I 
110TH CONGRESS 
1ST SESSION H. R. 1821 
To amend the Internal Revenue Code of 1986 to modify the rules relating 
to clean energy renewable bonds. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 29, 2007 
Mr. MCDERMOTT (for himself and Mr. RAMSTAD) 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 modify 
the rules relating to clean energy renewable bonds. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Clean Renewable En-
ergy for Public Power Act of 2007’’. 
SEC. 2. MODIFICATIONS RELATING TO CLEAN RENEWABLE 
ENERGY BONDS. 
(a) CLEAN RENEWABLE ENERGY BOND.—Paragraph 
(1) of section 54(d) of the Internal Revenue Code of 1986 
(defining clean renewable energy bond) is amended— 
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(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 
(3) in subparagraph (D) by striking ‘‘subsection 
(h)’’ and inserting ‘‘subsection (g)’’. 
(b) QUALIFIED PROJECT.—Subparagraph (A) of sec-
tion 54(d)(2) of such Code (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-
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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 
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) of such Code (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.’’. 
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(d) CHANGE IN USE.—Subparagraph (D) of section 
54(d)(2) of such Code (relating to treatment of changes 
in use) is amended by striking ‘‘or qualified issuer’’. 
(e) MAXIMUM TERM.—Paragraph (2) of section 
54(e) of such Code (relating to maximum term) is amend-
ed by striking ‘‘without regard to the requirements of sub-
section (1)(6) and’’. 
(f) REPEAL OF LIMITATION ON AMOUNT OF BONDS 
DESIGNATED.—Section 54 of such Code is amended by 
striking subsection (f) (relating to repeal of limitation on 
amount of bonds designated). 
(g) SPECIAL
RULES
RELATING
TO
EXPENDI-
TURES.—Subsection (h) of section 54 of such Code (relat-
ing 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 
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(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 of such Code is amended by striking 
subsection (i) (relating to repeal of special rules relating 
to arbitrage). 
(i) PUBLIC POWER ENTITY.—Subsection (j) of sec-
tion 54 of such Code (defining Cooperative electric com-
pany; qualified energy tax credit bond lender; govern-
mental body; qualified 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) 
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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.’’. 
(j) REPEAL OF RATABLE PRINCIPAL AMORTIZATION 
REQUIREMENT.—Subsection (l) of section 54 of such 
Code (relating to other definitions and special rules) is 
amended by striking paragraph (5) and redesignating 
paragraph (6) as paragraph (5). 
(k) NET PROCEEDS.—Subsection (i) of section 54 of 
such Code (relating to other definitions and special rules), 
as amended by subsection (j), is amended by redesignating 
paragraphs (2), (3), (4), and (5) as paragraphs (4), (5), 
(6), and (7), respectively, and by inserting after paragraph 
(1) the following new paragraphs: 
‘‘(2) NET PROCEEDS.—The term ‘net proceeds’ 
means, with respect to an issue, the proceeds of such 
issue reduced by amounts in a reasonably required 
reserve or replacement fund. 
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