I 
110TH CONGRESS 
1ST SESSION H. R. 2652 
To amend the Internal Revenue Code of 1986 to generate renewable energy 
and encourage novel technologies related to the production of energy, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 11, 2007 
Mr. ENGLISH of Pennsylvania introduced the following bill; which was referred 
to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to generate 
renewable energy and encourage novel technologies re-
lated to the production of energy, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE, ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Generating Renewable Energy and Encouraging Novel 
Technologies Act of 2007’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
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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. 
(c) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title, etc. 
TITLE I—INVESTMENT INCENTIVES 
Sec. 101. Expensing for certain energy property. 
Sec. 102. Modifications relating to clean renewable energy bonds. 
Sec. 103. Extension and modification of investment tax credit with respect to 
solar energy property and qualified fuel cell property. 
Sec. 104. Extension and modification of credit for residential energy efficient 
property. 
Sec. 105. 15-year recovery period for property used in the transmission or dis-
tribution of electricity for sale. 
TITLE II—PRODUCTION INCENTIVES 
Sec. 201. Extension of production credit for wind, solar, and geothermal. 
Sec. 202. Electricity produced from ocean energy. 
TITLE III—INCENTIVES FOR ALTERNATIVE FUELS 
Sec. 301. Technology neutral diesel credit. 
Sec. 302. Extension of credit for alcohol used as fuel. 
Sec. 303. Extension of credit for alternative fuels. 
Sec. 304. Investment tax credit for cellulosic biomass ethanol plant property. 
TITLE IV—INCENTIVES TO CONSERVE ENERGY 
Sec. 401. Extension of nonbusiness energy property. 
Sec. 402. Modifications of energy efficient appliance credit for appliances pro-
duced after 2007. 
Sec. 403. Increase and extension of energy efficient commercial buildings de-
duction. 
TITLE V—CREDIT FOR OIL SHALE RECOVERY COSTS 
Sec. 501. Incentives for extraction and processing of oil shale. 
TITLE VI—PROVISIONS RELATING TO ADVANCED COAL AND 
NUCLEAR ENERGY 
Sec. 601. Alternative method for satisfying certain requirements relating to 
production of refined coal. 
Sec. 602. Advanced Nuclear Power Production. 
TITLE VII—COAL TO LIQUIDS TECHNOLOGY 
Sec. 701. Credit for investment in coal-to-liquid fuels projects. 
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Sec. 702. Temporary expensing for equipment used in coal-to-liquid fuels proc-
ess. 
Sec. 703. Extension of alternative fuel credit for fuel derived from coal through 
the Fischer-Tropsch process. 
Sec. 704. Modifications to enhanced oil recovery credit. 
Sec. 705. Allowance of enhanced oil, natural gas, and coalbed methane recov-
ery, and capture and sequestration credit against the alter-
native minimum tax. 
TITLE I—INVESTMENT 
INCENTIVES 
SEC. 101. EXPENSING FOR CERTAIN ENERGY PROPERTY. 
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 of is amended by inserting after section 179E the 
following new section: 
‘‘SEC. 179F. ELECTION TO EXPENSE CERTAIN ENERGY 
PROPERTY. 
‘‘(a) TREATMENT AS EXPENSES.—A taxpayer may 
elect to treat the cost of any qualified energy property as 
an expense which is not chargeable to capital account. Any 
cost so treated shall be allowed as a deduction for the tax-
able 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. 
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‘‘(2) ELECTION
IRREVOCABLE.—Any election 
made under this section may not be revoked except 
with the consent of the Secretary. 
‘‘(c) QUALIFIED ENERGY PROPERTY.—For purposes 
of this section— 
‘‘(1) The term ‘qualified energy property’ 
means any property located in the United States— 
‘‘(A) which— 
‘‘(i) is described in subparagraph (A) 
of section 48(a)(3) (or would be so de-
scribed if ‘solar or wind energy’ were sub-
stituted for ‘solar energy’ in clause (i) 
thereof and the last sentence of such sec-
tion did not apply to such subparagraph), 
‘‘(ii) is described in paragraph (15) of 
section 48(l) (as in effect on the day before 
the date of the enactment of the Revenue 
Reconciliation Act of 1990) and is a quali-
fying small power production facility within 
the meaning of section 3(17)(C) of the 
Federal 
Power 
Act 
(16 
U.S.C. 
796(17)(C)), as in effect on September 1, 
1986, 
‘‘(iii) 
is 
described 
in 
section 
48(l)(3)(A)(ix) (as in effect on the day be-
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fore the date of the enactment of the Rev-
enue Reconciliation Act of 1990), or 
‘‘(iv) ocean energy property, 
‘‘(B) the original use of which commences 
with the taxpayer, 
‘‘(C) the construction of which— 
‘‘(i) except as provided in subpara-
graph (B), is subject to a binding con-
struction contract entered into after the 
date of the enactment of this section and 
before January 1, 2011, but only if there 
was no written binding construction con-
tract entered into on or before such date of 
enactment, or 
‘‘(ii) in the case of self-constructed 
property, began after the date of the enact-
ment of this section and before January 1, 
2011, and 
‘‘(D) which is placed in service by the tax-
payer after the date of the enactment of this 
section and before January 1, 2016. 
‘‘(2) OCEAN
ENERGY
PROPERTY.—The term 
‘ocean energy property’ means property— 
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‘‘(A) for hydro thermal energy generation 
through closed-cycle, open-cycle and hybrid 
processes, or 
‘‘(B) for hydro mechanical energy genera-
tion through channel systems, float systems, 
and oscillating water column systems. 
‘‘(3) SPECIAL RULE.—Nothing in any provision 
of law shall be construed to treat property as not 
being described in paragraph (1)(A)(i) (or the cor-
responding provisions of prior law) by reason of 
being public utility property (within the meaning of 
section 48(a)(3)). 
‘‘(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-
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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 energy 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 
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). 
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‘‘(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) is amended by striking 
‘‘and’’ at the 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) is amended by inserting 
‘‘179F,’’ after ‘‘179D,’’ both places it appears in 
paragraphs (2)(C) and (3)(C). 
(3) Section 263(a)(1) 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 subparagraph (K) the 
following new subparagraph: 
‘‘(L) expenditures for which a deduction is 
allowed under section 179F.’’. 
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(4) Section 312(k)(3)(B) is amended by strik-
ing ‘‘or 179E’’ each place it appears in the heading 
and text and inserting ‘‘179E, or 179F’’. 
(5) Section 168(e)(B) is amended by inserting 
‘‘and’’ after clause (iv), by striking ‘‘and’’ at the end 
of clause (v) and inserting a period, by striking 
clause (vi), and by striking the last sentence at the 
end. 
(6) The table of sections for part VI of sub-
chapter B of chapter 1 is amended by inserting after 
the item relating to section 179E the following new 
item: 
‘‘Sec. 179F. Election to expense certain energy property.’’. 
(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. 102. MODIFICATIONS RELATING TO CLEAN RENEW-
ABLE ENERGY BONDS. 
(a) CLEAN RENEWABLE ENERGY BOND.—Paragraph 
(1) of section 54(d) (defining clean renewable energy 
bond) is amended— 
(1) in subparagraph (A) by striking ‘‘pursuant’’ 
and all that follows through ‘‘subsection (f)(2)’’, 
(2) in subparagraph (B) by striking ‘‘95 per-
cent or more of the proceeds’’ and inserting ‘‘90 per-
cent or more of the net proceeds’’, and 
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(3) in subparagraph (D) by striking ‘‘subsection 
(h)’’ and inserting ‘‘subsection (g)’’. 
(b) QUALIFIED PROJECT.—Subparagraph (A) of sec-
tion 54(d)(2) (defining qualified project) is amended to 
read as follows: 
‘‘(A) IN
GENERAL.—The term ‘qualified 
project’ means any qualified facility (as deter-
mined under section 45(d) without regard to 
paragraphs (8) and (10) thereof and to any 
placed in service requirement) owned by a 
qualified borrower and also without regard to 
the following— 
‘‘(i) in the case of a qualified facility 
described in section 45(d)(9) (regarding in-
cremental hydropower production), any de-
termination of incremental hydropower 
production and related calculations shall be 
determined by the qualified borrower based 
on a methodology that meets Federal En-
ergy Regulatory Commission standards; 
and 
‘‘(ii) in the case of a qualified facility 
described in section 45(d)(9) (regarding 
non-hydropower production), the facility 
need not be licensed by the Federal Energy 
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Regulation Commission if the facility, 
when constructed, will meet Federal En-
ergy Regulatory Commission licensing re-
quirements and other applicable environ-
mental, licensing, and regulatory require-
ments.’’. 
(c) REIMBURSEMENT.—Subparagraph (C) of section 
54(d)(2) (relating to reimbursement) is amended to read 
as follows: 
‘‘(C) REIMBURSEMENT.—For purposes of 
paragraph (1)(B), proceeds of a clean renew-
able energy bond may be issued to reimburse a 
qualified borrower for amounts paid after the 
date of the enactment of this section in the 
same manner as proceeds of State and local 
government obligations the interest upon which 
is exempt from tax under section 103.’’. 
(d) CHANGE IN USE.—Subparagraph (D) of section 
54(d)(2) (relating to treatment of changes in use) is 
amended by striking ‘‘or qualified issuer’’. 
(e) MAXIMUM TERM.—Paragraph (2) of section 
54(e) (relating to maximum term) is amended by striking 
‘‘without regard to the requirements of subsection (1)(6) 
and’’. 
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(f) REPEAL OF LIMITATION ON AMOUNT OF BONDS 
DESIGNATED.—Section 54 is amended by striking sub-
section (f) (relating to repeal of limitation on amount of 
bonds designated). 
(g) SPECIAL
RULES
RELATING
TO
EXPENDI-
TURES.—Subsection (h) of section 54 (relating to special 
rules relating to expenditures) is amended— 
(1) in paragraph (1)(A) by striking ‘‘95 percent 
of the proceeds’’ and inserting ‘‘90 percent of the 
net proceeds’’, 
(2) in paragraph (1)(B)— 
(A) by striking ‘‘10 percent of the pro-
ceeds’’ and inserting ‘‘5 percent of the net pro-
ceeds’’, and 
(B) by striking ‘‘the 6-month period begin-
ning on’’ both places it appears and inserting 
‘‘1 year of’’, and 
(3) in paragraph (1)(C) by inserting ‘‘net’’ be-
fore ‘‘proceeds’’, 
(4) in paragraph (3) by striking ‘‘95 percent of 
the proceeds’’ and inserting ‘‘90 percent of the net 
proceeds’’. 
(h) REPEAL OF SPECIAL RULES RELATING TO ARBI-
TRAGE.—Section 54 is amended by striking subsection (i) 
(relating to repeal of special rules relating to arbitrage). 
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(i) PUBLIC POWER ENTITY.—Subsection (j) of sec-
tion 54 (defining cooperative electric company; qualified 
energy tax credit bond lender; governmental body; quali-
fied borrower) is amended— 
(1) by redesignating paragraphs (4) and (5) as 
paragraph (5) and (6) and by inserting after para-
graph (3) the following new paragraph: 
‘‘(4) PUBLIC POWER ENTITY.—The term ‘public 
power entity’ means a State utility with a service ob-
ligation, as such terms are defined in section 217 of 
the Federal Power Act (as in effect on the date of 
enactment of this paragraph).’’, 
(2) in paragraph (5), as so redesignated, by 
striking ‘‘or’’ at the end of subparagraph (B), by 
striking the period at the end of subparagraph (C) 
and inserting ‘‘, or’’, and by adding at the end the 
following: 
‘‘(D) a public power entity.’’, and 
(3) in paragraph (6), as so redesignated, by 
striking ‘‘or’’ at the end of subparagraph (A), by 
striking the period at the end of subparagraph (B) 
and inserting ‘‘, or’’, and by adding at the end the 
following: 
‘‘(C) a public power entity.’’. 
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