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Revenue Code of 1986 for taxable years ending after 
December 31, 2005. 
(2) SUBSECTION (b).—The amendments made 
by subsection (b) shall take effect on the date of the 
enactment of this Act. 
SEC. 1306. MODIFICATIONS TO SPECIAL RULES FOR NU-
CLEAR DECOMMISSIONING COSTS. 
(a) REPEAL
OF LIMITATION
ON DEPOSITS INTO 
FUND BASED ON COST OF SERVICE; CONTRIBUTIONS 
AFTER FUNDING PERIOD.—Subsection (b) of section 
468A (relating to special rules for nuclear decommis-
sioning costs) is amended to read as follows: 
‘‘(b) LIMITATION ON AMOUNTS PAID INTO FUND.—
The amount which a taxpayer may pay into the Fund for 
any taxable year shall not exceed the ruling amount appli-
cable to such taxable year.’’. 
(b) TREATMENT
OF CERTAIN DECOMMISSIONING 
COSTS.—
(1) IN GENERAL.—Section 468A is amended by 
redesignating subsections (f) and (g) as subsections 
(g) and (h), respectively, and by inserting after sub-
section (e) the following new subsection: 
‘‘(f) TRANSFERS INTO QUALIFIED FUNDS.—
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(b), any taxpayer maintaining a Fund to which this
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section applies with respect to a nuclear power plant 
may transfer into such Fund not more than an 
amount equal to the present value of the portion of 
the total nuclear decommissioning costs with respect 
to such nuclear power plant previously excluded for 
such nuclear power plant under subsection (d)(2)(A) 
as in effect immediately before the date of the enact-
ment of the Enhanced Energy Infrastructure and 
Technology Tax Act of 2005. 
‘‘(2) 
DEDUCTION
FOR
AMOUNTS
TRANS-
FERRED.—
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (C), the deduction allowed by 
subsection (a) for any transfer permitted by 
this subsection shall be allowed ratably over the 
remaining estimated useful life (within the 
meaning of subsection (d)(2)(A)) of the nuclear 
power plant beginning with the taxable year 
during which the transfer is made. 
‘‘(B) DENIAL
OF
DEDUCTION
FOR
PRE-
VIOUSLY DEDUCTED AMOUNTS.—No deduction 
shall be allowed for any transfer under this sub-
section of an amount for which a deduction was 
previously allowed to the taxpayer (or a prede-
cessor) or a corresponding amount was not in-
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cluded in gross income of the taxpayer (or a 
predecessor). For purposes of the preceding 
sentence, a ratable portion of each transfer 
shall be treated as being from previously de-
ducted or excluded amounts to the extent there-
of. 
‘‘(C) TRANSFERS OF QUALIFIED FUNDS.—
If—
‘‘(i) any transfer permitted by this 
subsection is made to any Fund to which 
this section applies, and 
‘‘(ii) such Fund is transferred there-
after, 
any deduction under this subsection for taxable 
years ending after the date that such Fund is 
transferred shall be allowed to the transferor 
for the taxable year which includes such date. 
‘‘(D) SPECIAL RULES.—
‘‘(i) GAIN OR LOSS NOT RECOGNIZED 
ON TRANSFERS TO FUND.—No gain or loss 
shall be recognized on any transfer de-
scribed in paragraph (1). 
‘‘(ii) TRANSFERS
OF
APPRECIATED 
PROPERTY TO FUND.—If appreciated prop-
erty is transferred in a transfer described
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in paragraph (1), the amount of the deduc-
tion shall not exceed the adjusted basis of 
such property. 
‘‘(3) NEW RULING AMOUNT REQUIRED.—Para-
graph (1) shall not apply to any transfer unless the 
taxpayer requests from the Secretary a new schedule 
of ruling amounts in connection with such transfer. 
‘‘(4) NO
BASIS
IN
QUALIFIED
FUNDS.—Not-
withstanding any other provision of law, the tax-
payer’s basis in any Fund to which this section ap-
plies shall not be increased by reason of any transfer 
permitted by this subsection.’’. 
(2) NEW RULING AMOUNT TO TAKE INTO AC-
COUNT TOTAL COSTS.—Subparagraph (A) of section 
468A(d)(2) (defining ruling amount) is amended to 
read as follows: 
‘‘(A) fund the total nuclear decommis-
sioning costs with respect to such power plant 
over the estimated useful life of such power 
plant, and’’. 
(c) TECHNICAL AMENDMENTS.—Section 468A(e)(2) 
(relating to taxation of Fund) is amended—
(1) by striking ‘‘rate set forth in subparagraph 
(B)’’ in subparagraph (A) and inserting ‘‘rate of 20 
percent’’,
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(2) by striking subparagraph (B), and 
(3) by redesignating subparagraphs (C) and 
(D) as subparagraphs (B) and (C), respectively. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2005. 
SEC. 1307. ARBITRAGE RULES NOT TO APPLY TO PREPAY-
MENTS FOR NATURAL GAS. 
(a) IN GENERAL.—Subsection (b) of section 148 (re-
lating to higher yielding investments) is amended by add-
ing at the end the following new paragraph: 
‘‘(4) SAFE
HARBOR
FOR
PREPAID
NATURAL 
GAS.—
‘‘(A) IN GENERAL.—The term ‘investment-
type property’ does not include a prepayment 
under a qualified natural gas supply contract. 
‘‘(B) QUALIFIED
NATURAL
GAS
SUPPLY 
CONTRACT.—For purposes of this paragraph, 
the term ‘qualified natural gas supply contract’ 
means any contract to acquire natural gas for 
resale by a utility owned by a governmental 
unit if the amount of gas permitted to be ac-
quired under the contract by the utility during 
any year does not exceed the sum of—
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‘‘(i) the annual average amount dur-
ing the testing period of natural gas pur-
chased (other than for resale) by cus-
tomers of such utility who are located 
within the service area of such utility, and 
‘‘(ii) the amount of natural gas to be 
used to transport the prepaid natural gas 
to the utility during such year. 
‘‘(C) NATURAL GAS USED TO GENERATE 
ELECTRICITY.—Natural gas used to generate 
electricity shall be taken into account in deter-
mining 
the 
average 
under 
subparagraph 
(B)(i)—
‘‘(i) only if the electricity is generated 
by a utility owned by a governmental unit, 
and 
‘‘(ii) only to the extent that the elec-
tricity is sold (other than for resale) to 
customers of such utility who are located 
within the service area of such utility. 
‘‘(D) ADJUSTMENTS
FOR
CHANGES
IN 
CUSTOMER BASE.—
‘‘(i) NEW
BUSINESS
CUSTOMERS.—
If—
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‘‘(I) after the close of the testing 
period and before the date of issuance 
of the issue, the utility owned by a 
governmental unit enters into a con-
tract to supply natural gas (other 
than for resale) for a business use at 
a property within the service area of 
such utility, and 
‘‘(II) the utility did not supply 
natural gas to such property during 
the testing period or the ratable 
amount of natural gas to be supplied 
under the contract is significantly 
greater than the ratable amount of 
gas supplied to such property during 
the testing period, 
then a contract shall not fail to be treated 
as a qualified natural gas supply contract 
by reason of supplying the additional nat-
ural gas under the contract referred to in 
subclause (I). 
‘‘(ii) LOST CUSTOMERS.—The average 
under subparagraph (B)(i) shall not exceed 
the annual amount of natural gas reason-
ably expected to be purchased (other than
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for resale) by persons who are located 
within the service area of such utility and 
who, as of the date of issuance of the 
issue, are customers of such utility. 
‘‘(E) RULING REQUESTS.—The Secretary 
may increase the average under subparagraph 
(B)(i) for any period if the utility owned by the 
governmental unit establishes to the satisfaction 
of the Secretary that, based on objective evi-
dence of growth in natural gas consumption or 
population, such average would otherwise be in-
sufficient for such period. 
‘‘(F) ADJUSTMENT
FOR
NATURAL
GAS 
OTHERWISE ON HAND.—
‘‘(i) IN GENERAL.—The amount oth-
erwise permitted to be acquired under the 
contract for any period shall be reduced 
by—
‘‘(I) the applicable share of nat-
ural gas held by the utility on the 
date of issuance of the issue, and 
‘‘(II) the natural gas (not taken 
into account under subclause (I)) 
which the utility has a right to ac-
quire during such period (determined
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as of the date of issuance of the 
issue). 
‘‘(ii) APPLICABLE SHARE.—For pur-
poses of the clause (i), the term ‘applicable 
share’ means, with respect to any period, 
the natural gas allocable to such period if 
the gas were allocated ratably over the pe-
riod to which the prepayment relates. 
‘‘(G) INTENTIONAL ACTS.—Subparagraph 
(A) shall cease to apply to any issue if the util-
ity owned by the governmental unit engages in 
any intentional act to render the volume of nat-
ural gas acquired by such prepayment to be in 
excess of the sum of—
‘‘(i) the amount of natural gas needed 
(other than for resale) by customers of 
such utility who are located within the 
service area of such utility, and 
‘‘(ii) the amount of natural gas used 
to transport such natural gas to the utility. 
‘‘(H) TESTING PERIOD.—For purposes of 
this paragraph, the term ‘testing period’ means, 
with respect to an issue, the most recent 5 cal-
endar years ending before the date of issuance 
of the issue.
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‘‘(I) SERVICE AREA.—For purposes of this 
paragraph, the service area of a utility owned 
by a governmental unit shall be comprised of—
‘‘(i) any area throughout which such 
utility provided at all times during the 
testing period—
‘‘(I) in the case of a natural gas 
utility, natural gas transmission or 
distribution services, and 
‘‘(II) in the case of an electric 
utility, electricity distribution services, 
‘‘(ii) any area within a county contig-
uous to the area described in clause (i) in 
which retail customers of such utility are 
located if such area is not also served by 
another utility providing natural gas or 
electricity services, as the case may be, and 
‘‘(iii) any area recognized as the serv-
ice area of such utility under State or Fed-
eral law.’’. 
(b) PRIVATE LOAN FINANCING TEST NOT TO APPLY 
TO PREPAYMENTS FOR NATURAL GAS.—Paragraph (2) of 
section 141(c) (providing exceptions to the private loan fi-
nancing test) is amended by striking ‘‘or’’ at the end of 
subparagraph (A), by striking the period at the end of
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subparagraph (B) and inserting ‘‘, or’’, and by adding at 
the end the following new subparagraph: 
‘‘(C) is a qualified natural gas supply con-
tract (as defined in section 148(b)(4)).’’. 
(c) EXCEPTION FOR QUALIFIED ELECTRIC AND NAT-
URAL
GAS
SUPPLY
CONTRACTS.—Section 141(d) is 
amended by adding at the end the following new para-
graph: 
‘‘(7) EXCEPTION
FOR
QUALIFIED
ELECTRIC 
AND NATURAL GAS SUPPLY CONTRACTS.—The term 
‘nongovernmental output property’ shall not include 
any contract for the prepayment of electricity or nat-
ural gas which is not investment property under sec-
tion 148(b)(2).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after the date 
of the enactment of this Act. 
SEC. 1308. DETERMINATION OF SMALL REFINER EXCEP-
TION TO OIL DEPLETION DEDUCTION. 
(a) IN GENERAL.—Paragraph (4) of section 613A(d) 
(relating to limitations on application of subsection (c)) 
is amended to read as follows: 
‘‘(4) CERTAIN
REFINERS
EXCLUDED.—If the 
taxpayer or 1 or more related persons engages in the 
refining of crude oil, subsection (c) shall not apply
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to the taxpayer for a taxable year if the average 
daily refinery runs of the taxpayer and such persons 
for the taxable year exceed 75,000 barrels. For pur-
poses of this paragraph, the average daily refinery 
runs for any taxable year shall be determined by di-
viding the aggregate refinery runs for the taxable 
year by the number of days in the taxable year.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years ending after the 
date of the enactment of this Act. 
Subtitle B—Miscellaneous Energy 
Tax Incentives 
SEC. 1311. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT 
PROPERTY. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 (relating to nonrefundable personal 
credits) is amended by inserting after section 25B the fol-
lowing new section: 
‘‘SEC. 25C. RESIDENTIAL ENERGY EFFICIENT PROPERTY. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount 
equal to the sum of—
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‘‘(1) 15 percent of the qualified solar water 
heating property expenditures made by the taxpayer 
during such year, 
‘‘(2) 15 percent of the qualified photovoltaic 
property expenditures made by the taxpayer during 
such year, and 
‘‘(3) 15 percent of the qualified fuel cell prop-
erty expenditures made by the taxpayer during such 
year. 
‘‘(b) LIMITATIONS.—
‘‘(1) MAXIMUM CREDIT.—
‘‘(A) IN
GENERAL.—The credit allowed 
under subsection (a) shall not exceed—
‘‘(i) $2,000 for solar water heating 
property described in subsection (c)(1), 
‘‘(ii) $2,000 for photovoltaic property 
described in subsection (c)(2), and 
‘‘(iii) $500 for each 0.5 kilowatt of ca-
pacity of property described in subsection 
(c)(3). 
‘‘(B) PRIOR EXPENDITURES BY TAXPAYER 
ON SAME RESIDENCE TAKEN INTO ACCOUNT.—
In determining the amount of the credit allowed 
to a taxpayer with respect to any dwelling unit 
under this section, the dollar amounts under
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clauses (i) and (ii) of subparagraph (A) with re-
spect to each type of property described in such 
clauses shall be reduced by the credit allowed to 
the taxpayer under this section with respect to 
such type of property for all preceding taxable 
years with respect to such dwelling unit. 
‘‘(2) PROPERTY STANDARDS.—No credit shall 
be allowed under this section for an item of property 
unless—
‘‘(A) the original use of such property com-
mences with the taxpayer, 
‘‘(B) such property can be reasonably ex-
pected to remain in use for at least 5 years, 
‘‘(C) such property is installed on or in 
connection with a dwelling unit located in the 
United States and used as a residence by the 
taxpayer, 
‘‘(D) in the case of solar water heating 
property, such property is certified for perform-
ance by the non-profit Solar Rating and Certifi-
cation Corporation or a comparable entity en-
dorsed by the government of the State in which 
such property is installed, and 
‘‘(E) in the case of fuel cell property, such 
property meets the performance and quality
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standards (if any) which have been prescribed 
by the Secretary by regulations (after consulta-
tion with the Secretary of Energy). 
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED SOLAR WATER HEATING PROP-
ERTY
EXPENDITURE.—The term ‘qualified solar 
water heating property expenditure’ means an ex-
penditure for property which uses solar energy to 
heat water for use in a dwelling unit. 
‘‘(2) QUALIFIED PHOTOVOLTAIC PROPERTY EX-
PENDITURE.—The term ‘qualified photovoltaic prop-
erty expenditure’ means an expenditure for property 
which uses solar energy to generate electricity for 
use in a dwelling unit and which is not described in 
paragraph (1). 
‘‘(3) QUALIFIED
FUEL
CELL
PROPERTY
EX-
PENDITURE.—The term ‘qualified fuel cell property 
expenditure’ means an expenditure for any qualified 
fuel cell property (as defined in section 48(b)(1)). 
‘‘(d) SPECIAL RULES.—For purposes of this sec-
tion—
‘‘(1) SOLAR PANELS.—No expenditure relating 
to a solar panel or other property installed as a roof 
(or portion thereof) shall fail to be treated as prop-
erty described in paragraph (1) or (2) of subsection
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(c) solely because it constitutes a structural compo-
nent of the structure on which it is installed. 
‘‘(2) SWIMMING POOLS, ETC., USED AS STOR-
AGE MEDIUM.—Expenditures which are properly al-
locable to a swimming pool, hot tub, or any other 
energy storage medium which has a function other 
than the function of such storage shall not be taken 
into account for purposes of this section. 
‘‘(3) DOLLAR AMOUNTS IN CASE OF JOINT OC-
CUPANCY.—In the case of any dwelling unit which is 
jointly occupied and used during any calendar year 
as a residence by 2 or more individuals, the fol-
lowing rules shall apply: 
‘‘(A) The amount of the credit allowable 
under subsection (a) by reason of expenditures 
made during such calendar year by any of such 
individuals with respect to such dwelling unit 
shall be determined by treating all of such indi-
viduals as 1 taxpayer whose taxable year is 
such calendar year. 
‘‘(B) There shall be allowable, with respect 
to such expenditures to each of such individ-
uals, a credit under subsection (a) for the tax-
able year in which such calendar year ends in 
an amount which bears the same ratio to the
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amount determined under subparagraph (A) as 
the amount of such expenditures made by such 
individual during such calendar year bears to 
the aggregate of such expenditures made by all 
of such individuals during such calendar year. 
‘‘(C) Subparagraphs (A) and (B) shall be 
applied separately with respect to expenditures 
described in paragraphs (1), (2), and (3) of 
subsection (c). 
‘‘(4) TENANT-STOCKHOLDER IN COOPERATIVE 
HOUSING CORPORATION.—In the case of an indi-
vidual who is a tenant-stockholder (as defined in sec-
tion 216) in a cooperative housing corporation (as 
defined in such section), such individual shall be 
treated as having made the individual’s tenant-stock-
holder’s proportionate share (as defined in section 
216(b)(3)) of any expenditures of such corporation. 
‘‘(5) CONDOMINIUMS.—
‘‘(A) IN GENERAL.—In the case of an indi-
vidual who is a member of a condominium man-
agement association with respect to a condo-
minium which the individual owns, such indi-
vidual shall be treated as having made the indi-
vidual’s proportionate share of any expenditures 
of such association.