) ROUND-TRIP COMMUTE.—The term ‘round 
trip commute’ means the reasonable driving distance 
from an individual’s residence to such individual’s 
place of employment and back to such residence.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part VII of subchapter B of chapter 1 of such Code 
is amended by redesignating the item relating to section 
224 as an item relating to section 225 and inserting before 
such item the following new item: 
‘‘Sec. 224. Certain commuting expenses.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 402. TAX CREDIT FOR FUEL EXPENSES OF TRUCKERS. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to business credits), as amended by this 
Act, is amended by adding at the end the following new 
section: 
‘‘SEC. 45S. CREDIT FOR FUEL EXPENSES OF TRUCKERS. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
trucker fuel expense credit for any taxable year is an 
amount equal to 25 percent of the aggregate amount paid 
or incurred by the taxpayer for diesel fuel used by the 
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taxpayer in the ordinary course of the trade or business 
of transporting goods by truck. 
‘‘(b) LIMITATION.—The credit determined under sub-
section (a) shall not exceed $2,500 with respect to any 
taxpayer for any taxable year. 
‘‘(c) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(1) AGGREGATION RULES.—All persons treat-
ed as a single employer under subsection (a) or (b) 
of section 52 or subsection (m) or (o) of section 414 
shall be treated as one person. 
‘‘(2) DENIAL OF DOUBLE BENEFIT.—No deduc-
tion or credit shall be allowed under any other provi-
sion of this chapter with respect to the amount of 
the credit determined under this section.’’. 
(b) CONFORMING AMENDMENT.—Section 38(b) of 
such Code (relating to general business credit), as amend-
ed by this Act, is amended by striking ‘‘plus’’ at the end 
of paragraph (34), by striking the period at the end of 
paragraph (35) and inserting ‘‘, plus’’, and by adding at 
the end of following new paragraph: 
‘‘(36) the trucker fuel expense credit deter-
mined under section 45S(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart B of part IV of subchapter A of chapter 1 
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of such Code (relating to other credits) is amended by add-
ing at the end the following new section: 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
TITLE V—COAL-TO-LIQUID FUEL 
Subtitle A—Coal to Liquid Fuel 
Activities 
SEC. 501. SHORT TITLE. 
This subtitle may be cited as the ‘‘Coal-to-Liquid 
Fuel Promotion Act of 2008’’. 
SEC. 502. DEFINITIONS. 
In this subtitle: 
(1) COAL-TO-LIQUID.—The term ‘‘coal-to-liq-
uid’’ means— 
(A) with respect to a process or tech-
nology, the use of a feedstock, the majority of 
which is the coal resources of the United 
States, using the class of reactions known as 
Fischer-Tropsch, to produce synthetic fuel suit-
able for transportation; and 
(B) with respect to a facility, the portion 
of a facility related to producing the inputs to 
the Fischer-Tropsch process, the Fischer- 
Tropsch process, finished fuel production, or 
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the capture, transportation, or sequestration of 
byproducts of the use of a feedstock that is pri-
marily domestic coal at the Fischer-Tropsch fa-
cility, including carbon emissions. 
(2) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Energy. 
SEC. 503. COAL-TO-LIQUID FUEL LOAN GUARANTEE PRO-
GRAM. 
(a) ELIGIBLE PROJECTS.—Section 1703(b) of the 
Energy Policy Act of 2005 (42 U.S.C. 16513(b)) is 
amended by adding at the end the following: 
‘‘(11) Large-scale coal-to-liquid facilities (as de-
fined in section 502 of the Coal-to-Liquid Fuel Pro-
motion Act of 2008) that use a feedstock, the major-
ity of which is the coal resources of the United 
States, to produce not less than 10,000 barrels a 
day of liquid transportation fuel.’’. 
(b) AUTHORIZATION OF APPROPRIATIONS.—Section 
1704 of the Energy Policy Act of 2005 (42 U.S.C. 16514) 
is amended by adding at the end the following: 
‘‘(c) COAL-TO-LIQUID PROJECTS.— 
‘‘(1) IN GENERAL.—There are authorized to be 
appropriated such sums as are necessary to provide 
the cost of guarantees for projects involving large- 
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scale 
coal-to-liquid 
facilities 
under 
section 
1703(b)(11). 
‘‘(2) ALTERNATIVE FUNDING.—If no appropria-
tions are made available under paragraph (1), an eli-
gible applicant may elect to provide payment to the 
Secretary, to be delivered if and at the time the ap-
plication is approved, in the amount of the estimated 
cost of the loan guarantee to the Federal Govern-
ment, as determined by the Secretary. 
‘‘(3) LIMITATIONS.— 
‘‘(A) IN
GENERAL.—No loan guarantees 
shall be provided under this title for projects 
described in paragraph (1) after (as determined 
by the Secretary)— 
‘‘(i) the tenth such loan guarantee is 
issued under this title; or 
‘‘(ii) production capacity covered by 
such loan guarantees reaches 100,000 bar-
rels per day of coal-to-liquid fuel. 
‘‘(B) INDIVIDUAL PROJECTS.— 
‘‘(i) IN GENERAL.—A loan guarantee 
may be provided under this title for any 
large-scale coal-to-liquid facility described 
in paragraph (1) that produces no more 
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than 20,000 barrels of coal-to-liquid fuel 
per day. 
‘‘(ii) NON-FEDERAL
FUNDING
RE-
QUIREMENT.—To be eligible for a loan 
guarantee under this title, a large-scale 
coal-to-liquid facility described in para-
graph (1) that produces more than 20,000 
barrels per day of coal-to-liquid fuel shall 
be eligible to receive a loan guarantee for 
the proportion of the cost of the facility 
that represents 20,000 barrels of coal-to- 
liquid fuel per day of production. 
‘‘(4) REQUIREMENTS.— 
‘‘(A) GUIDELINES.—Not later than 180 
days after the date of enactment of this sub-
section, the Secretary shall publish guidelines 
for the coal-to-liquids loan guarantee applica-
tion process. 
‘‘(B) APPLICATIONS.—Not later than 1 
year after the date of enactment of this sub-
section, the Secretary shall begin to accept ap-
plications for coal-to-liquid loan guarantees 
under this subsection. 
‘‘(C) DEADLINE.—Not later than 1 year 
from the date of acceptance of an application 
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under subparagraph (B), the Secretary shall 
evaluate the application and make final deter-
minations under this subsection. 
‘‘(5) REPORTS TO CONGRESS.—The Secretary 
shall submit to the Committee on Energy and Nat-
ural Resources of the Senate and the Committee on 
Energy and Commerce of the House of Representa-
tives a report describing the status of the program 
under this subsection not later than each of— 
‘‘(A) 180 days after the date of enactment 
of this subsection; 
‘‘(B) 1 year after the date of enactment of 
this subsection; and 
‘‘(C) the dates on which the Secretary ap-
proves the first and fifth applications for coal- 
to-liquid loan guarantees under this sub-
section.’’. 
SEC. 504. COAL-TO-LIQUID FACILITIES LOAN PROGRAM. 
(a) DEFINITION OF ELIGIBLE RECIPIENT.—In this 
section, the term ‘‘eligible recipient’’ means an individual, 
organization, or other entity that owns, operates, or plans 
to construct a coal-to-liquid facility that will produce at 
least 10,000 barrels per day of coal-to-liquid fuel. 
(b) ESTABLISHMENT.—The Secretary shall establish 
a program under which the Secretary shall provide loans, 
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in a total amount not to exceed $20,000,000, for use by 
eligible recipients to pay the Federal share of the cost of 
obtaining any services necessary for the planning, permit-
ting, and construction of a coal-to-liquid facility. 
(c) APPLICATION.—To be eligible to receive a loan 
under subsection (b), the eligible recipient shall submit to 
the Secretary an application at such time, in such manner, 
and containing such information as the Secretary may re-
quire. 
(d) NON-FEDERAL MATCH.—To be eligible to receive 
a loan under this section, an eligible recipient shall use 
non-Federal funds to provide a dollar-for-dollar match of 
the amount of the loan. 
(e) REPAYMENT OF LOAN.— 
(1) IN GENERAL.—To be eligible to receive a 
loan under this section, an eligible recipient shall 
agree to repay the original amount of the loan to the 
Secretary not later than 5 years after the date of the 
receipt of the loan. 
(2) SOURCE OF FUNDS.—Repayment of a loan 
under paragraph (1) may be made from any financ-
ing or assistance received for the construction of a 
coal-to-liquid facility described in subsection (a), in-
cluding a loan guarantee provided under section 
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1703(b)(11) of the Energy Policy Act of 2005 (42 
U.S.C. 16513(b)(11)). 
(f) REQUIREMENTS.— 
(1) GUIDELINES.—Not later than 180 days 
after the date of enactment of this Act, the Sec-
retary shall publish guidelines for the coal-to-liquids 
loan application process. 
(2) APPLICATIONS.—Not later than 1 year 
after the date of enactment of this Act, the Sec-
retary shall begin to accept applications for coal-to- 
liquid loans under this section. 
(g) REPORTS TO CONGRESS.—Not later than each of 
180 days and 1 year after the date of enactment of this 
Act, the Secretary shall submit to the Committee on En-
ergy and Natural Resources of the Senate and the Com-
mittee on Energy and Commerce of the House of Rep-
resentatives a report describing the status of the program 
under this section. 
(h) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$200,000,000, to remain available until expended. 
SEC. 505. LOCATION OF COAL-TO-LIQUID MANUFACTURING 
FACILITIES. 
The Secretary, in coordination with the head of any 
affected agency, shall promulgate such regulations as the 
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Secretary determines to be necessary to support the devel-
opment on Federal land (including land of the Department 
of Energy, military bases, and military installations closed 
or realigned under the defense base closure and realign-
ment) of coal-to-liquid manufacturing facilities and associ-
ated infrastructure, including the capture, transportation, 
or sequestration of carbon dioxide. 
SEC. 506. STRATEGIC PETROLEUM RESERVE. 
(a) DEVELOPMENT, OPERATION, AND MAINTENANCE 
OF RESERVE.—Section 159 of the Energy Policy and Con-
servation Act (42 U.S.C. 6239) is amended— 
(1) by redesignating subsections (f), (g), (j), 
(k), and (l) as subsections (a), (b), (e), (f), and (g), 
respectively; and 
(2) by inserting after subsection (b) (as redesig-
nated by paragraph (1)) the following: 
‘‘(c) STUDY
OF
MAINTAINING
COAL-TO-LIQUID 
PRODUCTS IN RESERVE.—Not later than 1 year after the 
date of enactment of the Coal-to-Liquid Fuel Promotion 
Act of 2008, the Secretary and the Secretary of Defense 
shall— 
‘‘(1) conduct a study of the feasibility and suit-
ability of maintaining coal-to-liquid products in the 
Reserve; and 
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‘‘(2) submit to the Committee on Energy and 
Natural Resources and the Committee on Armed 
Services of the Senate and the Committee on Energy 
and Commerce and the Committee on Armed Serv-
ices of the House of Representatives a report de-
scribing the results of the study. 
‘‘(d) CONSTRUCTION OF STORAGE FACILITIES.—As 
soon as practicable after the date of enactment of the 
Coal-to-Liquid Fuel Promotion Act of 2008, the Secretary 
may construct 1 or more storage facilities in the vicinity 
of pipeline infrastructure and at least 1 military base.’’. 
(b) PETROLEUM PRODUCTS FOR STORAGE IN RE-
SERVE.—Section 160 of the Energy Policy and Conserva-
tion Act (42 U.S.C. 6240) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1), by inserting a semi-
colon at the end; 
(B) in paragraph (2), by striking ‘‘and’’ at 
the end; 
(C) in paragraph (3), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(D) by adding at the end the following: 
‘‘(4) coal-to-liquid products (as defined in sec-
tion 502 of the Coal-to-Liquid Fuel Promotion Act 
of 2008), as the Secretary determines to be appro-
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priate, in a quantity not to exceed 20 percent of the 
total quantity of petroleum and petroleum products 
in the Reserve.’’; 
(2) in subsection (b), by redesignating para-
graphs (3) through (5) as paragraphs (2) through 
(4), respectively; and 
(3) by redesignating subsections (f) and (h) as 
subsections (d) and (e), respectively. 
(c) CONFORMING AMENDMENTS.—Section 167 of the 
Energy Policy and Conservation Act (42 U.S.C. 6247) is 
amended— 
(1) in subsection (b)— 
(A) by redesignating paragraphs (2) and 
(3) as paragraphs (1) and (2), respectively; and 
(B) in paragraph (2) (as redesignated by 
subparagraph (A)), by striking ‘‘section 160(f)’’ 
and inserting ‘‘section 160(e)’’; and 
(2) in subsection (d), in the matter preceding 
paragraph (1), by striking ‘‘section 160(f)’’ and in-
serting ‘‘section 160(e)’’. 
SEC. 507. AUTHORIZATION TO CONDUCT RESEARCH, DE-
VELOPMENT, TESTING, AND EVALUATION OF 
ASSURED DOMESTIC FUELS. 
Of the amount authorized to be appropriated for the 
Air Force for research, development, testing, and evalua-
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tion, $10,000,000 may be made available for the Air Force 
Research Laboratory to continue support efforts to test, 
qualify, and procure synthetic fuels developed from coal 
for aviation jet use. 
SEC. 508. COAL-TO-LIQUID LONG-TERM FUEL PROCURE-
MENT AND DEPARTMENT OF DEFENSE DE-
VELOPMENT. 
Section 2398a of title 10, United States Code is 
amended— 
(1) in subsection (b)— 
(A) by striking ‘‘The Secretary’’ and in-
serting the following: 
‘‘(1) IN GENERAL.—The Secretary’’; and 
(B) by adding at the end the following: 
‘‘(2) COAL-TO-LIQUID
PRODUCTION
FACILI-
TIES.— 
‘‘(A) IN GENERAL.—The Secretary of De-
fense may enter into contracts or other agree-
ments with private companies or other entities 
to develop and operate coal-to-liquid facilities 
(as defined in section 502 of the Coal-to-Liquid 
Fuel Promotion Act of 2008) on or near mili-
tary installations. 
‘‘(B) CONSIDERATIONS.—In entering into 
contracts and other agreements under subpara-
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graph (A), the Secretary shall consider land 
availability, testing opportunities, and proximity 
to raw materials.’’; 
(2) in subsection (d)— 
(A) by striking ‘‘Subject to applicable pro-
visions of law, any’’ and inserting ‘‘Any’’; and 
(B) by striking ‘‘1 or more years’’ and in-
serting ‘‘up to 25 years’’; and 
(3) by adding at the end the following: 
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section.’’. 
SEC. 509. REPORT ON EMISSIONS OF FISCHER-TROPSCH 
PRODUCTS 
USED 
AS 
TRANSPORTATION 
FUELS. 
(a) IN GENERAL.—In cooperation with the Adminis-
trator of the Environmental Protection Agency, the Sec-
retary of Defense, the Administrator of the Federal Avia-
tion Administration, and the Secretary of Health and 
Human Services, the Secretary shall— 
(1) carry out a research and demonstration pro-
gram to evaluate the emissions of the use of Fischer- 
Tropsch fuel for transportation, including diesel and 
jet fuel; 
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(2) evaluate the effect of using Fischer-Tropsch 
transportation fuel on land and air engine exhaust 
emissions; and 
(3) in accordance with subsection (e), submit to 
Congress a report on the effect on air quality and 
public health of using Fischer-Tropsch fuel in the 
transportation sector. 
(b) GUIDANCE AND TECHNICAL SUPPORT.—The Sec-
retary shall issue any guidance or technical support docu-
ments necessary to facilitate the effective use of Fischer- 
Tropsch fuel and blends under this section. 
(c) FACILITIES.—For the purpose of evaluating the 
emissions of Fischer-Tropsch transportation fuels, the 
Secretary shall— 
(1) support the use and capital modification of 
existing facilities and the construction of new facili-
ties at the research centers designated in section 
417 of the Energy Policy Act of 2005 (42 U.S.C. 
15977); and 
(2) engage those research centers in the evalua-
tion and preparation of the report required under 
subsection (a)(3). 
(d) REQUIREMENTS.—The program described in sub-
section (a)(1) shall consider— 
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(1) the use of neat (100 percent) Fischer- 
Tropsch fuel and blends of Fischer-Tropsch fuels 
with conventional crude oil-derived fuel for heavy- 
duty and light-duty diesel engines and the aviation 
sector; and 
(2) the production costs associated with domes-
tic production of those fuels and prices for con-
sumers. 
(e) REPORTS.—The Secretary shall submit to the 
Committee on Energy and Natural Resources of the Sen-
ate and the Committee on Energy and Commerce of the 
House of Representatives— 
(1) not later than 180 days after the date of 
enactment of this Act, an interim report on actions 
taken to carry out this section; and 
(2) not later than 1 year after the date of en-
actment of this Act, a final report on actions taken 
to carry out this section. 
(f) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section. 
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Subtitle B—Amendments to the 
Internal Revenue Code of 1986 
SEC. 511. CREDIT FOR INVESTMENT IN COAL-TO-LIQUID 
FUELS PROJECTS. 
(a) IN GENERAL.—Section 46 of the Internal Rev-
enue Code of 1986 (relating to amount of credit) is 
amended by striking ‘‘and’’ at the end of paragraph (3), 
by striking the period at the end of paragraph (4) and 
inserting ‘‘, and’’, and by adding at the end the following 
new paragraph: 
‘‘(5) the qualifying coal-to-liquid fuels project 
credit.’’. 
(b) AMOUNT OF CREDIT.—Subpart E of part IV of 
subchapter A of chapter 1 of the Internal Revenue Code 
of 1986 (relating to rules for computing investment credit) 
is amended by inserting after section 48B the following 
new section: 
‘‘SEC. 48C. QUALIFYING COAL-TO-LIQUID FUELS PROJECT 
CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 46, the 
qualifying coal-to-liquid fuels project credit for any taxable 
year is an amount equal to 20 percent of the qualified 
investment for such taxable year. 
‘‘(b) QUALIFIED INVESTMENT.— 
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‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the qualified investment for any taxable year is 
the basis of property placed in service by the tax-
payer during such taxable year which is part of a 
qualifying coal-to-liquid fuels project— 
‘‘(A)(i) the construction, reconstruction, or 
erection of which is completed by the taxpayer, 
or 
‘‘(ii) which is acquired by the taxpayer if 
the original use of such property commences 
with the taxpayer, and 
‘‘(B) with respect to which depreciation (or 
amortization in lieu of depreciation) is allow-
able. 
‘‘(2) APPLICABLE RULES.—For purposes of this 
section, rules similar to the rules of subsection 
(a)(4) and (b) of section 48 shall apply. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) 
QUALIFYING
COAL-TO-LIQUID
FUELS 
PROJECT.—The term ‘qualifying coal-to-liquid fuels 
project’ means any domestic project which— 
‘‘(A) employs the class of reactions known 
as Fischer-Tropsch to produce at least 10,000 
barrels per day of transportation grade liquid 
fuels from a feedstock that is primarily domes-
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tic coal (including any property which allows for 
the capture, transportation, or sequestration of 
by-products resulting from such process, includ-
ing carbon emissions), and 
‘‘(B) any portion of the qualified invest-
ment in which is certified under the qualifying 
coal-to-liquid program as eligible for credit 
under this section in an amount (not to exceed 
$200,000,000) determined by the Secretary. 
‘‘(2) COAL.—The term ‘coal’ means any carbon-
ized or semicarbonized matter, including peat. 
‘‘(d) QUALIFYING COAL-TO-LIQUID FUELS PROJECT 
PROGRAM.— 
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with the Secretary of Energy, shall establish a 
qualifying coal-to-liquid fuels project program to 
consider and award certifications for qualified in-
vestment eligible for credits under this section to 10 
qualifying coal-to-liquid fuels project sponsors under 
this section. The total qualified investment which 
may be awarded eligibility for credit under the pro-
gram shall not exceed $2,000,000,000. 
‘‘(2) PERIOD
OF
ISSUANCE.—A certificate of 
eligibility under paragraph (1) may be issued only 
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during the 10-fiscal year period beginning on Octo-
ber 1, 2007. 
‘‘(3) SELECTION
CRITERIA.—The Secretary 
shall not make a competitive certification award for 
qualified investment for credit eligibility under this 
section unless the recipient has documented to the 
satisfaction of the Secretary that— 
‘‘(A) the proposal of the award recipient is 
financially viable, 
‘‘(B) the recipient will provide sufficient 
information to the Secretary for the Secretary 
to ensure that the qualified investment is spent 
efficiently and effectively, 
‘‘(C) the fuels identified with respect to the 
gasification technology for such project will 
comprise at least 90 percent of the fuels re-
quired by the project for the production of 
transportation grade liquid fuels, 
‘‘(D) the award recipient’s project team is 
competent in the planning and construction of 
coal gasification facilities and familiar with op-
eration of the Fischer-Tropsch process, with 
preference given to those recipients with experi-
ence which demonstrates successful and reliable 
operations of such process, and 
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‘‘(E) the award recipient has met other cri-
teria established and published by the Sec-
retary. 
‘‘(e) DENIAL OF DOUBLE BENEFIT.—No deduction 
or other credit shall be allowed with respect to the basis 
of any property taken into account in determining the 
credit allowed under this section.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 49(a)(1)(C) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘and’’ at the 
end of clause (iii), by striking the period at the end 
of clause (iv) and inserting ‘‘, and’’, and by adding 
after clause (iv) the following new clause: 
‘‘(v) the basis of any property which 
is part of a qualifying coal-to-liquid fuels 
project under section 48C.’’. 
(2) The table of sections for subpart E of part 
IV of subchapter A of chapter 1 of such Code is 
amended by inserting after the item relating to sec-
tion 48B the following new item: 
‘‘Sec. 48C. Qualifying coal-to-liquid fuels project credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to periods after the date of the 
enactment of this Act, under rules similar to the rules of 
section 48(m) of the Internal Revenue Code of 1986 (as 
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in effect on the day before the date of the enactment of 
the Revenue Reconciliation Act of 1990). 
SEC. 512. TEMPORARY EXPENSING FOR EQUIPMENT USED 
IN COAL-TO-LIQUID FUELS PROCESS. 
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by inserting after section 179E the following new section: 
‘‘SEC. 179F. ELECTION TO EXPENSE CERTAIN COAL-TO-LIQ-
UID FUELS FACILITIES. 
‘‘(a) TREATMENT AS EXPENSES.—A taxpayer may 
elect to treat the cost of any qualified coal-to-liquid fuels 
process property as an expense which is not chargeable 
to capital account. Any cost so treated shall be allowed 
as a deduction for the taxable year in which the expense 
is incurred. 
‘‘(b) ELECTION.— 
‘‘(1) IN GENERAL.—An election under this sec-
tion for any taxable year shall be made on the tax-
payer’s return of the tax imposed by this chapter for 
the taxable year. Such election shall be made in such 
manner as the Secretary may by regulations pre-
scribe. 
‘‘(2) ELECTION
IRREVOCABLE.—Any election 
made under this section may not be revoked except 
with the consent of the Secretary. 
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‘‘(c) QUALIFIED COAL-TO-LIQUID FUELS PROCESS 
PROPERTY.—The term ‘qualified coal-to-liquid fuels proc-
ess property’ means any property located in the United 
States— 
‘‘(1) which employs the Fischer-Tropsch process 
to produce transportation grade liquid fuels from a 
feedstock that is primarily domestic coal (including 
any property which allows for the capture, transpor-
tation, or sequestration of by-products resulting 
from such process, including carbon emissions), 
‘‘(2) the original use of which commences with 
the taxpayer, 
‘‘(3) the construction of which— 
‘‘(A) except as provided in subparagraph 
(B), is subject to a binding construction con-
tract entered into after the date of the enact-
ment of this section and before January 1, 
2011, but only if there was no written binding 
construction contract entered into on or before 
such date of enactment, or 
‘‘(B) in the case of self-constructed prop-
erty, began after the date of the enactment of 
this section and before January 1, 2011, and 
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‘‘(4) which is placed in service by the taxpayer 
after the date of the enactment of this section and 
before January 1, 2016. 
‘‘(d) ELECTION TO ALLOCATE DEDUCTION TO COOP-
ERATIVE OWNER.—If— 
‘‘(1) a taxpayer to which subsection (a) applies 
is an organization to which part I of subchapter T 
applies, and 
‘‘(2) one or more persons directly holding an 
ownership interest in the taxpayer are organizations 
to which part I of subchapter T apply, 
the taxpayer may elect to allocate all or a portion of the 
deduction allowable under subsection (a) to such persons. 
Such allocation shall be equal to the person’s ratable share 
of the total amount allocated, determined on the basis of 
the person’s ownership interest in the taxpayer. The tax-
able income of the taxpayer shall not be reduced under 
section 1382 by reason of any amount to which the pre-
ceding sentence applies. 
‘‘(e) BASIS REDUCTION.— 
‘‘(1) IN GENERAL.—For purposes of this title, 
if a deduction is allowed under this section with re-
spect to any qualified coal-to-liquid fuels process 
property, the basis of such property shall be reduced 
by the amount of the deduction so allowed. 
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‘‘(2) ORDINARY
INCOME
RECAPTURE.—For 
purposes of section 1245, the amount of the deduc-
tion allowable under subsection (a) with respect to 
any property which is of a character subject to the 
allowance for depreciation shall be treated as a de-
duction allowed for depreciation under section 167. 
‘‘(f) APPLICATION WITH OTHER DEDUCTIONS AND 
CREDITS.— 
‘‘(1) OTHER DEDUCTIONS.—No deduction shall 
be allowed under any other provision of this chapter 
with respect to any expenditure with respect to 
which a deduction is allowed under subsection (a) to 
the taxpayer. 
‘‘(2) CREDITS.—No credit shall be allowed 
under section 38 with respect to any amount for 
which a deduction is allowed under subsection (a). 
‘‘(g) REPORTING.—No deduction shall be allowed 
under subsection (a) to any taxpayer for any taxable year 
unless such taxpayer files with the Secretary a report con-
taining such information with respect to the operation of 
the property of the taxpayer as the Secretary shall re-
quire.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 1016(a) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘and’’ at the 
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end of paragraph (36), by striking the period at the 
end of paragraph (37) and inserting ‘‘, and’’, and by 
adding at the end the following new paragraph: 
‘‘(38) to the extent provided in section 
179F(e)(1).’’. 
(2) Section 1245(a) of such Code is amended 
by inserting ‘‘179F,’’ after ‘‘179D,’’ both places it 
appears in paragraphs (2)(C) and (3)(C). 
(3) Section 263(a)(1) of such Code is amended 
by striking ‘‘or’’ at the end of subparagraph (J), by 
striking the period at the end of subparagraph (K) 
and inserting ‘‘, or’’, and by inserting after subpara-
graph (K) the following new subparagraph: 
‘‘(L) expenditures for which a deduction is 
allowed under section 179F.’’. 
(4) Section 312(k)(3)(B) of such Code is 
amended by striking ‘‘or 179E’’ each place it ap-
pears in the heading and text and inserting ‘‘179E, 
or 179F’’. 
(5) The table of sections for part VI of sub-
chapter B of chapter 1 of such Code is amended by 
inserting after the item relating to section 179E the 
following new item: 
‘‘Sec. 179F. Election to expense certain coal-to-liquid fuels facilities.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to properties placed in service after 
the date of the enactment of this Act. 
SEC. 513. EXTENSION OF ALTERNATIVE FUEL CREDIT FOR 
FUEL DERIVED FROM COAL THROUGH THE 
FISCHER-TROPSCH PROCESS. 
(a) ALTERNATIVE FUEL CREDIT.—Paragraph (4) of 
section 6426(d) of the Internal Revenue Code of 1986 is 
amended to read as follows: 
‘‘(4) TERMINATION.—This subsection shall not 
apply to— 
‘‘(A) any sale or use involving liquid fuel 
derived from a feedstock that is primarily do-
mestic coal (including peat) through the Fisch-
er-Tropsch process for any period after Sep-
tember 30, 2020, 
‘‘(B) any sale or use involving liquified hy-
drogen for any period after September 30, 
2014, and 
‘‘(C) any other sale or use for any period 
after September 30, 2009.’’. 
(b) PAYMENTS.— 
(1) IN
GENERAL.—Paragraph (5) of section 
6427(e) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘and’’ and the end of subpara-
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graph (C), by striking the period at the end of sub-
paragraph (D) and inserting ‘‘, and’’, and by adding 
at the end the following new subparagraph: 
‘‘(E) any alternative fuel or alternative fuel 
mixture (as so defined) involving liquid fuel de-
rived from coal (including peat) through the 
Fischer-Tropsch process sold or used after Sep-
tember 30, 2020.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
6427(e)(5)(C) of such Code is amended by striking 
‘‘subparagraph (D)’’ and inserting ‘‘subparagraphs 
(D) and (E)’’. 
SEC. 514. MODIFICATIONS TO ENHANCED OIL RECOVERY 
CREDIT. 
(a) ENHANCED CREDIT FOR CARBON DIOXIDE IN-
JECTIONS.—Section 43 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
subsection: 
‘‘(f) ENHANCED CREDIT
FOR PROJECTS USING 
QUALIFIED CARBON DIOXIDE.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion— 
‘‘(A) the term ‘qualified project’ includes a 
project described in paragraph (2), and 
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‘‘(B) in the case of a project described in 
paragraph (2), subsection (a) shall be applied 
by substituting ‘50 percent’ for ‘15 percent’. 
‘‘(2) PROJECTS DESCRIBED.—A project is de-
scribed in this paragraph if it begins or is substan-
tially expanded after December 31, 2007, and 
‘‘(A) uses qualified carbon dioxide in an 
enhanced oil, natural gas, or coalbed methane 
recovery method, which involves flooding or in-
jection, or 
‘‘(B) enables the capture or sequestration 
of qualified carbon dioxide. 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) ENHANCED
OIL
RECOVERY.—The 
term ‘enhanced oil recovery’ means recovery of 
oil by injecting or flooding with qualified carbon 
dioxide. 
‘‘(B) ENHANCED
NATURAL
GAS
RECOV-
ERY.—The term ‘enhanced natural gas recov-
ery’ means recovery of natural gas by injecting 
or flooding with qualified carbon dioxide. 
‘‘(C) ENHANCED COALBED METHANE RE-
COVERY.—The term ‘enhanced coalbed methane 
recovery’ means recovery of coalbed methane by 
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injecting or flooding with qualified carbon diox-
ide. 
‘‘(D) QUALIFIED CARBON DIOXIDE.—The 
term ‘qualified carbon dioxide’ means carbon di-
oxide which is produced from the gasification 
and subsequent refinement of a feedstock which 
is primarily domestic coal, at a facility which 
produces coal-to-liquid fuel. 
‘‘(E) CAPTURE OR SEQUESTRATION.—The 
term ‘capture or sequestration’ means any 
equipment or facility necessary to— 
‘‘(i) capture or separate qualified car-
bon dioxide from other emissions, 
‘‘(ii) transport qualified carbon diox-
ide, or 
‘‘(iii) process and use qualified carbon 
dioxide in a qualified project. 
‘‘(4) TERMINATION.—This subsection shall not 
apply to costs paid or incurred for any qualified 
project after December 31, 2020.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 43 of the Internal Revenue Code of 
1986 is amended— 
(A) by striking ‘‘enhanced oil recovery 
credit’’ in subsection (a) and inserting ‘‘en-
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hanced oil, natural gas, and coalbed methane 
recovery, and capture and sequestration credit’’, 
(B) by striking ‘‘qualified enhanced oil re-
covery costs’’ each place it appears and insert-
ing ‘‘qualified costs’’, 
(C) by striking ‘‘qualified enhanced oil re-
covery project’’ each place it appears and in-
serting ‘‘qualified project’’, and 
(D) by striking the heading and inserting: 
‘‘SEC. 43. ENHANCED OIL, NATURAL GAS, AND COALBED 
METHANE RECOVERY, AND CAPTURE AND SE-
QUESTRATION CREDIT.’’. 
(2) The item in the table of sections for subpart 
D of part IV of subchapter A of chapter 1 of such 
Code relating to section 43 is amended to read as 
follows: 
‘‘Sec. 43. Enhanced oil, natural gas, and coalbed methane recovery, and cap-
ture and sequestration credit.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to costs paid or incurred in taxable 
years ending after December 31, 2007. 
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SEC. 515. ALLOWANCE OF ENHANCED OIL, NATURAL GAS, 
AND COALBED METHANE RECOVERY, AND 
CAPTURE 
AND 
SEQUESTRATION 
CREDIT 
AGAINST THE ALTERNATIVE MINIMUM TAX. 
(a) IN GENERAL.—Subsection (c) of section 38 of the 
Internal Revenue Code of 1986 (relating to limitation 
based on amount of tax) is amended by redesignating 
paragraphs (4) and (5) as paragraphs (5) and (6), respec-
tively, and by inserting after paragraph (3) the following 
new paragraph: 
‘‘(4) SPECIAL RULES FOR ENHANCED OIL, NAT-
URAL GAS, AND COALBED METHANE RECOVERY, AND 
CAPTURE
AND
SEQUESTRATION
CREDIT.—In the 
case of the enhanced oil, natural gas, and coalbed 
methane recovery, and capture and sequestration 
credit determined under section 43— 
‘‘(A) this section and section 39 shall be 
applied separately with respect to such credit, 
and 
‘‘(B) in applying paragraph (1) to such 
credit— 
‘‘(i) the tentative minimum tax shall 
be treated as being zero, and 
‘‘(ii) the limitation under paragraph 
(1) (as modified by clause (i)) shall be re-
duced by the credit allowed under sub-
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section (a) for the taxable year (other than 
the enhanced oil, natural gas, and coalbed 
methane recovery, and capture and seques-
tration credit and the specified credits).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 38(c)(2)(A)(ii)(II) of such Code is 
amended by inserting ‘‘the enhanced oil, natural gas, 
and coalbed methane recovery, and capture and se-
questration credit,’’ after ‘‘employee credit,’’. 
(2) Section 38(c)(3)(A)(ii)(II) of such Code is 
amended by inserting ‘‘, the enhanced oil, natural 
gas, coalbed methane recovery, capture and seques-
tration credit,’’ after ‘‘employee credit’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after De-
cember 31, 2007. 
TITLE VI—ENERGY EFFICIENT 
TAX CREDIT FOR VEHICLES 
SEC. 601. CREDIT FOR HYBRIDS AND PLUG-IN HYBRIDS. 
(a) IN GENERAL.—Subparagraph (A) of section 
30B(d)(2) of the Internal Revenue Code of 1986 (relating 
to credit amount for passenger automobiles and light 
trucks) is amended to read as follows: 
‘‘(A) CREDIT
AMOUNT
FOR
PASSENGER 
AUTOMOBILES AND LIGHT TRUCKS.— 
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‘‘(i) IN GENERAL.—In the case of a 
new qualified hybrid motor vehicle (other 
than a new qualified plug-in hybrid motor 
vehicle) which is a passenger automobile or 
light truck and which has a gross vehicle 
weight rating of not more than 8,500 
pounds, the amount determined under this 
paragraph is the sum of the amounts de-
termined under subclauses (I), (II), and 
(III). 
‘‘(I) 
FUEL
ECONOMY.—The 
amount determined under this sub-
clause is the amount which would be 
determined under subsection (c)(2)(A) 
if such vehicle were a vehicle referred 
to in such subsection. 
‘‘(II) CONSERVATION
CREDIT.— 
The amount determined under this 
subclause is the amount which would 
be 
determined 
under 
subsection 
(c)(2)(B) if such vehicle were a vehicle 
referred to in such subsection. 
‘‘(III) DOMESTIC ACQUISITION.— 
In the case of a vehicle acquired for 
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use or lease by the taxpayer from a 
domestic corporation, $1,000. 
‘‘(ii) NEW
QUALIFIED
PLUG-IN
HY-
BRID MOTOR VEHICLES.—In the case of a 
new qualified plug-in hybrid motor vehicle 
which is a passenger automobile or light 
truck and which has a gross vehicle weight 
rating of not more than 8,500 pounds, the 
amount determined under this paragraph 
is the sum of the amounts determined 
under subclauses (I), (II), (III), and (IV). 
‘‘(I) 
BASE
AMOUNT.—The 
amount determined under this sub-
clause is $3,000. 
‘‘(II) FLEXIBLE
FUEL.—In the 
case of a vehicle which is warrantied 
by its manufacturer to operate on a 
fuel described in section 30C(c)(1)(A), 
the amount determined under this 
subclause is $150. 
‘‘(III) POWER OF TRACTION BAT-
TERY.—In the case of vehicle which 
draws propulsion energy from a trac-
tion battery of not less than 5 kWh, 
the amount determined under this 
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subclause is $500, plus $250 for each 
kWh that such battery exceeds 5 
kWh. The amount determined under 
this 
subclause 
shall 
not 
exceed 
$3,000. 
‘‘(IV) DOMESTIC ACQUISITION.— 
In the case of a vehicle acquired for 
use or lease by the taxpayer from a 
domestic corporation, $1,000.’’. 
(b) NEW QUALIFIED PLUG-IN HYBRID MOTOR VEHI-
CLE.—Subsection (d) of section 30B of such Code is 
amended by adding at the end the following new para-
graph: 
‘‘(4) NEW QUALIFIED PLUG-IN HYBRID MOTOR 
VEHICLE.—For purposes of this subsection, the term 
‘new qualified plug-in hybrid motor vehicle’ means 
any new qualified hybrid motor vehicle which— 
‘‘(A) meets or exceeds the Bin 5 Tier II 
emission standard established in regulations 
prescribed by the Administrator of the Environ-
mental Protection Agency under section 202(i) 
of the Clean Air Act for that make and model 
year vehicle, 
‘‘(B) draws propulsion energy from a trac-
tion battery of not less than 4 kWh, and 
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‘‘(C) is equipped with a means of re-
charging its rechargeable energy storage system 
from an external source of electricity.’’. 
(c) APPLICATION OF LIMITATION ON NUMBER OF 
HYBRIDS ELIGIBLE FOR CREDIT.— 
(1) IN
GENERAL.—Subsection (f) of section 
30B of such Code is amended by adding at the end 
the following new paragraph: 
‘‘(6) SEPARATE APPLICATION TO NEW QUALI-
FIED PLUG-IN HYBRID MOTOR VEHICLES.—In the 
case of a new qualified plug-in hybrid motor vehicle, 
this subsection shall be applied— 
‘‘(A) separately with respect to such vehi-
cles by treating only new qualified plug-in hy-
brid motor vehicles as qualified vehicles, 
‘‘(B) by substituting ‘100,000’ for ‘60,000’ 
in paragraph (2), and 
‘‘(C) by substituting ‘the date of the enact-
ment of paragraph (6)’ for ‘December 31, 
2005’ in paragraph (2).’’. 
(2) CONFORMING AMENDMENT.—Paragraph (5) 
of section 30B(f) of such Code is amended by insert-
ing ‘‘other than a new qualified plug-in hybrid motor 
vehicle’’ after ‘‘subsection (d)(2)(A)’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
the date of the enactment of this Act, in taxable years 
ending after such date. 
TITLE 
VII—EXTENSION 
AND 
MODIFICATION OF TAX PRO-
VISIONS 
SEC. 700. SHORT TITLE; ETC. 
(a) SHORT TITLE.—This title may be cited as the 
‘‘Clean Energy Tax Stimulus Act of 2008’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this title an amend-
ment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
Subtitle A—Extension of Clean 
Energy Production Incentives 
SEC. 701. EXTENSION AND MODIFICATION OF RENEWABLE 
ENERGY PRODUCTION TAX CREDIT. 
(a) EXTENSION OF CREDIT.—Each of the following 
provisions of section 45(d) (relating to qualified facilities) 
is amended by striking ‘‘January 1, 2009’’ and inserting 
‘‘January 1, 2010’’: 
(1) Paragraph (1). 
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(2) Clauses (i) and (ii) of paragraph (2)(A). 
(3) Clauses (i)(I) and (ii) of paragraph (3)(A). 
(4) Paragraph (4). 
(5) Paragraph (5). 
(6) Paragraph (6). 
(7) Paragraph (7). 
(8) Paragraph (8). 
(9) Subparagraphs (A) and (B) of paragraph 
(9). 
(b) PRODUCTION CREDIT FOR ELECTRICITY PRO-
DUCED FROM MARINE RENEWABLES.— 
(1) IN
GENERAL.—Paragraph (1) of section 
45(c) (relating to resources) is amended by striking 
‘‘and’’ at the end of subparagraph (G), by striking 
the period at the end of subparagraph (H) and in-
serting ‘‘, and’’, and by adding at the end the fol-
lowing new subparagraph: 
‘‘(I) marine and hydrokinetic renewable en-
ergy.’’. 
(2) MARINE RENEWABLES.—Subsection (c) of 
section 45 is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(10) MARINE
AND
HYDROKINETIC
RENEW-
ABLE ENERGY.— 
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‘‘(A) IN GENERAL.—The term ‘marine and 
hydrokinetic renewable energy’ means energy 
derived from— 
‘‘(i) waves, tides, and currents in 
oceans, estuaries, and tidal areas, 
‘‘(ii) free flowing water in rivers, 
lakes, and streams, 
‘‘(iii) free flowing water in an irriga-
tion system, canal, or other man-made 
channel, including projects that utilize non-
mechanical structures to accelerate the 
flow of water for electric power production 
purposes, or 
‘‘(iv) differentials in ocean tempera-
ture (ocean thermal energy conversion). 
‘‘(B) EXCEPTIONS.—Such term shall not 
include any energy which is derived from any 
source which utilizes a dam, diversionary struc-
ture (except as provided in subparagraph 
(A)(iii)), or impoundment for electric power 
production purposes.’’. 
(3) DEFINITION OF FACILITY.—Subsection (d) 
of section 45 is amended by adding at the end the 
following new paragraph: 
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‘‘(11) MARINE
AND
HYDROKINETIC
RENEW-
ABLE ENERGY FACILITIES.—In the case of a facility 
producing electricity from marine and hydrokinetic 
renewable energy, the term ‘qualified facility’ means 
any facility owned by the taxpayer— 
‘‘(A) which has a nameplate capacity rat-
ing of at least 150 kilowatts, and 
‘‘(B) which is originally placed in service 
on or after the date of the enactment of this 
paragraph and before January 1, 2010.’’. 
(4) CREDIT RATE.—Subparagraph (A) of sec-
tion 45(b)(4) is amended by striking ‘‘or (9)’’ and 
inserting ‘‘(9), or (11)’’. 
(5) COORDINATION
WITH
SMALL
IRRIGATION 
POWER.—Paragraph (5) of section 45(d), as amend-
ed by subsection (a), is amended by striking ‘‘Janu-
ary 1, 2010’’ and inserting ‘‘the date of the enact-
ment of paragraph (11)’’. 
(c) SALES OF ELECTRICITY TO REGULATED PUBLIC 
UTILITIES TREATED
AS SALES
TO UNRELATED PER-
SONS.—Section 45(e)(4) (relating to related persons) is 
amended by adding at the end the following new sentence: 
‘‘A taxpayer shall be treated as selling electricity to an 
unrelated person if such electricity is sold to a regulated 
public utility (as defined in section 7701(a)(33).’’. 
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(d) TRASH FACILITY CLARIFICATION.—Paragraph 
(7) of section 45(d) is amended— 
(1) by striking ‘‘facility which burns’’ and in-
serting ‘‘facility (other than a facility described in 
paragraph (6)) which uses’’, and 
(2) by striking ‘‘COMBUSTION’’. 
(e) EFFECTIVE DATES.— 
(1) EXTENSION.—The amendments made by 
subsection (a) shall apply to property originally 
placed in service after December 31, 2008. 
(2) MODIFICATIONS.—The amendments made 
by subsections (b) and (c) shall apply to electricity 
produced and sold after the date of the enactment 
of this Act, in taxable years ending after such date. 
(3) TRASH
FACILITY
CLARIFICATION.—The 
amendments made by subsection (d) shall apply to 
electricity produced and sold before, on, or after De-
cember 31, 2007. 
SEC. 702. EXTENSION AND MODIFICATION OF SOLAR EN-
ERGY AND FUEL CELL INVESTMENT TAX 
CREDIT. 
(a) EXTENSION OF CREDIT.— 
(1) SOLAR
ENERGY
PROPERTY.—Paragraphs 
(2)(A)(i)(II) and (3)(A)(ii) of section 48(a) (relating 
to energy credit) are each amended by striking 
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‘‘January 1, 2009’’ and inserting ‘‘January 1, 
2017’’. 
(2) FUEL CELL PROPERTY.—Subparagraph (E) 
of section 48(c)(1) (relating to qualified fuel cell 
property) is amended by striking ‘‘December 31, 
2008’’ and inserting ‘‘December 31, 2016’’. 
(3) QUALIFIED
MICROTURBINE
PROPERTY.— 
Subparagraph (E) of section 48(c)(2) (relating to 
qualified microturbine property) is amended by 
striking ‘‘December 31, 2008’’ and inserting ‘‘De-
cember 31, 2016’’. 
(b) ALLOWANCE OF ENERGY CREDIT AGAINST AL-
TERNATIVE MINIMUM TAX.—Subparagraph (B) of section 
38(c)(4) (relating to specified credits) is amended by strik-
ing ‘‘and’’ at the end of clause (iii), by striking the period 
at the end of clause (iv) and inserting ‘‘, and’’, and by 
adding at the end the following new clause: 
‘‘(v) the credit determined under sec-
tion 46 to the extent that such credit is at-
tributable to the energy credit determined 
under section 48.’’. 
(c) REPEAL OF DOLLAR PER KILOWATT LIMITATION 
FOR FUEL CELL PROPERTY.— 
(1) IN GENERAL.—Section 48(c)(1) (relating to 
qualified fuel cell), as amended by subsection (a)(2), 
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is amended by striking subparagraph (B) and by re-
designating subparagraphs (C), (D), and (E) as sub-
paragraphs (B), (C), and (D), respectively. 
(2) 
CONFORMING
AMENDMENT.—Section 
48(a)(1) is amended by striking ‘‘paragraphs (1)(B) 
and (2)(B) of subsection (c)’’ and inserting ‘‘sub-
section (c)(2)(B)’’. 
(d) PUBLIC ELECTRIC UTILITY PROPERTY TAKEN 
INTO ACCOUNT.— 
(1) IN
GENERAL.—Paragraph (3) of section 
48(a) is amended by striking the second sentence 
thereof. 
(2) CONFORMING AMENDMENTS.— 
(A) Paragraph (1) of section 48(c), as 
amended by this section, is amended by striking 
subparagraph (C) and redesignating subpara-
graph (D) as subparagraph (C). 
(B) Paragraph (2) of section 48(c), as 
amended by subsection (a)(3), is amended by 
striking subparagraph (D) and redesignating 
subparagraph (E) as subparagraph (D). 
(e) EFFECTIVE DATES.— 
(1) EXTENSION.—The amendments made by 
subsection (a) shall take effect on the date of the en-
actment of this Act. 
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(2) ALLOWANCE AGAINST ALTERNATIVE MIN-
IMUM TAX.—The amendments made by subsection 
(b) shall apply to credits determined under section 
46 of the Internal Revenue Code of 1986 in taxable 
years beginning after the date of the enactment of 
this Act and to carrybacks of such credits. 
(3) FUEL CELL PROPERTY AND PUBLIC ELEC-
TRIC UTILITY PROPERTY.—The amendments made 
by subsections (c) and (d) shall apply to periods 
after the date of the enactment of this Act, in tax-
able years ending after such date, under rules simi-
lar to the rules of section 48(m) of the Internal Rev-
enue Code of 1986 (as in effect on the day before 
the date of the enactment of the Revenue Reconcili-
ation Act of 1990). 
SEC. 703. EXTENSION AND MODIFICATION OF RESIDENTIAL 
ENERGY EFFICIENT PROPERTY CREDIT. 
(a) EXTENSION.—Section 25D(g) (relating to termi-
nation) is amended by striking ‘‘December 31, 2008’’ and 
inserting ‘‘December 31, 2009’’. 
(b) NO DOLLAR LIMITATION
FOR CREDIT
FOR 
SOLAR ELECTRIC PROPERTY.— 
(1) IN GENERAL.—Section 25D(b)(1) (relating 
to maximum credit) is amended by striking subpara-
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graph (A) and by redesignating subparagraphs (B) 
and (C) as subparagraphs (A) and (B), respectively. 
(2) 
CONFORMING
AMENDMENTS.—Section 
25D(e)(4) is amended— 
(A) by striking clause (i) in subparagraph 
(A), 
(B) by redesignating clauses (ii) and (iii) 
in subparagraph (A) as clauses (i) and (ii), re-
spectively, and 
(C) by striking ‘‘, (2),’’ in subparagraph 
(C). 
(c) 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 
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‘‘(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-
ULAR
AND
ALTERNATIVE
MINIMUM
TAX.—In 
the case of a taxable year to which section 
26(a)(2) applies, if the credit allowable under 
subsection (a) exceeds the limitation imposed by 
section 26(a)(2) for such taxable year reduced 
by the sum of the credits allowable under this 
subpart (other than this section), such excess 
shall be carried to the succeeding taxable year 
and added to the credit allowable under sub-
section (a) for such succeeding taxable year. 
‘‘(B) RULE
FOR
OTHER
YEARS.—In the 
case of a taxable year to which section 26(a)(2) 
does not apply, if the credit allowable under 
subsection (a) exceeds the limitation imposed by 
paragraph (1) for such taxable year, such ex-
cess shall be carried to the succeeding taxable 
year and added to the credit allowable under 
subsection (a) for such succeeding taxable 
year.’’. 
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(2) CONFORMING AMENDMENTS.— 
(A) Section 23(b)(4)(B) is amended by in-
serting ‘‘and section 25D’’ after ‘‘this section’’. 
(B) Section 24(b)(3)(B) is amended by 
striking ‘‘and 25B’’ and inserting ‘‘, 25B, and 
25D’’. 
(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’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2007. 
(2) APPLICATION
OF
EGTRRA
SUNSET.—The 
amendments made by subparagraphs (A) and (B) of 
subsection (c)(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. 
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100 
SEC. 704. EXTENSION AND MODIFICATION OF CREDIT FOR 
CLEAN RENEWABLE ENERGY BONDS. 
(a) EXTENSION.—Section 54(m) (relating to termi-
nation) is amended by striking ‘‘December 31, 2008’’ and 
inserting ‘‘December 31, 2009’’. 
(b) INCREASE IN NATIONAL LIMITATION.—Section 
54(f) (relating to limitation on amount of bonds des-
ignated) is amended— 
(1) by inserting ‘‘, and for the period beginning 
after the date of the enactment of the Clean Energy 
Tax Stimulus Act of 2008 and ending before Janu-
ary 1, 2010, $400,000,000’’ after ‘‘$1,200,000,000’’ 
in paragraph (1), 
(2) by striking ‘‘$750,000,000 of the’’ in para-
graph (2) and inserting ‘‘$750,000,000 of the 
$1,200,000,000’’, and 
(3) by striking ‘‘bodies’’ in paragraph (2) and 
inserting ‘‘bodies, and except that the Secretary may 
not allocate more than 1⁄3 of the $400,000,000 na-
tional clean renewable energy bond limitation to fi-
nance qualified projects of qualified borrowers which 
are public power providers nor more than 1⁄3 of such 
limitation to finance qualified projects of qualified 
borrowers which are mutual or cooperative electric 
companies described in section 501(c)(12) or section 
1381(a)(2)(C)’’. 
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101 
(c) PUBLIC POWER PROVIDERS DEFINED.—Section 
54(j) is amended— 
(1) by adding at the end the following new 
paragraph: 
‘‘(6) PUBLIC
POWER
PROVIDER.—The term 
‘public power provider’ means a State utility with a 
service obligation, as such terms are defined in sec-
tion 217 of the Federal Power Act (as in effect on 
the date of the enactment of this paragraph).’’, and 
(2) by inserting ‘‘; PUBLIC POWER PROVIDER’’ 
before the period at the end of the heading. 
(d) TECHNICAL AMENDMENT.—The third sentence of 
section 54(e)(2) is amended by striking ‘‘subsection 
(l)(6)’’ and inserting ‘‘subsection (l)(5)’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to bonds issued after the date of 
the enactment of this Act. 
SEC. 705. EXTENSION OF SPECIAL RULE TO IMPLEMENT 
FERC RESTRUCTURING POLICY. 
(a) QUALIFYING ELECTRIC TRANSMISSION TRANS-
ACTION.— 
(1) IN GENERAL.—Section 451(i)(3) (defining 
qualifying electric transmission transaction) is 
amended by striking ‘‘January 1, 2008’’ and insert-
ing ‘‘January 1, 2010’’. 
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102 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to transactions after 
December 31, 2007. 
(b) INDEPENDENT TRANSMISSION COMPANY.— 
(1) IN GENERAL.—Section 451(i)(4)(B)(ii) (de-
fining independent transmission company) is amend-
ed by striking ‘‘December 31, 2007’’ and inserting 
‘‘the date which is 2 years after the date of such 
transaction’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall take effect as if included in 
the amendments made by section 909 of the Amer-
ican Jobs Creation Act of 2004. 
SEC. 706. EXTENSION OF WIND PRODUCTION TAX CREDIT. 
(a) IN GENERAL.—Paragraph (1) of section 45(d), 
as amended by this Act, is amended by striking ‘‘2010’’ 
and inserting ‘‘2019’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property originally placed in 
service on or after January 1, 2009. 
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103 
Subtitle B—Extension of Incentives 
To Improve Energy Efficiency 
SEC. 711. EXTENSION AND MODIFICATION OF CREDIT FOR 
ENERGY EFFICIENCY IMPROVEMENTS TO EX-
ISTING HOMES. 
(a) EXTENSION OF CREDIT.—Section 25C(g) (relat-
ing to termination) is amended by striking ‘‘December 31, 
2007’’ and inserting ‘‘December 31, 2009’’. 
(b) QUALIFIED BIOMASS FUEL PROPERTY.— 
(1) IN GENERAL.—Section 25C(d)(3) is amend-
ed— 
(A) by striking ‘‘and’’ at the end of sub-
paragraph (D), 
(B) by striking the period at the end of 
subparagraph (E) and inserting ‘‘, and’’, and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(F) a stove which uses the burning of bio-
mass fuel to heat a dwelling unit located in the 
United States and used as a residence by the 
taxpayer, or to heat water for use in such a 
dwelling unit, and which has a thermal effi-
ciency rating of at least 75 percent.’’. 
(2) BIOMASS FUEL.—Section 25C(d) (relating 
to residential energy property expenditures) is 
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104 
amended by adding at the end the following new 
paragraph: 
‘‘(6) BIOMASS FUEL.—The term ‘biomass fuel’ 
means any plant-derived fuel available on a renew-
able or recurring basis, including agricultural crops 
and trees, wood and wood waste and residues (in-
cluding wood pellets), plants (including aquatic 
plants), grasses, residues, and fibers.’’. 
(c) MODIFICATIONS OF STANDARDS FOR ENERGY- 
EFFICIENT BUILDING PROPERTY.— 
(1) ELECTRIC
HEAT
PUMPS.—Subparagraph 
(B) of section 25C(d)(3) is amended to read as fol-
lows: 
‘‘(A) an electric heat pump which achieves 
the highest efficiency tier established by the 
Consortium for Energy Efficiency, as in effect 
on January 1, 2008.’’. 
(2) CENTRAL
AIR
CONDITIONERS.—Section 
25C(d)(3)(D) is amended by striking ‘‘2006’’ and 
inserting ‘‘2008’’. 
(3) WATER
HEATERS.—Subparagraph (E) of 
section 25C(d) is amended to read as follows: 
‘‘(E) a natural gas, propane, or oil water 
heater which has either an energy factor of at 
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105 
least 0.80 or a thermal efficiency of at least 90 
percent.’’. 
(4) OIL
FURNACES
AND
HOT
WATER
BOIL-
ERS.—Paragraph (4) of section 25C(d) is amended 
to read as follows: 
‘‘(4) QUALIFIED NATURAL GAS, PROPANE, AND 
OIL FURNACES AND HOT WATER BOILERS.— 
‘‘(A) QUALIFIED
NATURAL
GAS
FUR-
NACE.—The term ‘qualified natural gas fur-
nace’ means any natural gas furnace which 
achieves an annual fuel utilization efficiency 
rate of not less than 95. 
‘‘(B) 
QUALIFIED
NATURAL
GAS
HOT 
WATER
BOILER.—The term ‘qualified natural 
gas hot water boiler’ means any natural gas hot 
water boiler which achieves an annual fuel utili-
zation efficiency rate of not less than 90. 
‘‘(C) QUALIFIED
PROPANE
FURNACE.— 
The term ‘qualified propane furnace’ means any 
propane furnace which achieves an annual fuel 
utilization efficiency rate of not less than 95. 
‘‘(D) QUALIFIED
PROPANE
HOT
WATER 
BOILER.—The term ‘qualified propane hot 
water boiler’ means any propane hot water boil-
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106 
er which achieves an annual fuel utilization effi-
ciency rate of not less than 90. 
‘‘(E) QUALIFIED
OIL
FURNACES.—The 
term ‘qualified oil furnace’ means any oil fur-
nace which achieves an annual fuel utilization 
efficiency rate of not less than 90. 
‘‘(F) QUALIFIED
OIL
HOT
WATER
BOIL-
ER.—The term ‘qualified oil hot water boiler’ 
means any oil hot water boiler which achieves 
an annual fuel utilization efficiency rate of not 
less than 90.’’. 
(d) EFFECTIVE DATE.—The amendments made this 
section shall apply to expenditures made after December 
31, 2007. 
SEC. 712. EXTENSION AND MODIFICATION OF TAX CREDIT 
FOR ENERGY EFFICIENT NEW HOMES. 
(a) EXTENSION OF CREDIT.—Subsection (g) of sec-
tion 45L (relating to termination) is amended by striking 
‘‘December 31, 2008’’ and inserting ‘‘December 31, 
2010’’. 
(b) ALLOWANCE
FOR
CONTRACTOR’S
PERSONAL 
RESIDENCE.—Subparagraph (B) of section 45L(a)(1) is 
amended to read as follows: 
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107 
‘‘(B)(i) acquired by a person from such eli-
gible contractor and used by any person as a 
residence during the taxable year, or 
‘‘(ii) used by such eligible contractor as a 
residence during the taxable year.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to homes acquired after December 
31, 2008. 
SEC. 713. EXTENSION AND MODIFICATION OF ENERGY EF-
FICIENT COMMERCIAL BUILDINGS DEDUC-
TION. 
(a) EXTENSION.—Section 179D(h) (relating to ter-
mination) is amended by striking ‘‘December 31, 2008’’ 
and inserting ‘‘December 31, 2009’’. 
(b) 
ADJUSTMENT
OF
MAXIMUM
DEDUCTION 
AMOUNT.— 
(1) IN GENERAL.—Subparagraph (A) of section 
179D(b)(1) (relating to maximum amount of deduc-
tion) is amended by striking ‘‘$1.80’’ and inserting 
‘‘$2.25’’. 
(2) PARTIAL ALLOWANCE.—Paragraph (1) of 
section 179D(d) is amended— 
(A) by striking ‘‘$.60’’ and inserting 
‘‘$0.75’’, and 
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108 
(B) by striking ‘‘$1.80’’ and inserting 
‘‘$2.25’’. 
(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. 
SEC. 714. MODIFICATION AND EXTENSION OF ENERGY EF-
FICIENT APPLIANCE CREDIT FOR APPLI-
ANCES PRODUCED AFTER 2007. 
(a) IN GENERAL.—Subsection (b) of section 45M (re-
lating to applicable amount) is amended to read as follows: 
‘‘(b) APPLICABLE AMOUNT.—For purposes of sub-
section (a)— 
‘‘(1) DISHWASHERS.—The applicable amount 
is— 
‘‘(A) $45 in the case of a dishwasher which 
is manufactured in calendar year 2008 or 2009 
and which uses no more than 324 kilowatt 
hours per year and 5.8 gallons per cycle, and 
‘‘(B) $75 in the case of a dishwasher 
which is manufactured in calendar year 2008, 
2009, or 2010 and which uses no more than 
307 kilowatt hours per year and 5.0 gallons per 
cycle (5.5 gallons per cycle for dishwashers de-
signed for greater than 12 place settings). 
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109 
‘‘(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, 
‘‘(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— 
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110 
‘‘(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, 
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.’’. 
(b) ELIGIBLE PRODUCTION.— 
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111 
(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), and 
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112 
‘‘(3) 
refrigerators 
described 
in 
subsection 
(b)(3).’’. 
(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.— 
(1) IN
GENERAL.—Paragraph (1) of section 
45M(f) (defining qualified energy efficient appliance) 
is amended to read as follows: 
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113 
‘‘(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), and 
‘‘(C) any refrigerator described in sub-
section (b)(3).’’. 
(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: 
‘‘(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.’’. 
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114 
(4) REPLACEMENT OF ENERGY FACTOR.—Sec-
tion 45M(f)(6), as redesignated by paragraph (3), is 
amended to read as follows: 
‘‘(6) 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.’’. 
(5) GALLONS
PER
CYCLE; WATER
CONSUMP-
TION FACTOR.—Section 45M(f) (relating to defini-
tions), as amended by paragraph (3), is amended by 
adding at the end the following: 
‘‘(9) 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. 
‘‘(10) WATER
CONSUMPTION
FACTOR.—The 
term ‘water consumption factor’ means, with respect 
to a clothes washer, the quotient of the total weight-
ed per-cycle water consumption divided by the cubic 
foot (or liter) capacity of the clothes washer.’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to appliances produced after De-
cember 31, 2007. 
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115 
TITLE VIII—INCENTIVIZING THE 
EXTRACTION 
AND 
PROC-
ESSING OF OIL SHALE 
SEC. 801. INCENTIVES FOR EXTRACTION AND PROCESSING 
OF OIL SHALE. 
(a) INVESTMENT TAX CREDIT FOR EXTRACTION AND 
PROCESSING OF OIL SHALE USING IN-SITU CONVERSION 
TECHNOLOGY.— 
(1) IN GENERAL.—Subpart E of part IV of 
subchapter A of chapter 1 of the Internal Revenue 
Code of 1986, as amended by this Act, is amended 
by inserting after section 48C the following new sec-
tion: 
‘‘SEC. 48D. OIL SHALE EXTRACTION AND PROCESSING FA-
CILITY. 
‘‘(a) GENERAL RULE.—For purposes of section 46, 
the oil shale extraction and processing credit for any tax-
able year is 30 percent of the cost of any qualified oil shale 
extraction and processing property. 
‘‘(b) QUALIFIED
OIL
SHALE
EXTRACTION
AND 
PROCESSING PROPERTY.—The term ‘qualified oil shale 
extraction and processing property’ means property of a 
character subject to the allowance for depreciation— 
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116 
‘‘(1) which is used in the United States solely 
to extract and process oil shale using in-situ conver-
sion technology, 
‘‘(2) the original use of which commences with 
the taxpayer after the date of the enactment of this 
section, 
‘‘(3) which is acquired by the taxpayer by pur-
chase (as defined in section 179(d)) after the date 
of the enactment of this subsection, but only if no 
written binding contract for the acquisition was in 
effect on or before the date of the enactment of this 
subsection, and 
‘‘(4) which is placed in service by the taxpayer 
before January 1, 2019. 
‘‘(c) SPECIAL
RULE
FOR
CERTAIN
SUBSIDIZED 
PROPERTY.—For purposes of this section, rules similar to 
the rules of section 48(a)(4) shall apply. 
‘‘(d) DENIAL OF DOUBLE BENEFIT.—A deduction or 
credit shall not be allowed under any other provision of 
this chapter for the cost taken into account under sub-
section (a).’’. 
(2) CREDIT TREATED AS PART OF INVESTMENT 
CREDIT.—Section 46, as amended by this Act, is 
amended by striking ‘‘and’’ at the end of paragraph 
(5), by striking the period at the end of paragraph 
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117 
(6) and inserting ‘‘, and’’, and by adding at the end 
the following new paragraph: 
‘‘(7) the oil shale extraction and processing 
credit.’’. 
(3) CONFORMING AMENDMENTS.— 
(A) Section 49(a)(1)(C), as amended by 
this Act, 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 
adding at the end the following new clause: 
‘‘(vii) the basis of any qualified oil 
shale extraction and processing property.’’. 
(B) The table of sections for subpart E of 
part IV of subchapter A of chapter 1, as 
amended by this Act, is amended by inserting 
after the item relating to section 48C the fol-
lowing new item: 
‘‘Sec. 48D. Oil shale extraction and processing facility.’’. 
(b) EXPENSING OIL SHALE EXTRACTION AND PROC-
ESSING PROPERTY.—Part VI of subchapter B of chapter 
1 of such Code is amended by inserting after section 179F 
the following new section: 
‘‘SEC. 179G. ELECTION TO EXPENSE CERTAIN OIL SHALE 
EXTRACTION AND PROCESSING PROPERTY. 
‘‘(a) TREATMENT AS EXPENSES.—A taxpayer may 
elect to treat the cost of any qualified oil shale extraction 
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118 
and processing property as an expense which is not 
chargeable to capital account. Any cost so treated shall 
be allowed as a deduction for the taxable year in which 
the expense is incurred. 
‘‘(b) ELECTION.— 
‘‘(1) IN GENERAL.—An election under this sec-
tion for any taxable year shall be made on the tax-
payer’s return of the tax imposed by this chapter for 
the taxable year. Such election shall be made in such 
manner as the Secretary may by regulations pre-
scribe. 
‘‘(2) ELECTION
IRREVOCABLE.—Any election 
made under this section may not be revoked except 
with the consent of the Secretary. 
‘‘(c) QUALIFIED OIL SHALE EXTRACTION AND PROC-
ESSING PROPERTY.—For purposes of this section— 
‘‘(1) The term ‘qualified oil shale extraction 
and processing property’ means any property located 
in the United States— 
‘‘(A) the original use of which commences 
with the taxpayer and which original use is 
solely to extract or process oil shale, and 
‘‘(B) which is placed in service by the tax-
payer after the date of the enactment of this 
section and before January 1, 2019. 
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119 
‘‘(d) ELECTION TO ALLOCATE DEDUCTION TO COOP-
ERATIVE OWNER.—If— 
‘‘(1) a taxpayer to which subsection (a) applies 
is an organization to which part I of subchapter T 
applies, and 
‘‘(2) one or more persons directly holding an 
ownership interest in the taxpayer are organizations 
to which part I of subchapter T apply, 
the taxpayer may elect to allocate all or a portion of the 
deduction allowable under subsection (a) to such persons. 
Such allocation shall be equal to the person’s ratable share 
of the total amount allocated, determined on the basis of 
the person’s ownership interest in the taxpayer. The tax-
able income of the taxpayer shall not be reduced under 
section 1382 by reason of any amount to which the pre-
ceding sentence applies. 
‘‘(e) BASIS REDUCTION.— 
‘‘(1) IN GENERAL.—For purposes of this title, 
if a deduction is allowed under this section with re-
spect to any qualified oil shale extraction and proc-
essing property, the basis of such property shall be 
reduced by the amount of the deduction so allowed. 
‘‘(2) ORDINARY
INCOME
RECAPTURE.—For 
purposes of section 1245, the amount of the deduc-
tion allowable under subsection (a) with respect to 
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122 
TITLE IX—LAND FOR BIOFUEL 
PRODUCTION 
SEC. 901. LEASE OF PUBLIC LANDS FOR PRODUCTION OF 
RENEWABLE BIOMASS FOR BIOFUELS. 
Title II of the Federal Land Policy and Management 
Act of 1976 (43 U.S.C. 1711 et seq.) is amended by add-
ing at the end the following new section: 
‘‘SEC. 215. LEASE OF PUBLIC LANDS FOR PRODUCTION OF 
RENEWABLE BIOMASS FOR BIOFUELS. 
‘‘(a) AUTHORITY TO LEASE LANDS.—The Secretary 
may lease a tract of the public lands under this Act where, 
as a result of land use planning required under section 
202 of this Act, the Secretary determines that— 
‘‘(1) the tract is suitable for agricultural pro-
duction; and 
‘‘(2) the lessee of the tract will use the tract for 
the production of renewable biomass to be used in 
the production of biofuels. 
‘‘(b) EXCLUSION OF CERTAIN PUBLIC LANDS.—This 
section does not apply with respect to the following land: 
‘‘(1) Land in a unit of the National Wilderness 
Preservation System. 
‘‘(2) Land included in the National Wild and 
Scenic Rivers Systems. 
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‘‘(3) Land included in the National System of 
Trails. 
‘‘(4) Land designated as a National Monument. 
‘‘(5) Land regarding which other public objec-
tives and values, including recreation and scenic val-
ues, outweigh the benefit of using the land for the 
production of renewable biomass for biofuels, as de-
termined by the Secretary. 
‘‘(c) CONSIDERATION.—The lease of public lands 
under this section shall be made at a rental rate deter-
mined by the Secretary to be appropriate to promote the 
production of renewable biomass for biofuels. 
‘‘(d) COMPETITIVE BIDDING.— 
‘‘(1) IN GENERAL.—The lease of public lands 
under this section shall be conducted under competi-
tive bidding procedures to be established by the Sec-
retary. 
‘‘(2) MODIFICATION.—The Secretary may lease 
public lands under this section with modified com-
petitive bidding or without competitive bidding— 
‘‘(A) to assure an equitable distribution of 
land among potential renters; or 
‘‘(B) to encourage farmers who are using 
other lands to produce feed grains for biofuels 
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production to return the other lands to crop 
production for food or feed use. 
‘‘(e) DEFINITIONS.—In this section: 
‘‘(1) BIOFUEL.—The term ‘biofuel’ means a 
fuel derived from renewable biomass. 
‘‘(2) RENEWABLE BIOMASS.—The term ‘renew-
able biomass’ means— 
‘‘(A) renewable plant material, including 
feed grains and other agricultural commodities 
(other than trees); and 
‘‘(B) crop residue and other vegetative 
waste material (other than wood waste and 
wood residues).’’. 
Æ 
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