105 
tive with respect to such employer for all 
subsequent applicable taxable years and for 
all subsequent taxable years in which de-
ferred deduction executive remuneration 
with respect to services performed in all 
such applicable taxable years would (but for 
this paragraph) be deductible. 
‘‘(E) 
EXECUTIVE
REMUNERATION.—For 
purposes of this paragraph, the term ‘executive 
remuneration’ means the applicable employee re-
muneration of the covered executive, as deter-
mined under paragraph (4) without regard to 
subparagraphs (B), (C), and (D) thereof. Such 
term shall not include any deferred deduction ex-
ecutive remuneration with respect to services per-
formed in a prior applicable taxable year. 
‘‘(F) DEFERRED
DEDUCTION
EXECUTIVE 
REMUNERATION.—For purposes of this para-
graph, the term ‘deferred deduction executive re-
muneration’ means remuneration which would 
be executive remuneration for services performed 
in an applicable taxable year but for the fact 
that the deduction under this chapter (deter-
mined without regard to this paragraph) for
106 
such remuneration is allowable in a subsequent 
taxable year. 
‘‘(G) COORDINATION.—Rules similar to the 
rules of subparagraphs (F) and (G) of paragraph 
(4) shall apply for purposes of this paragraph. 
‘‘(H) REGULATORY AUTHORITY.—The Sec-
retary may prescribe such guidance, rules, or 
regulations as are necessary to carry out the 
purposes of this paragraph and the Emergency 
Economic Stabilization Act of 2008, including 
the extent to which this paragraph applies in the 
case of any acquisition, merger, or reorganiza-
tion of an applicable employer.’’. 
(b) GOLDEN PARACHUTE RULE.—Section 280G of the 
Internal Revenue Code of 1986 is amended— 
(1) by redesignating subsection (e) as subsection 
(f), and 
(2) by inserting after subsection (d) the following 
new subsection: 
‘‘(e) SPECIAL RULE FOR APPLICATION TO EMPLOYERS 
PARTICIPATING IN THE TROUBLED ASSETS RELIEF PRO-
GRAM.— 
‘‘(1) IN GENERAL.—In the case of the severance 
from employment of a covered executive of an appli-
cable employer during the period during which the
107 
authorities under section 101(a) of the Emergency 
Economic Stabilization Act of 2008 are in effect (de-
termined under section 120 of such Act), this section 
shall be applied to payments to such executive with 
the following modifications: 
‘‘(A) Any reference to a disqualified indi-
vidual (other than in subsection (c)) shall be 
treated as a reference to a covered executive. 
‘‘(B) Any reference to a change described in 
subsection (b)(2)(A)(i) shall be treated as a ref-
erence to an applicable severance from employ-
ment of a covered executive, and any reference to 
a payment contingent on such a change shall be 
treated as a reference to any payment made dur-
ing an applicable taxable year of the employer 
on account of such applicable severance from em-
ployment. 
‘‘(C) Any reference to a corporation shall be 
treated as a reference to an applicable employer. 
‘‘(D) 
The 
provisions 
of 
subsections 
(b)(2)(C), (b)(4), (b)(5), and (d)(5) shall not 
apply. 
‘‘(2) DEFINITIONS
AND
SPECIAL
RULES.—For 
purposes of this subsection:
108 
‘‘(A) DEFINITIONS.—Any term used in this 
subsection which is also used in section 
162(m)(5) shall have the meaning given such 
term by such section. 
‘‘(B) APPLICABLE
SEVERANCE
FROM
EM-
PLOYMENT.—The term ‘applicable severance from 
employment’ means any severance from employ-
ment of a covered executive— 
‘‘(i) by reason of an involuntary termi-
nation of the executive by the employer, or 
‘‘(ii) in connection with any bank-
ruptcy, liquidation, or receivership of the 
employer. 
‘‘(C) COORDINATION AND OTHER RULES.— 
‘‘(i) IN
GENERAL.—If a payment 
which is treated as a parachute payment by 
reason of this subsection is also a parachute 
payment determined without regard to this 
subsection, this subsection shall not apply to 
such payment. 
‘‘(ii) REGULATORY
AUTHORITY.—The 
Secretary may prescribe such guidance, 
rules, or regulations as are necessary— 
‘‘(I) to carry out the purposes of 
this subsection and the Emergency
109 
Economic Stabilization Act of 2008, 
including the extent to which this sub-
section applies in the case of any ac-
quisition, merger, or reorganization of 
an applicable employer, 
‘‘(II) to apply this section and 
section 4999 in cases where one or 
more payments with respect to any in-
dividual are treated as parachute pay-
ments by reason of this subsection, and 
other payments with respect to such in-
dividual are treated as parachute pay-
ments under this section without re-
gard to this subsection, and 
‘‘(III) to prevent the avoidance of 
the application of this section through 
the mischaracterization of a severance 
from employment as other than an ap-
plicable severance from employment.’’. 
(c) EFFECTIVE DATES.— 
(1) IN GENERAL.—The amendment made by sub-
section (a) shall apply to taxable years ending on or 
after the date of the enactment of this Act. 
(2) GOLDEN
PARACHUTE
RULE.—The amend-
ments made by subsection (b) shall apply to payments
110 
with respect to severances occurring during the period 
during which the authorities under section 101(a) of 
this Act are in effect (determined under section 120 
of this Act). 
SEC. 303. EXTENSION OF EXCLUSION OF INCOME FROM DIS-
CHARGE OF QUALIFIED PRINCIPAL RESI-
DENCE INDEBTEDNESS. 
(a) 
EXTENSION.—Subparagraph 
(E) 
of 
section 
108(a)(1) of the Internal Revenue Code of 1986 is amended 
by striking ‘‘January 1, 2010’’ and inserting ‘‘January 1, 
2013’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to discharges of indebtedness occurring 
on or after January 1, 2010. 
DIVISION B—ENERGY IMPROVE-
MENT AND EXTENSION ACT 
OF 2008 
SECTION 1. SHORT TITLE, ETC. 
(a) SHORT TITLE.—This division may be cited as the 
‘‘Energy Improvement and Extension Act of 2008’’. 
(b) REFERENCE.—Except as otherwise expressly pro-
vided, whenever in this division an amendment or repeal 
is expressed in terms of an amendment to, or repeal of, a 
section or other provision, the reference shall be considered
111 
to be made to a section or other provision of the Internal 
Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents for 
this division is as follows: 
Sec. 1. Short title, etc. 
TITLE I—ENERGY PRODUCTION INCENTIVES 
Subtitle A—Renewable Energy Incentives 
Sec. 101. Renewable energy credit. 
Sec. 102. Production credit for electricity produced from marine renewables. 
Sec. 103. Energy credit. 
Sec. 104. Energy credit for small wind property. 
Sec. 105. Energy credit for geothermal heat pump systems. 
Sec. 106. Credit for residential energy efficient property. 
Sec. 107. New clean renewable energy bonds. 
Sec. 108. Credit for steel industry fuel. 
Sec. 109. Special rule to implement FERC and State electric restructuring pol-
icy. 
Subtitle B—Carbon Mitigation and Coal Provisions 
Sec. 111. Expansion and modification of advanced coal project investment credit. 
Sec. 112. Expansion and modification of coal gasification investment credit. 
Sec. 113. Temporary increase in coal excise tax; funding of Black Lung Dis-
ability Trust Fund. 
Sec. 114. Special rules for refund of the coal excise tax to certain coal producers 
and exporters. 
Sec. 115. Tax credit for carbon dioxide sequestration. 
Sec. 116. Certain income and gains relating to industrial source carbon dioxide 
treated as qualifying income for publicly traded partnerships. 
Sec. 117. Carbon audit of the tax code. 
TITLE II—TRANSPORTATION AND DOMESTIC FUEL SECURITY 
PROVISIONS 
Sec. 201. Inclusion of cellulosic biofuel in bonus depreciation for biomass ethanol 
plant property. 
Sec. 202. Credits for biodiesel and renewable diesel. 
Sec. 203. Clarification that credits for fuel are designed to provide an incentive 
for United States production. 
Sec. 204. Extension and modification of alternative fuel credit. 
Sec. 205. Credit for new qualified plug-in electric drive motor vehicles. 
Sec. 206. Exclusion from heavy truck tax for idling reduction units and advanced 
insulation. 
Sec. 207. Alternative fuel vehicle refueling property credit. 
Sec. 208. Certain income and gains relating to alcohol fuels and mixtures, bio-
diesel fuels and mixtures, and alternative fuels and mixtures 
treated as qualifying income for publicly traded partnerships. 
Sec. 209. Extension and modification of election to expense certain refineries.
112 
Sec. 210. Extension of suspension of taxable income limit on percentage depletion 
for oil and natural gas produced from marginal properties. 
Sec. 211. Transportation fringe benefit to bicycle commuters. 
TITLE III—ENERGY CONSERVATION AND EFFICIENCY PROVISIONS 
Sec. 301. Qualified energy conservation bonds. 
Sec. 302. Credit for nonbusiness energy property. 
Sec. 303. Energy efficient commercial buildings deduction. 
Sec. 304. New energy efficient home credit. 
Sec. 305. Modifications of energy efficient appliance credit for appliances pro-
duced after 2007. 
Sec. 306. Accelerated recovery period for depreciation of smart meters and smart 
grid systems. 
Sec. 307. Qualified green building and sustainable design projects. 
Sec. 308. Special depreciation allowance for certain reuse and recycling property. 
TITLE IV—REVENUE PROVISIONS 
Sec. 401. Limitation of deduction for income attributable to domestic production 
of oil, gas, or primary products thereof. 
Sec. 402. Elimination of the different treatment of foreign oil and gas extraction 
income and foreign oil related income for purposes of the foreign 
tax credit. 
Sec. 403. Broker reporting of customer’s basis in securities transactions. 
Sec. 404. 0.2 percent FUTA surtax. 
Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax. 
TITLE I—ENERGY PRODUCTION 
INCENTIVES 
Subtitle A—Renewable Energy 
Incentives 
SEC. 101. RENEWABLE ENERGY CREDIT. 
(a) EXTENSION OF CREDIT.— 
(1) 1-YEAR EXTENSION FOR WIND AND REFINED 
COAL FACILITIES.—Paragraphs (1) and (8) of section 
45(d) are each amended by striking ‘‘January 1, 
2009’’ and inserting ‘‘January 1, 2010’’. 
(2) 2-YEAR EXTENSION FOR CERTAIN OTHER FA-
CILITIES.—Each of the following provisions of section
113 
45(d) is amended by striking ‘‘January 1, 2009’’ and 
inserting ‘‘January 1, 2011’’: 
(A) Clauses (i) and (ii) of paragraph 
(2)(A). 
(B) Clauses (i)(I) and (ii) of paragraph 
(3)(A). 
(C) Paragraph (4). 
(D) Paragraph (5). 
(E) Paragraph (6). 
(F) Paragraph (7). 
(G) Subparagraphs (A) and (B) of para-
graph (9). 
(b) MODIFICATION OF REFINED COAL AS A QUALIFIED 
ENERGY RESOURCE.— 
(1) ELIMINATION OF INCREASED MARKET VALUE 
TEST.—Section 45(c)(7)(A)(i) (defining refined coal), 
as amended by section 108, is amended— 
(A) by striking subclause (IV), 
(B) by adding ‘‘and’’ at the end of subclause 
(II), and 
(C) by striking ‘‘, and’’ at the end of sub-
clause (III) and inserting a period. 
(2) INCREASE IN REQUIRED EMISSION REDUC-
TION.—Section 45(c)(7)(B) (defining qualified emis-
sion reduction) is amended by inserting ‘‘at least 40
114 
percent of the emissions of’’ after ‘‘nitrogen oxide 
and’’. 
(c) 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’’. 
(d) EXPANSION OF BIOMASS FACILITIES.— 
(1) OPEN-LOOP
BIOMASS
FACILITIES.—Para-
graph (3) of section 45(d) is amended by redesig-
nating subparagraph (B) as subparagraph (C) and 
by inserting after subparagraph (A) the following new 
subparagraph: 
‘‘(B) EXPANSION OF FACILITY.—Such term 
shall include a new unit placed in service after 
the date of the enactment of this subparagraph 
in connection with a facility described in sub-
paragraph (A), but only to the extent of the in-
creased amount of electricity produced at the fa-
cility by reason of such new unit.’’. 
(2) CLOSED-LOOP BIOMASS FACILITIES.—Para-
graph (2) of section 45(d) is amended by redesig-
nating subparagraph (B) as subparagraph (C) and
115 
inserting after subparagraph (A) the following new 
subparagraph: 
‘‘(B) EXPANSION OF FACILITY.—Such term 
shall include a new unit placed in service after 
the date of the enactment of this subparagraph 
in connection with a facility described in sub-
paragraph (A)(i), but only to the extent of the 
increased amount of electricity produced at the 
facility by reason of such new unit.’’. 
(e) MODIFICATION OF RULES FOR HYDROPOWER PRO-
DUCTION.—Subparagraph (C) of section 45(c)(8) is amend-
ed to read as follows: 
‘‘(C) NONHYDROELECTRIC DAM.—For pur-
poses of subparagraph (A), a facility is described 
in this subparagraph if— 
‘‘(i) the hydroelectric project installed 
on the nonhydroelectric dam is licensed by 
the Federal Energy Regulatory Commission 
and meets all other applicable environ-
mental, licensing, and regulatory require-
ments, 
‘‘(ii) the nonhydroelectric dam was 
placed in service before the date of the en-
actment of this paragraph and operated for 
flood control, navigation, or water supply
116 
purposes and did not produce hydroelectric 
power on the date of the enactment of this 
paragraph, and 
‘‘(iii) the hydroelectric project is oper-
ated so that the water surface elevation at 
any given location and time that would 
have occurred in the absence of the hydro-
electric project is maintained, subject to any 
license requirements imposed under applica-
ble law that change the water surface ele-
vation for the purpose of improving envi-
ronmental quality of the affected waterway. 
The Secretary, in consultation with the Federal 
Energy Regulatory Commission, shall certify if a 
hydroelectric project licensed at a nonhydro-
electric dam meets the criteria in clause (iii). 
Nothing in this section shall affect the standards 
under which the Federal Energy Regulatory 
Commission issues licenses for and regulates hy-
dropower projects under part I of the Federal 
Power Act.’’. 
(f) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amendments made by this sec-
117 
tion shall apply to property originally placed in serv-
ice after December 31, 2008. 
(2) REFINED COAL.—The amendments made by 
subsection (b) shall apply to coal produced and sold 
from facilities placed in service after December 31, 
2008. 
(3) 
TRASH
FACILITY
CLARIFICATION.—The 
amendments made by subsection (c) shall apply to 
electricity produced and sold after the date of the en-
actment of this Act. 
(4) EXPANSION
OF
BIOMASS
FACILITIES.—The 
amendments made by subsection (d) shall apply to 
property placed in service after the date of the enact-
ment of this Act. 
SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRO-
DUCED FROM MARINE RENEWABLES. 
(a) IN GENERAL.—Paragraph (1) of section 45(c) is 
amended by striking ‘‘and’’ at the end of subparagraph (G), 
by striking the period at the end of subparagraph (H) and 
inserting ‘‘, and’’, and by adding at the end the following 
new subparagraph: 
‘‘(I) marine and hydrokinetic renewable en-
ergy.’’.
118 
(b) MARINE RENEWABLES.—Subsection (c) of section 
45 is amended by adding at the end the following new para-
graph: 
‘‘(10) MARINE AND HYDROKINETIC RENEWABLE 
ENERGY.— 
‘‘(A) IN GENERAL.—The term ‘marine and 
hydrokinetic renewable energy’ means energy de-
rived 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 pur-
poses, or 
‘‘(iv) differentials in ocean temperature 
(ocean thermal energy conversion). 
‘‘(B) EXCEPTIONS.—Such term shall not in-
clude any energy which is derived from any 
source which utilizes a dam, diversionary struc-
ture (except as provided in subparagraph
119 
(A)(iii)), or impoundment for electric power pro-
duction purposes.’’. 
(c) DEFINITION OF FACILITY.—Subsection (d) of sec-
tion 45 is amended by adding at the end the following new 
paragraph: 
‘‘(11) MARINE AND HYDROKINETIC RENEWABLE 
ENERGY FACILITIES.—In the case of a facility pro-
ducing electricity from marine and hydrokinetic re-
newable 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, 2012.’’. 
(d) CREDIT RATE.—Subparagraph (A) of section 
45(b)(4) is amended by striking ‘‘or (9)’’ and inserting ‘‘(9), 
or (11)’’. 
(e) 
COORDINATION
WITH
SMALL
IRRIGATION 
POWER.—Paragraph (5) of section 45(d), as amended by 
section 101, is amended by striking ‘‘January 1, 2012’’ and 
inserting ‘‘the date of the enactment of paragraph (11)’’. 
(f) EFFECTIVE DATE.—The amendments made by this 
section shall apply to electricity produced and sold after
120 
the date of the enactment of this Act, in taxable years end-
ing after such date. 
SEC. 103. ENERGY CREDIT. 
(a) EXTENSION OF CREDIT.— 
(1) SOLAR
ENERGY
PROPERTY.—Paragraphs 
(2)(A)(i)(II) and (3)(A)(ii) of section 48(a) are each 
amended by striking ‘‘January 1, 2009’’ and insert-
ing ‘‘January 1, 2017’’. 
(2) FUEL CELL PROPERTY.—Subparagraph (E) 
of section 48(c)(1) is amended by striking ‘‘December 
31, 2008’’ and inserting ‘‘December 31, 2016’’. 
(3) MICROTURBINE
PROPERTY.—Subparagraph 
(E) of section 48(c)(2) is amended by striking ‘‘De-
cember 31, 2008’’ and inserting ‘‘December 31, 2016’’. 
(b) ALLOWANCE OF ENERGY CREDIT AGAINST ALTER-
NATIVE MINIMUM TAX.— 
(1) IN GENERAL.—Subparagraph (B) of section 
38(c)(4), as amended by the Housing Assistance Tax 
Act of 2008, is amended by redesignating clause (vi) 
as clause (vi) and (vii), respectively, and by inserting 
after clause (iv) 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,’’.
121 
(2) TECHNICAL AMENDMENT.—Clause (vi) of sec-
tion 38(c)(4)(B), as redesignated by paragraph (1), is 
amended by striking ‘‘section 47 to the extent attrib-
utable to’’ and inserting ‘‘section 46 to the extent that 
such credit is attributable to the rehabilitation credit 
under section 47, but only with respect to’’. 
(c) ENERGY CREDIT
FOR COMBINED HEAT
AND 
POWER SYSTEM PROPERTY.— 
(1) IN GENERAL.—Section 48(a)(3)(A) is amend-
ed by striking ‘‘or’’ at the end of clause (iii), by in-
serting ‘‘or’’ at the end of clause (iv), and by adding 
at the end the following new clause: 
‘‘(v) combined heat and power system 
property,’’. 
(2) COMBINED HEAT AND POWER SYSTEM PROP-
ERTY.—Subsection (c) of section 48 is amended— 
(A) by striking ‘‘QUALIFIED FUEL CELL 
PROPERTY; QUALIFIED MICROTURBINE PROP-
ERTY’’ in the heading and inserting ‘‘DEFINI-
TIONS’’, and 
(B) by adding at the end the following new 
paragraph: 
‘‘(3) COMBINED HEAT AND POWER SYSTEM PROP-
ERTY.—
122 
‘‘(A) COMBINED HEAT AND POWER SYSTEM 
PROPERTY.—The term ‘combined heat and power 
system property’ means property comprising a 
system— 
‘‘(i) which uses the same energy source 
for the simultaneous or sequential genera-
tion of electrical power, mechanical shaft 
power, or both, in combination with the 
generation of steam or other forms of useful 
thermal energy (including heating and cool-
ing applications), 
‘‘(ii) which produces— 
‘‘(I) at least 20 percent of its total 
useful energy in the form of thermal 
energy which is not used to produce 
electrical or mechanical power (or com-
bination thereof), and 
‘‘(II) at least 20 percent of its 
total useful energy in the form of elec-
trical or mechanical power (or com-
bination thereof), 
‘‘(iii) the energy efficiency percentage 
of which exceeds 60 percent, and 
‘‘(iv) which is placed in service before 
January 1, 2017.